Containment Cost Savings

Dave Jensen thinks the OEM auto makers are trying to strangle their own suppliers. Dave has been a quality manager for a midwestern automotive parts manufacturer for almost 20 years. His world and his business relationship with his customers are both changing. "The OEMs negotiate prices all the way to the bone, then they hold our feet to the fire with outrageous containment costs for the slightest quality issue," Dave says.

Dave's company has been producing components for the "Big Three" for years. They have done very well for themselves by producing good quality products at a reasonable cost. However, as the auto industry evolves into a global marketplace, they are beginning to feel the sting of the cost reductions imposed by their customers. These constraints eventually start to affect the quality of the product. "We just don't have enough time or resources to shake all the bugs out of a new component launch," Dave explains. "We know where the issues are, we just have to fix them on the fly."

Last summer Dave and his staff ran into just this sort of problem. Several components for a new customer vehicle were launched with intense pressure, reduced staff, and tight budget concerns. A rush to production almost always leads to issues of quality, and they had their share on this product line. Before long the customer complaints were steadily piling up on almost every part on the product line. They were staring down the barrel at a costly mandated containment. "It was a nightmare, and we could not wake up!" Quality Engineer Jeff Stone says.

After one component went into a mandated containment program, they decided to put the other components into "Self-Imposed Containment" in an effort to avoid the limited selection of very expensive service providers. Their quality problems were workable, but they needed more time, and they were surely headed for a mandate on the other components.

Dave found a way to reduce some of these headaches. He was able to negotiate a more cost-effective service rate with a smaller Sorting and Inspection Firm that could be more responsive to their needs. The reduced cost allowed them to allocate more resources to their known issues. The service provider's feedback kept them aware of how Dave and his staff were doing, and the customer complaints nearly disappeared. "They even found a few issues we didn't know existed," Dave says. He was able to utilize his Quality Supplier's engineers to help find and eliminate the root causes of their issues and to put safeguards in place to catch anything that fell through the cracks.

The Case for Self-Imposed Containment

In today's global marketplace of manufactured products the pressure for cost reduction and quality improvement can be overwhelming. Nowhere is this more evident than in the business of automotive parts production. OEM parts suppliers are being squeezed heavily to produce parts at a reduced cost everywhere in the world. OEMs want the parts cheaper. They are also demanding stricter quality standards across the board, and they are enforcing that requirement with teeth. Mandated containments and controlled shipping are sapping away the meager profit margin agreed upon in the price concession negotiations.

Containments and controlled shipping are very expensive. Not only are you saddled with the cost of sorting your parts, but all administrative and set-up costs as well. Then there is still no guarantee your customer will release you as soon as you have met their requirements. Some parts suppliers have taken a more proactive approach to dealing with their quality issues while keeping costs under control.

By finding a reliable and trusted quality services provider that is willing to perform a "Self-Imposed Containment" at a reasonable cost, some parts suppliers have avoided the disaster of a mandated containment while focusing on their quality issues. They have more time and resources to devote to correcting the issues that cause them grief, and a steady stream of information and data fed back to them for continuous improvement. The time spent in a self-imposed containment is substantially less than a mandated containment, and the costs are lower too.

If you find yourself in this situation, let Continental Quality Engineering give you a hand. We will provide a team of experienced inspectors at your site or ours and can also follow up with Quality Engineering Support to help you perform the Root Cause Analysis and implement Irreversible Corrective Actions. Call us today at (800) 875-4557 for a free quote.

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Great Inventions of the 20th Century

1903- Color Photography

Kodachrome
They give us those nice bright colors
They give us the greens of summers
Make you think all the world's a sunny day, oh yeah...
-Paul Simon, "Kodachrome", 1973

Although color photography was actually around in the 1800s, the first fully practical color film wasn't put on the market until 1907. Two French brothers, Auguste and Louis Lumiere, patented a color film process called "Autochrome"
in 1903. The brothers were primarily interested in motion pictures, and were in fact among the earliest key filmmakers. They chose to concentrate on photography after deciding that "the cinema is an invention without future."

Initial attempts at color photography failed to fix the color permanently and prevent it from fading. Autochrome used a screen plate made using dyed dots of potato starch. The screen plate let filtered red, green or blue light through to a photographic film in contact with it, which was then developed to a negative and reversed to a positive.

Kodachrome, the first multi-layered color film, was developed by the Eastman Kodak Company and first sold as 35mm film in 1936. Dye couplers, used to ensure that the correct dye forms in the correct places during developing, were added later during developing rather than incorporated into the film itself as with all other color films of the time. This method produced a finer grain and a more vivid color reproduction.

The Agfa Company of Germany developed the Agfacolor series of film products starting just one year later. These were fairly successful, but met with limited success in the United States.

In 1942, the Eastman Kodak Company introduced Kodacolor, which by the 1960s became the most popular film used for amateur photography. Most photographers today, amateur and professional alike, use products made by Kodak. 80% of modern photographs are shot in color.