The production floor looks great, thanks to your remarkable work in observing GMP principles. The setup time has been minimized; the workforce is well trained; all these great things are contributions of the JIT/TTQM approaches. And you cant seem to find any other way to improve your operation; however, theres still a serious problem: non-compliant and/or damaged raw materials and parts.
Unless you have some leverage based on volume, its almost impossible to dictate price, quantities, place and time of delivery. And you probably wont be able to change a suppliers operations, but you can track which vendors service you the best and change suppliers accordingly. No matter how small your operation might seem, you can assess the responsiveness and the responsibility of your suppliers. The receiving people know based on inspection records, complaints from manufacturing and from customer service which vendors originate the quality problems that may persist in your products. And you can always use this information to improve your operation.
First, quantify the cost of defective materials on a vendor by vendor basis. Incorporate the cost of non-compliant suppliers and disruptions in the production floor caused by the defective materials and parts including downtime, rework, disposal, staffing, customer returns and lost sales. Once youve quantified the lost revenue, implement a supplier certification program.
Alert potential vendors to the specific types of damage youve noted through the evaluation of your operations. Use raw data. If its possible, determine what percent of your materials are damaged, and relay this information to all potential vendors. Establish what is acceptable and what is not. Tell vendors when their performance is slipping, and establish a point at which you will seek out new suppliers if things go downhill. Be sure to share this number with your vendors. If you take the time to assess a vendors ability to serve you and let them know youre keeping a close watch, youre more likely to get the consistent quality you deserve (and need).
Even if you have extremely low volumes, you can be successful if you reduce your supplier base so that you tender enough business to the few that you use so that you shift the balance of power in your favor. Chances are you will find that a certified supplier is the best ally in your quest for defect-free products.
James U. Carvallo is a lecturer at Cal Poly Pomona and president of Vector Associates. For more information, you can contact him at email@example.com.