Manufacturing is a collaborative process. Manufacturers rely on suppliers for parts and materials that are used in the assembly process. Maintaining quality throughout the supply chain is essential to manufacturing a winning product. One weak link in the chain can result in the worst-case scenario: a product recall.
For example, cars, assemblies, and medical devices are often complex products constructed of thousands of parts, many of which come from outside suppliers. A flaw in a single part can result in a recall. The National Highway Traffic Safety Administration (NHTSA) has issued a recall for 41.6 million cars with 56 million defective Takata Airbags. These airbags could explode because of a faulty inflator, causing injury or death.
Working with suppliers that maintain strict quality standards minimizes nonconformities and usually keeps them from reaching the customer. Using a supplier quality management application is an important part of this preventive process. That’s why manufacturers need to take advantage of the Supplier Quality Management Application that is part of QAD CEBOS EQMS.
The Price of Poor Supplier Quality
While replacing their airbags won’t cost the consumer anything, the costs are significant for GM and other automotive manufacturers that installed Takata airbags in their cars. FOX Business Network reported that the recall has cost Honda $5 billion, and the company doesn’t expect to get compensated by Takata anytime soon. GM predicts that the recall will cost the company $320 million, to start.
Recalls have a snowball effect. Stock prices for affected companies can plummet. The cost of a recall eats into company profits. Loss of customer confidence causes previously loyal customers to look elsewhere for their next vehicle.
For automotive and medical device manufacturers, more than money is at stake. Lives are on the line.
The Challenges of Maintaining Supplier Quality
Global supply chains make it difficult to maintain visibility into supplier quality. Manual processes can’t handle the complexity of monitoring and evaluating suppliers from across the U.S. and around the world.
Manufacturers need to be able to thoroughly vet the suppliers they will be working with. Managing and approving supplier lists is a huge task, particularly if these lists need to be evaluated manually.
Once a supplier has been chosen, manufacturers often audit the supplier regularly. Periodic audits ensure the supplier is held accountable for providing quality parts. Monthly supplier scorecards need to be processed to guarantee suppliers are maintaining necessary standards of quality, delivery, etc.
The Advantages of Supplier Quality Management Software
A supplier quality management (SQM) application automates many of the manual processes involved in evaluating and managing suppliers. SQM saves manufacturers time and money by integrating all the systems related to supplier quality.
SQM focuses on 3 main areas:
- Product: overseeing materials received from the supplier, managing periodic performance reviews, and providing a portal for suppliers to respond to SCARs.
- Information: providing visibility into and proper flow of supplier information, including producing an approved supplier list, managing audit schedules, and tracking supplier certifications.
- Financial: managing nonconformances and associated supplier chargebacks as a result of a supplier’s poor quality.
Why QAD CEBOS Supplier Quality Management Is the Right Choice
QAD CEBOS Enterprise Quality Management Software (EQMS) provides a comprehensive solution for supplier quality management. The key function of QAD CEBOS SQM is its ability to manage an approved supplier list at both the overall supplier level and specific commodity level.
Our SQM manages supplier audit schedules for any audit type, including onboarding and maintenance audits. The solution tracks supplier certifications and notifies the manufacturer of impending expirations. The SQM also manages regular supplier performance reviews.
Not only can QAD CEBOS SQM track supplier deviations, but it can manage supplier chargebacks to ensure your company gets reimbursed for any expenses that come from nonconforming parts. With QAD CEBOS SQM, your company lessens its risk of experiencing a crippling recall.
Get the details on the benefits of using the QAD CEBOS Supplier Management Application. Register for our webinar QAD CEBOS EQMS: Supplier Quality Management Application Overview