Disjointed and Disconnected

Research shows more organizations turning to enterprise quality management software to deal with quality issues
Manufacturing and industrial executives face more challenges related to product and process quality than ever before.

In today’s global marketplace, manufacturing operations are becoming more complex as facilities and suppliers expand in number and geographical location. Add in the dynamics of consumer preferences and regulations, and business leaders have much on their plates.

In addition, it’s common for quality management strategies and IT capabilities to vary considerably between facilities and regions, with solutions to many challenges implemented as needed. Rather than acting as an enabler of stronger quality management, disjointed systems and data sources often hinder executives’ ability to address these new enterprise challenges.

To keep pace with these challenges, more business leaders are adopting—or planning to adopt—enterprise quality management software (EQMS), an emerging software category that allows organizations to globally standardize, streamline and centralize key quality processes.

According to new research by LNS Research, a Cambridge, MA-based technology research firm focused on the industrial space, the software takes a more modern, holistic approach to overcoming quality challenges and can consolidate many of the traditionally manual and isolated processes that surface as roadblocks to improvement.

More than 500 executives from a wide range of industries and organization sizes participated in the LNS Research 2012-2013 Quality Management Survey, which highlights quality executives’ objectives and challenges, and illustrates the need for a more comprehensive solution for managing quality.1

Objectives, pain points
Early in the survey, executives were asked to rank their top quality management objective. The top executive goal was to reduce the total cost of quality; 37% of executives chose this as a top priority across industries (see Figure 1).

Figure 1

Given the level of detail into the effectiveness of quality processes the cost of quality metric can provide, perhaps it’s not surprising that reducing it was ranked as the top quality management objective for most decision makers. The second and third-most important objectives for quality executives were to reduce nonconformances in manufacturing and improve customer experience.

The survey also asked quality executives what their biggest quality challenges were in 2012. Participants were not limited to just one response. The primary challenge surrounding quality was effectively measuring quality metrics, with more than 55% of executives identifying this as a main concern (see Online Figure 1). Interestingly, the top challenge aligns with quality executives’ top objective of measuring cost of quality.

Online Figure 1

For the second-most prevalent response, more than 50% of quality executives said their organization’s cultural approach to quality was a challenge because quality was viewed as an individual department, not a shared responsibility across the enterprise. The challenges of handling disparate quality systems and data sources were the third-highest response, with about 45% citing this.

The top challenges are symptoms of having disconnected quality systems and data sources across the enterprise, and they are best overcome by consolidating and integrating IT efforts across the value chain. Without this integration, it is typically too expensive and resource-intensive to get a holistic picture of the cost of quality and effective quality metrics. EQMS can help organizations bridge the gap between disparate quality systems and data sources and enhance the ability to effectively measure quality metrics.

Taking on challenges
EQMS software can help organizations achieve this big-picture visibility with a platform approach that supports cross-functional communication and collaboration on various quality issues. The solution automates traditionally manual processes such as compliance management, audit management and supplier quality management, allowing standardized instances of those processes to be deployed across the enterprise.

Organizations typically choose to globally standardize with EQMS only those processes that deliver substantial synergies at the enterprise level. For this reason, methods for deploying EQMS tend to be unique to each organization.

LNS Research has seen consistency in some of the highest implementation rates, however, with functionalities such as corrective and preventive actions (CAPA) and document management. Because CAPA is so widely used, it generally makes sense to deploy it across the enterprise with EQMS. Delivering CAPA with EQMS drastically reduces enterprise risk, and similar benefits are being experienced with other EQMS functionalities as well.

As more quality executives see the potential return on investment from standardizing quality processes that benefit their organizations on a single platform, EQMS implementations are expected to rise, which the survey data also shows. The survey asked quality executives about adoption rates of EQMS, as well as those of more commonly implemented enterprise solutions such as enterprise resource planning (ERP) and business intelligence (BI) for perspective. Though only about 20% said they had currently implemented EQMS software functionalities, 27% said they were in the planning stages of an EQMS implementation (see Online Figure 2).

Online Figure 2

Contrast this with ERP and BI, which both had higher current adoption rates at about 75% and 40%, respectively, but also had a lower percentage of survey respondents in the planning stages. About 15% of survey respondents replied that an ERP implementation was in the planning stages, and about 18% were in the planning stages for BI. These data are indicative of potential growth of the EQMS space in the near future, and of the value quality executives and technology decision makers are seeing in its functionality.

EQMS and operational metrics
Users of EQMS applications reported measurable improvements in several operational metrics, such as overall equipment effectiveness (OEE), a holistic business measurement that includes quality, efficiency and asset availability.

According to the survey, respondents who implemented EQMS software experienced a median OEE that was 8.5% higher than that of organizations without EQMS functionality.

Respondents with EQMS capabilities also reported a 3% higher on-time delivery rate median, a 3% higher products in compliance median and a successful new product introduction median of 24% more than those that lacked capabilities. The data show integrating disparate systems and leveraging centralized and automated workflow capabilities with an EQMS allows organizations to streamline processes and better react to any quality issues that arise.

Compared to the past, the complexities of today’s competitive environment can no longer be supported by a disjointed quality IT architecture. As technological capabilities advance and the world becomes even more interconnected, issues around quality will be subject to growing supply chains and heavier scrutiny.

The need for EQMS is growing, and the 27% of respondents who noted an implementation on the horizon are positioning their organizations for a competitive advantage in quality.

Reference
Matthew Littlefield and Mike Roberts, "The Global State of EQMS," LNS Research, Sep 10, 2013, www.lnsresearch.com/research-library/research-articles/the-global-state-of-eqms-ebook-.

Article Credits: QP