Integrating Quality Management throughout the EnterpriseEnterprise Quality

OverviewOver many decades of evolution and innovation a myriad of disparate advances in production efficiency, inspection methods, testing systems, statistical analysis, networking technologies, and data systems have expanded the range of tools available for managing quality.

For companies that intend to compete and lead in their chosen markets, one of today's biggest challenges is bringing all of the necessary quality tools and techniques together within a unified and comprehensive enterprise-wide quality management (QM) framework

Achieving enterprise-wide quality management requires cross-

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functional communication and collaboration supported by a software approach that centralizes, standardizes, and streamlines quality management data from across the value chain. The unified software approach breaks down functional silos created by traditionally implemented standalone and targeted solutions. By supporting the proliferation and accessibility of information across supply chain activities, design, production, distribution, and service, enterprise-wide QM provides a holistic viewpoint for managing the quality of products and processes, with a built-in bias for continuous improvement.

This whitepaper offers an overview of the issues and areas of focus that should be considered in the

formulation of a comprehensive enterprise level QM system.

Starting with the often-overlooked area of determining “what are the correct goals” the first section provides a brief summary of the structured Design-Thinking approach to problem definition.

Subsequent sections then drill down and explore the individual focus areas that need to be unified within the QM framework, such as procurement, incoming Quality Certificates, source inspections, product design and sales/distribution. The final sections look at how all of these elements are brought together under an umbrella of Quality Analytics and Continuous Improvement..

Quality Management is focused not only on product/service quality, but also the means to achieve it.

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If you can't measure it, you can't manage it…

If you don't know what “It” is, you can't possibly measure it.

Design-Thinking: Start by Asking the Audacious QuestionsDesign thinking is a methodology for achieving practical, creative resolution of problems that looks for an improved future result. It is basically a form of solution-focused thinking that starts with the goal or what is meant to be achieved instead of starting with a certain problem. This differs from the scientific method, which starts with defining all parameters of the problem in order to define the solution. The design way of problem solving starts with a solution definition in order to identify enough of the parameters needed to optimize the path to that goal.

Define the Problem

This is the most important and often overlooked step in the process. Failure to correctly define the right problems at the outset is like being a few degrees off on your launch trajectory; the magnitude and cost of a small initial error can become enormous down the road. The goal of this stage is to target the right problems to solve, and to frame the problems in a way that invites creative solutions.

Research and Ideation

Design thinking requires the team to look at all issues from a variety of viewpoints in order to produce a number of options as well as the metrics by which they can be evaluated. This is best accomplished with broad input from cross-functional teams and expert outside resources that can

bring together a range of perspectives and insights. Even highly successful businesses can sometimes fall into the trap of solving a problem the same way every time.

Refine, Prototype, Iterate and Improve the Selected Options

As the options are narrowed down, the best ideas rise to the top and can be refined, combined and expanded upon. This stage should include fleshing out the details of selected alternatives, prototyping some of the actual processes, and sharing the proposals with other stakeholders and decision makers in order to gain a broader range of feedback.

Choose and Execute

This stage represents the heart of the implementation process, including team assignments, task descriptions, resource allocation, project schedule and budget. Clearly defining the roles and responsibilities for both inside and outside resources is critical for success of the overall project.

Monitor, Measure and Manage

Design-thinking is an inherently iterative and self-monitoring process that leverages disciplined creativity to yield optimal results. It's important to remember that the design-thinking process does not end with the project's “go-live” event. Especially with a Quality Management system, building in mechanisms for monitoring, measuring and corrective actions are critical elements to foster continuous improvement.

Regardless of the specific issues and problems defined during the upfront design-thinking process, it is always important to keep in mind that effective Quality Management is an inherently enterprise-wide endeavor. Achieving quality goals depends on many different and complementary processes that must be integrated and managed within the overall ERP and business intelligence environment.

The successful deployment of QM systems requires a structured implementation process that clearly defines objectives ahead of time and lays out specific parameters, schedule and outcomes for the project. Every company is unique and has specific requirements and issues that must be taken into account.

Idhasoft's experience over many such implementations has shown that any successful QM project requires a disciplined approach with careful attention to the following areas.

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The SAP Quality Management module offers a solid and comprehensive foundation for integrating all classic quality management tasks, such as quality planning, quality inspection, quality control, and continuous improvement.

The following sections provide an

Up-Front Planning

Top-down Design

Detailed QM process definition

Pre-Live Testing & Training

Step-by-Step Go-Live Process

On-going Monitoring and Optimization

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overview of the SAP-based capabilities that can be leveraged for implementing QM systems, with specific focus on some key areas where Idhasoft SAP experts have tailored these capabilities to address specific customer requirements.

Product Engineering and Design for Manufacturing

¡ Similar to the first step in design-thinking, this first vital step in the QM process is often oLvf all product master data and quality management data

¡ Boost data quality by unifying the management of product, quality, resource, and finance information

¡ Optimize end-to-end processes by combining product data management with continuous

¡ portfolio analysis

¡ Maximize reuse and logistics efficiency by configuring new products based on a single data model for development, sales, and service

Procurement

Integrating QM within the Procurement process is focused on managing the front-end of the materials pipeline and pushing the company's quality requirements out into the vendor ecosystem.

Some key aspects of procurement QM include:

¡ Providing QA input into Vendor evaluation for use by Procurement staff:

- Q u a l i f y i n g Ve n d o r Q M systems

- Vendor Audits

¡ Control of Incoming Materials by:

- Supply Relationship profiles (adapting quality requirements according to the maturity of the product in its lifecycle)

- PPAP and First-Article approval processes

- Source inspections

- Quality-relevant Stock Postings

- Quality-related Invoice blocks

- Incoming Quality Certificates

The overall objective is to make quality a fundamental part of all purchasing processes within a comprehensive Supplier Relationship Management (SRM) framework. The SRM supplier portal in SAP software gives companies the ability to choose optimal interaction channels for various business processes and documents to collaborate more effectively in supplier-facing relationships.

Depending on the specific requirements and supplier capabilities, the SAP system can support either paper-based or electronic documents for QM transactions and tracking. All of the SAP QM documents, certificates and transactions can be implemented within Electronic Data Interchange (EDI) systems between the company and suppliers if appropriate. (For more detail on EDI, please see the Idhasoft whitepaper on “Streamlining EDI Design & Implementation with SAP”)

Additional detail on the use of Incoming Quality Certificates and Source Inspection is provided in the

following sections.

Incoming Quality Certificates

The SAP QM software can be used to enable the use of item-specific Incoming Certificates that are tailored to track and manage quality of specific materials within the overall ERP system. Requirements for certificates and the types of certificates are included with the Material Master Records, thereby making certificates an integrated element at all points within the procurement, vendor and incoming goods receipt processes.

The “Certificate Type” settings define the specific certificate parameters and establish the controls over the processing of the certificates and associated Goods Receipts. The diagram below shows some of the decision points and available actions in the Incoming Certificate process flow.

Available actions if the Certificate is

NOT delivered with the Goods.

¡ Cancellation of the GR

¡ Processing of the inspection with an Indicator

¡ Posting of stocked to blocked stock

Available actions if certificate received before the Goods Receipt (Either electronically or paper-based):

¡ Electronic transfer via IDoc

¡ Transfer of data to Incoming Inspection Lot

¡ Manual transfer of Data to other Inspection Lots.

¡ Archiving of Certificate (.pdf in Optical Archive)

For electronic certificates the process makes use of standard EDI procedures as implemented in SAP through the use of ALE connectivity mechanisms and iDoc processing methods.

Electronic interchange of QM information between companies and suppliers offers the advantages of more immediate feedback, timely corrective actions and reduced risk of manual errors or misplaced documentation. For suppliers, it also can improve time-to-payment by streamlining processing times and avoiding the need for follow-up questions on goods receipts.

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Source Inspections

Source Inspection management is another important tool within the SAP QM portfolio of capabilities. Source Inspections enable a company's internal QA staff to check quality levels at the vendor sites prior to shipment and incoming receipt of the materials. This can be particularly useful for new items, high-risk items, high-cost complex assemblies or any other materials in which optimizing supplier QA processes is critical for success.

SAP QM enables users to create the requirement for Source Inspections within the Quality Information Records. The source inspection requirement can be Material, Vendor and/or Plant specific.

Source Inspections are triggered either manually or by means of a report that identifies all open Purchase Order materials within a User-defined lead time ahead of scheduled delivery date.

The SAP QM Source Inspection settings and results are then linked within the ERP system to control the Goods Receipt inspection processing. Available actions include:

¡ Waiving the incoming Goods Receipt inspection if Source Inspection is successful

¡ Maintaining Goods Receipt inspection as “active” despite results of Source Inspection

¡ Disallowing the Goods Receipt if Source Inspection is unsuccessful

¡ Setting corrective action criteria and timeframe requirements for failed inspections

Sales and Distribution

Just as quality management on the supplier-facing side is critical for optimizing good materials into the front-end of the pipeline, quality management on the customer-facing side is critical for optimizing customer satisfaction and revenues on the back-end.

Companies need to proactively put in place QM methodologies that establish acceptable quality levels, provide proof of achievement and provide for meeting customer-specific when appropriate.

The QM functionality within SAP software enables companies to define parameters such as:

¡ Customer-specific quality requirements

¡ Flexible specifications – the ability to choose applicable customers for existing products

¡ Generation of Certificates of Conformance and/or Analysis

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Quality Certificates

The SAP QM Certificate Profiles function enables users to establish the requirements for Quality Certificates and to define the types, parameters and customer assignments for the certificates. The Certificate Profile also contains specific controls over the processing of the certificate, such as:

¡ Origin of the results data included on each customer Quality Certificate:

- Inspection Lot results

- Batch Characteristics

- Certificate layout (as defined in a Layout Set in SAP)

¡ Output format and access rights are defined for each Customer:

- .pdf format

- Fax

- Print

- Internet retrieval by Customer

Continuous Quality Improvement

As mentioned earlier in the design-thinking section, long term success requires built-in proactive mechanisms for monitoring, measurement and process improvement. A robust quality management system must always be questioning the current results, identifying variances from the goals and creatively looking for ways to do things better.

The key elements for driving continuous improvement are:

¡ Identifying problem areas

¡ Analyzing causes of problems

¡ Eliminating the root causes

¡ Corrective actions

SAP QM provides support for continuous improvement through the following functionality:

¡ Quality Analytics – Processing the data gathered in each stage of the quality process to determine areas for improvement

¡ Problem and Complaint Management – Handling internal and external problems

¡ Corrective and Preventive Actions – Linked to the Problem and Complaint Management module, CAPA is used to manage these actions

Robust analytics capabilities at the heart of the Quality Management Information System (QMIS) support both daily QM success and long-term continuous improvement by providing early warning of emerging problems and in-depth analysis for corrective actions.

QM Early Warning System

¡ Provides warning of pre-defined exception situations

¡ Works with either standard or flexible analyses in QMIS

¡ Can be run manually or set to run automatically at pre-defined times

¡ Can be set to trigger follow-up actions by means of workflow, e-mail, fax, etc

Quality Analytics

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Exceptions can be analyzed by

¡ Threshold values

¡ Trends

¡ Planned/actual comparisons

¡ Combinations of the above, using “and/or” parameters

Quality engineers need flexible and intuitive analytics capabilities that can interface with the QMIS in a variety of ways to support both routine and ad hoc requirements. It's important that the analytics have comprehensive access to all

quality related data within a single unified QMIS. By minimizing the need to export data and conduct cumbersome secondary manual calculations the integrated analytics system saves valuable time while enabling users to focus on issue analysis and problem solving.

The integrated system can directly support:

¡ Analysis of data from notifications and inspection lots

¡ Predefined queries

¡ Early warning system

Ad-hoc reports

¡ Work lists

¡ Inspection reports

¡ Results history

¡ Certificates

Process Control

¡ Control charts

Supplier evaluation

¡ Quality scores

¡ Audit results

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The Bottom Line Effective Quality Management requires a combination of creativity, commitment and investment in the tools and capabilities to support both daily activities and in-depth analysis. Quality management must have a comprehensive scope. It doesn't start at the receiving dock or end at the shipping dock.

Quality Management system implementations require a deep understanding of quality principles, data management, analysis methodologies and the underlying software technologies for collecting, tracking and processing data within a unified Quality Management Information System. Working with a partner who already understands and has implemented QM systems is vital for ultimate success.

About IdhasoftIdhasoft Inc. is a global leader in strategic technical solutions, SAP® gold channel partner and 2010 SAP Business All-in-One Partner of the Year-USA, providing innovative end-to-end business solutions to companies around the world. Idhasoft founding vision is to serve the SMB marketplace with a unique blend of business solutions and services. We help our clients drive efficiency, improve profitability and build a lasting competitive advantage.

Idhasoft capabilities and services include the following:

¡ 100% commitment to SAP solutions, services and technologies

¡ SAP Gold All-in-One Solution Provider and Premier Implementation Partner

¡ Partner Center of Excellence Certified master VAR

¡ SAP Certified Industry Specific Solutions

¡ Dedicated SAP Practices- ERP, CRM, SRM, SCM, BI and Net Weaver/Portals

¡ Senior SAP experienced consulting team with both industry and SAP experience

¡ Invited expert each year at ASUG, SAPPHIRE and other SAP conferences

¡ State-of-art Solutions Center with SAP Ramp-up Applications

¡ Idhasoft's pre-configured Industry and Solutions templates

¡ Our consultants work closely with SAP COE and SAP Product Development

Quality is not an imposition…

It's an opportunity for excellence!

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