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How do reduce the risk of suppliers having similar problems?
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  Post Number #1  
Old 8th February 2018, 03:43 PM
outdoorsNW

 
 
Total Posts: 36
Please Help! How do reduce the risk of suppliers having similar problems?

I donít have a lot of experience with supplier management. I was hired for my experience in other areas.

In the last few months I have three suppliers, all ISO9001, where poor document control was a major cause of nonconforming product (I suspect not the root cause). Each individual supplier had a SCAR issued.

We are a high mix low volume shop, although the problems occurred on parts with 2 to 8 orders in the last year. As part of the SCAR process, I verified that my company sent each supplier the correct documentation.

In each case, personnel turnover was a significant factor.All are smaller companies with around 12-35 employees. I can provide a lot more details if needed.

I am concerned that other suppliers may have the same weakness and the strong job market will cause more staff turnover with suppliers. How do I head off even more suppliers with the same problem?

I donít think I can justify the time and travel budget needed to visit 18-22 suppliers.
Do I send suppliers a letter and hope suppliers act, although I bet most wonít?
Do I try to arrange conference calls with the suppliers?
Do I send suppliers a survey (hopefully as part of our annual paperwork required to do business with us package) and follow up on weak answers?
Is visiting suppliers the only option likely to have much impact?
Do I do something else?

Details:
Supplier A has 25-35 employees and did a great job until the company lost a key manager a year ago. Since then quality is poor. Recently they failed to use a drawing that was sent with the PO email. Nor did they use an older version of the drawing. The SCAR blamed doc control and order intake not handling the drawing correctly. For a later order of the same part they used the correct drawing but failed to use our packaging instructions and many parts arrived damaged. The packaging instructions were not sent with the PO but had been sent in the past. Follow up on a SCAR revealed the operations manager position is now vacant due to the managerís poor performance on matters such as this.

Supplier A has almost lost our business. They got another order because we do not have time to find another supplier or bring the operation in house. I have reservations, but others selected this path. I have a clear commitment if supplier A screws up in the near future, they will be replaced.

Supplier B has 20-30 employees with new a Quality Manager, General Manager, and possibly others. They are selected by our end customer, so replacement is more difficult. The problems are mostly with supplier Bís subcontractor C, but supplier B is not rejecting subcontractor Cís poor work. Subcontractor C is being asked to work with a poor combination of paint materials, which may be fixed once regulatory requirements are fulfilled. I discovered supplier Bís personnel were not aware of the customerís quality standard and inspections were being conducted using a less stringent standard common in the industry (no safety risk).

Yesterday I found out the relatively new quality manager at supplier B is leaving, reportedly moving closer to family. So I may lose a lot of the progress so far.

Supplier D has around a dozen people. They have also had quality manager turnover. They had problems with half a dozen parts on one PO where they failed to follow the print instructions for part markings. Even though the parts are for the same end customer, the required part marking varied and someone did not correctly match the requirements to the parts. I donít know if supplier D is required by our end customer.


Tom

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  Post Number #2  
Old 8th February 2018, 04:45 PM
Ninja's Avatar
Ninja

 
 
Total Posts: 1,031
Re: How do reduce the risk of suppliers having similar problems?

Quote:
In Reply to Parent Post by outdoorsNW View Post

I donít think I can justify the time and travel budget needed to visit 18-22 suppliers.
Do I send suppliers a letter and hope suppliers act, although I bet most wonít?
Do I try to arrange conference calls with the suppliers?
Do I send suppliers a survey (hopefully as part of our annual paperwork required to do business with us package) and follow up on weak answers?
Is visiting suppliers the only option likely to have much impact?
Do I do something else?
To your bullet points in order:

1. No. A letter is easy to recycle...and who uses US mail now anyway? Hope is not a plan.

2. Not a conference call...a one on one call with someone on their side who can affect change/improvement. May take some other calls to figure out who this is, but the nitty gritty of how to fix it needs to be with a person, not a committee.

3. A survey...no chance. May as well do nothing.

4. Visiting is good, but not the only option. Cost benefit needs to run here...if you are low volume to them, a visit may be seen as you being more trouble than you're worth.

5. Get on the phone with each of them and find out what's going on...not in what happened, but in how its not going to happen again.
"We didn't have that person to stop it going wrong" may be the truth...what are they doing to stop it going wrong for your next order?

- One on one...preferrably by video so you're face to face...is how you get that kind of change as a small buyer. You're talking with a person able to do something (arrange that first), and laying out how they aren't meeting your needs...and ASKING how you can help them be your good supplier.
Asking, Asking, Asking...small buyers can't demand...

Your approach is to HELP, not to hold accountable...that's done financially...
How can you help them, in their current circumstance, to be the supplier you need.

As a small buyer, vendor visits should be a rarity. Vendor visits are costly to the vendor, especially to a small shop...don't make a pest of yourself. In my experience, small shops are good vendors to good customers, not to pests.

{And separately...go find replacement suppliers as a backup plan just in case}

I'm a small shop, and buy from many small shops. For some, I show up and pick up the product, and pay on the spot (no packing for shipment, no net30dys) Funny how they treat me like a big customer...

HTH
Thank You to Ninja for your informative Post and/or Attachment!
  Post Number #3  
Old 8th February 2018, 05:31 PM
John Broomfield's Avatar
John Broomfield

 
 
Total Posts: 2,622
Yin Yang Re: How do reduce the risk of suppliers having similar problems?

Also:

Invite your colleagues to review and update the supplier selection criteria.

...obviously they are not yet effective.
Thanks to John Broomfield for your informative Post and/or Attachment!
  Post Number #4  
Old 8th February 2018, 05:44 PM
Ninja's Avatar
Ninja

 
 
Total Posts: 1,031
Re: How do reduce the risk of suppliers having similar problems?

John's point is on the mark, of course, but do take some comfort that it isn't just YOUR suppliers...

ISO or not, small suppliers struggle with detailed directions...and all the more so for small customers...

What you're facing is endemic to being a small customer. Get creative, manage personal relationships, and do whatever you can to make your suppliers care about you.
It's a tall order when you're a sporadic or small buyer.
People protect the business they NEED...your only tool if they don't NEED you is to make them WANT you.

When talking with one of their decision makers...work on finding out what they want it a customer...then consider if you can do that and remain profitable.
  Post Number #5  
Old 8th February 2018, 11:42 PM
Golfman25

 
 
Total Posts: 1,430
Re: How do reduce the risk of suppliers having similar problems?

I would take each supplier individually. Don't assume others will have problems. Maybe they will, maybe they won't. A lot will be "it depends."

Prioritize. And go visit who you can. The problem with ISO is it took something that happened regularly - a supplier visit - and outsourced it. You want to see how they handle orders and control plans.

Tackle this thing one problem at a time. Good luck.
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