It is quite a normal process for Original Manufacturers (OEMs) to have people from their own company or contract third parties to visit and audit overseas suppliers to verify the quality of the products or services that they are producing for them. This is particularly well known in China and should be no surprise to any reader.
OEMs have not introduced this practice because they wanted to, but because they needed to. When I worked for an OEM, I too had to do this. and the good news is that it has and continues to work well, since the quality of products and services today are far superior than those of the past.
Effective, but clearly expensive to perform with Western auditors, so to reduce costs, there has been a shift to introduce local auditors as one would expect.
Understandably, the practice and the associated army of auditors remain in place.
I often ask myself that if all of this auditing process were to stop what would happen?
There will always be the most enlightened multinational companies who adopt these approaches but for the vast majority of smaller and I think that we can find out the answers by asking local people one question
“Given a choice, if you were able to buy the same product produced overseas or domestically (Even if moderately more expensive), which one would you choose?”
The answer I have always received is that they would choose to buy the product manufactured overseas. This tells you that cost (Price)
Only when a local person says that he does not care, do you know that the change has taken place.
I firmly believe that Chinese suppliers need to turn their approach on its head, not talk about it nor put more certification references in their presentation slides but really live quality.
With education and experience, it is easy to tell id the company is really embracing quality or not.
There also needs to be a catalyst to make this happen.
There are three parts:
- OEMs inform their suppliers that they will reduce the amount of effort that that put into the day to day supplier management.
- OEMs explain that demonstrable evidence that the suppliers have really embraced a quality culture would allow them to gain more business.
- Realisation / education that if they adopt a pragmatic approach then the suppliers will really reduce their costs.
This then needs to be driven from the top of the company downwards.