Rupert Musgrove, UK managing director of G&P, explains why improving quality control higher up the supply chain can lead to lower costs, improved efficiencies and zero defects on the production line.
Rupert Musgrove
Most companies understand that stringently monitoring quality in the supply chain is hugely important but, for complex products, it becomes a necessity. In the automotive industry, for example, around 80% of product value is added by thousands of external suppliers.
However, utilising such a diverse portfolio of suppliers presents a unique challenge. Indeed, while each supplier only carries a very small risk of product defectivity, this rises in correlation with the number of suppliers in the chain. Suddenly, the risk of receiving poor-quality parts becomes very real.
As such, it’s not unusual for quality issues to escape when pushing to get production over the line. Unfortunately, this almost always has a detrimental impact, especially from a brand and financial perspective.
The cost of quality
Without effective management, quality-related costs can throttle sales revenue. This makes investing in quality management processes critical to reducing overall costs associated with poor quality parts.
There are four key areas in which the cost of quality impacts a business: prevention costs, appraisal costs, internal failure costs and external failure costs.
Cost of good quality:
1) Prevention costs: Proactive investment aimed at avoiding issues. Examples are the introduction of quality management systems and established specifications, as well as implementing quality plans and training programmes to upskill the team.
2) Appraisal costs: Costs associated with measuring and monitoring activities to meet quality standards. Testing of parts, materials, equipment, processes, supplier ratings and audits.
Cost of poor quality:
1) Internal failure costs: The financial cost of quality issues before the product reaches market – reworking, reproducing, scrapping, failure analysis and addressing issues.
2) External failure costs: Expenses from issues once the product is in the market – recalls, warranty claims, customer service and legal liabilities, as well as reputational impact, value and future profitability.
The most frequent quality issues that we come across are parts that don’t meet required specifications, manufacturing defects, inadequate process control, assembly errors and insufficient component information and traceability. In sectors with complex products, quality issues can be catastrophic. It is not just an immediate financial issue either – there are also reputational and legal factors to consider.
So, if an OEM fails to achieve full and effective management of its entire supply chain, the quality of its final product will aways carry risk. The simple solution? Robust quality management – and not just at a final assembly stage.
Specialist quality management solutions
We can help companies to understand where quality issues may be arising in their supply chain Providing a holistic approach to quality management backed by 30 years of international expertise, we provide independent engineering, technical, inspection and rectification services to OEMs and tiered suppliers across the manufacturing chain.
Our consultants implement quality management systems or APQP. They can deploy agile and scalable resources skilled in supply chain quality management, including Advanced Product Quality Planning (APQP) to achieve Production Part Approval Process (PPAP) and Supplier Quality Assurance (SQA) to resolve issues and improve process capability.
We can also deploy agile and scalable personnel, ranging from highly skilled vehicle technicians responsible for identifying and rectifying build issues, to programme managers and supplier quality engineers working in the supply chain to improve quality and capability at source. Our highly skilled teams can inspect, identify and rectify non-conformances, address root causes, use real-time data analysis to track elements across the manufacturing supply chain, and even set up supply chain firewalls.
By rectifying these upstream issues, OEMs can prevent disruption within operations while ensuring that manufacturing teams can deliver upon their original build schedule.
We work closely with our customers to understand their unique quality, efficiency and profitability requirements, ensuring meaningful programme outcomes. Most importantly, we’ve developed the capability to implement these processes quickly for emergency situations, or as part of a longer-term managed service.
Working with an external quality management partner offers a number of benefits. Firstly, it relieves pressure on in-house teams. Secondly, it identifies quality issues and implements solutions quickly and cost-effectively. Finally, it allows customers to leverage the knowledge and abilities of a highly skilled team.
For more information about G&P, visit https://www.gpqm.com/.
