Based on an original white paper by Louis Columbus
If you study the top-performing companies across all manufacturing industries, a plain and simple truth emerges: the ability to produce consistently high-quality products − regardless of the forces impacting demand, suppliers, pricing or channels − is the key to accomplishing revenue and profit goals. Manufacturing companies that dominate their chosen markets have as their core strength the ability to deliver exceptionally high levels of quality in their products on a consistent basis. Compliance is the competitive strategy of making sure that every product produced every day will exceed customer expectations and, as a result, drive up sales and profits.
Compliance is essential for any manufacturer that wishes to go beyond survival and thrive in an increasingly competitive and turbulent global arena. The top 10 reasons that manufacturers need to consider regarding the automation of their compliance initiatives and strategies are provided in the following blog series,and all have as their foundation the use of quality as a long-term competitive differentiator.
Complying with customers’ expectations is much more difficult, and it takes much more focus than regulatory compliance. However, together, both are acting as catalysts to companies that choose to capitalise on change rather than avoid it.
Reason 1: Improve Product Conformance at the Process Level
When products don’t regularly conform to quality assurance or customer standards, it costs the entire company lost time in firefighting toward a workaround solution and possibly reduced customer satisfaction. Instead of resorting to the quick fix that can drain revenue, manufacturers that have turned compliance into a competitive weapon take these steps:
- First, they evaluate and re-define the supply chains, production processes and quality-assurance standards to alleviate bottlenecks in the production areas.
- Second, entirely new approaches to measuring quality and compliance are initiated to augment procedures that are already utilised. These steps give the manufacturing teams insight into which processes are under-performing and the circumstances responsible for these defective processes.
- Third, enterprise compliance and quality management software is used to selectively automate those areas where manufacturers can get the best return from this IT investment.
- Fourth, benchmarking and performance analysis is completed. Corrective and preventative action at this point is no longer a firefighting exercise, rather it’s one that can be handled through exception reporting and fine-tuning of the process itself. The result is that when non-conformance is reduced, customer satisfaction increases and service costs drop.
Reason 2: Create a Culture of Quality in Your Supply Chains
Many manufacturers marvel at the Toyota Production System (TPS) and envision it as insular, contained within the Toyota manufacturing plants with Six-Sigma measures of production quality and efficiency. The foundation of this world-class production system is actually based on a very high level of supply-chain quality standards that Toyota suppliers need to consistently meet in order to continue shipping products to the auto manufacturer. Suppliers have said that participating in the TPS first forces a culture change in their companies, then a re-alignment of processes to better share knowledge in the Toyota Supplier Network. Compliance to the TPS standards forces suppliers to create a culture of quality. Creating corrective-action strategies with suppliers based on mutually agreed-to metrics produces the motivation needed for change to happen. Automating supplier conformance strategies is part of turning compliance into a competitive weapon.
Reason 3: Synchronise Inspections and Audit Data to Supplier Rating
When manufacturers rely only upon manual processes to complete inspections and audits, it is rare that these results are correlated back to supplier rating results. Maintaining the information in a centralised database, minimising the possibility of error and automating calculations could in fact signal exceptional gains in the performance of suppliers to quality standards. The opportunity for a manufacturer to further increase the performance of suppliers to quality, delivery and performance standards is lost because the supplier rating information is not adequately calculated and communicated to the supplier.
Manufacturers that choose to automate their manufacturing compliance strategies using an approach that is based on Enterprise Compliance and Quality Management (ECQM) can encourage each supplier to implement specific improvement strategies, allowing them to rapidly see the results in new shipments.
As you can see, automating your manufacturing compliance not only provides efficiency to your direct department, but it is also a strategy that can positively influence your entire organisation and even broader supply network.
In our next blog we’ll explore how an automated compliance system relates to corrective action plans, supplier ranking and system of records for supplier, production and process performance. Stay tuned!