Our client set up a new transmission plant and grew by over 45% following its inception. At the same time, complaints and quality concerns increased disproportionately. While most of the issues were not reflected in the final product, our client’s production was severely impacted, resulting in production downtime, high inventory levels and costs related to poor quality throughout the value stream. The Supplier Quality Department realized that some major changes were required to regain efficiency and effectiveness. In some areas, a cultural change was needed to collaborate better with other departments.
Together with our client, we defined the three comprehensive project goals:
- Improve the organizational effectiveness of the Supplier Quality Department and the cross-functional communication with process partners.
- Improve Quality of supplied parts in order to reduce the effort of the Supplier Quality organization.
- Reduce the number of claims issued by the client’s production departments by improving the effectiveness of receiving inspection.
Approach and Results
An important element in Supplier Management is the use of robust data. Our client had an enormous treasure trove of data, which was very usable in some aspects, but also incomplete in others. As a result, we supplemented the existing data with a few analyses and evaluations in order to obtain a complete picture of the initial situation. The traditional preparation of a brown paper was also part of our as-is assessment in the first two weeks of the project.
Stop the Bleeding
Having quickly analyzed the initial situation, we were able to define the road map to achieve the project goals:
After identifying the gaps in the information flow, our first focus was to change the data-driven decision-making and communication structure so that the right decisions could be made at the designated points in the organization.
Building on this, with the help of short-term external support, we ensured that the sample checks were adjusted so that quality problems from the supplier network no longer ended up in the company’s own production. The calm thus established within the organization made it possible to tackle the quality problems from the supply chain in a consistent and focused manner.
Based on historical data and identification of core activities, we were able to determine which issues, suppliers, and teams within the Supplier Quality organization were most affected by quality defects and matched these with the key issues that were currently prioritized within the organization. As at many other companies, perceived priorities from factual necessities were often very far apart.
With the newly gained overview of core activities, it was now possible to realign task priorities, competencies and requirements of internal customers (especially manufacturing) and adjust the team structure accordingly.
Dashboards, which were made available to the teams (first manually and later electronically), allowed everyone to reassess their tasks and priorities. This led to an enormous increase in productivity and at the same time to a reduction in stress within the team.
To improve communication with suppliers, all employees in Supplier Quality Assurance were trained in the basics and specifics of the 8D problem-solving method, which is standard in the automotive industry. In addition to 8D reporting requirements, the methodology of solving problems was emphasized, with the goal of avoiding repeat defects and consistently eliminating the root causes of supplier issues.
Once the organization was well established and the skills within the team improved, we conducted Supplier Visits together with client employees. The goal here, in addition to rigorous problem resolution, was to coach the SQAs on site: How do I quickly identify the situation at the supplier? How do I deal with missing information? And how do I ensure that the supplier also sets its priority on rigorous defect elimination? Through these questions, the employees were coached and supported by the experienced change2target Implementers.
In the course of the one-year project, it became necessary to resolve many pitfalls and fight resistance. In the end, however, we and our client succeeded in achieving the desired goals and sustainably strengthening the clout of the client’s supplier quality team.