Anyone who is serious about improving manufacturing quality knows the importance of pushing quality initiatives up through the supply chain to the source. Receiving inspections have been the traditional way of doing quality. Our general philosophy is to move more of the quality checks and verifications to the source. This is a trend that our customers have been moving toward and it offers numerous cost benefits, including:
- Reductions in receiving inspection inventory. We have had customers report 75 to 90 percent reductions in receiving inspections because First Article Inspections (FAI) were performed prior to shipping. This big carrying cost can be eliminated by doing inspections at the source, where potential nonconformances can be handled prior to shipping the product.
- Catching the problem at the source as opposed to during manufacturing. We have had customers report that it is 10 times less expensive to find problems before they move too far down the supply chain, where errors can become magnified through unnecessary waste and consumption of critical resources. The savings are not just limited to a reduction of paperwork costs. Savings also include the expensive rework costs that are incurred when you catch a problem during manufacturing as opposed to at the supplier.
- Significant improvement in audit performance. Outstanding audit performance translates to big cost savings when you are able to achieve audits with zero to two findings compared to 10 or 20 findings in prior audits. The more corrective actions that must be performed may lead to broken deadlines, budget overruns and unhappy customers.
More intangible and harder to quantify savings can be recognized by an open two-way communication portal with suppliers. By using a software platform like Solumina, it facilitates and formalizes communication, replacing the many phone calls and emails that can’t be traced throughout the supplier portal.
For more details about improving your supply chain, watch this video on how to streamline your supply chain.
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