Supplier Issue

A company that was ‘heaven’ to work with is a biscuit company, this is next to managing a chocolate manufacturing company or a beer bottling company. I have done the biscuit and chocolate, I’m still waiting for the dream job in a beer company to happen.

pepperbiscuits  beer-chocolate-pairing

All companies you work with, it is inevitable that Supplier relationship plays a part on the success of the business. This is where Supplier Assurance Program comes in. Procedures that are part of the Management system where the company `mistake-proof’ the materials that a Supplier will provide.

The first thing in doing this is a document called `Specification’, more specific is what we call `Supplier Specification’. This serves as an agreement between you and your Supplier that what is written in the `spec’ or specification is what they will deliver to the doorstep of your company whenever you need that material. In it is what the material is all about: the character, color, look, make, weight, number, packaging, condition of the product, conditions of delivery and period of delivery. The specification is just a document unless the Supplier will deliver the product based on the agreed delivery date and all else meets what is written in the document. This is what I tell my trainees is how I would define a Supplier’s `quality of service’ if the delivered material meets all that is in the spec.

So let me emphasize this, “the definition of `Quality of Service’ is when a Supplier meets the requirements on what is written on the Specification”. Otherwise, the Specification is just a document if the Supplier is unable to meet on what is written and agreed upon.

So why the emphasis? So as to remind new businesses who want to be suppliers not to promise or over promise to a customer if they are not sure if they can meet what is written in the specification.

When I was a Quality Assurance Manager in a biscuit company, one of the major product had an issue with one of its ingredients – the cheese. I was told that on occasions the cheese came out burnt on the biscuit product. Giving it a bitter burnt taste.

So I did my research on cheese and looked at the ingredients to find out the cause why there were batches of cheese that burnt and others tolerated the temperature that was set to bake the biscuit. I rang around cheese manufacturers to find out what in the process would make the inconsistency. What I found out was that the type of cheese we were using would depend on the quality of milk used by the cheese maker. Also, the burning of the cheese could come from the sugar content after the cheese is made or the yield. So the consistency of the milk used will determine the consistency of the cheese and therefore a cheese that will consistently not burn when baked at a certain temperature.

So what my Supplier would tell me was that because they had no control on the cheese they supplied to us they expected us to just tolerate whatever cheese they would supply to us. Just reject the products that have a burnt taste and they will replace the cheese. To a third world country this could be, but based on my definition of Quality, before I use their cheese I would have sourced other cheesemakers who can keep up with their end of the specification.

I did this by doing the following:

Set up a testing regime where a set temperature and time in a simulated over will see if the cheese would burn or not.I then asked all supplier to submit a sample of the batch of the cheese that they will supply to us for me to test if it will tolerate the temperature or not.

I then asked all supplier to submit a sample of the batch of the cheese that they will supply to us for me to test if it will tolerate the temperature or not.

Any batch tested that burnt will be rejected and that batch will be returned to the supplier.

The above steps proved to be effective so I added that to the Product Specification with our Suppliers. All would-be suppliers were asked to submit samples of their product for baking temperature tolerance testing before trying the product with our biscuit.

The end result was that burnt bitter taste due to the cheese supply was eliminated by 95%. The 5% trouble that remained was traced to when the Supplier did not do a baking temperature tolerance test on the batch they supplied to us and our Quality controllers did not do a batch test on the remaining batches of cheese supplied to us and we have accepted once a batch of the biscuit started burning.

The above process can be described as `mistake-proofing’ the process by basically looking wherein the process can your correct the cause of the variation to ensure that the process is not disrupted.

Addendum

I was helping a Start-up food retailer to source out food products for her shop. She asked me to source out suppliers of home-made spring rolls for one of her products. I surfed the internet and there was this lady in my area who advertised her spring roll product and on her site was a photo of what I assumed was her spring roll product. I asked how many pieces in each order. She was not sure and said it might be between 15 or 16. So I messaged her and asked how much and how many days to order before delivery or pick up. The way she handled the questions told me that this was a person who was a first timer in business. It seemed to me that everything she said would be alright for me as her customer.

spring roll

So I placed my order and told her when I will pick it up which was 2 days from when I placed my order. The following day she messages me and said she can’t supply on the day we agreed because `she had to go somewhere’. She suggested the following day. I just said okay, I could have canceled the order, but I was curious about her as a supplier and what would be the outcome of her final product.

On the day agreed I picked it up on the scheduled time. I knocked on her door and I said I was picking up my order. She asked me to wait outside to get my order. She came back, I took it and gave her the money.  She had to excuses to me, one was that she had no change for the note I paid her. Second, she apologized for her product because it was not fried cleanly, the skin had burnt marks indicative that either her frying pan was not clean, or the ingredients on her spring rolls that she previously fried leaked. She lost me as a `repeat customer’.

As I was driving back to get home I was thinking, this start-up entrepreneur has to study basic lessons in business or I guess she still has to learn about business. There were so many principles of business that she violated or was not so conscious of. The following are points she should consider:

  1. Her product needs to meet certain specification, in this case, customer expectation. So during the first contact with the customer, she has to be sure of her answer about her product.
  2. Reliability and Respect for the customer. If she agreed upon a delivery date and then she messages her customer that she can’t deliver I don’t think the customer would ever order from her again.
  3. If you posted on your site a product that was cleanly fried, you have to present a cleanly fried spring roll. No excuse.
  4. Whether your business is at home or in an office or a factory, you should provide a reception area where your customer can feel safe that the product being purchased is clean. Letting your customer stay outside does not give that confidence. In addition, stick to the agreed price. Make sure you are able to provide change to your customer.

The crucial part of starting a business is ensuring that you have a product meets specification or customer requirement or specification – QUALITY. Your processes in making the product are organized to meet what your customer wants – RELIABILITY. Your processes are clear and ready for scrutiny by your customer or any regulatory agent – TRANSPARENCY. Your product is made in an environment where it has no risk of contamination – SAFETY. And lastly, the first impression counts, so respect for the customer is of prime importance – CUSTOMER CARE.

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