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| October 2006 |
Critical Steps in a Global Sourcing Project |
Quality Sourcing Solutions
In today's competitive world, getting cost out of your product is critical to survival. One widely employed strategy is to source components or finished goods from low-cost countries such as China. Low-cost sourcing can be effective, if certain critical steps are followed:
- Prepare design documentation.
- Select vendors.
- Engineering first article validation.
Formal supplier audit.
Pre-production validation.- Quality inspection plan for ongoing production.
Vendor development. |
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Prepare Design Documentation
Preparing proper design documentation is perhaps the most important, yet most often overlooked, step of the sourcing process. It makes sense that you must know what you want, and the clearer you are about this, the clearer your vendor will be as well. Review your engineering prints to see that they are correct. Pay careful attention to dimensions, notes, and material requirements. Does your material requirement call for a particular brand, or is it generic enough for a Chinese vendor to understand? Do you know what the Chinese equivalent material is? It is not enough to have just a sample, though samples are helpful. At a minimum, some sort of purchasing specification is required that states material, critical features and dimensions, and other requirements. |
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Select Vendors
The best way to select vendors is by using vendors you already know, or have a good recommendation on. Unfortunately, this isn't always possible, and given the fluid state of Chinese vendors, you may find that your favorite vendor changes several times during your relationship - often due to key staff leaving and starting a new, sometimes competing, company.
Often you'll want to get an initial idea of a vendor's capability before performing a full audit, though an audit could be performed at this stage. At a minimum, get a feel for the vendor's technical capability to perform your job. Look at other parts the vendor makes that are similar to yours. Ask questions about maintenance, machine setup, change management, supplier management, etc. An ISO-certified Chinese vendor may still not have the quality systems you need.
You may want to have samples produced by several vendors, unless an expensive mould or tooling is required. If heavy investment is required, you may decide to do a full audit at this point. |
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Engineering First Article Validation
This step tells you if the vendor has the technical ability to make your part. You'll also want to inspect any moulds or tooling that was created. Get approximately three samples and carefully check every dimension and note. Ask for material certification. Ask the vendor to measure the sample and provide their data for comparison. It should be assumed that these samples were produced under careful supervision, and are not necessarily representative of what you'll see in production.
If you've taken the time to prepare design documentation, and have discussed your expectations with the vendor, you should have received acceptable samples, even if everything is not exactly within tolerances. Still, don't be afraid to stop work if you suspect some technical shortcoming and are not willing to spend the time and money developing this vendor.
By asking the vendor to provide measurement data, you'll also get a sense of their technical capability and some insight into the effectiveness of their gauge-control program. One of the biggest problems with Chinese vendors is lack of adequate gauge-control and gauge-calibration programs. Don't overlook this. You can loan a gauge, but it's not good if it's not maintained and calibrated. |
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Formal Supplier Audit
The timing of the formal supplier audit may vary, depending upon your knowledge of the vendor. You may also choose to perform an audit earlier if significant investment is required. Third-parties, such as Quality Sourcing Solutions, may be able to perform audits for you, or may have already performed an audit, the results of which you may purchase.
In general, this is a mini-ISO audit. Usually, two teams are required for one full day. One team will review quality documentation, including quality manual, procedures, record keeping, corrective actions, supplier management documentation, and training records. Another team will focus on the implementation of quality on the shop floor, and will look at actual production records, machine maintenance, measurements, revisions of design and manufacturing documents, and gauge calibrations. |
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Pre-Production Validation
In pre-production validation, you begin to understand the supplier's process variability. You may perform the same checks you did on the engineering first article, but now your samples are from a much larger production run. You'll usually request the vendor to make several hundred parts (minimum), and select samples from these.
The data you collect in this step will help you understand your inspection requirements for future shipments. It may also point out several areas that need your development attention. |
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Quality Inspection Plan for Ongoing Production
Now that you understand your vendors technical and process ability, you'll want to consider how to maintain quality in the future. Will you perform inspections, or will you hire a third party? Will you trust your vendor to perform inspections? What kinds of information and reports to you need to satisfy your customers? What is really important about these parts, and what features must be inspected? |
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Vendor Development
You will likely have discovered some things you need to change in order to be more confident with your vendor. Perhaps the vendor needs assistance with managing change, or with a gauge calibration program. Vendor development is often a step that is overlooked during a sourcing project. Sometimes considerable expense is required, and involves lengthy trips by product-line experts from your home country. Of course, this step could be required much earlier in the process. The point is, don't overlook the possibility. In order to enjoy the cost savings you need, you must be prepared to invest in some vendor development.
Whatever your sourcing needs, we hope this information was helpful. Quality Sourcing Solutions is ready to help your sourcing project succeed. For more information, please e-mail us at info@go-qss.com |
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