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Risk vs. Cost Series: Why Process Auditability and Quality Matter

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This is the first post in a three-part series focused on analyzing risk vs. cost when deciding whether to outsource electrical and mechanical assemblies to a contract manufacturer.

Auditability DefinitionWhether an OEM manufactures product in-house or outsources, its quality — and reputation — depend on auditable processes. Low process audit scores correlate to low on-time delivery rates and poor quality. In manufacturing, the cost of poor quality is high. Scrap, rework, product failures and recalls can ruin a company’s reputation and efficiencies. For these reasons, it’s imperative to make sure the processes your product flows through from design to delivery are auditable.

When considering outsourcing, an OEM can reduce risk by partnering with a contract manufacturer that values quality just as much as the OEM does. However, the value that auditable processes bring to each entity is a little different. Here’s a breakdown of what auditable supplier processes and quality mean to each organization in an outsourcing agreement.

Why Supplier Process Auditability and Quality Matter to OEMs

  • Boosts product consistency and reduces risk of human error and rework, leading to an efficient manufacture of goods and lower labor costs.

  • Implements documented quality systems that provide clarity and help build trust in the supplier and the outsourced parts.

  • Builds in multiple process checkpoints to ensure quality throughout the manufacture, with a final inspection verifying the end product.

  • Provides the ability to audit contract manufacturing partner’s processes, from an informal facility tour to an in-depth and formal review, to reveal compatibility and open a discussion about expectations.

  • Uncovers cost savings and design improvements by reviewing shared audits from like-minded continuous improvement partners.

Why Process Auditability and Quality Matter to Outsourcing Partners

  • Improves product consistency and reduces risk of human error, waste and rework due to reliable processes.

  • Reduces safety risk involved in the manufacture of custom products, helping keep costs down.

  • Defines roles and sets boundaries for each position/department involved, establishing accountability and solidifying consistency on each build.

  • Streamlines and improves training, reducing the time it takes to show someone new how to build the product as well as boosting consistency and efficiency.

  • Identifies gaps, reduces costs and adds to the collective wisdom of the company as the continuous improvement mentality uncovers additional improvement opportunities.

Analyzing the Risk vs. Cost of Quality

Quality is the direct product of clear, concise and auditable processes, and it’s not something that manufacturers can afford to skimp on. In order to reduce risk, improve consistency and build high-quality products, it’s imperative that auditable processes are in place. The alternative can be very costly, or even fatal.

Many OEMs, and some U.S. government contracts, require their contract manufacturing partners to be ISO-certified. Since MCL is ISO 9001:2015-certified, it has had the opportunity to build electrical and mechanical assemblies for military vehicles for more than 25 years. Read our case study to find out What We’ve Learned from Building Electrical & Mechanical Assemblies for 10,000+ Military Vehicles. Click the button below to read it now.

What We’ve Learned from Building Electrical &  Mechanical Assemblies for 10,000+ Military Vehicles

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