I was sent to visit a key supplier that had run smoothly for years until a string of failures occurred that could be traced back to this factory. I went to see if I could find out what had changed.
The factory tour clued me in very quickly on some potential issues. Theoretically, the company was adhering to ISO9001 processes, but the day-to-day practice was showing me something different. Work instructions were missing from workbenches, cleanliness was lacking, and at one station I realized workers were handling wooden veneer with their bare hands prior to applying epoxy – and the contamination caused by oils in human skin at the assembly stage can cause this kind of product to delaminate.
I told the factory owner and he made a good show of telling off the workers, who immediately put on the nitrile gloves that had been sitting nearby in a box. Not five minutes later, the owner handed me a part-finished product to show me – with his bare hands.
What I suspected at that moment was confirmed when we entered the conference room for the debriefing session. Management had no idea what quality on their factory floor was supposed to look like. Indeed, management equated process quality control with overproducing and hoping enough product was fit for purpose, as they told me they made sure to “pick out the bad ones at the end before shipping to the customer”.
Proper quality control means ensuring each step not only isn’t pushing bad parts to the next stage (a total waste of resources, time and money) but also that the reasons for failure are investigated and as far as possible, eliminated. I explained this, but it became clear that structural issues at the company were deeply embedded and couldn’t be solved with a quick summary of lean manufacturing principles. Workers on the floor were being paid by the piece and so they had no incentive to prevent bad work moving on to the next stage. I also learned that the previous factory manager – who did have a quality background – had been let go. From that moment on it seemed that the company had lost the recipe.
The solution clearly wasn’t to exit immediately; the supply risk was too high. My recommendation was two-fold: to first develop an already-known alternative source to supplement and eventually potentially replace the existing supply, while second attempting to salvage the existing supplier by managing the relationship as diligently as possible through weekly status calls, co-development of workbench instructions, shared data logging and monitoring process improvement.
The long-term indicator would be the ongoing cost of quality. If the supplier fixed it, there would be no need to leave. If they didn't, the backup would be ready.
Sometimes you can't fire a supplier on the spot. But you can decide, clearly and deliberately, that the relationship has a limited future and start building accordingly.