Paper Costs WHAT? --The true cost of Paper-based Quality Management Systems

Paper-based quality management systems are fairly common, especially in small to mid-sized operations. Three years ago an estimated 80% of managers were using spreadsheets and word processors to manage their auditing and compliance systems. These systems require a steady flow of paper documents from office to office. Whereas, paper-based systems may be minimally sufficient for managing product and process quality, they are prone to error and significantly increase the risk of non-compliance when production is regulated. The rigidity of paper-based Quality Management systems makes them a bottleneck that impedes progress as a company grows.  

Problems with Paper Based Systems:

• Poor document control. In a paper-based system documents are often opaque to all except the person filling them out.Any change in standard operating procedures means that a manager will have to go from office to office to track down the progress of documents that might be stuck somewhere in the review cycle. Manual documents can be prone to copy errors that are difficult to check. Such errors can make cause accidental compliance violation. 
• Corrective and Preventative Actions Problems. Paper-based systems limit management's ability to quickly evaluate problems and deploy timely preventative actions on a large scale. The problem is that paper-based quality systems do not provide data in real-time. They require manual analysis and detailed manual cross checking.
• Poor Metrics. Paper-based systems do not collect on-going metrics, since the statistics and calculations have to be compiled by hand. One compiled metric reports can only be distributed weekly and monthly in a ridged format that can't be drilled down easily for detailed causal analysis. Lack of metrics or slow-delivery of statistical metrics means that issues can't be addressed in a timely way.

What is the true cost of Paper Based Quality Management Systems?

Paper-based systems may seem less costly up-front. Hidden costs can be enormous however.

• Staff time. Document control in a paper-based system will take over 35% of a quality control engineer's time that could be spent on higher value activities.
• Low effectiveness. The paper-based system can't allow management to identify preventative measures on a large scale, nor can they enable management to ensure that corrective measures are effectively implemented because of the lack of timely metrics.
• Risk of Lost Compliance. The lack of timeliness in reporting may cost the organization hard-earned compliance and result in poor quality production for an extended period of time.
• Cost of Poor Quality (CoPQ). Product recalls have become a significant quality control issue in manufacturing. These costs include lost goodwill as well as the possibly major expenses from replacement, refund, re-work and scrapping, not to mention the possible costs of legal action. Failure to identify process problems increases the risk of CoPQ. Estimates are that CoPQ can be worth from 5% to 30% of a manufacturer's gross sales.

Value of Automation:

If daily production is going ok, many feel that the costs of automating quality management can't be justified. This consideration does not add the cost of poor quality into the computation. If lowered risk, increased flexibility, reactivity, and potential for growth management is added in, the alternative of automation often meets corporate budget hurdles.

The costly old way of manually inputting and analyzing compliance and quality control data are quickly becoming outdated because technology is making it easier. The heavy lifting is being engineered out of the hands of managers so they can spend more time planning future growth, change and improvement. If a manager spends 80% of his or her time identifying benchmarks, chasing people for their data, compiling statistics, ensuring data accuracy and writing reports, there is little time left for doing something with the insights gained by the system.

Automated quality management systems replace untimely written reports with continuous statistical compilations visible and sharable on flexible dashboards in close to real-time. The data is automatically and securely recorded. The data itself is auditable and cannot be altered or adjusted manually. Quality control and regulation compliance can be guaranteed by unbiased and accurate information flow.

For a fascinating look at the costs of Paper or to find out about our own eQMS software that can help you with document management, training management, CAPA's, and audits, click below:

Zen QMS offers a validated Quality Management System that can help you graduate from your paper QMS to an affordable, easily implemented cloud based QMS