Digital transformation creates significant changes for an organization’s information technology department and processes. But it can also create the need for major changes in the management and processes of other business functions. A truly effective transformation will impact every area of the organization. The success of the digital transformation of a company depends upon how the other departments react to the introduction of digital technologies and systems or fail to react. This article is part of a series of articles that consider some of the changes and their implications in different business functions and departments. In this article, I will address changes that are needed within the quality and regulatory departments and operations.
First, let us quickly review what we mean by digital transformation. The Institute for Digital Transformation defines digital transformation as, “The integration of digital technologies into a business resulting in the reshaping of an organization that reorients it around the customer experience, business value and constant change.” This definition recognizes that digital transformation is much more than just a change in IT technology such as hardware, software, or a digital platform. A digital transformation goes to the heart of the business processes and transforms them to leverage digital capabilities that were unavailable during the industrial age. Customer demands, including the customer experience, and business value are different in a digital business. Added to that, a digital business doesn’t stop and rest on its laurels, it embraces constant change to adopt and leverage new digital technologies and new business models. This is not your father’s industrial-age company.
Digital Technology and Quality and Regulatory Departments
Let’s identify some of the technology aspects of a digital transformation that would have a significant impact on the processes and procedures of Quality and Regulatory Departments. This is an illustrative list, not an exhaustive list. In fact, the specifics of each of these technologies is changing almost monthly, so this list is really a list of categories of digital technologies.
- Smart devices are products or appliances that are characterized by sensors or monitors, a user interface, processing capability and digital communication. As such, these devices are essentially computers embedded in a product that is providing additional functionality. Most smart devices can also be customized with a personal profile or programmable functionality that enable the user to create a unique pattern of interaction with the device. Many quality inspection and test equipment items now meet this definition.
- The Internet of Things is a digital technology that has grown rapidly during the past few years. It is characterized by any device or equipment with digital communication capability along with sensors or monitors. The Internet of Things connects devices digitally across a common network and allows either one-way or two-way communication. Except for some small handheld devices, almost all inspection and test equipment is now compatible with the Internet of Things.
- Analytics platforms provide aggregation of data into a dashboard or user interface. This enables an inspector or operator to monitor and control the performance of any connected device or a combination of devices. This aggregated data is available at the workstation or on a smart device.
- Factory automation has been used in quality inspection and test equipment for decades, but the automation available in the digital age is more sophisticated and is connected into the Internet of Things. In some cases, advanced techniques such as artificial intelligence or machine learning may be used to further improve speed and efficiency of the factory automation.
Each of these technologies are continually improving in their breadth and depth of performance. For the purposes of our discussion, the precise performance level is not critical, rather it is the impact that these technologies create on the processes and management of Quality and Regulatory Departments.
Transformation of the Quality and Regulatory Operations
Traditionally Quality and Regulatory Departments in organizations had the role of checking on the work of others to ensure it met required standards. Their job was to catch problems and prevent the organization from sending anything to a customer that did not meet both internal and industry standards. To that end they inspected products, paperwork, test data, and process compliance after the fact. They audited workstations, suppliers, and customer shipments to make everything was done properly and in order. These are still needed activities, but in the digital age, these activities can be done by systems and machines. People no longer need to perform these tasks, instead the equipment, sensors and monitors throughout the operation can be used to provide real-time data about each step in each process to ensure it was done in the correct order and performed in the correct manner. Each product going through the system can be inspected by automated inspection and test equipment to ensure it is conforming to standards. If anything, out of the allowable performance is noted, the digital technology can either stop the flow or shunt that item off to the side for review and disposition.
The sensors and monitors generate the data that can also be used to create real-time process monitoring using statistical process control. The need for audits of the process are not necessary because the systems are now collecting 100% of the data from 100% of the items. Through the use of the business analytics, that data can be aggregated, and a real-time understanding of quality and compliance can be made available to anyone in the organization. The result is better quality, better information, and less operating costs once the automated inspection and test systems are in use and the workstation monitors are fully integrated.
Quality and Regulatory Operations Business Model
In the digital age, the role of the Quality and Regulatory Departments is transformed. Traditionally, their job was to make sure that nothing was sent to a customer that was non-compliant. In the digital age, their job is to make certain the organization is always sending compliant products to customers. You may be asking, “What is the difference?” In the industrial age, they were at the end of the process and were the ones tasked to say, “NO!” In fact, the easiest way to be certain that you did not ship a non-conforming product was to not ship anything at all. Unfortunately, many industrial age Quality and Regulatory Departments adopted that philosophy. Nothing shipped until the organization’s operations absolutely proved an item was good. Essentially, the company “inspected in” quality and conformance. In the digital age, that creates a huge problem. Keep in mind that digital age products are often customized and made uniquely for each customer. If that unique product must first prove that its uniqueness is acceptable before it can ship, then everything will be held up for massive amounts of inspection and test.
To operate effectively in the digital age, the Quality and Regulatory Departments must focus on the process and not the product. Instead of being at the end of the process, inspecting; they are engaged in the design of the process to ensure it can only may conforming products. They design and certify the process, demonstrating that it works correctly and delivers conforming results. Then the organization can have confidence that each unique item that goes through that process will also be conforming. The quality perspective must change to focus on ensuring the process is robust and controlled. The process control then ensures that it is delivering acceptable products. This is done be using the real-time Internet of Things data and automation results. These are aggregated into the process analytics and the results are delivered to the workstations and the smart devices of the individuals in the Quality and Regulatory Departments.
To do this, the activity of the individuals in the Quality and Regulatory Departments changes. In the industrial age, they found a problem by inspecting and testing. Once they found a problem, they then analyzed it to understand the nature of the problem and implement a corrective action. However, in the digital age, finding and fixing problems creates havoc in the other operations since the process is shut down while that is occurring. The majority of their time is now spent in the design and testing of processes before production ever starts. Once production starts, they monitor the process to identify small indications of an impending problem and implement a preventive action to ensure it never rises to the level of a non-conformance or defect. They no longer fix problems, they prevent problems.
Quality and Regulatory Operations and Control
I have already discussed how the nature of the work changes for the individuals in the Quality and Regulatory Departments. But it must be recognized that this shift is a very big challenge for these organizations. All the leaders, managers and subject matter experts have spent years trying to fix problems that they found. In fact, many of them were considered heroes for working long weekends and holidays to fix a problem and get the production line running again. Now, stopping the production operations to fix a problem is a sign of a failure in the quality or regulatory processes. There should have never been a problem that would have resulted in the need to shut things down if the quality and regulatory processes are working correctly. Essentially, the digital age is telling these “fire-fighters” that they are doing a really good job when you never have a “fire” to fight.
This means that the focus of the operation becomes the product development, process development, supplier qualification, and equipment design. The activity within these departments is now early in the development process, assisting with design and establishing critical to quality characteristics that can be used in operations to monitor and control the process. While many industrial age organizations would say they already do that, the reality is that in most organizations it is a quick “check the box” activity. That is because these individuals had to run off to fight another fire found in the products currently being produced. Fortunately, the digital age people can be allocated to do that work because the inspection and test work they had been doing is now done by automation and analytics. Individuals in these organization now become experts at analyzing technical risk and working with the other departments to manage that risk and make processes even more robust. Managers in these organizations are focused on training and equipping their people to do this work and allocating resources to the areas of highest business risk.
Digital age Quality and Regulatory Departments have a different role in the organization. The digital technology is doing their traditional role of inspecting and testing products. So, the role of these organizations moves earlier into the development lifecycle to create products and processes that don’t have or create defects. Their role is now defect prevention, not defect correction. This is a more difficult role, but it is vital for an operation to be able to realize the benefits of digital age processes and systems throughout the rest of the operation.
Raymond Sheen, PMP® LSS BB, is president and founder of Product & Process Innovation, Inc. He is a veteran business leader with over 30 years of executive, engineering management, and project management experience deploying new technology and improving business performance. He has consulted and trained companies in various industries and business functions including marketing, engineering, manufacturing, service, IT, and Finance. Ray is author of the book, Guide to Building Your Business Case, published by Harvard Business Review Press. Ray received his B.S. in Mechanical Engineering from the United States Air Force Academy and his M.S. in Astronautical Engineering from the Massachusetts Institute of Technology and has a graduate certificate in Digital Leadership and Strategy from Boston University.