Best-in-class companies are 111% more likely than their competitors to have real-time interoperability between their PLM and quality management systems.

A recent study on collaboration and technology interoperability benchmarked over 300 manufacturing executives and found that best-in-class companies are 111% more likely than their competitors to have real-time interoperability between their product lifecycle management (PLM) and quality management systems (QMS). Indeed, this approach in technology delivers significant value to companies that have made the investment.

Quality can be a powerful competitive advantage, but ensuring that quality products are delivered to market takes a team effort. Achieving closed-loop quality management allows organizations to attain this goal. It is valuable to identify how manufacturers with PLM and QMS software interoperability are able to effectively ensure quality and identify the differentiating capabilities that are supported through this interoperability.

Software Interoperability

The impact quality can have on corporate performance is often misunderstood and underestimated by manufacturing organizations. If we examine the design-make-deliver processes, there are a number of workflows where the incorporation of a closed-loop quality management initiative would yield tangible benefits. Interestingly, previous research has established that PLM and QMS software interoperability is a key technology enabler of closed-loop quality management.

To better understand how well organizations that have invested in PLM and QMS software interoperability are achieving closed-loop quality management, it is useful to examine two types of firms: those that have invested in PLM and quality management, and those that haven't. Manufacturers that have implemented a PLM and quality management interoperability solution are better able to manufacture products and subsequently get them to market quicker and at a higher quality-all while streamlining operations across the design-make-deliver process (see Table 1).

In fact, these manufacturers are able to achieve an 83% overall equipment effectiveness (OEE) rate across the board, which shows that these companies are better using their assets because of improved quality capabilities. They also enjoy 6% more successful new product introductions. In certain industries, even a 1% or 2% increase can have a significant impact; a 6% advantage can translate into millions of dollars of business. In addition, these manufacturers were able to achieve a 90% on-time and complete shipment rate.

Companies that have yet to implement system interoperability between PLM and QMS software can use the research presented here to understand the best practices implemented by those companies that have already done so. This information can be used in their strategic and tactical actions, and as a means for attaining sponsorship from senior management to implement these capabilities and technologies. The analysis will focus on some of the key elements required to implement comprehensive closed-loop quality management through the use of a PLM and quality management interoperability solution.

Business Capabilities

While PLM and QMS software interoperability is a key enabler, achieving closed-loop quality management takes more than a technology implementation. It takes an enterprise-wide commitment to quality, a culture of operational excellence, and employees who are given the right quality information at the right time and in the right context. Table 2 presents the business process capabilities that companies with previously implemented closed-loop quality management are most likely to have. When studied in their entirety, this set of business processes enables the incorporation of quality management into the complete lifecycle of products and processes across engineering and manufacturing functions.

Organizations with PLM and QMS software interoperability are 58% more likely than their competitors to have standard business processes to manage and respond to non-conformance and recall events. These manufacturers have procedures established in case of a non-conforming incident, which gives all the employees a clear understanding of the steps that need to be taken once an adverse event has occurred. This includes escalating adverse events to appropriate decision makers, depending on the type and the severity of the incident, and the actions that need to be initiated during such scenarios. Once these processes are standardized, all of the stakeholders are aware of their responsibilities and are able to intelligently act in a timely fashion.

One of the ways to enable standardization of quality and operating processes across the enterprise is to have a strong executive vision and subsequent buy-in from stakeholders at different levels of the organization. Manufacturers with PLM and quality management interoperability are more likely than their competitors to have established executive sponsorship for improving operations and quality through investing in process improvement, collaboration, and technology interoperability. The key to success is to have senior executive sponsorship, as well as cross-functional teams to streamline quality and operations processes. Aligning the organization in such a way is crucial because it allows manufacturers to control the quality of the product both within the four walls of the plant and across the value chain.

Another key capability is the ability of an organization to easily flow quality specification data between engineering and manufacturing. By ensuring that both engineering and manufacturing have easy access to up-to-date and accurate quality data, both groups are better equipped to continuously improve product performance.

Closely related to this capability is quality planning, which provides the ability to identify all functional needs of the product early in the design phase and incorporate this information into each stage of the design cycle to ensure product quality. In addition, upfront quality planning provides the ability to identify failure modes, future risks associated with the product, improve manufacturability and identify impact on maintenance.

While organizations that have PLM and QMS software interoperability are more than three times as likely as their competitors to have this capability, only 39% of them have actually adopted it. Indeed, the ability to identify all functional needs of the product ahead of time and incorporate this information into each stage of the design cycle is essential to ensuring product quality.

The next set of capabilities is critical to enable better visibility, collaboration and control across business processes needed for closed-loop quality management. First, organizations that have PLM and QMS software interoperability are more likely to have real-time visibility between executives and global manufacturing operations, and between suppliers' performance and manufacturing. Such architecture allows for improved decision-making in a number of different ways. It gives executives a view into operations that doesn't rely on aggregations or assumptions that can distort decisions and result in sub-optimal manufacturing and engineering decisions regarding quality.

PLM and QMS software interoperability also helps manufacturing operations to have an accurate view (from a quality perspective) into the flow of demand and goods through the supply chain. This view improves visibility and control over the quality process across the manufacturing and supply chain, so manufacturers are able to detect problems before they occur.

Finally, these manufacturers arm their employees with quality testing and inspection data, which easily flows between product development and manufacturing systems. Design engineers, manufacturing engineers and operations all have very different responsibilities when it comes to quality. Providing this critical data can greatly improve manufacturing efficiency and collaboration across these traditionally disparate groups.

All these capabilities are critical for creating closed-loop quality management. Standardized operating procedures for adverse events, a culture toward quality, up-front quality planning, and real-time visibility into critical quality data to facilitate communication between disparate groups are all needed to foster the necessary control, collaboration, and continuous improvement inherent in closed-loop quality management.

Summary

Manufacturers can take several actions associated with improvements in a number of key performance indicators to achieve closed-loop quality management. First, companies should standardize processes for responding to adverse events across the enterprise. Manufacturers that have PLM and QMS software interoperability are 58% more likely than their competitors to adopt such a capability, which is an important step to viewing quality as an enterprise-level issue rather than a plant-level issue.

Manufactures should also obtain executive sponsorship for closed-loop quality management. Quality can be a powerful competitive advantage, but ensuring quality takes a team effort. In particular, quality management needs an executive to lead the charge. This capability will enable manufacturers to secure resources from senior management to streamline quality operations across the enterprise. It will also lend legitimacy to continuous improvement team efforts in the area of closed-loop quality management.

Quality planning should be performed early. Quality needs to be managed early in the design stages and consistently throughout the process using cross-functional, collaborative methods so that quality information can be highly visible throughout the design chain. In doing so, companies can identify all functional needs of the product ahead of time and incorporate this information to ensure product quality.

Manufacturers should invest in PLM and QMS software interoperability. Research shows that such a technology enabler elevates quality management to an enterprise-level business process, transcending traditional functional areas. Specific areas for investing in interoperability include the flow of quality data, risk management processes, corrective and preventive action processes, and compliance.

For more information, contact the authors at nuris.ismail@aberdeen.com or matthew.littlefield@aberdeen.com, or visit www.aberdeen.com.

SIDEBAR: Definitions of Key Performance Indicators

• Overall equipment effectiveness (OEE) is a composite metric accounting for availability, performance and quality.
• Successful new product introductions (NPI) is measured as the average share of new product introductions that hit quality, time and volume targets.
• On-time and complete shipments are products delivered on time and complete, as compared to total original commitment, with no re-re-promise dates.

SIDEBAR: Defining Closed-Loop Quality Management

Closed-loop quality management is a strategic framework aligning business processes and technology enablers to support quality management across product design, sourcing, manufacturing process planning, manufacturing execution, delivery, maintenance, and customer service.

When these traditionally disparate business functions are aligned from a quality perspective, it enables the following business capabilities:

• Collaboration and bi-directional feedback between procurement, manufacturing, supply chain, customer service, and product development on non-conformance issues
• Control, visibility, and improvement of quality process across procurement, product development, manufacturing, supply chain, and service
• Integrated root cause analysis of non-conformance and quality issues across the business