CHINA AUTOMOTIVE SUPPLIER

QUALITY MANAGEMENT BRIEFING

Vol. 4, No. 6, June 2020

1

How To Ensure Your Long-Term Suppliers' CONTINUOUS Quality Compliance (Ⅱ)

How to watch for the quality capability of a supplier’s product realization process

(Continued from the last issue)

How can we evaluate whether products continuously produced by a supplier can meet the quality requirements, in other words, can the quality of the supplier’s products be kept stable and satisfactory to the customer?

▼ Understand the production process, with focuses on the main processes that affect the product quality;

▼ Pay attention on-site to whether the main processes are implemented according to the process requirement, whether there are any operation deviations, and whether the inspection records meet the requirements;

▼ More importantly, watch out for process risks while focusing on process execution compliance.

This writer once visited the production site of a formula mixing process at a brake pad factory. The process was to weigh and mix nearly 20 different chemical raw materials according to the requirements of the formula. For the brake pad production, the mixing process not only is labor-intensive and quite dusty but also requires a strong sense of responsibility. Moreover, it is a very confidential process. Being the lifeline of the enterprise generally, the process is usually operated by the owners, their relatives, or trusted employees, while other employees and outsiders are not allowed to enter the control room.

According to this writer’s on-site observations, there were more than 20 material bins on the left side, and each bin was also marked with stored materials. On the right side, there were purchased raw materials, with the names, addresses, and telephone numbers of the manufacturers on the bags. The operator needed to put the purchased raw materials into the bins with the corresponding names on the bins which were equipped with the function of opening the door when a QR code was scanned. The operator had a piece of paper on which the 20 or so QR codes were printed. When adding the raw materials into the bins, the operator would scan one of the QR codes printed on the paper, go to the right side to get the purchased raw material, pour the material into the bin with the open door and then manually close the door, and he would go through this process with all the materials.

This writer checked the on-site operation instructions, the feeding time, feeding amount, and other documents and records, and didn’t find any problems. He then asked the operator, “so you follow this process every time you add the materials into the bins. What if you put the raw materials into other bins by mistake?” The operator answered: “I have been working here for years and have never made any mistakes. My boss trusts me deeply. And I can tell all the materials here without even looking at the markings on the bags.”

The operator’s narrative, the on-site records, and operations all seemed flawless and the process apparently was in compliance with the requirement. However, from the perspective of the process risk, with the operator leaning on the boss' blind trust and years of experience on his job, there are very high risks with this process. For example, with all QR codes printed together on a single piece of paper, there was no guarantee that the correct QR code was selected in the first place. The process, therefore, is very likely to produce non-conforming products.

Obviously, when we look at the process capability of suppliers, we should also pay more attention to the risks of process quality. Helping suppliers to avoid the risk is an important part of sustainable quality stability.

(To be continued)


By Felix SS YUAN

2

Cabin Air Filter

Cabin air filter is an essential part of the operation of vehicles. It filters the air from the outside into the interior of the vehicle to improve the air cleanliness. The standard filter cartridges can only filter out large dust, and there are filter cartridges with PM2.5 filtering that can filter out small particles, pollen, bacteria, industrial waste gas, and dust, etc. providing a good air environment and protecting the health of the people in the car.

Primary failure modes 

  ▼  Filter material performances (width, thickness, permeability, and weight) fail to meet the requirements, resulting in the degradation of filtration efficiency and performance.

  ▼  The workplace is dusty when the filter paper is being folded. After absorbing the dust on the surface of filter cartridges, the filter performances fail to meet the requirements.

Key preventive measures

  ▲  Incoming inspection: Pay attention to the air permeability of the filter paper, which is generally controlled at ≥ 1500 (L / ㎡. S).

  ▲  Production process: the temperature of hot-melt adhesive should be controlled when the side strip is pasted on the filter. Generally, the temperature should be controlled at 170 ℃± 20 ℃, the side strip shall not be pasted askew, and the hot melt adhesive cannot stick to the product surface which could cause contamination.


By Felix SS YUAN

3

SCM C19: Cross-border Supply Chain Management in the Aftermath of COVID-19 

COVID-19 has fundamentally changed how the global automotive industry, especially the aftermarket communities, conduct their business, including the management of supply chains.

COVID-19 has also brought about wider adoptions of many new business practices in cross-border supply chain management, which are made possible by technologies such as cloud-based computing, advanced live-streaming applications, improved communication networks and devices, and the promise of revolutionary 5G technology.

The profound impact of the coronavirus pandemic has already transformed the traditional supply chain management across the border into an updated business model that can be called as: Cross-border Supply Chain Management post COVID-19, or simply SCM C19.

The focus of SCM C19 is to address the specific challenges to the international buyers who are not able or not willing to travel overseas for their procurement operations for the foreseeable future, such as:

   ◆  How to identify and pre-qualify new suppliers

   ◆  How to inspect and audit potential suppliers

   ◆  How to manage the pre-shipment QC inspections

SCM C19 also addresses some of the long-standing obstacles in overseas purchases that have been made even more serious by the pandemic:

   ◆  How to lower the inventory cost by avoiding large-volume or high MOQspurchases

   ◆  How to improve the working capital turnover by cutting short the time from ordering to selling.

SCM C19 provides a general framework for the global aftermarket communities to deal with these challenges and many other new norms post COVID-19:

With SCM C19, business in Europe and the US still buy from suppliers overseas such as China, and many operations of cross-border supply chain management are still based on the traditional on-the-ground activities, but the whole process is supplemented by both the technologies which enable remote and real-time buyer participations and also the third-party service providers who are working locally in China and overseas, so that although international buyers are not coming to China personally to meet the sellers face to face, cross-border purchases can still be conducted smoothly and safely across the ocean.

(To be continued)


4

Cost of raw materials:

Exchange rates:

USD/RMB: 1:7.1022



EUR/RMB: 1:7.8771



RUB/RMB: 1:0.1002




June 2020



The above information is for reference only


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While there are still many “hotspots” of the coronavirus outbreaks in the world, the general situation in many countries is certainly stabilizing or improving, even after the gradual “work resumptions”. There are already clear signs that the automotive aftermarket business in Europe is also starting to pick up.

However, many businesses have not fully opened and their employees are still working from home, yet in Europe and some other regions, the general summer holiday seasons are also just around the corner. We are already seeing people take extended holidays in combination with the continued stay-at-home requirement in some countries.

Considering the expected gradual recovery of the automotive spare parts business in the coming months, we suggest that international buyers review the inventory and sales forecast for the new future and then start to plan the procurement now so that your business could be well prepared without further disruptions in the next few months.

Despite a few clusters of new cases in China recently, almost all spare parts factories in China are already in full normal operations. With the new concept of SCM C19 introduced above, you can certainly continue to rely on your supply chains in China for the procurement requirement in this era of the pandemic.




SHENTOU SUPPLY CHAIN MANAGEMENT CO. LTD. is a Shenzhen, China, based company serving international automotive clients in the implementation of their China strategies and programs. CHINA AUTOMOTIVE SUPPLIER QUALITY MANAGEMENT BRIEFING is a monthly newsletter published by Shentou to address the specific and unique quality challenges and concerns international automotive companies face with suppliers in China. Comments are welcome at qms@shentou.com. Click here to subscribe.

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