The nature of today’s global economy means that manufacturing processes need to be monitored more closely than ever. Supply chains are complex. Intense competition means that continuous improvement is a relentless endeavor. Manufacturers today are constantly pushing for any marginal gain that might provide an edge in the marketplace. In a perfect world, adjustments to manufacturing processes could be made without fearing a negative impact on quality. However, experience has taught us that when things change, errors can occur, and quality issues can arise.

When such events do unfold, the results can vary dramatically, depending on a number of factors. A good containment strategy – one that limits the damage of non-conformance to the plant floor, or should I say, “plant floors,” in the age of the enterprise manufacturing network – is worth its weight in gold. We’ve seen the damage done once a defect goes undetected and  multiplies across the marketplace. Increasingly, containment is being viewed by manufacturers as a required capability, rather than merely an insurance policy to rely upon in case of emergency.

Proactively putting a containment strategy in place can prevent defective parts from spilling into the broader supply and demand chains. This strategy can then avoid a domino effect resulting in costly recalls, extended warranty claims, and in some cases, injuries or death. With such high potential costs, it shouldn’t be surprising that implementing such a strategy can achieve a strong Return on Investment or ROI. I know of several cases where a return on investment was achieved in just a few months, simply based on the cost savings of being able to react faster, contain non-conformances, protect brand integrity and avoid potential recall actions.

No Shortages of Examples

We have all read about the challenges that the automotive industry has had in the area of defective airbag identification, so I won’t repeat here. Suffice it to say that this entire ordeal has been quite costly to the corporations involved and has impacted thousands of workers and consumers – not to mention the families that have lost loved ones.

The challenge is that no single producer can ever be perfect in every design and production process. However, the ability to quickly investigate, identify and mitigate any product anomaly is now the minimum bar for entry into automotive. The pursuit of operational excellence demands recognition of this fact. It is incumbent on all manufacturers to implement not only the processes required to address non-conformance situations without delay, but to have the framework and tools required to expedite changes when process adjustments must be made.

First Step – See the Problem

Any plant manager, supervisor or global vice president of operations will tell you that the first step to responding to an adverse condition is to know about it. Visibility must be as near to real-time as possible. Hence, this explains the drive by supervisors to have access to a dashboard – ideally on a mobile device. Another term for this strategic imperative is “operational agility.”

Second Step – Do Something

While step #1 is all about knowing you have a problem, step #2 of actually doing something about it. I call this having visibility to intelligence that is “actionable.” What action can I do to assess the extent of the situation immediately, once I become aware of an adverse event?

Here is where a good containment strategy comes into play. Having an ability to quickly identify the potential scope of the problem, and then actually isolate the defective components quickly, so as to prevent them from moving forward or escaping into the wider production process is now critical. This capability dramatically minimizes the impact from such an event. In many cases, a product issue caused by an up-stream supplier might not be found until much later after the product has been shipped, or worse, consumed. The ability to execute quickly can go a long way to minimizing the impact from this type of event.

The complexity of today’s value chains means accurate product traceability and genealogy data is imperative in order to react in a timely manner. With cases stretching as far back as the early 2000 time period, this has clearly not been the case for the recent airbag debacle. With a lack of detailed traceability and genealogy data one has to assume, whatever containment processes were in place across all manufacturers involved have been rendered useless. This has in turn resulted in a lack of control and an inability to efficiently resolve this issue. Both the financial and human costs have been significant. In this instance, the right containment strategy would not only have delivered a return on investment (by all parties involved), it could have potentially reduced the human toll.

Next Step – Establishing the Framework

As is the case with most large projects, at a high level it is clear what is needed. But, taking that first step to move towards the bigger solution can often be a challenge. There are many benefits of improving real-time visibility to operations – improving traceability and containment effectiveness is just one. Perhaps an ROI can be justified simply based on improved performance. Just be sure that your solution also includes the capability to offer enterprise-level traceability and containment capabilities. Then your project can be off to a good start.

If you liked this article, here are a few others you might also find interesting:

• In the Automotive Industry, was 2014 a Year Worth Recalling?
• The Competitive Advantage of Global Traceability
• 5 Key IT Enablers for Enterprise Product Traceability and Containment