When a Low cost Suppliers Become Expensive - Industrial Metallurgists

When a Low cost Suppliers Become Expensive

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This article outlines an eight-step process to help you identify and repair the root cause of problems that arise when working with suppliers.

Low cost Suppliers Become Expensive when you do not consider the hidden costs when choosing your suppliers. Harvard has an interesting take on this worth reading as well.

I have consulted with manufacturers in many industries. Regardless of the products being produced, they all face the same general challenges and frustrations about product development and manufacturing.  Each of them is concerned about the following questions that impact their profitability:

1.    How can we reduce the time it takes to develop new product?
2.    How can we reduce the costs to make our products?
3.    How can we improve product quality?

With this in mind, let's look at the following all-too-common scenario with a new, low-cost supplier:

A manufacturer decides to have a component of his product manufactured by a new lower-cost supplier.  The manufacturer receives prototypes from the new supplier and proceeds to build the product using the prototypes.  He performs some tests on the product and decides to change to the new, lower-cost component.  Unfortunately, quality problems start to appear along the way.  For example

The ripple effects of these problems are:

  1. The product launch is delayed.
  2. The production line is shut down or limps along while the quality assurance staff sorts through batches of components looking for acceptable samples.

For both situations, the manufacturer’s engineers must drop their other projects and fix the new problem quickly, before it becomes too costly.  Meetings, analyses, tests and overtime follow in rapid succession while other projects are delayed.

What follows is a discussion of the steps to take to identify the root cause of the problem and fix it.  The strategy is based upon the understanding that the shape, dimensions, properties, and performance of a component depends on its materials and the response of the materials to the component fabrication processes.  The same concepts can be applied to a sub-assembly and the formation of the joints (welded, soldered, brazed, adhesive) between the sub-assembly’s components.

Fixing the Problem

A component will not perform as required or will have poor reliability due to one or both of the following reasons:

In some cases, problems with shape, dimensions, or cosmetic appearance are related to a problem with the materials.

Identifying the root cause of a quality problem requires analysis of the component and its materials in order to obtain the information needed to quickly focus on the potential root causes of the problem.  Without this information engineering teams end up guessing at the possible causes, and their effort is usually not productive.

The following eight-step approach should be used to determine the root cause of the problem so that it can be quickly corrected:

1.  Gather all known requirements for the component. These include the component’s shape and dimensions, its materials, performance requirements, and reliability requirements.  Reliability requirements refer to the use conditions to which the component will be exposed during its use and the allowable performance degradation after exposure to the use conditions.

2.  Get samples of the component for analysis of the component and its materials. Samples of both good and bad samples should be obtained. The analysis data from the good samples will be used as a benchmark against which the data from the bad samples can be compared.  In addition to analyzing the bad samples, it is also helpful to evaluate good samples to verify that the materials do indeed satisfy their requirements.  Sometimes, something works even though it doesn’t meet its specifications.  This can make problem solving very difficult if it is not known what the supplier was doing right in the first place.

3.  Gather information about the manufacturing processes that were used to make the component. Find out the process steps and process conditions.  This information is important to help understand the results of the analyses discussed in the next step.

4.  Identify the analyses that need to be performed. Analysis of the shape, dimensions, and cosmetic appearance is fairly straightforward.  Analysis of the materials that comprise the component can include analysis of a) composition, b) microscopic structures, c) properties, and d) defects in the material.  The specific analyses to perform depend on the component’s design requirements and the types of materials that make up the component.  Work with the lab analyst to get her input about the analyses that should be performed.  This will require providing as much information about the problem as possible to the analyst.

5.  Perform the analyses.

6.  Review the analysis results and identify possible root causes of the problem. The root cause can be related to the materials used to make the component, an error by the operator on the component production line, the manufacturing equipment, or the manufacturing steps or process parameters used to fabricate the component.  The data from the analysis should help focus on a few potential root causes.  Sometimes, the root cause is obvious.  In other cases, some work is required to verify a specific root cause for a particular problem.

7.  Provide feedback to the supplier. The supplier may need help figuring out what to do to control or change the manufacturing processes in order to produce a component that meets all of its requirements.  The materials analysis information will help the supplier understand what is required.  After the supplier has made the necessary changes get new samples of the component and have them analyzed to verify that the problem was fixed.

8.  Update the component's specifications. A potential root cause is that the specifications for the component did not have enough detail, resulting in a component that met the specifications, but did not work as required.  If this was the case, then the specifications must be updated to include the missing shape, dimensional, cosmetic, and/or materials requirements.

Learn more about the component design process and supplier selection on our YouTube channel

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