Page 35 - MetalForming March 2020

Compete on Quality
ing inspections. Metalformers should proactively provide CAPA-level data on the production runs for their cus- tomers’ 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, produc-
tion workflows and change requests. ECO tracking enables contract manu- facturers 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, pro- duction and fulfillment defines this met- ric, 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 cus- tomer 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 trou- bleshooting more efficient, leading to permanent solutions to the problems most likely leading to the RMAs.
5. Manufacturing cycle time (aggre- gate)—This metric quantifies the amount of elapsed time from receiving an order until a product enters fin- ished-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 inte- gration, 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 fin- ished products. Metal formers should continually monitor yield rates to determine how they compare to plans and goals. Real-time integra- tion, 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 statis- tical process control charts to quantify and illustrate quality trends over time.
Applying an Agile Framework for Quality
The key to succeeding in any con- tract-manufacturing partnership is defining the initial
cost targets with a
clear understanding
that quality levels,
yield rates and on-
time delivery per-
formance will never
be sacrificed for a
lower price. Quality,
efficiency, customer
delivery dates and
supply-chain per-
formance are not
negotiable. Think in terms of a frame- work and stay agile—inflexibility can make an outsourcing partnership too structured, causing it to fail.
Partnerships between contract man- ufacturers 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 manufac- turing performance; reducing cycle times; improving on-time delivery per- centages; and increasing quality.
Here we present three strategies that contract metal formers should consider in order to consistently maintain high product quality at a competitive price.
1. Serve as an extension of the cus- tomer. Contract metal formers should not position their facilities as just one more shop floor producing parts or products for their customers. Con- versely, the most successful and prof- itable partnerships develop when cus- tomers treat their suppliers as they would their own production facility. Supporting visibility and accounta- bility across shop floors to ensure con- sistent product quality measures is central to establishing and maintain- ing this relationship. Contract metal formers should strive to report back on yield rates, machine stability and efficiency, and, in some cases, overall equipment effectiveness (OEE) of the machines used for production.
2. Focus on value, not costs alone.
Partnerships between OEMs/Tier Ones and contract manufacturers quickly will become transactional—and stay
there—if the par- ties focus only on cost. Instead, both should share informa- tion in real time, including quality metrics, compli- ance reporting, track-and-trace- ability data and monitoring data.
3. Collaborate in real time. The best-managed part- nerships form as a result of well-orches- trated operations. The key to making this strategy work: using a real-time dashboard of quality management and compliance metrics that includes machine utilization levels, scrap rates, cycle times, reject codes, downtime hours and OEE performance—down to the workcenter level. MF
“Instead of simply following customer requirements, contract metalformers can grow their businesses in 2020 by taking the helm in expanding their compliance and quality-management initiatives, particularly as they relate to logistics.”
“Partnerships between OEMs/Tier Ones and contract manufacturers quickly will become transactional—and stay there—if the parties focus only on cost.”
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