Manufacturing 2020 Quality Mandate: Make it Right or Do Not Make it at All

Larry Korak, Director of Industry & Strategy, Industrial Manufacturing, Infor

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Larry Korak, Director of Industry & Strategy, Industrial Manufacturing, Infor

As manufacturers gear up for the next generation of performance standards, quality assurance is gaining a renewed emphasis. Between heightened consumer expectations and stricter regulations, today’s pressures for tight variation control are forcing manufacturers to take a closer look at their operational processes. The bar has been raised, and manufacturers must adapt in order to remain competitive.

Now, more than ever, an IT infrastructure which supports end-to-end quality controls is critical. The entire company culture must have product quality as its core foundation. This type of bottom-up focus starts at order entry and doesn’t end until the product is received and the customer is satisfied. Underlying every process is a highly integrated real-time system for collaboration, collective innovation, proactive problem solving and continuous improvement. Modern ERP solutions not only support the quality mindset, they go a step further, actually motivating and fueling the quest for better products.

Research firms have tried to tackle the quality issues in manufacturing and provide guidance to companies who know quality is important. Using customer case studies as their reference point, Deloitte developed a three-part approach, the 3V Challenge, which used Variability, Visibility and Velocity as its three core principles. In one example, Deloitte said they worked with a company to identify potential causes of product failure and ways to make significant quality improvements. They uncovered that variability in manufacturing practices and processes among its many contractors and component suppliers, led to inconsistent production, product reliability issues and high-levels of product returns. Also, that a lack of visibility resulted in an inability to effectively monitor its geographically-dispersed supply chain, which was inconsistently adhering to the company’s production requirements and that poor velocity of information exchange, given the lack of data-driven insights, left the company unable to drive corrective action among its many manufacturers in a timely manner.

Analytics was used to remedy these issues with Variability, Visibility and Velocity and improve consistency, reporting and the timeliness of communication. Although the solution seems simple in hindsight, many manufacturers have trouble pinpointing where to start and how to focus on the overriding issues. It is easy to become distracted by ancillary problems that arise out of the core source of inadequate systems.

Additional points to consider when boosting quality include:

Monitoring Warranty Claims

Although experts may disagree on whether the product or process should be the first focus of attention, similar to the classic chicken-egg debate, most do seem to agree that warranty claims offer one of the best indicators of how well a product is performing. Reducing the rate of warranty claims is also one of the key financial incentives for improving product quality, at the top of a CFO’s list, who is looking to reduce costs associated with in-warranty service calls, depot repair and parts replacement.

Advanced Analytics

If the company has use of today’s advanced data management solutions, warranty claims can help pinpoint the exact nature of the issue, whether it is a supplier’s faulty component, equipment on the shop floor performing below standards, operators who need additional training, or communication gaps concerning the necessary specifications. Analytics can also be used to define the correlation between cost-saving measures, such as reducing steps or speeding processes—and the rate of warranty claims, helping manufacturers find the right balance between saving money and providing the quality that customers expect—and demand.

“Today’s pressures for tight variation control are forcing manufacturers to take a closer look at their operational processes”

Collaborative Tools

Collaborative tools provide another front-line technology tactic that users throughout the organization can leverage to boost compliance and help ensure customer priorities are met. Integrated into the ERP system, a business collaboration tool allow for comments, questions and updates to be addressed in real-time and then captured and tracked along with relevant data in the system, like the account, customer order or product. This ability to tie conversations to order and product data in the ERP means valuable information can be referenced later and accessed by the company-wide team who is working on the same project or customer order. This allows for fast sharing of updates, last minute specification changes and critical operational issues—such as unexpected equipment downtime—that require immediate attention. Collaborative tools in manufacturing have gone from being a “nice to have” to an absolute necessity to meet today’s fast pace of change.

Product Customizations

In addition to speed of delivery and product consistency, customers are also expecting more and more product customization from manufacturers. From laptops and shoes to cars and recreational vehicles, consumers expect to specify particular styles, colors, components and features in many products, that at one time were strictly madeto stock. This high degree of customization helps create customer loyalty, but it also complicates the quality control process. No longer can a manufacturer wait to perform a quality check at the end of the production workflow. That is too late, with far too many valuable resources—including time—being wasted if the end product doesnot meet specifications. Manufacturers, therefore, need to build in multiple check points in their MTO and ETO manufacturing processes. The goal is to catch errors as early in the process as possible.

As manufacturers struggle to find areas of competitive differentiation, quality control topics will undoubtedly continue to be a high priority. Not only does a strong, multi-level quality assurance program help meet customer expectations, it also reduces costs associated with scrap and make-overs. These cost savings can be invested in other value-add programs, further improving customer perception. So, while quality control may not be the cure-all tactic that suddenly turns fickle customers into loyal followers, offering a consistent level of product value and quality does go a long way in improving customer opinion. As the old adage says, “a happy customer is one of the best forms of advertising.