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Operational Excellence: Becoming the Preferred Supplier, Phase 3—Re-engineer Your Quality System

The final phase of becoming a preferred supplier is to apply a business process re-engineer approach to your quality system. Before you start with this phase, the company should have implemented Phase 1 and Phase 2, which are focused on changing its leadership mentality to embrace LEAN Six Sigma and the pillars of operational excellence. It’s paramount to have the right mindset before you re-engineer your quality system.

Most organizations build their quality systems for compliance to ISO 9001 or industry-specific standards, such as AS9100, ISO 13485, TL 9000, or TS 16949. It’s important to maintain these certifications to reassure existing and new customers that the manufacturing facility has implemented quality systems compliant to a recognized quality management standard. However, a mistake that is often made is to develop procedures and a structure solely focused on passing registration and surveillance audits to maintain these certifications.

The business objective when implementing a quality management system is to develop closed-loop systems and practical procedures that enable employees to manufacture and consistently deliver quality products on time to customers. The quality management system certifications should not be your end goal; customer excellence should be the goal of an effective quality system.

ISO provides valuable guidelines on implementing quality management systems to the various standards. One document that every manufacturing leadership team should read is “Quality Management Principles” from the International Organization for Standardization (ISO) [1]. This document delivers practical information in establishing the fundamentals of a quality management system, including:

• Customer focus
• Leadership
• Engagement of people
• Process approach
• Improvement
• Evidence-based decision making
• Relationship management

These principles provide the basis of how an effective quality management system should be developed. The guidelines in the next paragraphs provide supplementary guidelines to these quality management principles. These are five practical and proven approaches that can help you re-engineer your quality management system for customer excellence.

1. Lowest Common Denominator: Less Is More

I once audited a printed circuit board assembly factory and asked for their document listing. The listing was impressive and had over 500 procedures that had been created over 15 years. These procedures had comprehensive instructions and technical information that gave the impression of assurance. However, as I asked operators and technicians in the production line to explain their process steps and point out the steps of the procedure, it was quickly apparent that they knew their processes well but were not familiar with the respective procedures. The process engineer knew where to find the information in the procedure, but the end user—the operator—was not so sure. To address this common issue, some companies have created work instructions as the least common denominator of information that every production line personnel should master. These companies have also created technical documents that support these work instructions for trouble-shooting and problem-solving purposes where engineering is involved.

As you evaluate your current quality systems, put yourself in the shoes of the end user, and create simple-to-read, value-added instructions. Also, your supporting technical documents should not be lengthy. Keep the most essential and useful information available to support your operations.

2. Redefine Your Training Philosophy

Is your training program built to satisfy the ISO auditor? Or is it built to elevate your company’s performance into a world-class organization? Training can be a controversial topic in organizations. Defining the return on investment on hours trained can not always be quantified in accounting. How many hours can you let employees off the production line to invest in training? Is your training program ISO-compliant? Does the current training material provide value to your operations? Those are questions that are discussed in every organization.

Here is an approach that companies should consider taking. Don’t make training a burden to operations; instead, make it part of the operations process. Training can be incorporated as part of your day-to-day operations and a deliverable for every employee during the day. Design a training system where your production supervisors, process engineers, or area trainers can allocate a small percentage of the time each day to carry out on-the-job training. The key component here is to make it simple so that you cover a small element of knowledge each day—possibly 5 to 10 minutes with each operator. During the year, you will have covered at least 1,200 minutes of one-on-one training per operator, which equates to 20 hours of essential, practical on-the-job training. The goal should be to bring the competence and knowledge level of each employee to a higher level on a daily basis.

3. Eliminate Bureaucracy

How many signatures are required to approve a procedure or process plan? How long has a corrective action been open for because you are waiting for a final signature? Is your quality system built on LEAN principles or hierarchical structure for it to function?

Do not confuse a comprehensive review of a document requiring every manager to sign a document before it’s released. You need to clearly identify roles and responsibilities to review and approve documents in your quality system. There should also be a process to communicate and give the opportunity to others for informal reviews before a document is released. Here is an approach that works well in LEAN organizations:

1. Designated approvers of a controlled document should consist of your subject-matter expert, quality systems oversight, and a senior manager accountable for that process.
2. Provide a 72-hour grace period where a pre-approved document is available for review by other subject-matter experts and managers in the organization. This gives the opportunity for anyone in the organization to identify a possible discrepancy or concern with the document. Ultimately, the accountable manager for that process determines what input(s) will be considered in the document.
3. Once the grace period has passed without any further revisions, the document is released in the system as an approved document.

This approach addresses the most common form of bureaucracy in an organization. There should not be situations where improvements are not taken because a document is paralyzed in a review and approval cycle.

4. Walk in Your Customer's Shoes

One of the defining elements of a quality system is the effectiveness of its corrective action and preventive action (CAPA) system. Customers understand that every supplier will experience product failures or shortcomings during the production and order fulfillment process. When a failure occurs, the customer will initiate a corrective action request to the supplier and this is where the supplier can shine or disappoint in the customer’s eyes. Customers expect that a supplier will do diligent root-cause analysis and provide a technical approach in preparing a corrective action response. The customer will place faith that the supplier has taken the necessary steps to prevent the problem from reoccurring.

The moment of truth will occur in two stages. The first stage will during the initial review of the corrective action response. Three factors are evaluated:

1. Did the supplier respond on time to this corrective action?
2. Did the supplier provide a comprehensive root cause analysis, containment, and corrective action plan that addresses the issue? The quality of the response should be remarkable
3. Has the supplier outlined how will the actions be verified for effectiveness? This is one of the differentiators between average supplier and outstanding suppliers

The second stage will occur during the implementation of the corrective action plan and monitoring phase. This is where the supplier should proactively monitor and provide objective data to the customer demonstrating that the problem has been addressed and subsequent production runs don’t show the failures. The customer will gain a higher level of respect and confidence with a supplier that has applied due diligence in preparing a response, implementing action plans, and providing objective evidence to prove the problem has been addressed.

When you re-engineer the CAPA system, put yourself in your customer’s shoes and make sure that your CAPA system is best-in-class.

5. Leave a Lasting Impression

Customers have several options in selecting suppliers to fulfill their needs. Becoming a preferred supplier takes a concerted effort to be unique. The minimum expectation is for the supplier to deliver products with good quality and on-time. The differentiator will be the overall customer experience a customer has with a supplier. When you re-engineer your quality system, make sure that all processes that have customer-facing interactions have been designed to provide your customer with a positive, lasting impression. Make your organization stand out amongst your competitors with these two principles:

1. Constant communication with your customer.
2. Proactively provide data, plans or technical reports before your customer asks for this; be one step ahead of your customer and two steps ahead of your competitors.

References

1. "Quality Management Principles," The International Organization for Standardization, Edition 2, 2015.

Alfred Macha is the president of AMT Partners.

This article was initially published in the August 2019 issue of SMT007 Magazine.