Punishing Poor Quality Vendors

[curvyrace]

I have worked most of my twenty year career at small companies and, as a result, have been havily involved in quality assurance. During that time, I've always been able to resolve quality issues with vendors with one or two meetings and clarification of my employers expectations. But, I'm now faced with a vendor who despite 9 non-conformances in 3 months, several emails and multiple phone calls cannot seem to get a single shipment to us without major quality issues.

I would like to stop using this vendor, but their pricing is too favorable to allow that. I know the quality issues are detracting from their pricing and that is definitely working into our decision making process. One thing I've never had to do and am considering here, is somehow punishing this vendor for further problems. I was wondering if some other folks out there have any experience with setting up some kind of QA punishment system? I'd appreciate hearing about any experiences you may have had in this area.

 

[CoryPad]

The only thing I am familiar with is having the Quality dept involved in putting a supplier on "New Business Hold".

 

[shawnpeter]

i've done a required delivery date per quote, 5 days grace to compensate for whatever unforseen issues, and then a 1.5% price reduction per day following that day. To counter the negative perception of that we offered a 5% over the quoted price if received within 5 days prior to the quoted date. adjust accordingly and use wisely.

 

[DVWE]

One word: Backcharge.

 

[rustbuster]

You need to have your purchasing people clarify the quality requirements / expectations in the purchase order or contract with clear ramifications should they not meet the expectations.

What good is cheap pricing if you are recieving inadequate materials?

 

[Compositepro]

It sounds to me that your "quality non-conformances" are are not truly important quality issues but are paperwork issues. If there is a real quality issue then there must be a real cost involved. The punishment for bad product or service should be what it has always been - they lose your business. Perhaps your company is making unreasonable demands for the price it is paying. As you have said, your company is unwilling to pay more to get what it wants from someone else.
Punishment is rarely as effective as incentive in a business relationship. It seems that your supplier does not feel that losing your business would be much of a punishment.

 

[stanweld]

Prior to discontinuing a relationship with a supplier, we announced a formal audit of the vendor's quality system in relation to our Purchase Order Specifications. The supplier then had a limited time to respond to the audit findings. In one such case after an inappropriate response, we discontinued purchasing its products. Because we purchased over 60% of its output, the company soon closed its doors.

If your company will not refuse to purchase from this supplier, add cost penalties for nonconformances in your P.O. and backcharge per DVWE's advice.

 

[PAN]

You may ask your vendor to propose the corrective and preventive actions. If you still find the repeated problems from this vendor, you may suspend new order and consider other acceptable vendors...

 

[KENAT]

Bassically, the first thing you need to do is get everyone internally on the same page about the quality not being acceptable and something needing to be done, which it sounds like you aren't, then you can try and come up with a plan but you'll likely have to get finance, purchasing, legal... to approve whatever it may be.

Unless you're in some place a bit more flexible.

Posting guidelines faq731-376

http://eng-tips.com/market.cfm?

(probably not aimed specifically at you)
What is Engineering anyway: faq1088-1484​

 

[curvyrace]

Thanks for your input everybody! It's very helpful!

 

[tomwalz]

We had a problem with poor quality saw tips. They were cracked and chipped. Some would wet and braze well and some did not. Counts were pretty irregular. We fought it for years. I finally wrote a set of “industry standard” specifications. We went on an industry specific discussion group and asked if anyone had the same problems.

It turned out lots of folks had the same problems. Typically the carbide suppliers would lie and tell them they were the only ones. Once it became public everyone demanded accurate counts and 100% usable parts. It took about six months for the carbide suppliers to get straightened out. Now a defective part or a poor count is very rare.


Thomas J. Walz
Carbide Processors, Inc.

http://www.carbideprocessors.com

Good engineering starts with a Grainger Catalog.

 

[MikeHalloran]

One time a vendor supplied an assembly comprising four thick steel plates that didn't fit together right, because the dowels used for alignment were not perfectly perpendicular to the adjacent surfaces.

My manufacturing manager arranged a personal meeting between me, the brash young (long time ago) design engineer who knew everything, and the business owner, an experienced machinist. I explained what the assemblies had to do, and basically verbally reiterated the tolerances that were clearly stated on the drawings. Then I told him that he had been highly recommended, and said that I was therefore surprised and disappointed in his work.

It takes a huge ego to be a machinist; shaming one will definitely produce a result.

Luckily for me, the result was that the replacement assemblies and the remainder of the order fit together like 14th century watch parts. The joints were invisible once assembled, and even the noncritical surfaces were so smooth that they were difficult to paint.



Mike Halloran
Pembroke Pines, FL, USA

 

[MintJulep]

In dog training there are two basic rules.

Reward desirable behavior.

Do not reward undesirable behavior.

Works the same for vendors.

If you get bad parts you send them back and don't pay for them.

When you get good parts, pay promptly.

 

[QualityManSmartscope]

1. Get a new supplier, and stop wasting time, money, effort.

2. It is not worth your time, and others time to monitor a non responsive supplier.

3. Hidden cost, reputation at risk cost, customer satisfaction cost, monitoring cost, non conformance processing cost, accounting back and forth cost.

4. Action; a) bid out the job b) audit new supplier c)Perform First Article c) Run a production quantity
d) Juxtiposition the two suppliers results, and if favorable to the new supplier..cut off non responsive supplier. Note: Make sure you have no other parts with that old supplier..ramp up the new supplier with all the parts
that old supplier has before cutting them off to minimize your risk..

If it were me..that is what I would do..nature of business