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MRP: Material Requirements Planning

MRP in Manufacturing: Material Requirements Planning

An MRP in manufacturing stands for Material Requirements Planning. The MRP in manufacturing is a program that creates a method used for calculating the components and materials that are needed to construct a product.

A material requirements planning process can be thought of as a master production schedule, it is the central source that is used to inform operators of what is needed to be produced, how many units are needs and when those products should be manufactured. 

The material requirement planning process often consists of 3 main components being:

  1. Takes note of materials and components currently in the inventory that is on hand and readily available.
  2. The program identifies the additional inputs that are required for a seamless production process, creates a materials list for an easier ordering process
  3. Schedules the production process and the purchase of raw materials to keep manufacturing on schedule, not allowing delays

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Training Matrix, what you need to know.

What is a Training Matrix?

A business most often uses a spreadsheet or similar visual display as a training matrix. This spreadsheet usually lists certificates and training records for employees.

A training matrix tracks the competency levels of each employee, each employee’s development and training. It ensures they have the proper training and certification to perform a certain task. It helps you to analyze the gaps in actual knowledge compared to the required knowledge.

Track the certifications and skills of employees using a training matrix.

Why use a Training Matrix?

A training matrix is a display of each employee’s skill level showing where they are needing improvement or further training.

With the use of an employee training matrix, you are able to see not only who possesses certain skills and certifications, but also how long they have had them. Even further when they will need to renew their training.

Due to this feature, you are able to create a more efficient plan placing the most competent and experienced workers where they fit best. Not only does the matrix notify you when someone’s certification will expire, but also all other certifications they have.

This creates an online filing cabinet of all employees in case of an audit with everything is in one place. Thus proof of training can be presented at any time.

Features to Include

  • Custom reports are useful because a manufacturing training matrix often needs several different certifications that not all employees will have. Creating custom reports that pertain to each employee’s tasks so there is no room for mistakes or chance of unsafe work. 
  • Automated reminders: Notifications are created for re-certification dates and other important dates/ specialized tasks. 
  • Organize staff: Manage your employee training matrix by job location, job requirements and position (the more subdivisions the better, makes it easier to see who possesses what knowledge and is able to do a certain task).
Training matrix most often is modeled after an Excel sheet

Benefits of a smart Training Matrix

  • Helps to track trends by tracking staff training and efficiency, which helps to view areas for improvement.
  • Keeps a historical archive. All past and present documents can be updated as things change and easily accessed in the case of an audit.
  • Creates a single source for all documents. All certificates and documents are in organized folders stored on a cloud server, accessible from any location.

Types of Matrices

  1. Skills-training matrix: Displays staff members skills and certifications along with expiration dates. 
  2. Cross-training matrix is most often in industrial and manufacturing settings (a manufacturing training matrix is often more in-depth). It helps in businesses where employees often perform tasks outside their specified roles. This matrix ensures at least 1 person has the skills to perform any task in the process at all times during production.
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QMS: Quality Management System

What is the purpose of a Quality Management System (QMS)?

A Quality Management System (QMS) in the manufacturing industry is mainly concerned with customer compliance and retention. Its main focus is to ensure the product is constantly meeting the requirements set by the customer, and making sure their transaction was satisfactory at every stage of manufacturing. 

It emphasizes the importance of predictable outcomes of industrial production lines, attempting to achieve 100% product consistency. A QMS can be defined as a formalized system that documents processes, procedures, and responsibilities for achieving quality policies and objectives. 

A Quality Management System (QMS) in manufacturing helps coordinate and direct an organization’s activities to meet customer and regulatory requirements and improve its effectiveness and efficiency on a continuous basis. There are certain principles the QMS is attempting to highlight, here are a few of them:

  • Customer focus: Both customer’s needs and services, successful businesses are able to spot new opportunities while maintaining customer loyalty and repeat business.
  • Process approach: Focus on constantly improving your process- good processes save money and time and improve the efficiency of manufacture and consistency of the final product.
  • Mutually beneficial supplier relations: Healthy relationships with suppliers enhance productivity between partners, companies must recognize they are interdependent with their suppliers and making their life easier helps you in the long run.
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ERP stands for Enterprise Resource Planning

What does ERP stand for? How does it work?​

The term ERP stands for Enterprise Resource Planning. An ERP software system is considered management software and is used to collect, store and interpret data collected from various business activities.

It tracks resources such as cash, production capacity and raw materials. It further tracks current ongoing of the business such as current orders, purchase orders and employee payroll. All the data collected and interpreted is available for use and view of any department.

ERP software is an integrated system that holds an updated view of the core process while facilitating error free transactions and production processes enhancing the efficiency of the shop floor.

There are a few reasons an ERP system could be useful for your business, some areas of improvement could include:

  • Finance: ERP offers an overview of all financial transactions and orders.
  • Human Resources: Tracks payroll and also gives an up to date view of employee performance making it easier to locate a forming issue.
  • Manufacturing: Automates several daily processes, streamlining an efficient shop floor.
  • Supply chain: Save time and money by automating your inventory tracking and manage supplies.
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What is Continuous Improvement?

ISO 9001 – Continuous Improvement Definition

So what does continuous improvement mean? The concept of continuous improvement in ISO 9001 is simple, but how is improvement measured and what exactly is an improvement? ISO’s version of continuous improvement holds that all improvements should address at least one of the following options:

  • Improvement of internal efficiency
  • Improvement of quality or performance that the market expects
  • Improve the ability to adapt to customer requirements
ISO 9001 continuous improvement of individual skills or production processes

Scope of Improvement

Asking a corporation to constantly improve seems vague and almost impossible at first glance, but within ISO 9001 there are many opportunities for improvement. The concept of continuous improvement does not state that a company should plan to improve all parts of its process at one time or strive for continuous improvement of only process steps. It is seeking the effort of improvement and desire to try different things in your process or make slight improvements to your system. You do not need to improve profits or shorten your process, but you must attempt to do things that may improve the function of your process or try adding another aspect to your QMS (it is the effort that counts).

How to Find Opportunities for Improvement?

There are a few places where you can search for areas that may be in need of improvement to maintain compliance with the standards. Customers are often a good source to find improvements. Whether it be considering how satisfied they are and whether there are any complaints or feedback can be a good place to start. Another place to look is, at what other businesses in your industry are doing. See if any of their ideas or innovations could work within your process to improve its function or the final product. One more thing ISO auditors are on the lookout for are improvements that have come due to employee suggestions. It is important to involve all levels of management and employees in creating an efficient and profitable process. Both internal and external audits are apart of the certification process, and often shed light on some things that can improve or are currently non-conforming.

Continuous improvement process steps are easier to find than one may think. Audits help outline them.

10 Pillars of Continuous Improvement

KaiNexus Blog has created a list of principles that they consider to be key when aiming for continuous improvement. Here is a mix of what they say and a few added points of my own:

  1. Build improvements on several small changes, not only major shifts. Approach change in incremental steps to avoid intimidation.
  2. Value employee ideas: opportunities are often noticed by operators and overlooked by management.
  3. Incremental improvements often come at little to no cost. Many improvements involve eliminating certain tasks rather than adding them.
  4. Employees take ownership when involved: being able to have an input improves communication.
  5. Source of improvement: Improvements are welcome from anyone within the company, boosting commitment.
  6. Improvement must be measurable. Measure the impact of changes, showing you if a similar solution could be useful elsewhere.
  7. You can improve the same section can more than once. If something has become better that doesn’t mean it is to its full potential.
  8. Any part of the process or aspect of the final product can be an improvement: there is no set list of improvements.
  9. Record any improvement or attempt at improvement. That is how the auditors are able to see if you have made changes or at least trying to.
  10. Improvement is not delegated to a certain part of the company. Any improvement from any department would count under ISO. 
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Top 13 ISO Advantages

Top 13 reasons that you should invest in ISO 9001.

Implementing ISO’s process based approach improves processes on the shop floor, it reduces errors in manufacturing while improving the communication between the operators and the management.

There are many ISO advantages that come with implementing a Quality Management system. Advantages of ISO standards could be placed under three categories:

  • Organizing processes that are currently implemented during the manufacturing
  • Increasing the efficiency of your manufacturing process
  • Striving for continuous improvement
ISO advantages

But how do those translate to your day to day operation and actual working environment? Here is our take:

1. Reduces mistakes and their costs​

Documenting and keeping track of changes in your work instructions and procedure manuals reduce production errors in manufacturing. Further, data tracking and documentation of your inspection process reduce the cost of mistakes by catching them earlier.

2. Build customer confidence

One of the advantages of ISO 9001 certification is to keep track of any past problems and how it occurred, while keeping a record of all maintenance performed. The an attempt to be able to predict when another problem may arise, and know how to minimize the effect of it does.

3. Improves communication on the shop floor

Since all your activities and processes are documented and work instructions are all in one place, the internal communication is improved and all operators are using the same agenda.

4. Avoid returns and reduce warranties

Due to the constant sampling and monitoring, problems with machinery are detected and solved much quicker, long before anything produced is sent to market.

5. Supplier engagement

Suppliers also become more like partners due to the constant line of communication and transparent process produced by the system, making them more involved in the entire process.

6. Employee retention and motivation

Within your company, a QMS helps you to define clear goals and ensure that you constantly review them. Having a system to clearly define employee’s tasks and constantly reduce non-conformities throughout production saves employees’ time and helps them be more productive.

Also having clear measures to provide the proper training and assess each process’s performance leads to less frustration and increased employee satisfaction and motivation.

7. Improves internal management

Having ISO certification can improve internal management as the entire process from the delivery of inputs to the exporting of the product to market is recorded, measured and monitored with the management team having a real-time feed as each step in the process is completed.

8. Ease of access to the Global market

An important advantage of ISO is that it is a globally recognized standard, meaning potential customers from any country will be aware you are committed to consistent outcomes, while improving customer relations and efficiency.

9. ISO certification signals reliable service to customers

Realizing companies that are certified prove to provide many advantages such as more reliable production scheduling and deliveries, as well as improved reporting and communications with customers and suppliers.

10. Identify trends in your process

Collecting operation data will allow you to aggregate your production data, analyze it and identify data trends in your manufacturing processes. Using the correct data collection tool and the proper reporting system helps you to use your own production data history and make informed and evidence based decisions.

11. Minimize errors

Some advantages of ISO 9001 certification provides product consistency and quality control which both aid with accuracy as well as production and delivery efficiency. The ISO system also has a list of all past mistakes and manufacturing errors, ensuring you do not encounter the same issue twice and if you do the solution is recorded. It also monitors both customer needs and satisfaction rate, helping you to improve.

12. Take charge of all internal documentation

Another important thing to highlight to all members of staff is the importance of tracking data and records. Clearly identifying which documentation is the correct one to use for a certain situation. The consolidation and monitoring of documents maintains that the latest versions of the system and work instructions are being used, and are distributed digitally to any staff whom it may concern.     

13. Leads to a happier workforce

Implementing ISO comes with continuously improving the environment of your operation. This makes your organization consider a combination of physical and digital factors in providing a suitable environment for your production process. This means giving consideration to factors such as social, physiological, and physical environment. In turn creating an environment that is calm, non-confrontational, thus minimizing stress, preventing burnout, while being a comfortable (light, temperature, airflow) environment for your workforce.

Simplifying Quality Inspection.

Measure, monitor, and manage quality data throughout the production cycle or repair and overhaul process. We offer production work force management and document management solutions.

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Proprietary Products: Single Source and Sole Source Procurement

Single Source Procurement

Single source procurement is an order where you decide which suppliers offer the best price and quality for your specific need. In simple terms, it is the decision to select one certain supplier, although there are others who offer the same or very similar product.

The decision to go with a single source is often based on the price they offer and sometimes based upon a superior product to all other suppliers.

single source vendors are the bulk of company's.

There are other factors that go into your decision such as past order accuracy, quality of the product and commitment to good service. Although deciding to go with a single source for your supply, there are other possible suppliers to switch to if necessary.

It is important to keep a record of why a specific vendor was chosen and what alternatives were considered. Keep this information in case anything were to change or you are unhappy with the service provided.

You should also make a note of what rationale was used to select the supplier and how the agreed-upon price was met and considered reasonable.

This way the process can be repeated to find an alternative vendor. A single source example would be if you are manufacturing golf balls and are looking for someone to supply the plastic outer shell.

There are probably several companies that would be willing to provide you with that service, choosing the best quality and the priced option is up to you. 

Sole Source Procurement/ Proprietary Procurement

Sole source or proprietary procurement is defined as there being only one supplier of a certain good or product.

This vendor/ supplier is the only source for this specific input. Being either the only provider within a reasonable geographic region or a company that has created itself as a monopoly.

Often these products are extremely unique or made with a scarce resource/ material making these suppliers the only option.

single source VS sole source

When dealing with a sole source option, you are unable to switch suppliers as there are no alternatives available. Due to this nature, you can either try using something else to complete your production or change the requirements for your final product. 

When deciding to work with a sole source proprietary the competitive process is surpassed. There is no bidding or squeezing you into a time slot between other orders.

There is simply a negotiation between you and the supplier to discuss what is a fair price and decide any other parameter of the deal.

Unfortunately, this is the only person to make a deal with so you may have to pay a higher price or ease up on some order restrictions to keep them interested.

A sole source example would be the computer company Dell, it’s accessories specifically. When you own a laptop, there are a few charging cables that will fit into the ports of most computers.

If you have a Dell and purchase a charger that fits, it will not work unless it is purchased directly through the company itself. So, you can find chargers that fit but do not charge, unless they are purchased straight from Dell.

Price Justification

There are several avenues to research the best supplier, that is if there is more than one available. With a sole source procurement, the entirety of the research process is instead spent on negotiation. Whereas single source procurement requires research and comparisons between suppliers.

Most products can be purchased from single source vendors.

Helping to ensure you receive the best quality product at the best price. Researching is time-consuming but will be very useful in saving you money and frustration in the long run. Here are some places to begin:

  • Look through a product catalogue to see if anything similar is sold that could be of use.
  • Reference price lists, but still get a quote as they often tend to be less than advertised. 
  • Investigate if there are industry standards surrounding the part you need.
  • Previous customers of the supplier and their satisfaction rate.

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What is a Manufacturing Execution System (MES)?

Definition of Manufacturing Execution System

A Manufacturing Execution System or MES is a computer system implemented on the shop floor or a manufacturing facility. An MES software is used to track and record the transition of raw materials to finished goods. It should also create various audit trails of inputs, keep track of materials, track stages of the production process, and much more. 

How does a manufacturing execution system work?

An MES system collects information helping the management team to understand the conditions and speed of operation on the shop floor. A typical MES software will track the production flow and help to create a more optimizes process. Here is a great definition from A methodology for Manufacturing Execution Systems (MES) implementation published in IOP Conference Series: Materials Science and Engineering

Manufacturing execution system is information systems (IS) application that bridges the gap between IS at the top level, namely enterprise resource planning (ERP), and IS at the lower levels, namely the automation systems.

A methodology for Manufacturing Execution Systems (MES) implementation

A typical MES system creates operation traceability, capturing the processes and outcomes of each production line. Further, a typical MES system will do collect data from the manufacturing floor and create data trends to map existing patterns in production. An MES system could create a paperless trail of the entire operation and control the quality of the end products.

Implementing an MES will help several function areas of the shop floor, providing valuable information to those in upper management.

Here is a summary of how it can help:

  • Gives an accurate measure of costs(Labor costs, scrap, machine downtime, etc.)
  • Creates operation traceability
  • Reduces inventory cost, optimizing inventory and purchases
  • Tracks and gathers real-time data throughout the entire production cycle, starting with order release until the product delivery stage (allows visibility for the entire process)

Today’s MES software has gone a long way from the 1970’s production execution system. The progression of Industry 4.0 is going to create a ” next-generation MES” which will further underline the importance of adopting digital manufacturing.

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CRM in the Manufacturing Sector

What is CRM in Manufacturing Sector?

The acronym CRM stands for Customer Relationship Management. A CRM system is a computer system that can help your manufacturing business manage its customer relations. Improving customer satisfaction and attracting new business.

You can store information about your customers or vendors. Such as who they are, where they are located and what was discussed during the last communication in your CRM system.

Why CRM in Manufacturing Sector can be beneficial?

  • Manufacturing businesses of any size can use a CRM system to store customer information, helping them manage customer relations. A CRM system can store all customer information and record all communications. 
  • Sales & Marketing: The role of CRM in the manufacturing sector is more than storing and tracking contacts and communication. A good CRM system can help your business seek out sales prospects and manage your marketing efforts. It could help your sales and marketing team to find the most effective marketing trends.
Image for CRM definition

From a manufacturing point of view, your sales team can view the entire customer relationship map. From the first point of customer contact to closing the sale. CRM software follows sales efforts to determine the most effective customer relationship management. Meaning, your sales team can see all past successes and failures. Finding the best customer service model possible to approach future prospects.

How can a CRM system improve your manufacturing business?

  • Acts as a lead generator: helps aim focus towards the best prospects giving you a higher chance of closing a deal.
  • Improves customer service and insight: CRM systems gather information about your prospects from different sources. Giving you an insight into how your customers run their business and any current issues they may be facing. 
  • Higher referral rate: Have a better understanding of a customers’ business improves relationships. Pushing them to talk about your service with others in the industry. Further, knowing the industry and customers helps to identify opportunities.

Depending on your manufacturing operation, you could use a CRM system to reach out to other businesses (B2B) or individual customers (B2C).

CRM in B2B Sales

Working with other businesses in your industry, B2B sales, a CRM in the manufacturing sector is used to track leads and customers, suppliers and vendors over long term sales processes.

Image for CRM benefits for manufacturing

CRM in B2C Sales

If your business is dealing with individual sales, B2C sales, you can use your CRM to track past purchases and organize repeat scheduled jobs (Think of window cleaning business, usually repeat customer and most often done more than once a year, your CRM tracks and schedules these appointments and displays any past complaints).

How to know if you need a CRM system?

Here is a list of questions to help you with the decision making:

  • Are customer information and prospective leads stored in separate places, would it be helpful to have them in the same spot?
  • Do your customers interact with the same person every time, if not is it a smooth transition for them to talk to someone else?
  • Does your sales team follow a structured process where productivity can be displayed?

The best type of CRM for your business:

When choosing the right CRM in the manufacturing sector, you need to make a decision about what type of service best suits your business.

CRM systems are available on a cloud-based system or in house. In the cloud-based model, you don’t have to worry about maintaining your own software system. Although, your information and contacts are stored on a machine somewhere off your premises.

With an in-house CRM system, you’ll be able to store all your information in-house but then you’ll need technical staff to maintain your system.

When it comes to the type of CRM for your manufacturing business, consider the size of your operation and your team’s strengths and weaknesses in both these platforms. 

Simplifying Quality Inspection.

Measure, monitor, and manage quality data throughout the production cycle or repair and overhaul process. We offer production work force management and document management solutions.

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ISO Terms: Quality Policy, Objectives and Manual

Quality Objectives

A quality objective is a set of goals for the value of the product, service provided and the production process can strive for. Quality objectives outline the key processes of the company’s quality assurance policy. Businesses use them to focus the efforts of the employees to work toward constant improvement.

The quality objectives created by your business should be created using the SMART principle. Meaning each goal is specific, measurable, achievable, realistic and time-based. While also being relevant to all people within the organization regardless of their department.

Occasionally people call quality objectives, key performance indicators (KPI). Each goal stemming from some aspect of the product or process such as durability, stability or safety objectives which are the aims to meet.

Making sure that each objective is communicated properly to those involved is a key part of beginning this process. Each individual should understand their part in reaching the goal, and how to remain compliant with the set standards while doing so.

Quality Policy

The quality policy is where the company has stated its promise. The promise to strive for consistent quality and constant improvement. The quality policy is a short document created by the executive management team.

It displays exactly what quality means to their company specifically. The purpose of their product or service and the strategic direction they are planning to take to achieve these goals.

You must show this document to all employees so all are aware and the company is aligned with their objective. The document is also made public to be accessed by customers and investors for reference and reassurance.

In short, a quality policy describes your business, what it offers and your commitment to delivering the highest quality product. Customer requirements are accounted for in the quality policy. Quality objectives are the goals linked to meeting customer requirements. These objectives are within the quality policy statements.   

Quality Manual

The quality manual is a document that holds the intentions for operating the processes within the QMS (quality management system). The quality manual contains any policies that may alter your production. Or that changes your ability to be compliant with the ISO 9001 requirements.

A quality policy is a promise to deliver a certain standard of final product.

Quality manuals are used to explain the operations of the company’s QMS to those within the company or to those outside, such as vendors or customers. Although there are certain things present in the majority of quality manuals, the contents are completely up to you. Although you are bound to provide evidence each process has been completed. So be sure to maintain that your policies align with your actual business practices. What quality manuals do need to have are at least 4 sections:

  • Quality Policy: direction and vision of the company.
  • QMS scope: what parts are included and excluded from the quality management system.
  • Quality system processes: Key activities (such as purchasing of inputs, process inspections, etc.).
  • Management Responsivities: which senior management members are involved with the QMS and their responsibilities.

In essence, the quality manual communicates management’s expectations to employees. In order to demonstrate the process plans to conform with the requirements set by ISO 9001. The manual is used as an aid while designing the quality management processes that will be effective in the organization.

Documented Information

As of the 2015 updated version of ISO 9001, both the terms ‘record’ and ‘documented procedure’ have been excluded. Both terms are now considered as “documented information.”

Documented information can be defined as all the information passing through a business. All information that needs to be maintained or controlled that is. Documented information is referring to any information that must be organized and accessible. Some examples of documented information could be work instructions, inspection processes, product labels.

Documented information is a large portion of being eligible to become certified. This information explains the currently running processes of the company. As well as how they plan to improve these processes in the future.