Solutions for challenges in quality system implementation maintenance

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 on

HO CHI MINH CITY OPEN UNIVERSITY UNIVERSITÉ LIBRE DE BRUXELLES

SOLVAY BRUSSELS SCHOOL OF ECONOMICS & MANAGEMENT

MBQPM 6 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

Chapter 3 Solving the issues and Implementation of solutions 24 Chapter 4 Interim evaluation of implemented solutions and 31

proposal for next step

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

Quality

training

program

Max 2 misses, all training topics completed

15 misses, and key training topics missed

high risk of conformance/non compliance

non-training is followed

by excel file Contamination

control

program

fully executed Missed deadline Medium risk

process

in-CAPA

timeliness

10% late less than 2 days and 5% late less than 5 days

25% more than

5 days late for all cases

Impacted on the cost of goods sold, defect rate,

customer satisfaction

Rework

2.5% per tonnage

5% for the last

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 out-dated 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 2

The flowchart of this report

Chapter 1

Introduction of the

issues

Chapter 2 Analysis of the issues

Chapter 3 Solving the issues and implementation

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)

3) The Performance evaluation of Operations and Quality is based on both

a) Completion of the audits at all factories

b) Remedial actions for the all of the nonconformities discovered during the audits

c) External assessment by regional team to verify effectiveness of the corrective and preventive actions

The first set of data come from update of the audit results in Table 2

Table 2 Internal Quality Audit updated 10 Mar 2017

(Fiscal year 2016: Jun 2016 to May 2017)

Factory Bien Hoa Can Tho Long An

Binh Dinh Nghe An

Hung Yen Ha Nam

Audit date Aug-2016 none none

Sep-2016 Oct-2016

Jan

2017 Feb 2017 Total

findings 109 na na 87 67 105 95 Items

Quality system especially system relevant to day-to-day operations are performing and also reflective of compliance with corporate and regional requirements

So the problem is: failure to implement 100% audits to all facility and failure to ensure all non-conformities from audit finding are addressed

in a timely manner for all factories

Finding the root cause:

Without having to resource to SWOT of the department or looking further into the past for testimonies and personal anecdotes the team and I dived right in to the Ishikawa tool to find the root cause or causes

Figure 1

Failure

to execute audit program MAN

MANCHINE MATERIALS

Complicated audit checklist

Lack of Leadership

follow-up and

commitment

No clear responsibilities defined for personnel

Lack user-friendly software to support audit and reminders The network of

similar factories

does not yet

promote mual

We further deep-dived into the Man and Method aspect as they came out strongest for the fishbone exercise by using 5-Why method

1 Why did we fail the implementation of audit program?

a Because there’s no follow-up mechanism, no reporting routine

in place, no person assigned the full responsibilities, the person who was in charge left the company

2 Why didn’t we have follow-up mechanism, sufficient human resources, full assignment of tasks to individuals

a Because there have not been strong commitment by leadership

to add manpower at headquarters as well as at individual factories Also, there’s no procedure in place to ensure a stepwise process is effective to guide all relevant personnel

3 Why didn’t we have strong commitment from leadership and individual factories and why were there no procedures on place?

a Because Regional leader failed to communicate the importance

of such implementation and how it could impact the business negatively and because there was not a request to formulate the strategy to Vietnam from Regional office

4 Why didn’t Regional office communicate the strategy properly to local Vietnam factories

a It’s oversight and also lack of resources One regional manager had to handle too many countries

b Local Vietnam leadership was not fully aware of the content, importance, impact of such audit program (not yet in KPI)

Devising the possible solutions;

Several meetings have been held locally within leadership of Vietnam factories to address the newly found root causes of lacking of regional support and so we come up with the following solutions:

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 KPI (to be shown later in the Implementation of solution along with other quality objectives and targets) for the audit program: actual audit and remedial actions

3) Input into budget a quality lead for each factory; this is a very ambitious request due to it has substantial financial impact into operations This quality lead person will coordinate all efforts related

to implementation of strategic activities such as audit plan, audit execution, follow-up on remedial 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 control, inspection program, training program

Table 3 System maintenance issue summary at BH

Document

Control

45%

procedures not updated timely

DC Procedure not have form for records retention

There are 67 internal audit findings related Doc Control: wrong forms, inaccurate info

Corporate & regional procedures, updates, and requirements are not part of regular refresh GMP/HACCP training

No training plan

defined for contractors

Routine

checking/in

spection

No defined plan for manager/leader to check

on routine tasks

No procedure in place to ensure check on routine tasks such as verification of record retention period or correct form version

Finding the root cause:

As requirement for any audits, the teams were supposed to have discussions to remedy these issues but such meeting and follow-up were not adequately addressed As part of this final project, the Document control was selected as targeted improvement for this second problem of

maintenance of the Quality management system See table 4 below for how Risk Assessment is used to identify the priorities of the Document control issues that have higher priority

Table 4 Data analysis of the DOCUMENT CONTROL issue with Risk Assessment

ce (1-5)

Severit

y (1-5)

Detectabi lity (1-5)

Risk Priority Number

2 Lacking the proper procedures

3

New/Revised SOP, WI (Work

Instruction) not issued to

respective departments

4

The review cycle not respected

with more than 20% procedures

past regular review timeline

5

Signature authority not 100%

established to ensure the right

persons can review/approve

document

Further documented interviews to the relevant Operations and Quality staff revealed that the training on document control is not yet part of the yearly GMP training Also there was incidents of records loss or not communicated

to the proper departments

3) Data and analysis of defect rate and top defects

The third issue being part of this final project is to address the defect rates with a focus on the top 3 defects Each top defect will eventually

be input into the Pareto chart to identify the influencing factors This quality tool was found effective and convincing to the team The defects data presented here are from two factories only and for their main production process: livestock feeds Other seven (7) factories experienced similar challenges and would received similar solution implementation Lastly, the further analysis of defect issue is done for Bien Hoa only with the assumption that due to having same machinery and similar operations processes, the problem can be translational from Bien Hoa as representative for south factories to Hung Yen as representative for North factories

On a further note, for deviation classified per internal procedure as non-conformity and triggers a process similar to 8D Process: building

of a team, problem definition, containment and bracketing actions, root cause analysis, Corrective and Preventive Action implementation, verification of the effectiveness of these actions, Result sharing with team

Table 5 Defect rate in past 4 quarters before the Management Review Bien Hoa - Quantity

defect (livestock only)

% Top 3 defect (High

Mois, Fine, Size) 0.55% 0.71% 0.61% 0.62% 0.62%

% Top 3 defect (High

Mois, Fine, Size) 1.29% 1.12% 1.02% 1.11% 1.13%

Note: all defects are detected and removed from production or from finished

goods stock; this ensures all released products are in full compliance with

customer's specifications and regulatory requirements

From the comprehensive data in Table 5, the defect rate in percentage, calculated as tonnage of defects per overall production for that same period The defect rate hoovers around 1.5% which is higher than the Gold standard 0.5%

Figure 2 Bien Hoa Factory Defect rate for 2016

Figure 3 Hung Yen Factory Defect rate for 2016

Finding the root cause:

For the final project, the Bien Hoa factory data were used for further analysis

to identify the influencing factors contributing to the three major defects High moisture, Fine, and Size Please see below for defect definitions

Preliminary discussions with commercial team, management, and customer service team resulted in that the focus should be more on High moisture and Fine These two will have the most impact going forward Especially for the high moisture problem which usually leads to complaint on mite development at customer site Below Figure 4 indicate number of complaints based on production date

TOP 3 DEFECTS DEFINITION

High moisture: when product moisture is above the 12%

specifications

Fine: there is a 2% limit for fine within for finished goods Fines are

small particles of product that are usually caused by frictions such as grinding or moving through pipes and silos

Size: the standard size for feed product in pellets is 90% with 9.5mm

+/- 2mm in length, any size different than that is considered defect.