Are you stuck between a document and a hard spot? : The true cost of THE LITTLE DUTCH BOY strategy

May 30, 2015


Are you stuck between a document and a hard spot? : The true cost of THE LITTLE DUTCH BOY strategy



Are you stuck between a document and a hard spot? : The true cost of THE LITTLE DUTCH BOY strategy

After a presentation in EMEA, I was asked if our solution would effectively provide the value of the fable: “THE LITTLE DUTCH BOY WHO SAVED HOLLAND”.

When I quickly answered “yes”, the person who had asked the question said “I was afraid of that. We have too many one-off solutions”. Based on the company’s quick fix mentality, he went on to discuss opportunity costs in informal/hidden enterprises. I was not sure if I misinterpreted the fable or we had translation issues. This caused me to investigate the content of the fable, and as it turns out, I was wrong about it. In short, the little Dutch boy was quick to see the risk and plugged the hole which saved Holland. Unfortunately, he could never remove his finger (lost opportunity costs) and an increasing number of boys were needed to plug new holes (hidden costs of informal enterprise). Rather than providing a scalable fix, the town had to keep finding more boys none of whom could ever leave. Many of you have enterprise solutions (i.e. hard spots) that must evolve at a measured pace, while business requirements evolve more rapidly. For each new initiative, it is easy to deploy a point process and a manual process to fill the gap. You get a quick fix but the enterprise often does not benefit, and you are often processing the same data multiple times. Even with one single document management solution, each process uses different metadata, and you have multiple versions of documents.

A simple way to measure effectiveness of your document based process is bench-marking a retailer’s or customer’s audits and recertification processes. Let’s start with audits. The good news is that most of you have solid quality programs that you want to show off. The bad news is the prolonged time required to prepare or preposition documentation, and the cold sweat concerns about an auditor requesting a missing document. You have a document management solution or a couple of shared drives. How hard can it be to find the current supplier documents? Watch the audit preparation team hustle to pull together the supplier data. It can be a real eye opener. We are usually challenged about these statements. If you don’t have these issues, you have the best in class capabilities. Unfortunately, manual processes are the most common strategies to manage supplier documentation. This is a common scenario that we see:

  • R&D finds a supplier and starts to communicate. Note: Since R&D is the key influencer, the supplier sales team is likely to feed much information to R&D. Documents are most often in emails and local drives. Periodically, or during commercialization, documents are put on shared drives and possibly in PLM or document management. How many R&D people are working with the Sales rep? Even if there are only 2, you double the risk of that last document stored, as it may not be the current document from the supplier.
  • How many different product groups and R&D people per group are working with one or more sales rep per supplier? What is the risk? Based on the source of data, the assumptions may be wrong and you would expose the launch (rework) and production quality (first pass quality) to risk.

    • In Chemicals, Viscosity values vary by Test Method and Equipment used.
    • In Food, best buy and shelf life days’ calculation vary by product category and potentially by the customer.

    With each sample request or line trial, you get more data and documents that might be in Quality or R&D.

If no changes to material attributes are requested, you may revisit product information every 2 years or more. Having the wrong or conflicting documents have a long tail effect on R&D effectiveness and product quality.

While it will take some effort, you will be amazed at how many times a supplier or item document is touched and data is re-entered. A quick review of common development cycle highlights the number of touches or risks of working with old data. Since multiple projects across departments can use the same experimental item, multiply this example by the number of departments.

  • Customer is going to buy quickly. We get the supplier data and documents
  • We send some samples, pricing, etc. With interaction, we send out documentation. Documentation maybe pulled by sampling, sales, quality, etc.
  • Customer doesn’t buy this season
  • 6 months later, the customer is active again! A number of supplier’s documents are expired or will expire before we ship. How many of you have visibility into this? If not, you could hit a road block in commercialization. Since the Customer is active, several departments or other customers maybe in play. How many interactions are happening with the supplier? How many iterations of each document are responsible for touché and loss of time? Where are the documents?
  • Have the auditors collected more up to date documents?
  • Has the recertification process collected more up to date documents? (see below)
  • Based on our experience, the number becomes commentarial

If we just stop here, you can see how audit preparation is a challenge. We commonly hear that Supplier Quality support teams are consumed by audit preparation and support.

Next, let’s talk about recertification, based on Customer or Safety Legislation, ensuring material and supplier data. Accurate, up to date and complete Supplier and Material Information Compliance needs to be core competent. To assess your risks, consider what % of your materials and packaging has been updated in the last 2 years. What % of items is added each year? Is your backlog growing? If all product development and quality are based on this data and these documents, is the risk level acceptable? While audit prep and support are struggles, material and supplier information compliance are usually black holes. Based on audit issues,

  • Can you identify which documents need to be recertified? Why is this hard? Often, each plant will have documents and each document can have different effective dates. In case of Kosher or Halal, the certifier can be at all plants in one day. Can you find all the documents that need to be recertified within a quarter? Since many documents don’t have effective dates, these documents should be recertified with the item or packaging material. This, further complicated by the fact that each department has different needs, can capture different metadata.
  • Materials and packaging specifications and recertification intervals should be volume and risk based. You need to ensure that all items and documents with the items are reviewed and the risk of out-of-date or inaccurate information is minimized.

You should be able to identify recertification items, communicate with the supplier, have visibility into the status, have automated dunning capabilities, have escalation processes and manage supplier risks. If you claw back the time to find documents, create emails, update tracking spreadsheets, manually dun suppliers and not to re-enter data multiple times; key quality and compliance resources can be focused on improving quality rather than doing clerical work.

Somewhere between documents and the hard spot is a new category of systems of engagement providing solutions that can support multiple business processes and roles. System of Engagement solutions are designed to be agile and complement your enterprise systems. When information and documents are approved, the systems of record (PLM, ERP, QMS, CRM and SCM) can be updated. A potential solution to these issues would be as follows:

  • Supplier portal or adding to your Supplier portal that allows your supplier to have one point of collaboration.
  • Template based solutions that support all or missing data/documents from suppliers. For manual processes, you can configure templates to collect data and documents by business processes. Templates should be able to be easily created and updated by the business.
  • Business process or ad-hoc collaboration with the Supplier or Sites and visibility into the status of requests.
  • Automated dunning for potential or late requests.
  • Reviewed supplier responses.
  • One or more enterprise systems updated.
  • Post to document management with complete metadata tags.
  • Automated recertification of dated document and specifications/audits, objects, etc.
  • Searchable documents and specifications/audits, objects, etc.
  • Role and supplier security to protect information.

Don’t settle for just documents; wait for a hard spot (PLM or ERP) to get changed or continue to fill each gap individually, and look at Systems of Engagements!

A recent post provides a strategic view of the future of Systems of Engagements. Most of you can get started and incrementally implement it and evolve into this vision.

Next, using a Copacker or Toller example, I will describe getting started with a System of Engagement and a phased approach to strategic implementation of a System of Record.

Over the next few weeks, I will continue to share my PLM Odyssey, “better practices” and business strategies for agile innovation and compliance strategies. No two process companies or PLM implementations are ever the same, but many are remarkably similar. Stay tuned to find out how you might benefit from the PLM journey of others.

– Rory

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