It’s standard practice today for manufacturers to use ERP systems for their sales and financial transactions and a manufacturing execution system (MES) to track their raw materials through finished goods. However, these very same companies are still managing shop floor quality processes with spreadsheets and paper-based processes. We can guess what you’re thinking: I’m also guilty of this.
And you’re right. You’re not alone. With 79% of organizations still managing their EHS and Quality programs with paper and spreadsheets, there are countless opportunities for improvements across the board. With a paper or spreadsheet-based management system, there’s a good chance you’re dealing with outdated documents, siloed data, and limited visibility. But visibility across your company isn’t the only thing on the line here. When it comes to meeting FDA or OSHA regulations, the stakes for non-compliance couldn’t be higher and so the time for modernization is now.
To help you automate your processes and take your programs to the next level, we’ve outlined five essential steps to ensure a successful digital transformation journey.
Step 1: Lay the Foundation (In other words, the “what”)
If your organization is still managing EHSQ processes with paper or spreadsheets, you’re probably familiar with the frustrations that come along:
- Misplaced or lost files
- The high cost associated with storing so many documents
- Lack of version control with spreadsheets
- Painful audits
Are you struggling with one or more of these pain points? According to the Industry Digital Readiness Index, 81% of employees expect that digitalization will streamline processes and improve document workflow. You’re probably already on board with automation, it’s the rest of the organization that needs convincing.
Step 2: The Need for Visibility (the “why”)
You know it, we know it, but maybe management isn’t completely aware – there is a huge cost associated with poor quality. Addressing issues first and foremost internally can save a significant amount of time, money, and resources. Quality Management guru Dr. W. Edwards Deming said when a company can address an issue internally the cost is only one time (1x) the cost of goods sold. However, once it enters the supply chain, the cost skyrockets to a thousand times (1000x). Therefore, it’s critical to address quality issues as soon as they are identified, whether that’s internally or with a supplier.
Most product recalls can be traced back to a supplier, which means organizations need to increase visibility and treat suppliers like their own. An EHS management system gives you the option to share processes and procedures with your suppliers, even if you have multiple. By creating a standardized, repeatable process that is consistent and well-documented, this allows you to have control and visibility throughout the entire supply chain. Otherwise, key people might be missing important information to do their jobs effectively.
Step 3: Make the Business Case
We return here to the Cost of Poor Quality (COPQ), as we know this is what the C-Suite is looking for – the numbers. The indirect costs associated with poor quality can greatly impact a company’s profitability:
- Excessive overtime
- Warranty costs
- Returns
- Excess inventory
- Compliance failure
- Increased audits
- Brand reputation issues
Cost of poor quality for an average company is about 20% of Sales – that’s huge. The single best solution to ensuring product quality and in turn, reducing your costs is implementing an automated quality management solution.
Step 4: Digitalization (the “how”)
By taking your paper-based records and digitizing them, you can start to standardize data and processes. Many of your EHS and Quality processes are overwhelmingly collaborative. Internal and external audits, incidents, nonconformances, corrective actions and preventive actions (CAPAs) and management of change (MoC) – these all require overlap and teamwork from a variety of individuals across the shop floor.
With a centralized EHSQ system, your quality information is integrated into one solution, creating that visibility across the entire team. Procedures, audit reports, findings, non-conformance requirements – you name it – these can be tracked, monitored, and processed all the while being visible to everyone on and off the shop floor. This holistic view of the shop floor is incredibly impactful long-term, as management can start to track trends in processes and easily drill down into risks. Having this tool enables alerts to be shared and issues to be managed earlier in the process, which in turn, greatly reduces costs to the organization.
Step 5: The Deployment Decision (the “who”)
After you’ve secured buy-in for your new EHSQ software project, you now need to decide what deployment method you’re going to choose: a true Software as a Service (SaaS) or an on-premises solution. Collaborating with other departments and looking at your long-term goals is important here. For more information on making the right deployment decision for your organization, leverage these expert guides:
