Compliance, Traceability and New Product Introductions

New product introductions are an integral part of any manufacturer’s business; successes can change the industry landscape and failures can empty the coffers of even the largest companies.

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New product introductions are collaborative in nature and require effective communication across multiple functional groups in an organization, including product development, manufacturing engineering, manufacturing operations and the supply chain.

Aberdeen’s December 2008 benchmark report, “Compliance and Traceability in Real-Time: Accelerating the Speed of Business,” in part analyzes product introductions from an angle not frequently examined, and exposes the role of technology interoperability in the successful launch of new products. When the success rate of new product introductions is examined, relative to hitting not just time and volume targets but also quality targets, Best-in-Class manufacturers outperformed Laggard manufacturers by 25 percent.

In such a high stakes area of business, a 25 percent improvement is enviable no matter what your current performance. What are the Best-in-Class doing from a process and technology perspective that allows for so many more successful launches of new products?

In the context of this current research, Best-in-Class manufacturers are differentiating themselves first by the strategic actions they are taking. More specifically, Best-in-Class manufacturers are about 17 percent more likely than other manufacturers (63 percent vs. 54 percent) to build compliance and traceability into production processes. This means that the Best-in-Class organizations are more likely to ensure compliance and traceability right from the first stages of production. Product development designs compliance and traceability into the product, manufacturing engineers design it into the process, and then, manufacturing managers execute these through the supply chain and delivery to the end customer.

Furthermore, if there is an adverse event at any stage, mechanisms are in place to communicate the ramifications of this event upstream to any interested parties,­­ ultimately allowing for continuous improvement and more successful product lauches in future iterations. Orchestrating across so many disparate groups and guaranteeing closed-loop feedback can be a daunting task for any organization, whether that organization hits its targets 9 percent of the time or 99 percent of the time.

In addition, the Best-in-Class are using technologies that are markedly different than other manufacturers. First, they are adopting technology to enable the success of each area of the business (product development, manufacturing engineering, manufacturing operations and the supply chain) independently, and then interoperating across these technologies in real-time to ensure that these groups communicate and collaborate in an effective manner. Furthermore, the Best-in-Class are using a quality management system to collect quality data from different areas of the business, contextualize this data and ensure that all stakeholders across the value chain have access to the data.

Take these steps

New product introductions are an integral part of any manufacturer’s business, and all too often, the role of compliance and traceability are overlooked. Manufacturers hoping to continually improve the percentage of product launches that hit all targets should take the following steps.

First, start by putting programs and processes in place to build compliance and traceability into production processes. Integrating compliance and traceability into the production process enables companies to have critical information for improved decision-making, such as how a product was manufactured, who worked on it, what components were used, and what assets and equipment were used.

Then, establish real-time interoperability among manufacturing execution systems (MES), quality management systems (QMS), product lifecycle management (PLM) and supply chain management (SCM). Real-time interoperability is critical in gaining visibility into product and process information across the value chain. Without integration and interoperability across systems, quality information that is captured and stored in multiple systems of record are not shared, often leading to missed assessment of non-conformance, quality and recall events. Manufacturers that have yet to invest in interoperability across these systems should do so to eliminate silos of quality data.

Matthew Littlefield, matthew.littlefield@aberdeen.com, is a Senior Research Analyst at Aberdeen Group Inc., in Boston.
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