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When You Neglect Operations February 1, 2016

Posted by Tim Rodgers in Management & leadership, Operations, Process engineering, Quality.
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A few months ago I heard that one of the companies I used to work for decided to shut down a business unit. I wasn’t surprised, but some people might have been. They had a diversified product line and a hard-working sales force that maintained a high level of demand. Large customers were excited about the new products under development. The supply chain was well-established. What went wrong?

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The Battle Over Discrepant Material January 19, 2016

Posted by Tim Rodgers in Quality, Supply chain.
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Quality issues have been on my mind a lot lately, specifically some of the more frustrating things that I’ve had to deal with during my career as a quality manager. In my last job my team was responsible for managing the discrepant material review (DMR) process for our US-based factory.

For those who are unfamiliar, the DMR process is how most factories deal with raw materials or other inputs that have been identified as possibly defective and unsuitable for use. Incoming materials that don’t pass visual inspection or other testing are supposed to be sequestered so they can’t go into production. Later, the DMR process is used to determine what to do with that material. The choices are usually:

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“Dare to Know” Reliability Engineering Podcasts January 12, 2015

Posted by Tim Rodgers in Process engineering, Product design, Quality.
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Over the last several months I’ve been working on a project with my friend and former colleague Fred Schenkelberg on a series of podcasts with thought leaders in the world of reliability engineering. Reliability and quality professionals have a tough job, but they’re not alone. There’s a large and growing community of experienced engineers, managers, authors, and other experts who are available to share their practical expertise and insights. Our Dare to Know interviews provide the opportunity to hear from these leaders and learn about the latest developments in analysis techniques, reliability standards, and business processes.

You can access the interviews at Fred’s Accendo Reliability web site: http://www.fmsreliability.com/accendo/dare-to-know/

Let me know what you think, or if you’re interested in joining us for a future interview.

Check Out “Document Center” December 11, 2014

Posted by Tim Rodgers in Quality, Supply chain.
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I don’t typically use this forum for recommendations, but here’s something I can support enthusiastically. My friends at Document Center manage and sell a comprehensive collection of industry and government standards from around the world. Customers who want to clearly express their requirements and quality expectations should be referencing standards in their communications with suppliers. Standards are developed through the cooperative efforts of experienced teams with deep understanding of their respective industries. While your specific product may have unique requirements, it’s important to use standards as a starting point rather than creating something from scratch. Your suppliers should already be familiar with them, and you should be as well.

If you’re looking for standards that are appropriate for your industry, or the most recent version of a standard that you’re currently using, go to Document Center. While you’re there, take a look at the guest blog that I contributed to the site last month at: Does Anyone In China Pay Attention to Standards?.

Why Should a Supplier Work Harder For You? September 22, 2014

Posted by Tim Rodgers in International management, Management & leadership, Quality, Supply chain.
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A recent LinkedIn discussion addressed the question of the best strategy for dealing with poor supplier performance. A lot of the respondents seemed to advocate a punitive approach, either threatening the loss of future business if performance doesn’t improve, or combing through the terms & conditions in the contract for enforcement language. I’ve always thought that there’s a lot of similarity between managing suppliers and managing subordinates, and I wonder if some of these same people threaten their teams with punitive actions when individual performance doesn’t meet expectations.

I’m not a psychologist, but I’ve always been suspicious about the long-term effectiveness of threats. A supplier who works to avoid negative consequences may achieve a minimum level of performance, but probably not much more than that. If you expect your supplier to represent your interests when you’re not actively observing their performance, you have to provide a reason for them to do so. What’s in it for them? An ongoing relationship with future business? That assumes that the supplier actually wants or values your business, which is not a given, and that you are sincerely prepared to switch suppliers if you don’t get the performance you expect.

Two important questions to consider before threatening to switch suppliers are: (1) What is the switching cost, including the risk to current production? and (2) Is switching suppliers really going to lead to higher performance? Regarding the latter question, there’s an assumption that the supplier is the cause of the poor performance. Before changing suppliers you need to be confident that the same performance problems won’t be repeated elsewhere.

A supplier is more likely to behave as a partner if they get something more out of the relationship than money for services rendered. So, what do suppliers want? Here are some examples:

  • Large, well-known customers that they can use in their advertising to attract new customers. This is especially valuable for smaller suppliers that are looking for revenue growth.
  • Technical capabilities that can be leveraged to other customers. If the customer’s requirements drive the supplier to develop new technology, or higher levels of quality or throughput, then the supplier will be able to attract other customers.
  • Entry into new markets. Suppliers that focus on specific markets (e.g., consumer electronics, semiconductors, automotive, aerospace) are at risk due to economic and demand cycles. A diversified portfolio of customers and markets provides more stability.
  • Predictable demand for better asset utilization. Suppliers are just like any other business: they like being able to confidently plan into the future. This is so important that some suppliers are willing to give a discount if the customer is willing to commit to use a fixed level of their capacity over a period of time.

Most suppliers operate with very small profit margins, and if they are in a position to choose their customers, they have to consider the cost to service each customer. If you can’t give them a reason to value your business, then you shouldn’t be surprised or disappointed if they don’t go the extra mile.

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