Quality management specialist ranks top supplier challenges for 2008
By Manufacturing Business Technology Staff -- Manufacturing Business Technology, 5/8/2008 12:00:00 PM
Sparta Systems, a vendor of enterprise quality and compliance management software, now offers its list of the top supplier-related challenges facing the manufacturing industry at the 2008.
The list, compiled from conversations with Sparta Systems customers in the manufacturing, life sciences, and food & beverage industries, outlines the most significant challenges facing organizations for gauging, prioritizing, and mitigating supplier quality issues across the global organization.
Choosing to procure parts, ingredients, or components from unreliable suppliers will continue to reverberate throughout the manufacturing industry. More than ever companies need to proactively address their supplier quality issues with tools and processes that prevent incidents from arising before they have a chance to do significant damage to businesses or consumers’ well-being.
Says Simon Jacobson, a senior analyst with Boston-based AMR Research, “Regulatory oversight and customer demand for quality products have moved quality management from afterthought to strategic requirement. Quality management’s role in creating a predictable product supply is vital in today’s highly competitive world. It’s also an integral component of risk mitigation. Organizations that do not deeply embed quality management into their manufacturing and value chain operations weaken their competitive standings in the market and expose their brands to great risks.&rdquo.
Knowing this, Sparta Systems lists these as the top five supplier quality challenges currently facing the greater manufacturing industry:
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Reticence to implement performance-based scorecards. In addition to risk, companies that face greater regulatory scrutiny have implemented a systematic approach to grading and assessing suppliers that evaluates performance, material quality and operational stability. Yet no such system exists for companies in less regulated industries, creating a need for a scorecard system across the greater landscape that ensures accurate grading and ranking of suppliers based on criteria that directly impacts quality. Such a system will result in reduced costs for the organization, as less time and effort is spent using unreliable suppliers and dealing with aftereffects of a flawed finished product.
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Inefficient, decentralized reporting. Due to the daunting audit process faced by all industries across the greater manufacturing landscape, companies dealing with numerous suppliers are forced to provide detailed reports of their supplier relationships. Yet even some of the largest organizations have failed to implement a centralized system for tracking these relationships, instead relying on rudimentary methods such as Excel spreadsheets to track these issues. Only by instituting a centralized system for comprehensive tracking of supplier data can organizations streamline their reporting efforts and realize the benefits of a more efficient compliance process.
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Lack of C-level involvement in supply quality management. As executives at manufacturing organizations both large and small are often tasked with overseeing multiple facets of the companies’ global operations, supplier quality is often left to siloed departments that lack visibility into the correlation between supply quality management and the companies’ ability to grow revenues. Executives need to take a greater role in ensuring that supplier relationships are effectively maintained and that the correct procedures are in place for gauging supply quality and evaluating processes.
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Battle Between supply quality management and supply chain management. For years, the manufacturing industry has been in the midst of a struggle between supply chain management and supply quality management. With the lengthening of the supply chain resulting from expanding global footprints, companies are constantly faced with the quandary of ensuring quality in their products from the supplier. The quality of supply procurement and manufacturing must be linked directly to the supply chain so that a balance can be achieved between quality and speed of the broader manufacturing process.
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Lack of risk-based analysis for supplier quality. Organizations in the life sciences and pharmaceutical industries use comprehensive tools for analyzing and grading suppliers based on the level of risk they pose for the greater manufacturing operation. Without a risk-based solution in less regulated manufacturing sectors, too much valuable time and resources are allocated to assessing the risk factor of reliable suppliers that pose no threat to the larger operation while giving less scrutiny to more suspicious suppliers than they should realistically be receiving.
According to James E. McGowan, CEO, Sparta Systems. “This list represents the most pressing challenges facing the manufacturing industry as we view it today, and Sparta remains committed to addressing these and other supply quality challenges so that our customers can continue to expand their operations effectively.
