Supplier Management

1. Design Stage

The product development life cycle begins with idea generation, concept development, and market testing. For example, the E-Bike handlebar is designed with the form, fit, and function in mind that best serve the market/user’s requirements and the overall aesthetics of the final bike.

Although Pro QC do not actively get involved in this stage, a postmortem investigation with many of our client often reveals the following challenges.

Supplier Risks & Challenges:

Misalignment between the buyer, supplier sales department, and factory production department on critical design requirements
Advance product quality planning was not factored in early enough
Difficulties in transitioning from a prototype supplier to a mass manufacturing supplier

2. Product Development

In this stage, the engineers will refine the design and define the engineering specifications of the handle such as material properties, dimensions, weight, and other requirements while satisfying different product and safety compliances. This is also the stage where engineering prototypes (engineering build) are made to rigorously test the form, fit, and function of the product.

Supplier Risks & Challenges:

Poor communication of the technical details between buyer and factories
Misalignment on the new product’s specifications
Misalignment on design/engineering revisions
Supplier’s production capability is unable to meet the design requirement

Pro QC’s Supplier Management Solutions:

First Article Inspection (FAI)
Supplier Development Services
Resident Supplier Quality Resourcing

3. Identify Potential Suppliers

Once the component specifications are defined, the procurement department will begin to identify a list of suitable suppliers that can potentially meet their requirements in terms of capabilities, cost, capacity, and quality.

Supplier Risks & Challenges:

Lack of experience and due diligence in new supplier region
Communication challenges
Concern about supplier scams
Low confidence supplier’s trustworthiness
Concerns over supplier’s financial viability

Pro QC’s Supplier Management Solutions:

Onsite Supplier Verification
Financial Credit Check

4. Supplier Qualification

Once a list of trustworthy suppliers has been identified, an evaluation of supplier reliability is recommended to ensure they can produce at a consistent level of quality. A world-class organization usually has a comprehensive supplier qualification program to identify and mitigate the risks associated with quality, safety, on-time delivery, cost, and compliance.

Supplier Risks & Challenges:

Suppliers are not as capable as they initially claimed
Supplier lacks effective and systematic quality assurance practice
Supplier is ISO 9001 certified, but the underlying principles are not implemented in practice
Mass production quality does not match prototype quality
Buyers want to sell to big retailers, but their suppliers do not yet comply with the retailer’s supplier code of conduct
Supplier violation on labor law, ethical and environmental compliances
Goods held in customs due to supply chain security malpractice

Pro QC’s Supplier Management Solutions:

Global Supplier Audit Programs
Supplier Quality Audit for Potential Suppliers
Quality Management System Audit
Social & Ethical Audits
Supply Chain Security Audit
Environmental Audit

5. Pre-Production Validation

Before commencing volume production, it is crucial to validate the factory’s equipment, staffing, production methods, capacity, and quality control plan for each product line. This is an important stage to prevent critical failures, costly mistakes, and loss of time due to changes and rework.

Supplier Risks & Challenges:

Factory not ready for mass production
Shipment delays due to critical failure, poor quality, and resource constraints
An exponential increase in defective products
Product recall
High Cost of Poor Quality
An exponential increase in the cost of change after mass production commences

Pro QC’s Supplier Management Solutions:

Engineering Build (EB) and Quality Build (QB) Audit
First Article Inspection (FAI)
APQP/PPAP Audit
Manufacturing Process Audit or VDA 6.3 Process Audit

6. Production Planning

Production planning is an administrative process that involves ensuring that sufficient raw materials, components, staff, and other outsourced processes such as secondary processing are procured to create finished products according to the specified schedule.

Supplier Risks & Challenges:

Production delay due to poor material procurement planning
Production delay due to inadequate production staffing
Poor sub-supplier management

Pro QC’s Supplier Management Solutions:

Order Expediting

7. Incoming Quality Control

Incoming quality control is required when all the procured material and components arrive at the factory. This is the first step in controlling the production process and resulting product quality. Understanding how a factory manages its incoming material and its supply chain is a very good indication of its commitment to quality. (The saying goes: Garbage in, garbage out.)

Supplier Risks & Challenges:

The factory does not manage the quality of its supply chain or is poor at supplier management
Suppliers turn a blind eye to defective components during incoming and still use them for production and assembly
Using sub-standard material or components (e.g., lower-quality fabric than required)
Substituting lower-cost alternatives for product components (e.g., cheaper electronic components in a mobile phone)
“Quality fade” where suppliers make small, gradual substitutions in materials and components over time
Bulk material ordered by the supplier degrades over time due to poor storage conditions

Pro QC’s Supplier Management Solutions:

Incoming Inspection
In-Process Inspection
Manufacturing Process Audit or VDA 6.3 Process Audit

8. Production & Assembly

Upon approval for volume production, raw materials and components are processed, extruded, forged, cast, injected, machined, and assembled. It is important to note that a factory may not have all the production capabilities and may outsource certain processes to other suppliers.

Supplier Risks & Challenges:

Operators are not producing according to the production control plan
Supplier is under pressure to ship goods, turning a blind eye to defective components
Lack of quality staff to enforce quality control
Poor control of re-worked material/product
Mistakes made by temporary, untrained staff/operators
Communication breakdown when the supplier is under pressure

Pro QC’s Supplier Management Solutions:

First Article Inspection (FAI)
In-Process Inspection
Manufacturing Process Improvement
Quality/Root Cause Investigation (8D)
CAPA Verification
Order Expediting & Production Monitoring
End-Of-Line Testing & inspection

9. Packaging

Packaging and labeling of the goods are the last steps before shipping. The smallest aesthetic defect on the packaging or missing components often leads to customer returns, and a misplaced label often leads to compliance issues.

Supplier Risks & Challenges:

Products are poorly packaged
Human mistakes and missing components lead to customer returns
Wrong labeling leads to compliance issues and significant re-work

Pro QC’s Supplier Management Solutions:

Manufacturing Process Audit
Poka-Yoke Implementation
Pre-Shipment Inspection
End-Of-Line Testing & inspection

10. Shipping

Packaged products are being loaded by suppliers at the factory or warehouse into containers and shipped to their final destination.

Supplier Risks & Challenges:

Rough handling of goods during container loading by the factory or outsourced warehouse, leading to damaged product
Poor container loading leads to product damage during transit

Pro QC’s Supplier Management Solutions:

Container Loading Supervision
C-TPAT Audit