Quality control at source is instrumental for a business to ensure product quality and protect their brand. The cost savings achieved by minimizing rework, returns and recalls usually far surpass the setup and running costs of an effective, well-managed quality control program.
This case study demonstrates how QIMA helped an international sourcing business optimize their quality control costs by minimizing missed inspections while ensuring production schedules are observed and safeguarding product quality.
Case Study
Client Background
The client is a professional sourcing organization responsible for the international procurement of consumer goods for their parent company and third-party customers. The client has annual revenue of over USD 41 billion and employs over 150,000 people in 35 countries. Their major sourcing regions are Southeast Asia, North America, and Turkey.
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Challenge
The client had a quality control program in place, but struggled with a high rate of missed inspections. A missed inspection refers to a situation when a quality control specialist arrives at the manufacturing site to conduct product inspection, but is unable to do so because the product is not ready for the inspection as scheduled (production not finished, goods not packed, etc.)
In 2014, the rate of missed inspections in the client’s supply chain was over 10%, which translated into a loss of USD 187,500 per year.
Before starting a partnership with QIMA, the client has attempted to solve the problem by sending factories reminders and making phone calls ahead of the planned inspection. However, this approach failed to produce improvement due to:
the scale of the client’s supplier base
failure to target specific problem suppliers
lack of follow-up on the impact of the reminders
The Client approached QIMA, a leading provider of intelligent quality control and compliance solutions, with the goal of optimizing their quality control program, reducing the cost of missed inspections and analyzing supplier performance to identify hotspots in their supply chain.
Implementation
Using the data collected during the client’s product inspections and accumulated in the QIMA Dashboard, QIMA was able to identify specific suppliers and factories with the highest rates of missed reports. These factories received personalized and individual reminders about the upcoming inspections. In addition, the day before inspectors would be dispatched, QIMA teams would reach out to the suppliers by phone to get direct confirmation about the production status of the shipment to be inspected. In absence of positive confirmation, inspections were rescheduled.
Through QIMA’s close follow-up for all poorly performing factories, the number of missed inspections was sharply reduced.
Meanwhile, details of any inspections missed despite these measures were shared with the client through the QIMA Dashboard. With access their sourcing data in real-time, the client was able to see individual supplier performance benchmarked against their supply chain, industry and region, and therefore able to make informed decisions on supplier management, such as:
prioritize high-performing suppliers
educate low-performing suppliers on production management and assist them with production scheduling
remove suppliers that proved unwilling / unable to improve after a given time period
Impact
Within the first 36 months of partnership with QIMA, the rate of missed inspections in the client’s supply chain dropped by 20%, representing savings of approximately USD 40,000 per year.
After successful roll-out in China, the client extended their partnership with QIMA in more challenging countries for missed reports, such as India and Bangladesh. QIMA’s detailed, data-driven approach ensures that the client has uninterrupted access to real-time sourcing intelligence, which is instrumental for their continuing effort to improve supplier management and optimize their supply chain.