Quality Progress - September 2017 - 15

Subject matter experts take on your quality-related queries

THIS MONTH'S QUESTION

What processes or mechanisms do manufacturers use to
prevent supply chain disasters? It is my understanding they
focus on reducing their suppliers to improve product quality and
consistency. Because the products and components are shipped
and made by fewer suppliers, how does just-in-time (JIT) interact
with the risk management component of the supply chain?
For example, what if a container of parts sinks at sea? What
if a truck hauling parts gets into an accident? How is a balance
struck between JIT and risk management when it comes to
supply chain management?
OUR RESPONSE

This is a great question. It gives
me an opportunity to vent my
frustration about what I consider
a significant and often overlooked
issue.
I don't think it is a question of
balance as much as a question
of the completeness and effectiveness of an organization's risk
management plan-regardless
of whether JIT is considered. The
presence of JIT just places more
emphasis on the need for a solid
risk management plan.
Your examples are excellent
considerations that should be
included in a risk management
plan, as appropriate. Recall the
2011 catastrophe in Japan when an
earthquake and a tsunami struck
the country on the same day. It
resulted in disrupted supply chains
of several large U.S. automakers,
and the organizations ran into difficulty and delays acquiring paint.
I would not be surprised if their
risk management plans did not
consider such catastrophic events.
Why are such events not
considered? In my experience,

contributors to the risk management plan might consider the
likelihood of such events too small
to be worth the time, effort and
consideration. Others might be
afraid of being mocked for surfacing what some people consider an
outrageous issue. This behavior
could stem from the attitude and
desire to simply complete the risk
management plan and check the
box.
The fact is, these events do
occur, and the impact can be
enormous. Any organization
doing business with other organizations located on the Pacific
Rim, for example, should consider
the likelihood of earthquakes, volcanoes, typhoons and tsunamis
because it is well known that they
occur with some degree of regularity in that part of the world.
In addition, mudslides, forest
fires and widespread illnesses or
epidemics also occur in various
parts of the world. These are
just a few examples-numerous
others can be cited. Perhaps even
flying monkeys.

Another issue lies with the concept of reducing the number of
suppliers. Overall, I find this concept appealing. However, I have
seen organizations push it to the
extreme by reducing their suppliers to a single source. This creates
a dangerous situation, particularly
when the level of communication
is not frequent, open or honest, or
at the strategic level.
Additionally, I have witnessed
organizations not exercise their
alternative or backup suppliers,
and place orders only with their
primary suppliers. Consequently,
the backup suppliers fall into
oblivion. As a result, they could
seek other customers, change
or eliminate their products or
services, lower their customer
priority and, in extreme cases,
refuse to do business with the
organization.
Remember, there are generally
four ways to manage or respond
to risk:
1. Avoidance.
2. Transfer.
3. Monitoring.
4. Mitigation.1
Each approach could be
beneficial to enhancing your risk
management plan.
Good luck and don't sweat the
flying monkeys.
NOTE
1. A detailed discussion of each of these
risk management techniques can
be found in T.M. Kubiak's book, The
Certified Six Sigma Master Black Belt
Handbook.

This response was written by T.M.
Kubiak, president, Performance
Improvement Solutions, Fort
Mohave, AZ.

qualityprogress.com ❘ September 2017

QP 15


http://www.qualityprogress.com

Table of Contents for the Digital Edition of Quality Progress - September 2017

Seen and Heard
Progress Report
Mr. Pareto Head
Career Coach
Expert Answers
Field Notes
Data Disruption
The Deal With Big Data
Better Intelligence
A Study in Measurement
Innovation Imperative
Statistics Spotlight
Standard Issues
ASQ's 2017 Quality Resource Guide
Marketplace
Footnotes
Back to Basics
Quality Progress - September 2017 - Intro
Quality Progress - September 2017 - cover1
Quality Progress - September 2017 - cover2
Quality Progress - September 2017 - 1
Quality Progress - September 2017 - 2
Quality Progress - September 2017 - 3
Quality Progress - September 2017 - 4
Quality Progress - September 2017 - 5
Quality Progress - September 2017 - Seen and Heard
Quality Progress - September 2017 - 7
Quality Progress - September 2017 - Progress Report
Quality Progress - September 2017 - 9
Quality Progress - September 2017 - Mr. Pareto Head
Quality Progress - September 2017 - 11
Quality Progress - September 2017 - Career Coach
Quality Progress - September 2017 - 13
Quality Progress - September 2017 - 14
Quality Progress - September 2017 - Expert Answers
Quality Progress - September 2017 - Field Notes
Quality Progress - September 2017 - 17
Quality Progress - September 2017 - 18
Quality Progress - September 2017 - 19
Quality Progress - September 2017 - Data Disruption
Quality Progress - September 2017 - 21
Quality Progress - September 2017 - 22
Quality Progress - September 2017 - 23
Quality Progress - September 2017 - 24
Quality Progress - September 2017 - 25
Quality Progress - September 2017 - The Deal With Big Data
Quality Progress - September 2017 - 27
Quality Progress - September 2017 - 28
Quality Progress - September 2017 - 29
Quality Progress - September 2017 - 30
Quality Progress - September 2017 - 31
Quality Progress - September 2017 - 32
Quality Progress - September 2017 - 33
Quality Progress - September 2017 - Better Intelligence
Quality Progress - September 2017 - 35
Quality Progress - September 2017 - 36
Quality Progress - September 2017 - 37
Quality Progress - September 2017 - 38
Quality Progress - September 2017 - 39
Quality Progress - September 2017 - 40
Quality Progress - September 2017 - 41
Quality Progress - September 2017 - A Study in Measurement
Quality Progress - September 2017 - 43
Quality Progress - September 2017 - 44
Quality Progress - September 2017 - 45
Quality Progress - September 2017 - 46
Quality Progress - September 2017 - 47
Quality Progress - September 2017 - Innovation Imperative
Quality Progress - September 2017 - 49
Quality Progress - September 2017 - 50
Quality Progress - September 2017 - Statistics Spotlight
Quality Progress - September 2017 - 52
Quality Progress - September 2017 - 53
Quality Progress - September 2017 - Standard Issues
Quality Progress - September 2017 - 55
Quality Progress - September 2017 - 56
Quality Progress - September 2017 - 57
Quality Progress - September 2017 - ASQ's 2017 Quality Resource Guide
Quality Progress - September 2017 - 59
Quality Progress - September 2017 - 60
Quality Progress - September 2017 - 61
Quality Progress - September 2017 - 62
Quality Progress - September 2017 - 63
Quality Progress - September 2017 - 64
Quality Progress - September 2017 - 65
Quality Progress - September 2017 - 66
Quality Progress - September 2017 - 67
Quality Progress - September 2017 - Marketplace
Quality Progress - September 2017 - 69
Quality Progress - September 2017 - Footnotes
Quality Progress - September 2017 - 71
Quality Progress - September 2017 - Back to Basics
Quality Progress - September 2017 - cover3
Quality Progress - September 2017 - cover4
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