The beginning of the year is always a challenging time for suppliers, as it follows the end of the previous fiscal year. Typically, companies will hold off on placing orders at the end of the year. Once new budgets are approved, January sees a large influx of orders, as companies look to “catch-up,” and rebuild their inventories. The end of 2012 was marred by anxieties about the fiscal cliff, prompting companies to cut orders back even further, creating a need to place even larger orders in January. And the rebounding economy has created even more added orders as companies who’ve tightened their belts year after year are finally getting the chance to breathe a little. Needless to say, suppliers were busy in January.
It’s always great when business is booming, but when all of your customers are playing catch-up, a sense of panic can set in. You’re faced with a seemingly overwhelming amount of orders, all from customers who needed things yesterday. This is a crucial point for suppliers. It’s easy to get caught up in the panic and let quality slip. Suddenly ISO procedures aren’t followed, as suppliers accept rushed orders placed over the phone, rather than insisting on a written PO. When traceability goes out the window, it’s easy to mistakenly fill an order using an older design that doesn’t reflect the most recent updates. Detailed quality inspection can also go out the window in the rush to fill orders.
The irony of course, is that in rushing, errors are made that increase both cost and production time. And that cost increase is exponential. If an order has to be scrapped, the initial material cost of that order is lost. Then, more money has to be spent to buy those materials again. Once you have new materials, you have to tie up your machines manufacturing the part a second time. That, in turn, pushes back the customer whose order should’ve been in the machine, delaying your production schedule even further.
As the economy continues to rebound, and companies move production back to the U.S., it’s important for suppliers to remember the cost of a mistake. Insisting on proper ISO procedures and maintaining stringent quality inspection may seem like time you can’t afford, but it’s essential to staying on top of orders. In the end, you can’t underestimate the value of qualit