When it comes down to it, supplier quality can make or break an outsourcing project. Improving supplier performance can range from a relatively simple task to entirely impossible depending on how the supplier was chosen in the first place.
After being involved with a supplier for a period of time, issues may begin to surface. Orders not being filled, product defects, unexpected changes in the final product, and even whole missed deliveries — are common headaches. The ability of a company to solve performance problems is going to depend on the level of relationship with a supplier. Good ones take time and are worth their weight in gold.
Here are five ways to improve Chinese supplier performance.
1. Audit Reports
- During a supplier search, obtain multiple audits for a factory prior to choosing a manufacturer.
- Periodically conduct refresher audits to stay on top of how manufacturer is performing.
- It’s not unusual in China for a supplier to keep colleagues in the dark if there are problems in the workplace until the situation becomes unsalvageable. Things in China change quickly. Management turnover is a constant reality. Regular audits yield early warnings when things are on the decline.
2. Identifying the Root Cause
- If deliveries are constantly being delayed or defective products are being sent out to customers, do the legwork to pinpoint the problem that the supplier is having. For example, if shipments are always coming up short, there could be a staffing problem or an pstream suppliers is not delivering on time.
- Gather as many facts as possible as you work with the supplier. Collect them from everyone – from the shop floor to the top floor, to be ready for difficult conversations.
3. Communicating a Problem to a Supplier
- When directly speaking to a supplier it is important to:
- Leave emotions out of the conversation.
- Have a list of topics to be covered during the discussion.
- Be prepared with facts and armed with constructive questions, such as, “the number of defects has increased by 10% over the last month, what can we do to improve on this?”
4. Become More Involved in Supplier Operations
- If proactive improvements aren’t yielding results, you have two choices:
- Become more involved in the supplier’s business.
- Find a new supplier.
- Finding a new supplier takes time and can be very difficult. Consider the benefits of developing the supplier.
- Face to face interactions to show the supplier that you are serious about their issues.
- Implement simple Lean Manufacturing techniques.
- Work side by side with operators to implement changes that stick.
- Measure the results. Make them visible for the whole plant to see.
- Celebrate and communicate wins.
- “Sell” more changes to the supplier as momentum builds. Remind the supplier that they savings he/she achieves on your parts result in efficiency gains for the entire plant – and the supplier’s overall bottom line.
- Once supplier performance has been addressed, meet regularly with the supplier and stay on top of things. Good relationships take time. We’ve found that working very close with operators simultaneously with top management builds a foundation on which trust is built. The tough conversations get easier over time, due to increased comfort and confidence in the relationship.
If your company is experiencing Chinese supplier performance problems and you are having a hard time getting through to the supplier, it may be time for professional help. CMD has decades of experience working with Chinese suppliers. We’ll help you to decide if you should fix the relationship with your current supplier or move on. CMD also offers supplier search services where our experts will match your business up with the right suppliers, in China…and beyond.