Whether your supply chain is domestic or outsourced overseas, you are probably aware of the many negative results of poor supply chain management. Proactively managing your supply chain is the only way to ensure consistent product quality and safety. When choosing a supply chain management program, you should focus on five key elements: traceability, measurement, certification, efficiency and organizational buy-in.
In addition to these five elements, you should understand that your end user is the main driver for any management program. Consider who uses your products, as well as how and where they are used in order to assess all risks.
The Department of Defense (DoD), for example, is the largest procurer of goods and services in the world and must track the items it buys, evaluate their performance and ensure quality. The DoD has effectively managed its large and complicated supply chain by adopting a European system, the EAN.UCC Standards, which will be used here to demonstrate examples of each key element.
The goal of any supply chain management program is to track all products and ingredients backward and forward through the manufacturing process. The more complex your supply chain, the greater the need for a flawless tracking system.
Use tools like barcodes, numbering systems and Radio Frequency Identifications (RFIDs) to track each product along the supply chain. Give each item a unique number and be sure to apply your numbering system at every stage. Many private companies make software packages that allow you to track your supply chain remotely, rapidly and at a low cost; an added measure of control for those with decentralized or overseas suppliers.
The key to effective traceability is to make sure each supplier (part maker, assembly plant, packer, distributor, etc.) makes product quality and safety a priority. Most problems that could result in a batch isolation or recall occur as the product is handed off from one supply chain component to another.
First, thoroughly examine your supply chain. Beware of hand-off points, as well as introduction locations of new ingredients or components as these tend to be the highest-risk error points. The DoD's Uniform Identification policy mandates all suppliers and manufacturers uniquely identify property, facilities, equipment, operating materials, and supplies using identifiers like the EAN.UCC System's Global Individual Asset Identifier (GIAI) and the Global Returnable Asset Identifier (GRAI). This system allows the DoD to identify all supply chain components, as well as the items manufactured. Adopting similar measurement tools will enable you to identify the unique function of each element along your own supply chain.
Once you've identified your components and risk points, your second measurement task is testing. Have your internal quality assurance personnel or a third-party auditor test for and document contamination or other flaws. Testing adds a few extra steps to the manufacturing process, but it impacts your product quality profoundly, enabling you to isolate any contaminated batch and identify the source of the problem immediately.
The final measurement component is an analysis of your supply chain's current technology systems. You'll be asking your suppliers to make an investment in technology that allows them to communicate and track your products efficiently. Before deciding on a management program, be sure you have a thorough understanding of your suppliers' current capabilities and future needs.
Certification programs are often the best insurance against product quality problems. They not only set guidelines, but they often involve an additional process of checks and balances as well. There are three main certification types: regulatory compliance, industry self-regulation and third-party certification, each with distinct characteristics.
- Regulatory compliance is the most widely used, yet often the most hands-off, method of product quality assurance. Governmental agencies like the USDA, FDA and EPA establish rules and punishments, but typically don't inspect unless they've become aware of a specific problem. Governmental regulations are an excellent starting point, but they should not be relied upon as your only means of management and quality assurance.
- Industry-wide self-regulation is a second means of certifying the quality of your supply chain. This method is often more successful than regulatory compliance due to the additional commitment. Industries often decide to self-regulate rather than request stricter guidelines from governing organizations. Self-regulation has historically been successful for many industries, including the water filtration systems industry and the wine industry. Because of recent lead paint scares, the toy industry is currently investigating a similar means of self-regulation. The DoD's Unique Identification system of requirements, in our example above, has brought about self-regulation activities among companies within the defense industry.
- Third-party, voluntary certification is an excellent assurance resource. This type of certification offers guidelines and benchmarks such as government regulation and industry standards, but its regular audits and additional resources bring an added level of assistance when it comes to identifying problems and creating solutions. Third-party certifiers perform random audits of your supply chain critical access points and random tests of your raw materials. They'll help you design your management process, making it easy to identify issues before they become problems. They'll take you through an investigation of any flawed products and recommend corrective action.
Supply chain management and certification programs are not as time and cost-intensive as they may seem. In fact, the benefits of avoiding any potential crisis far outweigh the costs. Depending on the current status of your facilities' operations and the steps necessary to correct supply chain problems, a program can be implemented in as few as two months or as many as 12 months in cases needing serious overhaul. Regardless, a key element to consider when selecting a supply chain management program is efficiency: how will such a program work within your day-to-day processes?
The DoD's adoption of EAN.UCC standards vastly improved its efficiency by clearly identifying products, streamlining information, and simplifying the processes of asset management and quality control. While supply chain management programs can take time and energy to implement, they should ultimately increase the efficiency of your overall manufacturing process.
Successful supply chain management depends on the cooperation of employees at every level. The final key to a successful management program is to understand that it's far easier to set guidelines than to ensure compliance. Supply chain partners must all work together, as well as advocate a universal understanding of the assets provided by the program.
Training makes sure supply chain employees understand program expectations and benefits. Train your employees on an ongoing basis, not just once. This will reinforce the importance of compliance. Be prepared to conduct random audits and surveys of your employees' work. Just as you test your finished products, you should test the means by which those products are made.
Self-assessment is another tactic that lets your suppliers maintain responsibility and accountability. Self-assessments should augment, not replace, audits and random product tests. These types of assessments give your suppliers the autonomy to identify and solve shortcomings on their own, increasing their pride in the overall process.
Supply chain management is not only beneficial to your production executives; its benefits should be known among your sales and marketing departments as well. Brand management, reputation and respect all result from producing and selling safe, quality items. As the news media point out, consumers feel very strongly about product safety issues. Reinforce the benefits of supply chain management from the top of your organization downward by highlighting the profitability and marketability that comes with quality.
NSF International an independent, not-for-profit organization, helps protect consumers by certifying products and writing standards for food, water and consumer goods. NSF is a World Health Organization Collaborating Centre for Food and Water Safety and Indoor Environment. Additional services include safety audits for the food and water industries, management systems registrations delivered through NSF International Strategic Registrations, organic certification provided by Quality Assurance International and education through the NSF Center for Public Health Education. www.nsf.org