Solutions for challenges in quality system implementation maintenance

HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLES SOLVAY BRUSSELS SCHOOL OF ECONOMICS & MANAGEMENT MBQPM GEORGE NGUYEN SOLUTIONS FOR CHALLENGES IN QUALITY SYSTEM IMPLEMENTATION & MAINTENANCE MASTER FINAL PROJECT MASTER IN BUSINESS QUALITY AND PERFORMANCE MANAGEMENT Ho Chi Minh City Mar-2018 ABSTRACT Challenges in quality system implementation and maintenance are analyzed then several solutions proposed and implemented After nine months of solutions-implementation, the successes and failures of such solutions are collected and further analyzed to provide further proposed remedial and continuous-improvement actions that also align with updated company strategies 2018-2019 ACKNOWLEDGMENTS This report is not possible without guidance and valuable advices from professor Jacques Martin I am also in-debt to great lectures and inspiration by professors Michel Brotto, Pierre Cranpazano, and Antigoni Papadimitriou I’m also grateful for my family continuous support TABLE OF CONTENT Topic page Abstract Acknowledgement Table of Content Chapter Introduction Chapter Analysis of Issues Chapter Solving the issues and Implementation of solutions 24 Chapter Interim evaluation of implemented solutions and 31 proposal for next step Chapter Comprehensive Conclusion 37 References 39 Definition of Terms 40 CHAPTER 1: INTRODUCTION : Company profile: CaGreen is a global company having production factories of swine and poultry feed in Vietnam These feed are sold to local dealers who sell them to smaller dealers who then sell to farmers who are in business of farming pigs, chicken, and ducks CaGreen purchases ingredients/materials from domestic and international suppliers; all suppliers are managed under a supplier management system to ensure consistent materials quality CaGreen has several factories strategically located in industrial zones around Vietnam; and each factory operates independently (via an end-to-end manufacturing process) The Quality department is responsible for the safety, quality and regulatory compliance of product This department has personnel in head office and in each factory Scope statement: The project focuses on production and quality department in relevance to two representative factories one in the South and one in the North Vietnam out of the total eleven factories The southern factory is called Bien Hoa is located in Bien Hoa city, Dong Nai province The northern factory is called Hung Yen factory located in Hung Yen industrial zone of same name province Bien Hoa and Hung Yen factories may sometimes be abbreviated as BH and HY, respectively Of the two representative factories, most information for this final project comes from Bien Hoa location and several references shall be made from details of Hung Yen factory This set-up is supported by the fact that there is only one Quality department for all factories and the there are more similarities than differences among them Current issues and their criticality a) Failure or very slow to implement new Quality tasks and projects The failure to implement Quality system tasks and project showed to have impact onto the the QMS (Quality management system) as well as the significant business performance and customer satisfaction impact The summary of the Management Review conducted on March 10th 2017 to look back at 2016 performance is evidence for the deficiencies in the system Table1 High-level Summary Management Review outcome for FY2016 Item Internal audit Program Quality training program Contamination control program CAPA timeliness Rework Date KPI 100% conducted Max misses, all training topics completed fully executed 10% late less than days and 5% late less than days 2.5% per tonnage 10- Mar 2017 Actual Impact Note Non-compliance with Global and regional guidelines, risk of regulatory 15% complete audit findings 15 misses, and high risk of nonkey training conformance/non topics missed compliance Missed deadline Medium risk Impacted on the cost of goods sold, 25% more than defect rate, days late for customer all cases satisfaction 5% for the last Cost of goods sold 12 months impact training is followed by excel file inprocess Note: KPIs that met the targets are not included in this list b) Quality system maintenance issue: documentation, verification mechanism, training program, etc are not consistent despite best efforts Besides the the issues which were shown in from the Management Review the document control issue is omni present in Non conformity details found in cases of using wrong form, using outdated work instruction and SOP, there are procedures not updated to reflect current practice c) High defect rate: wrong ingredients, defective finished goods, etc in production are not under reasonable control This third issue generally related to defect rate within the production processes from pre-mixing and weighing of ingredients to the in process mixing of proper ingredient bins to the final mixing and packaging Even though the defects are detected based on final product testing however defect rate negatively impacts the Cost of Goods Sold and ultimately has an impact on customer satisfaction The defect issue will further be analyzed in chapter The flowchart of this report Chapter Introduction of the issues Chapter Analysis of the issues Chapter Solving the issues and implementation of solutions Chapter Interim evaluation of result data after implementation & proposal for next steps Chapter Comprehensive conclusion CHAPTER 2: DATA ANALYTICS AND INVESTIGATION OF THREE ISSUES : 1) Data and analysis of the failure to implement the Quality System elements The failure in several implementation of quality program were addressed during Management Review and followed up after management review Individuals were identified to take ownership of these failures so that they could further investigate the root cause and come up with resolutions As part of this Final Project, I was involved with one follow-up in terms of data collection, identification of the key affecting factors and root causes, discussions and solutions implementation for the internal audit program implementation Before providing further details of the internal audit program requirements given by regional offices of CaGreen, below is introduction of what such audit program entails: Food Safety Internal Audit program: 1) Mandatory audits that are conducted yearly to all factory to ensure compliance with regulations, standards, and policies on food safety 2) The audit checklist is comprehensive and inclusive of below standards: a) ISO 22000 Food Safety system also known as HACCP b) PAS 222 Publicly available System on food safety c) Corporate requirements: special requirements for all facility based on business risk and current strategy d) Regulatory requirements by the Ministry of Agriculture and Rural Development (MARD) Table Solutions for the issue with Quality System Maintenance Current No Item Risk Priority number Person in Timeline Deliverables Charge Procedure that complies with Revision of the Document Control Procedure (SOP for the applicable Docume nt 40 Control Supervis SOP) sections of the 25 Apr ISO 9001, ISO 2017 22000, and PAS 222 or (Publicly available System) Revision of the Quality Manual to add linkages of the Quality systems into the current Fully revised available and approved QM with the documents, the goal is to establish a foundation for the na QA 30 Jun Manager 2017 appendix to have linkages of current further improvement of documents with the Document control, requirements follow-up of missing elements within the Quality system 26 Electronic records and Implementation of document electronic DMS keeping system (Document Management System); this requires 36 QA 30 Sep Manager 2017 collaboration with IT with access control and with real-time reflection of and leadership for any lifecycle of budge approval a controlled document Revision of the GMP awareness training materials to include na emphasis on proper QA 30 Apr revised GMP Manager 2017 slide deck documentation Document control is no more than integrated into the KPIs from June-2017 going forward Major finding is linked to its impact to the product and customers minor non- Producti na on 15 May Supervis 2017 or conformity in Documentation for the next internal audit FY17 27 3.3 Solution implementation for the issue with overall defect rate and top defects Table Investigation and Proposal of solutions Solution (already Top factor s Weig ht agreed to by Investigation outcome management and trained to PIC Verifica Timelin tion of e Implem enation Person In Charge) Both corn and wheat 1) The Procurement accounted for 90% of the department to rehigh moisture issue In negotiate for better fact, in all cases of high moisture control and moisture defects from moisture specs raw materials there was targeting 14.5% By QA about 40% cases linked (instead of 15%) Supervi to corn received at near Raw Done 15% moisture limit & Full sor at 2) Warehouse implem factory materi 31% 59% cases linked to supervisor to ensure entation level als wheat also nearing the all doors and gaps May- Comple 13% moisture limit In are closed during the 2017 tion comparison to previous storage of both date 25 shipment, QC lab data ingredients May showed average 2017 moisture level of 13.7% 3) The supply chain and 11.9% for corn and supervisor to ensure wheat respectively production planning Also equally important, to consume these two 28 both ingredients increase ingredients within in moisture level after 2- less than weeks weeks of storage by and with a KPI of about 0.2% per week weeks max This requires collaboration with procurement and Production departments QA verified Based on complaint rate Production on 27 data throughout the year Supervisor to monitor Intake air from enviro nment 23% and also based on the the intake air humidity actual monitoring of but switch to daily relative humidity of monitoring and use intake air, it was found such fluctuation data that there is correlation to in collaboration between the high- with water adjustment Apr 2017 Started and 15-Apr found 2017 sufficien t evidenc humidity season and the during the adding into e of the high moisture of product the first mixer implem entation Water It was discovered that Formula for adding QA some shift leader allowable volume of verified adjusted the volume of water was provided to Started on 07 adjust 15% added water during first Production team 02 May May ment mixer running; the Production Manager 2017 volume added was and Production and capture in the computer Supervisors were found 2017 29 system REPEET there asked to be sufficien was not clear correlation responsible for t with the high moisture evidenc maintaining this level due to the fact that formula with proper e of the there is a subsequent implem step of cooling duration records entation However, it was determined that such water adjustment is required to be under control mechanism instead of deliberate actions 30 CHAPTER 4: INTERIM EVALUATION OF IMPLEMENTED SOLUTIONS & PROPOSAL FOR NEXT STEPS Data related to performance and results of selected solution implementations were collected and analyzed up to end of Feb-2018 The CaGreen company fiscal year runs from 01 Jun to 31 May of next year, therefore at the time data were collected the year end results have not been concluded 4.1 Interim evaluation of implemented solution for the Failure to implement the Quality System elements issue & next-steps proposal: 4.1 a) Internal Audit Program: as seen in Figure below, the completion of internal audits was done with all factories were audited Two important observations could be made: - For Long An and Can Tho factories, they were audited for the first time in many years and therefore the number of findings were relatively higher compared to other factories - For Nghe An factory, there was more findings in 2017 than last year due to number of auditors difference; there were auditors for 2017 vs only for 2016 The details of findings are mostly different however with repeats relevant to handling of raw materials This non-conformity is linked to one of the defects as described in chapter 2; however this is not one of the top defects to be focused upon 31 Figure Internal Audit findings FY17 vs FY16 180 160 140 120 100 80 60 40 20 Bien Hoa Can Tho Long An Binh Dinh FY17 Total findings Nghe An Hung Yen Ha Nam FY16 finding 4.2 Interim evaluation of implemented solutions to address the Quality System maintenance issue & next-steps proposal: Table Interim evaluation of Document Control Issue after Solutions Feb 2018 No Item Mar-17 Feb18 Source Internal Using incorrect form 12 audit and Deviation report Comment some improvement observed The revision of Lacking the proper procedures for key processes Personal Document Control check by and of the Overall Project Training Master owner Plan are still pending 32 New/Revised SOP, With support from WI (Work Instruction) not issued to 11 respective Deviation Report departments respected with more procedures past each factory, the issue is fully resolved The review cycle not than 20% Quality Lead on Internal regular review audit and Deviation report timeline The lack of followup based on excel file prompts the need for technology Signature authority not 100% Personal established to ensure the right 7 persons can review/approve check by Project owner No action taken and follow-up failed to address document Note: red is Feb-2018 and blue is Mar-2017 33 One big success in this Document Control focus as part of the solutions for improving the situation with failure to properly maintain the Quality system is that the assignment of a Quality lead in each factory This person report directly to QA Manager to ensure consistent standardization message/mechanism and to ensure the implementation of other strategic elements which are no part of this Final Project A major issue in implementation of solution is the continued usage of manual, human-dependent follow-up system Technology should be use early and as much as possible to resolve the issue of intricate management systems overlapping and at times confusing to the person in charge 4.3 Interim evaluation of implemented solution for the issue with overall defect rate and top defects & next-steps proposal: Of the three implemented solutions, this one is substantial undertaking due to it links to Cost of Goods sold as well as directly affecting each factory’s bottom line for each month It was no surprise that the implementation was welcomed most by factory management In Figure below, the complaints on mite (direct result from high moisture) was compared from FY16 with some positive results 34 Figure High Moisture (mite) complaint cases FY17 vs FY16 18 16 14 12 10 Mar Apr May Jun Jul Aug Complaint number FY16 Sep Oct Nov Dec Jan Feb Complaint number FY17 It was evident that during the high-humidity months of September, October and even November, the solutions worked well It’s worth mentioning that Bien Hoa factory also implemented the better packaging to ensure air-tight barrier between product and environment; this improvement had the best impact in terms of resolving the moisture issue During the implementation of solutions, another improvement was made in parallel: the over-haul revision of the Customer complaint management in which roles of Quality, Customer Service, Production teams are re-defined to better respond to complaints and feedback One key improvement in this procedure is the Customer Satisfaction feedback on the scale of to with is very dissatisfied and is very satisfied Figure below shows a snap shot of the current factory’s status in terms of customer satisfaction It’s evident that next steps should be considered to address how the handling of customer demands and feedbacks KPI is proposed to be satisfaction level 4.5/5 or 90% 35 Figure Satisfation percentage 70% 60% 50% 40% 30% 20% 10% 0% May-17 Jun-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 36 CHAPTER 5: COMPREHENSIVE CONCLUSION: The implementation of proposed solutions generally brought back very encouraging results in areas of audit compliance, defect reduction, quality system management maintenance, and slight improvement in Document control There are several items discovered during the Final Project that can be input for next strategic planning for the Quality Department within CaGreen Vietnam: Striving for a standardized system is an ongoing effort as in the law on entropy and the geographical distance did not help Feedback from the new Quality Manual was that for the first time all the requirements are listed side-by-side with available procedures, work instructions, and from This gave the production and quality team as well as management the on-going visibility of how adequate the current quality system is in comparison with standards This helped the future updates of any related regulations by ISO standards or by the Ministry of Agriculture and rural development Technology: one of the big advantages of global company is that there is an abundance of software available for implementations locally However, CaGreen Vietnam has not yet utilized such tools in their quest for standardization of all factories Deficits of the Solutions within the scope of this Final Project could have been avoided or improved if such technology was included These available technologies include DOC XS for electronic Document Control, Enablon for reporting of non-conformity, incidents and follow-up, Archer for the management of Quality Suppliers The very unique advantage of technology is that it is intrinsically standardized and so each 37 and any factory can speak the same language with any other factory locally, regionally or globally Culture: CaGeen is one of the rare companies that has a deep culture of integrity, nurturing, long-term development, full commitment to regulatory compliance in every office and every factory CaGreen has produced a Guide-Book that connects all employees worldwide with single set of core values and leadership strong commitment to follow-through with these values So such culture can be leveraged with the local challenges Other note-worthy lessons Learnt - Overlapping KPIs with clear real-time dashboard to make progress visible to all levels of management - The QA Manager with excellent English skills and extensive experience in Quality Management System arrived to the company few months before the start of this Final Project and it helped substantially in terms of integrating the corporate requirements into local locations, being the voice to reflect challenges locally to the corporate 38 REFERENCES - Internal Audit reports for Bien Hoa Fiscal Year 2017 - Company Quality Manual version 5, effective 07 May 2017 - ISO standards: 9001 2015, 22000:2003, PAS 222 - Corporate software Archer, Enablon, Doc XS 39 DEFINITION OF TERMS - QMS Quality Management System - COGS Cost of Goods Sold - GMP Good Manufacturing Practice - ISO International Standard Organization - QA Quality Assurance - QC Quality Control - REPEET Software to run the production processes - Archer Web-based software to manage raw material sourcing & suppliers - Enablon Extensive web-based software to manage incidents, complaints 40 ... not audit findings related have form for Doc Control: wrong records retention forms, inaccurate info na in WI Corporate & regional Training program Training procedures, updates, No training No approved... actions and so forth 2) Data and analysis of Quality System maintenance issue The second issue as part of the final project is the insufficient maintenance of the quality system in terms of document... following solutions: 12 1) Training for plant managers and supervisor on the quality program including the importance of quality audit and the criticality of audit finding corrections 2) Input