Ten Cost Savings with Cloud-Based SPC
Check this list to realize a quick ROI.
Manufacturers have long used statistical process control (SPC) to measure and control quality during the manufacturing process. However, the more recent development of real-time, quality intelligent, and Cloud-native SPC software has made quantifying a return on one’s SPC investment—as well as identifying ways to save money along the way—much faster and easier.
Quality spoke with Eric Weisbrod, vice president of product management at InfinityQS, to determine the specific costs that can be drastically reduced or even eliminated with a Cloud-based SPC platform.
Historically, Weisbrod says, manufacturers have purchased enterprise-wide software upfront. Of course, they don’t have to pay for printers, servers, or infrastructure when they have Cloud-native software, but it’s still a cost commitment that many organizations are (understandably) reluctant to make. At the same time, “if it’s true Cloud, it’s a subscription-based model,” Weisbrod explains. “This means that you can increase or decrease the number of licenses you’re using on a month-to-month basis.”
This is especially helpful for seasonal work, Weisbrod says. In the case of soda manufacturers, summer is their busy season. With a Cloud-based SPC solution, these manufacturers can regulate their system around the Fourth of July and other peak times; in the past, they may have paid more for the system at times when they didn’t need it as much, just to have enough licenses available for the busy season. Cloud-based software enables organizations to ramp licenses up and down, month to month, according to their needs.
“It’s a big deal for large and small organizations to get enterprise-class software at a month-to-month rate,” Weisbrod says. “We also hear manufacturers say, ‘I’m closing down this plant, but I have all these licenses. What should I do with them? Can I get a credit back for these?’ With Cloud-based software, you simply change the number of users in the platform with no need to re-license, and the cost goes up or down [accordingly].”
Another obvious way to save money by moving to the Cloud is with one’s deployment of the software itself. In a traditional, on-premises software deployment, the average manufacturing site still needs to buy a server, a network to support the server, database software, and IT personnel or a database administrator to oversee it, Weisbrod explains. But with a Cloud-native deployment, all the manufacturing site needs is robust and reliable Internet access and one person to install WiFi.
“Most manufacturers will tell you that the costs of [on-premises] deployment are typically multiples of the actual software cost,” Weisbrod says. Meanwhile, standardized deployments via Cloud are not only much faster, they are less expensive and easier to pull off.
“If your sites are Cloud-based and you have two sites that make the same products, you can deploy at one site and then instantly deploy the next site,” Weisbrod says. “You can tell the system to add lines 1-7 from the new site a to the model from the original site, and poof. It just works.”
3. Operational Efficiency
Though more indirect than the examples listed above, operational efficiency costs are integral to an organization’s financial well-being. With the examples below, Weisbrod describes how intelligent SPC can help organizations save time and money by tightening up other key steps in the manufacturing process.
Finding Successes, Not Just Problems
“The intelligent SPC part of it is the ability to make comparisons. For example, you can see another site in the same system that has already achieved the success you’re looking for, and you can go ask them, ‘How did you achieve that?’ That provides a much faster path to improvement.
“Often people start performing SPC not even for the altruistic ‘we want to improve ourselves’ reason. It’s because ‘we had a finding’ or ‘we had a customer complaint that we had to start doing this,’ and usually, the focus is negative. ‘Tell me where my problems are.’
That’s also really important; but when you have easy access to data and appropriate analysis, you can very quickly hone in on where your successes are—and then go talk to those people and help your trouble spots through their successes. With Cloud SPC, you can do this across products, production lines, and manufacturing sites. You can’t achieve this if you’re working in disparate systems, or if you’re still on paper or using spreadsheets.”
Finally, the most transformative part of these improvements comes from using a centralized repository for all quality data to live in one place. This enables sites to improve locally and the results to be seen globally. The easiest way to amplify success is to repeat it across the enterprise.
“Part of SPC is like low-grade psychology. You’ll look at a control chart and you might see something that you think is important. The chart is not telling you to adjust the process, but we just can’t help ourselves. You look at it and say, ‘That looks like that’s getting bad, and I’d better do something,’ and that’s how you over-control a process—which creates more problems.
“So, one of the things we’re big proponents of at InfinityQS is exceptions-based reporting. The old way of showing a whole bunch of control charts leaves it up to the user to say, ‘Which ones should I pay attention to?’ With exceptions-based reporting, you tell the system what’s important. You tell the system which kinds of specifications and statistical violations are important to you, and then the system will tell you when those things have happened‚—and then tells you, ‘Now’s the time you need to look at this specific control chart.’ If everything is running well and none of your rules are being violated, there’s nothing to look at. If you want to, you can go in and look. But if there are problems, the most problematic one is always in the upper-left corner, and you can just click there and ask the system to show you the control chart for that specific problem.”
“Shop floor operators, supervisors, the quality department—they’re busy individuals. The most ideal scenario is that they walk in and the system says, ‘No issues, nothing to see here.’ Then they can move on to their other tasks instead of sitting down for five or ten minutes to wade through charts—and come to the determination that nothing is wrong. Those five to ten minutes add up, and you could have been applying your time elsewhere.”
“With Cloud SPC, everyone is making decisions based on the exact same data. Whereas every time you have a handoff of, ‘Well, we typed this into Excel, but then I took it and compiled it from Excel, and put it into this database for my manager—and then that report got combined with other data for the corporate director…’ there are opportunities for errors or misinterpretations to occur at each of those points in the chain.
“But when everyone is making conclusions from the same data, you’re making the right decisions—not potentially making missteps unbeknownst to you just because of some giant data version of the game ‘telephone,’ where something gets lost in translation.”
Audit Time Reduction
“I was working with a bottler that was going through a rolling-out process for all of their sites. For the upcoming sites, there was a monthly call during which already-deployed sites could discuss struggles and wins, and sites not yet deployed could ask questions and learn lessons from the earlier sites.
“One of things that still sticks out in my mind is this: a quality manager at one of the recently-deployed sites said, ‘We had our quality audit, and the stuff that used to take me two days with an auditor we got done in three hours.’ Not only does this directly save time, but it builds auditor confidence, too. It shows your competence as a manufacturer.”
In terms of minimum spend, moving to the Cloud also paves the way for lower-cost devices.
With on-premises, Weisbrod says, “you need a dedicated PC—and if you’re in a messy manufacturing environment, that computer needs a stainless steel enclosure to protect it.” One PC might cost several hundreds of dollars, he says, but an enclosure for that one PC would be closer to several thousands.
“When you need to hose down the shop floor, you can’t hose down the computer without an enclosure,” Weisbrod continues. “But when you’re working in the Cloud, you buy a tablet for $300, put it in a drop-proof case, carry it into the room when you need it, and take it out when you don’t. All you need is an Internet connection.”
5. Scrap and Rework
Another benefit of Cloud-based SPC is that an organization’s entire supply chain can exist in one ecosystem, and that elements of the supply chain—even unfortunate ones such as scrap and rework—can be easily monitored and tweaked.
“Let’s say I’m manufacturing products that I get from an internal or external supplier,” Weisbrod says. “When we receive items, we do incoming inspection to make sure that what they sent us is okay…but they already did inspections on their side, so it’s double the work. If I could just see their results myself—it could even be in the same native system—suddenly, I get multiple savings.”
Weisbrod continues, “I get the savings of not having to do an incoming inspection, which saves me labor,” he continues. “It also saves me a lot of time and cost that I’d otherwise incur if they make a defective product, ship it to my door, then I do my incoming inspection and decide it’s unacceptable, and then I either have to scrap it or send it back to them so they can rework it.”
Scrap, shipping, and rework are all direct costs to an organization. However, these costs can become direct savings, Weisbrod says, when an organization is working with any sort of modern system—but especially when the software is Cloud-based.
“If you’re dealing with the right Cloud system, all the information you need ‘is just a browser away,’” Weisbrod says. “You simply log in to a website to see what’s happening.”
In Weisbrod’s experience of working with companies that fill containers with food, beverages, and other products, anything one could think of in terms of waste is also “giveaway product.” To protect against FDA findings, these companies often overfill their containers, thus giving away product when they don’t have to.
Weisbrod points to a client in the dairy industry who had a similar problem with milk fat. This used to be categorized as waste, as it had no saleable value. But today, given the popularity of nutritional supplements and whey proteins, milk fat has become a saleable byproduct of the dairy process, Weisbrod says. This means that a manufacturer can now tailor their process to get the most of saleable product out of it, specifically by using quality intelligence and Cloud-based SPC to pinpoint instances of waste or giveaway—and correct for them.
With machining, the improvement opportunity may be with the process and not the product itself or giving away product, “but you’re machining something,” Weisbrod says, “and the more material you have to remove takes additional time to machine and causes additional wear in your tooling, which adds manufacturing cost.”
Weisbrod counts this extra machining time and tool wear as “giveaway,” as well, because both can have a negative effect on a company’s bottom line. With smart and Cloud-based SPC, however, an organization can make their own adjustments based on their data.
“You could review your process and your tolerance and say, ‘I could run towards the high side of my tolerance because it saves me in my machining costs. It enables me to machine in a little less time, facilitating a little more throughput, and it saves a little wear and tear on my tools so I can get more pieces out of that tooling,’” Weisbrod says. “I consider these improvements as giveaway reduction, because they it go beyond trying to reduce what goes in the scrap bin.”
Weisbrod tells the story of working with a large food and beverage manufacturer that was “thrilled” with their Cloud-based SPC system for its error-proofing capabilities. They stated that certain problems they’d had in the past had gone away since they started using the software; however, they didn’t count these wins as ROI.
“They said, ‘That’s not ROI because we prevented it, and we can’t really claim that as cost savings,’” Weisbrod explains. “And we said, ‘Well, we understand where you’re coming from, but it is saving you money. And it’s not just saving you the dollars and the materials of the recalls themselves, but also brand protection.’”
When it comes to building the faith of one’s customers, “it takes a long time to earn their trust,” Weisbrod says. “That trust can be lost in an instant, and it can take a long time to build it back again.”
Intelligent SPC provides error-proofing, accuracy, responsiveness, and many other important qualities that apply to an organization’s brand—and can also prevent recalls from occurring. “Companies may or may not account for that in their bottom line, and I think that’s something manufacturers should really think about,” Weisbrod says. “Admittedly, it’s a challenging topic to truly quantify. Do you say, ‘In the past several years we’ve had these kinds of recalls, we’ve been using this software for two years now and we haven’t had these recalls again, so we’ve incurred these savings?’ It is a bit of a logical leap, but I think it’s an important consideration because preventing recalls is one way a system provides value to a company.”
Ease of adoption and training costs are often linked, and rightfully so: the greater the former, the lesser the latter. Fortunately, Cloud SPC is much easier to adopt than most on-premises software, Weisbrod says, because of its streamlined deployment, easier-to-use interface, and high-tech intuitiveness.
“SPC deployments often languish or never flourish because they’re just not well-received on the shop floor, and it costs money to provide training and retraining and to get consultants in,” Weisbrod says. “But a dedicated quality intelligence platform can make SPC not ‘feel’ like SPC. [At InfinityQS], we try to match what the operators’ practices are, take those results, and utilize them for SPC analysis.”
“We try to match the users’ workflow so, to them, ‘You just keep doing what you were doing’ and the software is like an efficiency tool,” he continues. “But in reality, the user is collecting the information and doing meaningful SPC analysis, and it enables people to actually achieve results—and a return from their SPC deployments—that much faster.”
Plus, with a truly centralized quality intelligence platform designed for SPC results, “you don’t have to necessarily be an SPC expert or practitioner to use the software,” Weisbrod says, which also can excise those additional training and consultancy costs from an already tight budget.
Finally, Cloud-Based systems are designed to provide documentation and even eLearning on demand. This allows ongoing training for new employees and refresher training for users that need it, when they need it. Extracting the most ROI from a system means users have the knowledge they need to demonstrate value that benefits the organization.
9. IT Savings
While not unique to Cloud-Based SPC, there are many benefits that accompany any cloud deployment. The hardware savings are mentioned above, but the associated software (database, installation packages, etc.) and the ongoing maintenance and updates add up. Add to that the expertise needed not only to install/maintain these systems, but to stay current on those updates and improvements, and there are significant savings.
10.Paper and Printing
A Cloud-based SPC system of digital documentation obviates the need to print, file, and retrieve important forms, resulting in considerable time and cost savings.
“We’ve had people tells us that they’ve saved tens of thousands of dollars every year just in paper costs,” Weisbrod says. The no-printers advantage is obvious, but what many don’t account for is the cost savings associated with storage and retrieval.
“When you’re paper-based, all that paper has to live somewhere,” Weisbrod explains. “It lives in filing cabinets for x number of months, and then it gets carted off to a warehouse somewhere to be held for the requisite number of years.” These are all direct costs to an organization, he says, that Cloud-native SPC software can eliminate.