GSQA Value: the Supply Chain Quality Imperative
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1 GSQA Value: the Supply Chain Quality Imperative November 1, 2010 Quality Assurance for your Supply Chain John McGlinn VP Sales EMNS, Inc. Page 1
2 About EMNS Service solution in production for over 12 years In use at Fortune 1,000 companies Over 10,000 connected facilities in over 40 countries Experts in high reliability and security hosting Headquartered in Downers Grove, IL GSQA has customers in the following process and discrete market verticals: Consumer Packaged Goods/Toys Rubber and Plastics Chemicals Oil and Petroleum, Nuclear Fuel Paints and Coatings Beverage and Snack Foods Confectionery Pet Food Proteins Beef and Pork Mining/Natural i Resources Page 2
3 Agenda Why Worry? (About the Supply Chain Quality Imperative) e) Issues (Unknown suppliers & materials) Solutions (Don t want to leave you hanging) Page 3
4 InA Perfect World All Suppliers Would Be Equal. Materials Would Arrive On Time From the right supplier/country Properly Labeled Made To Your Specifications With No Variability Or Defects Every Time! But it s not a perfect world! Page 4
5 The Supply Chain Quality Imperative Quality visibility can be lost over the horizon, whether 10 miles or 10, miles away. Out-sourcing and off-shoring extend supply chains and defy manual methods of quality management. Extended (tiered ) and decentralized supply chains create new quality challenges: material validation and supplier quality assurance at lower cost and higher efficiency. Page 5
6 SampleTiered SupplyChain Material Flow Ship Shipping location enters shipment and lot information Ship Rcv Lots Used Ship Rcv Lots Used Ship OEM/Finished Product Plant Rcv Receiving location confirms receipt of lot information Ship Uncontrolled 3 rd Tier Suppliers Rcv Lots Used Ship Rcv Lots Used Ship Rcv Lots Used Incoming lots are mapped to outgoing lots Invisible 2nd Tier Suppliers ip Sh Rc cv Lots Used Sh ip Trusted First Tier Suppliers Page 6
7 Extended Quality Visibility Multiple quality events in the supply chain need to be linked for complete quality visibility Supply Chain Quality Management Supplier Quality Assurance 4: Supplier s Supplier External Supplier 3: Supplier Feeder 2: Enterprise Finishing 1. Customer Dist Channel Page 7
8 Why Worry? Reputation Financial Risk Market Performance Food/Product Safety Recalls Brand Equity Operational Risk Scrap Rework Reputation Plant Disruptions Poor Quality Other Operational Inefficiencies Page 8
9 Since It s Not A Perfect World You Must. Distribute ib t Specifications Test Inbound Materials Perform Supplier Audits Manage Corrective Actions Recover Costs From Suppliers Have Supplier Quality Manuals Rate and Rank Suppliers Perform Supplier Development The Cost Of Supplier Quality Page 9
10 Industry Challenges Still paper-based COAs? PDFs with ? Inactionable data? Specs on paper, in PDF, in , out-of-synch with suppliers? Non-conformances by phone calls, s, lost time, chasing responses, no tracking? Regulatory Compliance docs managed on paper, separate web site, audits labor intensive? One-up, one-down traceability difficult to achieve, does not provide enough visibility? Material variability impact on finished products known? Root-cause analysis tools?. Analysis of supplier process results, lab test comparisons, spec adjustments? Purchasing cannot see supplier material performance, non-conformance & audit responsiveness? Hard-to-get material data for reports? In the dark, out of synch about critical issues? Keeping supply base in compliance? Page 10
11 Industry Challenges Still paper-based COAs? PDFs with ? Inactionable data? Specs on paper, in PDF, in , out-of-synch with suppliers? Non-conformances by phone calls, s, lost time, chasing responses, no tracking? Regulatory Compliance docs managed on paper, separate web site, audits labor intensive? One-up, one-down traceability difficult to achieve, does not provide enough visibility? Material variability impact on finished products known? Root-cause analysis tools?. Analysis of supplier process results, lab test comparisons, spec adjustments? Purchasing cannot see supplier material performance, non-conformance & audit responsiveness? Hard-to-get material data for reports? In the dark, out of synch about critical issues? Keeping supply base in compliance? Page 11
12 One companytook a different approach Reduce test costs of incoming raw materials. Increase supplier confidence from continuous material compliance information. Lower test-equipment costs and testing consumables. Provide online ASN (advance a shipment notification) o from all suppliers s independent of their technology ogy assets for enhanced inventory management with On-The-Way, Shipment Received, or Released Status, with date procured to support first-in first-out material management and increased production efficiency. Online ASNs also should provide production scheduling efficiency with material delivery dates that support more accurate production scheduling, that in turn should reduce line down time waiting for needed materials, and provide an increase in production efficiency. Eliminate manual COA entry, filing, and storage by online supplier-entered entered COA data. Simplify record keeping and information accessibility supporting supplier shipment tracking and materials traceability. Online information will also reduce storage and archival costs. Reduce non-conforming material by online shipment validation of material specification prior to materials being shipped by the supplier to reduce wasted time and money dealing with out of specification material. Reduce manufacturing waste caused by high material quality variability using automatic SPC, Ppk and time trend analysis on incoming materials to reduce unexpected results in the manufacturing process, reduce defects, unusable lots, wasted materials and associated disposal and reclamation costs. Simplify the cost recovery effort to track and analyze the expenses incurred because of a supplier's non-conformance and quality issues, and allow for the charges to be passed back to the supplier. Provide corporate-wide online real time view of all suppliers, CAR/CAP summaries, supplier performance and audit status to simplify the management of suppliers worldwide. Also should result in a reduction in documentation storage and archival costs. Provide online management of CAR/CAP, supplier development, audit and statistical ti ti analysis data to reduce the manual generation, tracking, management and reporting of quality records required for ongoing ISO/QS/AS 9000 and TS compliance. Online information should also reduce documentation storage and archival costs. Provide online message of the day and automated supplier notification of CAR, audit and quality events that will reduce mailings, faxes and to suppliers. Provide supplier rating and ranking through online supplier quality performance summaries. Reduce costs in supplier communications, specification management and testing requirements with online real time analysis of material characteristics and trends across suppliers and regions to simplify engineering's task of evaluating and modifying material specifications. Page 12
13 GSQA is a single point for manufacturers to align supply chain quality objectives with their suppliers and co-manufacturers to achieve a higher quality standard, improve productivity, and reduce costs. Page 13
14 Ten Points of GSQA Control Electronic COAs (e-coa) Utilizing your supplier s COA data, plant floor test data, non- conformances, yield results and other quality observations, GSQA highlights variations in material characteristics and production processes that are impacting quality and yield. Send and receive raw material, packaging, in-process and finished product Certificate Of Analysis (COA) electronically between your suppliers, plants, co-manufacturers and customers. Specifications Immediate and secure on-line access to your most recent internal and external specifications for your plants, suppliers and co-manufacturers. On-Line e-signature supplier specification acceptance. Non-Conformances Managing non-conformance, and corrective actions and costs on-line directly with suppliers reduces corrective action cycle time, and helps lower the cost of quality. Regulatory Compliance GSQA s compliance manager collects documentation and data directly from your suppliers and plants based on the product types provided by that supplier. Automatic alerts warns users of expiring documentation and compliance status. Traceability GSQA provides immediate multi-tier traceability for incoming, in-process, and outbound batches or lots. One click access to COAs, supplier, customer and carrier information. Production Analysis Statistics Uses SPC alerts via to immediately warn when suppliers begin to lose control of their processes and fall outof-specification. Compare lab results with COAs to assess supplier confidence and trustworthiness. Scorecards Custom-built to meet specific supplier performance requirements and tied directly with non-conformance data and integrated with ERP/MES data. Cp, CpK, Pp, PpK tracking for current performance and future forecasting. Reports and Alerts Real time data analytics in the form of reports gives each department a view into mission-critical trends that result in maintaining supplier quality. A system of alerts keeps every GSQA user aligned on priority events. Certifications & Audits Feature-rich automation for complete quality documentation control, collaboration, and management. Page 14
15 Ten Points of GSQA Control Electronic COAs (e-coa) Utilizing your supplier s COA data, plant floor test data, non- conformances, yield results and other quality observations, GSQA highlights variations in material characteristics and production processes that are impacting quality and yield. Send and receive raw material, packaging, in-process and finished product Certificate Of Analysis (COA) electronically between your suppliers, plants, co-manufacturers and customers. Specifications Immediate and secure on-line access to your most recent internal and external specifications for your plants, suppliers and co-manufacturers. On-Line e-signature supplier specification acceptance. Non-Conformances Managing non-conformance, and corrective actions and costs on-line directly with suppliers reduces corrective action cycle time, and helps lower the cost of quality. Regulatory Compliance GSQA s compliance manager collects documentation and data directly from your suppliers and plants based on the product types provided by that supplier. Automatic alerts warns users of expiring documentation and compliance status. Traceability GSQA provides immediate multi-tier traceability for incoming, in-process, and outbound batches or lots. One click access to COAs, supplier, customer and carrier information. Production Analysis Statistics Uses SPC alerts via to immediately warn when suppliers begin to lose control of their processes and fall outof-specification. Compare lab results with COAs to assess supplier confidence and trustworthiness. Scorecards Custom-built to meet specific supplier performance requirements and tied directly with non-conformance data and integrated with ERP/MES data. Cp, CpK, Pp, PpK tracking for current performance and future forecasting. Reports and Alerts Real time data analytics in the form of reports gives each department a view into mission-critical trends that result in maintaining supplier quality. A system of alerts keeps every GSQA user aligned on priority events. Certifications & Audits Feature-rich automation for complete quality documentation control, collaboration, and management. Page 15
16 Scalable Wbb Web based dsystem GSQA: Data-driven, web-based, enterprise supplier quality and material performance management system focused on global supply chain quality visibility, operational efficiencies, and product safety. Page 16
17 Single Solution, Sl Single Instance, Global l Visibilityibilit Page 17
18 Single Solution, Sl Single Instance, Global l Visibilityibilit Page 18
19 Departments Always Involved Quality: must keep material variability low (spec compliance) Purchasing: own supplier performance Regulatory: maintain supply base in compliance Operations: plant efficiency and yield goals R&D: specification definition and spec-tuning Page 19
20 GSQA Provides idessolutions & Value: Multiple ltipledepartments Quality: proactive analysis that results in reduced supplier material variability, decreased scrap events, and root-cause analysis. Purchasing: real-time assessment of supplier performance data for strategic sourcing. Regulatory: automated document collection and management for assuring supplier compliance and traceability. Operations: correlation of raw materials with finished product attributes for improved yield. R&D: interface to PLM and Formulation Mgt systems for online specification distribution and sign-off. Page 20
21 Supplier/Material Risk Which suppliers pose the greatest risk? Which suppliers contribute the most to the cost of quality? Knowledgebase Scorecard Certifications Audit Mgt. Material Validation (e COA) Nonconformance Mgt. Page 21
22 Functional Structure re of GSQA Result: Enhanced Operational Performance Audit/Cert/Reg-Doc Compliance Trending e-coa Results Global Supplier Comparisons Supplier-Material Performance Supplier Scorecarding WIP Testing Production Analysis Knowledgebase Supplier COPQ Analysis Finished Product e-coa Quality-based Traceability Certifications Audit Mgt. Not a document management system but a datadriven, web-based, enterprise supplier quality and material performance management system focused on global supply chain quality visibility, operational efficiencies, and product safety. Material Validation (e COA) Nonconformance Mgt. Page 22
23 Multi tier Supply Chain Quality Management Supplier #1 Supplier s Supplier Supplier s Supplier s Supplier Receive Raw Materials Ship Materials Receive Materials Ship Raw Materials Receive Raw Materials Plant #1 Ship Finished Products Ship Raw Materials Web EMNS hosting GSQA Chicago, IL USA Receive Finished Products OEM/Customer Transparency & Global Quality Visibility Page 23
24 Food dsupply Chain Quality Traceability GSQA Traceability Graphical Report $ $ $+,$ $++ Basic Raw Materials Primary Packager/Manufacturer Distributor/Repackager/Shipper End User/Plant S = Shipping Test; $+ = WIP Test; $++ = Finished Product Test ( ( ) $+ Page 24
25 Vendor O (Melt Shop/Rolling Mill) Vendor C (Plate Cutting) Vendor I (Test Lab) Discrete Material lprocess Flow Map QSL Tier 3 Tier 3 Tier 2 PO Tier 1 PO Tier 2 QSL Tier 4 QSL Tier 5 Vendor R (Plate Distributor) Vendor L (Nozzle Welding / Machining) Vendor G Foundry (Nozzle Castings) PO Tier 1 PO Tier 2 L&S Machine (Top Nozzle Leaf Spring Machining) Vendor W (Nozzle Assembly / Engraving) Vendor V (Spring Screw Machining) Melt Shop Rolling Mill QSL PO Utility Customer (Fuel Assembly) Finished Product Delivery (Fuel Assembly) Tier 1 PO Tier 2 Extrusion Mill QSL Tier 3 Melt Shop QSL Page 25
26 GSQA Traceability of Finished i Nozzle Assembly Finished Nozzle Assembly Quality-BOM Page 26
27 GSQA Traceability of Finished i Nozzle Assembly Shipment Details (underlined link) Lot Test Data and uploaded quality Documents (underlined link) Spring deeper in the tree or back in the supply chain Ship-From & Ship-To Details (underlined links) Page 27
28 GSQA Traceability of Finished i Nozzle Assembly Adapter plate deeper in the tree or back in the supply chain Page 28
29 GSQA Traceability of Finished i Nozzle Assembly Raw bar stock deeper in the tree or back in the supply chain Reverse trace: Where-used Page 29
30 Suppliers Extend Automation Directly to Suppliers Existing, Secure, Supplier-facing, Collaborative Portal Regulatory Docs Regulatory Certifications Compliance Extended d Auditing ERP Site Audits Traceability Specs Spec. Collaboration Spec. Distribution Spec. Sign-off Material Quality & Product Safety & Regulatory Compliance Specs. Test Methods PLM System Specs. Test Methods ASN Lot Level Ship Notice ERP System e-coa Test Results LIMS Material Used MES CAPA Plant Quality Page 30
31 The SupplyChainQualityImperativeisNow! is Manage quality and material performance across your supply chain today! GSQA provides valuable supply chain transparency, not just $ savings in quality administration costs for example. Seeing the summary error rates for every lot of every material for every shipment from every supplier every day provides a very clear picture of the material quality going into our products. The automatic GSQA ranking of suppliers insures the best performers are contributing to our supply chain. Page 31
32 Thank you! John McGlinn Page 32
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