Mohan PonnuduraiIndustry Solution Director

Sparta Systems, Inc.

Do More with Less Using EQMSThe Benefits of Enterprise Quality Management

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Agenda

Industry Issues/Challenges Quality Management Framework Business Pains Current State of Systems What should be Considered Value, Benefits and Considerations Summary and Q&A

Key Takeaways Quality in the C-Suite Collaboration Power of One Visibility/Analytics COPQ Reduction Improved OE

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Your Ideas and Concepts

Business Critical Functions Specialized Systems Localized Processes Point Solutions Internally ‘jigged’ systems Custom/Manual Operations Integrated Platforms

Heavy investments made it best of breed solutions

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Today’s Manufacturing Business Issues

Globalization

Product Life Cycle (PLC)

Mergers and Acquisitions

Compliance

Economic Cycle

Supply Chain Disaggregation

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Industry Pressures

Cost Pressure Margin Pressure Customer Satisfaction/Retention Risk Management Supply Chain/Supplier Management

Recent Developments

Insolvency of Manganese Bronze Holding (London TaxiCab manufacturer)

Apple quality issues Foxconn employee concerns (overwork, underage) Elpida Memory (biggest Japanese BK and

liquidation) Sony (cutting production, shrinking business, selling

buildings/facilities) AMD cutting 30% of workforce Quality issues at Ranbaxy Safety recalls at Food processing plants

Solutions• Outsource

• Cut Personnel• Consolidate• Improve OE• Cut Costs

Sales / Marketing / PlanningLogistical Information Flow

ERP

Defining Quality Management Scope

Innovation Management

Portfolio Management

New Product Development

Manufacturing & Quality

Operations

Product Field Performance

Sales & Marketing

Production Planning

Sourcing / Supply Chain

Delivery Logistics

After Sales Service

Innovation Lifecycle

Value Chain

R&D / EngineeringProduct Information Flow

PLM

SourcingSupplier Information Flow

SCM

Distribution & Field UseField Information Flow

CRM

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Business Pains

Invested Technologies Pillars are Islands Siloed other data Untimely detection or resolution NVA Activities Visibility Lessons Learned

A Day in the Life Of… A Scenario

Supplier Rec.

Record event on supplier history

Insert inspection and material details

Follow inspection criteria instructions

Record results

Receiving Inspection

Inspection results in

a non- conforming

material

NCR

Trend Detection Correction Root Cause Determination

CAPA Determination

Materials Received at the Dock

A Day in the Life Of… A Scenario

CAPA

Collect all data Investigate and record root

cause FMEA Implement corrections

NCR Investigation

reveals aSystematic

issue

EffectivenessCheck

Document Change

Change Plan Risk Assessment Design Change Execution

Check Plan Check Execution Approvals

Need tocontinuously

verify effectiveness

of CAPA actions

SOP changeis required to

equipmentmaintenance

procedure

Supplier Audit

Schedule and plan audit Execute audit on-line/off-line Record findings

Supplier record Shows 5 relatedQuality events

In the lastmonth

Supplier CAR

Schedule and plan audit Execute audit on-line/off-line Record findings

Revision to equipment

maintenanceprocedure

triggersCAPA process

What should be done?

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Pressures Cost Control Competition Collaboration Margin Value (SH, Brand)

Ideal Outcome Be competitive Be responsive Be profitable Manage Risk Improve visibility Single platform

Reality Check

True Cost of Poor Quality

(COPQ *)

Replacement Cost ScrapSupport Effort

Warranty Cost

Recall

* COPQ is 15-25% of total costSource: ASQ

Data collectionProductivity LossUser Dissatisfaction

Re-Work

Inventory Costs

Customer Retention

Brand/Image

Adverse Social Media Chatter

Additional Advertising

Customer Satisfaction

Internal Training

Investigation

Overtime costs

FRACAS/CAPA

Opportunity Costs Fix / Workaround

Impact on other Programs

Documentation

Customer Goodwill

Supplier / Logistics

TestingCertification

Product LiabilityCosts

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Current State

• Pressures of cost control, risk management, better supplier network, etc.

• Demands of increased PLC, broader value chain, shareholder value, reputation, etc.

• Pillar systems and many point solutionsERP

MES

PLM

Other

$$$

• Innovation Lifecycle• Value Chain• Brand• SH Value

PP P

PP

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Ideal State

• Pillar systems do not manage quality processes well; reason for point solutions

• Multiple data islands• Integrated solution with quality

pillar• Completeness of Quality vision

ERPMES

PLMOther

PP P

PP

ERP PLM

MES Other

EQMS

CURRENT STATE

IDEAL STATE

Survival – Value and Benefits

Centralized Harmonized Transparency Empowered

Stakeholders Collaborative Risk Accessibility to

Information

Top reasons for Quality Management System

Source: Aberdeen Research

The Balancing Act

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Tools,

Systems,

Platforms, &

Architecture

Best UseExecution

The Balancing Act

ProcessCapability

Technology Capability

Improve

Execute efficientlyAdapt & improvise effectively

Institutionalize & measure accountability

Quality Management Processes

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Text Goes Here

Text Goes Here

Text Goes Here

Text Goes Here

Text Goes Here

Lab IssuesDeviations & Incidents

AuditManagement

Supplier Quality Management

Training Management

Investigations

Risk Evaluation

Root Cause Analysis

Effectivity Analysis

Customer/Field Issues

CAPA

Change ControlBatch / IT / Process / Document

Material / Equipment

Identifying the benefits from efficient execution,

thoughtful improvement & effective tools & technology

Effective Quality Management Framework

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Enterprise Quality

Management

Identify

Analyze

Correct

Contain

Prevent

Reporting

Analysis

What benefits are delivered?

Functional Benefits Scalability of the system Visibility and transparency into critical issues

throughout the entire organization Ease of data entry and transfer across the organization Faster issue resolution, reduced non-value add

activity, reduced costs Ability to manage enterprise auditing from the

executive suites to the shop floor and suppliers within one centralized repository – this creates visibility and saves $ by sharing information between various audit groups

Suppliers

HQ

Shop Floor and Labs

Quality

Plant Management

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Supplier Quality Management

Key part of the value chain

Broad supply chain Collaboration Methods

- Audit- CAR- Scorecard- Faster Resolution- Effective supplier

network

Managing Suppliers as part of the Quality Framework

Source: Aberdeen Research

Values and Benefits

ROI

Value – Now and recurring benefits How does this provide rapid ROI What can you do as ongoing leverage of initial investment –

constant benefits Adjacent Functions

Success Factors

Give Quality a seat in the C-suite- Visibility of KPIs- Decision making capability

Make Quality a team sport - Top to bottom culture

Increase Collaboration- Internal cross functional and external (suppliers)- Accessibility of Information through Dashboard and Analytics

Link Quality to Risk – Cost, OE, Brand, SH Value- Shift to leading indicators instead of focusing on event based activities

Power of One – Values of a single system One size does not fit all

- Standardization- Variability in Work flows based on business rules

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