Commentary: Manufacturing quality reimagined: The hidden power of your data
Manufacturers that only use quality data in a reactive manner at the local plant level are missing out on opportunities to generate large-scale, enterprisewide savings.
For many manufacturers, quality management means using data to help them respond to on-site alarms after a process or machine fails or when quality checks indicate products are outside of specification limits. This data may include part or component measurements, process parameters, and traceability fields such as lot codes, shifts, and work orders. But, manufacturers that only use their data in a reactive manner at the local level are missing out on realizing the full power of their quality data. This data also has the potential to provide strategic insights that can be used to proactively prevent problems from occurring and quickly uncover opportunities to make significant enterprisewide improvements.
These improvements can be attained by aggregating data from all of an organization's plants and suppliers to provide visibility into the performance of the entire organization, rather than just one plant or production line. When data is aggregated and delivered to the corporate level for analysis using statistical charts and visualizations, it can generate actionable insights that can be used to streamline global operations, improve overall product quality, and save companies millions of dollars.
Enterprisewide visibility
However, despite advancements in data collection and storage technology, many manufacturers still manually collect quality data and store it in discrete databases or keep paper records in filing cabinets at the local plant level. A recent InfinityQS survey of 260 manufacturers found that 75 percent of respondents still manually collect their data-with 47 percent of those relying on pencil and paper. Such an approach creates data silos and inconsistencies, which prevent executives and decision makers from seeing what's happening across multiple sites and extending improvements beyond a single plant.
A better approach is to unify quality data from all sources, including global suppliers, incoming inspection, shop floor operators, the quality lab, and packaging. With such enterprisewide visibility, manufacturing companies can discover insights that were previously hidden by data silos or locked away in filing cabinets. This unification of data can best be achieved by first centralizing manufacturing data from across the enterprise in a single repository. Then a statistical process control (SPC) engine can be used to analyze the data and compare operations from line to line, product to product, and site to site. For many companies, a cloud-based, software-as-a-service (SaaS) quality intelligence system is an appropriate way to achieve that.
For instance, a bottled water company previously employed a paper-based system for collecting and analyzing its quality data. When plant-floor issues arose, its quality engineers had to retrieve all of the necessary data, and then stop operations to sort and decipher hand-written notes before they could fix the problems. By automating data collection and moving to a cloud-based quality intelligence solution, the company now has real-time visibility over its processes-both within each individual site and from the corporate level across more than 25 facilities. The company can now track trends in its quality data, at both the corporate level and within individual plants, to make intelligent, timely decisions. For instance, at regular intervals, operators can pull products off the production line and gather data on key performance indicators (KPIs), such as height, diameter, and thickness. By reviewing and analyzing the collected data, the company is able to ensure consistency in the shapes and sizes of its water bottles, and highlight the greatest opportunities for improvement in the blow molding process. This approach enables it to catch issues early in the process and reduce, if not eliminate scrap, recalls, and potential delays in production.
Notably, a quality intelligence solution enables quality and process improvement teams and plant floor operators to identify issues in real time and catch problems before they occur. Manufacturers can then shift from reacting to quality issues to actually preventing them.
For example, one global tire manufacturer wanted to better leverage its production data for proactive process improvement. By utilizing a quality intelligence solution, the company can keep an eye on its processes at all times, including recordkeeping for ISO 9001 compliance and overall product quality. The quality intelligence solution issues automated alerts that notify key personnel when manufacturing processes begin to drift, ensuring that each tire is consistently produced to the highest quality standards. With this approach, the company was able to drive operational process improvements that resulted in significant cost savings and increased productivity. In one plant, it realized US$400,000 in annual savings on a single belt line. It did this by analyzing dimensional data and uncovering previously unknown quality information that revealed opportunities for reducing waste and raw material usage. Similar savings were realized on other production lines and throughout other facilities.
Providing operational insights
Once a company has consolidated the quality data from all its sites, that data can then be analyzed by quality professionals, vice presidents, operations managers, or C-level executives. Aggregated data can be sorted and viewed in different ways to compare plant-to-plant, product-to-product, and line-to-line performance, enabling quality personnel to proactively pinpoint opportunities for improvement that can significantly increase output and efficiency across the enterprise.
Such comparative analyses can show which sites need help and where the biggest gains and cost savings opportunities are located. With these operational insights, quality professionals transform from reactive "firefighters" into quality and process improvement strategists. They can use these operational insights to streamline, optimize, and transform processes and operations across the enterprise, thereby elevating product quality, improving efficiency, and creating significant cost savings.
Global transformation
Quality professionals and executives at the corporate level can also identify which lines and plants are their top-performing ones. They can take those best practices and standardize them to all facilities to achieve substantially improved results. Organizations can then begin to see real, measurable impacts to their bottom lines.
In some cases, those impacts can be substantial. One North American consumer packaged goods company uses the data in its secure, centralized repository to perform predictive analyses and respond quickly to variances across plants. Because the data are centralized in the cloud, the company can monitor if different facilities are producing above target and quickly make adjustments to prevent waste, reduce excess product or "giveaway," promote standardization, and minimize plant-to-plant variations. Furthermore, the manufacturer is able to analyze the aggregated data to identify areas for continuous improvement. The company has reported a staggering US$2.1 million in savings due to waste reduction alone.
Many organizations are exhausted from reacting to crises on the plant floor and constantly looking for opportunities to squeeze more profitability from the production line. Reimagining how they manage quality can help break that cycle. When the same data that alert manufacturers to plant-floor issues also provide critical insight into how to optimize global operations, quality becomes a competitive advantage. With the proper technology in place-automated data collection, cloud computing, a centralized data repository, and quality intelligence-manufacturers can unveil the hidden power within their quality data.
Container imports at U.S. ports are seeing another busy month as retailers and manufacturers hustle to get their orders into the country ahead of a potential labor strike that could stop operations at East Coast and Gulf Coast ports as soon as October 1.
Less than two weeks from now, the existing contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance covering East and Gulf Coast ports is set to expire. With negotiations hung up on issues like wages and automation, the ILA has threatened to put its 85,000 members on strike if a new contract is not reached by then, prompting business groups like the National Retail Federation (NRF) to call for both sides to reach an agreement.
But until such an agreement is reached, importers are playing it safe and accelerating their plans. “Import levels are being impacted by concerns about the potential East and Gulf Coast port strike,” Hackett Associates Founder Ben Hackett said in a release. “This has caused some cargo owners to bring forward shipments, bumping up June-through-September imports. In addition, some importers are weighing the decision to bring forward some goods, particularly from China, that could be impacted by rising tariffs following the election.”
The stakes are high, since a potential strike would come at a sensitive time when businesses are already facing other global supply chain disruptions, according to FourKites’ Mike DeAngelis, senior director of international solutions. “We're facing a perfect storm — with the Red Sea disruptions preventing normal access to the Suez Canal and the Panama Canal’s still-reduced capacity, an ILA strike would effectively choke off major arteries of global trade,” DeAngelis said in a statement.
Although West Coast and Canadian ports would see a surge in traffic if the strike occurs, they cannot absorb all the volume from the East and Gulf Coast ports. And the influx of freight there could cause weeks, if not months-long backlogs, even after the strikes end, reshaping shipping patterns well into 2025, DeAngelis said.
With an eye on those consequences, importers are also looking at more creative contingency plans, such as turning to air freight, west coast ports, or intermodal combinations of rail and truck modes, according to less than truckload (LTL) carrier Averitt Express.
“While some importers and exporters have already rerouted shipments to West Coast ports or delayed shipping altogether, there are still significant volumes of cargo en route to the East and Gulf Coast ports that cannot be rerouted. Unfortunately, once cargo is on a vessel, it becomes virtually impossible to change its destination, leaving shippers with limited options for those shipments,” Averitt said in a release.
However, one silver lining for coping with a potential strike is that prevailing global supply chain turbulence has already prompted many U.S. companies to stock up for bad weather, said Christian Roeloffs, co-founder and CEO of Container xChange.
"While the threat of strikes looms large, it’s important to note that U.S. inventories are currently strong due to the pulling forward of orders earlier this year to avoid existing disruptions. This stockpile will act as an essential buffer, mitigating the risk of container rates spiking dramatically due to the strikes,” Roeloffs said.
In addition, forecasts for a fairly modest winter peak shopping season could take the edge off the impact of a strike. “With no significant signs of peak season demand strengthening, these strikes might not have as intense an impact as historically seen. However, the overall impact will largely depend on the duration of the strikes, with prolonged disruptions having the potential to intensify the implications for supply chains, leading to more pronounced bottlenecks and greater challenges in container availability, " he said.
A coalition of freight transport and cargo handling organizations is calling on countries to honor their existing resolutions to report the results of national container inspection programs, and for the International Maritime Organization (IMO) to publish those results.
Those two steps would help improve safety in the carriage of goods by sea, according to the Cargo Integrity Group (CIG), which is a is a partnership of industry associations seeking to raise awareness and greater uptake of the IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (2014) – often referred to as CTU Code.
According to the Cargo Integrity Group, member governments of the IMO adopted resolutions more than 20 years ago agreeing to conduct routine inspections of freight containers and the cargoes packed in them. But less than 5% of 167 national administrations covered by the agreement are regularly submitting the results of their inspections to IMO in publicly available form.
The low numbers of reports means that insufficient data is available for IMO or industry to draw reliable conclusions, fundamentally undermining their efforts to improve the safety and sustainability of shipments by sea, CIG said.
Meanwhile, the dangers posed by poorly packed, mis-handled, or mis-declared containerized shipments has been demonstrated again recently in a series of fires and explosions aboard container ships. Whilst the precise circumstances of those incidents remain under investigation, the Cargo Integrity Group says it is concerned that measures already in place to help identify possible weaknesses are not being fully implemented and that opportunities for improving compliance standards are being missed.
By the numbers, overall retail sales in August were up 0.1% seasonally adjusted month over month and up 2.1% unadjusted year over year. That compared with increases of 1.1% month over month and 2.9% year over year in July.
August’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.3% seasonally adjusted month over month and up 3.3% unadjusted year over year. Core retail sales were up 3.4% year over year for the first eight months of the year, in line with NRF’s forecast for 2024 retail sales to grow between 2.5% and 3.5% over 2023.
“These numbers show the continued resiliency of the American consumer,” NRF Chief Economist Jack Kleinhenz said in a release. “While sales growth decelerated from last month’s pace, there is little hint of consumer spending unraveling. Households have the underpinnings to spend as recent wage gains have outpaced inflation even though payroll growth saw a slowdown in July and August. Easing inflation is providing added spending capacity to cost-weary shoppers and the interest rate cuts expected to come from the Fed should help create a more positive environment for consumers in the future.”
The U.S., U.K., and Australia will strengthen supply chain resiliency by sharing data and taking joint actions under the terms of a pact signed last week, the three nations said.
The agreement creates a “Supply Chain Resilience Cooperation Group” designed to build resilience in priority supply chains and to enhance the members’ mutual ability to identify and address risks, threats, and disruptions, according to the U.K.’s Department for Business and Trade.
One of the top priorities for the new group is developing an early warning pilot focused on the telecommunications supply chain, which is essential for the three countries’ global, digitized economies, they said. By identifying and monitoring disruption risks to the telecommunications supply chain, this pilot will enhance all three countries’ knowledge of relevant vulnerabilities, criticality, and residual risks. It will also develop procedures for sharing this information and responding cooperatively to disruptions.
According to the U.S. Department of Homeland Security (DHS), the group chose that sector because telecommunications infrastructure is vital to the distribution of public safety information, emergency services, and the day to day lives of many citizens. For example, undersea fiberoptic cables carry over 95% of transoceanic data traffic without which smartphones, financial networks, and communications systems would cease to function reliably.
“The resilience of our critical supply chains is a homeland security and economic security imperative,” Secretary of Homeland Security Alejandro N. Mayorkas said in a release. “Collaboration with international partners allows us to anticipate and mitigate disruptions before they occur. Our new U.S.-U.K.-Australia Supply Chain Resilience Cooperation Group will help ensure that our communities continue to have the essential goods and services they need, when they need them.”
A new survey finds a disconnect in organizations’ approach to maintenance, repair, and operations (MRO), as specialists call for greater focus than executives are providing, according to a report from Verusen, a provider of inventory optimization software.
Nearly three-quarters (71%) of the 250 procurement and operations leaders surveyed think MRO procurement/operations should be treated as a strategic initiative for continuous improvement and a potential innovation source. However, just over half (58%) of respondents note that MRO procurement/operations are treated as strategic organizational initiatives.
That result comes from “Future Strategies for MRO Inventory Optimization,” a survey produced by Atlanta-based Verusen along with WBR Insights and ProcureCon MRO.
Balancing MRO working capital and risk has become increasingly important as large asset-intensive industries such as oil and gas, mining, energy and utilities, resources, and heavy manufacturing seek solutions to optimize their MRO inventories, spend, and risk with deeper intelligence. Roughly half of organizations need to take a risk-based approach, as the survey found that 46% of organizations do not include asset criticality (spare parts deemed the most critical to continuous operations) in their materials planning process.
“Rather than merely seeing the MRO function as a necessary project or cost, businesses now see it as a mission-critical deliverable, and companies are more apt to explore new methods and technologies, including AI, to enhance this capability and drive innovation,” Scott Matthews, CEO of Verusen, said in a release. “This is because improving MRO, while addressing asset criticality, delivers tangible results by removing risk and expense from procurement initiatives.”
Survey respondents expressed specific challenges with product data inconsistencies and inaccuracies from different systems and sources. A lack of standardized data formats and incomplete information hampers efficient inventory management. The problem is further compounded by the complexity of integrating legacy systems with modern data management, leading to fragmented/siloed data. Centralizing inventory management and optimizing procurement without standardized product data is especially challenging.
In fact, only 39% of survey respondents report full data uniformity across all materials, and many respondents do not regularly review asset criticality, which adds to the challenges.