October 21, 2009

John Adams, the director of AMREP North America, said in a presentation to Chinese suppliers and his US customers said that quality management of suppliers has to be beyond just depending on suppliers making quality better or through sporadic enforcing of suppliers’ compliance to customers’ expectations.

Bad times provide opportunities for reinventing supplier management approaches. A “Win-Win” approach with cost and productive gains to both suppliers and customers are in great need now. Customers, he said, are now moving towards working with suppliers on a “when needed” and “on demand” basis that require suppliers to be in-tune with the customers’ changing quality, inventory and production needs. Conversely, the suppliers feel they cannot fulfil their customers’ new purchasing approach while trying to manage production controls and multitudes of sub-suppliers.

Mr. Adams said that China is moving towards the “second gear” of industrialization. It is now moving technologically upwards in manufacturing. However, it does not mean that the industrialized Chinese technical force has upgraded rapidly to match the quality and technical demands of American high technology product manufacturing.

AMREP Supplier Management Services, originating from Singapore and starting out with the supplier outsourcing revolution of the 1980s, has the experience of moving into different emerging countries with suppliers and the ability to track the changing demands of outsourcing supplier quality management. Where suppliers continue to remain in the first phase of outsourcing manufacturing, supply quality control is basically revolving around final product inspection, random audits and pre-shipment inspection. AMREP’s work in Singapore, Taiwan and Japan evolved into higher levels of supplier-customer-3rd party interactive quality management and feedback.

This evolution from just plain supplier product inspection into Customer/ AMREP participation in the supplier’s design, material, technology, production processes, quality management and feedback loop processes was a big threesome Win-Win loop. Consequently the suppliers gain from interactive involvement and interference in their design and production; the customers gain from confidence in supplier’s reliability and dependability; AMREP gains as an impartial and independent useful instrument, tool and bridge for the buyer and seller.

‘China, being such a big country with ever increasing, changing, and moving suppliers, requires a bolder way of making the changeover more effectively from just quality inspection to a tri-party supplier management method,’ says Mr Adams.

The AMREP Technological Center (ATC), China is the AMREP way of making the Tri-Party Win-Win formula work well in a changing business climate and a changing country with changing suppliers.