Interview: Managing supplier quality in Asia In 2014 our retired CEO of AMREP did an interview with Mike Lee, of the Asia Supplier Management Journal, on managing supplier quality in China, Asia and India.
Mike Lee: You said AMREP has provided supplier management support to well known International Procurement Offices in Asia and China since 1982. You included IBM, Dell Computers and Motorola plus others as customers. These companies have their own quality control and quality engineering staff, and yet they used your company. Why?
Derrick Goh: It is all about picking the right person for the job to be done. Most procurement managers and strategists have poor ground level knowledge of the working characteristics of the suppliers they selected. Most of their technical and quality staff have good university degrees but short-term manufacturing experiences, and little skills in handling difficult suppliers. Consequently, my people are called in to solve supplier problems which our customers’ procurement people created and their technical and quality people cannot cure.
Mike Lee: You implied the Customer creates procurement problems for themselves.
Derrick Goh: Yes and No. We have dealt with different suppliers with different managements these past several years. Be it a Taiwanese, Japanese, Singaporean, Thai or Indian operation, the shared fundamental objective is to maximize production and send it out ASAP. Therefore, all factory employees work hard at achieving this through all means applicable. Meaning, making unachievable promises, cutting corners, making mistakes, rushing things.
Mike Lee: So how does one manage these problems?
Derrick Goh: The customers’ problems create opportunities for our service. We cannot solve the customers’ internal staffing problems. Make a China guy your procurement strategist and he is strategizing to create a business for himself in the China of opportunities. Place an American procurement manager inside your China office and he is plotting the same thing, more often than not with the very suppliers you have signed up. We can handle the suppliers’ problems. The supplier quality people we send into suppliers’ factories must obey and conform to our operating rules and code of conduct. For example, our supplier quality personnel cannot socialize with the suppliers’ senior production people, including not having meals with them or be entertained in the factory. Managing employee integrity and honesty is a top priority for us. I did not invent this. I learned it from my first customer-IBM.
Mike Lee: Your focus is on managing the suppliers’ technical and quality problems relating to procurement
Derrick Goh: There will always be technical and quality problems with production. Practical product and manufacturing backgrounds are good ground level experiences that lead to better supplier problem resolutions. Suppliers find it easier to work with practical production and quality specialists. People that they can relate to, talk their language, and understand what manufacturing is about. We send in our teams of specialists to isolate the problems and develop solutions with the supplier and our customers. The advantage we have is that our staff have worked in all sorts of production settings and industries, so this exposes them to quite a wide range of quality problems.
Mike Lee: Thanks Derrick, let’s talk about supplier management services the next time.