Using Automation to build a Resilient Supply Chain that is focused on Quality, Continuous Improvement & Innovation

In March 2020, Harvard Business Review published an article titled – “Coronavirus Is a Wake-Up Call for Supply Chain Management”.

There were three key points in the article that stood out.

1. Lack of data visibility across the supply chain is a major challenge. Since the pandemic broke out in China in January and February of 2020, procurement leaders across the globe were dealing with supply chain disruptions. But even after two months, they still did not have visibility into whether a particular supplier was in a containment zone or not. In short, supplier mapping by location was a clear missing element in the supply chain management process. The few manufacturers who had taken measures to map their entire supply chain, came out stronger in dealing with the disruption.
2. The procurement process was often focused on cost-savings, rather than revenue assurance and risk management. It was, often, over-optimized for cost-cutting while ignoring the fact that a major issue could result in serious supply chain disruptions, which will flow across the value chain.
3. Apparently, over 3,000 critical suppliers in China made force majeure declarations in March 2020, a record number for a month at that time. Now, if manufacturers had risk mitigation strategies in place to replace these suppliers or at least had known the risks, it would have been easier to manage changes to the supply chain. Ideally, the supplier quality and performance management process must take into account disaster handling.

Overall, manufacturers have a greater responsibility to manage their suppliers, ideally with the help of the latest digital technology. This will help manufacturers establish a data-driven approach to supplier quality and performance management. Supply chain effectiveness will revolve around a cultural shift wherein suppliers and manufacturers work together as truly collaborative, long-term partners.

In this Whitepaper, we dig deeper into the finer nuances of supply chain management from a quality perspective. We also believe that embracing the latest technology and digital transformation methodologies will make life easier for procurement, supply chain, and quality leaders.

A modern, cloud-based supplier management solution will enable and catalyze the following:

1. Ease of collaboration and teamwork between suppliers and internal parties
2. Data visibility and detailed mapping of the entire supply chain
3. Scalability, in terms of adding new suppliers, users, locations, and features
4. Custom workflows to suit your organization’s approach
5. Integrated risk management
6. Anytime, anywhere access to data thanks to a cloud-based, mobile-ready platform
7. Predictive analytics and insights that’ll streamline decision making
8. Automated workflows for taking corrective and preventive actions

Overall, the following are the key trends shaping the future of supplier management:

• The emergence of IoT, industrial robotics, and other embedded systems in the shop floor and transportation layers that enable data access and visibility
• Using digital transformation and automation to reduce lead times in the supply chain
• Using supply chain management as a key differentiator to drive competitive advantage
• Data-driven optimization of inventory and working capital
• A culture of collaboration between suppliers and manufacturers, ideally with a win-win business model for both
• Using predictive analytics to balance supply and demand, across the value chain

Need for Automation and digital transformation of supplier management process

One of the key regulatory requirements is that the manufacturing enterprise is ultimately responsible for the quality of the product, even that of components or raw materials provided by suppliers. The manufacturer is responsible for ensuring that any non-conformance in the final product – even if the root cause of the issue was a component supplied by a third party.

The enterprise, therefore, needs an integrated framework to assess, qualify, onboard, interact and collaborate with suppliers, measure and monitor their performance, escalate issues and, when required, off-board suppliers effectively. This is not possible in a manual system, especially when you are handling several suppliers, across product lines.

A truly integrated supplier management system is therefore a critical need in today’s context. The supplier management solution that is part of your EQMS must seamlessly integrate with your company’s ERP and CRM. This will ensure enterprise-wide data visibility.

What Sets ComplianceQuest Apart from a Supplier Management Perspective

The ComplianceQuest Supplier Management solution is part of a Quality Management System, a modular platform that lets you choose the modules you need most to meet your immediate quality needs. ComplianceQuest’s Supplier Solution offers the following:

• Provides end-to-end supplier management from on-boarding to off-boarding in a single solution
• Includes all stakeholders, internal and external parties in a single solution by using collaboration at the core to bring transparency and visibility and thereby increase productivity, accuracy, and quality
• Natively leverages predictive intelligence and AI capabilities to drive supply chain communication prioritization, issue resolution
• Real-time performance monitoring gives an accurate picture of the performance of the supply chain
• By integrating with ERP & CRM, it triggers the next best course of action, be it complaint-handling, root cause analysis, or CAPA
• It allows you to customize your workflows based on your organizational needs
• CQ’s integrated risk management capabilities help leaders adopt a proactive approach to mitigating risk and build a quality culture across the supply chain
• Being data-driven, it enables continuous improvement through dashboards, charts, and visualizations
• Scalability makes it future-proof, protecting your investments
• Being mobile-ready, it gives you protected access to supplier data anywhere, anytime

Key Modules and Features of ComplianceQuest’s Supplier Quality Management System

The CQ Supplier Management module has a well-thought-out set of features that can be customized as per your organization’s specific workflow. Its key features include:

• Supplier On-Boarding: Streamline your supplier onboarding activities for new vendors, contract manufacturers and key suppliers. This module includes supplier checklists, clear definition of success criteria, etc. (Read our whitepaper on the 6-step approach to supplier qualification and onboarding)
• Supplier Corrective Action Requests: The in-built SCAR process issues alerts to suppliers about non-conformance or change management efforts enabling them to take corrective action quickly.
• Supplier Audits: A robust auditing suite with an audit workflow engine provides best practice functionality to conduct all types of audits – even remote audits. You can record findings, and the link to the SCAR process enables responding to the finding. Issue reports and analyze trends about supplier performance.
• Document Exchange: Securely share, distribute, track, and control access to latest versions of documents such as product drawings, quality manuals, supplier quality agreements, Certificate of Analysis (CoA), Certificate of Compliance (CoC), sales collateral, etc. from a browser or a tablet device. Suppliers can access the relevant documents from a central location in a unified cloud-based QHSE (EQMS + EHS) solution.
• Incoming Inspections and Certificate Of Analysis: The suppliers can submit their inspection data to buyers and receive approval to release a shipment. This ensures that buyers receive raw materials as per the specifications, without delaying production.
• Supplier Scorecard: You can rate your suppliers and measure their performance based on benchmarks of various parameters such as risk level, nonconformances, audit results, product family, class of suppliers, the region where the material is supplied, etc. This enables building a culture of quality that promotes continuous improvement and reduces the Cost of Quality. A supplier rating score drives workflow, actions, and the right behaviors.
• PPAP (Production Part Approval Process): Reduce the risk of nonconforming products and delays by managing new parts/material and change requests more efficiently. Involve the suppliers in the PPAP process. You can use the PPAP functionality where the required documentation facilitates the automation of the workflow for submission, review, collaboration, and approvals. The Supplier Portal lets the supplier see the status of all the requested PPAPs.
• Supplier Deviation Request: complete closed-loop process for managing temporary supplier deviations for received goods, helping reduce data errors that potentially could lead to a product recall. Suppliers can electronically submit their deviation request details, the reason for the change and any corrective actions performed. Buyers can then easily review the request, go through the approval process and propose a final disposition (Use As Is, Rework, Scrap, SCAR, etc.). Alerts such as acknowledgments and approvals or rejections are automatically sent to the supplier for follow-up.
• Approved Supplier List (ASL): Maintain an updated and current ASL.
• Buyer and Supplier Collaboration: Seek feedback from across the enterprise and the supply chain without giving up ownership of the tasks. Issues can be resolved in a consistent, streamlined, and effective manner by embedding business processes within the workflow.
• Permit to Work: Ensure that the contractors are trained and understand the safety risks at the workplace prior to their arrival.
• Mobile Access: Ensure business continuity and improved efficiency, visibility, and flexibility with complete access to the solution including reports, approvals, record views, reviews, alerts, etc. anywhere, anytime, and from any device.
• Reporting and Analytics: Einstein Analytics with out-of-the-box reports and dashboards lets you tailor your reports and dashboards to suit your needs. Make informed, data-backed decisions in real-time.
• Social Like & Follow: You can like and follow relevant records in the system, be notified via email, dashboard, and mobile to stay informed of developments.

The Key: Building Resilient & Innovative Supply Chains

For most supply chain and quality leaders, the biggest challenge currently is to build and manage a resilient supply chain. Also, for companies to engage in new product development and innovation, the supply chain has to keep pace. If you’re building a new medical device, for instance, chances are your key suppliers are also experimenting and running tests in a lab. There is bound to be issues with non-conformance and efficiency. The key is to establish a long-term partnership with your critical suppliers and define a “clear success criteria” for a win-win business model. The issues along the way can be tackled if a data and metric-driven process is followed.

At ComplianceQuest, we have worked with world-class companies across sectors – especially in manufacturing and life sciences – where supply chain quality is as critical to innovation and growth as internal processes. To build a resilient and innovative supply chain, automation is the only way forward.

A next-generation cloud-based Supplier Management Solution, part of an EQMS will certainly catalyze the process of building and managing you supply chain. The key is to not only optimize for today but for the future as well.