Yesterday we had a meeting with one of our bar stock suppliers.

This supplier is a distributor, not a mill.
We had them in because we have been receiving a significant amount of material that does not meet the ASTM spec that we specify in our PO and that they (and the mill) agree to.

It came out in the meeting that one of their quality objectives is to minimize returns. And this objective applies to sales and warehousing. They get penalized if they go over a certain limit. And they are upset because we have had a lot of returns in 2007.
Well - tough. The standard is the standard and you agreed to that.

Anyway - I see this "objective" as a problem for me, the customer. To me this says that the sales group is incentivized to talk their customers in to not returning out of spec product. They are NOT incentivized to do a real root cause and go back to the mill or their handling processes.
In fact, the tact they've taken is that they can resell the stuff we return to another customer, therefore it's not defective and they refuse answer the SCAR with a real corrective action.

Am I being petty or is this just wrong?

Yesterday we had a meeting with one of our bar stock suppliers.

This supplier is a distributor, not a mill.
We had them in because we have been receiving a significant amount of material that does not meet the ASTM spec that we specify in our PO and that they (and the mill) agree to.

It came out in the meeting that one of their quality objectives is to minimize returns. And this objective applies to sales and warehousing. They get penalized if they go over a certain limit. And they are upset because we have had a lot of returns in 2007.
Well - tough. The standard is the standard and you agreed to that.

Anyway - I see this "objective" as a problem for me, the customer. To me this says that the sales group is incentivized to talk their customers in to not returning out of spec product. They are NOT incentivized to do a real root cause and go back to the mill or their handling processes.
In fact, the tact they've taken is that they can resell the stuff we return to another customer, therefore it's not defective and they refuse answer the SCAR with a real corrective action.

Am I being petty or is this just wrong?

If they're knowingly misrepresenting their products, it's not just wrong, it's criminally wrong.

I think they have the right goal, but the wrong motivation. There's nothing wrong with wanting to minimize returns-seems like a fairly good goal. However, to get upset with customers for returning unacceptable product is not the way to go about it. Keep the goal, but they need to focus on shipping acceptable product in the first place. Instead of 'busting your chops', they should be at the mill figuring out what is going on. I'm sure you are not their only customer. What kind of product are the other customers receiving, in addition to you?

It's no different that one unit of a large company exercising Lean practices. Oh sure, their numbers look good, but what about upstream and downstream?? It all has to work together.

Then again, I am horribly old-fashioned, in that the customer is right. I know that's idealistic, but hey! I have a vendor right now that I have called twice and sent an e-mail to; I have money to sign a contract to get them to come and do work. I cannot get them to follow-up. I'm sure somehow it's my fault.

If the distributor has no control over the mill, they should be willing to set more realistic goals.

Yesterday we had a meeting with one of our bar stock suppliers.

This supplier is a distributor, not a mill.
We had them in because we have been receiving a significant amount of material that does not meet the ASTM spec that we specify in our PO and that they (and the mill) agree to.

It came out in the meeting that one of their quality objectives is to minimize returns. And this objective applies to sales and warehousing. They get penalized if they go over a certain limit. And they are upset because we have had a lot of returns in 2007.
Well - tough. The standard is the standard and you agreed to that.

Anyway - I see this "objective" as a problem for me, the customer. To me this says that the sales group is incentivized to talk their customers in to not returning out of spec product. They are NOT incentivized to do a real root cause and go back to the mill or their handling processes.
In fact, the tact they've taken is that they can resell the stuff we return to another customer, therefore it's not defective and they refuse answer the SCAR with a real corrective action.

Am I being petty or is this just wrong?

The objective is wrong as it is being implemented. The sales group could be minimizing returns by making sure they correctly understand and transmit customer specs to the warehouse and shipping folks, thereby reducing the need for returns. But no. That is not how they are doing it. I think the problem with this supplier is much deeper than this objective, and goes to their values and management philosophy. I would find another bar stock distributor. Lord knows there are enough of them around. There are good ones, but many are fairly sleazy. I had one that shipped me 5 million pounds of a particular lot of certified alloy stock, when the mill cert said that lot was only 750,000 lbs total.


Geoff Withnell

The objective is wrong as it is being implemented. The sales group could be minimizing returns by making sure they correctly understand and transmit customer specs to the warehouse and shipping folks, thereby reducing the need for returns. But no. That is not how they are doing it. I think the problem with this supplier is much deeper than this objective, and goes to their values and management philosophy. I would find another bar stock distributor. Lord knows there are enough of them around. There are good ones, but many are fairly sleazy. I had one that shipped me 5 million pounds of a particular lot of certified alloy stock, when the mill cert said that lot was only 750,000 lbs total.


Geoff Withnell

We have other suppliers. This is our #2. Our #1 is being much more cooperative. But this ain't a small company. I wonder if it's a David and Goliath thing - my company being David.

To all - Yes, it's definately in the implementation. Can't argue with an objective to reduce returns.
But when a blanket corporate objective penalizes one group for something they don't control it seems it would cause this kind of issue.

I think they have the right goal, but the wrong motivation. There's nothing wrong with wanting to minimize returns-seems like a fairly good goal.

This is a fairly common trap in goal-setting. Minimizing returns is not a good objective, for the reasons evident here. Preventing the causes of returns should be the goal, which, if accomplished, will minimize returns without giving anyone incentive to prevaricate.

This is a fairly common trap in goal-setting. Minimizing returns is not a good objective, for the reasons evident here. Preventing the causes of returns should be the goal, which, if accomplished, will minimize returns without giving anyone incentive to prevaricate.

:applause: Jim, you have put your finger on it (be sure to wash your hands!:D). Number of returns should be the METRIC. The objective is correct shipments.

Geoff Withnell

I am really glad that this thread was created. To me, it exemplifies, how a misinterpreted quality objective might affect customers. The metal distributor needs to do a much better job at 6.2.2d).

But, I am also very happy because it makes a point against those who think that ANY business objective IS a quality objective. Similarly to the scenario described herein, there are many other business objectives that could be detrimental to quality and customer satisfaction. Thus, not all objectives are meant to be quality objectives.
In fact, the tact they've taken is that they can resell the stuff we return to another customer, therefore it's not defective and they refuse answer the SCAR with a real corrective action.That being the case, you know that supplier is unethical (at least). Keeping doing business with this type of supplier is a problem in itself, because you have to be extra vigilant with what they send you. I know that the metal distribution business is a seller's market right now, but the moment you lose confidence in a supplier is the moment you need to find an alternative source.

An ancient Burmese saying: Trust is like virginity; once you lose it, you can't get it back....:lol:

I am really glad that this thread was created. To me, it exemplifies, how a misinterpreted quality objective might affect customers. The metal distributor needs to do a much better job at 6.2.2d).

But, I am also very happy because it makes a point against those who think that ANY business objective IS a quality objective. Similarly to the scenario described herein, there are many other business objectives that could be detrimental to quality and customer satisfaction. Thus, not all objectives are meant to be quality objectives.

I agree with Sidney. Successful/respected organizations ensure that business and quality objectives are aligned for the good of all its stakeholders.

Stijloor.