As the manufacturing industry spins its web across the world more and more, the network connecting businesses and their partners become much more complex. One of these areas most impacted is a company's supply chain, the main catalyst of one's ability to produce and distribute their products as efficiently and to as large and diverse of a customer base as possible. While this broadening supply chain ability certainly brings along many benefits, the ability to manage risk, particularly in the area of quality, becomes quite challenging.
In a new report released by Sparta Systems, entitled “Four Best Practices To Improve Quality In The Supply Chain”, Mohan Ponnudurai, Industry Solutions Director for the company, discusses the difficulties manufacturers are encountering in their supply chains with respect to quality, and offers a quartet of solutions aimed at not only remedying the issues at hand, but ensuring that they don’t occur again down the road.
“From a supply chain perspective, we are seeing more and more companies identifying their supply chains as a real differentiator for their business, as a great portion of their product issues are discovered after they have entered the market via recalls or customer complaints,” Ponnudurai says.
According to an accompanying research report conducted by Deloitte Consulting, 52 percent of recalls result from supplier and contract manufacturing issues. “Product recalls are up 135 percent since 1999, and while 58 percent of executives manage this issue through indemnification, relying on this solution is unsustainable and fails to address the real issues at hand,” he says.
Ponnudurai points to companies dealing in high degrees of technology as those who may have the most to lose. “For these high tech companies, they have suppliers at not just one but multiple levels,” he says, continuing, “while commodity suppliers may be easier to find alternatives to, others more crucial to the product’s uniqueness become a differentiator, and the relationship between the business and them is more of a partnership rather than just a supplier.” So how does a company ensure that their relationship with these critical suppliers is as effective as possible so that quality in the product isn’t lost? Before offering the solution, Ponnudurai first identifies the source of the issue.
“Visibility into the supply chain, and the subsequent deficiencies that emerge as a result, is a major issue for both manufacturers and their suppliers,” he says, adding, “with companies having anywhere from a hundred to over a thousand different suppliers, there is a significant disconnect in communication between both sides.”
The report lays out four distinct practices that serve to address and alleviate these issues:
Broaden the Scope of Supplier Assessments
The report states that most companies restrict supplier performance measurement monitoring to less than 33 percent of their total supply base, opting to typically focus on suppliers that spend the most, or have a strategic relationship regarding a key product or client company. “While these suppliers serve important roles for these companies, there are plenty of others whose relaxed supervision can lead to quality issues that add up over time and lead to a negative impact on profit and brand reputation.”
Establish Clear Measurement Programs
While companies are actively attempting to monitor their supply chain partners’ performances in specific areas such as ‘Quality’, ‘On-Time Delivery’, ‘Service’, and ‘Total Cost’, many lack the tools needed to accurately quantify and measure their suppliers’ performances in a meaningful manner. In fact, according to a study conducted by Aberdeen, just over half of enterprises leverage automation tools to support measurement and monitoring of their suppliers.
Invest in Infrastructure
The report states that according to findings from LNS Research’s 2013 Quality Management Survey, companies that have deployed a supplier quality management solution reported an average success rate of 94 percent for New Product Introduction (NPI) versus 70 percent success for those companies that have not deployed such a solution.
“Enabling process based communication such as escalations and approvals, and automating quality workflows such as Supplier Corrective Actions, delivers improved visibility and control,” Ponnudurai says, “much of this can be achieved through a leveraging of cloud computing.”
Closing The Loop
Managing supplier related non-conformances and corrective actions is a key challenge for manufacturers. However, Ponnudurai says that today’s leading companies are remedying this issue through “leveraging technology to connect and integrate suppliers into quality management processes, allowing themselves to extend the features and benefits of internal quality management systems to suppliers with the goal of facilitating efficient communication and faster resolutions.”
These four practices are all aimed at improving a company’s visibility, traceability, accountability, and profitability with regards to their supplier partnerships. In fact, Sparta Systems themselves provide a couple of tools, amongst others, that directly serve as mediums for the four practices that Ponnudurai lays out. Its flagship solution, known as TrackWise™, is a platform that provides an enterprise quality management solution (EQMS) that optimizes quality, ensures compliance, reduces risk, and lowers costs for global manufacturers. Complimenting this tool is a web-based software-as-a-service (SaaS) application called Stratas™, which connects suppliers inward to a company’s TrackWise application, thus enabling a two-way near real-time communication that creates desired transparency, management, and control over third-party quality.
Additionally, Sparta sees the world is moving towards mobile connectivity, and the manufacturing enterprises are accessing crucial tasks and activities through tablets, smartphones and other connected devices. TrackWise Mobility provides access to these dispersed stakeholders.
Finally, there is so much data being generated through complex activities in the manufacturing sectors. Having visibility to crucial data, analysis of forward looking trends and threshold based notifications allow decision makers to make insightful and timely decisions to be proactive, effective and efficient. TrackWise Analytics provides this informational insight for increased visibility, transparency and capabilities at all levels.
“Quality is at the foundation of a product’s success, and companies are seeing that, in today’s world, quality is a dynamic component that brings both tangible and intangible values to their business,” he says, adding, “the tools we offer designed towards these solutions mitigate these issues by expanding beyond the four walls of communication and operate in a manner that is conducive to today’s high-speed, complex world.”
For more information on the report, TrackWise™, Stratas™, or Sparta Systems as a whole, visit http://www.spartasystems.com/.
About Sparta Systems
Founded in 1994, Sparta Systems maintains an extensive customer base in pharmaceuticals, medical devices, biotechnology, CROs, consumer products, electronics manufacturing and other highly regulated industries. The company offers its customers a global quality management software solution, including the onsite solutions delivery support required throughout the project lifecycle. Sparta Systems’ goal is to offer solutions that minimize risk and provide ROI for customers with an enterprise system flexible enough to manage any process and scalable enough to support thousands of users around the globe. As a result, Sparta offers a “one-stop shop” platform for achieving compliance, improving control and reducing costs.