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As companies move their assembly and manufacturing operations offshore, it can take weeks to be delivered to distribution sites within the United States. Therefore, it is very important for such companies to gain visibility into their outsourcer's manufacturing sites so that they can prevent any unacceptable products from entering the supply chain.

If low-quality products do enter the supply chain, the company often has to wait weeks after it was shipped from the outsourcer's manufacturing site to scrap a part of the shipment at the point of destination. And if a company has to throw away low-quality products late in the supply chain, it may experience shortages if the supply chain is already too lean. The company may also see disruption in fulfillment of orders to their customers.

Carrying high inventory at distribution centers is one way some companies try to make sure quality issues do not happen, but it is expensive to do this. It is especially expensive to do this in an industry like consumer electronics.

The additional handling and transportation costs caused by poor quality products being rejected at the point of production, rather than the point of delivery, also increase inventory write-off costs. For this reason, it is important that the company's quality management systems can provide clear and timely information about any quality issues.

Let's take the example of what happened to a large golf club manufacturer that decided to outsource manufacturing of its components to manufacturers in China. After manufacture, the components are sent to the company's plant in the United States where final assembly is performed. The outsourcing vendor sent process quality information to the company once a week over spreadsheets. By the time the golf club manufacturer was able to put all the information together and create trend charts, some of the information was over 10 days old.

While its quality engineers had visibility into any product or process quality issues in the recent batch of components, it was actually too late to do anything about the batch, which was already on a ship on its way to the United States. The quality engineers, therefore, looked for a way to get clear and timely access to quality data and process capability, so they could reduce quality issues at the company's plants.

The Quality Management System Solution

Manufacturers that outsource manufacturing need to deploy a Web-based quality management system in their own environment. The Web-based quality system provides all the capabilities expected of a quality management system, such as cost recovery, inspections, audits, document control and supplier dashboards.

In addition, a supplier can access the quality system of the manufacturer over the Internet and enter relevant data in real-time from their own production line, giving the manufacturer instant access to data. As a result, such a quality management system, while owned by the manufacturer, can span the entire company, and this is a very important thing in business.

Such a system enables manufacturer's quality engineers to:

• Define inspection points in the supplier's manufacturing line and define quality attributes to be collected at those inspection points, so that the supplier can collect data using the Web-based quality system at those inspection points. The system then automatically calculates process capability and makes it available to the manufacturer's quality managers all within hours. As a result, a manufacturer's quality managers have real-time visibility into process capability issues at their supplier.
• Trend all collected data, identify issues and create corrective actions to be implemented at supplier's plants. A Web-based system ensures that a supplier has instant visibility into corrective actions created by the manufacturer. The supplier's engineers work on corrective actions to identify root cause and resolution. A web-based system also allows the quality managers of the supplier's quality engineers to track the progress of corrective actions and to ensure that they have been closed successfully.
• Audit the supplier's processes on a frequent basis and easily correlate the detailed audit data and results against previously identified corrective actions to ensure the corrective actions were successfully implemented.

Using these capabilities, the manufacturer's quality managers not only can prevent a poor quality shipment from entering the supply chain in a timely manner, but they can also identify quality issues, create appropriate corrective actions for the supplier and systematically prevent such problems from occurring again.

In the example above, the quality engineers of the golf club manufacturer implemented just such a data entry system at its outsourcing partner's plants. Since then, the manufacturing process capability of the outsourcing partner has increased, and quality issues can now be identified in real-time and proactively addressed. A traditional PC-based quality management solution would not have been able to meet these requirements. It would have increased the risk that the manufacturer's suppliers would reject the products.