As a leader in quality, you understand how important quality management is to operational excellence in manufacturing. However, line of business (LOB) leaders see IT and quality departments as cost centers instead of profit centers.
LOB leaders hesitate to invest in quality tools unless there is an adverse event, such as a recall or line stoppage. They don’t see the potential return on investment (ROI) in quality management software.
Investing in the right quality management tools makes business sense. Enterprise quality management software (EQMS) enables companies to grow by connecting all the people, processes, and tools necessary to promote total quality management (TQM). With EQMS, quality processes are automated and standardized for greater efficiency, more consistent compliance, and faster product delivery.
Quality team members can advocate for EQMS adoption by drawing on their understanding of how quality management delivers business value.
Quality and LOB are not at cross purposes. Quality leaders like yourself should be prepared to show how quality management aligns with business strategy.
This eBook will arm you with the discussion points you need to convince business leaders that investing in quality benefits the entire company.
Seeing Things from the LOB Perspective
Realizing ROI from Quality
Winning Over Customers
Building a Great Reputation
LOB is looking to boost key performance indicators (KPIs) and increase the bottom line. Business strategy tends to focus on ways to enhance profitability and encourage growth. In order to argue for enterprise quality management software, quality team members must show how it aligns with business goals.
Research shows that neglecting quality interferes with business strategy. The Keysight Test Equipment Report1 found that the top 5 negative business effects of quality issues were:
Increased costs 58%
Lost time and market advantages 44%
Damaged customer relationships 34%
Tarnished brand 26%
Lost business 25%
Quality team members need to bridge the gap between quality management and overall business goals.
Everyone at the company — from engineering to manufacturing and operations through to sales — benefits from better quality management. EQMS builds quality into the process, accelerating production, reducing the cost of manufacturing, and increasing the chance of a successful product launch.
Defect-free products are critical to the success of the entire company. For example, QAD CEBOS customer HFI, an automotive interior supplier based in Ohio, was able to launch three new facilities in two years thanks to standardization through EQMS.2 HFI reduced risk and increased production, doubling the number of projects they can complete each year.
When manufacturers don’t invest in quality, they spend money containing and correcting problems instead. It’s better to invest the money in quality upfront than waste it on the fallout from a product defect.
The costs of poor quality are:
Manufacturers and suppliers are responsible for the cost of a recall. The manufacturer must pay for returns and the cost of parts and labor for replacing a defective part.
The 2018 report The auto industry’s growing recall problem—and how to fix it found that a 2016 recall of 23 million GM vehicles cost the company $4.1 billion.3
Back in 2014, SeaDek Marine Products was plagued with major stockouts, running out of inventory 14 times that year.
SeaDek was able to save $250,000 by using supply chain management to avoid running out of inventory.4
With supply chain management, the company was able to track supplier data so they could manufacture enough product to meet increasing demands.
For the entire year of 2015, SeaDek only experienced a single minor stockout.
Supply chain management is one part of the quality management puzzle. EQMS enables manufacturers to take a proactive and more profitable approach to quality instead of a reactive and wasteful approach.
Business leaders tend to try to satisfy customers by providing them with the product innovations they crave. OEMs want to differentiate themselves in the marketplace by offering features that their competitors can’t deliver.
However, the drive to innovate shouldn’t lead manufacturers to underinvest in quality.
A 2018 report found that 300,000 cars were recalled in 2016 because of problems with the audio in infotainment units.5
While consumers crave electronic and software systems that offer automation and enhance their driving experience, the software bugs need to be removed before the automobile gets to the showroom floor. An infotainment system loses its appeal quickly when it malfunctions regularly and leads to the inconvenience of a recall.
A proactive approach to quality prevents defective products from reaching the consumer. When high-quality products enter the marketplace, it boosts customer satisfaction. You come across as a trustworthy company.
The more reliable your products are, the better chance you have of retaining customers. Happy customers will want to buy more of your products in the future.
Loyal customers also become advocates for your brand. They may give referrals, widening your customer base and saving the cost of acquiring new customers. Consumers tend to trust recommendations from people they know.
Manual quality management takes a long time, increasing risk. Delays in implementing corrective actions allow problems to persist.
Without EQMS, audits take six weeks to prepare for. Corrective actions may take an entire year to implement. By the time old records are closed out, a problem has been affecting production for a year.
Prepare for Audit
Identify Corrective Action
Delay in Corrective Action
Continuation of Problem
If your company doesn’t take a proactive approach to combatting risk, it may fail an audit. Failing an audit can result in fines.
After an audit failure, customers may put your company on probation or stop placing orders with it. Your company can lose its status as a preferred supplier of a product. Top automotive companies refuse to work with manufacturers that can’t pass audits.
EQMS automates error-prone manual quality processes. Continuous improvement is possible with EQMS, eliminating long delays between detecting a problem and implementing corrective actions.
Vishay Dale Incorporated, a manufacturer of electronic, engineering, and tech components, partnered with QAD CEBOS for EQMS to reduce risk. EQMS enabled the company to digitize and track documents needed for audits.
Vishay Dale developed more than 500,000 entries to link documents and transferred over 65,000 documents related to audits and corrective measures.6 With EQMS, Vishay Dale could accelerate implementation of approvals and corrective changes.
Quality products enhance your company’s reputation. When manufacturers take a proactive approach to quality management, new products deliver everything promised. Successful new product introductions are key to establishing a track record as an innovator.
No company wants to be known for a huge product recall. For example, Takata has become virtually synonymous with defective airbags.
The recall of Takata airbags has been highly publicized because of injuries and deaths, as well as the size of the recall. The National Highway Traffic Safety Administration (NHTSA) reported 13 confirmed fatalities and hundreds of injuries from shrapnel caused by exploding airbags.7
Continuous improvement enables your company to introduce new products with confidence. Products that are free from nonconformances give your company a reputation for being trustworthy and reliable.
Today, customers share their opinions freely on social media. If customers have a negative experience with your products, they can easily post comments on Twitter or Facebook. All their followers would see this negative feedback, costing your company future sales.
On the other hand, a winning experience with your product may produce positive comments, Instagram photos, or YouTube videos of your product in action. Manufacturing a high-quality product can result in free advertising for your brand and its products.
When you are championing quality software in front of LOB leaders, draw on your passion for quality. You know firsthand the value that quality management brings to your business.
Be an advocate for quality by going into budget meetings armed with the facts you need to persuade leadership that quality software is worth the investment.
QAD CEBOS can work with you to help you articulate an argument for EQMS. We support our customers throughout the adoption process from design and implementation to training and support.