Quality management (QM) ensures products are delivered to a specific quality standard and that processes maintain those standards. It can also help to reduce costs, rework and scrap. To be effective it requires not only investment in time and resources but also support from the top floor to the shop floor. Manufacturers who want to implement QM, or improve it, need to be aware of what steps they need to take so that QM efforts are successful.
Making QM work requires commitment and acceptance of change in a number of areas.
As with any major organizational initiative, support from company leadership is critical. An executive should be given the responsibility to ensure the initiative is planned and to drive its execution, with regular reports back to the management team.
Key aspects of the QM project are:
- getting some staff to become the initial QM team,
- establishing a change management program to educate all staff about what QM entails,
- engaging with shop floor staff to get their buy-in,
- investing in technical and digital resources to make QM work successfully.
Embrace digital business
Manufacturers that want QM to work must get away from old manual processes and embrace the concept of the digital business — applying digital technology to business processes and operations.
Investment is needed in ‘smart’ machines, primarily on the factory floor and in the warehouse. These are devices with embedded sensors that can connect, share and interact with users and other smart devices. Smart machines enable better monitoring of production equipment and real-time reporting in case of quality issues and machine problems.
Starting a QM team
The QM team are the people who ensure the whole business sticks to quality standards. At first, it can be existing staff pulled into new QM roles, but a dedicated quality manager and staff should be appointed at some stage, sooner rather than later.
The QM team needs to determine upfront some basic elements.
- Clearly defined goals: align the QM goals with overall business objectives, such as improving product quality or increasing output.
- Appropriate metrics: what metrics will be used to demonstrate how the QM project is achieving its goals? This decision will include what metrics are actionable, how they can be measured, and how to collect the data needed.
- Establish quality standards: these are the acceptance criteria for products or processes, typically within minimum or maximum acceptable values.
- Identify quality control points: where in the company, and in what processes, will quality checks be done?
- Reporting method: how are the metrics and improvement towards goals to be communicated, who can see the information, and how can the information identify gaps or opportunities for process changes?
The advantage of using an ERP system with a QM function is that it becomes the data store for all QM data. The QM data can be captured and communicated in real-time. Using dashboards and embedded analytics in the ERP system is an easy way to access the information for those who need it. Having accurate, dependable data gives management the reporting and metrics they need to make informed decisions.
There are several well-established metrics that the QM team can use.
Defect rates — how many units of production are defective, or unusable, out of a specific number of units.
First pass yield — how many quality units are produced as a percentage of the total units that began the process. This is a useful metric as it can be used to track waste; when scrap parts are created, or units require re-work, waste is generated.
Customer Satisfaction (CSAT) score — measures customer satisfaction with a product or service.
Customer complaints — customer complaints provide valuable insight into product or service quality.
On-time delivery to commit — measures how often production can meet commitments for product delivery.
Perfect order percentage — how many complete orders are shipped on time as a percentage of all orders.
Customer reject rate — measures how many parts delivered to customers are defective. Because products can have more than one part to them, this metric can track how many specific parts are rejected.
Return merchandise authorizations (RMA) — measure how often customers request and receive a refund for returned goods.
Overall Equipment Effectiveness — this is the best metric for identifying losses in production and improving the productivity of manufacturing equipment.
In addition to metrics that track the performance of quality initiatives, the QM team also need to institute a reporting system so that different functions of the organizations can see where and when there are problems.
One important report is a non-conformance report (NCR). This is generated during quality control checks when a product or procedure does not meet the initial quality regulations or requirements defined by the QM standards. This should be an automated report so that departments such as production and inventory inspection can be alerted as soon as the issue is raised. By creating an NCR, issues can be defined and analyzed so that fixes can be done quickly and correctly to ensure the non-conformity is dealt with.
Corrective and Preventive Actions (CAPA) is a methodology that is used to identify how improvements to an organization’s processes can be made to mitigate undesirable situations like product nonconformities. CAPA provides a structure for a manufacturer to follow to find the cause of a problem, solve it, and identify ways to prevent the problem from occurring in the future.
Customer complaints are important for the QM team to receive from the sales and customer service departments. From RMAs that are reported, the information can be collated and analyzed to see if there are quality issues that need to be addressed.
The QM reporting system should be automated via the ERP system. The integrated nature of an ERP system allows quality workflows to be established that the entire business can see and use to take action. This is in contrast to many stand-alone QM systems which only expose certain parts of the company to quality issues.
QM is not just an internal program, suppliers should also be involved. The QM team should communicate with suppliers so they are aware of the quality assurance actions they are expected to put in place. Data should be shared with suppliers on quality control tests done during the initial inspection phase so they can review their own quality tests if required.
Manufacturers have realized that improving and maintaining quality in their products and processes is now essential to be competitive. The advantage of using a QM solution that is part of an ERP system is that quality issues can be automatically communicated to all the departments of the business which need to know when and where quality problems occur. This ensures that the company’s QM initiatives are not just isolated to certain functions and that building a quality culture throughout the organization can be achieved.