Resilient Supply Chains
_{Supply Chain Quality Management}

In the first blog of this three part series, you learned about the importance of order management to supply chains, and how the order management process can be improved.

In this blog (part two) you will learn about Supply Chain Quality Management – what it is, how it works and why it matters.

Quality problems in the supply chain: a hypothetical example

A retail company has been experiencing a surge in customer complaints about a particular smartphone model they sell. Customers report issues such as malfunctioning screens, battery failures, and overheating problems a few months into using the phones.

Upon investigation, the company discovers that the defects stem from components supplied by one of their overseas vendors. The vendor, located in a different country, has been struggling with quality control issues in their manufacturing processes. However, due to the lack of robust supplier quality management procedures in place, the retail company failed to identify and address these issues promptly, and now struggles to find an alternative, more reliable source of components.

The importance of supplier awareness

In manufacturing, an average of 80% of a product’s value comes from suppliers.

Mastering supplier management (and thus the quality of supplier goods) is critical for all organizations with a supply chain – especially in this era of global disruption and uncertainty. This involves mitigating supply risks, which is in the DNA of the Supply Chain Quality Management (SCQM) team – whose job it is to provide a situational awareness picture of the supply chain, as well as provide steps to solve the many problems that can occur.

To this end, businesses need a robust action plan that contains, for example, a set of quick containment actions that support quality control or complaint management. One way to support this is through the Eight Disciplines (8D) approach. Originally developed at Ford Motor Company – this methodology can be used for supply chain problem identification and solving.

For a company, being able to regularly assess its global supply chain is the first step in properly monitoring (and understanding) the global manufacturing capabilities of its suppliers. This understanding allows companies to, for example, pre-empt critical component shortages by changing the manufacturer for a specific part. To this end, we implement various specialized audit methodologies (eg. VDA6.3 and Aero Excellence) that provide detailed insights into the quality of your supply chain, and that leverage best practices from several industries.

This methodology allows us to identify individual patterns – but also global ones. For example, we recently performed a complete assessment campaign for one of our clients, in which we audited more than 200 suppliers in 35 countries over 17 weeks.

From this snapshot, we are able to create a supplier development program using robust methodologies initially developed for the automotive industry, but that are today widely applied in other sectors, such as Advanced Product Quality Planning (APQP). We can also create entirely bespoke audit methods for clients.

‘Rightshoring’ for your supply chain

Rightshoring can be defined as locating a business’s manufacturing in areas that provide the best combination of cost and efficiency. To help our customers succeed with this approach, we rely on our ‘rightshore vision’. This leverages a network of 2500+ experts across the world.

As part of this vision, our local consultants and audit teams quickly get to work on client premises, reducing travel time, costs and project eCO2 emissions. We interact, if possible, with suppliers in the local language – streamlining remediation. Through this rightshoring approach, we have demonstrated a reduction of 60% eCO2 when compared to the traditional approach of European experts traveling overseas.

As is very clear for anyone who has bought an item that did not deliver upon expectations, quality control is essential. And it is increasingly important, the more complex that products become – as more components means more points of failure.

As electronic goods become increasingly complex, and as supply chains continue to endure geopolitical instability – SCQM, and the people who do it, will be more important than ever.

In the third and final part of this blog series, you will learn about the importance of sustainability in supply chains, and what steps you can take to make your supply chains more sustainable.

If you are currently facing delivery disruptions, or if you need to ramp up your supply chain to meet changing demand, we can help. Capgemini has years of experience helping companies across sectors and countries with supply chain quality management, along with access to some of the world’s leading experts in the subject. To find out more, contact our expert .