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Mehul Shah

Quality Insider

Companies With EQMS Outperform Others in OEE Performance

It's important to focus on measuring and continuously improving overall equipment effectiveness

Published: Tuesday, May 21, 2013 - 13:20

Most people think quality is all about compliance, but it delivers operational benefits as well. From our research, it is apparent that companies that have taken an integrated, holistic approach to quality with technology such as enterprise quality management software (EQMS) considerably outperform others in key quality performance indicators.

In identifying areas for cost savings and efficiencies, it is often helpful for an organization to focus on measuring and continuously improving the overall equipment effectiveness (OEE) metric. Combining parts of quality, efficiency, and asset availability, OEE is a holistic business measurement on which many market leaders are focused.

With the use of benchmark data from LNS’s 2012-2013 Quality Management Survey, this article will discuss the technologies and strategies organizations are utilizing to improve OEE as well as provide some insight into the performance improvements experienced by organizations that have implemented an automated EQMS solution.

The operational benefits of EQMS processes

When used correctly, the OEE metric can deliver visibility into the effectiveness of quality management processes and solutions from across the value chain. Today, many of these processes can be automated with EQMS, providing managers with a robust, centralized, and standardized solution for globally inspecting quality process data and content.

Automating the following processes and functionalities with EQMS can have a dramatic effect on OEE:

Corrective and preventive actions (CAPA) management

Automated CAPA management streamlines traditionally manual and paper-based processes such as approvals and escalation. EQMS facilitates the use of CAPA management, enabling organizations to identify root causes quicker and communicate those root causes to the entire organization. This is a critical component for realizing continuous improvements in processes as well as OEE over time.

Change management

In many cases, manual change management processes have resulted in a lack of communication, making it difficult to identify how a specific change may have affected a manufacturing process. By automating change management, managers can leverage a centralized solution as products and processes shift over time, facilitating the prevention as well as resolution for any nonconformances that may arise.

Audit management

The process of audit management can be beneficial to both internal and external efficiencies. By automating the process with EQMS, organizations can ensure that issues are being identified, resolved, and followed up on in a timely manner. Especially in a large global organization, a strong, automated, standardized, and centralized audit management solution can provide considerable improvements to efficiencies that reach down to the bottom line. 

Supplier quality management

An important challenge many companies have is realizing the potential of the global supplier network. Suppliers can help to improve costs, but the lack of visibility into upstream operations often gets in the way of this. By automating supplier quality management with EQMS, managers can open up a line for communication and collaboration with suppliers and partners, which can help to identify nonconformances earlier the in value chain.

Which functionalities are organizations automating with EQMS?

The 2012-2013 Quality Management Survey asked nearly 500 executives questions regarding people, processes, technology, and metrics. Those executives that indicated the use of EQMS to manage quality were prompted to list which specific functionalities their organizations currently had implemented, which is depicted in the chart below.

eqms functionalities adoption

54% of companies are automating the CAPA process with Enterprise Quality Management Software. Tweet this stat. (Click here for larger image.)

As you can see, 54 percent of executives stated that their organizations are automating the CAPA process with EQMS. Numbers were lower for the other functionalities that have a direct effect on OEE, with audit management at 34 percent, SQM at 32 percent, and change management at 23 percent. However, from our discussions with industry-leading executives, there is a growing interest in the EQMS solutions category. This will be an important data point to review over the years. 

The effect of EQMS adoption on OEE performance

In our analysis of the quality data, one area that stands out is the effect of EQMS on OEE. As shown in the chart below, executives stating that their organizations embraced an EQMS solution outperformed others, with a median OEE performance of 88 percent. This is considerably higher than those companies with no plans for an EQMS implementation (79.5%).

quality management performance

Companies that automate quality processes with EQMS outperform competitors in OEE performance. Tweet this stat. (Click here for larger image.)

More than 50 percent of organizations using an EQMS solution reporting a median OEE of 88 percent or higher, which is strong evidence of the consistencies that EQMS can deliver to quality management. Companies looking to improve the OEE metric should consider implementing an automated EQMS solution to strengthen the effectiveness of that individual process as well as related processes that can benefit from a closed-loop quality environment

There are a variety of ways companies can implement an EQMS solution, ranging from standalone functionalities or modules to extensions of existing enterprise IT investments. It is highly recommended that those responsible for making quality management decisions educate themselves about EQMS.

LNS Research's EQMS Solution Selection Guide has helped hundreds of executives on their quality management journeys learn about the software category's top vendors. It can be found below. In the comments section of this post, please feel free to share your experiences with automating quality management processes.

Enterprise Quality Management Software


About The Author

Mehul Shah’s picture

Mehul Shah

Mehul Shah is a senior associate at LNS Research, developer of solutions for industrial operations management. Shah builds solutions that will help executives leverage results from research. Shah has experience in managing quantitative and quality research projects and has provided practical insights to senior executives to improve operational and financial performance. He is a recognized speaker on various topics including sustainability, asset management, and quality management.