LNS Research Analyst, Dan Jacob, details 5 times to change your Supplier Quality Management strategy and reveals exclusive LNS survey data.
While managing supplier quality may be equally as important as it was a decade or two ago, it’s becoming an increasingly challenging task as today’s economy continues to globalize. More often than not, behind every company producing a complex product there’s a complex supply chain. This growing number of factors to manage can be overwhelming and even detrimental to quality. Fortunately, many market leaders have figured it out.
Last week we spoke with Pieter Vande Vusse, Director Quality at Lange-Mekra North America, a manufacturer of rear view vision systems for commercial vehicles. With more than fifteen years of experience in quality, sourcing, and production management in the automotive industry, he has developed a strong understanding of what drives success in supplier quality management. To Vande Vusse, it’s a two-sided relationship that takes time and effort. Below is an excerpt from our discussion.
LNS: In your experience, what are the biggest lessons you’ve learned in supplier quality management?
PVV: I’ll touch on two things. First, you’ve got to make sure your suppliers understand how you define a quality part. Avoiding or overlooking this step almost always surfaces negatively in your cost of poor quality metric. And second, your relationship with suppliers is important. You have to treat them more like partners than suppliers.
LNS: Organizations can deal with anywhere from one to thousands of suppliers. How much of the responsibility do you think lies on suppliers for delivering quality parts and components?
PVV: I like to think of it this way, when you point your fingers at a supplier for doing something wrong, which ones are you pointing at them? Probably your pointer finger and your thumb, right? The other three fingers are pointing directly back at you. In other words, 60% are pointing at you and 40% are pointing at your suppliers. In my experiences, this 60-40 rule has been pretty consistent.
I can’t tell you how many times over the years I’ve seen OEMs point fingers at suppliers for quality issues, and by the time the root cause was identified, it turned out that the supplier was meeting expectations but the quality specifications just weren’t properly defined. To turn this 60-40 rule in your favor you’ve got to define what good quality is and set realistic expectations for that supplier to produce parts.
LNS: Why is it so important to have a definition of what’s considered “good” quality?
PVV: Defining and quantifying quality specifications is a key to successful supplier relationships. It not only helps to improve communication, it avoids unwanted costs down the road. The challenge is balancing the right level of quality specifications to meet and the costs of meeting those specifications. The military may pay $300 for a hammer, but that’s because the supplier has to go through all of those specifications and each test/check costs money.
Quality is a monetary negotiation. When you run into a quality issue you’re discussing money every time. What you want to focus on, though, is getting the right quality parts at the right time, which takes some up front work. You’ve got to define your exact quality specifications and make sure the supplier has the capability to support those specifications. Doing this is good for costs and it’s good for building successful supplier relationships.
LNS: You’ve mentioned supplier relationship management several times. What does that mean to you?
PVV: You’ve got to remember when you buy parts from suppliers, you’re not buying the supplier. Think of it this way, when you go to your friend’s house, do you take the last beer in his fridge? No, that’s rude. Just the same way, you’re not going to go to your suppliers and boss them around. More often than not, you’re not their only customer. They were in business before your relationship and will most likely be in business after your relationship. That means they do something well and you’ve got to respect that.
Treat suppliers the way customers treat you. Or, maybe a better way to put that is, treat suppliers the way you want your customers to treat you. Of course, if a customer mistreats you and you mistreat your suppliers, you’re stuck in the middle and that’s only going to drive costs up. I’ve found the most success with getting quality parts and maximizing cost reductions by working harmoniously with suppliers as if they’re a trusted partner. At the same time, the supplier has to be accountable, just as you have to be accountable, too.
The views above are Pieter Vande Vusse’s and not necessarily those of Lange-Mekra North America. To continue the conversation on supplier quality management, leave your thoughts in the comments section below, tweet to Pieter @pietvan, or connect with him on LinkedIn.
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