is now a strategic objective, not just a collection of tactical projects.
Overlapping compliance requirements cry out for an encompassing architectural
A recent Aberdeen
report on Compliance and Traceability provides insight into the development and
maturation of manufacturers’ compliance programs. Best-in-class manufacturers
understand that compliance programs are not just necessary activities, but a
competitive advantage. The report relates that best-in-class companies are
working toward common, single and enterprise compliance systems, and replacing
outdated manual and one-off, non-integrated tools.
The report highlighted pitfalls that hamper most compliance initiatives:
focusing on document rather than process management and a lack of metrics to
Why is it that focusing on process is such a challenge? To understand, we need
to understand the history of compliance programs. In the 1980s and ‘90s,
compliance programs were “checklist” audits. The effort to achieve compliance
focused on having an answer for every item on the auditors' “checklists.”
Companies focused on spreadsheets and manuals to meet early compliance
requests. With the recent round of corporate corruption, front-page recalls and
other high profile, compliance-related debacles, compliance has turned into a
bottom line assurance that the process is operating in a safe and effective
manner. Therefore, corporate and industry compliance programs are now focused on
effective process. It is no longer acceptable to simply “have the answers” -
inspectors want to know how
you got the answers.
One additional challenge in the old way of doing things was the myriad
governmental, industry and client standards that had to be met (e.g., ISO9000,
AS9100, 21CFR11, TS16949, GMPs, ISO13485, etc.). It was not unusual for an
organization to have 3-4 ongoing compliance initiatives, each with their own
manual and checklists to pass each individual test. The good news about a process
orientation is that once compliance is “built-in” to a process, the effort to
demonstrate compliance requires minimal added labor, and audits go much
smoother. A recent study by AMR Research concluded: “As business and IT
recognize the overlapping requirements of individual compliance mandates,
leaders are taking steps to build out a sustainable architecture that minimizes
time and cost while maximizing future reuse.” (Source: AMR Research)
Strategic Actions to Addressing
Figure 1. Results of AMR Implementation
A common framework for compliance initiatives is the backbone of process
approach to built-in compliance. It allows for common information to be
distributed and kept up to date. It provides distributed teams with the ability
to work together off of one source of information. In complex manufacturing,
this not only helps with compliance but provides companies that employ this
strategy with a competitive advantage to reduce cycle time and reduce costs.
When AMR looked at how to develop this active compliance framework, they asked
survey participants who had achieved best-in-class status how they had
implemented the framework. The results are shown in Figure 1.
Not surprisingly, most organizations leveraged mature quality initiatives.
There are two types of “quality.” First, there is quality control
which is a measurement function at the back end of the process. While an
important part of manufacturing, this is not the type of quality that the
survey is referring to. Quality management
is the life
cycle-long approach of building in quality functions to the manufacturing
process that the survey refers to as “mature quality initiatives.”
Much like ERP streamlined the inventory and financial aspects of manufacturing,
Enterprise Quality Management (EQM) is now providing that same streamlining
function to the rest of manufacturing operations.
“The new role of the quality professional is to provide the organization with a
seamless, integrated view of the business,” said John M. Cachat, chairman, IQS
Inc. “The Quality Organization must provide the answers that cannot be found in
financial and ERP systems.”
Figure 2. Manufacturing Product Life Cycle
Where Do You Start?
Not to sound mundane, but you start at the beginning.
Quality is built-in from the planning and engineering stages. The knowledgeable
source may add that the planning process has detailed product and process
designs, failure analysis (FMEAs), etc. However, someone familiar with the
entire manufacturing process will tell you that these important details and
analyses that affect quality do not make it “over the wall” to manufacturing
with any regularity.
Organizations have tried vaulting documents and sharing them, but the result is
that operations, inspection, purchasing and quality functions need data and
information - not necessarily documents.
Figure 3. Example of Information Gathering and Sharing
Process-orientation has two components: deriving information
critical to the process and sharing the information across the process
When investigations begin on a quality failure, rarely is the answer that no one
in the organization knew the problem existed, but that not all of the people in
the organization that needed the information had it.
Figure 4. The Components of Process
So start at the beginning. Gather the pieces. Share them. It
sounds simple, but in reality, with the amount and complexity of information
required in manufacturing today, gathering and sharing requires sophisticated
Once you accept that quality cannot be “tested” into a product, but that it has
to be built-in (and that to be compliant you have to demonstrate it), then your
next question is not “Do we need technology to manage the process?” but “Which
technology do we need to manage the process?”
Table 1. Developing a Process Model
Mapping and Modeling a Compliant Process
First, complete a physical inventory of all the software
tools currently used across your quality, environmental health and safety, and
financial (SOX) compliance efforts. This includes all spreadsheets, reports,
databases, purchased software and homegrown legacy systems.
Second, develop a process model that encompasses all common processes across
the enterprise quality and compliance requirements. We have listed the
processes used in a quality and compliance, as well as the normal activities,
lists, and spreadsheets that are often used in a process. Table 1 provides a
place to list your organization’s assets.
Figure 5. Example of a Model
Understanding the components of process is half the battle.
Once you have the components - defining the linking and interconnections - the
“sharing” is the next (and often most complex) step. Rarely will one - or even
a small group of individuals - understand the majority of the relationships. It
is generally at this point that organizations turn to software providers that
have an intact, proven model. An example of one model is shown in Figure 5.
Connecting the dots and defining business requirements to reflect
interconnections can take time. However, the result is a system that can:
- Improve audit performance
- Dramatically reduce preparation time
- Reduce audit findings
- Reduce redundant labor
- Provide a competitive advantage
- Reduce product cycle times
- Reduce overall cost of producing product in-house and with
- Reduce warranty and recall impacts
- Improve quality (build products right the first time)
In summary, a recent Aberdeen report indicates a big swing to a
process-oriented approach to compliance, and the move of best-in-class
organizations to use the efforts not just for compliance but to achieve a
competitive edge. We have reviewed how to develop a process approach and
provided some guidelines. The Aberdeen
report sites yet another obstacle that must be overcome, and that is the
ability to provide metrics to measure the success of a compliance initiative.
Figure 6. Example of Progress Measurement
Measuring Success, Beginning to End
Because building in compliance is a life cycle-long
approach, some of the logical metrics to measure are the end result of the
process: yield, throughput, etc. Those metrics will provide overall visibility
to the process. In this case, unlike the process, the metrics start at the end.
To measure progress along the process, and provide insight into where along the
process there are bottlenecks and larger improvements to be made, we can dive
into the process and look at different levels of metrics. If we look at various
phases, there are metrics that can indicate stage effectiveness (see Figure 6).
Table 2. Implementation Challenges
Tracking these metrics will provide insight as to what is
happening early on in the product lifecycle. Manufacturers know that pushing
engineering changes late in the product launch process increases costs and
increases the probability of mistakes.
For most, this all seems like common sense. However, the Aberdeen report identified the following
implementation challenges (see Table 2).
- Focusing on document rather than process management.
- A lack of metrics to measure success. The Aberdeen report further
defines the actions taken by best-in-class manufacturers as the
- More than twice as likely as other manufacturers to have compliance
and traceability centrally managed at the corporate level.
- More than twice as likely as other manufacturers to integrate disparate
- 75% more likely to have process visibility and automated traceability
than other manufacturers.
- More than five times as likely as other manufacturers to measure
compliance and traceability performance in real or near-real time.
Polyone, based in Avon Lake,
OH, implemented examples of these
actions. Polyone is the world’s largest polymer services company, providing
customers with a single source for polymer, colorant and additive products. The
company has a corporate function that manages quality, environmental, health
and safety. Polyone replaced four separate software solutions (training,
documentation, audits and corrective action) with a single software solution
provided by IQS Inc.
“Quiz! from IQS streamlines our training information
management,” a Polyone representative said. “It reduces the time we spend
certifying procedure, safety or operational changes, as well as training
certification. Most importantly, it provides objective evidence that people
have met training objectives. The whole process of verifying the effectiveness
of the training system is now much simpler.”
This example supports the Aberdeen
report finding that best-in-class companies focus on solutions that operate in
real time. The non-value-added time and labor required to support separate,
stand-alone, non-integrated solutions will no longer be tolerated. Figure 7
explains measurement frequency and best-in-class status.
Levels of Integration
It is important to define levels of integration. The three
distinct levels are:
- Integrating with enterprise quality and compliance management
- Integrating with other corporate systems (ERP, PLM, MES).
- Integrating the supply chain (customers and suppliers).
In the PolyOne example, the immediate solution was replacing disparate
stand-alone tools from multiple vendors with a single solution. The next step
was integration with the SAP ERP system. This integration provided a single
employee file that was shared across the compliance system.
Another comment is that some management teams consider Microsoft Excel and
e-mail to be software systems. They are not. They are personal productivity
tools, which make them non-lean by nature and full of waste from
non-value-added re-entry of information. The best-in-class companies have
elevated compliance to the corporate boardroom and treat the software systems
the same as ERP: business critical.
Also, be sure to avoid the quick fix. Consultants who sell technology services
will present a solution that involves the creation of a data warehouse. The premise
is that in order to get the metrics, we need to get data from all over the
place and put it in a data warehouse. Sounds simple, makes sense. However, it
avoids the operational excellence and common business challenge of improving
the underlying business process. The time and effort spent on creating a data
warehouse should be focused on creating the underlying common business
processes. Creating the reports, dashboards and charts is easy. The processes
your organization uses to collect the data for the charts needs to be the
Table 3. Common Model Elements
This article discussed actions taken by best-in-class
manufacturing companies. If you would like to develop a plan to improve your
enterprise quality and management system, the steps are straightforward.
First, complete a physical inventory of all the software tools currently used
across your quality, environmental health and safety, and financial (SOX)
compliance efforts. This includes all spreadsheets, reports, databases,
purchased software and homegrown legacy systems.
Second, develop a process model that encompasses all common processes across
the enterprise quality and compliance requirements. A common model will have the
elements shown in Table 3.
Compliance is a necessary evil in today’s marketplaces. Best-in-class
organizations are turning compliance from a cost of doing business to a
competitive advantage. Organizations who want to compete in a global
environment need every competitive weapon at their disposal. Who’d have ever
thought one would come disguised as compliance?
For more information on compliance systems, contact IQS Inc., 19706
Center Ridge Road, Cleveland, OH 44116-3637; phone (440) 333-1344 or (800)
fax (440) 333-3752; or e-mail email@example.com.