Supplier Development through Supplier Quality Assurance Division (SQuAD) Services

Supplier Development through Supplier Quality Assurance Division (SQuAD) Services:

India has surpassed France in World Bank’s annual Gross Domestic product ranking 2017 to become sixth largest economy of the world. It has a GDP of $2.848 trillion (2018 latest figures) and is slated to cross United Kingdom soon and become the fifth largest economy of the world. For this growth to continue and to move up the ladder, Indian manufacturing sector has to be a single largest contributor.

While Indian manufacturing sector has been growing steadily and competing with other economies for quite some time now, a quantum leap is now required. The Government of India has taken many initiatives and launched schemes such as ‘Make in India’, ‘Skill India’, ‘National Manufacturing Policy and ‘ZED’ for ensuring compliance & competitiveness. These schemes are mostly targeted towards MSME, as it is felt that this is where the impetus for growth & need lies. This effort of the GOI however has to be supplemented by other stake holders to be effective.

While the large manufacturing organisations in India have consistently worked on establishing and sustaining excellent Quality and other Management Systems Standards in their own factories and workplaces, MSMEs have no structured system of doing so on a continual basis. Since the large manufactures are procuring a lot of products from MSMEs, the effect of quality and reliability of MSMEs is substantial on the overall competiveness of manufacturing sector.

During our interactions with various customers in various forums, the Stake-holders/CEO’s re-iterated the need to improve their suppliers in a systematic manner in order to have sustained results. This effort, in their opinion, will not only benefit the MSMEs but also help them to scale up their own growth. Their own growth is restricted because of a unreliable supplier base. They have tried to do this by in the past but not succeeded to the desired level because they did not have to resources and the expertise to do so. Market was looking for a professional company which could help in Supplier selection and upgradation and that too at a low and affordable price.

With this background, we conceptualised the setting up of a Supplier Quality Assurance Division and aptly titled it ‘SQuAD Services’ to support Customers/Suppliers. An important requirement of this service was that it had to be offered at very reasonable prices as compared to other services of inspection being offered by us because of the different target audience. From TUV India’s point of view, it provided us the flexibility of offering ‘limitless’ options and value additions in the services offered.

Most premium and the flagship services relates to Supplier Systems Improvement. This is for those customers who are buying material from the suppliers on a continuous basis and are broadly satisfied with them; however there is a distinct possibility of improvement. TUV India’s SQuAD team would assess, identify gaps, formulate and implement need-based training and close the gap. The service also envisaged monitoring the improvement activity through follow-up assessments and hand-holding till maturity. The objective of this service was to Drive Excellence in Supplier Quality and Systems, not restricting to improvement in product quality only. The benefit to the Suppliers with this support from TUV India would make them align their thought process towards sustained improvements in all aspects of their operations.

The second service under the category relates to the process of selection of suppliers. Supplier Approvals was planned for supporting suppliers in developing and establishing a strong quality culture to enable specific customer approval. It was also a service for Customers who desired assessment of potential suppliers prior to placement of order. The service included assessment and due-diligence in accordance with customer’s guidelines, need based association with suppliers for devising improvement plans, implementation and hand-holding till maturity and approval. The objective of this service was to provide proficient analysis of Client’s needs and expectations and translating into implementable guidelines at Suppliers works before any order is placed on them. This is a preventive approach.

The third service, which is the basic support that most industries require, was proposed for PDI, Incoming and In-process Inspection at Suppliers’ premises by deploying TUV India SQuAD teams – consisting of a Project Co-ordinator, Supervisors and Inspectors as per requirement. The intent was to support the Supplier by bringing in integrity, neutrality and value-addition in the inspections. The objective of this service was to provide immediate solutions for obtaining quality product. Once the PDI process is established, the outcome of the result can be used for Improvement of the process.

The clarity and intent of the SQuAD services was well accepted by customers. We received our first significant order from Escorts Railway Equipment Division for placing eight inspectors for their Receipt Inspection Activity. There were windfall and tangible gains to the organisation both in terms of quality, reliability and delivery within first year of operations. The project is now extended to another year now with more number of persons. The data collected by our inspector became a bench mark and the organisation launched the Supplier improvement scheme with our association. In this scheme they picked up 5 suppliers as a pilot and now work is going on to improve these five suppliers. Once successful they will replicate this model to the next twenty suppliers in their list.

In the second year of operations of SQuaD services, Enquiries & Orders have started flowing in on a much regular basis. A leading Engine manufacturing company has given us the order for assessing their OEM’s of DG sets on PAN India basis. A leading organisation in the Power Sector is expected to release an order for Supplier Assessment for more than 100 of its Suppliers on PAN India basis, and also carry out follow-up assessments. They also plan to extend it to Suppliers of their other divisions in India. Another OEM of India’s top automobile company has asked us to place 4 SQuAD Engineers for PDI at their works. There is also a discussion going on with an OEM of 2-wheeler plant for placing about more than 15 SQuAD Engineers at their works for In-process and Pre-despatch Inspection.

The challenge that TUV India faces today is not in terms of deliverables but working within the wafer thin budgets of the customers. Future of TUV India’s SQuAD Services is bright. Requirement of these services is expected to grow in the near future, owing to TUV India’s excellent involvement and focusing on value addition in the working with Suppliers. This improvement initiative by TUV India will also go a long way in contributing to the country’s initiative of Make-in-India which requires conforming to world-class standards.