What CSCOs Need to Know About the Future of Quality Management

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Earlier this week, I had the pleasure to moderate a Virtual Executive Meeting for Heads of Quality on the future of quality management. Nearly sixty heads of quality from large global companies joined this interactive event to share perspective on a recent five-month Gartner investigation into what quality management must look like by 2025. During the conversation, it struck me that we were missing a critical piece of the quality transformation: supply chain leaders. Nearly every trend, implication, or use case impacts supply chains. Therefore, here are two key findings all supply chain leaders must know about the future of quality management. Finding 1: Dramatic Trends Are Forcing A Quality Management Rethink A series of trends related to pervasive digital capabilities, operational transformation, and public value shifts are forcing companies to rethink the way they manage quality (Figure 1). While these trends existed before, the pandemic intensified their impact on quality. As a result, these trends have exposed the need for quality management transformation in three ways: Heightened expectation: Advancements in digital technologies and changing public values are increasing expectations around quality. No longer is “meeting spec” enough. Instead, customers expect personalized products faster and sustainably sourced. At least they do today – as expectations seem to change almost daily. Blurred boundaries: The changing nature of work and growth in interconnected ecosystems are all leading to murkier distinctions between functions, factories, business units, and companies. Even product ownership is becoming murky, with 76% of supply chain leaders expecting to combine product offerings with other companies in the next 2 years. While this offers great opportunity to create customer value, it also blurs the boundary between what’s “inside” versus “outside” a company’s quality system. Added friction: Resilient supply chains are autonomous, adaptive, and digital. Yet quality management is largely top-down and bureaucratic. It’s no surprise, then, that roughly half of employees already report that quality processes impede their ability to achieve changing company objectives. Without a transformation, quality management is destined to be a relic of the past. To make transformation possible, CSCOs and supply chain leaders need to work with quality leaders (both within and outside of supply chain) to rethink ways of managing quality where they impede supply chain transformations. Finding 2: The Future of Quality Management is Predictive, Connected, Flexible, Embedded The consensus view is that by 2025, quality management will need several radical shifts to remain valuable and viable. Specifically, quality management must be defined by four characteristics (Figure 2). Predictive capabilities To keep up with expectations and help companies get high quality products out the door faster, the value of quality management will shift from solving known problems to predicting problems before issues occur.No longer a pipedream, predictive capabilities in quality management are already emerging. One company we spoke to was automating root cause analysis for field failures based on decades of failure data. Another was using an algorithm to forecast the outcome of certificate of analysis testing – weeks before the testing was completed.By 2025, these capabilities will need to be mainstream or companies risk being slower, less precise and more expensive than their predictive quality competitors. Connected across the ecosystem Greater dependence on ecosystem partners bring great opportunity – but also new risks. The complexities of an interconnected network expose us to failures beyond our control. For example, as we co-create solutions with our ecosystem partners, we run the risk of differing – sometimes competing – quality standards across the ecosystem. This leads to an inconsistent customer experience.As our supply chains evolve into complex interconnected ecosystem, the scope of where quality management is applied will need to expand. By 2025, the quality system must include the multitude of partners and devices that make up the modern interconnected network. Flexible open-source governance Quality governance needs to evolve from top-down to flexible open-source, where end users can adapt quality procedures to changing contexts. One life sciences company has started moving in this direction. Eschewing the traditional policy-process-practice cascade, this company developed a modular approach to quality management, where each facility selects only the parts that are relevant and valuable to them.In 2025, entire quality systems will need to be this flexible and modular. Embedded in business operations To ensure quality without slowing the business down, companies need to shift from seeing quality as a role to quality as a skill. This principle is based on Agile philosophy in software development. In Agile, quality is no longer a single individual’s responsibility to be completed at a given time – it’s a continuous responsibility for the entire team.As inspections and audits are increasingly automated by 2025, the remaining quality activities should be completed by employees actively engaged in that work – not an individual with “quality” in their title. An Opportunity for CSCOs If we are to do more than just pay lip service to quality being everyone’s responsibility, this quality transformation must be part of our overall supply chain transformation – regardless of reporting lines. Therefore, CSCOs and supply chain leaders should be a catalyst for rethinking quality management by taking the following three steps: Convene supply chain leaders, quality leaders and other stakeholders to discuss the 2025 vision for quality management Identify implications for your organization and develop scenarios for change Embed the quality transformation implications into the supply chain transformation strategy. Bryan Klein Research Director Gartner Supply Chain [email protected]
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