PART 1. Quality Assurance in Outsourced Manufacturing

Updated: Jun 19, 2020


A single faulty component installed during final assembly is all it takes. One flawed part is grounds to have an entire product line recalled and scrapped. The recent Fiat Chrysler recall comes to mind, as does the infamous 6.5 million Toyota vehicle recall disaster.

In 2018, Toyota made an average of 19,900 cars a day. According to Toyota, some 30,000 parts come together to create one automobile. Imagine the logistical difficulties of managing all 30,000 of these parts: procuring and managing the suppliers, moving parts along the supply chain, ensuring punctual deliveries, and bringing them together for final assembly, all while making sure that each of these 30,000 components are flawless, quality units.

Obviously, inspections at the micro- or floor-level can only be so effective when it comes to hundreds of millions of parts a day. We advocate a bigger-picture examination of the manufacturing process, one that targets the root causes of flawed parts production.

In our experience, there are three main variables pertaining to quality control: Unauthorized subcontracting, Inability to control cycle times, Lack of preventative maintenance regulation.

Unauthorized Subcontracting

Unauthorized subcontracting was a major problem for one of our clients. The client, a billion-dollar OEM, revealed that its contract manufacturers were subcontracting their production to lower-tier suppliers, all without its knowledge or approval.

The client was understandably wary. These subcontractors were unknowns, and the OEM had little visibility over the scope of their production and internal processes.

Though the OEM asked to be informed every time their suppliers subcontracted production, our client had no mechanisms to vigorously manage or enforce this demand.

Cycle Time Control

Cycle time, the time it takes for a manufacturing mold to create one set of units, is used to gauge efficiency and sustainability. A “designed cycle time” is a mold’s most optimal and sustainable rate of production. As such, the larger the variance between the designed and actual cycle times, the greater the likelihood that problems will manifest during production.

According to clients, some suppliers had a deliberate tendency to, despite several warnings, operate at drastically low cycle times. The logic behind this practice falls in line with suppliers’ interests -- save time and overall costs by completing production as fast as possible.

What suppliers gain in reduced costs and saved time is what OEMs lose in quality control. Products created with lower-than-designed cycle times are more likely to have flaws. Low cycle times in the case of a plastics injection mold, for example, may not be enough to adequately cool the plastic, creating damaged goods. To prevent this from happening, OEMs need to keep track of their suppliers’ cycle times and keep them accountable.

Poor Preventative Maintenance

Like any machine, manufacturing molds require regular upkeep and maintenance to perform at optimal capacity. A mold may create 50,000 flawless parts, but it cannot be expected to make another 50,000 of the exact same quality without some kind of maintenance. As such, rigorous preventative maintenance is required to manufacture quality products.

In reality, however, suppliers often eschew regular preventative maintenance in favor of constant, steady production. Of course, this is not to say that all suppliers are complacent and opportunistic.

The problem is that even if suppliers claim to have performed maintenance, there is no way for OEMs to confirm it. There are no corroborative alerts or reports short of those submitted by the suppliers themselves, should they even deem necessary to submit any.

What's the Solution?

A common theme running through the problems we just described is accountability. If OEMs can keep their suppliers completely accountable for their actions, it would go a long way in solving these issues. Short of being actually physically present in their suppliers’ facilities, OEMs can achieve this sort of accountability through hard data.

Yet the fact remains that in the 21st century, OEMs have by and large yet to come up with tooling data-gathering systems that are automated and interconnected.

High-management officials may already be thinking of the logistics of such a system, and of the specific metrics and their applications, but so far, no concrete solutions have been unleashed upon the world.

Read part two of this article, where we introduce just such a solution. Learn about how it uses tooling data to create quality-related KPIs.

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