Case Studies: Improve Foreign Supplier Quality
Cequent Transportation Accessories (Plymouth, MI) designs and manufactures a range of accessories for light trucks, SUVs, recreational vehicles, passenger cars and trailers.
Cequent has long used enterprise quality management. Three years ago, however, overseas supplier rejected parts per million (PPM) were at a high-unacceptable by Cequent standards and in direct conflict with the requirements expected of its domestic suppliers. In addition, as the importer of record when leveraging overseas suppliers, manufacturers have a responsibility to protect against the risk of defective parts entering the market. To mitigate risk and improve quality from its Chinese suppliers, Cequent used IQS’ (Cleveland) global infrastructure to implement a domestic quality and compliance program in China.
Unchecked SuppliersLeft unchecked, Chinese suppliers-like domestic suppliers-may ignore quality. Unlike domestic suppliers, they will respond to quality benchmarks by throwing labor-end-state inspection and rework-at the problem. The Chinese manufacturing business does not have a history of quality management and quality processes, so simply dictating an end-state is not the answer. Providing a step-by-step process all the way down to part characteristics can remove cultural and traditional process barriers.
Although a solid process is the foundation, an importer’s responsibility does not stop there. Other factors-such as poor tooling and equipment as well as basic communication challenges-can contribute to poor quality. To complete the quality program, the importing organization needs to provide monitoring and in-process checks to ensure that all aspects of the production process meet quality standards. Importing organizations serious about quality also should provide a monitoring and compliance mechanism that checks quality throughout the process and not just at end-state.
Getting Serious About QualityThe good news is that a rigorous process for identifying, managing and monitoring quality already exists. Automotive calls it Advanced Product Quality Planning (APQP), with Failure Mode and Effect Analysis (FMEA)-essentially a risk profile and its operational counterpart, a control plan. These standards are now regularly being used in aerospace and defense, and have recently been extended into the medical device market to stem a growing tide of quality issues there. As Cequent’s enterprise quality management software, IQS not only provides a framework for FMEAs and the associated control and inspection plans, but it integrates them with each other and the rest of the quality management system.
Before launching a quality management solution with its Chinese suppliers, Cequent first ensures that they can build or prototype a product in its U.S. labs. After the appropriate risk profiles, control plans, work instructions and inspection plans are in place, Cequent establishes the supplier as an entity within its IQS global infrastructure and deploys the supplier using its quality framework in IQS. This provides the supplier with a step-by-step, detailed process for executing quality properly, while giving Cequent complete visibility into a supplier’s real-time inspection and compliance data as well as the ability to make characteristic-level changes to the documentation when needed.
The final step for Cequent was to develop a plan whereby quality experts would spend physical time at the plant helping suppliers learn and apply the inspection process. Not only has this increased the speed of supplier adoption, it also has improved the overall flow of data and communication. “With IQS, we are able to quickly break down cultural barriers, set performance expectations and forge a path to success with our suppliers,” says Kreg Kukor, Cequent director of global quality systems.
IQS’ global quality infrastructure enabled Cequent to successfully deploy a quality program to its first Chinese supplier in less than 24 hours. Through this quality transformation, Cequent has assurance-before product arrives in the United States-that supplier-exported parts have passed required quality thresholds, reducing future warranty costs or recall issues. Today, 97.5% of product moves through plants without rework.
“Typically, an overseas supplier can copy a great design, but risk rapidly escalates when the design has a defect, or the characteristic details are not coordinated and shared through the enterprise from engineering to post production,” says Kukor. “By teaching suppliers to use FMEAs and control plans as living documents, we proactively reduce PPM, warranty and risk, while improving our suppliers’ capabilities. The reality is that their success is in our hands.”
IQS enables Cequent to track supplier performance, create supplier scorecards, implement a dock-to-stock program and have up-to-the-second information available on nonconformances. This creates a no-excuses environment with accountability standards. “We’ve found that our suppliers greatly appreciate the effort we have put into our supplier quality management program because it has proven to help improve their company’s performance and to build a long-term business relationship with us,” says Kukor.
“IQS made it possible to develop a robust quality management process for suppliers that we could quickly and seamlessly replicate across our entire global supply chain,” adds Kukor. “We plan to continue developing FMEA-based quality inspection programs in IQS to reduce our PPM across our entire global supply base.”
- Lowered overall supplier PPM from 33,555 to a monthly average below 300
- Lowered internal PPM from 1,102 to 172
- Reduced supplier nonconformance from 176 to 30
- Increased supplier container shipments from 1 per month to 8 per month
- Doubled supplier spend as a result of improved supplier quality