Yes, quality audits can help manufacturers stay customer-driven – and even change sales and marketing

Profile picture for user louis.columbus By Louis Columbus July 24, 2018
Summary:
Audit is a loaded term, but as Louis Columbus of IQMS explains, it's time to take another look. Internal audits are a powerful tool for quality - and quality is the new marketing. Here's how an IQMS customer is using internal audits to earn a whole new level of customer trust.

female-engineer-audit
Quality is the new marketing today. While quality has always been at the center of modern manufacturing operations, it’s now become a crucial part of how customers evaluate the end product.

This is especially true for manufacturers selling to customers who are active on Amazon’s product ratings, peer review sites and social media including Facebook, Twitter, and many others. And as Jon Reed and Barb Mosher Zinck have both documented on diginomica, peer reviews are gaining steam in the B2B world as well.

Thanks to the real-time responses of Amazon, e-commerce, and social media sites, prospects know in seconds if a given manufacturers’ products are worth buying or not.

Social media and product ratings sites mirror your true quality

The many product rating, peer review, and customer feedback sites create a powerful mirror that reflects back to every company rated what their true quality is. Feedback from the mirror happens in real-time and reflects what customers most and least value. It’s a raw data stream that immediately says where every company met, exceeded or missed expectations.

The only way to make this mirror work for you as a company is to prioritize product quality from the customer’s viewpoint first.

Unfortunately, that’s not how most of us in the manufacturing world are used to working. Fortunately, we are seeing more and more examples of customers taking significant steps towards customer-centric manufacturing.

The good news? We’ve learned enough on how this is done to define metrics that can guide us down this path. (For more details on those metrics, see my last diginomica piece, Want to be a customer-focused manufacturer? You need these five quality metrics).

Turning this era of real-time customer feedback into a strength begins by taking a focused approach to setting clear, customer-centric goals for quality. Turn your customers into collaborators in creation. Involve them more in how you define quality, ask them to rate your performance on more delivered orders, and make the data part of the DNA of your business. And the best place to start is with an internal audit of where you are with them today.

Audit is another word for growth plan

Let’s get past the heavy baggage the word “audit” carries around. It’s often mentioned negatively, as if something has gone wrong or that something needs fixing. From the many manufacturing and production floors I’ve visited and walked with quality engineers, plant managers, and production teams one trait differentiates the most successful from all the rest. As one Director of Quality at a major plastics manufacturer told me who requested anonymity told me:

Audits are invaluable for telling us if we’re tracking well with our customers or not and we’ve signed up with our biggest accounts to do them every 90 days or more.

Audits are extremely valuable because they force our teams to think beyond the walls of our manufacturing center and focus on what matters most, which is fueling our customers’ growth.

Despite the confidential nature of what this plastics manufacturer does for customers in aerospace and defense (A&D), consumer electronics, and for its own product lines, it’s no surprise you can see its assemblies on everything from the first U.S. space missions to the latest Shuttle missions on display in the Smithsonian National Air and Space Museum. The company’s product quality is considered epic in the A&D industry specifically; they are the gold standard in their specialty.

How audits can lead epic quality for customers - a plastics use case

This plastics manufacturer’s ability to consistently deliver high-quality products on time and customized to order is opening up entirely new markets. Their gold standard reputation in A&D is specifically opening up the automotive market today with major car manufacturers now interested in working with them.

So far, this is a classic story of quality excellence in manufacturing operations. But here is the big shift you may not be expecting. Audits are not just a framework for internal quality. They are now a powerful marketing tool. I asked the A&D customer to share more. What was the catalyst that led to new markets opening up?

Our internal audit process is more thorough than what our customers expect, and we have unique metrics and KPIs that tell us how on track we are to their requirements,”

Audits and the data they generate are making marketing and selling easy, all you have to do is show a new prospect an audit and explain that we do this every 90 days and they are welcome to the data on their production runs anytime.

By making the audit results available every 90 days, they’re reinforcing the trust their customers have with them with data. It shows they don’t have anything to hide and are turning customers into collaborators in creating a new quality standard. The following are the lessons learned for visiting with and seeing the quality audits during a recent plant visit:

  • Build audits around metrics and Key Performance Indicators (KPIs) that are based on customer outcomes first, factoring in internal measures of performance over time. Audits are excellent at finding the internal disconnects that cost customers valuable time in getting real-time status on orders, shipments, and special production requests. Audits at a minimum need to track and trend order entry accuracy, warehouse pick accuracy, on-time delivery percentage, orders shipped without damage (% of orders shipped damage-free) and percentage of orders invoiced correctly. Taken together these are the five elements that define perfect order performance.
  • Audits are invaluable for discovering if a given production process is making a customers’ product deviate from a quality standard before it becomes an issue. Product quality problems get mirrored immediately to the outside world, which is a good enough reason alone to get into a steady habit of doing them and tracking results. Establishing a cadence for performing audits is one of the key factors that led to the plastics manufacturer mentioned earlier being able to expand and grow in new markets.
  • Providing audit data to customers increases trust and makes them collaborators in creating a new standard for quality.  It’s time for manufacturers to realize that their highest performing counterparts are making the truthful and at times merciless mirror of product quality work for them by partnering with customers often. Look across any series of product reviews or social media sites, and the manufacturers with sterling reputations have ingrained customer listening, Voice of the Customer and Voice of the Product programs to stay in sync with each customers’ quality requirements.
  • Start with a Quality roadmap and built out to customers from that foundation. For this part of the journey, you may find our free ebook on quality roadmaps helpful. Drawing on plant visits across Asia, Europe, and North America, IQMS’ How To Build A Product Quality Roadmap provides insights and lessons learned into how market-leading manufacturers are continually improving product quality. Often these roadmaps are openly discussed and reviewed with top customers during quarterly customer advisory councils where joint goals are set.

You’re not going to turn quality into a competitive edge in a month. It’s a discipline you’ll need to bear down on with the help of experts inside - and probably outside - company walls. But I think you’ll find that the practice of regular internal audits – and sharing those audits with your supplier network – is a powerful step. And you can bet that transparency will be reflected in the reviews and conversations you see online.