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Jason Spera

Management

Leveraging MES and QMS to Optimize Cost and Quality

There’s no need to choose between reducing costs and delighting customers

Published: Wednesday, June 2, 2021 - 12:03

In a customer-centered world, meeting customers’ needs is more demanding and business-critical than ever. Simultaneously, manufacturers struggle to reduce operating costs as margins compress and the competitive landscape intensifies. This dichotomy and a pressure to “choose” between reducing costs and delighting customers is not mutually exclusive.

Best-in-class manufacturers recognize there’s no trade-off; they take a holistic approach to quality management that allows them to excel in both arenas. A quality-driven mindset across every layer of an enterprise strategically enhances process visibility and compliance to enable improvements in both cost and customer satisfaction.

The trade-off mindset

For many discrete manufacturers, delivering more robust customizations at a reduced margin or choosing to settle for less than zero-defect quality in favor of cutting operating costs is part of the old trade-off mindset.

Although reaching zero defects and peak performance is important, manufacturers also must reduce recalls, supply chain interruptions, and downtime to strategically adapt to demand fluctuation, rising expenses, labor issues, and other costly operational issues—all while complying with regulatory agencies.

According to an Aberdeen Group study, “Quality Management: Digital Transformation Accelerates the Best-in-Class Edge,” complying with regulatory requirements is a top pressure for 29 percent of discrete manufacturers. To “do it all,” manufacturers prioritize quality but not at the expense of feasibility and profitability.

Common approaches to forming quality-oriented strategies

Manufacturers typically take one of three approaches to creating cost-effective, quality-oriented strategies for the enterprise.

Standardize quality processes
63 percent of manufacturers aim to standardize quality processes such as compliance and risk-based controls, quality training, and more. In doing so, their goal is to create a manufacturing environment in which the cost of quality decreases as excellence becomes standardized. This approach, however, fails to account for fluctuating demand and other unexpected disruptions that must be addressed in a cost-effective way that also prioritizes quality.

Improve visibility and traceability
35 percent of manufacturers strategically enhance visibility and traceability controls across production processes. This is a valuable endeavor that enables manufacturers to transparently gain insights from their operations at any point in the manufacturing process, quickly recognizing discrepancies in quality. It doesn’t, however, provide a framework by which operators can report and address quality management issues.

Promote quality from the top down

Centralize real-time data and KPIs

Collaborate with suppliers across the enterprise
27 percent of manufacturers attempt to improve collaboration with their suppliers and enhance communications throughout their enterprise. This tactic aims to ensure that suppliers are delivering quality products through scorecards, high-impact supplier projects, and more, as well as create a connected environment in which quality data are shared across IT and operational technology constituents. Like the second strategy, these efforts are valuable but don’t provide an actionable or cost-effective system for managing quality.

While these are three worthwhile efforts, they are only stopgaps when it comes to addressing the long-term balance between cost and quality.

The best-in-class approach: A holistic perspective

Instead of focusing solely on short-term strategies like the three mentioned above, best-in-class manufacturers are taking a holistic look at how quality management fits into their wider manufacturing operations. To do this, they no longer rely on quality management system (QMS) technology alone. Instead, they have integrated a full range of QMS features into manufacturing execution system (MES) solutions.

Focusing on quality from the top down

Delivering top-notch quality for a lower cost all begins with getting C-level buy-in on prioritizing quality management. This executive sponsorship, which solidifies the ongoing commitment and attention of senior management, is crucial. It sends an enterprisewide message that higher quality, not just lower costs, must be considered in everyday operational decisions.

Of equal importance is the practice of disseminating proven strategies for cost-effective quality management to these key stakeholders, as well as other operational departments, on an ongoing basis. In fact, many have created centers of excellence to share best practices that promote quality across the enterprise—from standards, to budgeting, to management.

Handle and share high-quality data

Best-in-class manufacturers aren’t just centralizing and sharing best practices for cost-effective quality; they are also reporting real-time measurements of quality and KPI data across the enterprise. These data empower various constituents to access the actionable intelligence they need to make real process improvements. Through cloud enabled KPI as well as audit data sharing, management, and storage, they are also enabling a new level of collaboration among all departments.

Benchmark supplier performance via audits

Automate change control management

These leading manufacturers also combine quality data with enterprisewide operational data, creating a single source of truth that includes QMS and MES inputs for enhanced insight, clarity, and functionality factorywide.

Determine which suppliers measure up

In addition to measuring, analyzing, and sharing data about their own internal performance, best-in-class manufacturers are also doing the same for their network of suppliers. From monitoring on-time delivery compared to required dates, commitment dates, and established lead times, to accounting for each supplier’s defect rates, product costs, compliance to standard operating procedures (SOP), and product quality, they keep scorecards to determine which suppliers enhance the quality of their products—and which do not.

Additionally, manufacturers are collaborating with their most robust suppliers on product design to improve their performance, establish key processes for automatic quality KPI monitoring and failure notifications, and gain access to a portal for supplier process visibility.

Automate key quality processes

Finally, manufacturers are also turning to QMS automation to standardize a framework for high-quality manufacturing at a lower cost. In fact, the best of the best-in-class are automating key manufacturing processes such as change-control management, corrective action/preventive action (CAPA), audit management, dashboards, supplier quality ratings, advanced product quality planning, and more.

This level of automation leaves little room for error when manufacturing high-quality products and correcting defects. By using QMS functionality and technology, and applying it more broadly when the executing manufacturing processes, these leaders further demonstrate the value of an integrated QMS/MES solution.

Strategically reduce the cost of quality

Each of these leading approaches are designed to increase quality while decreasing operating costs and delivering significant ROI. Manufacturing leaders are able to excel at reducing the cost of quality with a holistic, MES- and QMS-oriented approach that allows quality data to be used across the enterprise and made actionable through shared access.

Implementation rates of holistic QMS solutions are 22% higher among manufacturing leaders
Here’s how best-in class manufacturers are reaping the benefits of their holistic approach to quality management. Ultimately, they cut costs by strategically elevating QMS technology and functionality across the factory with the help of MES, ensuring that customers come first, quality is managed strategically, and performance improvements are attained on an ongoing basis.

Reduce cost of quality

Automating the three pillars of zero-defect quality

For manufacturers, the goal is to move raw materials to finished, high-quality, zero-defect products in the least amount of time and with the greatest level of efficiency to achieve optimal levels of customer satisfaction. By leveraging embedded, comprehensive, quality management capabilities, manufacturers can firewall and detect, identify, repair, and recover from defects found throughout the entire manufacturing process.
Automated administrative reaction to nonconformances
Extending those quality management capabilities with administrative quality management—encompassed within an MES for maximum reach within the factory—enables enterprises to support continuous initiatives for improvement while also documenting this process for auditors and customers alike. Furthermore, administrative quality management can effortlessly enable digital automation to be instituted in place of labor-intensive, detailed manufacturing processes, such as those involved in material review boards, CAPA, and more.

Eight reasons to enable a holistic MES and QMS

By leveraging a holistic MES solution with quality management, companies are able to gain instant access to deeper, richer manufacturing data than a standalone QMS system could provide. This allows any manufacturer to enable eight core capabilities that lower the cost of customer-pleasing quality.

1. Firewall factory from nonconforming materials
Keeping defective parts and materials from entering your factory environment is a key benefit of MES/QMS solutions. By instituting inspection of raw materials and incoming parts as a critical function, an MES with quality management optimizes quality control and stops downstream quality issues to minimize the cost of poor quality. This is done by using intelligent sampling automation and innovative, guided visual prompting, which allow manufacturers to ensure that key inspection criteria are never missed at early stages. Automating this process can also adaptively refine sampling rates based on past supplier performance, which removes unnecessary hunting to find the right inspection documents and criteria.

2. Prevent defects from leaving the factory
Just as a holistic MES/QMS can keep defective parts from entering the factory, it can also keep them from leaving the premises. Training requirements can be enforced through certification validation that automatically allows only certified personnel to perform certain types of transactions. Workstation setup and machine/program recipes can also be validated to reduce the cost of quality. In addition to validation, rich and visually appealing guided instructions can empower employees to do the highest-quality job possible. If defects are found, the system makes it simple to log them in a timely and accurate manner for immediate attention; when integrated with statistical process control (SPC) systems, the MES platform can trigger actions to contain, hold, or restrict the defect.

3. Enable intelligent product, process, and document revision
As products become increasingly complex and differentiated, processes also must become more robust. By intelligently managing linked relationships between BOMs, DHRs, CADs, and other documentation, as well as assembly instructions, product history, test plans, and quality issues, a holistic MES/QMS makes it easier to perform real-time revisions and updates, reflecting them across all interrelated parts and documents. This enables robust change control, supplier coordination and collaboration, quality management, and business process improvements. The system can also be used to document the process of manufacturing—the “how,” not just the “what,” of a product being built. Ultimately, these improvements allow manufacturers to cost-effectively adapt to the changing conditions and constraints of their factory environment, improving quality operations every step of the way.

4. Unleash continuous process improvement
Instead of merely keeping quality in and defects out, continuous process improvement empowers manufacturers to begin making significant improvements to their businesses. It defines, controls, supports, and maintains their quality process, from complaints, to nonconformance, failure reporting, analysis, and corrective action systems, and more. Instead of tracking manufacturing nonconformances in a separate system, which prevents quality and manufacturing teams from accessing the information, an MES/QMS solution instantaneously handles nonconformances and corrective actions—including rework, repair, and scrap—with full transparency for all stakeholders. With continuous process improvement, everyone can access and view all issues, actions, and steps through to final resolution in one, central system.

5. Create a holistic, single source of truth
The automated collection of quality data and contextual access via MES/QMS results in tremendous opportunities for effective analysis and reporting. This is established via real-time dashboards that warn of impending issues and process performance; condition-generated reports sent immediately to mobile devices when needed; real-time process interlocking of machines and conveyors based on control conditions; visual quality data collection; repair guidance; diagnostics support; and more. This entire reporting engine creates a single source of truth with the ability to collaboratively traverse data in real time and gather deeper insights than was previously possible with basic dashboards and reports.

6. Achieve forward and reverse traceability and visibility
When a recall occurs, a factory’s traceability system must ensure that every faulty unit is identified and recalled while avoiding the recall of any “good” quality items unaffected by the problem. Simply erring on the side of caution and recalling more units than necessary is not only bad for brand image but also highly inefficient. Total process, product, and material traceability is an essential building block to operational excellence. With a robust MES/QMS system, one built with granular traceability at its core, manufacturers can automatically trace the entire scope of their operations, from operator data to process variables, to electronic approvals, and multilevel confirmations. This type of forward and backward visibility can’t be overlooked. It drives operational intelligence before, during, and after quality has been called into question.

7. Build a connected and collaborative ecosystem
Complete awareness of everything, including people, processes, and technology, is critical to quality. It is essential to have an efficient, easy-to-use method of collecting and analyzing data without the burdens of excessive costs or time. With industrial MES/QMS platforms, intelligence is gathered both horizontally and vertically from machines, devices, and systems—such as enterprise resource planning—to seamlessly facilitate transactions, process, and logistics. MES, therefore, plays a crucial role in collecting and analyzing data that can be leveraged by the entire enterprise system, serving as the digital hub of information and connectivity.

8. Ensure adherence to regulatory and customer compliance
Finally, for regulatory and customer compliance, manufacturers may already be compiling the necessary data needed to meet all regulations. However, by taking one step back and using an integrated MES/QMS to assess the ease and accuracy with which these data are being collected, interrogated, and disseminated to customers and regulators, manufacturers can create an audit support system that is as cost-effective as it is precise. This adds a new layer of confidence to audits, certificates of conformance, and all compliance documentation, and it can be done with a few simple clicks.

Eliminating redundancies and errors, reducing product delays, simplifying compliance, and improving collaboration and decision-making can all coexist while delighting customers.

Discuss

About The Author

Jason Spera’s picture

Jason Spera

Jason Spera is CEO and co-founder of Aegis Software. He is a leader in MES/MOM software platforms for discrete manufacturers with particular expertise in electronics manufacturing. Founded in 1997, today more than 2,200 factory sites worldwide use some form of Aegis software to improve productivity and quality while meeting regulatory, compliance and traceability challenges. Spera's background as a manufacturing engineer in an electronics manufacturing company and the needs he saw in that role led to the creation of the original software products, and continue to inform the vision that drives Aegis solutions today. He regularly speaks on topics surrounding factory digitization, IIoT, and Industry 4.0.