Quality doesn’t cost. It pays. Here’s why…

BusinessDictionary.com defines the price of non-quality as the “aggregate of time, money, and opportunity cost losses resulting from doing things wrong.” You can get a fairly good idea of what that cost is if you consider a typical purchasing scenario in our industry:

A company solicits bids from a number of shops that provide pretty good pricing and pretty good service. Ultimately, who’s awarded the job? It’s the shop that provides the lowest reasonable price. There may be some question as to whether the part is going to come in on time, or, for that matter, if the part is going to be manufactured just right. But, that’s why the company always keeps safety stock in inventory, their first added cost of non-quality.

The cost of non-quality continues throughout the delivery process. The parts eventually come in and go to Inspection (inspection cost). Inspection is busy so it takes a few days (delay cost) to report back that there’s a discrepancy. A meeting is called with the design engineer, purchasing agent, quality manager, and the inspector to see if the parts should be sent back to the supplier, used as is or reworked in-house (material review board and dispositioning costs). There are other “costly” issues to consider as well, such as the adverse impact on production and delivery, whether and how much to compromise tolerances and their impact on performance, whether to screen the entire lot, whether to charge the vendor or absorb the costs, possible warranty and liability issues, and so on.

I trust you’re starting to get the picture, and understand that there is a price to be paid for non-quality parts. And it could be a big price.

Now, let me introduce you to a smarter customer: The firm takes the time and effort to screen multiple companies that have very robust quality systems in place, coupled with very robust manufacturing processes, processes that are designed to make 100% good parts 100% of the time—whether they’re inspected or not. Why? “Because if you never make a bad piece, you never ship a bad piece.”

If you want to avoid the costs associated with non-quality, here are some questions to ask a potential precision parts supplier:

Do they learn and understand the function of the part in the product? Suppliers that do so should be capable of tailoring the manufacturing process to provide the highest level of performance, while at the same time minimizing costs.
Do they have formal Process Planning before the job is released? This ensures that the manufacturing process is capable of producing 100% good parts 100% of the time.
Do they issue detailed, written Work Instructions and Control Plans to the shop floor? This type of diligent attention to detail also helps ensure that the parts will be produced properly the first time and every time, and minimizes variations from lot to lot.
Are they ISO 9001:2008 certified? It really is a moot point for a manufacturer to boast that it’s ISO 9001 compliant. That’s because the claim has not been validated by a third party. So make sure your vendor is ISO 9001 certified.
Are they AS9100 certified? This is an aerospace standard that includes everything in ISO 9001, and goes well beyond it. If your supplier has AS9100 certifi cation, you can feel confi dent they have the highest levels of systems and controls that make sure nothing goes wrong that could have an adverse impact on the performance of your parts.
Do they practice “lean manufacturing?” Also called “lean production,” lean manufacturing is an advanced process management philosophy. It considers the expenditure of resources for any goal other than the creation of value for the customer to be wasteful. Practitioners of “lean” typically embrace Six Sigma processes whereby 99.99966% of the products manufactured are free of defects, compared with traditional practices that rely on inspection to avoid shipping defective parts.
Do they utilize Statistical Process Control (SPC)? When parts are produced using SPC with a process capability index (CPk) greater than 1.33, the chances of producing and shipping a bad part are negligible. The result? Consistently good parts that ship “dock to stock.” In addition, parts produced with a CPk greater than 1.33 can generally have their tolerances relaxed up to 40% which may also mean lower costs. And, if the vendor is able to ship SPC data with the parts, the need for incoming inspection is practically eliminated.
Is their facility clean and secure? Better still, insist on a walk-through to make sure it’s not just clean, but neat and well-organized. Check out the equipment: is it state-of-the-art? Just as importantly is the facility secure from outsiders in order to protect your intellectual property? Are swipe cards being used? Is the supplier NADCAP approved? Are all points of entry locked?

When your supplier answers “yes” to all the above, they are no doubt capable of shipping quality parts on time all the time. If any of their answers are “no,” consider the possible additional costs of doing business with this shop: Safety stock, inventory that runs the risk of becoming obsolete, incoming inspection costs, material review board costs, the disposing of discrepant material, production delays, warranty repairs, and late shipments. But perhaps the most dangerous cost of all? Dissatisfi ed customers.

Submit a Comment

Your email address will not be published. Required fields are marked *