Case Study 3: Managing Supplier Quality Of Integrated Device

Case Study 3 Managing Supplier Quality Integrated Deviceson Pp 839

Case Study 3: Managing Supplier Quality: Integrated Devices on pp. , then answer the following questions/mandates: Bill Edwards is a quality engineer assigned to the Injected Molding Commodity Team at Integrated Devices. The commodity team is responsible for evaluating, selecting, and negotiating agreements with plastic-injected molding suppliers to be used throughout Integrated Devices. The team is also responsible for improving service quality and material that Integrated Devices receives from its suppliers. Bill’s role after supplier selection involves working directly with suppliers that require training or technical assistance concerning quality control and quality improvement. The company spends about 70 percent of each sales dollar on purchased goods and services, so suppliers have a major impact on product quality.

Bill just received a call concerning a recurring manufacturing problem at Integrated Devices’ Plant No. 3. The plant buyer said the plant is experiencing some quality variability problems with a key plastic-injected molding component supplied by Trexler Plastics. The component is sometimes too short or too long to fit properly with other components within the finished product. On occasion, the bracket snaps, causing end-product failure.

Although the unit cost of the plastic-injected molding component is only $1.55, these quality issues (length variability and snapping) are creating production problems that far exceed the component’s purchase price. The local buyer announced he was having difficulty resolving the problem and asked for support from the corporate commodity team. The buyer said, “You corporate guys selected this supplier that we all have to use. The least you can do is to help us out of the jam your supplier choice is causing.” The buyer’s comment surprised Bill, although Bill would soon come to understand that plant personnel resented not being able to select their own suppliers. After investigating the problem during a tension-filled meeting with Plant No. 3 personnel, Bill determined he would have to visit the supplier directly. He would work with Trexler’s process engineers to address the manufacturing variability caused by the non-conforming component. Bill went back and reviewed his team’s actions when selecting a single supplier to provide an entire family of plastic-injected moldings. Trexler had quoted the lowest price of all competing suppliers and had provided samples that passed Integrated Devices’ engineering tests. Upon his arrival at the supplier, Bill learned that Trexler did not have a dedicated process engineer.

One engineer, Steve Smith, was responsible for plant layout, process, quality, and industrial engineering. This individual, who was hired only two months previously, was still becoming familiar with Trexler’s procedures. When Bill asked to review the supplier’s quality control procedures, Steve had to ask several people before he could locate Trexler’s procedures manual. Bill decided that his first step should be to understand the process responsible for producing the defective component. At an afternoon meeting, Bill asked Steve for actual output data from Trexler’s process.

Steve explained they did not collect data for process capability studies or for statistical control charting of continuous production. However, he did say that sometimes “things don’t seem to be operating well” with the equipment that produces the component. Trexler uses an inspector to examine every finished item to determine if it should be shipped to the customer. After explaining the basics of process capability to Steve, Bill asked him to collect data from the process that produced the bracket component. Bill requested that Steve take exact measurements periodically from the process so they could draw statistical conclusions.

Bill said he would return in three days to examine the data. Upon his return three days later, Steve shared with Bill the details of the data collection effort (see Exhibit 1). Once Bill calculated a preliminary process capability from this data and examined the training and quality control procedures at Trexler, he realized he had some serious work ahead of him.

Sample Paper For Above instruction

Managing supplier quality is a critical aspect of modern manufacturing, especially when a significant portion of a company's costs and product quality is influenced by suppliers. The case of Integrated Devices and its supplier Trexler Plastics exemplifies the complexities and challenges involved in ensuring supplier quality and maintaining continuous improvement within a supply chain. This paper discusses the process capability analysis performed in the case, the importance of verifying process capability before implementing statistical control, the proactive or reactive nature of the company's approach, contractual strategies for quality management, risks associated with supplier selection criteria, and the importance of collaboration between corporate and plant levels.

First, the calculation of process capability indices, Cp and Cpk, provides a quantitative measure of how well a process meets specified limits. In this case, data collected from Trexler’s process were used to compute these indices. The Cp index expresses the potential capability of a process assuming it is centered within specification limits, while the Cpk considers process centering and variation. The formulas are:

Cp = (USL - LSL) / (6 * standard deviation)

Cpk = Min[(USL - μ) / (3 σ), (μ - LSL) / (3 σ)]

Where USL and LSL are upper and lower specification limits, μ is the process mean, and σ is the standard deviation. Based on the data provided in the case (or hypothetical data similar to that), the calculated Cp and Cpk values indicate whether Trexler’s process can consistently produce parts within the specified tolerances. For example, if the USL for the component length is 10.0 mm and the LSL is 9.8 mm, with a calculated standard deviation of 0.02 mm and mean close to 9.9 mm, the indices reveal whether the process is capable of meeting specifications reliably.

Generally, a Cpk value of at least 1.33 is considered acceptable in manufacturing, signifying the process is capable with a reasonable margin. If the calculated Cpk is below this threshold, it suggests the process needs improvement before it can be trusted for consistent quality production. The goal should be to align the process so that Cpk reaches at least 1.33, with higher values (such as 1.67 or 2.0) indicating greater process robustness. Therefore, the process at Trexler should satisfy the design requirements if the computed Cpk exceeds 1.33; otherwise, corrective actions are necessary.

It is crucial to verify process capability before developing statistical control limits because control charts assume that the process is stable and predictable. Implementing SPC charts on an unstable process can lead to misleading conclusions, such as overreacting to assignable causes or missing signals of actual process changes. Proven process capability indicates that the process variation is within predictable limits, which makes control chart signals meaningful and actionable. Without establishing capability, managers risk chasing false alarms or neglecting true issues, ultimately impairing quality improvement efforts.

Integrated Devices appears to be reactive in managing supplier quality, as evident from the case. The company responds after issues arise—such as the recurring defect—rather than proactively preventing defects through process control and supplier development. The reactive approach results in increased costs, production delays, and diminished supplier relations. Adopting a proactive stance involves working closely with suppliers to implement process improvements, failure prevention, and quality assurance measures before defects occur, which reduces costs and enhances product reliability.

Negotiating quality requirements into supplier contracts offers notable advantages. It formalizes quality expectations, ensures accountability, and facilitates supplier performance management. Clear contractual quality criteria enable suppliers to understand the quality standards they must meet and provide a basis for evaluating supplier performance. Additionally, it encourages suppliers to pursue continuous improvement and aligns their processes with the company's quality goals. Such contractual integration fosters a partnership mindset, ultimately leading to higher quality and more reliable supply chains.

Relying solely on product samples during supplier selection carries risks, including the potential for unrepresentative samples that do not reflect ongoing process variability, and false assurance about future quality. Sampling may miss infrequent defects or issues that only manifest under specific conditions. Overemphasizing unit cost as a decision criterion introduces risks of compromising quality for lower prices. Cost-driven decisions might lead to selecting suppliers with insufficient quality controls, resulting in higher overall costs due to defects, rework, or warranty claims.

It was vital for Bill to collaborate with Plant No. 3 personnel before visiting Trexler because understanding the plant’s specific issues, operations, and personnel feedback provides valuable context that shapes the investigation approach. Building rapport and gathering insights from plant staff helps identify apparent and underlying problems, ensuring that the supplier visit is focused, efficient, and productive. This collaboration also fosters trust and cooperation, essential for implementing effective improvements.

Firms use corporate commodity teams to achieve strategic supplier management, leverage buying power, and ensure uniform standards across the organization. Corporate teams facilitate supplier evaluations, negotiate contracts, and develop standards that benefit the entire company. However, resistance from local plant personnel may arise due to perceived loss of autonomy or mismatched priorities. To gain support, firms can involve plant personnel early in the supplier selection process, communicate the strategic benefits of corporate decisions, and foster collaboration, ultimately aligning local and corporate interests for a more effective supply chain.

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