Wearable Devices: When Purpose is More Than Just Fashion, Quality and Compliance are Not Optional

When we think of wearable devices we usually think of watches, or goggles. Well, these smart watches do more than just tell time or weather or incoming caller ID, and the goggles do more than project some image in our field of view. The upcoming iWatch from Apple is poised to deliver more than just a slaved device function, whence it is merely a remote display with events pushed from the smart phone. The devices like FitBit or Nike+ or most of the Android Gear are merely lifestyle devices. iWatch on the other hand is intended as a health device which gathers vital signs, stores and even notifies your health care professional when certain thresholds are breached, through the HealthBook and HealthKit applications. Then, guess what? Now this smart watch has become a medical device!

Apple is rumored to be talking to the FDA to obtain clearance for the iWatch as a medical device. Why? It conceivably can triage and make medical decisions by logging vitals and notifying your doctor. The iWatch is designed to sense and track blood glucose levels through skin induction, and through BLE. Together with an insulin pump it could deliver doses of insulin based on set thresholds Now it is a medical device, and as such it should be regulated and certified by FDA. Thus, Apple’s foresight and drive to gain a broader application not just today, but tomorrow through app and hardware extensions could make this a true medical device, even a class II device. With such proclamation brings challenges to OEMs like Apple – there is 21 CFR Part 11 for complaints, post-market surveillance, eMDR/eMDV, CAPA, audit trails and FDA scrutiny to name a few.

Now let’s look at goggles, or smart glasses. The most ubiquitous one is Google Glass, and the Oculus Rift also comes to mind. These are not intended for anything other than recreational use or a mere extension of displays placed in front of your eyes. These devices, like the smart watches, have extended purposes through apps or integration with other devices through WiFi, BLE or NFC. Think about all of its useful purposes in other areas: an aircraft engine mechanic could call up diagrams and test instructions literally in front of his face while having both hands free to handle the work in front; a surgeon requesting a chart or a zoomed view from a camera while performing surgery, freeing up his/her hands; or a recreational/private pilot using this device as a HUD (Heads Up Display) which greatly enhances flight safety in inclement weather; or how about an oil rig worker with heavy gloves and tools needing to refer to technical drawings while at a hazardous work site. All of these examples are not simply recreational use, but each as some type of critical safety component. Therefore, they should be certified under strict industry regulations, and have proper post-market surveillance.

To be successful in the short and long terms, these manufacturers should carefully weave quality and safety processes as part of the product life cycle, and extend it out to their entire supply chain. When government regulatory bodies get involved in the manufacturing process it is critical to establish the following:

1. Put an integrated, enterprise quality system in place to build global quality processes throughout the organization and supply chain

2.  Hire and train dedicated personnel on these systems and the quality processes

3. Build and maintain proper records for product quality, reliability, safety and consumer satisfaction.

For more information, download "A Fresh Look at Quality in High Tech Manufacturing"

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Electronics Manufacturing & How EQMS Increases Tracking and Visibility of Suppliers

Joseph Moses Juran, one of the founding fathers of quality management, penned The Quality Control Handbook in 1951. In his handbook, he outlined a nine-step supplier quality assurance process that is still followed to this day. Although Juran’s process is still highly relevant, times have changed -- especially so in the electronics and high-tech manufacturing space where products are continually evolving. While tried and true practices are timeless, electronics manufacturers need to be flexible and find ways to adapt age-old best practices to a continually evolving industry. One of the most impactful changes within the industry is the role of suppliers. Suppliers are now involved at an earlier stage in the product life cycle than they were before, particularly in the high-end electronics and other complex manufacturing spaces. As a result, these suppliers are providing more value to manufacturers beyond the parts that they are creating.

Suppliers as Collaborators

Original equipment manufacturers (OEMs) are taking a more direct approach by investing in strategic supplies, giving more importance to the role of suppliers earlier on.  Many brands and manufacturers that are household names have made investments in their suppliers. For instance, auto manufacturer BMW has made a significant investment in the carbon fiber used to create various parts of its I and M models. Tech giant Apple made a similar investment in its supplier of sapphire glass, the material that provides the basis for several key components of its iPhone 5 and 5s models. OEMs that have made such an investment in their suppliers stand to gain a competitive advantage in their field by making the process more standardized, streamlined, and cost-effective.

More high tech companies are also bringing suppliers into their design environment. Suppliers, designers, and manufacturers often use the same system, so if a component gets changed, any division with a hand in that process is flagged and proactively notified in real-time.

In an industry peppered with as much rapid-fire change as the electronics manufacturing space, these changes, as well as the changing relationship and roles of suppliers and manufacturers, must be addressed during the supplier quality assurance process. Enterprise quality management solutions (EQMS) come into play to bridge the gap between these divisions.

Bridging the Gap Between Supply Chain Roles -- As Well As the Past, Present, and Future

EQMS is neither a hindrance, nor a duplicate of existing systems that may have already been in place. Rather, it offers more granular insight into work flows, triggering warnings early on in the process. By connecting the various spheres of designers, suppliers, and manufacturers, it provides greater traceability and accountability. Given that many suppliers are now a more integral part of the process, EQMS provides a way to keep them in the loop and notify them of changes sooner, rather than later.

In order to ensure and validate that suppliers conform to requirements, an EQMS system can put early warning triggers in place. When these triggers are established as part of a supplier non-conformance procedure, certain key people can be notified or action can be initiated to create a more streamlined workflow for this specific action. In addition to being able to aid in the process of generating a supplier non-conformance report, EQMS can also help with “lessons learned” processes and predictive intelligence. Historical and current data logged via EQMS can be mined for future processes to be sure that any past failures are not replicated in future efforts. This can be helpful in predicting failures, specific issues, or maintenance concerns with certain types of equipment.

Supplier Quality Assessment: Red Flags to Watch For

As technology evolves at a faster pace, the ability to bring a product to market faster and tighten the cycle time is crucial to electronics manufacturers. Having visibility and collaboration and same-system access for quicker task completions and swift remediation is important when it comes to delivering quality and safe products at a faster pace.  Having structured workflows and processes can help to be sure that products meet not just written, but internal quality standards which may need to be verified by cross-functional teams before release.

EQMS has the potential to put these cross-functional teams on the same page and better recognize when supplier non-conformance and supplier corrective action requests (SCAR) should be issued. There are five common red flags that may trigger the need for remediation. These triggers include:

  • Non-conforming materials
  • Changes that have not been approved
  • Changes that have been made without informing pertinent members / departments of a supply chain
  • Incomplete incoming materials (Although this trigger isn’t very common in the electronics manufacturing space, there are some instances where incomplete materials -- such as integrated chips without heat-sink mounting -- can pose an issue.)
  • Excessive field failures as a result of a supplier component


Despite the continually evolving nature of the electronics industry and the roles of suppliers in the chain, some constants remain. Supplier scoring is a timeless part of a process and insight into adverse trends allows each link in the chain to more quickly pivot and correct course.

View our Webcast about increasing brand reputation through high quality products.

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New Trend in Manufacturing: Vertical Integration Through Strategic Supplier Relationships. But What About Quality?

The first question that comes to mind is “how can you ensure quality, reliability and safety amid your expansion and vertical integration of your supply chain through greater industrial partnership, equity ownership, joint ventures and other relationships?” Lately, there has been a spate of high profile recalls. The root cause for greater than 50% of those recalls or post market issues have been attributed to suppliers. What this means is when you have visibility, you can respond and react faster to remediate issues early on. Let’s look at some examples of how industry leading technology companies are taking vertical integration to the next level:

  • BMW: is investing in carbon fiber which is raw material for the CFRP in the BMW M models and i-series of cars. The joint venture called SGL Automotive Carbon Fiber in Moses Lake, WA is the world’s largest CF manufacturing operation and is poised to triple the present output (current capacity of 100,000 cars per year) by 2016.
  • Apple: is investing in Sapphire Glass manufacturing operations through its capital infusion for GT Advanced in Mesa, AZ. What this investment provides Apple is mass production of high quality sapphire glass for its future iPhones, iPads, iWatch and other devices at a lower price point and with superior optical quality.
  • Tesla: is building its own Li-Ion cell manufacturing plant in TX so not to be slowed down by the limited global supply chain headed by Panasonic. As Tesla increases its output with new models, they foresee supply disruptions that can lead to critical mass issues as they strive to reach global scale.

As the quality guru Ed Deming stated in his 1-10-100 rule, having visibility to the issues earlier in the supply chain costs less to fix and remediate than if it had been discovered later or even once a product makes it into the marketplace. Recalls cost a lot of time to resolve, costs a lot to remediate and takes away resources from other value added activities. The cost elements bleed into long term financial effects via legal, civil and criminal charges and long term brand value devaluation, Ultimately, the effects of recalls are brand reputation, market share erosion and adverse shareholder value.

The challenges that this complex supply chain presents are not the lack of supply, delivery, inventory, critical supply data, but the visibility of critical information to perform proactive tasks or to make impactful decisions. When multiple stakeholders are present in a vertically integrated “out-of-the–four walls” supply chain, it is imperative to provide near real-time access to a common system so there is no latency in using leading indicators instead of trailing indicators to initiate critical tasks.

Just ask yourself this: Is it possible to ignore supplier or material issues that feed your business and still make equity or capital investments for JV partnerships, or to buy out other vendors to improve your competitive advantage, or provide the means of business continuity to expand output and market position? The answer should be that it is imperative to have full control and visibility of issues caused by these suppliers for safety, reliability, high quality products, brand value and profitability.

Sparta Systems foresaw this critical need and recently launched Stratas, a cloud application that that extends the Company’s flagship quality management software, TrackWise, beyond a customer’s four walls. Stratas provides greater control and visibility into third party supplier quality operations, thereby reducing risk and improving efficiency throughout the value chain.

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Market Share Does Not Mean Your Business is Healthy

There is a lot that companies claim and advertise on their market share in a given segment which makes it looks like they are running a healthy business. Many companies have systematically built up market share at a healthy pace, and are profitable. However, there are some companies that have built up market share at a cost. This cost is from buying companies to bulk up, to gain critical mass which in turn reduces fixed costs, reduces unit cost through shared parts usage or R&D, or cost savings due to supply chain optimization and logistics. Is there anything wrong with this approach? Not always, but the market is littered with carcasses of many failed strategies. One such strategy was employed at Johnson Controls Inc (JCI), the world’s number one for automotive seating. JCI acquired companies at a torrid pace, spending more than $1 billion since 2011. Yet, the scale has not made the business richer. Besides macro economic issues in Europe, troubles integrating acquired companies have not allowed JCI to achieve cost savings from this dominant position.  JCI’s operating margins have shrunk to 3.8% from 4.4%, while its competitors are enjoying double-digit ops margins. So having a market dominant position and global scale alone do not define market success.

Let’s see where companies like JCI can look to attain margin improvement. These companies in the industrial sector are typically global with broad global supply chain and multiple manufacturing sites dealing with a myriad of customers. In case of JCI, they operate 53 manufacturing sites in China alone, the fastest growing automotive sector for JCI. So it is easy to look at the supply chain for a quick answer. The business needs and benefits of supply chain quality management (SCQM) are multi-folded, so let’s dig a bit deeper into these areas:

Cost – Cost control is paramount no matter what sector you are in. Recall what Edward Deming states in his quality paradigm which is the classic 1-10-100 rule. It states the sooner you find an issue in the value chain, the lower the cost to fix and remediate. The cost includes resources, time and materials on the tangible side, and brand, reputation and equity on the intangible side. We all know what it costs when a product is recalled (fixing, replacement, legal, brand rehabilitation etc.). Efficiency gains also play downstream into other products that are across the entire product portfolio. Cost directly affects margins which ultimately provides better shareholder value.

Quality – Quality is an important aspect whether you are B2B or B2C. The typical 4P’s of marketing starts with the product, and without a high quality product, the other P’s have crimped value. Managing a supplier issue in a timely and efficient manner ensures that you put quality parts and material into the final product. Managing supplier CAPAs or SCARs in real-time provides that unmatched advantage to any manufacturer.

Reliability and Consistency – Since there are so many stakeholders in a typical value chain, often with the manufacturing, packaging and distribution done by various sub-contractors, it is essential to manage reliable and consistent delivery to the marketplace no matter where this marketplace is in the world. For example, look at McDonalds – you can expect consistency throughout the world. Another example is FedEx – you can expect the same reliability in every country they serve. Managing suppliers to the same standards and processes ensures brand value characteristics.

Risk & Brand Protection – Brand is an asset which can easily make or break a company. Just look at what the multiple product recalls cost Toyota in terms of brand valuation, and subsequent loss of market share. Brand and image rehabilitation costs a company time and resources during which time a competitor can swoop in to gain and retain market share. No matter how a quality related safety or reliability issue happened, your company is responsible for any malaise caused by your suppliers. Risk to your products, your customers and your brand are not something you can take lightly. Risks are not purely short-term, and the costs associated with lawsuits, injury and loss of life, can even lead to executive criminal negligence.

Optimization and Collaboration – Since multi-national companies typically utilize global suppliers of specialty, differentiating or commodity parts and materials, it is a good business practice to identify critical suppliers and optimize the supply chain to reduce unnecessary redundancy and to foster collaborative relationships as an ongoing activity. How can this be accomplished? By virtue of breaking down the proverbial four-walls around the company and making strategic suppliers become business partners. This strategy forms an integrated, collaborative cross-functional team from the early stages of product development to delivery. Differentiation and strategic partnerships create compelling products that help companies bring products to market early, gain the first mover advantage and keep competitors at bay. This methodology is used heavily in high-value or durable product markets like aerospace and defense, automotive and even consumer electronics.

Supply chain quality and visibility – Supplier quality visibility and standardization of quality processes across the entire supply chain are critical in a manufacturing environment.  Access to real time metrics dashboards will lead to enterprise wide supply chain quality visibility for purchasing as well as supplier development for the newly acquired or vertically integrated seating divisions. While this provides consistent quality across the entire product portfolio, it also allows a company to optimize the supply chain for current and future portfolio management.

Some of the companies who had clear market share leadership and product prowess could not maintain their market position or sustain profitable businesses. History shows several high profile companies secede their position or went out of business completely. These include Motorola, Xerox, Kodak, BlackBerry (RIM), Dell, Sun Microsystems, Sony, and Toys ‘R’ Us, to name a few. Follow the leaders like Apple, Amazon, and IBM in defining successful supply chain management strategies to adapt and sustain a successful business.

Therefore, standardize all internal manufacturing and quality control processes centered around a single system. With the current manufacturing landscape susceptible to compromised or adulterated materials in the supply chain, the right quality processes need to be established to reduce risk and secure brand reputation.  Supply Chain Quality Management needs to be built into a company’s business strategy, with clear supplier objectives, deliverables and repercussions for materials.  Creating this quality environment raises the likelihood of a company turning out high quality products and in return, raises margins and market share.

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Agnostic Prognostics: Impactful decision making using Metrics, KPIs and Data Analysis

Recently, GE Aviation and Accenture teamed together to create Taleris (Source: Aviation Week, July 1, 2013, Airline Intel), a company which delivers Intelligent Operations Services for Airlines and Cargo Carriers, to harness mature predictive analytics and prognostic technology with parametric and non-parametric information to provide meaningful outcomes to petabytes of disparate data for the aviation industry. In simple terms, this relationship brings together structured and non-structured data, where analytics are performed using predictive models so the airline operation could have optimized planning and implementation. At first glance, this operational nirvana of providing near-real time decision making ability seems impractical due to the difficulties in cost effectively analyzing incredibly large amounts of data.  A near-utopia state would further include the fusion of external data, that is unstructured and sentiment based from social media.

The integration of data is gravely needed in all the manufacturing sectors, including automotive, industrial, electronics, aerospace, healthcare and medical devices. There are a lot of enterprise systems bearing the alphabet soup of acronyms like ERP, CRM, SCM, SRM, PLM, EAM, QMS to name a few. Each one generates megabytes of data on a continuous basis, each doing its own thing, and each not very aware of the relationship other systems hold. What this fails to provide is impactful information gleaned from the fusion of related data without using some sort of relationship models.

When data is entered into the quality management system, even within processes like customer complaints, CAPA, supplier management, etc., people tend to look at them individually. But those days are over. TrackWise EQMS not only provides a platform to manage these individual processes but also provides flexibility and configurability for repeatable and predictable business processes suitable for a specific industry. TrackWise Analytics component integrates the data, or fuses the related data, through the automatic generation of the semantic layer as the report data warehouse to allow the end user to create the metrics, outputs, charts etc. that brings operational information for effective decision-making.

Analytics provides a platform for future predictive models to bring forward leading indicators that would allow companies to minimize the effects of disruptive events. This becomes even more powerful when social media, unstructured data, and customer sentiments are included as part of the predictive models. This level of self-service analytics is essential to today’s manufacturing effectiveness since companies are facing tough competition, disparate supplier networks, greater scrutiny of margins (i.e. cash flow) and complex manufacturing operations.

For more information, visit us at http://www.spartasystems.com/.

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Delivering Value to Key Quality KPIs with Supplier Quality Management

Electronics manufacturers have to juggle a number of challenges simultaneously that, when brought together, have the potential to create the perfect storm. Just to name a few, these include the increasing complexities of products and products, shrinking operating margins, and heavy reliance on the global supplier network. Luckily, each of these factors has a common denominator: quality management. The earlier you can build quality into complex products or processes, the better you will be able to manage these challenges and reduce unwanted costs in the long run. As a consequence, it’s critical to have strong quality capabilities closer to product development and sourcing processes. Market leaders have realized this and it’s triggered considerable investments in supplier quality management (SQM).

This post will inspect specific approaches you can take to get the most out of your supplier relationships, enabling a communicative and collaborative environment that fosters real improvements in risk, compliance, quality, and efficiency that can be felt across the enterprise.

Reducing Risk and Improving Visibility with Scorecards and Portals

When it comes to SQM, among others there are two capabilities that stand out as instrumental to catching and resolving quality issues before they’re even shipped and reducing risk of doing business with particular suppliers: portals and scorecards.

- Supplier Portals: Typically delivered over the cloud, a supplier portal can bridge the gap between suppliers and the rest of the value chain. Today’s companies can leverage portals to take more control over supplier activities and facilitate two-way communication and collaboration. Electronics manufacturers can, for instance, obtain better visibility into test results and order status information such as delivery times, as well as make changes to engineering requirements. - Supplier Scorecards: Scorecards can be thought of as a directory of suppliers that entails very specific data ranging from basic demographic information up through potential impact to your risk portfolio if you choose one to source a part of component. With scorecards, you can evaluate and even rank suppliers based on past and current performance, assigning a numerical value to each. This is becoming more and more important as the electronics manufacturing industry leverages global suppliers to improve operating margins and offer competitive pricing.

Taking a Global Approach to SQM with EQMS

For electronics manufacturers, it makes sense to deploy and standardize SQM capabilities globally. It’s become increasingly common for them to be delivered as part of an enterprise quality management software (EQMS) solution, which is essentially a hub for centralizing, streamlining, and standardizing quality process data and content. Many companies are applying this holistic approach to get more out of relationships with suppliers.

Fortunately, EQMS functionalities in addition to scorecards and portals typically work in conjunction with one another, which really enhances the impacts that quality process data and content can have. For instance, supplier scorecard data can interoperate with global risk management to provide executives with a better understanding of the enterprise risk portfolio. Similar closed-loop synergies can be found with other functionalities.

Understanding the Business Value of Supplier Quality

Because SQM capabilities delivered through EQMS bring together traditionally disparate data sources and processes, its holistic nature tends to deliver significant end-to-end benefits when compared to manual or homegrown processes. This is not simply theoretical; it’s been proven in LNS Research’s 2012-2013 Quality Management Software survey that asked over 500 executives detailed questions on quality performance.

The below box plots cross-analyze the adoption of web-based supplier portals with performance in the overall equipment effectiveness (OEE) metric. As can easily be seen, companies that are leveraging portals to automatically collect supplier data and open up lines for collaboration are outperforming others without that capability.


Companies with supplier portals have a median OEE of 88%, outperforming others by 3% and showing considerably less variation in performance. Since the metric comprises variables including quality, availability, and efficiency, earlier interaction with suppliers and communication of quality deviations is likely the driving factor for improved OEE performance.

Electronics manufacturers looking to drive improvements in key quality metrics such as OEE would be well suited to automate traditionally manual supplier quality management processes. The improved visibility and impact on efficiency provided by portals is only the tip of the iceberg with today’s SQM functionalities. Companies are also leveraging scorecards as well as a range of other interoperable functionalities such as SPC, supplier corrective actions, and more.

Wearable Computing and Enterprise Applications – Will it see mainstream adoption?

Last week JP Morgan Investor Research reported that wearable computer devices are poised to grow from less than $4B to $40-50B market in a few years. We have seen a few Star Trek like devices in the public lately and most recently the pre-release test ‘explorers’ by Google which is called Glass. There are other devices planned for the marketplace in the coming months, including a device from Apple, tentatively called Apple iWatch. Wearable devices that primarily use hand gestures, finger taps or voice command will make these devices true hands-free computing communicators. These devices have so far demonstrated limited consumer utility earning them high tech gadget status. But, will they become mainstream in the industrial, corporate or manufacturing environment? How can they make a positive impact? Can they really make the workplace safe, effective and efficient? Let’s examine a few scenarios for this hands-free tool.

There are some areas in some sectors where human hands can be used elsewhere while you have access to information. Take for example, aircraft engine manufacturing or MRO facilities, where you could have the instructions, or schematics as you are dealing with high value assemblies. This would provide a safe environment but also quality output and cost savings.

Another instance of good use is where your hands cannot access a laptop or tablet, as in a environmental disaster area, clean suit area or other places where you would like the information without stopping work and getting to a workstation. You are performing an audit in a nuclear plant, and here you can go through the checklist whilst wearing a safety suit and helmet.


So how would such an interface in an industrial setting go….. Picture yourself in a semiconductor facility, in a bunny suit, addressing an issue with a lithography process….

Process Engineer (PE): “Ok Google Glass, Open quality system”

Glass: Shows quality system desktop

PE: “Ok Glass, Add Incident”

Glass: New Incident PR opens

PE: Calls out each field, says the value, snaps picture, attach, finally says ‘Submit PR’

Glass: Submitted

PE: “Ok Glass, exit quality system”

Glass: Logs out of QS

So there are uses for wearable computing devices that offer hands-free, projected visuals without impeding other functions, hence, saving valuable time, providing real-time access to information with greater form factor to meet the occupational requirements. It is breakthrough right now, but only time will tell if these devices will become the disruptive mainstream with acceptable utility in industrial or ruggedized setting.

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Q&A Blog Series: Using Analytics to Improve Quality-Electronics/High Tech Manufacturing

1. Name, Mohan Ponnudurai, Industry Solution Director

2. How does poor data affect quality in your industry?

High tech and electronics sectors are very advanced in terms of using systems, software solutions and enterprise applications, mainly because of where they are typically in the maturity curve. These industries are fast paced with tighter product life cycles and output yield and quality are very important for the survival. As such, they run the businesses using specific processes, managing those processes with metrics, rules and near real-time visibility. Data integrity is the number one requirement when it comes to manufacturing, supply chain and customer demands, therefore, poor data will produce poor metrics and analytics that will destroy their market position. Having data alone is insufficient – gaining access to this data bring forward relevant information to the right people to gain insight so impactful actions can be implemented to get the products to the market efficiently.

3. What problems arise in this type of situation?

Typically problems arise when there are multiple sources of data, whereas there is no single source of truth when it comes to master data (because of growth, M&A, legacy systems, fragmented upgrades to ERP, PLM, MES, etc.) This poses a big deal of inaccuracies and IT is burdened with data synchronization and making sure everyone internally (engineering, manufacturing, supply chain) are looking at the same data. This is critical when you are tracking material progression through manufacturing, demand and supply management and forecast as well as capacity planning to respond to fickle demands.

These are not really structured reports, but more like analytic outputs based on what-if scenarios (supply/demand control planning), trends based on known cause codes or even based on common part numbers. Any small deviation in yield (or output) can be detrimental to quality and supply to meet customer demands.

4. How can business intelligence and analytics solutions be used to address quality-related challenges?

BIand analytics provide the manufacturing, supply chain, field service and supplier/partners the power to get the actionable information as required, without going to IT, issue the request or wait for the outcome. By this time, the critical need expired, because the high tech vertical is expected to respond in near real time. Quality issues can be flagged, identified, actionable tasks assigned and inventory, supply, raw materials and stages of manufacturing status can be visible and changed as required instead of waiting further in the production stages and issue rework or in most cases scrap. Ultimately, you want to synchronize the material, inventory and supply chain to match the real demand based on forecast and planned production. No one wants to be in a position not to know where things are with reference to quality and safety, and need to know when to stop the process instead of getting into rework or recall.

5. How can TrackWise Analytics be used to progress each role in the electronics/high tech manufacturing industry?

a. Executives and Decision Makers

­- Make data-driven decisions faster to address the yield, OEE and cost of poor quality, and align with corporate goals and objectives

- Increase the visibility of quality activities to influence KPIs across the organization

- Align the organization around a standard quality measurement and KPIs to instill a quality oriented culture

b. Managers and Process Owners

­- Identify emerging trends and implement corrective actions before a trend becomes a costly problem

- Ensure team efficiency by exposing issues early for resolution

- Provide answers to executive questions in near real-time through powerful analytics and predefined reports

- Enable views of process/record status in near real-time to manage open team tasks/issues

- Gain in-depth insight by easily filtering information to show data specific to a region, site or product

c. Quality Analysts

- Create and deliver reports rapidly

- Enable business teams to respond to questions in real-time

- Collaborate effectively with other stakeholders including suppliers

- Easily conduct ad-hoc analysis to track and trend quality data

d. End-users / Data Consumers

- Highlight what requires immediate attention to facilitate appropriate prioritization

- Gain access to personally relevant information through self-service report configuration with flexible filtering, output choices and drill-down functionality

- Enable day-to-day task management and improve operational reporting

e. IT/System Owners

­- Achieve lower total cost of ownership and reduce ongoing maintenance overhead through a single integrated solution

- Focus on greater value-add activities versus managing report creation and distribution

- Easily provide a single solution for quality processes from TrackWise EQMS

- Eliminate the technical resource demands required to support third party BI solutions

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Challenges in Electronics Manufacturing Series – Supply Quality and Supplier Management Issues

Supplier Quality Management has a direct impact on a company’s margin, bottom line and eventually shareholder value. Today’s electronics manufacturing industry has global supply chains that are wide, and broad. Managing suppliers, incoming material quality, supplier oversight and control and effective visibility to process tasks are at the heart of manufacturing operations. A smooth running supply chain process is essential for a company to get the products at the expected level of quality, time and function to the customers. When this critical activity fails or falls short, the eventual outcome includes a loss of consumer confidence, adverse market reaction, and loss of shareholder value. Let me illustrate with an example. Apple is a company that is pervasive in everyday life of millions of consumers, through products that are ubiquitous. Apple is known for innovative products, with a reputation for technological leadership and high quality products. This allows Apple to demand premium pricing that the consumers are willing to fork out. What happens when these expectations are not met? Turmoil in the market and a crack in the marketplace allow competitors to capture market share. When iPhone 5 hit the market in September 2012 with much fanfair and huge pent up demand from consumers, it was faced with several quality and supply issues such as: a shortage of the new ‘incell’ screen technology, scratchable anodized aluminum casing, a supply shortage, etc. What precipitated these issues was simply a manufacturing difficulty of incell screens at 3 suppliers due to greater quality control demands placed on those suppliers and Foxconn EMS.

These problems hit Apple in a hard way. Some major implications included reduction in margins from 40% down to 35% with even lower margins expected in the coming quarters.  Their gross margins could collapse even further as Apple brings lower priced models to fend off competition. We have seen Apple’s stock price go from a high of $705 to $395, which has wiped $250B off the valuation of the company.

As Apple lost 26% in 2013, their closest rival, Samsung, gained 13% during the same period. In addition, the stock price valuation shows the pessimism of the investors with a PE of only 9, which is well below the market average of 15. This is despite the overall good financial health of Apple, which has no debt, $150B in cash and short term investments that have the potential to generate an additional $40B of cash in a year. And now, Apple is transitioning the application processors (A5 chip) from Samsung to TSMC, which could lead to complications if TSMC cannot meet Apple’s demands.

This illustration shows how managing suppliers, manufacturing, and controlling quality and bringing the products to market at the level of quality and technological consumers expect can make or break margins and ultimately the shareholder value.

A supply chain as diverse as Apple’s, with suppliers that are globally dispersed and a rapid product life cycle, demands sound enterprise visibility and collaboration across the value chain. A supplier quality management solution that is part of an enterprise quality management system (EQMS) is an essential pillar that can work together with PLM, ERP, SCM and CRM to effectively and efficiently manage all the quality processes that not only manage the issues effectively and in a timely manner, but also provides a collaborative environment for the critical suppliers (ex: Tier 1). An integrated supplier quality management solution would also provide the required metrics and KPIs to effectively and efficiently analyze and manage risk while providing management the necessary visibility to make impactful decisions. What do you gain? Reduced cycle times, operational efficiencies, successful product launches, cost savings resulting in better margins, customer satisfaction, and ultimately increased shareholder value.

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Quality in Manufacturing in 2013 and Beyond – Outsourcing to Off-Shoring to Re-Shoring

The manufacturing business model of the 20th century was largely structured by what a company owns, manages and how it directly controls its assets. In the 50’s and 60’s, it was all about diversification and economies of scale. In the 70’s and 80’s, it was about global competition which resulted in bloated management structures. As part of the growth and diversification efforts, manufacturers’ plan was to identify core competencies and outsource the rest. True outsourcing started in the 90’s as a business strategy, with the focus on outsourcing commodity or ancillary services. This evolved to services and manufacturing of the core business activities. What was the true motivation? Globalization of the market place and lower barriers to entry allowed for foreign competition which led to cost competition. In the early stages of the outsourcing, cost was king.  As companies found ways to expand their breath and depth of the market, they concentrated on gaining market share, usually as low cost entrant.  Quality took a backseat. 

Take a look at early foreign entrants in the automobile sector (Hyundai Excel, Lada, Yugo, Renault, etc.). Even though they gained market share, reliability and quality suffered. This eventually led some manufacturers to cease operations, while others changed strategy completely, giving quality their highest priority.  Again, Hyundai is a fine example, and so are Ford, GM, Nissan, Peugeot, etc.  Another industry example is consumer electronics. When you consider the personal computer, laptop, TV or cell phone market, you see similar trends. Samsung changed its entire corporate strategy from being a cost leader to providing quality and reliable products.

Outsourcing requires a lot of planning, management and execution. When manufacturers’ outsource, they do not necessarily have appropriate controls in place for their lower tier suppliers. Typically, outsourced companies rely on the suppliers at the tier 1 level to manage their supply chains. They do not have visibility into the quality processes, traceability of components and reliability of designs. Outsourcing critical areas of business allows the suppliers to gain technical know-how, hence, they eventually become competitors. This was the case with AsusTek which started as an outsource manufacturer for major computer companies, eventually gaining enough capabilities from design, manufacturing, logistics and marketing to become a computer company, now known under the brand as Asus.

Outsourcing was not just limited to the electronics segment. Almost all manufacturing has been outsourced and offshored; look at textiles, apparel, furniture, automotive parts, and even aerospace. Case in point here is Boeing. As part of the cost management structure to gain financial advantage and spread the risk across the supply chain, Boeing outsourced 60% of the B787 Dreamliner to partners. However, supply chain failure, poor estimates of technological capabilities and loss of control of the suppliers, led to almost four years of delays, cost over-runs and poor quality products.

Eventually, outsourcing led to offshoring.  Again, this was caused by competitive demands including low cost for labor using developing worlds with ample resources, low cost capital and government policies to build specialist industries. This was the case in Taiwan, and now Taiwan leads the global market for semiconductor foundries. Or China, which leads the electronics industry for outsourced manufacturing. Offshoring is even more challenging due to different regulatory jurisdictions, labor laws, control of the supply chain and communications.

Now in 2013, the new trend is reshoring. More companies are moving their services and manufacturing operations back to the United States. Caterpillar moved operations from China to Mexico and the US.  Dell moved its customer support from India to the US.  K’Nex[1] Brands moved manufacturing from outsourcing in China to the US. K’Nex said, ‘by moving production closer to the US retailers, K’Nex can react faster to fickle shifts in toy demands and deliver what is needed faster’. It also has greater control over quality and materials, which is crucial to product safety. Reshoring provides tax advantages but also has its own set of difficulties. What are these? Difficulties of sourcing certain parts due to the long term effects of moving production off-shore. Boeing also moved some assembly production back in-house.

The common factor of all these trends is quality. When you have lack of control or visibility of your suppliers, partners or the supply chain, you will end up with inferior products while suffering from reliability and safety issues. There needs to be consistent processes, a harmonized approach to safety and risk based management of issues, suppliers, standards and collaboration.  Quality is touted as a competitive advantage – look at the number of TV commercials with the J.D. Power & Associates quality award, or Malcolm Baldridge Quality award. Businesses have discovered the hard way that the reliability and quality of their core product or service remains non-negotiable, even in this most imaginative and image-saturated of marketing eras. Lawrence Green wrote recently on UK Telegraph[2] that ‘product, after all, one of the famous “Four Ps” of marketing, along with price, place and promotion’.

So what have we learned from all these shifts? Quality is non-negotiable no matter what the product is, what its value is or how it’s used by businesses or consumers. Quality is a process that is continuous, built from the ground up and transcends the value chain. To effectively manage quality in the current global marketplace, global supply chain and complex product life cycle, you need to have people, process and technology. People – you need to have a culture that is top down, with the employees trained on the quality paradigm or blueprint. This should include your partners, suppliers and outside manufacturers. Process – you need to have defined processes to manage every step during the life cycle.  These processes are not one-size-fits-all, and they need to be flexible as part of the continuous improvement as per ISO and provide mechanisms to comply under regulatory and quality requirements. Some critical processes are Supplier Quality Management, Audit management, FRACAS/CAPA, Failure Analysis, Non-conformance/Deviation, Customer Complaints, etc.  Lastly, technology – to effectively and efficiently manage for quality, you need to have the tools that can provide repeatable and predictable results, and to provide information in timely manner to the appropriate personnel to make effective decisions.

[1] Source: Wall Street Journal, ‘A Toy Maker Comes Home to USA’, 3/11/2013 [2] Source: Yahoo Finance, ‘Think Tank: Brand is nothing without Quality’, 3/9/2013

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Some Quality Thoughts from ISO 9000 Conference

While attending and presenting at the ISO 9000 annual conference taking place in San Diego, CA Feb 18-19, 2013, I noticed a major focal point was related to global quality sustainability.  Many topics and speakers stressed the importance of having a Quality Management System (QMS) that not only provided methods and processes but also had the flexibility to conform to a variety of standards. They all talked about procedures, specifications, documentations, etc. and how having just processes alone will neither guaranty quality nor customer satisfaction. There were presentations given on pharma, healthcare, aviation, automotive, services, etc.  Regardless of the industry vertical, common elements I noticed were customer focus and supply chain quality. 

A presentation made by the Director of Global Quality Strategy at GM was compelling.  It covered customer first/product quality framework. He showed data connecting customer perceptions, buyer behavior and relationships as part of how Cadillac improved their customer experience, increased initial and continued quality, reliability and customer retention. GM considered quality data, looked at sales, service and supplier experience and many other factors that customers touch but do not see. In addition to standard quality engineering, GM is now aiming towards lean quality and single global standards across all the GM brands and groups. This clearly shows the value of quality and how it connects to value for the company. 

Another session that stands out was given by a Boeing Systems manager on QMS for aviation and how that has evolved to where it is today. He spoke about how ISO 9000 and AS 9000 have morphed into IAQG (International Aerospace Quality Group) 9100 and these standards have been accepted by major A&D companies. It included a certification scheme and best practices related to supply chain and people capabilities. 9100 provides womb-to-tomb processes that are more prescriptive for aviation, space and defense applications. 

During my presentation on Enterprise Quality Management Systems (EQMS) for Manufacturing, in the face of industry challenges and what enterprises should look for in a system or solution, much of the audience agreed with what I had to say.  Companies need to forget the silo mentality, get out of data islands and embrace the ‘Power of One’ from a system perspective, but not from a solution perspective. They need to have a system that provides processes tailored for their business and allow for both compliance and risk based procedures. This provides a business case now, value at a quicker clip, and also recurring benefits. They also grasped why collecting data for the sake of collection without visibility, analysis and disseminationis a real resource killer. They clearly got the value from quality from a customer and corporate growth perspective. 

Sparta System’s TrackWise solutions allow these enterprises with diverse and disparate systems to have a centralized/harmonized EQMS to manage their businesses based on their quality standards whilst providing repeatable and predictive processes. This is where the value is – for compliance and quality. Companies understand it. They get it.

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Global Supply Chain, Supplier Management, Quality and Safety: A Tale of Toyota and Boeing

The Japanese carmaker Toyota said Wednesday (1/29/2013) it was recalling more than 1 million vehicles sold in the United States due to faulty airbags and windshield wipers.  On Jan 16, 2013, Boeing’s 787 Dreamliner was grounded by the US Federal Aviation Administration and other foreign regulators due to a faulty Li-Ion battery that had caused an aft cargo hold fire at Boston, and an electronics bay smoke/smell during flight in Japan that resulted in an emergency landing. When you look at both of these manufacturers, the problems are caused by relatively inexpensive components sourced from suppliers that also employed suppliers at lower tiers as part of the sub-assemblies, or just simple error during manufacturing. In the case of Toyota’s windshield wiper issue, the root cause seems to be over-tightening during manufacturing, which is a simple enough corrective action to remedy the situation. The airbag issue seems to have design or manufacturing cause, however, it is also simple enough to fix by replacement of the subassembly. These recalls and fixes provide the consumer with confidence that there is no panic and it is safe to operate these vehicles. Automobiles are one thing and a complex aircraft is whole different animal!

When you look at the Boeing 787, a simple battery pack, double the size of your typical automobile battery, is the cause of the worldwide grounding of the $208M aircraft. This is causing public panic related to safety towards this revolutionary aircraft, and havoc for fleet planners at the air carriers. Boeing is not alone in this because of the web of supply chain leading to the battery itself, multiple regulatory bodies and operating jurisdictions. To grasp the complexity and regulatory genealogy, you need to understand history 101 of the Dreamliner program.

In 2003, Boeing was facing a daunting task of catching up to Airbus and needed to respond to the marketplace looking for an efficient product. The answer was an aircraft with superior operating costs, light weight carbon fiber reinforced plastic (CFRP), greater efficiencies, passenger comfort and a truly revolutionary design. The only way the board of directors would sign off on the Dreamliner program was to spread the risk among a global chain of suppliers and partners. In December 2003, these risk sharing partners agreed to take on half of the estimated $10 billion development cost.  The global supply chain and partners were responsible from design to manufacturing - The plan backfired as production problems quickly surfaced with supplier quality management issues.

By giving up control of its supply chain, Boeing had lost the ability to oversee each step of production. Problems sometimes weren't discovered until the parts came together at its final assembly in the Everett, WA plant causing complex rework, paperwork for certification and simple task tracking. The program got delayed by 3.5 years, costing an additional $4B plus and Boeing ended up buying out several partners and facilities to bring control to chaos. Finally, the first delivery was made to the launch customer, All Nippon Airways of Japan, in 2011.

Then, this month, all the progress came to a sudden stop. First, a battery ignited on a Japan Airlines B787 shortly after it landed at Boston's Logan International Airport. Passengers had already left the plane, but it took firefighters 40 minutes to put out the fire. Problems also popped up on other planes. There were fuel and oil leaks, a cracked cockpit window and a computer glitch erroneously indicating a brake problem. Then a Dreamliner flown by All Nippon Airways made an emergency landing after pilots learned of battery anomalies and detected a burning smell. Both Japanese airlines grounded their Dreamliner fleets. The FAA, which just days earlier insisted that the plane was safe, followed suit by grounding the US based 787s which is operated solely by United. This was followed by the grounding of the 787 by all other worldwide regulators.

Just look at the battery issue alone: Lithium-Cobalt chemistry based batteries are manufactured by GS Yuasa of Japan; Kanto Aircraft Instrument of Japan provides battery health monitoring circuitry; this is integrated with a battery charging system provided by Securaplane Technologies of Tucson, AZ (which is a subsidiary of Meggitt plc of UK); this is integrated by the power system solution provided by Thales of France; this goes into the aircraft auxiliary power unit by UTC Aero Systems of the US (which is part of United Technologies) which is finally integrated into the aircraft electric grid architecture by Boeing at Everett, WA and Charleston, SC final assembly lines. This is just one aspect of supply chain management and these integrate and interact with many other systems in the aircraft.

US and Japanese investigators have yet to determine the root cause of the problems, and the longer the B787 stays grounded, the more cost Boeing will incur in penalties to airlines.  Figuring out the root cause goes through many layers and with the multitude of suppliers and partners spanning continents and several regulatory jurisdictions, it becomes a daunting task to manage and find resolution. As investigators try to figure out the cause of the plane's latest problems the world again is in a familiar position with the Dreamliner: waiting.

What these two scenarios illustrate are also faced by companies in all sectors on a daily basis, albeit, in smaller scale. There are an average of 6 recalls per day in the consumer sector. When you have multiple levels deep of a supplier network, you need to have mechanisms in place to monitor, track and progress issues as they arise. You need to have processes in place to close-the-loop; you need to be able to manage investigations, root cause analysis, risk assessment and management, corrective action management and verification to state a few. Supplier evaluation and supplier quality is not just essential during manufacturing, but are required from the beginning to end: product definition, sourcing, manufacturing, post-market. Complex supplier networks like the one at Toyota and Boeing require best-practices based solutions that are part of the product life cycle. Visit us to learn more on supplier management, supplier quality and extended enterprise at www.spartasystems.com.

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Quality in 2013 Part 2: Q&A with Mohan Ponnudurai, Industry Solution Director, Electronic Manufacturing

What if I told you paying attention to quality-related processes could give you a leg up on competition? That is the case in the electronic manufacturing industry.  Today, we speak with Mohan Ponnudurai, industry solution director at Sparta Systems to discuss the challenges in the electronics and high-tech industries and uncover the key to managing growth and greater revenue. 

What quality-related challenges are facing your industry in 2013? 

The electronic and high-tech manufacturing industry is under pressure to do more with less. In other words, the industry is pressed to deliver final products with a limited number of resources and tighter cost control. 

Growth through R&D and acquisitions can account for frequent product changes as well as inheriting systems, processes and cultures that are necessary but must be harmonized. In tandem, the industry must address customer concerns in a timely fashion. The lifecycle to respond is narrow and short, and if a customer’s concern falls through the cracks, it can affect cost and reputation. 

What problems arise in this type of situation? 

A lack of response or a delayed response to internal and external complaints creates barriers in communication across multiple layers and teams. Separate systems silo information which results in unaddressed complaints, lack of transparency, visibility and wasted time. 

This can be an outcome of relying on outdated methods, like a homegrown database or a paper-based system to manage manufacturing-centric quality processes. This balancing act working with disparate systems and outdated technology overstresses another. There’s a greater chance that avoidable problems are getting repeated when the right data is not being produced and scrubbed for redundancies and inefficiencies. 

This also isolates supply chains and slows down the process to identify and verify reliable suppliers. 

How does this type of situation affect quality control?  

Outdated technology and the collection of data from disconnected systems results in a waste of time and resources and hinders the completion of tasks. The information silos can cause management oversight, making it harder to identify and record any issues. 

When the right information isn’t transparent, it causes a ripple effect and allows issues to slip through the cracks. The electronic manufacturing industry needs a centralized system to share information to analyze trends, investigate and identify the root cause of problems, and to close the loop and ensure continuous improvement. 

What are some best practices for managing and identifying risk across the industry?

An enterprise quality management software solution takes these islands of data-based point solutions and configures them under a single system to extend past the four walls of the enterprise to include internal value chain, suppliers and stakeholders. 

Bringing business-critical data under a unified system enables seamless data interchange, closed-loop business decisions based on best practices and lessons learned and real-time access to accurate data. Harmonizing processes allows for timely mitigation and looking at risk history to determine the avoidable component and resolve at the earliest stage of production. 

An enterprise quality management software solution provides a mechanism for managing quality data in a predictable and repeatable way. This is the true cost savings in doing more with less.

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High Tech Manufacturing Challenges Series – Supply Chain Quality

Quality Issues Plaguing Apple Lately

In a recent blog post just prior to the iPhone 5 release, we addressed the challenges faced by the global supply chain of Apple, and how the critical component and accessories segment should enforce stricter controls to maintain the type of quality Apple demands of its suppliers.  Another component we need to consider is that the consumers of Apple products demand and expect a very high level of quality from Apple.

Since the iPhone 5 shipments began on September 21, albeit at a much slower pace than expected, we have been witnessing a myriad of problems or issues related to the entire supply chain. This has prompted many Apple fan sites, user forums, threads, investor forums, etc. to openly discuss and to a certain degree bash Apple. Why? Apple is not used to these types of quality issues, and this may be a crack in its armor for the first time. We have seen issues with the camera (purple haze problem), LED ‘leaking’ through the top layer, anodized aluminum slate finish easily getting nicked/scratched or signs of wear right out-the-box, etc.

As these problems arose, Apple ordered Foxconn, it’s major EMS for iDevices in China, to institute stricter quality control measures. This slowed down production, or yield significantly, which in return slowed down supply availability which affected millions of pre-orders, and stretched delivery times to 4 business weeks. To all the Apple consumers eagerly waiting for their beloved iPhone 5, it raised their ire and negativity towards Apple.

Supply chain was already stressed due to the shorter supply of the new in-cell technology panel as one of the suppliers was facing mass production issues. Add that to the tighter quality control standards, it further constricted iPhone supply. Another component internal to Foxconn, is the fact they employed under-age interns at its facilities, and this created a furor too. Despite that Apple had nothing to do with it, the pundits and general population connect Apple to Foxconn due to the ubiquitous nature of their relationship and the products they produce for Apple.

What does all this mean for Apple? The quality issues have created a PR nightmare for Apple, which is not just affecting iPhone. Foxconn is a major EMS for other  Apple  products including iPod, iPad, MacBook, Apple TV, etc. You do not want a consumer leaving the iPhone band, because it would take them away from the Apple ecosystem (App Store, iTunes, etc.). Negativity surrounding iPhone could spread to iPad (for which Apple holds 64% market share in the crowded field) and the soon to enter iPad Mini for the lower tier market. These problems have already wiped $60B off the market value of Apple (since Sept 21 to now) and eroded possible upside in the latest quarterly revenue and profit report. Managing quality issues is important for Apple, and it thrives on that reputation which allows them to charge premium pricing and maintain high overall margins (net approaching 40%). They cannot be seen as a commodity device brand, like Samsung, LG, or even Nokia.

What can and should Apple do? Apple needs to make sure that their critical suppliers are evaluated, audited and kept within a tighter collaborative environment through stricter supply quality management programs. The internal systems should be available to these critical partners from the initial phase through after market and logistics; provide access to the extended members to the common system for real-time interaction and finally define, manage and maintain a common, harmonized system to make decision making efficient and timely. Multiple systems or multiple processes do not help any members to provide timely resolution, while making sure costs are controlled, efficiencies maintained for economically accepted yields and product supply is maintained to appease the demand and provide sufficient cash flow for investor confidence. Apple will succeed, but these negative events are speed bumps on an otherwise smooth ride.

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Apple’s Friends with Benefits: Working Together to Build a Brand

Today is the routinely awaited announcement of the 6th iteration of the iPhone - The iPhone5. It is highly anticipated, with the hope of seeing new technologies some call revolutionary, some say incremental. Whatever that may be, we will not know after the announcement is made. Why? Apple is very tight lipped and values secrecy as part of the competitive advantage, just keeping close partners and suppliers in the know.

What this means for core suppliers

As part of the supplier quality management, Apple's initial production will use LG supplied panels as the other two are  not ready for mass production. This is supply chain and management harmonization at its best. Supplier management and production control are essential to seamless production and timely product release on September 21 in many more countries than in the past.

Quality starts from Day One

Apple expends so much effort and resources to deliver products that their customers expect from them. Quality and user experience are hallmarks of Apple and any deviation will be detrimental to their image and brand value. Every detail of the product, fit and finish and customer experience are processed in detail as part of the product life cycle management.

As has been in the past, Apple's primary manufacturer of iPhone is Foxconn /HonHai in China. Foxconn had been in the news lately due to their worker treatment and Apple had taken direct actions to make sure those non-conformances are addressed and new processes are in place as part of their continued commitment to safe and quality practices. Foxconn is handling the entire final production and some logistics as part of the order fulfillment. This makes them a strategic partner as part of the value chain which places huge importance for quality at all levels.


The Apple iDevices market is huge, with so many third party vendors supporting its ecosystem. There are vendors of all sizes, price points and quality. Take iHome for example, a leading a provider of docking clocks, radios, speakers,etc. for Apple products. There are also bigger names involved for higher quality speaker docks like JBL, Bose. Also consider simple device accessories like screen protectors, chargers, covers, holsters and replicators.  All these must fit and function well in the crowded market. But for the iPhone 5, there is no official released dimensions or specifications, so these vendors cannot provide these products on day one due to strict secrecy employed by Apple.

One of the changes is the bi-directional smaller 9-pin ‘Lightning’ connector instead of the old 30-pin connector that the entire Apple mobile universe uses would make the existing cadre of accessories obsolete. It is rumored that Apple would release an adaptor to appease Apple citizens with all their load of accessory investment. So these third party vendors must meet the strict design guidelines to make relevance in the crowded accessory marketplace.

What's next?

Customer experience and satisfaction is so important, and handling customer events, concerns, returns, replacements extend that experience. The way Apple handles product and production issues to the delight of the customers is paramount. As a result, Apple places customer satisfaction as the reason for their success and continued growth.

This extends to the accessory suppliers as they are fighting to gain market share in the sea of suppliers. Some have made a name (like iHome, Otterbox, JBL, etc.) and some are getting into this market with some innovative products like on-demand 3-D printed phone cases.  All must provide quality products that mirror the quality image of the parent product. This includes Apple and all vendors and their collective suppliers. They should all be harmonized with solutions to manage any expected problems in the grander scale to be successful.

Based on its track record, Apple exemplifies the benefits of harmonizing processes,  raining personnel and technology to make this work in the fragmented and globalized supply chain.

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Jobless Recovery and Economic Growth: How QMS Technology can be used to Gain Efficiencies

Jobless recovery or jobless growth is an economic phenomenon in which a macro-economy experiences growth while maintaining or decreasing its level of employment. The latest national unemployment rate inched up to 8.3% whilst adding 163,000 new jobs. U.S. real gross domestic product increased at an annual rate of 1.5 percent in the second quarter of 2012, (that is, from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.0 percent. The reality is less people are working due to negative job growth (4.4 million less jobs than in 2008), but the economy is growing while corporations net profits are increasing.

What is really happening here is that the employers are gaining in operational efficiency – i.e. getting more out per employee, making better use of invested capital and performing better at projects that return more ROI and effective tax strategies.

Let’s talk about operational efficiencies. This comes down to managing operations effectively, cutting non-value added activities, implementing efficient business processes and simply streamlining operations. This streamlining is walking a fine line, where one can optimize while taking risks in terms of safety, compliance, quality or other aspects that might otherwise add cost. In today’s world of globalization, stricter regulatory oversights (depending on products and markets served), demanding customer demographics and ubiquity of 24x7 news and social media, no one can afford or choose to take a risk on quality. So then, what are some of the ways these corporations balance all the above elements whilst maintaining quality, managing cost and maximize margins? Technology is the answer.

Some ways in which QMS technology helps institute operational efficiencies can be seen in the examples below:

- Many sectors (such as high technology and electronics) are seeing a great deal of outsourcing, off shoring and risk sharing partnerships. While this decreases costs, technology is used to connect these diverse groups of the value chain together. Since quality is still important to maintain customer satisfaction, superior products and ultimately operating margins, quality management solutions are used to maintain this link as it they are part of the same company. QMS allows these stakeholders to have full visibility, information transparency and faster resolutions to problems.

- Globalization brings in a broader supply chain, where managing critical suppliers in near real-time is essential to survival and profitability. These suppliers and corporate purchasers, along with operations, interact using quality management systems to react to and resolve problems. This translates into better products, quicker time to market and better responses to customers.

- Problems often arise but communications to the appropriate personnel, both internal and external, are manually processed. This not only adds time to closure but also expends non-value-added efforts yielding nothing in return. Another area of inefficiency comes from lost records, missed deadlines, lack of accountability, etc. By using QMS like systems, these unnecessary layers are removed, allowing a company to do more with less resources.

- Growth in certain industries has taken place due to mergers and acquisitions, which often creates a scenario of diverse and disparate systems. What this mish-mash of systems creates is islands of data which do not interact or share information. Someone, an IT resource usually, needs to manually sort through the data.  This inefficiency not only requires specialized resources, but also time. However, decision makers need updated data and information for effective and timely management.

Therefore, you see how technology solutions like quality management systems help industries do more with less people. Best-in-class companies are making use of technologies as part of their best practices; the efficiencies gained from the effective use of these systems will remain in place as we move into the future.

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Reinventing Your Approach to Supply Chains Using Enterprise Quality Management Solutions

In the electronics and high-tech industries, the supply chain stretches globally. Most outsourced production, logistics, support and even design services take place around the world. Managing these various stakeholders effectively and efficiently requires central harmonized and standardized processes with adequate visibility and transparency to management.  It’s imperative that companies manage suppliers using an integrated enterprise quality management system that is repeatable, with processes that are understood by all the relevant players.  Dashboards should enable suppliers and the enterprise to act as a cohesive unit allowing visibility and access to a shared vision and values. It is essential to manage suppliers in various geographical regions based on their commercial risk, performance capabilities, strategic development and corporate vision. This is not a trivial task considering the complexity and the sheer volume of data one must manage for effective supplier qualification and quality management.  Suppliers gain visibility on their performance through their own performance dashboard, respond to events or Failure Reporting Analysis and Corrective Action Software (FRACAS) tasks directly online, respond to queries and audit findings, etc.  They are an integral part of the extended enterprise, thus offering the enterprise supply chain, procurement/sourcing and management use of a common data source.  The benefits include increased efficiencies, the ability to ramp up NPI quicker and avoid broken supply chain processes. 

An article highlighting 3M’s manufacturing supply chain distribution model was posted in the Wall Street Journal on May 17, 2012.  It detailed the challenges faced by the existing supply chain of their product, Command Strip. The article stated it took 3M 100 days of cycle time and travel of 1,350 miles between 4 states before the product was packaged for the local market. When command strips needed to be produced for the rest of the world, unfinished bulk product was shipped to local partners for further processing.  This required more work, more time and higher logistics costs based only on the traditional way they did business.  3M also maintained spare inventory at each of the intermediate production sites in case of delayed incoming material which added to inventory carrying costs. Now multiply this process paradigm to 65,000 products produced at 214 plants in 41 countries, not to mention the sheer volume of suppliers and additional costs.  As a result, the decision was made to drastically overhaul 3M’s supply chain process.  They will create global 'super hubs', 14 in all, which would be closely located and capable of producing a multitude of products for local markets.  This would cut the cycle times, remove excess inventory, produce what is needed and become more nimble with lower number of suppliers and dramatically improve efficiencies.

Many companies in this industry are turning to enterprise quality management systems that allow them to optimize quality, ensure compliance and reduce operational costs and risks.  Flexible and configurable EQMS software allows enterprises to adapt to company-specific business processes, enabling users to define, track, manage and report on the core activities and processes vital to their success.  The efficiency and effectiveness of these holistic quality systems are improved through interactive integration with other existing enterprise-level quality management software.

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Using Real Time Data Information

Comments on a Wall Street Journal Article: The Benefits of Data Talking to Data Companies have been collecting business related data in various forms for decades. It used to be that collected information was sorted and stored in giant databases collecting virtual dust until needed and analyzed using business intelligence software. This data was not always useful – often dependent upon on when it was analyzed and read. Thus the information was not always timely.  Organizations realized that they were making decisions based on ‘stale’ data instead of using information as it happens.[1]

This is what is happening now with infrastructure and technology to ‘stream’ live data, integrated with advanced data analytics systems and techniques coupled with delivering the relevant and appropriate information to the right person in a format that is conducive to effective decision making. This allows companies to link multiple stakeholders, both internal and external, to what is happening now. This is data talking to data in real time.

Many industries improve their operational efficiencies, foster better customer and supplier relationships and improve customer satisfaction and retention by utilizing these technologies. Nowhere is it more relevant than in the advanced manufacturing and supply chain of the electronics industry, as more markets around the developing world have increased their appetite for better, faster and more advanced devices. This demands newer products faster and cheaper. Therefore, the electronics manufacturing sector has embraced real time management using systems to effectively and efficiently manage tasks that are cross-functional in nature and involves both outside manufacturing and global supply chain.  Below is a  great example that illustrates this real time data management.

Let’s say at the final assembly of a product, a critical problem that could cost the reputation of the product is discovered. Initial triage of the deviation finds the problematic part and a full investigation that includes the supplier of the offending part is implemented. This leads to an amended inspection process, a corrected method for final packaging of the part and training of the personnel at the final assembly site. While this process goes on, another factory is notified of the findings, resolution and new processes while another group analyzes the previously completed lots for any anomalies by way of sample testing. All these steps go on in near real time while making sure the information is processed while maintaining the proper yields and minimizing errors – leading to higher quality output to the hands of the customer.

This example is just the tip of the iceberg and helps illustrate why electronics and high tech manufacturing put trust into TrackWise Enterprise Quality Management Solutions. It’s a platform that is integrated with their ERP, MES, CRM, SCM and other enterprise pillar applications, which helps them produce the high quality, safe products their customers expect, while increasing operational efficiency that yield greater revenue and profits to the shareholders.

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Source: Wall Street Journal, 04/02/2012