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The Pay Offs of Supplier Quality Management System Implementations

Last modified: June 12, 2016

Our final post for this series about supplier quality management (SQM) takes a look at several case studies as beneficial applications. From A-Z, our series of SQM posts detail supplier relations, analysis and how to maximize value with your suppliers. With global distribution and variations expanding exponentially, SQM’s strategic and collaborative processes help your bottom line by working with goal-sharing suppliers vested in profitable results for everyone.

SQM Case Studies and Examples of System Implementations

Business:

Cequent Transportation Accessories manufacturers vehicle accessories and has an established history in enterprise quality management.

The Challenge:

Overseas rejected supplier parts per million (PPM) were at a high just three years ago and did not meet Cequent standards, which fell short of its domestic supplier expectations. The importer of record must 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 on Unchecked Suppliers. Simply dictating an end-state is not the answer. Providing a step-by-step process and even parts characteristics can remove cultural and traditional process barriers. Other factors-such as poor tooling of equipment and challenges in communication also detract from overall quality. An importing company must handle the quality via in-process checking and monitoring to meet the standards of quality for the entire production process – not simply the end-state quality.

SQM Systems – Getting Serious

Thankfully, a thorough quality-monitoring process exists called Advanced Product Quality Planning (APQP) and has Failure Mode and Effect Analysis (FMEA) which is basically a control plan and risk profile. It is used in the medical device, defense and aerospace industries. Cequent’s IQS software provides a framework for FMEAs and associated control and inspection plans to also integrate them together along with the full quality management system.

After confirming they can make a unit in their labs, Cequent puts inspection and control plans in motion and runs risk profiles while detailing work instructions. The supplier is then added to the IQS global infrastructure and Cequent deploys the new supplier entity by way of their framework quality in IQS. A supplier now has access to step-by-step detailed processes to achieve high quality standards. This also gives Cequent total real-time visibility into a supplier’s data on inspections and compliance status. Characteristic-level documentation changes can also be made anytime as necessary. The final step for Cequent is spending physical time at the plant helping suppliers learn and apply the inspection process which increases supplier adoption speed and improves overall data and communication flow. “With a supplier quality management system in place, 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.

This SQM success means Cequent was able to deploy a quality program to its first Chinese supplier in less than 24 hours. Cequent has made a transformation to quality assurance and prior to a full order’s U.S. arrival, all parts must clear quality threshold requirements to reduce warranty recalls and costs in the future. Now, 97.5% of Cequent product passes though supplier plants free of rework needs.

SQM System Performance Tracking

Their freshly implemented SQM system helps Cequent add dock-to-stock program, do supplier tracking, make supplier scorecards, and access up-to-the-second nonconformance information. This standard creates an accountable, no-excuse environment. “The implementation of the supplier quality management system 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,” says Kukor.

SQM Benefits

Within three years:

  • Achieved total supplier PPM reduction from 33,555 to under 300 monthly average
  • Reduced internal PPM from 1,102 to 172
  • Lowered nonconformance of suppliers from 176 to 30

Within two years:

  • Container supplier shipments went from 1 to 8 per month
  • Improved supplier quality spend by suppliers
  • Cequent’s quality program for its first Chinese supplier deployed in under 24 hours

Our Personal SQM System Case Study

The unique way we improved our Supplier Quality Management (SQM) was by The Supplier Day Conference. This method calls all key suppliers in to discover the particulars of your company operations. The theme is Improved Quality Management (IQM) and during the conference, every supplier will cover their current SQM system. Another good topic to cover is Continuous Improvement to add supplier SQM quality. It can also be helpful to host a tour of your plant to allow suppliers to see your active quality systems and allow them to converse with your Quality team.

All production operators need to be well-versed in production site quality. Should a Return to Vendor (RTV) of components happen, be sure to discuss the reject components and how to best avoid duplicate occurrences for future shipments.

Another possible next step is Six Sigma quality. To achieve Six Sigma, a company’s limit is 3.4 defects per million opportunities for nonconformance within their production processes. That is almost perfection level or zero defects and very hard meet even with focus and discipline. While perfection doesn’t exist, still work to do your utmost to meet as close to quality perfection with your suppliers as possible.

New Product case study: When a supplier produces a new component for you, always require a pre-shipment sample to be sent prior to entire delivery fulfillment for an inspection by your Quality control team. Get their approval first and avoid having to reject the entire components shipment.

How have you improved supplier quality? Did you implement operational SQM? Tell us how your implementation results turned out below:

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