Posted By Everette Phillips, September 07, 2011 at 11:16 AM, in Category: Global Value Networks
In Asia, it is not uncommon for my company’s customers to share manufacturing plant capacity with other companies. One interesting outcome is that the same plant with the same equipment, management team, and employees can produce products of different quality. The reason is that the quality process is often dictated by the customer. I find this to be true even in many ISO-9000-registered plants.
Some companies deal with this issue by sending auditors to review the ISO-9000 documentation and records of their contract manufacturers. Some companies keep inspectors on-site. The strategy one uses is dictated more by the failure costs than anything else.
But, regardless of the strategy, I feel that companies need to focus on the process, determine root causes of failures, and take corrective action on a case-by-case basis, even in plants operated by contract manufacturers. And it’s important to take a diplomatic approach and consider cultural differences.
For example, we have an inspector on our payroll at one of the shared-capacity plants that we use. There are inspectors from other Western firms at the same facility, and we all make similar products. However, each firm doing business with this contractor has different quality processes. Our firm has our employee inspector track WIP, so we know what materials exist and in what process state they exist. We do this to make sure the facility does not get ahead of our production plan.
We also do this as part of quality reporting. We track corrective actions for quality issues by production process. If we find a painting issue, for example, our employee meets with the painting department, reviews the procedure, and identifies an improved process or inspection method. The employee does the same thing for each process, from welding to machining and assembly. This tracking and coordination saves us time and money, and helps us greatly with on-time delivery from an extended supply chain.
Our process is intrusive, however, and it requires some diplomacy. In our discussions with our inspector employee, we learned that an inspector from another company was recently severely beaten by factory workers after that inspector rejected a large lot of product from the loading dock. The people who load the product were not paid by the hour; they were paid by the quantity of product packaged and shipped. The rejection cost them money, so they beat up the person who rejected the shipment.
I found it interesting that they did not assault the guy who did a bad job painting, or welded poorly, or who made an assembly error. The people in the packing and loading area did not understand the manufacturing process, and they could not correctly assign blame for the flaw in the process. From their point of view, the quality guy was the problem.
In addition to being surprised by the misplaced blame, I was at first shocked by the physical violence. However,
I soon came to see that we need to understand that safety in the workplace -- even protection from violence – is a new area of corporate responsibility in many parts of the world. I grew up in New York, and I have many relatives in manufacturing and trade positions. I would often hear them tell stories during the 1960s, ’70s, and ’80s that shocked me because they involved violence in the workplace. I think the U.S. has come a long way regarding such things. Asia might just be a little behind the curve, but catching up.
I know that the other companies using the same facility do not push back to the individual processes as we do, because the plant management has told us we are the most difficult of their customers. At the same time, they concede that the quality of the product they make for us exceeds that of their other customers, and they tolerate us because we are helping them achieve a quality level that opens new doors for them to win other customers.
In the end, as a consumer of the products made by our contract manufacturers, we are responsible for quality. We can improve quality by our buying habits and by helping correctly place the economic incentives that serve our interests.
Everette Phillips is CEO and president of Global Manufacturing Network, a provider of contract manufacturing, sourcing, and logistics services for products and components, with a focus on items with special engineering requirements.
Written by Everette Phillips
Everette's experience includes robotics, advanced manufacturing, supply chain management and international manufacturing. After a career path as a robotics engineer helping automate plants in North America, he became a manager of European Operations for Factory Automation & Robotics in Europe for SEIKO living an expat in Brussels then returning to the US as GM for Advanced Mfg Technologies in North America. Currently, as President of Global Mfg Network, he is involved in coordinating production of highly engineered parts, assemblies and products across a wide range of industries in manufacturing facilities located in Asia and North America and Europe. Everette is a regular speaker and panelist on topics related to manufacturing, international business and technologies such as robotics and advanced manufacturing. He has a BS Bioengineering from Cornell and an MBA from the UCLA Anderson School. Everette serves on the board of Cornell Engineering Alumni Association as a Regional VP and on the Advisory Board for Entrepreneurship@Cornell.