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Handgards EMNS,Inc.May,2016 AchievingGrowthinaCompetitiveGlobal MarketviaSupplyChainQualityAssurance TableofContents…
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Handgards EMNS,Inc.May,2016 AchievingGrowthinaCompetitiveGlobal MarketviaSupplyChainQualityAssurance TableofContents CompanyOverview.................................................................................3 InnovationandGrowth............................................................................4 HandgardsSupplierQualityManagementBeforeGSQA..........................6 MotivationforaChangeinApproach......................................................8 HowtheDecisiontotakeActionwasMade...........................................14 ImplementationandResults………………………………………………………………..16 Conclusion……………………………………………………………………………….19 AboutEMNS…………………………………………………………………………………………20 CompanyOverview TheIndustry For over 40 years, Handgards, a privately owned company located in El Paso, Texas, has been a North American leader for foodservice plastic disposables. Today Handgards employs around 300 people in its own 250,000 square foot facility. TheCustomers The company supplies schools, prisons, colleges, hospitals and institutional feeders. In addition, the company services a number of commercial accounts at the regional and national level, providing more than 800 products through its sales force of over 120 independent salespeople. History Founded in 1959 as Plasticsmith, the company changed its name to Handgards in 1966. In the beginning, disposable gloves the company supplied for hair-care product manufacturers, department stores and mail order houses, as well as veterinary, laboratory, physicians and safety supply houses. 2016EMNS,INC.ALLRIGHTSRESERVED 4 InnovationandGrowth Firsttointroducedisposablegloves Handgards was the first company in its industry to introduce disposable polyethylene gloves to the school foodservice and food processing trades. The use of these gloves was soon adopted by the entire foodservice industry to prevent contamination through food contact with the hands of workers. Innovationinsavingfoodandtime The company developed new lines of food storage and handling bags that not only protect products but also save time, both of which are so critical in any processes that relate to food. Expanded processes to manufacture productsforspecializedapplications Handgards has expanded its manufacturing processes to allow the company to develop additional products for school foodservice applications. These now include a wide variety of High Density Polyethylene (HDPE) fastloading sandwich bags for both hot and cold applications, food storage and freezer bags, as well as aprons. 2016EMNS,INC.ALLRIGHTSRESERVED 5 Thefundamentals The fundamental commitment of the company is to make sure that each product is top quality, protecting the health of people, as well as the reputation of the company. Protectingcustomersandbrands Beyond that, Handgards is acutely aware of how important it is for their customers to protect their own customers and brands. Recent events demonstrate that when a problem occurs, the headlines invariably feature the most famous brand involved, with a less-known supplier named as a footnote. Handgards is intensely aware that their customers depend on Handgards to not only deliver a quality product, but to also make sure that their brands are not sullied by human rights abuses (such as child labor violations) anywhere in the supply chain managed by Handgards. Quality management, the top priority, dependsondatamanagement All these conditions, against the background of growing government as well as consumer demands, mean that quality management is key to Handgards’ continued success. To stand behind this commitment requires the ability to manage data. It is the data that not only reflects the activities assuring quality and compliance, but also allows the company to intervene in negative practices, and reward 2016EMNS,INC.ALLRIGHTSRESERVED 6 good performance. To deliver on this commitment means the data management system must be efficient, as well as costeffective. HANDGARDS SUPPLY QUALITY MANAGEMENTBEFOREGSQA The three areas Handgards manages in the general domain of quality include: 1. The “Quality” side of the business (manufacturing specifications). 2. The “Compliance” side of the business (meeting regulatory standards and reporting requirements) 3. Social assessments (certifying that human rights standards are not being violated, for example that no child labor is being used to manufacture their products.) Managing quality at Handgards must address the fact that 75% of finished products sold come from overseas independent suppliers, while 25% is manufactured in El Paso. Managing variability in processes, sizes, capabilities,languagesandcultures Although the quality processes employed across the supply chain are similar, the day-today-management of quality is nevertheless performed locally by the quality departments of 2016EMNS,INC.ALLRIGHTSRESERVED 7 the suppliers. The suppliers themselves vary in size, with varying capabilities. This makes it important to be proactive in order to have consistency in achieving and maintaining high quality standards. To that end, Handgards employs five Chinabased consultants who regularly visit their suppliers. They not only validate that the products are being made to Handgards specifications, but also make sure that products are being manufactured in clean and wellmaintained facilities, consistent with food level, and in some cases, medical grade products. Howitwasdone Before using GSQA, Handgards would send suppliers a list of the information they needed to provide, and request they submit COAs (Certificates of Analysis) for each batch of product. Some suppliers have the additional challenge of complying with FDA requirements for medical devices because although the products, such as gloves, were to be used for food services, some of Handgards’ clients ask that products meet even higher, medical device standards. This meant that Handgards ‘raised the bar’ on reporting requirements for these suppliers. 2016EMNS,INC.ALLRIGHTSRESERVED 8 In general, the company’s requests (keeping in mind the three general areas) cover ã Product specifications ã Manufacturing methods ã Testing methods ã Labeling requirements Suppliers were, and still are, expected to supply the documentation certifying compliance in all these areas. This resulted in a large volume of documentation requiring constant Handgards review along with meticulous data management. MOTIVATION FOR A CHANGE IN APPROACH Increased number of products and orders Handgards’ business has continued to grow every year. The requirements continue to increase as does the sheer volume of suppliers and products the company sells. Before changing their methodology, Handgards received COAs from every supplier as well as from an array of laboratories, using e-mails. With hundreds of products arriving from overseas suppliers (many of them making the 2016EMNS,INC.ALLRIGHTSRESERVED 9 same items) managing the data became an overwhelming task. “We had to work with 45 suppliers who could be making 800 products, all with different lot numbers. Volume increased. We were getting a COA from every supplier for every product for every lot. It was very time-consuming, but suppliers knew it was necessary because of the medical level requirements.” Ana Ramos, VP of Quality, Handgards If the suppliers were producing vinyl gloves, they were required to list each ingredient used in their manufacture. If an item required ten ingredients to make, the suppliers needed to produce certifications for each of the ingredients, not only for the final product itself. Multipleformats Handgards gave suppliers a standard template, but while each of the suppliers was able to produce the documentation, they adjusted the data itself, based on their internal conventions. In addition, suppliers sent documents in a range of formats. Some of the documents arrived as images, some came as PDF files, and some were Excel spreadsheets. In the beginning, some sent their data to Handgards in their own language, so that each document needed to be 2016EMNS,INC.ALLRIGHTSRESERVED translated. 10 Initialapproach:Excelspreadsheets “In the beginning, we were more focused on production, rather than on the documentation that came with the level of management we were committed to having. We began with the clearest, most basic system: the data relating to all three domains (quality, compliance, social assessments) was managed using Excel spreadsheets.” A. Ramos. Limitationsandchallenges One of the major limitations of this system was the barrier to applying Statistical Process Control (SPC.) In order to make trends visible, data would need to be re-typed into a format that could populate a system with SPC capabilities. There was nothing in the system that could tell Handgards management quickly if materials were inspecification or out. The company was faced with developing specialized spreadsheets. If, for example, Handgards received 10,000 batch COAs during 2016EMNS,INC.ALLRIGHTSRESERVED 11 the year, they needed to see if they had, in fact, received 12,000 batches but had only received 10,000 COAs. “Wecrashedthesystem” As Handgards developed the spreadsheets, and the number of orders and items and lots grew, the data became so massive that the flow of data eventually ended up “crashing” the system. One day, the company was unable to access the quality data because they could not open the spreadsheets. A system that had appeared to serve the company well, at little cost, was now breaking down. Even before the “crash”, it was clear that accessing necessary data had become too slow and cumbersome. To limit the sizes of files, the data had already been broken up into several spreadsheets. Anything that required checking a complete set of data about any single item required referencing several spreadsheets. This process was time consuming and laborintensive. 2016EMNS,INC.ALLRIGHTSRESERVED 12 Qualitydatageneratedatthe receivingend Before implementing GSQA, every time a single batch arrived in Handgards’ warehouse, the quality inspection group checked/tested the product to ensure it met specifications. As a result, this team itself was generating a volume of quality data upon arrival, matching the volume that the suppliers were sending along with their products. “The COAs might have 10, 20 or 30 data points of information, and we validate the same data points for the 10,000 products when they arrive. We’re talking about 20,000 different documents, with many testing points in each one of them. It was a massive amount of data that takes a lot of work to summarize in a way that is meaningful to either your suppliers, or for your own company, to help decide whether something needs to be inspected tightly, or inspections could be reduced because of an outstanding quality record.” A. Ramos. While Handgards was in possession of all the required data, it took the work of several people and a lot of time to make that data usable. 2016EMNS,INC.ALLRIGHTSRESERVED 13 Newcompliancerequirements On the compliance side of Handgards’ data management, the company was facing a growing volume of documentation requirements. “When we started out, no one in our industry was required to submit any of it. Our approval process now requires not only information about price and specifications, but a checklist of documents attesting to the fact that they are complying with the regulatory requirements to which we are held in the United States.” A. Ramos Because some of the products Handgards produces are considered “medical equipment” Handgards requires Certificates of Guarantee from their suppliers. These Certificates declare that the suppliers’ products meet FDA and other regulatory requirements. Along with these come contact lists showing employees, positions, copies of all their certifications, and copies of audits. Preferred suppliers also sign codes of conduct, and submit written acknowledgements of the specifications for every product. In addition, they submit the formulation of every product they will produce for Handgards, as well as the material safety data sheet for every ingredient they have listed in the formula. 2016EMNS,INC.ALLRIGHTSRESERVED 14 Customerrequirements Customer requirements were a significant motivation to speed up the process of upgrading their capacity to manage quality data. “Food borne illnesses are nightmares for food producers, so they are a nightmare for us too. Many new customer-driven requirements appeared. We knew they were coming – and could not support the process. We had the data, what we were lacking were management and meaningful dashboards. Timelines were a major challenge.” A. Ramos Howthedecisiontotakeaction wasmade Handgards, in reviewing the various ways management could respond to the new challenges, considered the following factors: ã Handgards had grown significantly, with both a bigger supplier network, and more clients. ã Handgards reiterated their commitment to quality as the bedrock of both serving their individual clients and maintaining industry leadership overall. ã The challenge of managing quality (along with quality data) was growing as fast as the company’s client list and orders. 2016EMNS,INC.ALLRIGHTSRESERVED 15 ã Demands for higher quality standards were growing, both from the consumer side, and from the regulatory side. ã Both of these demand forces meant that more data was being generated for each product produced as well as for each client served, and for each regulatory requirement met. ã The method of managing the data was key, and making sure that it could be efficiently transformed into actionable knowledge through SPC was now paramount. Handgards saw the above as the main reasons for improving their system of managing quality data that relied heavily on supplier quality assurance. Firststeps Initially, Handgards’ management moved toward simply making the system in use more robust, i.e., by adding programs that would expand the capacity of individual managers to do their jobs more quickly and efficiently. However, once the IT department was included in the process, the search moved in another direction. The IT department conducted a search to identify a comprehensive approach that would add a number of capabilities to Handgards capacity for managing quality, the key being the capacity to quickly and effectively perform Statistical Quality Control. Another 2016EMNS,INC.ALLRIGHTSRESERVED 16 important requirement was that the system would manage all documents flowing in and out quickly enough to allow the quality professionals to intervene in a timely way when a threat was detected. The IT department identified GSQA and, after reviewing a number of other companies, selected GSQA. IMPLEMENTATION Suppliers’andco-manufacturers‘ responsestoimplementingGSQAand theprocessofgettingthemonboard The most surprising aspect of implementing the new system was that it was much easier than Handgards expected. One of the reasons for this was that Handgards employs several China-based consultants who function as representatives of the company. Because of the language and cultural barrier, this was an important aspect of how successful the implementation turned out to be. Handgards included the consultants in the entire process in advance. They understood all aspects of the program and were able to give valuable input to the process. In turn, they were able to help Handgards with generating realistic timelines and other kinds of input to cross any barriers 2016EMNS,INC.ALLRIGHTSRESERVED 17 based on distance. Because the consultants were able to have face-to-face conversations with Handgards suppliers, and because they fully understood the requirements, they contributed to making the process smoother than Handgards management expected. “With that being said, it was still not easy. Some of the suppliers are larger, with more staff that included English speakers. Some are very small, and have only one Englishspeaking person on their staffs. The (GSQA’s Supplier) interface in Mandarin helped to put them at ease.” A. Ramos Handgards’ suppliers were used to what they were doing; they had their own, longestablished processes. In spite of that, they began to use GSQA. “They began to see that we had not asked them to change that much.” A. Ramos Handgards began to see from the data flowing in just what the effect of any lack of attention could be. This allowed the company to create additional programs. For example, IT was able to create a program so that every order was picked up and placed into GSQA. This now 2016EMNS,INC.ALLRIGHTSRESERVED 18 allowed Handgards to do a nightly comparison between what had been ordered and what had been delivered. If orders were expected, then there should be COAs for review just before shipment. If COAs were not available for review, it was now possible to remind the suppliers not to ship the order until Handgards could review the COA. In addition, the system quickly allowed Handgards to sort out the problems related to any inconsistency of quantities or lot characteristics, which had made it difficult to match test results with the inbound products. When the previous system was lagging due to the slowness of data entry, there had been problems in this area. An additional effect of the implementation of GSQA on functions beyond quality (to date) includes audits, which generally require everyone’s participation and have become much easier. EMNS staff created questionnaire templates for Handgards, which replaced the paper forms in use before GSQA implementation. Since clients require that all paperwork related to audits be stored for several years, this created a large amount of physical storage space. Since GSQA is now the repository of this information, the space is no longer necessary. “We stopped doing things in paper. Everyone is excited about transitioning to 2016EMNS,INC.ALLRIGHTSRESERVED 19 data management. Even the janitors are getting excited about going digital. One of the most valuable aspects has been in the domain of being members of an industry. We now have the ability to present a very good dashboard; we can show what we are doing on the scorecard that is part of the GSQA program. This means we can empower suppliers by giving them feedback.” Ana Ramos Conclusion The Handgards implementation of GSQA has enabled them to save time, reduce costs and provide better quality assurance than ever. They are in the process of expanding GSQA use to domestic manufacturing. An updated version of this case study will be issued to reflect the comprehensive results of the implementation of GSQA. 2016EMNS,INC.ALLRIGHTSRESERVED 20 AboutEMNS ® EMNS is the provider of GSQA , a leading Software as a Service (SaaS) application for improving productivity through supply chain ® business intelligence. GSQA has been deployed ® in the SaaS model since 1996. GSQA is used by a variety of Fortune 200 companies to automate and streamline their existing supplier related activities. ® The GSQA target markets include complex discrete manufacturing, consumer products, food production, paint manufacturing, chemical processing and a variety of other manufacturers. To learn more, visit www.GSQA.com. How GSQA® Works.... GSQA fills the void left by most enterprise applications. GSQA collects, stores and analyzes material parameters and production settings to improve manufacturing yield. GSQA's knowledgebase of raw material characteristics and process variables allows manufacturers to correlate input cause to output effect. This correlation allows manufacturers to proactively prevent disruptions, resulting in improved yield by reducing waste. At the same time, GSQA improves the relationship between the licensing company and its supply base. The supply base is managed via easy-to-access web-based portal technology for regulatory and industry certifications. Procurement professionals gain data-driven insights into supplier performance for more
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