Industry Market Trends
Why Manufacturers Need an Integrated Quality Solution
September 25, 2013
One way manufacturers can improve efficiency and save money in their operations is by integrating enterprise quality management (EQM) software, enterprise resource planning (ERP) and manufacturing operations management (MOM) systems. Doing so can maximize the quality of processes and efforts across the value chain. Matthew Littlefield, president and principal analyst at LNS Research, recently gave a webinar on the benefits of an integrated quality solution, which is designed to do just that -- connect the various systems in an organization. By taking these systems out of silos and allowing them to communicate with each other, manufactures gain operational efficiency and cost savings. Speaking mostly from expertise in defense and aerospace industries, Littlefield said the issues for quality management software addressed in the webinar, solving concerns throughout the supply chain, are relevant to most discrete manufacturing industries. "You have to build in business processes that integrate the value chain, that's what we mean when we talk about integrative quality," he said during the presentation. Littlefield found in his research that the need to improve manufacturing efficiency is mentioned as the "far and away number one, off the charts" top reason for implementing quality management systems. "Most manufacturers want to reduce the total costs of quality, and while 28 percent overall want to improve customer experience, only 15 percent in A&D want to," he said, referring to the aerospace and defense industries. He outlined several ways an EQM can benefit manufacturers. 1. Effectively measuring metrics. "It's a big challenge for a lot of industries," he said, in that "homegrown databases for testing and for other areas, they're not connected, they're siloed. A lot of companies are tying them together and trying to harmonize processes to drive better visibility into metrics." 2. Eliminating disparate systems. An EQM enables collaboration. It's nearly impossible to collaborate across departments, trading partners and the supply chain without it, Littlefield said. 3. Moving to a single platform. Currently, manufacturers use ERP systems as their backbone, while also relying on other systems, such as customer relationship management (CRM), business intelligence, MOM, and many others. Integrated quality solutions act as hubs that connect various quality processes, systems, and data sources for the benefit of project teams. "Manufacturers need to move to a single platform," said Littlefield. "Companies want to connect the different areas of the business with a quality system to manage different aspects of quality at an enterprise level. Move towards the idea of integrative quality and ensure that your quality systems are very tightly coupled with your enterprise systems to really have a single platform." 4. Focusing on what matters. "Focus on only those costs that hit the balance sheet," advised Littlefield. Those are the ones that get executive attention when you want to improve quality processes, he said. EQM systems help businesses focus on equipment, labor, and product costs, or internal and external failures which get the attention of the C-suite, especially if the company can "show the cost of poor quality," he said. 5. Becoming more predictive. Doing this involves "looking at the performance of your quality system itself," he said. For example, supplier defect rates are a good metric to track, he added. 6. Finding correlations. It should seem a logical outcome of integrating systems. Look at supplier audits to find correlations between defective shipments and how supplier audits are going. Littlefield posited that companies behind on their audits will see issues in defects. 7. Empowering your employees. With a sufficiently integrated quality solution in place, you should be able to have anybody in your value chain, "from the buyer to the warehouse manager to the shop floor supervisor," as Oracle puts it, "to identify defective components and their associated defect-producing processes before they become too costly." Other experts agree that an integrated quality solution delivers tangible benefits. Mike Roberts wrote recently for LNS Research that manufacturers can use EQM systems to reduce the cost of quality. "Identifying quality issues closer to their source is key to keeping product quality high and costs down," he writes. "The farther down the value chain a defect moves, the bigger the impact to your organization. Infusing quality with design and sourcing efforts is key to resolving quality issues earlier and avoiding the dreaded hidden costs of quality down the road." Roberts mentioned that reducing the risk of compliance issues by reducing reliance on manual and paper-based processes is another important function of a good EQM system, since in many cases it "takes the human element out of many quality processes, and has considerable impacts to quality risk and compliance." He added, "Integrating these automation capabilities across the value chain can take that characteristic and compound its impact."