Managing the operations of
any lab, from inspection to metrology, calls for solutions
that will fit the budget and satisfy customers. When customers
request products or lab services that you don’t presently
provide, you must decide how to handle the request. Although
subcontracting the work presents its own challenges, it’s
often the most profitable and efficient solution. With a
planned and properly managed process, subcontracting can
provide the resources to meet your customers’ needs
in an efficient and cost-effective manner. Ongoing communication
with all parties is essential, of course, but the improved
service you can offer your customers increases your value
in their eyes.
The choice between performing all lab operations in-house
or outsourcing some functions requires several interdependent
decisions. Keeping the work under your roof means juggling
schedules and available resources. In addition to personnel
and equipment, efficiency and costs enter the picture. Outsourcing
some of the tasks enables you to provide specialties beyond
your scope without investing in--and periodically maintaining--seldom-used
equipment or hiring and training personnel. But outsourcing
does require an investment of time and research.
Once you decide to outsource, the specifics will depend
on your customers and their needs. If a customer has only
a few items, none of which your lab can handle, you can
usually encourage the customer to deal directly with one
of your qualified subcontractors. (Remember, though, that
your reputation is affected by your recommendations.) If
the customer has quite a few items, and only a few of them
must be sent out, you might suggest handling them all.
All quality programs require that any subcontracted work
meet or exceed the same standards under which you’re
presently working. The final responsibility for meeting
the standards still rests with you, but a good subcontractor
can match those standards and expand the capabilities you
offer your customers. As an example, our associates who
deal mainly in electronics take advantage of our strengths
in mechanical calibration and precision dimensional and
form measurement. By outsourcing those items to us, they’re
able to offer their customers additional services without
incurring the costs.
As with all management duties, communication is the key
to effective outsourcing. Your quality manual will spell
out additional outsourcing requirements that require your
compliance. Most ISO standards require that you disclose
to the customer your intent to subcontract. In addition,
the customer might have policies regarding subcontracting
work, so a review of the purchase order or contract to clarify
these issues is essential.
Always inform customers of your intent to subcontract
before work starts so there are no surprises. At that time,
you may want to give the customer the option of dealing
directly with the subcontractor. Many will choose to have
you take care of the arrangements because it’s more
convenient and usually more cost effective for them to deal
with one vendor.
Specialized gages are quite often given a comprehensive
calibration only by the original manufacturer. Other test
equipment might be beyond the scope of conventional services.
The research and scheduling required to cope with these
problems take time that a manager usually doesn’t
have. In such cases a well-connected subcontractor can save
a customer money.
Qualifying the subcontractor represents one of the largest
time investments, but doing so is critical to the venture’s
success. Lab accreditation and/or certification generally
provide a good indication of the subcontractor’s abilities,
but it’s by no means a guarantee. An effective, ongoing
and open line of communication will be necessary when work
is sent out. A visit to the subcontractor is also valuable
and provides an opportunity to do an on-site audit. You
should bring a checklist of what you’re looking for;
check your quality manual, too, because it will most likely
spell out subcontractor requirements. Click
here for an example checklist.
Some areas to consider include:
The subcontractor’s quality program. This program
is a critical area of concern, and a thorough review of
it involves a significant amount of time. Is the company
registered or compliant to the ISO or ANSI specifications
your program requires? If you don’t already have a
current copy of the company’s quality manual, request
one immediately. It should cover all the major elements,
including written procedures, records, storage and handling,
and complaint programs. Reviewing this manual will tell
you whether the company meets your program requirements.
What do your associates or customers say about the company’s
Documentation the company sends with analyzed products.
The documentation will show if your program requirements
were addressed. A particular area of concern for anyone
dealing with ISO, the Food and Drug Administration or military
programs are the data reports about items received out of
tolerance. This information is critical and must always
be detailed on the certification. Inquire if the company
offers additional services such as long-form certification
showing all data and special requests such as specific data
points. Additional costs might accompany these additional
Attach a cover sheet to the subcontractor’s certificate
so customers can easily find all the standard information
(i.e., manufacturer, model, serial number, etc.). This information
should be located in the same areas as on your standard
certification. During an audit, customers can find the information
here for an examle cover sheet.
Environmental controls. If the subcontractor uses a circular
chart recorder showing temperature and humidity, it’s
a good indication of the company’s environmental controls.
A quick glance will show the range and the fluctuation of
Communication procedures. From the receipt of equipment,
to in-process updates, to the final billing--how does the
subcontractor handle its communication flow? How long are
records retained, and what information is available? This
can be instrumental when a customer undergoes an audit.
Inspect the equipment. Equipment can be visually assessed
as to its condition and status; look closely at the calibration
Evaluate personnel. Observe the way they perform their work
and review their qualifications and written training records.
If the subcontractor is registered or accredited to any
of the current programs--such as ISO 9002 or A2LA--it’s
important to consider the area of accreditation. The company’s
actual scope might be limited to a certain area such as
electronic calibration, or to a single department or location.
The company might offer other services, products or locations
that aren’t included in their accreditation--which
is common--but you’ll want to determine if this complies
with the situation at hand.
For example, if a subcontractor is A2LA-certified, does
that mean it’s qualified for your gage block calibration
needs? A closer look at the scope of accreditation could
show that the company is certified for other areas that
don’t include dimensional gages.
The calibration (e.g., gage blocks, Fluke 5700 Calibrator,
etc.) standards the subcontractor uses must be traceable
and should maintain an accuracy greater than what’s
being verified. Most programs require a minimum ratio of
4:1 (i.e., the accuracy of the standard is four times better
than the unit under test). If the ratio is less than 4:1,
find out how the subcontractor will notify you. Some programs
require that labs report the ratio or measurement uncertainty
on the certification.
The purpose of this ratio is to ensure that the error
of the standards will have a minimum effect on the overall
values reported. In some instances (such as when measuring
gage blocks), achieving a 4:1 ratio will be very difficult,
and the subcontractor should address the issue. This is
a good item to ask about during the audit. Also inquire
about the company’s intervals of calibration and what
procedure it follows when its standards have been found
to be out of tolerance.
One feature that separates better labs from the rest is
their timeliness in contacting you regarding an issue. From
your customer’s standpoint, you are ultimately responsible
for how long it takes an item to be returned. How will the
outsourced lab handle the situation when its standards are
undergoing recertification? Will they call immediately or
leave you waiting?
Unfortunately, my company experienced the latter situation
with a major manufacturer that was registered to an ISO
standard and also lab-accredited. We’d sent our primary
gage block set to the original manufacturer for recertification.
The company didn’t tell us it was shifting its metrology
efforts to a Midwestern facility, which was undergoing its
registration audit. New-facility problems followed, but
we remained uninformed for more than a month. Our backlog
grew at the same rate as our frustration. A simple phone
call from them would have given us choices, but our phone
messages remained unanswered. A new supplier was the final
Outsourcing costs are another area to consider. The initial
fee is the most obvious, but it’s only one of many
costs; shipping to and from the subcontractor should also
be considered, as should the cost of coordination.
From a time standpoint, it’s more efficient to deal
with a few select subcontractors. The time spent tracking
items and obtaining status updates can skyrocket as the
number of subcontractors increase.
From an efficiency standpoint, it’s important to
anticipate a subcontractor’s need for manuals or equipment
data on items that are specialized, from an uncommon manufacturer,
or if limitations exist on how that equipment is used.
Along with the cost of determining the subcontractor’s
initial qualification are the costs incurred during the
necessary annual or periodic requalifications. Does the
subcontractor have a list of what services it offers, or
will you have to call the company each time? This process
can be time-consuming and incur “soft” costs.
A cost-related benefit of outsourcing, however, is that
reputable subcontractors will stand behind their work, should
problems arise, thus eliminating in-house rework costs.
There is no doubt that subcontracting involves a good
relationship and open communication with your customers.
But when well-planned and -executed, it will provide extra
value to your clients, meeting their needs in an efficient
and cost-efficient and cost-effective manner and making
you an invaluable resource.
Craig Howell is president of C.P.M. Labs (www.cpmlabs.com),
which was formed in 1982 in response to a local need
for a full-service calibration lab and ultra-precision measuring
facility. Located in Rancho Cordova, California, the company’s
philosophy and mission is to provide accurate, traceable
service that is affordable.