Tim Lozier and Janet Jacobsen06.12.06
Uncovering the Hidden Factory
By Tim Lozier and Janet Jacobsen
Tim Lozier Janet Jacobsen |
While an ERP or MES system can identify nonconformances and place products on hold, it typically only lists lots as “on hold.” As you use your QMS to resolve the nonconformance, the ERP or MES system doesn’t know where the product is in the disposition process, the cost of the nonconformance or the time to disposition. During this time, factors such as deadlines and customer demand often initiate a total product re-order to meet customer needs—all the while your nonconforming lot becomes “lost” and is stored in inventory, never to return to production. In effect, the nonconforming product becomes “hidden” and is eventually lost.
On The Trail to a Solution
This article demonstrates how integrating your ERP/MES and QMS system can help solve the mystery of this expensive, wasteful hidden factory. You will see that it is possible to:
• Communicate the nonconformance process to the ERP/MES system
• Determine the cost to take corrective action on a nonconformance versus the cost to rework
• Indicate the scheduled time to completion on a nonconformance
• Learn the status of your nonconformances in real time
These actions can help disposition a nonconformance in a timely fashion and with a clear indication of the cost to reinstate the lot to production. Rather than cut your losses on nonconforming lots, you can save materials and keep your production up with material overhead.
How It All Fits Together
Batches are held in the ERP/MES and a nonconformance is manually opened in the QMS. During this time there is no way to determine the status of the nonconformance, and the held lots sit in inventory for an indefinite amount of time or worse, are dispositioned but no one knows about it. |
Here is the simplest way to view the relationship between the QMS and ERP/MES system: the ERP/MES system tracks the product and materials, and the QMS tracks the process and any nonconformances. As the ERP/MES builds and tracks the inventory, bill of materials and lots, it records any nonconformances along the line. It then becomes the QMS’s job to determine the nature of the nonconformance and how to correct the problem—including time to complete, cost to complete and steps taken to complete the nonconformance.
So where does the integration of these two systems happen? As previously stated, an ERP or MES only knows if a product is on hold, and cannot determine the location of product in the nonconformance process. Using integration, once a lot is put on hold, a nonconformance is automatically initiated in the QMS system—and as the disposition process is completed in the QMS, data is fed to the ERP or MES. Simply put, an ERP/MES system’s data is stored in a database, and it pulls information from that database to display the up-to-date information. Similarly, the QMS stores its data in a database. The key to integration is allowing the two separate databases to share information so that the ERP/MES system is pulling information from the QMS database and the QMS is pulling information from the ERP or MES database—allowing the two systems to work from mutually exclusive database relationships.
When integrated with the ERP/MES, instead of merely knowing whether a lot is on hold, the QMS system will now indicate the location of the product in the nonconformance process, the cost to disposition and correct as well as an estimated time to completion. Once the disposition is complete, the lot can be routed back in the process and moved into production. An integrated process like this provides superior resource management compared to a disjointed system that result in hidden lots sitting in inventory.
Uncovering Your Hidden Factory
The following are a few key points to look for in a QMS software solution.
Using integration tools between your ERP/MES and QMS, nonconforming lots are pulled and the status of the nonconformance is relayed back to the ERP/MES so that no lot is wasted due to lack of communication between systems. |
Nonconformance. An integrated disposition process built into your QMS can assist in properly identifying and tracking any problems related to product nonconformances and in issuing corrective actions. The ability to link these nonconformances to the ERP/MES system can help determine the factors related to the completion of a process investigation and ensure that your nonconformances are addressed and corrected in a timely and cost-effective fashion. Make sure the QMS system can disposition lots individually, even though they may be related to a single nonconformance—otherwise, the disposition process will be delayed. Your QMS system should also be able build in business rules regarding the disposition process and bookending. Having the process automated in the software leads to tremendous time savings.
Bookending. While some systems can identify nonconformances and pull them off the line, it’s more important to ensure that no other lots are nonconforming. Bookending is a feature that will help guarantee that not only a single lot, but also the surrounding lots are put on hold until a nonconformance is addressed. This is an important precautionary measure—you should ensure the QMS can put business rules in place that will automatically bookend any nonconforming lots.
Reporting. Systems with strong reporting capabilities help identify the key performance indicators that will identify the stability of a quality system. By reporting nonconformances and time-to-completion information to top management, you can demonstrate how uncovering your hidden factory will save time and money in raw materials, labor and cost to rework.
When researching QMS software solutions, consider that software providers are frequently don’t have a sound grasp of shop floor operations; therefore, it’s important to assess the vendor’s background to ensure quality and compliance needs will be met.
Benefits of Uncovering the Factory
The bottom line is, less waste and more productivity can result from simple integration of your QMS and ERP or MES systems. By creating a communication point between your ERP/MES and QMS, you can reduce nonconforming products by identifying problems, correcting them and moving products back into production. Fewer nonconforming products/materials mean lower production costs and less overhead. This can increase your productivity and dramatically reduce your cost.
The hidden factory is not a new concept, and while it’s crucial to understand and recognize it, it is even more important to utilize your resources to expose it and eliminate it. Integration of your QMS and ERP/MES systems is the key to not only uncovering the hidden factory, but also to effectively managing the components that make it up.