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The Case for Self-Imposed Containment

In today's global marketplace for 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. OEM's 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 at 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 greatly reduced over a mandated one, and the costs are lower too.

A Case Study

A Midwestern auto parts manufacturer was getting hammered with complaints from an OEM manufacturer about several components that they provided for them. 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 expensive service providers. Their quality problems were elusive, and they were surely headed for a mandate on the other components.

Containment - quality testing The supplier found that they were 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 the issues identified by the service provider's feedback, and the customer complaints nearly disappeared. The supplier was able to utilize their engineers to eliminate the root causes of their issues, and put safeguards in place to catch anything that fell through the cracks.

With a proactive approach, and a diligence to solve the issues, the supplier was able to bring most of the self-imposed containments to a close faster than the one mandated component, and at a greatly reduced overall cost.