My colleagues and I at LNS Research have spoken to numerous companies during the past several years that have done an admirable job of building compliance into production processes. However, there are still many companies, particularly in the manufacturing sector, that struggle to meet product and process specifications set by regulatory bodies, customers, and even internal management. These companies are more vulnerable to quality risk than others.
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In reality, building production processes in a way that ensures product compliance can provide a competitive advantage, and executives are actually taking proactive measures to get ahead of impending changes in their respective industries. There are various strategies and resources organizations are leveraging to meet today’s ever-tightening regulations, and I will highlight them in this article.
Inspecting the products-in-compliance metric
Although we can provide qualitative analysis from the market to understand which resources companies are using to meet compliance specifications, it’s always beneficial to look at supporting data. In a recent quality management survey, LNS Research asked several questions regarding the products-in-compliance metric, which can be leveraged to identify those efforts that have the greatest effect on meeting compliance specifications.
Before going further, it’s important to define the products-in-compliance metric so you can benchmark your own efforts. When we discuss products in compliance, we’re referencing the percentage of products produced while operations are in compliance with all regulations, customer mandates, and standard operating procedures. Basically, the products-in-compliance metric refers to the percentage of products that meet the ideal specifications.
Based on benchmark data from batch manufacturing, discrete manufacturing, and life sciences, we see that in every industry the top 50 percent of performers (those above the white median line as shown in figure 1) are in the 99- to 100-percent range. Unfortunately, however, the bottom 50 percent of companies dramatically drop off in performance, with some performing as low as 90-percent compliance. The further the percentage drops in this box plot, typically the greater the quality risk.
Figure 1:
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The drivers for improving enterprise quality risk
To improve performance in product compliance and reduce quality risk, it takes focus and energy at every level of the organization, especially from top executives. My colleague, Matthew Littlefield, has written previously about the importance of a cohesive quality culture, and how buy-in from leadership is instrumental to its success. Our quantitative research, however, shows that there are specific investments in technology such as enterprise quality management software as well as actions that can improve product compliance.
Closed-loop quality management processes
Companies that have implemented closed-loop quality management processes are better able to capture downstream quality data and deliver it to upstream stakeholders for continuous operational improvement. Not surprisingly, this quality data delivery results in more robust quality management systems and an improved product-compliance performance.
Figure 2:
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Formal CAPA processes established across the company
Companies that have moved away from multiple and ad hoc corrective and preventive action (CAPA) systems to a formalized system with enterprise quality management software (EQMS) are again showing improved product compliance performance. A standardized system makes it easier to measure the system’s performance, and the system itself is more effective, too. This drives compliance improvements and reduces operational and quality risk.
Figure 3:
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Formal audit management processes
Similarly, companies that have standardized a formal audit management process experience higher product compliance. Whether through the use of EQMS or another system, a standardized audit process across the enterprise can ensure audits get done on time and can even help to identify trends that challenge meeting particular compliance specifications.
Figure 4:
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Formal risk management frameworks
Finally, companies that have a formal risk management program in place are better prepared to systematically identify areas of needed improvement when it comes to compliance across the enterprise. EQMS can facilitate formalizing risk management not only within the manufacturing environment, but across the value chain from product design through service.
Figure 5:
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