One of the most powerful catalysts driving new revenue is the insights gained from audits. Compliance, process, and product audits are essential for any quality management strategy to succeed.
Market leaders have the ability to take quick action on quality data gained from these audits and modify customer outcomes immediately.
- Excelling at audits is one of the most overlooked yet powerful ways to increase sales.
- ISO 9001 certification generates an initial sales bump that can be turned into long-term sales acceleration if combined with new products and programs.
- Manufacturers who attain and stay in compliance with ISO 9001 attain greater employment and sales growth long-term.
These and many other fascinating insights are from the Harvard Business School Working Paper, Quality Management and Job Quality: How the ISO 9001 Standard for Quality Management Systems Affects Employees and Employers by David I. Levine and Michael W. Toffel.
As the first large-scale study to determine how employee outcomes such as employment, earnings, and health and safety change when employers adopt ISO 9001, the researchers underscored how vital periodic audits are to continual improvement.
The study focused on single-plant firms across an array of industries, with Dun & Bradstreet finding nearly 1,000 companies in California meeting the criteria of being a single plant firm.
5 Reasons Why Quality Audits Need To Become Routine
Below are five reasons why quality audits need to become routine in manufacturing:
1. More accurately define and track major and minor non-conformances by product, prioritizing them and what action is needed to resolve each faster.
Product quality problems can turn into customer and public relations problems incredibly quick. Completing periodic audits to track major and minor non-conformances by product are essential for staying on top of any potential major product non-conformances.
Capturing trending data based on noncompliance/corrective action (NC/CA), Corrective Action/Preventative Action (CAPA) and customer requests, then scoring nonconformances using a quality management system can help in defining which quality issue gets addressed first.
Having a fresh set of data on these areas every month to 60 days in invaluable in solving quality challenges on the customer’s’ behalf.
2. Audits are indispensable in building a Manufacturing Intelligence knowledge base capable of tracking and predicting quality performance.
The future of MES is Manufacturing Intelligence designed with data capture, aggregation and advanced predictive analytics in mind. The more detailed and robust the data captured in audits, the better.
With reliable data, Manufacturing Intelligence applications can provide insights into points of product and process weakness not visible before. Every new insight discovered adds to the knowledge base available for solving future quality challenges, too.
3. Maintain a high health and safety level plant-wide while keeping injuries down by using audits to track conditions and improve.
A globally-known high-tech manufacturer uses audits every 60 days to evaluate the health and safety compliance of their lead production facility in the Midwestern U.S. The company manufactures make-to-stock and build-to-order products, and has seen more injuries in the latter product area in the last 12 months.
Using periodic audits the quality management team found that work instructions often required assemblers to shift build-to-order cabinets that could lead to sprained limbs.
Using periodic audits the entire build-to-order workflow was redesigned from an ergonomic standpoint. Injuries have since declined and so has turnover.
4. Providing improvement recommendations based on recent audit data to senior executive quality champions get results.
Make the most of the time communicating with senior executives and leadership by providing clear recommendations for quality improvement based on actual data.
By anchoring recommendations on audit data, the senior execs who are championing quality have what they need to take action. The Harvard Business School study also found that by doing audits on a regular basis, manufacturers learn how to make cost reductions permanent at the process level.
5. Keep customer-based metrics and Key Performance Indicators (KPIs) at the center of audits and track how operations plant-wide are performing versus plan.
Often the most valuable audits find where internal disconnects are causing customers lost time, orders and the potential to generate more revenue on their own.
Audits need to track and trend order entry accuracy, warehouse pick accuracy, on-time delivery percentage, orders shipped without damage (% of orders shipped damage-free) and percentage of orders invoiced correctly.
These five factors define perfect order performance. Excelling at perfect order performance is the first step to driving up customer trust and the opportunity to sell to them again.
Every manufacturer is on a quality journey, with those winning the most customers excelling at finding ways to improve fast. Getting into a regular cadence of quality audits creates the intelligence and urgency needed to keep improving every aspect of product quality.