According to the U.S. Consumer Product Safety Commission, deaths, injuries and property damage from consumer product incidents cost the nation more than $700 billion annually. There are severe costs to the business involved in the recall, in addition to potential costs of civil and criminal penalties.Read news headlines on any given day and thousands of products will have been recalled. Focus on any single item and its cost and dangers become instantly obvious: automobiles, children’s toys, medicines, food products and more. The following example illustrates such a scenario:
Audi North America
Audi North America assumed responsibility for its quality monitoring in 2002. Soon after, failure rate in their 4-cylinder engine exceeded 50 percent. Audi recalled many cars and replaced ignition systems.
Defective circuit boards from an Audi supplier were causing ignition system failures.
Audi was using only one supplier for the circuit board, creating a shortage of replacement units for the recalled vehicles.
Audi began to closely supervise the quality of their circuit board supplier and began working with a second supplier.
For manufacturers, avoiding recalls is imperative in terms of cost and quality. Focusing on quality in manufacturing can ensure that production is effective, cost efficient and defect free. Common challenges in enterprisewide quality management are communication difficulties among facilities, lack of standardization and consistency across plants. This is exacerbated when data and analyses are provided after production and defects have already occurred. Even when recall-specific data have been analyzed and safeguards put in place to prevent further recalls, the damage has already been done. Although recalls may be prevented, relying on consumer feedback after production makes it impossible to support timely, enterprisewide decisions for defect prevention and process improvement.
To address these issues, quality must become an enterprisewide objective throughout the manufacturing process, from the plant floor to the boardroom. Centralized enterprisewide quality management promotes cooperative working relationships and communication within teams and across facilities, and can include suppliers and quality data. Enterprisewide solutions provide standardization across facilities and access to real-time data and information, preventing production delays and providing complete quality records and lot tracing/genealogy. Establishing an infrastructure with quality at its core provides easier execution for all aspects of lean manufacturing.
Once a manufacturer has adopted an enterprisewide solution, tools can be easily leveraged to extend into the supply chain, where focus on quality is equally crucial. Manufacturers are dependant on supplier quality and collaboration, as well as an increasingly complex and diverse supplier network. Companies face pressure to reduce their supplier base at the same time they need to strengthen existing supplier relationships.
By utilizing modern technology, manufacturers can reach well beyond the enterprise and into the supply chain when quality standards are well defined and upheld. This eliminates poor quality components before reaching the manufacturer. Established effectively, centralized supply chain quality management can promote real-time collaboration between manufacturers and suppliers, while instantly providing information concerning the global supplier base. Manufacturers can identify and support best-of-breed suppliers while helping them meet stringent quality expectations.
The benefits of focusing on quality as a corporate goal are numerous. Focusing supply-chain quality management across a manufacturer’s divisions and throughout a supplier base can dramatically improve global quality performance. An enterprisewide quality solution will help manufacturers produce superior products at lower costs while improving plant-to-plant consistency in manufacturing methods and results. Second, the ability to assess supplier quality in real-time lessens dependence on oversight and auditing, freeing up quality resources to focus on strategic improvement initiatives. Finaly, deploying quality systems to the suppler base allows for easy supplier-to-supplier comparisons, resulting in more accurate vendor evaluations that generate quality information for best vendor selection.
Having quality strategy plays an integral role in meeting goals and achieving long-term business growth, while providing the flexibility to meet customers’ requirements. By offering a supply chain quality solution to vendors, companies are able to extend their quality strategies on a large scale and quickly pinpoint supplier quality problems before defective products are shipped. In addition, real-time data are shared and analyzed in a secure and timely manner, enabling critical manufacturing and supply chain decisions. Finally, by allowing suppliers and manufacturers to share quality-related data in real time, overall costs and efficiencies can be dramatically enhanced across the value chain. By doing so, the goals of attaining better, less expensive and defect-free products can become a reality, and the dreaded and costly recall can become a thing of the past.
About the auhor
Douglas C. Fair is vice president of statistical applications at InfinityQS International.Fair is the co-author of two books on statistical methods: Innovative Control Charting, Practical SPC Solutions for Today’s Manufacturing Environment (ASQ Quality Press, 1998) and Principles and Methods for Quality Management in Health Care (Aspen Publishing, 2000). Fair is a member of the American Society for Quality.