Seven Ways Contract Metal Formers Can Compete on Quality

Entering 2020, many brand manufacturers seek to mitigate the effects of uncertainty around international tariffs, an uneven global economy and national elections. This puts increased pressure on contract metal formers to:

• “Partnerships between contract manufacturers and their customers should begin with clearly defined goals for costs and pricing. However, do not allow costs and pricing to dominate these partnerships. Be sure to focus on what matters most: achieving a high percentage of perfect order manufacturing performance; reducing cycle times; improving on-time delivery percentages; and increasing quality.”
  
  —Louis Columbus, principal, IQMS Demonstrate compliance expertise. Regulatory reporting requirements changed in 2020 across several manufacturing sectors, particularly in highly regulated industries such as aerospace and defense, medical products, and pharmaceuticals. However, brand manufacturers often lack the staff to establish a dedicated team for staying on top of compliance-reporting requirements. Therefore, contract precision metal formers would be wise to develop expertise in regulatory compliance.
• Offer skilled, certified experts. Acute labor shortages continue to impede the ability of OEMs and Tier One manufacturers to take on new accounts. Contract metal formers can market the benefits of alleviating these labor shortages by developing their own skilled teams, often combining this with unique expertise. For example, one contract metal former has developed an inhouse team of certified technicians that can be assigned to its customer within a week to help meet security-device production forecasts, which could take 6 mo. for the customer to complete.

• Improve logistics, supply chain and quality services. Of the manufacturers I’ve spoken with that outsource production, 80 percent say that contract metal formers must improve in the areas of track-and-trace, supply-chain integration and visibility, and need to provide significantly more quality data for every production run. They believe that quality data are invaluable in improving work instructions and production workflows, leading to higher yields.

Seven Ways to Take the Lead on Quality and Compliance

Instead of simply following customer requirements, contract metal formers can grow their businesses in 2020 by taking the helm in expanding their compliance and quality-management initiatives, particularly as they relate to logistics. Seven metrics form the foundation of an agile framework to enable solid, reliable and consistent reporting of compliance, quality and yield rates. This can translate to increased efficiency and reduced costs.

1. Corrective/preventive action (CAPA)—Also known as corrective-action requests, CAPAs help to eliminate anomalies and nonconformances in products that often are discovered during inspections. Metalformers should proactively provide CAPA-level data on the production runs for their customers’ products, to provide an accurate longterm view of product quality.
2. Engineering change-order (ECO) tracking—Also known as an engineering change notice, this metric tracks changes to routing, bills of materials, production workflows and change requests. ECO tracking enables contract manufacturers to provide customers with insights into how well their products are being managed and coordinated.
3. Perfect order performance—This metric provides an immediate measure of the workflow synchronization and integration between a contract metal former and its customers. Each step of order capture, order management, production and fulfillment defines this metric, often represented by an index value.
4. Return material authorizations (RMAs) and returns—RMAs provide a direct measure of product quality and a product’s nonconformance to customer specifications and requirements. Contract manufacturers shold perform monthly Pareto analyses of the top 20 percent of the factors driving 80 percent of the returns. This will make troubleshooting more efficient, leading to permanent solutions to the problems most likely leading to the RMAs.
5. Manufacturing cycle time (aggregate)—This metric quantifies the amount of elapsed time from receiving an order until a product enters finished-goods inventory. Cycle times vary by manufacturing segment, the scale of factory operations, global locations and relative stability of supply chains supporting operations. Contract metal formers that implement real-time integration, apply Six Sigma to identify process bottlenecks and reengineer factory systems to become more customer-focused can significantly improve their manufacturing cycle times.
6. Production yield rates—Yield rates reflect how efficiently a machine or process transforms raw materials into finished products. Metal formers should continually monitor yield rates to determine how they compare to plans and goals. Real-time integration, greater supply-chain quality and compliance, and improved quality-monitoring systems all positively impact yield rates.
7. Inbound supplier-quality level—Contract metal formers should gauge how effectively their parts and raw-materials suppliers meet quality and on-time-delivery metrcs, using statistical process control charts to quantify and illustrate quality trends over time.