It is often said that quality is a given in the electronics industry. Component suppliers need to provide high-quality parts from the get-go if they expect to win business from OEMs and electronics manufacturing services (EMS) providers. If suppliers want to retain and win additional business, they need to continuously improve the quality of products they build while reducing cost and developing new technology that customers need. At the same time, suppliers must also improve on-time delivery and overall responsiveness to customer requests.
Supply Chain HQ recently interviewed Jamey Mann, director of global purchasing for Kimball Electronics, an EMS provider based in Jasper, Ind., about its quality expectations of suppliers, how suppliers are rated for quality and general quality trends in the electronics industry. The following is an edited version of the interview.
Supply Chain HQ: Has supplier quality in the electronics industry improved in recent years, and if so, why?
Jamey Mann: Overall quality has improved drastically over the past 5-10 years as a byproduct to the diligence that we emphasize with our supply base. We have made efforts to push suppliers to achieve parts per million defect goals. Also, technological improvements such as die shrinks as well as wafer and packaging improvements have helped drive continuous improvement. The markets we serve – automotive, medical, industrial and public safety – require the highest degree of quality as a core requirement. We, in turn, require the same from our supply base. The constant focus on continuous improvement has improved quality results.
“We place a heavy emphasis on continuous improvement. Our objective is to exceed our customers’ expectations every day,” says Jamey Mann, director of global purchasing for Kimball Electronics, Jasper, Ind.Supply Chain HQ: How do you rate supplier quality? Do you just rate product quality?
Jamey Mann: Kimball’s supplier quality system is based on three criteria: on-time delivery, product quality and service. A perfect score with our system would be 100. With on-time delivery, suppliers are rated based upon the suppliers’ actual deliveries to their committed delivery date. They are penalized for both late and early deliveries. Our delivery window is zero days late, 3 days early.
With product quality, suppliers are rated on parts per million defect levels. Our goal is zero ppm. Suppliers are also rated based on whether they delivered exactly what was ordered or specified and the overall function of the components through manufacturing. Poor fit, form or function is penalized, and a corrective action by Kimball is issued.
The service rating is based upon the supplier’s ability to close out corrective actions on a timely basis within the specified timeline expected for each event. Kimball’s supplier quality system is structured to rate all suppliers on a monthly, quarterly and annual basis.
Supply Chain HQ: What happens to suppliers that have poor quality ratings? Do they risk losing your business?
Jamey Mann: Yes. We direct our spend to those suppliers with high quality and the ability to maintain the same focus on continuous improvement. If a supplier’s quality decreases, then their spend will also decrease as the cost of poor quality is a factor in our sourcing model.
Supply Chain HQ: Have your expectations in terms of quality from suppliers changed over the years, and is it possible to get high-quality parts at a low cost?
Jamey Mann: Our expectations in terms of quality directly correlate to the markets we serve and the expectations of both our customers’ demands, as well as our own. Over the years, we have continued to place a heavy emphasis on continuous improvement in terms of high-quality products and services. Our objective is to exceed our customers’ expectations every day.
Kimball, along with our customers, requires excellent quality; therefore, it is an expectation. We also expect the best possible costs from our supply base. In many cases, you have to make decisions based on the total opportunity where cost and quality are requirements. Often, the lowest cost does not deliver the best quality. The cost of poor quality outweighs low cost in many instances.