Phillip Crosby's famous book, Quality Is Free, makes the argument that if you do it right the first time your organization saves the re-work cost and the yield loss cost, therefore investing in processes to achieve perfection results in free perfection.
We watched the automobile industry move from terrible to excellent following Crosby's (and many others) teaching about getting it right the first time. In our world of electronics, the component industry sets the expectation similarly is nothing short of perfection.
While anyone who has studied the subject of quality in manufactured goods knows that it pays to have perfect quality, achieving that requires an investment.
The question is: Where do you make that investment so that the resulting quality is really free?
First: vendor selection.
Anyone with a computer can buy almost anything directly from Asia these days. Where Asia offshoring gets its shaky reputation is from those who do not properly vet suppliers. Oddly, some companies just respond to any random email offer for materials or manufacturing services. They then blame China or whomever for their own sloppy selection process.
The right way is to decide on your standards and your profile for a quality supplier. Treat this process as you would selecting a United States-based supplier making adjustments for location. Ask all the questions, walk their production floor, gather enough quotations from them to have a balanced picture of costs, and engage them in discussions about their business strategy, their other customers, their corporate organization and financial health. Most importantly, assess their likelihood to stick with you during difficult times. Set up a scoring system and rate them against others.
The cost to do the selection process correctly can range from $50,000 to $100,000 depending your organization. Roll that into the overall cost savings resulting from buying directly offshore.
Custom manufactured material coming in the door can go directly to the line or pass through an incoming inspection. If you chose to send it to the line, stop reading this right now, you are doomed.
Treat your new offshore source as though they were across the alley. Something comes in the door it is tested or inspected. Full incoming inspection procedures performed, testing if no test certifications were included. But most importantly, every little detail that is incorrect is documented and sent to them for corrective action. This includes discrepancies in their paperwork.
Accountability with off shore suppliers needs to be instantaneous and tough…just like at home. Every order shipped incrementally builds a body of knowledge at your supplier. The knowledge is communicated to their production floor. The message is either this customer does not care, or this customer demands perfection.
So, how is all of this different from dealing with a U.S.-based supplier? It isn't, but it is often over looked because of time zone issues, communication concerns, and over reliance on ISO certifications, sheer size, or market prominence.
The cost to hold an offshore supplier accountable will vary depending upon your size and volume. Some portion of an inspector's time, some portion of your facility, and some portion of your staff's time discussing issues. Cost estimates range from $10,000 to $50,000.
If you have it, great! If not, you have much less leverage. The advantage we have over our customers in this regard is the third factor. We bring so many customers to the table that our overall importance is greater than the average OEM. Bigger customers get greater attention and more importance is attached to every email or call. It is just the dynamic of manufacturing businesses.
So, you have more control over an offshore supplier than at first glance. Don't allow the ticking time bomb of unseen quality issues to discourage you, but also be realistic about the investment necessary to achieve perfection.
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