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Cost and Delivery Optimization in Manufacturing – How to Achieve the Right Balance?

Introduction

Contract manufacturing has been a pivotal part of our business strategy. While it offers cost savings and flexibility, it also presents challenges related to quality and delivery. To achieve the baseline quality and delivery performance, we planned to work closely with suppliers.  In this blog post, I’ll share my experiences and strategies for achieving the balance.

Quality Performance

The Challenge

When we decided to outsource manufacturing, we knew that maintaining product quality would be critical. However, giving up direct control over the production process was a significant risk.

Strategies for Improvement

  1. Clear Expectations: We communicate our quality requirements explicitly to our suppliers. Frequent product inspections and audits help reinforce these standards.
  2. Continuous Vigilance: Regular monitoring of the manufacturing process at the supplier’s end is essential. We identify areas for improvement and collaborate with our suppliers to address any deviations.
  3. Shared Understanding: We work hard to ensure that our suppliers understand our specific quality needs for each delivery. Transparency fosters alignment and ensures consistent results.

Delivery vs. Quality

Striking the Balance

Balancing quality and delivery timelines is like walking a tightrope. Sometimes, pushing for top-tier quality may lead to delays. On the other hand, compromising delivery schedules for quality isn’t always feasible.

Our Approach

  1. Prioritization: We evaluate each situation individually. Some deliveries warrant prioritizing quality, while others require timely fulfilment.
  2. Open Dialogue: Effective communication with our suppliers is key. We discuss trade-offs and collaborate on solutions that strike the right balance.
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Supplier Improvement: A Learning Journey

Learning from Mistakes

  1. Iterative Learning: Mistakes happen, even with the best suppliers. The key is to learn from them and prevent their recurrence. Continuous improvement is our mantra.
  2. Systematic Evaluation: We assess our suppliers based on QCD (Quality, Cost, Delivery) parameters. Regular audits and supplier rating cards help us identify areas for enhancement.

Building Strong Partnerships

Contract manufacturing isn’t just about outsourcing—it’s about building strong partnerships. By emphasizing clear communication, vigilance, and supplier improvement, we maximize the benefits while maintaining quality and meeting delivery commitments.

Remember, it’s a journey—one where we learn, adapt, and grow together.

AUTHOR

Arun Kumar V

Senior Engineer - QA/QC, Srushty Global Solutions

Certified Six Sigma Green Belt Quality Engineer with extensive experience in CNC machining, assembly, fabrication, and special processes such as powder coating and anodizing. Proficient in IATF 16949 and ISO 9001 auditing standards, with proven expertise in establishing and maintaining Quality Management Systems (QMS).

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