From pork sausages to pet food, hardly a week goes by where consumers don’t hear about a dangerous product recall. And it’s not just food manufacturers. Ninety-six percent of manufacturers surveyed, including those in the life science and beverage industries, have experienced a product recall within the last five years. This is an ongoing problem that hits a company’s brand reputation hard, while costing millions of dollars to make right.
COVID-19 hasn’t helped the problem. Supplier audits and manufacturing inspections have decreased due to work-from-home ordinances and reduced-scale plant operations. It’s possible that there are many more product issues we’re not learning about, simply because of plant closures and less frequent inspections. As rigorous oversight resumes, we could very well see a spike in recalls.
The one safeguard in ensuring that defect-free products make it into the hands of consumers and companies is a concerted focus on quality management across the supply chain.
Not only can quality control bolster the supply chain, but, according to the aforementioned survey, it can add an average of $156 million to bottom-line revenues.
What, then, are the impediments to good quality, and how can companies achieve excellence across their supply chains?
With the pandemic continuing to disrupt supply chains, manufacturers are scrambling to find suppliers with enough raw materials, while going through their usual rigorous quality reviews of those suppliers. This shortage of adequate supplies and suppliers is in many cases the root cause of quality issues today.
Added to this, the long tail of the supply chain makes it next to impossible to identify and isolate a product issue. And differing regulatory requirements within specific regions or countries, as well as inconsistent operating procedures and policies across suppliers, can make it difficult to maintain and enforce a consistent level of quality.
Despite these challenges, today’s consumers and businesses demand an unprecedented abundance of goods on store shelves, cars in dealership parking lots, and medications in pharmacy windows, whenever and wherever they need them.
Unfortunately, the optimization of supplier relations is still a developing quality-management strategy, and it can be difficult to find the talent and resources required for both manufacturers and suppliers to address the problem strategically.
Adopting a Quality Management Practice
In order to address the growing complexity of supply chains and put quality front and center, manufacturers should take the following seven key steps:
- Establish a PPAP. For manufacturers relying on parts across the supply chain, it’s important to evaluate the components and subsystems received from each individual supplier, and to establish clear design specifications for better compliance with those standards. An effective Production Part Approval Process (PPAP) enables you to manage changes to products and processes and more easily evaluate future suppliers.
- Set up a receiving and inspection process. It’s critical to integrate the process of receiving materials from suppliers and to set up inspection schedules based on supplier performance tendencies. At minimum, a skip-lot sampling process should be implemented. These processes will track and evaluate the quality of goods in real time, reduce defects in finished products, and ensure consistent inspections.
- Implement SCAR. Nonconforming materials, missed or delayed deliveries, customer complaints and other infractions can require Supplier Corrective Action Requests (SCARs). This involves conducting a root-cause analysis, corrective planning and risk analysis. The goal is to ensure visibility of anything that’s out of specification.
- Qualify suppliers and materials. Managing the Approved Supplier List requires that you deliver real-time measurements of supplier and material performance. The review and approval workflow should provide transparency and control over the qualification process.
- Collect supplier ratings. You should have centralized visibility into supplier performance through quantitative and qualitative rating information in all aspects of a supplier relationship.
- Take an enterprise-wide approach. Expand the role of supplier quality management from just the quality team to everyone who has a relationship with your suppliers. Your procurement team can be a strong ally in ensuring proper supplier quality.
- Involve suppliers. Make suppliers part of your quality system. Your quality issues need to be your suppliers’ problem as soon as they arise. Suppliers should be involved in your quality-management system (QMS) and workflows as accountable members of the process and developers of the solution. In order to do this, systems must be seamlessly integrated to bridge the technology gap and enable constant communication across systems.
Unfortunately, many of these processes and protocols are done manually, which can cause errors, eat up time and consume resources. The key to becoming a supply chain leader and gaining these benefits is finding unique ways to employ modern technologies and strategies to maximize supply chain performance, rather than wasting time trying to optimize outdated systems and processes. According to an MHI Industry Report, companies that draw on available tech tools will be able to transform their supply chains.
Supply chain complexity continues to grow, along with the high price of product defects and recalls. Implementing a quality-management approach across the supply chain not only minimizes the number of quality issues, but ensures that manufacturers and their suppliers all understand what is expected of them, so they can uphold the highest standards of quality. From the concept of a product to its final destination, quality is a journey that everyone is on together.
David Isaacson is senior director of product marketing at ETQ.