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Real-time Data will Impact How Quality is Managed in Supply Chains

At a recent meeting I attended, several members of a quality team noted that suppliers sharing process capability data from their line would provide enormous benefit. Emerging real-time quality data systems being deployed by companies will improve the exchange of information between suppliers and Quality personnel, especially around inspection reports.  One area that has not been bridged yet, is the implicit assumption that everyone will be willing to share quality data including process specifications, SPC data, and other information from machines, inspection, maintenance, R&R gage studies, etc.  In fact, suppliers may be very reluctant to share data from their equipment, and the entire issue of bridging the culture gap of information sharing with suppliers will be another important part of the equation. Connected supplier quality can eventually provide the foundational data that would lead to predictive machine quality, that would predict when maintenance issues should be required linked to Internet of Things sensors.  Lots of people seem to assume that all of this data will flow seamlessly between companies – but is this realistic?

Software as a Service systems will likely be able to have quality managers connect directly to the supplier and indirectly through a web portal to gain access to quality measurement data, capability data, and employee performance data. An important part of this will be institutionalizing the system of measurement, ensuring that the supplier also knows how to access the system and use it, and methods to proactively measure supplier capabilities and evaluate issues as they arise. This is the opposite of the typical quality assurance process which is reactive. Every non-conforming part would have real-time information on process capability and where it in the system, ideally before it leave the supplier’s facility and is shipped to  a customer.

What needs to be sorted out are a number of other questions:

  • Who owns the data?
  • How will it be used? As a penalty, an incentive, or linked directly to contract payment terms?
  • How will the veracity of the data be determined?
  • Who will be assigned to problem-solving and on-going quality assurance efforts?
  • How will such data be applied in new product development?

Total Cost is also related to supplier quality management, and is a big opportunity. Across industries, billions of dollars of warranty costs are related to supplier quality issues. One participant noted that he was most proud of the Bronze Award from a competitor rather then a Gold Award from the customer.  When queried, he noted that the competitor is measuring process capability at the level of the machine cell. This suggests that we need to  focus measurement at the specific machine level, not the supplier level, if we truly want to get to the right level of measurement and follow-up.