The Role of Quality in Supply Chain Efficiency

How to leverage a better quality process to improve cash flow and reduce working capital requirements


To truly benefit from the technology, Quality and Operations need to work together. Once the technology is in place, the Quality department likes the results, and the Operations department appreciates the speed. However, unless and until both departments sit down and discuss the mutual benefits beforehand, it can be difficult for either department to want to make the effort to seek funding to purchase the technology.

 

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To help companies with this process, Celsis has worked with management consulting firm Arthur D. Little to create a Value Creation Model (VCM), which helps to quantify the financial value of implementing Celsis technology at an individual plant. The VCM shows the amount of time it would take to realize a return on investment, as well as a five-year net present value. On average, customers that have implemented the technology see an ROI within six to nine months, as well as a $500,000 five-year net present value.

The technology uses a simple and familiar protocol, and only a single enrichment is needed for detection. The testing is also non-destructive, allowing for further testing.

Kao uses the product for final product QC testing of its hair care, skin care and soap products. "One reason we selected Celsis over competitors is that it provides pass-fail results, and we can set it up to define what the pass-fail will be," notes Entrup. "I also liked the science behind Celsis, and it was already very well-proven at the time."

However, when encouraging Kao's initial adoption of Celsis several years ago, one challenge for Entrup was trying to assign tangible dollar amounts to the savings that it would provide to the company. "We didn't have a good feel at the time for what kinds of savings would be involved," he notes. As mentioned earlier, Celsis now has computations available for this in the form of the VCM.

Added Benefits

"Using Celsis, we now get results in one to two days, rather than three or four days," Entrup notes. In addition, if there is a positive result (meaning that the sample did test positive for bacteria, yeast or mold), it allows Kao to re-test quicker and obtain re-test results quicker. "Since the technology allows us to get micro results in half the time, we are able to release products and ship products pretty much as needed," he continues. "This has also reduced our warehouse space significantly. That is, instead of having to produce and then stockpile, the technology allows us to produce as orders require."

For Kao, other results have included a reduction in the time it takes personnel engaged in lab testing. "This allows more time for them to do other things in the micro labs that they weren't able to do before," Entrup explains. "It also lets our quality services group, which is responsible for finished product testing, to get their job done quicker."

While the technology does have benefits, it does need to be monitored. "One important key is to follow the maintenance and upkeep schedule that Celsis has prescribed," emphasizes Entrup. "The people who are using the machine really need to understand what it is doing. They can't just walk through and get results. They have to really understand the machine. If they don't, they won't be able to troubleshoot or maintain it properly."

The technology is working so well in Cincinnati that, in the near future, some representatives from Kao's parent company in Japan will be visiting the Cincinnati facility to discuss the potential for the technology to provide some "preservative challenge" testing. This testing challenges products to determine if they have enough preservative in them.

Meanwhile, the economy has prompted other companies to begin looking at following in Kao's footsteps by linking Quality and Operations, according to Lindsay Tjepkema, marketing and communications manager with Celsis. By leveraging the kind of solution offered by her company, "your safety stock is less, you're throwing away less products, and the potential damage to your company and your brand is greatly reduced," Tjepkema says. "In this time, with the economy being the way that it is, it's all the more important to make sure that you're doing things right, and Celsis really helps you do that.

 

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