At the recent ASQ (American Society for Quality) annual World Conference, our EMNS staff joined 2,200 quality assurance professionals in Seattle for several packed days of conversations and discovery. One of the discoveries was the increase in participants from China. They, in turn, discovered that one of the EMNS staff speaks Chinese, learned while working in that country for eighteen years.
Since we had an opportunity to sample the conversational topics of over 100 booth visitors, we found the interest in Supply Chain Quality Management to be intense, but on the other hand, there was less awareness about all the details, both general and technical, about why that interest is valid and important.
Why Supply Chain Quality Management: The Fundamentals
Customer Safety: Catching substandard products after they have reached the customer’s realm is unacceptable. Products flowing through the supply chain must be guarded by a convoy of statistics, backed by testing and other documentation, that assure all parties their quality goals have been met. The notion of relying on Finished Product Testing is naïve, as demonstrated by the number of recent breakdowns that proved the impossibility of in-depth supply chain QA relying on that method.
Such key inputs as steel in dental tools, titanium in high-performance aircraft engines, pepper in stews, latex in paints and zirconium in nuclear power plants are all components and ingredients sourced in their respective supply chains. While they carry a large burden of the product’s usefulness, they are rarely subjected to adequate testing processes documented by Certificates of Analysis (COA.)
Customer Satisfaction: When the product’s promise (the reason customers acquired it) is impacted by quality problems, customer satisfaction plummets. This is obvious, but what’s not always obvious is that the disappointment is associated with the brand, the name that is on the label, even if the sub-standard (untested, undocumented) material comes from a supplier in a second or third tier of the supply chain. The buck stops with your brand.
Overarching management issues: Supply Chain Quality Management and the risks to customer safety and satisfaction are intertwined with potential costs, including insurance costs, investment in quality tools, not to mention litigation costs should there be the kinds of failures we have witnessed in recent years. Together, risks associated with SCQM failures impact sales, brand integrity, and ultimately, market stature.
Operations efficiency: This important domain has a direct impact on cost and is therefore a reason for sleepless nights for managers, many times outweighing concerns about QA risks as well as customer satisfaction and safety. However, numerous analyses of the Cost of Quality have shown increased productivity and positive ROI from the purchase and implementation of a robust array of QA tools. Breakdowns in quality anywhere in the chain, if not detected and stopped in time using material testing and the electronic Certificates of Analysis (COA) powering SPC (statistical process control), result in production disturbances, sometimes even work stoppages. Material replacements, often at much higher, expedited costs, and the time spent on root-cause analysis and efforts to implement corrective actions are all costs that acquiring and deploying supply chain quality management systems eliminate, contributing to a positive ROI.
Inadequacy of supply chain management (versus supply chain quality management) systems. SCM is not focused at a sufficiently fine granularity to prevent the flow of substandard materials sourced at different tiers of a supply chain flowing into multi-ingredient products. Speed of fulfillment, lowering of inventory buffers, and management of demand control/responses are all focused on concerns other than QA.
Inadequacy of Document Management systems: while they may sound convenient, electronic documents are just paper-equivalents, not up to the task in the electronic age. They cannot be converted into data that can be processed with SPC quickly enough to avert breakdowns. Although adding awareness and hands-on control through specific workflows, data checks and special reporting is a step in the right direction, widely publicized breakdowns in several industries (covered in previous journal articles) have demonstrated that these tools alone are unable to reach their goal: consistently reliable supply chain QA management.
Inadequacy of home-grown “systems”. The capabilities of systems such as Excel and SharePoint applications and the myriad of outdated paper-based processes are limited. They are not equipped to handle the specific level of responsibility of quality assurance required by today’s B2B or B2C consumer nor the regulatory environments in many industries.
As stated by EMNS client, Handgards (see case study), these systems eventually collapse of their own weight, unable to handle the flow of documentation in any way that allows a growing company to prevent serious breakdowns in a complex, multi-tier supply chain. In contrast to these, digital approaches at the level of electronic COAs can build the foundation for a robust system.
As an example, a quick glance at the nature of an electronic COA shows how different it is from paper equivalents, as well as from systems focused merely on managing supply chains’ paperwork and forms without a primary focus on verified QA. A COA contains a much richer trove of data for lowering material risk, insuring specification conformance, evaluating and comparing providers of materials/products.
At EMNS, Inc. the COA is augmented by the Advance Ship Notification (ASN) that establishes who is transferring material to whom, adding traceability to the process. It includes test results (using various measurements) and is anchored by its requirement for unique codes such as lot numbers, serial number for unique items, groupings or batches of material. Test data can be entered through various automated methods, from automated data transfer to file uploads, to copy-and-paste, all the way down to manual entry on-line, depending on a supply chain partner’s capability. Following entry, graphical displays highlight disparities that might be cause for concern for spec conformance in critical materials.
In conclusion, only an online, SaaS, industrial-database-supported, purpose-built application can be sufficiently robust, secure and extensible to meet the emerging QA data demands of globally sourced materials and components. GSQA® from EMNS, Inc. is such a solution and can be researched at www.gsqa.com.