Three Reasons Why Closed-Loop Quality Management Strategies Fail

For years, executives have tried to create closed-loop environments where processes and data in each stage of the value chain benefit from cross-functional communication and collaboration. And for a number of reasons, this has proven difficult.

Over time, the rising complexity of products and processes has prompted many organizations to reconsider the effectiveness of current quality management capabilities and strategies and invest in emerging technologies to close the loop on quality management.

Because every organization is different, each will take a unique approach to creating and utilizing closed-loop quality processes. However, the end game is similar: improve the quality of products and processes. In its discussions with industry-leading executives, LNS Research has identified several reasons organizations are finding problems with closing the loop on quality. Specifically, executives see common roadblocks around optimizing people, processes, and technology.

This article looks at some of the challenges associated with creating a closed-loop environment, many of which tend to correlate with outdated and obsolete quality efforts regarding people and leadership, business-process capabilities, and technology architecture.

Misaligned high-level support and culture: Effective quality management requires an organizational commitment that starts with top-level support. Without it, decisions, strategies, and technologies to improve the quality of products and processes tend to be dispersed and decisions made without considering the effect on the broader enterprise. Executive buy-in also helps to support a harmonized culture that encourages all employees to consider how their actions will affect critical focal points such as the cost of quality.

Many organizations face this challenge. In fact, to put this into perspective, LNS Research’s 2012–2013 Quality Management Survey asked nearly 400 executives what their most pressing quality management challenges were (see figure 1). More than 50 percent stated that quality was viewed as a department rather than a responsibility, meaning that employees outside of quality-specific functions were not taking ownership of their impact on the quality of products and processes.

Figure 1: Top quality management challenges. Click here for larger image.

Lack of long-term quality vision around business processes: Large organizations, especially globally distributed ones that have experienced considerable merger-and-acquisition (M&A) activities, will typically have several solutions for the same quality process. Although they may vary by plant, business unit, division, or geography, processes such as corrective and preventive actions (CAPA) management or audit management each target a similar goal. The resulting lack of standardization from M&A activities and fragmented approaches to quality create a serious challenge for companies looking to close the quality management loop.

Inspecting data from the Quality Management Survey, in 2012, 47 percent of executives stated that a serious challenge was created by having disparate quality systems and data sources. Given the widespread use of manual processes and solutions that were implemented for targeted and local quality problems, this comes as little surprise. Today, many executives are faced with a tangled web of processes and solutions that require considerable backend work just to communicate a standardized set of quality data.

Disconnected technology architecture: Despite the emergence of the Enterprise Quality Management Software (EQMS) category, not many organizations have automated, standardized, and centralized quality functions using such a platform. This aligns with the challenge surrounding disparate quality systems and data sources.

Further complicating this challenge, within a large and distributed organization that is susceptible to M&A activities, it is not uncommon for there to be more than one instance of an enterprise application such as enterprise resource planning (ERP), manufacturing operations management (MOM), product life-cycle management (PLM), customer relationship management (CRM), or supply-chain management (SCM).

Because processes are often built into and on top of disparate enterprise applications, these can be a roadblock for closed-loop quality management. Rather than having a seamless solution for real-time communication and collaboration, in many cases these data are never seen at the enterprise level. Or, if they are, it may take significant resources—particularly time and analysis—to get the data to a point where they are useful in substantially improving a process or effecting a future decision.

Optimizing key resources for effective quality management

To effectively improve the quality of products and processes across the value chain, closed-loop quality management should be a key area for both attention and investment. Executives considering adding strength to their quality management portfolio should assess current quality capabilities, culture, and IT architecture in relation to emerging strategies. By focusing on overcoming these challenges, market leaders are benefiting from communicative and collaborative capabilities that were traditionally sources of major hurdles.

These are the main challenges we’ve heard about from quality leaders. What are some of the challenges you’re currently experiencing or have overcome by optimizing people, processes, or technology?

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