Today, quality matters more than ever.
Whether you’re sourcing custom manufactured parts for the automotive industry, the aerospace vertical, or the consumer products market, product quality compliance is most likely a major concern for your business. One that is continually guiding and shaping your sourcing and supply chain strategies.
In the most recent MFGWatch Manufacturing Report, over 40% of sourcing professionals surveyed said that product quality compliance was a major threat to their sourcing and supply chain strategies in 2016.
And with good reason.
In the modern manufacturing marketplace, one that’s increasingly global and connected through innovations like the Internet of Things, it's vitally important your parts and products are compliant with industry regulations to avoid unnecessary economic repercussions or brand defamation.
What’s more, counting on predictable precision and product quality from your supply base is not only essential to assuring your business remains continuously competitive, but more importantly, that your parts and products are consumer-safe, safeguarding the public from harm and your business from potentially costly recalls and/or lawsuites.
At the end of the day, your competitive advantage -- and business success -- is predicated on the quality of your parts and products.
How Buyers and Sourcing Professionals Can Stay Ahead of the Game – And Confirm Product Quality Compliance
Keeping a keen eye on supplier qualifications, capabilities, and business practices is an optimal place to start your supplier evaluation process – and assure part and product safety and compliance.
Throughout any manufacturing process, whether it’s metal fabrication, CNC machining, or low-volume injection molding, myriad errors can – and do – occur. Angles are fabricated improperly. Tolerances are machined incorrectly. And molds are poured imperfectly.
Even the best suppliers can sometimes stumble. But working with a quality suppliers of custom manufactured parts inherently lowers the overall risk of poor part and product quality, giving you a leg up in the manufacturing game.
Therefore, with so much emphasis placed on supplier quality management, the essential task of the modern sourcing professional is to not just get parts made, but to find and partner with expert suppliers that will ensure those parts are made to quality -- 100% of the time ...
To partner with suppliers whose capabilities are robust enough to accurately and precisely meet the requisite requirements of your custom manufactured parts on a regular and predictable basis ...
And to partner with manufacturing companies whose custom parts continuously meet and adhere to not only your proprietary, in-house quality standards, but also those of domestic and international manufacturing and safety institutions and organizations.
Remember: 40% of buyers and sourcing professionals in our most recent MFGWatch Manufacturing Report survey said that product quality compliance was a major issue facing the manufacturing industry today. So, it’s more important than ever to make sure you’re sourcing the most capable suppliers for your custom manufactured parts.
“Myriad considerations go into the manufacturing equation," says Ashton Udall, Founder of Global Sourcing Specialists. "The decision, after all, will have a direct impact on the quality of your product, your company's reputation and the bottom line. When choosing a manufacturer, you'll need to consider the nature of your company and how well the supply chain supports its business model.” – Entrepreneur.com: How to Find a Manufacturers For Your Product
And while websites and manufacturing marketplaces like MFG.com help you make those types of difficult decisions in record time, there's still a few thing you have to do to make the process properly fit your sourcing needs ...
ENSURING PRODUCT QUALITY COMPLIANCE: YOUR FIRST STEPS
In a recent article published for the Chartered Institute of Procurement & Supply entitled, Three Steps to Improve Supplier Compliance, Gary Plant, Managing Director for Altius, lays out a three step process that can help not just procurement professionals discover, acquire, and retain top manufacturing talent within their supply chains, but also entrepreneurs, buyers, and sourcing professionals at all levels.
Here, we look at a few of his points that will get you up and running – or even supplement your current supplier evaluation strategy.
1.) Evaluate Supplier [And Job Shop] Manufacturing Capability
This first step is essential to both the supplier selection process and the incumbent evaluation procedure.
Not fully understanding the manufacturing capabilities of either potential or incumbent suppliers can lead to lost capital, extended leads times or, most importantly, subpar part and product quality ...
So, how do you evaluate potential contract manufacturers and/or your current supply base properly?
Plant posits that any efficient sourcing operation has an information gatherer [or many, depending on company size], that collects and analyzes supplier performance information for continued evaluation by the buyer or organizational management.
But, Plant says, make sure to “verify [and continually measure] the supplier information. [Don't just gather it]. This evidence shouldn't just be checked once a year, it should always be live, up to date and instantly retrievable. Authorize the information. Once a supplier is thoroughly checked and approved for any given product or service, ensure suppliers from this list are used by all departments.
All too often the reality is that different departments stray from the approved suppliers list to appoint non-approved suppliers based on cheaper price. This can prove very costly if that decision also 'buys-in' risk.”
2.) Set Business Expectations DURING Onboarding
Plant says to “set clear policies and rules, so suppliers are very clear on what is expected. Formalize your requirements so that nothing is left to chance. [Develop] controls and restraints [and] ensure suppliers understand any control processes that need to be followed.”
Without these primary parameters, the sourcing process can, and sometimes does, become murky, leading to inconsistencies and confusion across departmental and supply chain channels.
Regardless of if you’re a large organization or an entrepreneur, setting clear and definable boundaries for your manufacturing requirements upfront greatly mitigates future manufacturing complications and streamlines the sourcing to production process.
3.) Establish a Repeatable System For Supplier Performance Measurement
Plant contends there are 3 major factors to establishing a robust measurement paradigm for contract supplier performance.
A.) Set Accountability Expectations Up Front.
“Don't let the robustness of your monitoring lull your suppliers into complacency and remove their sense of responsibility for their own compliance and performance.” Like performance expectations, setting accountability standards upfront avoids future communication and production issues.
B.) Keep Track of Your Audit Information.
“While physical audits have their place, technology can be used at lower cost to provide an audit trail.” Make sure you research proper and efficient auditing methods, and choose the system that is right for your sourcing and business needs.
Remember: Even systems like MFG.com’s buyer/supplier communication portal provide users the ability to transfer sensitive sourcing and manufacturing information between two parties over a highly secure network, providing -- in conjunction with MFG.com’s supplier rating system -- a way of auditing and evaluating product quality information for small-to-medium sized buyers.
C.) Measure Supplies Performance Against Key Performance Indicators
Plant says that measurement and evaluation can only bestow value when that data is measured against a thoughtful and rigorous Key Performance Indicator (KPI) paradigm, one that directly correlates to the sourcing strategy of the buyer.
“It's important to gather, measure and analyze statistics that illustrate whether the desired outcomes and objectives were achieved. For example, percentage delivered on time, percentage fixed first time, percentage call outs achieved within target time.”
If the measured data isn’t plotted against KPIs that matter to the business case or scenario at hand, the data, in essence, provides no actionable dividends for the buyer or sourcing professional.
In other words, spend time to develop and implement rigorous KPIs that will affect your business, like cost thresholds, delivery windows, and, especially, specific quality standards that must be met during the manufacturing process.
And be sure to design and implement a structure of due diligence compliance management standards prior to doing any business with any contract manufacturer or job shop.
“Rigorous due diligence will assist in determining the vendor's compliance with all laws and regulations applicable to the business lines that it will be managing for the company.
Transparency and disclosure are important elements of the evaluation, and should be part of the vendor's contractual obligations. The vendor should disclose any investigation or violation of trade compliance laws.” – Phillipe Naudin, President, SDV USA Inc. in Supplier Compliance: Ask the Experts
Performing these steps will put you on the road to safeguarding your organization from potential compliance issues in the future -- and ensure your parts and products meet compliance and safety guidelines not only in the United States, but across the world.
BONUS: HOW MFG.COM EASILY GETS YOUR QUALIFICATION PROCESS STARTED
At MFG.com, our contract manufacturing marketplace provides several discreet levels of supplier qualification, helping buyers of custom manufactured parts perform adequate first-level due diligence on any of the hundreds of custom parts manufacturers and job shops within the MFG.com Contract Manufacturing Marketplace.
Unlike other manufacturers directories across the web, MFG.com was designed to help you efficiently discover expert suppliers around the globe -- and vet their compentencies and capabilities all in one secure platform.
MFG.COM SUPPLIER RATING SYSTEM:
Knowing the pros and cons of a potential supplier from real-world buyers is a boon for supplier evaluation process. That's why the MFG.com supplier rating system provides buyers and sourcing professionals unprecedented transparency into the historical manufacturing performance of many of our suppliers, in areas such as:
- Project Performance
- Product Quality
- Supplier Responsiveness
- Supplier Delivery Compliance
MFG.COM CONTRACT MANUFACTURER PROFILES:
MFG.com Contract Manufacturer profiles give buyers a glimpse onto the shop floor. Not only are you able to see the exact processes any supplier is readily capable of, but you can also see their Marketplace compliance rating and most importantly, any certifications they currently hold.
Knowing if a contract manufacturer or job shop has the capabilities to fulfill your sourcing needs now -- or if they're certified to do the required work -- is essential to streamlining the supplier evaluation process and assuring you've taken the right steps toward assuring your parts and products will be made to quality.
MOVING FORWARD: WHY PRODUCT QUALITY COMPLIANCE MATTERS TO YOU
At the end of the day, the contract manufacturers with which you partner to make your parts and products determine:
1.) Public Safety – An important threshold, especially in the automotive, aerospace, medical, and consumer product verticals, public safety should be a primary concern of product quality compliance. Don’t forget the lessons learned by companies like Takata, Fisher-Price, Ikea, and others who were subject to product recalls – and in some cases, much worse -- due to safety compliance issues.
2.) Business Reputation – Product recalls and lawsuites can forever mar your brand and company image. Ensuring your parts and products meet safety compliance guidelines by following the steps above – as well as steps we’ll outline in future blog posts – mitigates the risk of potential manufacturing mistakes -- and potentially hazardous public safety scenarios.
3.) Business Success – Ultimately, the success of your business depends on product quality compliance. Unit and manufacturing cost isn’t always the number 1 concern when it comes to selecting a custom parts manufacturer or job shop. Understanding a shop’s competency, commitment, and consistency in the compliance department is often more important than price, especially in the long-term.
[Remember: You may pay more for manufacturing processes in the short-term, but your long-term savings will outweigh the initial, up-front cost when sourcing quality contract suppliers].
Check back for Part 2 of A Buyer’s Guide to Product Quality Compliance, where we examine the power of supplier certifications and why they’re important to determining the compliance of potential – and even incumbent – suppliers and contract manufacturers.
Please note: This article is in no way legal advice.