Vol. 4, No. 7, July 2020


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

How can we reduce the risks of defective parts being produced and delivered by suppliers through 2nd party audits?

(Continued from the last issue)

Before the audit, choose a proper timing, select qualified auditors, and then carry out the audit according to the pre-determined audit plan. in the meantime, it is also necessary to state the requirements for the supplier’s systematic documentation.

▍Audit timing selection
● When developing new suppliers, we should evaluate the quality management system and the continuous supply capability of the new suppliers.
● When exiting suppliers develop the quality management system, we should evaluate the quality management system and the quality control capability in the manufacturing process.
● When the supplier uses new materials or there are changes in material, location, and process, or has major quality complaints and delivery delays, we should evaluate the quality control capability and product quality management in the manufacturing process.
● For suppliers with stable long-term supply quality, we should evaluate the quality management system, process realization capability, and product quality on a regular basis.

▍Auditor’s compliance qualification
The selection of auditors is one of the key factors to ensure the continuous quality stability of the supply. Basic requirements for qualified auditors: select auditors with professional knowledge and audit experience according to the process/product characteristics of the suppliers to be audited, to help the supplier identify high risks and reduce them.

▍Audit planning
We suggest that the audits be planned with the following aspects: operations of quality management system, continuous supply capacity, process quality control ability, product quality control ability, environmental and occupational health and safety assurance ability, etc. Different audit schemes, objectives, and key audit points should be used depending on the supplier’s ability to continuously supply and stabilize the quality.

For instance, when there are serious delivery delays with the supplier, we need to plan the audit on the supplier’s finance, process, technology, and production capacity, in order to assess the supplier’s continuous supply capacity and determine whether the supplier’s supply capacity is up to standard, so as to reduce the risk of supply interruption. We need to pay special attention to the evaluation of suppliers’ continuous supply capability.

Currently, about 50% – 70% of the factories in the aftermarket cannot guarantee the effective implementation of the control plan requirements. Therefore, when we pay attention to the supplier’s process control capability, we sometimes overlook the many process quality risks, which unfortunately might lead to hidden quality dangers in the final products.

▍Requirements for suppliers’ systematic documentation
For qualified suppliers with long-term cooperation, we need suppliers to provide systematic documentation, including quality manual, procedure documents, quality assurance agreement.

The contents of change management include personnel, technology, process, materials, production/testing equipment, production site, etc. For safety-related parts, the supplier should timely inform the buyer of the changed management requirements including PPAP and control plan. Change management is the most important method to control the quality risks in the batch supply stage. We should assess the supplier’s process quality capability and continuous supply capability based on the timing of the changes by the supplier.

By Felix SS YUAN


Oil Filter

Oil filter is part of the lubrication system of the engine. Its main function is to remove all impurities, dirt, and other contaminants from the engine oil, providing clean lubricating oil for the engine to ensure the smooth operations of the crankshaft, connecting rod, camshaft, supercharger, and piston ring inside the engine. Its lubricating, cooling and cleaning functions reduce the wear and tear of the engine and prolong its life.

Primary failure modes:
◆ Failures of the filter paper include damaged filter element, saturated filtration capacity of the filter element, or improper installation, resulting in the filtration failure of the oil filter.
◆ Too many impurities and gums in the engine oil clogging the system.
◆ Unfiltered oil gets into the engine directly as the bypass valve opens up at the wrong timing.


Preventive measures:
◆ Strengthen the incoming inspections of the appearance, original filtration efficiency, and rated volume flow of the filter paper.
◆ Enhance the inspections of the fatigue life and height of the spring inside the bypass valve.
◆ Increase the inspection frequency of the correct assembly of the bypass valve.
◆ Control the O-ring material and its correct assembly accuracy and method.

By Felix SS YUAN


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

SCM C19, the cross-border supply chain management in the aftermath of COVID-19, address the challenges posed by the pandemic when buyers are not able or willing to travel overseas and meet the suppliers face to face.

Let us take a look at how key processes of cross-border supply chains are impacted by COVID-19.

Supplier Identification & Initial Screening

Traditionally the business communities rely on internet searches, emails and telephone communications to identify and establish initial contact with potential suppliers overseas.

With COVID-19, people are turning to tools such as cloud-based technologies, live match-making sessions and video-conferences for such purposes.

With SCM C19, more businesses are attending cloud-based trade shows to find the potential suppliers and using video-conferencing for introductory meetings. Live match-making between buyers and sellers by video-conferencing are sometimes sponsored by trade and official business promotion organizations, with the added assurance of pre-qualifications by the sponsoring partners. Buyers and sellers are also assisted by local service providers for coordination and language services.

Supplier Qualification

Pre-COVID-19, business typically use supplier questionnaires and on-site visits for factory inspections or audits based on ISO9001, IATF16949, ISO14001, ISO45001 & BSCI. Follow-up visits may also be needed for following up with non-conformity corrections.

With COVID-19, offline activities are complemented by online communication tools such as cloud-based file sharing and live-streaming.

With SCM C19, local service providers work with the buyers to jointly determine the inspections requirements and the audit procedures, especially product-specific critical processes before the inspections and audits.

On-site inspections and audits are performed by local service provides who also make video-recordings of the process for online review by the buyers. And inspections or audits of the key processes are also live-streamed by the service providers at pre-determined time period so buyers can monitor and participate remotely.

(To be continued)


Cost of raw materials:
Exchange rates:

USD/RMB: 1:7.0373

EUR/RMB: 1:7.7772

RUB/RMB: 1:0.1043

July 2020

The above information is for reference only


As more and more countries are proceeding with the market re-opening, we’ve noticed that business activities are picking up again in international trade. While there are more inquires, orders, productions and deliveries, international business traveling, part of the busy lives many of us were so used to prior to the coronavirus pandemic, is unfortunately still out of the question. The travel bans on foreign nationals coming into China, for example, have been in effect since March 28th of this year. Even if you are able to enter China through some “green channels”, you’d still have to be quarantined for up to 14 days in most cases.

Globally, almost all trade events have been cancelled due to COVID-19. But in China, many automotive trade events are still on schedule as of now. For example, the 2020 Beijing International Automotive Exhibition (Auto China 2020) from the 28th to the 30th of September, the 2020 Auto Aftermarket Guangzhou (AAG) from the 11th to the 13th of October, and the 2020 Automechanika Shanghai from the 2nd to the 5th of December. Not sure at this point if the travel bans would be lifted by then and the compulsory quarantines could be replaced by other alternative solutions (such as nucleic acid tests only).

Regardless, even if you are still not able / ready to travel to China, you could always find and get to know your new potential suppliers by using effective tools such as cloud-based computing, faster communication networks and easy-to-use live-streaming applications which have been widely adopted by the business communities in the new norms post COVID-19.

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 bi-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 Click here to subscribe.

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