Managers and companies responsible for compliance find themselves at a stand-off with today’s supply chain. The supply line is young, fresh, dynamic, exciting: bigger, faster, stronger, more. And there stands the lone corporate Quality Manager. How does it shake out?
The situation: quality personnel outnumbered
A principal at Oliver Wight recently told me, “I repeatedly see the lack of quality prevalent in planning systems at some of America’s best companies.” David Goddard has been a Business Improvement Specialist — working with large manufacturing companies – for over 20 years. He’s seen a lot of quality issues and solutions.
“I see Bill Of Materials errors driving poor costing and part shortages, and poor item master information (lead time for example) causing a constant state of crisis ergo expediting parts, which in turn costs money in all sorts of ways,” he said. “Quality issues in basic infrastructure data has lead to major companies running their businesses on spreadsheets vs. simple database-driven software tools. What a shame.”
Quality management in manufacturing is a problem. With so much expected of today’s supply, manufacture and delivery speeds, innovation and getting to market are challenging or if a company is still running a quality program on clipboards and spreadsheets, emails, or across multiple instances of an location-based, closed-system ERP installation.
Communications and data share must be instant and global. In many companies still, they’re not, and quality, as Goddard points out, is suffering.
Quality must choose its weapon for REACH, RoHS, TSCA, Prop 65
There are solutions. For instance, a quality management program for the environmental compliance piece must drill all the way down to the chemical-substances in a Bill Of Materials (BOM) – to reveal the compliance risk buried in parts and formulas. Software solutions can perform these quality checks. The software serves as the foundation for environmental compliance in a volatile marketplace that bobs and sways in the prevailing regulatory currents under REACH, RoHS, TSCA, Prop 65 and WEEE and hundreds of forces like them in the States and elsewhere.
As it is usually a function of the quality assurance team in manufacturing to assure that supplied parts – thus products – are compliant, today’s managers rely on software designed specifically for the job. Information Technology (IT) that tracks parts and supplier ingredients in today’s complex supply network and marketplace can conserve significant resources from a quality standpoint, freeing up time and money for other projects and business initiatives.
Quality software: one hero, not location-specific
Enterprise-wide quality assurance tools should not be location-specific. Today’s tools consist of a single database with arms that reach out to multiple locations and business entities in different places. This reach is critical as quality managers gather and track key minutia about supplied parts, mixtures and sourcing data, including the chemicals they contain.
This model of tendriled, online software stemming from a central database would include functionality that screens ingredient data (what chemicals are used in the dyes? In the paint and coatings? In the gearbox? In the dried fruit?) against hundreds of regulations worldwide for compliance and reporting.
Quality vs. profits: shoot once, shoot fast, it’s you or them
Today’s business problems include how to compete with a supply chain like Apple’s – a bristling hot pot of electronics suppliers and logistical hubs that delivers:
- a customized, monogrammed electronic gadget in 3 days, or
- a book you order today that’s delivered tomorrow, or
- the sneakers that you design to wear next week
Like it or not, this is today’s competitive field. All this speed still has to be cost-effective, innovative, compliant and risk-analyzed for whatever market it’s being made in and sold into. Today’s global supply chain has blink-fast distribution demands.
When a quality program has fire-power behind it, companies can innovate faster and get-to-market more quickly – neither of which are optional these days.
Quality’s advantage: business intelligence
The makers of Pantene, on the other hand, recently endured having their shampoo banned in certain countries, and maybe they need to centralize their data collection a little more reliably. Also, there have been numerous recalls involving products with cadmium in the paint (McDonalds) or in the jewelry.
This type of we-don’t-know-what’s-in-it seems too vague for a culture that:
- put a man on the moon
- routinely performs surgery on eyeballs and
- tracks 300 million people’s income down to the penny
Could we get a little precision in ingredient measurement and management? The state it’s in now would be like the CFO saying, “Well, we really don’t know where our money came from or where it went….”
Shoot out: quality tools win the green stand-off
It’s High Noon: you can win a standoff, but you do need a gun and a strategy. Here’s the strategy: if you make a product then you know what’s in it, and you also know what processes are applied along the way – and you also know what’s going to come out the other end and you know what the makeup of the output is. A simple software module to manage that information is your gun.
Incredibly, supply chain information about chemicals used in products is business intelligence that is achievable with a simple online software that you can subscribe to for a low cost. Within weeks you have quality management in at least one corner of your domain: chemical environmental compliance and risk management under REACH, RoHS, TSCA, and myriad state and regional regulations globally.
“In a recent case,” Goddard told me, “I know of one critical supplier to the automotive industry that became completely out of capacity to meet it customer needs. Any fallout of components due to quality is wasted capacity. This one company has seen yields as low as 60%. Imagine the cost of quality here. Not just loss of material and labor that the finance folks see but missed customer shipments resulting in long term loss of customers!”
The new view is that if a company can know what chemicals are in a product, they should know. Instead of waiting for a regulation to drop on one hazardous substance or another, companies are increasingly being proactive by relying on material disclosure software to guarantee an audit of chemicals and quantities in all parts, materials, formulas, mixtures and goods – finished or raw. Innovative IT can give a quality management plan this competence, driving compliance and maximizing profits, innovation, and getting safe, quality products to customers.
For over a decade, Chris Nowak has been immersed in the business of environmental management, regulatory compliance and supplier material disclosure process. Nowak serves as Director at Actio Corporation.