No one really talks about how closely tied the findings of manufacturing audits are to the long-term ability of their companies to compete. Studies of audit effectiveness consistently deliver a similar set of competitive priorities and strengths for companies who make the commitment to engrain manufacturing process workflows beyond the factory floor to engineering, sales, service and management. Making audit pay begins with transforming the use of audit data into competitive strengths and lasting competitive advantage. The bottom line is that the secret weapon of manufacturing is transforming a company with auditing data as the influencer – nothing less can create the product reliability that exceeds customers’ expectations daily.
Welcome to the Auditor’s Moment of Truth
Reading that heading, many would say it is reporting their results to the Director of Quality, or the VP of Operations. Yet the real moment of truth for auditors, and for that matter, the entire quality management department, is when a customer turns that key in the auto, or plugs in that appliance, machine or device, no matter how large or small, for the first time.
Those first seconds of questioning if the product is going to measure up to their expectations is the entire quality management departments’ moment of truth. Getting audit data out of the silos where it is housed for tactical decision making and making it a catalyst of changing how a company thinks about quality is crucial if they are turn their investments in quality into competitive strengths. Benchmarking that includes this data and fuels an Integrated Strategic Benchmarking Framework (ISB), a concept that is defined by Dr. Meybodi (2006), author of studies analyzing how manufacturers turn quality into competitive advantage. His work provides a roadmap for how to use the ISB to transform audits into competitive advantage, literally getting the insights off the auditor’s reports and quickly engrained into strategic product and service plans.
From a Culture of Conformity to Passion for Service
Auditors can and need to be the revolutionaries of change in their organizations, especially given how uncertain the economic times are worldwide today. It’s not enough to just focus on the manufacturing floor anymore; auditing data has to be the new vitality of change in any manufacturing company. Auditors must throw off their preconceived notions of how their data is being used, and instead see it as a catalyst for revolutionizing how their companies can compete and survive in a worldwide economy. There is no turning back from this challenge. Auditors must become the catalysts of change in their companies – getting a passion for serving their customers by delivering exceptional moments of truth daily. What’s needed is to the development of an ISB framework that is tailored to the unique requirements of companies that serve as the foundation of defining their Enterprise Compliance and Quality Management (ECQM) strategies. Imagine being able to integrate the unmet process and information needs of product planning, product management, engineering and manufacturing engineering with the data captured during NC/CA-based audits; or use document management systems to capture an entire history of Engineering Change Orders (ECO)s. Create an entirely new and more efficient approach to developing new products, and making integrating in key insights gained from internal audits to make next-generation products more finely tuned to the unmet needs of users. Or the potential to completely re-define the safety history of a product based on audit data, and make the change permanent in the product development process. What’s so powerful about all these scenarios is that they turn audit data into the catalysts of change in any company’s most critical processes. All tie back to that moment of truth in front of the customers, when the product is first turned on, plugged in, kick-started or the medication given. In the service of customers there is nothing less; auditing must become the catalyst of this change.
Finding New Markets Using Quality
In the best-selling book, Blue Ocean Strategy, Drs. W Chan Kim and Renee Mauborgne illustrate through intensive research how uncontested new markets are created, often by incumbent companies in slow-growing industries. What’s fascinating about their analysis is that quality often emerges as the delineating factor in sustaining a new market strategy. Along with the work done by Meybodi (2006) the extensive work of Drs. Chan Kim and Renee Mauborgne also support how critical quality is in defining new markets as well. Getting back to the moment of truth, what if that experience could be made progressively better every ninety days or less? What an entirely different competitive dynamic that would infuse into an industry. All of these changes in the success of failure of any company can be nurtured from audit data. Taken in this context, a comprehensive ECQM strategy can be the catalyst of growing entirely new and often uncontested markets.
From Price to Quality Competition
The need for getting away from price reductions as the means to gain customers – in effect buying them from gross margin sacrifices – must stop if companies are to stay viable and financially strong. Instead of just plummeting to the depths of price competition, what if the incremental losses used to fund these strategies was invested in quality instead? Wouldn’t that lead to an entirely new competitive dynamic in many industries? It would financially fuel the development of what Drs. Meybodi, Chan Kim, and Renee Mauborgne have long contended was the best approach to competing for market share, and that is in creating entirely new markets based on unforeseen needs.
Who better to find unmet needs than auditors who must continually benchmark processes, measure the conformance of products to customer requirements, and ensure that quality management strategies including Six Sigma are correctly deployed? Those auditing professionals managing critical product and process performance data have the potential to revolutionize their organizations, finding new markets in the process. Instead of just allowing complacency to rule, auditors have to be the catalysts of change and make moments of truth with customers real, meaningful, and relevant for any company to remain viable in the long-term.
W Chan Kim and Renee Mauborgne. (2004). Blue Ocean Strategy Harvard Business Review, 82(10), 76-84.
Meybodi, M. (2006). Internal manufacturing strategy audit: the first step in integrated strategic benchmarking. Benchmarking, 13(5), 580-595.