Many buyers have a strategic imperative to improve quality, and yet their suppliers in Asia often resist any effort to improve their operations. The hardest part is to convince them to take the first step. If the initial approach proves fruitful then over the years, the supplier can achieve a zero defect manufacturing mindset.
A survey by the American Society for Quality showed that the biggest hurdle buyers face in improving supply chain quality is “working with suppliers to improve performance”. That was in 2016, and we believe very little has changed.
Many companies have tried several approaches to get their key suppliers to improve. That is particularly difficult when those companies need to switch to pursue a “zero defect” objective and their suppliers resist taking even the first step.
Zero defect is a quality objective, which refers to the improvement of manufacturing systems to the point where zero or near-zero defectives are shipped to buyers. It is a way not only to satisfy buyers, but also to eliminate all the wasted activities and materials associated with defective manufacturing. Zero defect can ultimately become a mindset, with the whole organization not tolerating any form of poor quality.
Based on our experience guiding our clients through transformation projects, here is our practical advice. It starts with the buyer taking decisive actions. If consultants are involved, we also share some good practices.
If the buyer does not have leverage over the supplier and if the buyer is not ready to make strong decisions, the switch to zero defect is not likely to happen. Let us explain this further.
We should mention there is an important prerequisite. As the buyer, you need your supplier to clearly understand your quality standard and you need them to agree with your evaluation of their product quality. Without that prerequisite, the supplier’s teams will focus on differences in appreciation of what a defect is, rather than working on improvements.
We have observed buyers take several approaches that have been successful in persuading key suppliers to embark on a quality improvement program and, ultimately, to switch to a zero defect mindset.
Here are examples of approaches that have worked.
There are ways to make these approaches more likely to succeed:
If you decide to involve consultant(s), their following a few ‘good practices’ can go a long way.
The lead consultant needs to have a management meeting at the factory to introduce his team and to explain how he can help the factory reach their objectives.
Good preparation and good communication are quite important:
Many companies lack the confidence to push some of their key suppliers hard. That’s understandable.
A good start is communicating deeply with your key suppliers and finding one that is motivated – for example, their top management is aware that changes are needed, and they have a lot of extra business to gain if their performance improves.
Once a project with one supplier has shown positive results, you will have more confidence pushing your other suppliers harder. And, as you gain experience implementing operational changes in more of your supplier base, you will be better at picking the right candidates and at persuading them to follow the desired path.
Our external contributor is a partner at China Manufacturing Consultants (CMC). Founded in 2012, CMC is a manufacturing consulting firm that advises on and executes manufacturing initiatives from the boardroom to the shop floor. CMC shares effective approaches to convince key suppliers to take the actions necessary to markedly improve product quality and delivery times. The author may be reached at firstname.lastname@example.org
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at email@example.com.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.
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