Manage Your Suppliers’ Internal Defects

Manage Your Suppliers’ Internal Defects
August 17, 2020 Operational Excellence Society

As a manufacturer, we want our defects rate to be as close as possible to the “Six Sigma level, 3.4 defects per million opportunities” (DPMO) on products we fabricate.  A possibly overlooked key is how we manage our suppliers’ defects; what they do with the recovered contents off the parts we reject and return to them, and get shipped back to us as input to our own manufacturing processes.  Here’s what we need to know, and take action on.

Decades ago, the contributor of this article was attending a small group, three-week Six Sigma Training course.  Interestingly, the course leaders were from a supplier.  We said “interesting,” because it was the other way around (normally, as the customer, we wanted our suppliers to learn and implement Six Sigma, on their own, and if necessary, we or a designated entity would train our supply chain. In this case, the supplier was training us).

Anyway, the course leaders said they were working on their own certification as Six Sigma Master Black Belts (SSMBB).  And it was their certifying body’s requirement that they provide “evidence of having trained others” on the methodology; before they could be certified as masters.  Honestly, they said, they were providing the training “not out of the goodness of their hearts, but for their benefit.”

After that, as an out-of-state association member, we sent engineers to the Bluegrass State of Kentucky, to a host plant chosen by the legendary Toyota, to train their North America suppliers on the principles of lean manufacturing (also known as “The Toyota Way” or “Toyota Production System (TPS).”  Altogether, our “group of companies” subject of this paper was, and is, a firm believer of “Lean Six Sigma”; and rightly so.  Because in the era of operational excellence, it is neither being lean nor being a six sigma company only – we need to embrace both – as our tools to achieve excellence in things we do. As a matter of fact, our group of companies recruited a Toyota engineer to be our in-house lean manufacturing consultant-director.  Later, our group also engaged one of the earliest six sigma practitioners (a pioneer) in North America—to be our full-time “in-house consultant and six sigma implementation partner,” for a couple years, to train multiple batches of engineers from our various plants in North America, South America, and Europe.

Editor's Note
The Operational Excellence Society sometimes accepts guest submittals from experienced professionals who want to share their stories and experiences, but want to do so anonymously.  Rather than seeking fame and fortune, they have reached a point in their lives where they feel it’s their duty to give to those who are starting on their journey so, perhaps, they will not have to pay so much tuition to the University of Life as they did.  This is such a submittal.

Improve Your Process’ “First Pass Good Products”

If you are an OEM customer of our group of companies, you certainly have reasons to be impressed and feel confident in our production systems. (Note: Companies adopting the TPS usually call their own as “[Their-Company-Name] Production System.”  Our group subject of this paper established our own, in-house “TPS College” to train staff from all our member companies.)

The ultimate customers (the final buyers of the OEMs’ products) can have confidence with the quality of the goods they get, when informed that the manufacturers of the products they buy, and the manufacturers’ supply chain, practice “lean six sigma.”  As professionals in the supply chain, we do not intend to fail these customers: the OEMs and the final buyers.

But are we failing them?  Did we ever fail them?  Sadly, based on the writer’s decades of North America manufacturing experience, the answer is: “In a few cases, yes!”  Why?  How?

Our goal is bring these few cases down to zero, or near zero.  That much we owe to our customers.

A Narrow View: Target 3.4 DPMO of our own process

We suggest that it is a narrow view, if our concern is just to ensure that our own manufacturing system approximates or approaches the 3.4 DPMO level, or that the production inputs from our supply chain (the bad parts they have shipped to us and we discovered, at our site, as defectives) are within or approaching the same DPMO level.  We suggest we need to know and manage the supply chain’s internal defects rate (the proportion of parts they themselves discover – during their own inspection and tests – caught at end of the line or at their dock audit, and pulled out, not shipped to us, their customer-manufacturer.

Additionally, what about the defective parts we received and we determined at our site as defectives, rejected and sent back (returned) to the supplier? If some components in the rejected sub-assembly (sub-component or component we would have used) are recoverable, how are they recovered and reused in the supplier’s manufacturing process?

Cases have been observed in a supplier’s “recovery process and reuse” of recoverable components – that if the ultimate buyer knew, it would “horrifying” – a little bit of exaggeration here, but it illustrates the point!  OEM suppliers to the ultimate buyers need to ask this question: “Are we going to buy ourselves a product with a sub-component ‘recovered that way’; and reused in the finished product we are selling?”  If the answer is “No,” then, we have work to do.

A Broader View: Target 3.4 DPMO of our supplier’s process

We need to broaden our view, such that we are not satisfied with just our own process’ moving closer, and closer, to the target 3.4 DPMO.  If we are the OEM, we want the Tier-1 suppliers to be doing the same.  If we are a Tier-1, we want our sub-tiers (Tier-2, Tier-3, …, Tier-n) down the line to be in lock step with us, as we all aim for excellence.

In this writer’s experience, most OEMs do it right most of the time.  That said, it follows that some OEM engineers (not the entire OEM organization they represent) don’t do it right, some of the time.

When OEMs Do It Right

In the particular North America industry this writer worked for (for 20 years), he had observed that generally, the OEMs were, “collectively, a very good example” of operational excellence and state of readiness; to be high performing companies.  Let’s start with a discussion of the good points, then, later, look at how things can get even better, in our unending quest for continuous improvement and operational excellence. 

Note: What applies to this particular industry, the same principles apply, are transferable, to other industries, including defense, education, health care, financial services—banks and credit cards, and so forth.

The OEMs start with Design for Six Sigma (DFSS) and Design Failure Modes & Effects Analysis (DFMEA).  Businesses are awarded to Tier-1 suppliers, for the production of parts, components, or sub-components going into the final, fully assembled, finished product.  Tier-1s develop their own Process Failure Modes & Effects Analysis (PFMEA), [Quality] Control Plan (CP), and manufacturing system for each “part family” they will fabricate.  If the Tier-1 needs to buy components from sub-tiers, which will be assembled to the Tier-1 product, the sub-tiers develop their own PFMEAs and CPs a well.  A PFMEA and CP form part of the documentation package for the pre-production and thereafter, the Production Parts Approval Process (PPAP).  We will not discuss a lot of details here, e.g., parts testing in supplier lab and 3rd party laboratories, and test resultsbut rather just some highlights of the process.

OEMs frequently send their engineers to Tier-1 supplier locations; less frequently to sub-Tiers -2, -3, –n supply chain locations. And sub-tier visits may be delegated by OEMs to their trusted Tier-1 suppliers.

OEMs may call their engineers differently, e.g., Supplier Quality Engineers (SQEs), Supplier Technical Assistance engineers (STAs), or some equivalent terms unique to an OEM.

Production Parts Approval Process (PPAP)

The OEM engineers’ visits are more significant during the PPAP stage; during which the manufacturing Process Failure Modes & Effects Analysis (PFMEA), quality Control Plans (CPs), and related documents are reviewed (table audit).  As well, a Production Demonstration Run (PDR), Run at Rate (R@R), or “equivalent terminology” unique to an OEM, is observed on the manufacturing work cells (let’s call this “the floor audit”).

During these visits, the key objective would be to ensure that the Tier-1 supply chain’s state of readiness; to supply the component assemblies and component sub-assemblies, during the pre-production builds, production ramp up, and ultimately, the regular production runs – meet or exceed OEM expectations – and by extension, the final buyer’s expectations!

Suppliers would endeavor to pass the PDR, or R@R – demonstrate the capability to supply quality parts at the quoted production rates; and that this can be done problem-free for both parties – the OEM customer and the Tier-1 supplier—all the while keeping in mind the ultimate “finished product buyer” (the consumer).  In many cases, Tier-1 suppliers may not receive the final payment for the “customer-owned production tooling,” while final PPAP approval is pending.  This applies to contracts subject to “progress payments on production tooling.”  Rarely, a supplier may “lose their shirt” if they started building prototype tools to make prototype parts even before there’s a signed contract, the project didn’t reach PPAP stage, and the “new product” did not launch; but instead got cancelled.  An OEM may call this a “a business risk” taken by the supplier; who may have had a reasonable expectation, not guaranteed, that they’re getting new business and for “not asking for prototype tooling money,” as their bid winning point.

new product “platform” may last several years before it’s time to launch the next (replacement) platform.  New products are launched every so often, before production tooling and the “finishing-assembly fixtures” reaches a program’s end-of-life/capability to consistently fabricate good parts.  In between new product launches, supplier site visits by the OEMs continue, to ensure the “purchased supplier capacity and the quality of their purchased component assemblies (or sub-assemblies) are maintained throughout the particular product’s life cycle.

This is where the possibility of some issues or concerns between the visiting OEM representatives and supplier management team/resident engineers may arise.

Suppliers have little appetite for letting OEMs know “Opportunities for Manufacturing Process Improvements” (OFIs)

The periodic visits’ intent may be stated, implied, or understood, as an OEM initiative to help the supplier maintain or improve product quality, at the same time reduce manufacturing costs.  If the opportunities to reduce costs are not yet in the supplier’s continuous improvement pipeline, the OEM would ask to share in the projected cost savings that they identified. 

This can be a disincentive to a supplier, and the collaborative efforts between the OEM and a supplier plant may not be productive.  The latter would rather they find themselves (on their own) the potential savings, without outside help (from OEM talent) so as not share the fruits of a continuous improvement (CI) project.

Suppliers will not risk losing their business

Suppliers want to keep their hard-earned business, and want to get even more new business.  A manufacturer with ongoing process problems, if they are unable to solve them, may (at some point) be barred from quoting new businesses, or worst the OEM may decide to pull out the customer-paid tooling and assembly fixtures, and award (transfer) the business to a capable supplier.

Editor’s Note: This writer was involved in some “takeover businesses” wherein the OEMs asked for help, as they pulled out tooling and assembly equipment from failed companies, in the aftermath of the 2008-2009 financial crisis, bankruptcy of some OEMs and many Tier-1 and sub-tier suppliers.  At this time of Covid-19, we have more compelling reasons and opportunities to reinvent ourselves and enhance our state of readiness to deal with the business challenges.)

Therefore, when quality issues have been identified “by one or more OEM assembly plants, with respect a common part (production input)” used in one or more (multiple) OEM locations – if the issues are caused by manufacturing process problems, supplier would prefer to keep it to themselves.  Not all the time, but this can happen, some times.

Under this scenario, a supplier may, or will, take the position that they don’t have a process failure; the failures are due to “part design supplied by the OEM,” e.g., “stack-up tolerance issues caused by mating parts supplied by others.”

There is merit in some suppliers adopting the “customer’s part design” defense.  For example, an OEM indicated that they have performed several DOEs (Designs of Experiment), without success (this involved a product—“toys for the big boys, who have arrived”).  OEM engineers informed a supplier that the latter’s product would be the subject of their next, and possibly the final, DOE.

Matter of fact, it was determined that this last supplier’s product was “responsible” for the stack up tolerance issues.  However, upon more in-depth investigations, analyses and discussions, supplier and the OEM design team also determined that the “suspect” part was “built to specs.”  Meaning to say, the part math data supplied by the OEM team was used to generate the tool data; the tool is built to data.  The tool is “to math,” and yields the part, “it is what it is”– used by the OEM in the final assembly/finished product.  One, but not both, of two mating parts coming from different suppliers would need a design change (new math data), and the production tooling to be modified accordingly.

The production tooling used by this supplier would cost significantly less to modify than the production tooling for the mating part fabricated by another.  This supplier and OEM mutually agreed and worked together to modify the less expensive tool, did not fault the supplier’s manufacturing process and finishing-assembly equipment (paid for and owned by the OEM), and everybody was happy when the quality issue affecting different components from different suppliers went away.  There’s confidence that customer warranty claims costs (the “cost of quality”passed on by dealers to the OEM) would cease.  We are not overly worried about situations like this.

We suggest we should be concerned, and maintain a state of readiness, to discover real opportunities for improvement, and reduction of manufacturing costs, in the Tier-1 and sub-tier operations.  Some OEMs (certainly not everyone) may be surprised if they found out how many missed opportunities there are, as discussed below.

How can you miss “What is Hidden in Public View”?

To this writer’s enigma, he observed OEM SQEs fail to notice (in spite of multiple visits over a period of time) that a particular part (used in a multiple of their assembly plants) has not been manufactured on-site for a long time; it has turned into a pass-through part (i.e., manufactured by a sub-tier but shipped by the Tier-1).  This would have been OK were it not for the fact that it happened without the OEM’s knowledge and approval, prior to sub-contracting to a sub-tier.

According to one supplier site’s Quality Manager, “we have to re-PPAP if we as much as moved our production equipment an inch away ‘from its location approved during the original PPAP’.”  According to an engineer who was recalled from retirement (because his former boss needed his help still), he actually saw OEM engineers came on-site to observe as the plant moved one machine.  The OEM engineers stayed in the plant, and did not leave until the machine started producing good parts (meeting the OEM’s quality acceptance criteria) in the new location not far from where it was.

One OEM engineer was in a supplier plant for another business (let’s say Part B), not to “process audit” a program (say Part A) which he had previously approved the PPAP for, a few years earlier.  The supplier has a few manufacturing zones within the building.  During the plant walk, the OEM engineer asked “where is my machine [for Part A]? It’s not here [in Zone C].”

The supplier resident engineer said, “Oh, we moved it [to Zone B].  I will show you where.”  The SQE said, “You should have told me, before you moved. You know the procedure.”

“Sorry, we failed to notify.  We should have!”  The OEM engineer was on his right to report the unauthorized move to his boss.  But because his organization had continued to receive good, quality parts without interruption, he was kind enough to not report. But the message to the Tier-1 supplier was clear: They shouldn’t do it again, not notifying the OEM in advance of relocating an equipment or production process!

We won’t worry about the OEM engineers (a) who watched the equipment move (which was good practice, at its best), nor (b) the OEM engineer who “saw without looking” that his machine disappeared from the approved location.  We suggest that we ought to be concerned with (c) the enigmatic situation (mentioned in this section’s opening paragraph).  A more detailed discussion of this “failure” (a “tip of the iceberg”) is not for this paper to discuss further.  Rather, we will discuss (d) an iceberg.

Manage Our Supplier’s Internal Defects (The Iceberg)

When this writer started on his first engineering job in North America (he was previously head of White Collar Productivity Improvement, in “universal bank” in Asia), his hiring manager said,”what happened to our sister plant, I don’t want to happen here.  You make sure we don’t see a team of OEM engineers, ‘living in our boardroom,’ for days – asking for data, checking our progress in solving quality problems.”

It didn’t happen in any of the various plants this writer had been assigned to, one after the other, for 19 years!  But after rotating assignments to different plants in North America, he saw it happen.  For the second time, in the same plant his first boss referred to, decades ago; after that, this writer left the group (with a package).  He is writing this as a consultant now, who can help OEMs prevent this kind of quality problem, when dealing with Tier-1s.

We won’t see just the tip; we will see an iceberg here. 

Problem Escalation – Engaging Top-Levels of Management – and Still Not Enough!  Why?

It’s obvious; the OEM’s launch problem we are discussing here was really bad, like “everything that can go wrong, had gone wrong.”  The SQE had been on-site a lot, working with both the supplier’s “head office program management team,” and the supplier plant’s manufacturing engineering, and quality engineering department (with two certified six sigma black belts), and the senior site management.

The OEM assembly plant, where the Tier-1 supplier’s parts (left-hand side and right-hand side) go for assembly to the finished product, had escalated the matter to their senior leadership.  It was indicated that their head of quality, and others in the quality team from the OEM, would be on the supplier’s site.  To show full support to the plant, the group sent the corporate director of manufacturing, and their consultant – a Certified Six Sigma Senior Master Black Belt (CSSSMBB)—to help out, the same time the OEM Team was in the plant. 

That’s right, the group’s consultant is a notch higher than a Certified Six Sigma Master Black Belt (CSSMBB).  He has trained Six Sigma Black Belts (SSBBs) around the world (US, Canada, Mexico. Europe, and Australia) and is a published author and co-author of Six Sigma books.

There is no reason to doubt that the Tier-1 supplier was serious.  They are throwing in all the resources available to solve the quality issues.  The OEM Team was on-site longer than the supplier’s head office representatives, though.  Not just for one week; more than one week (though not weeks in a row); up to three or four days a week.

What’s wrong here?  The OEM team was in the boardroom much of the time.  We suggest they spent much too little time on the floor; and failing that, didn’t see as much as they needed to see.

Learning to See

There are many books on this subject.  Perhaps among the earliest and best of North American versions was first published in 1998, titled Learning to See.  

When this writer was training in Kentucky, USA two decades ago, the instructors did not use any reference book, just their in-house training binder, given to each attendee.  Our batch of trainees had five full-time instructors.  The lead instructor narrated this anecdote (of which we have no independent verification if actually true.  True or not, it has a point): A Toyota executive brought a newly hired engineer to the production floor.  The executive drew a circle on the floor, and said, “you just stand here, inside this circle, your first day, and observe.”  At the end of the day, the executive came back and asked the engineer, “What did you see?”

Our batch of trainees did not have the luxury of observing the floor for a day.  Towards the end of the first day of training, they divided our batch into five groups.  Each group separately had a quick “plant walk” (of the Toyota supplier’s facility, our host), and all together we went back to the classroom.  We were asked to report what things impressed (write them down under the Green column) and the things we saw could be improved (write them down under the Red column).  We had a long list of Greens and almost nothing, very few under the Reds.  Fair enough.

Towards the end of the third day in-class, we were asked to tour the plant again, and make a new list under the “Reds” and “Greens.”  Now we had a long list of reds and a shorter list of greens.  The lead instructor asked, “What happened?  You looked at the same plant that you saw days ago.  What changed?  This is the most difficult part of my job.  First, you come here, so impressed; you tell me how great my plant is.  And then, now you tell me this?  It’s like I hang my dirty laundry in public!”

For example, this writer asked: “Why is there a stack of bins (finished goods) close to one work cell?  You said you don’t have a finished goods warehouse here, each bin of finished goods go straight to the staging area at the shipping department.”  Our instructor replied, “You are correct.  Normally, we ‘build-to-ship,’ we ship to Toyota every four hours.  Once the shipment is ready, we change over the line to a different product – we don’t over-produce and store anything in the warehouse.  But fortunately, I have an answer for you.  We will have a tool trial in that line.  We are doing a ‘bank build,’ so we won’t miss a shipment, while doing the trial.  That’s why you saw the stack of goods.”

While our instructor “felt bad” about our feedbacks on how we could improve the plant, he actually felt satisfied that our training was being productive.  He said, two days prior, we did not know what to look for.  Two days later, we went to the floor knowing what to look for.  For example, is there this waste of over-production (inconsistent with the “build-to-ship” principle)?  He said, “You only see what you look for.  You have learned to see!”  And there was more to learn, in the remainder of our training.

In the case of the OEM Team mentioned here, it seems like they spent too much time at the supplier site’s boardroom, not enough time on the production floor.  Could one of their engineers had better watched the floor one full shift, or two OEM engineers between them watched two full shifts?  Instead of asking the supplier to present data and action plans at the boardroom?  We suggest that the “Go and see” principle is better put into practice on the production floor, not the boardroom.  And the other half of the equation is, “Know what to look for.”

Quality Parts Input, and OEM Production Goals

The OEM in this “case study” had a goal of producing a set number of products per week.  OEM could not meet their production targets, due to the high number of “Left-Hand Side” and “Right-Hand Side” parts from their Tier-1 supplier that got rejected right off the bat; the OEM wouldn’t even bring them the “components received warehouse” to the assembly line.  Many products were shipped back to the Tier-1 supplier plant.  Using bad parts in assembly to the final product, and shipping the finished goods to dealers – if they got sold to the final customers, could (or would) lead to warranty claims.

The good thing here is, the product has no relation or similarity to a defense project like this one below, which we want to discuss “parenthetically.”

The defense department decided that they would fully support the troops in Iraq and Afghanistan.  Money was not a question.  They would spend what they needed to spend, to bring back the soldiers home, alive and well, to their families.  To do so, minimize troop casualties and injuries, they would finish 27,500 MRAP Trucks in three years instead of 18.

The industrial engineers, and lean six sigma consultants, who were called upon to work with the defense establishment, the MRAP manufacturer and their parts supply chain, did their job remarkably well.  The number of American lives saved from the battlefield is something so many families can be grateful for.

Most products by the OEMs do not have the same urgency and utmost significance as a defense project mentioned above, or the fast-track production of medical use ventilators and PPE supplies happening this year.  But without unduly increasing the manufacturing costs, we can all learn from how defense and medical devices contractors can accomplish speed-to-market of quality products.  Apply them on a smaller scale, to our manufacturing processes.

What “Everybody Knows”

Knowledge is fruitless if there is no application.  What “everybody knows” is worthless if there is no action.  Especially, maybe, in relation to this topic which we now go back to: Managing the supplier’s internal defects.

First, the program involves injection-molded plastic parts, heavy enough to require two persons, one holding on each end of the part, to move it in some of the steps to manufacture and test the product, before they are packed.  To maintain the “virgin resin to regrind” ratio for optimum molding, the “recoverable resin from the reject parts returned by the OEM” should be cut to small pieces and put to the grinder as soon as possible, and introduced into the flow (of “virgin to regrind” blend) to the injection molding machine.  It’s doubtful that the plant manufacturing engineer ever drew a Value Stream Map showing the information and material flow of the resin; virgin from the silo and “regrind from the grinder =>blender =>machine hopper =>machine barrel.”  It’s doubtful the OEM Team ever asked, or watched, the blending process.

Second, there are electrical or electronic sub-components undergoing “engineering upgrades/changes” during the product launch and ramp up stage.  This is consistent with the continual improvement of the finished products, generally in this industry, but more specifically in this component assembly under discussion.  The earlier/obsolete sub-component versions should never be reused; the latest version may be reused but should be recovered and reused (before they become obsolete too), as soon as the part assemblies were back from the OEM.  It’s doubtful the OEM asked, of if the Tier-1 informed the OEM, of the recovery/reuse procedure (information flow, material flow).

The Tier-1 was over budget, with regards “actual direct labor,” versus headcount quoted to customer and on the supplier plant’s “labor budget.”  There’s no budgeted labor specifically for this program’s components recovery.  Their level of rejections/returned materials was not anticipated; and it’s probably unheard of?  The grinding operation labor budget did not include a dedicated person just for this product; a full-time staff was apparently required to catch up with the high volume of returns (rejects coming back from the OEM).

It is fair to suggest that these matters are nowhere sufficiently and satisfactorily covered in the Process Failure Modes & Effect Analysis (PFMEA) and quality Control Plan (CP).  How PFMEAs and CPs are sometimes done is another story.  Let’s not go there!

A good, mid-sized injection molding company, with low scrap, can have as little as just one operator per shift, grinding the scrap generated from different molding and assembly lines, and reintroducing the regrind into the blender, with the virgin material.  A full-time “band-saw-grinder machine operator” would obviously be necessary (in this particular operation) otherwise there’s the risk of exceeding the allowable “virgin to regrind” ratio.  The higher the regrind content of the resin going into the molding machine, the higher the risk of molding more bad parts.  This “self-feeding” or self-defeating cycle can go and on.  It’s doubtful the OEM ever asked, of if the Tier-1 volunteered the information how they grind the molded components off the product, or what ratio they maintain in the molding process.

The writer of this paper was asked to help in only one aspect of the project: job breakdown and “operation times” of the “excess team members” over and above the labor count quoted to and paid for by the OEM.  The customer was open to increasing the contracted piece price, just to help the supplier meet the weekly demand for the parts, without operating at a loss.  If the supplier decided to operate with the quoted and budgeted labor only, customer wouldn’t get their components, and would have very limited number of finished products to sell.  This writer provided what the OEM asked; piece price adjustment was agreed upon. 

After the time and motion study, and manning level requirements determined, this analyst would have liked to provide more useful information, to prevent the extra labor costs, but more importantly, to prevent the high scraps.  That would have been “unprofessional” to comment (unsolicited) on how others should do their job. After all, there were two full-time six sigma black belts in the supplier’s Quality Department; the time and motions study engineer worked in the head office Manufacturing Department, prior to rotational assignments to different plants in the group.

What the OEM didn’t know (but should have known) – and Hurt Team

Known (1): The molded components consist of an upper half and lower half (not exactly fifty-fifty, in terms of molded weight).

Unknown (1): One of the two is molded with 100 percent virgin material.  The other half is molded with high regrind content; sometimes, up to 100 percent regrind.  It is not known to this writer if any self-respecting OEM would have agreed to this, more likely not.  Let’s not go into how the writer discovered the matter of 100 percent regrind.

Known (2): After molding, one of the two halves’ batch goes to the work-in-process (WIP) storage.  When molding the other half, the WIP is brought online and used in assembly.

Perhaps Unknown (2):  The stone-cold WIP parts and the warm mating parts ‘”hot off the press” would not line up (or stack up) as easily as two halves molded in two injection presses, side-by-side and assembled together when both halves are warm.

Known (3):  Supplier has two injection molding machines with approximately the same tonnage.  If one is down for extended hours or days, the other could be used as backup to make production and shipments.  This operations analyst has no direct knowledge about supplier-customer agreement on maintaining backup equipment; there were instances where backup machines were known to OEMs.

Unknown to OEM (3):  Both machines (the two with the highest tonnage within the plant) mold parts with upper and lower halves.  Their secondary (finishing) operations have similar problems, but the assembly line subject of this paper has more severe problems as compared to the other.  The two machines are subject of “purchased capacity” contracts with two different OEMs.

What Should Have Been Tried—Would Have Benefitted 2 OEMs

If this writer was consulted, this could have been the basis of his recommendations.

  1. Revise the “purchased supplier capacity” contract, such that instead of just one injection molding machine being used for both upper and lower halves of the plastic part, the two halves would be molded simultaneously. Parts off the two machines would converge into their respective assembly line (the secondary, or finishing operations).  The two mating parts, both warm just off the press, would line up (stack up) more easily and effectively—than one stone-cold from the WIP warehouse and another from off the press (“online”).  In the vent assembly of WIP parts still became necessary (offline when not molding), they would still have a better chance to stack up easily, if they were molded same time with same virgin-regrind ratio.
  2. Document in the Value Stream Map (VSM) the procedure for recoverable resin; and the components; how they are recovered and reintroduced into the production system.
  3. A3s –the 1-page document for each problem occurrence should b e available to the OEM.

No professional would barge in a boardroom, and join uninvited, and interrupt the meeting of OEM representatives and the plant’s senior leadership to make an unsolicited recommendation.  Especially, if specifically requested to just inform the customer what the extra labor personnel are doing, just what they need to agree to a piece price increase.

We suggest that the OEM top “quality leader” (and his engineers who have been on the supplier site for days) should have figured this out, with their knowledge of lean six sigma, operational excellence, and state of readiness effectively applied.

Can a scenario as discussed in this paper really happen?  Can the OEM-supplier state of readiness to deal with quality issues fail, as indicated in this paper?  We suggest the answer is, Yes!   It happened twice in 20 years in just one supplier location; involving two different OEMs.  The writer was, “In the Plant Where It Happened.”

The future is in our hands.  We should be ready!  Let’s learn how to see.  And act effectively!

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