It’s reasonable to think that, if you have a good supplier and you trust that supplier, your future together in the quality dimension is secure. It is even more reasonable if the materials with which your product is made are not too complex, in either combinations or characteristics. However, let’s look at some scenarios that may have you reconsidering those assumptions, and wishing for a crystal ball, x-ray vision, and other ways of seeing what’s around the corner.
Let’s say your product is selling really well. In fact, your X100-ABC was just featured on the national evening news and orders are rising. The market for this product has begun to grow when up to this point you had only seen a demand for a completely different product in your line-up. All of that, of course, is just great! Congratulations!
ABC, Inc., your trusted supplier, sounds as thrilled as you are. There’s the good news – a much bigger contract – but then, there is the next challenge: ABC, Inc. management is asking “How are we going to fulfill this new demand?”
The team at ABC Inc. first proposes to get the old production line in their main plant in the US back up and running. It had been shut down last year because their new China facility was now more modern and efficient.
However, in addition to that approach, they will need even more ways of meeting the challenge. For example, the ABC, Inc. production VP says that another one of their plants in a more distant location could possibly start producing the needed material. The plant is currently being under-utilized, and while it is now producing a different material from the one the client needs, it generally fits the required profile.
As another option, a manager suggests “Why not get one of the plants of our overseas suppliers involved? Some of the material would then be much closer to our client’s growing market.”
In the meantime, you are busy meeting with your top executives to see what these new opportunities will mean to your board, to your investors, and to your share price. But, there is something on your mind that is rattling around like a loose bolt in a boxcar: a concern about what the future will bring, especially in the area of quality and reliability, the very features that have brought you and your company to this new position of leadership in your market.
The Cloud on the Horizon
You are right to be concerned. In fact, each one of the scenarios being considered is a potential wild card, a destabilization that could swamp you and your reputation without any warning. Why?
- Moving to an older production line (along with different, or less efficient machinery, a shortage of trained workforce and a potential gap in quality standards)
- Moving production to a plant in another area in the country, with a different workforce and different culture (along with longer or different transportation issues, climate, heat/humidity, that affect longevity and storage conditions)
- Production overseas, with a different workforce, different culture, and different language (along with all of the above, plus a difference in quality standards and background assumptions, government regulation, labor relations and documentation)
Each one of the adjustments that your reliable supplier makes to accommodate your needs creates potential changes. These changes can affect any one, or more, of the processes in production.
Since the quality of your product depends on each link remaining within its particular specifications, shifts, and changes in the chain at various levels greatly increase the risk of failure.
This story illustrates a case in which the VALUE OF THE CONTRACT has increased, but the PROBABILITY OF PRODUCING A QUALITY PRODUCT faces significant challenges.
Your Crystal Ball, Your X-ray Vision, and Your Eyes Around the Corner
What could you, the client, do to enable yourself to “see the future,” to see through walls (of distance and culture) and to predict what is coming around the corner?
The stability of your supplier’s process at every link, and the potential changes at various links that you may never see, or even suspect, directly affects the day-to-day work of an array of your key company contributors. While staying ahead of any threats and potential disasters is at the heart of a QA professional’s job, it is also a serious concern for purchasing managers and production directors who are directly affected as well. They depend on materials, ingredients, and components working smoothly, without the need to rely on costly warehouses filled with safety stock to provide backup.
“Beforemath” Rather than Aftermath
Using analytics is filled with challenges. The most obvious one is the acronym GIGO (garbage in, garbage out). The results are only as good as the data that is supplied. That’s why system rigor and workflow discipline are essential to developing a knowledge base with value.
The question is, how can you “see” what is not obvious? How do you see something before it happens, rather than dealing with the aftermath?
The answer is Data!
Your most cost-effective protection will come from the following processes:
- Collect data on suppliers’ material performance,
- Establish statistical process control (SPC) boundaries,
- Aggregate the supply chain’s data in one database,
- Summarize the data in trends diagrams,
- Display the results of queries by material, by plant, by supplier, by material type, by region, by receiving plant(s), etc. so that you can statistically “see” what is there, but not visible.
Sounds logical, right?
But, it’s not humanly possible to process all that data manually. It’s like the weather forecast that takes longer to process than the wind to move a new weather system into the area. The data needs to be mechanized, harmonized, aggregated, analyzed, summarized, reported, and the right professionals alerted if the data indicates a potential threat.
The better answer is to use a supply chain quality management system that is powered by Statistical Process Control (SPC). With this tool, you have the equivalent of a crystal ball. SPC can show you trends which ordinary reports can never expose. These trends, at every level of granularity where you wish to deploy them, can show you where a process is heading, not just where it has been. The system frees you from being trapped in the role of data collector/processor to allow you to do your job, which is to think about, analyze, and draw conclusions from the data.
This power enables you to not only prevent incidents before they reach your market but also to reward good performance since it allows you to see consistency and reliability in great detail.
Call us for more detail, because the real answer to this challenge is the ability to see around the next corner.