Building the Foundation of Enterprise Quality Management throughout the Product Value ChainMatthew LittlefieldPresident and Principal AnalystLNS Research

Mark BienkowskiSupplier Quality ManagerGE Healthcare

Agenda

•About LNS Research

•Industry Drivers

•Understanding Product Value Chain and Closed-Loop Quality

•Benchmarking the Potential Performance Benefits

•Recommendations for Success

•Executive Case Study from GE Healthcare: Supplier Quality Collaboration System

•Q&A

Understanding LNS

LNS is a research and advisory firm that helps clients innovate and achieve operational excellence.

LNS is a research and advisory firm that helps clients innovate and achieve operational excellence.

We deliver the market intelligence and thought leadership needed to capture the value of technology through:

• Experienced analysts• Primary research• Deep industry contacts• Interactive data visualizations

Global Executive Council

Starbucks – VP of Global Quality and Regulatory Affairs

Onyx Pharmaceutical – VP of Global Quality

Whirlpool – Director of Quality

Lindt Chocolate – VP R&D and Quality

Oriflame – Corporate Quality Lead

Champion Technology – VP Quality and EH&S

Gurwitch Products – VP Research and Quality

Newell Rubbermaid – Director of Quality

Hygia Health Service – VP of Operations

Discount Tire – VP of Quality

Daikin McQuay – Director, Corporate Quality

Bio-Rad Laboratories – Director of Quality Assurance

Owens-Illinois – VP of Global Quality

Harley-Davidson – Director Corporate Quality

Alcoa – Director Corporate Quality

Bridgelux – VP Corporate Quality

Plexus – VP Corporate Quality

Fresenius – VP Corporate Quality

Alent – VP Corporate Quality

Corbian – VP Corporate Quality

Research Model

Research Demographics

750+ Respondents to LNS Research 2013 Quality Survey

Industry Drivers

Top 5 Financial Objectives

•Organizations are focused on revenue growth, which is driving the customer centric organization

Top 5 Operational Objectives

•Improving manufacturing efficiency is at the top, but not well aligned to financial goals

Top 5 Quality Management Objectives

•Quality goals are synched with operations but not necessarily enabling revenue growth

Top Quality Challenges

•The top challenges are around culture, metrics, and systems, all important elements of Closed-Loop Quality

Understanding Closed-Loop Quality

Quality and the Product Value Chain

Current System Landscape

•Enterprise Resource Planning (ERP)

•Financial data, inventory data, production routings, recipe management

•Business Intelligence (BI)• Reporting, Analytics, Visibility

•Customer Relationship Management (CRM)

•Customer complaints, trade promotions

•Product Lifecycle Management (PLM)

•Product data, manufacturing process, quality inspection, quality by design

•Manufacturing Operations Management (MOM)

•In-line and at-line testing, statistical process control (SPC), manufacturing non-conformances

•Supply Chain Management (SCM)

•Supplier risk, scorecards, delivery scheduling, inspection

•Environment, Health, and Safety (EH&S)

•Carbon management, energy management, reporting

EQMS Architecture

Interconnecting Quality Processes

CAPAProcess

RiskManagement

AuditManagement

Adoption of EQMS

•Major adoptions of EQMS are coming.

Adoption of EQMS of Functionality

•NC/CAPA and Doc Control are most adopted•Supplier and engineering capabilities are lagging

Benchmarking the Value

Understanding a Box Plot

Box plots help to easily visualize the distribution of benchmark survey data

Improving OEE

•Establishing quality as a top executive priority improves median OEE by over 9%

Improving OEE

•Establishing closed-loop processes to connect quality across the value chain improves median OEE by >9%

Improving On-Time Deliveries

•Collecting quality data automatically through a Web-based portal improves median OTD by >3%

Improving NPI

•Collaborating with suppliers in design for quality initiatives improves NPI >24%

Recommendations for Success

Recommendations for Success

•Identify the processes and relationships between leading and lagging KPIs across the product value chain and develop real-time analytics

•Create closed-loop quality management process with EQMS by extending across the product value chain and integrating quality processes

•Begin to extend traditional EQMS processes with capabilities that impact upstream supplier and engineering processes, like: SQM, FMEA ,and change management

Thank You!!`Matthew LittlefieldPresident and Principal Analystmatthew.littlefield@LNSResearch.com

GE Healthcare

Supplier Quality Collaboration System

Mark Bienkowski

December 19, 2013

29 GE Healthcare

12/19/2013

Energy Management

GE

~$147B Revenue $15.1B operating earnings$17.8B cash flow

GE Capital

Home & Business Solutions

Healthcare

Aviation

Transportation

Energy Management

Power & Water

Oil & Gas

30 GE Healthcare

12/19/2013

GE Healthcare

$18.3 billion global business unit of GE

46,000 employees worldwide

$1 billion+/year investment in R&D

Core strengths in diagnostic imaging, patient monitoring solutions, bio-sciences, healthcare IT

31 GE Healthcare

12/19/2013

GE Healthcare Key CustomersHealthcare systems, hospitals, clinics• Physicians• Clinicians• Nurses• Executives and Administrators• IT managers • Biomedical engineers• Construction managers

Government officials Retirement communitiesPharmaceutical firms Genetics researchers Bio-science researchers

32 GE Healthcare

12/19/2013

Compliance•QMS- Fully implemented and effective Quality Management System•SCRs – Communicate all changes prior to implementation

•Part/Print issues, •process changes, •business changes

•ECR/ECO –•Communication and follow-thru

Performance•DPPM < •Right 1st time, every time•Prompt defect resolution•Continuous improvement

Expertise•Part Quality Plans ,

•NPI - Early Engagement•Transfers & Design Changes

•Knowledge Sharing for Producible Drawings and Parts

Communication•Know your SQE •Avoid production impact•Compliance Issues•Production defects•Ask, don’t assume

GE Expectations for World Class Suppliers

GE WCS

33 GE Healthcare

12/19/2013

Supplier Quality Collaboration System (SQCS)Summary Description•Workflow-based platform

•Real-time communication of quality related transactions; driving down overall transactional cycle time

•Transparent view of status for quality related records

•Eliminate need for manual forms, unnecessary email communication, and extra document repository locations

Why built? •Improve communication and transparency to suppliers

•Eliminate “extra” handling of common transactions between GEHC and its suppliers

Processes Supported:

•Supplier Change Requests (SCR)

•Supplier Change Notices (SCN)

•Supplier Corrective Action Requests (SCAR)

•Part Quality Plans (PQP)

•Supplier Audits

•Approved Supplier List (ASL)

Languages Supported:Chinese (simplified)EnglishFrenchGermanJapaneseKorean

34 GE Healthcare

12/19/2013

Database Tables•Approved Supplier List•ASL Sub tiers•Supplier Qualification Records•SCR Records•ECR/ECO Notification Records•Supplier Scorecard Records•SQE to Supplier List•Part Quality Plan (records)•Supplier Audit Schedule•Applied Practices

Supplier Quality Control Platform

Applications•Supplier Change Requests•ECR/ECO Notification•Supplier Qualification•Part Quality Plans•Supplier Certification Monitoring•Supplier Defect Monitoring•Supplier Scorecards*•Supplier Access to Dwgs and Specs*•Design Collaboration for NPIs•Supplier CAPA or SCARs•Supplier Auditing (NCs only)•Supplier Contact Info*•Part Acceptance•Part Data/CoC submission*•Transfers“*”= Not Workflow

ERPs

BI

PDMs

SupplierPortal

MESs

SSO

Supplier Quality Control System

IDMMyLearn

One stop shop

35 GE Healthcare

12/19/2013

Recommendations•Digitize workflows and records•Integrate PDM/ERP with central control•Improve online supplier communication

Field defect monitoring

FDA warning letter monitoring

Manufacturing defect monitoring

Audit planning and execution

Auditor qualification

Audit scheduling

Audit CAPA

ERP updates

Approved and unapproved lists

Contracts and requirements

Planning and execution

Supplier categorization

based on part risk

Part data and certificates of Conformance

Part Quality Plans Supplier Change Requests

ECR/ECO notifications

Corrective action requests

Supplier scorecards

Supplier CAPA

GEHC Standards

Qualification Auditing Part Acceptance Monitoring Change

ControlFeedback

Loops

MyWorkshop x x x x xMS Office x x x x xERP (n+1) x x xPDM (n+1) x x x xManual form x x xForm Router xCorporate xSupport Central x x xNCR/IQA xCIR xPowerSuite x xGESMP x xCognos x x xTOTAL 7 6 4 4 10 3

- Migrated to SQCS

Supplier Quality System Process Matrix (pre-SQCS)

Challenges/Risks•Complex manual processes•Large supplier base•Poor PDM/ERP linkage

Systems/Tools

36 GE Healthcare

12/19/2013

SQCS Results and Benefits

Suppliers able to better contribute to the design process in a collaborative manner

Quadrupled communication to suppliers

Cycle time for change control communications reduced by 50%

Significant reduction of non value added work for both GEHC and Suppliers

Globally consistent processes and records

User satisfaction

37 GE Healthcare

12/19/2013

Single Instance for Quality & Regulatory

Supplier Quality

•SCR•SCN•SCAR•PQP•Audits•ASL

Supplier Quality

•SCR•SCN•SCAR•PQP•Audits•ASL

Clinical Research

•CRO File Uploads to Oracle CDC

Clinical Research

•CRO File Uploads to Oracle CDC

Regulatory Workflows

•Med. Device Registration Req.•Device Reg. Workflows

Regulatory Workflows

•Med. Device Registration Req.•Device Reg. Workflows

A single platform for SQCS & Regulatory leveraging Oracle/Agile technologyUpgraded to version 9.3.1 to allow single instance

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