There is a mysterious, secret hidden factory lurking in your organization, but don’t go searching in the plant to find it. This factory is hidden because there is a lack of communication between your Enterprise Resource Planning system or Manufacturing Execution System, which is tracking nonconforming materials and your Quality Management System, which is tracking the corrective action of the process behind these nonconformances.

While an ERP or MES system can identify nonconformances and place products on hold, it typically only lists lots as “on hold.” As you use your QMS to resolve the nonconformance, the ERP or MES system doesn’t know where the product is in the disposition process, the cost of the nonconformance or the time to disposition. During this time, factors such as deadlines and customer demand often initiate a total re-order of the product to meet the customer’s needs. All the while, your nonconforming lot becomes “lost” and is stored in inventory, never to return to production. In effect, the nonconforming product becomes “hidden” and is eventually lost.