SUPPLIER AUDITING (The 5 minute rule)
ATTITUDE IS EVERYTHING
There are lots of articles, how to books, directions, edicts, etc. about “HOW TO PERFORM AN AUDIT”, but none that I have read effectively touch on an area that I consider essential to a quality system and an audit. An article by Myron Tribus (Judging the Quality of an Organization by Direct Observation) in the Cove helped push me to write this. It is something that I have thought about for a long time; finally have a format in which to express it. Thank you Marc for this forum.
QS9000 and other conventional Quality systems are inadequate to quantify the most important aspect of quality, attitude. Every quality system that I have seen tries to mandate what would be there anyway if a supplier had a strong customer focus. They do a excellent job of talking around the issue but do not address it directly. As with most corrective actions that we see as quality professionals, the current quality systems deal with the symptoms, not the real root cause of the situation, ATTITUDE.
My mentor in Quality Auditing (Adam Green, 25 yrs. ago) had great instincts for a quality system that were developed over many years and refined during hundreds of supplier audits. Before one supplier audit, he said “I can tell within 5 minutes if the supplier is going to pass the audit.” I loudly disagreed saying that this judgment cannot be made purely on how a receptionist greets us and by the first handshake. The evaluation has to be based on objective evaluation of the suppliers’ conformance to the quality requirements (at that time it was MIL-I-45208 & MIL-Q-9858). He simply said, “If you are in this long enough you will know what I mean.” (The periodic audits were a requirement of our system and we audited ‘good’ suppliers as often as ones with problems.)
I came upon a dilemma that helped me to more clearly define this problem. On subsequent days I did two local MIL-I audits. The first was at a medium sized supplier that had some product quality problems. They passed the audit easily, provided what appeared to be adequate corrective actions, but continued having problems with product quality and had little concern about on-going improvement of the quality of product. We eventually pulled out of the supplier due to on-going, unresolved problems. Modern shop, good instructions, but the owner’s son (taking over the business) would make decisions to override quality and workers’ concerns. The workers got to the point that their attitude changed (for the worse) in response to the new owner.
The next day I went to another supplier; located the tiny shop down an alley (3 men in a garage behind one of the owner’s homes). This supplier had never shipped us nonconforming product, we never had a question as to the quality of product or service received. However, they did not have a documented inspection or quality system. (Prescribed that they develop an inspection system to comply with MIL-I requirements.) They agreed wholeheartedly but needed help. They were local so I was able to work with them. Within two months, they had a compliant system. They went on to capture more business and the last I heard they had a thriving medium sized shop going. Had I only graded them on their lack of documentation (as required by any respectable auditing organization) they would not have remained a supplier. But I was impressed with their attitude. They expressed a sincere desire to do a better job for their customers. I held off issuing my report until there was progress to report, purely on the positive attitude of the people.
The point here is the difference in attitude. One shop had already captured the business but failed to maintain an attitude of customer service. The other ended up capturing more business because of their positive attitude towards customer service. Positive Attitude is the ‘root cause’ of excellence in a quality system. No matters how well written the manual or procedures are, if the attitude of excellence is not behind every word, then the quality system will be of little value. This attitude must flow from the top down.
Over the course of hundreds of supplier visits, Adam’s ‘5-minute rule’ has gone through my mind many times and I have tried to objectively define what goes into this subjective evaluation. It is difficult to exactly define what to look for, since it is the ‘total experience’ that creates the impression. Below are things that I have learned to look for during supplier visits and quality audits and some of the tricks that I use to know what questions to ask, and how I have learned to interpret the answers.
Initial phone call or contact:
Does the supplier take genuine interest in the intent of the audit or visit? If the visit is in response to a defect or problem you will be controlling the tone of the initial contact, be constructive and positive! If the purpose of the visit is an audit for possible new business, then the tone should be formal and structured.
For a first time visit to a supplier I ask for them to fax directions. Often the suppliers with a stronger ‘customer attitude’ have this readily available and simply need to know which direction that you are coming from.
I also ask for verbal directions, which I copy into my planner so that no matter what, I have what is needed.
Arrival at supplier’s facility
Arrive early, walk in the door precisely on time and if you are in the area the evening before take a ride by, you could learn something interesting. Example: do they run a full second shift, are a bunch of newer cars there late (could be last minute review by management of the quality system – What should they be concerned about if they have a strong quality system?), are trucks being loaded after hours (see below), etc.
Upon arrival on the day of the audit/visit, I take a turn around the employee parking lot. I look for the styles, age and condition of the cars. If there is a large number of older or poorly maintained cars one of the questions that I ask is how many temps are used and what is the turnover for the current year (if these are high, then they need excellent training). The older cars imply that they pay less than average for the area and may have a high turnover because of this. I also try to cruise past the shipping area and dumpster. Are these areas a mess? If the front office and production areas are neat and orderly it may be a show put on for the audit, if the back of the building is a mess. Also, note any trailers sitting on the edges of the parking area. This could be a sign of temporary holding areas to hide excess product or a recent rejection by another customer. If trailers are present, ask to see the MRB (or reject) logs (good idea to look at these in any case). If there is logged material that is not present then you may have just discovered the tip of a iceberg. Are the buildings and grounds well maintained, clean, trash containers placed strategically? This may indicate pride (or lack of) in ownership by all employees. Do any people that you see on the lot look closely at the passing car or is it ignored? A harsh stare may imply labor problems (since you will probably be dressed in business clothes), or it could just be a grumpy person. A pleasant glance or wave implies self-confidence and may indicate a good work atmosphere.
Are there Visitor or Customer parking spaces? Are visitor entrances clearly marked? How are you greeted at the lobby? Are you expected? Has the receptionist been briefed on who to expect, is there a bulletin board that indicates a welcome (to you and your group). Is the initial greeting pleasant? These are all things that the management of the company can arrange to happen if they have a customer focus. If they are not present then it implies that they haven’t taken the time to try to see things from a visitors’ point of view.
When entering the company:
How is the initial greeting from the company? Does it seem genuine? Is the person a manager, owner, or other responsible for representing the company? Is the person in sales? I personally do not like to have first contact with sales, and I tell them so. Their job is to give the best impression of the company (so is everyone’s) but sales often will allow a slanted view to be shown and they typically have little responsibility to actually correct a problem.
What does the ‘guide’ show you first? (I typically ask to use the bathroom when we are well away from the lobby. This allows a look at the ‘facilities’ that the employees have to use, not just the one up front for visitors.) If the bathroom is a mess then it implies that management doesn’t try too hard to maintain decent conditions for the employees. How you are ‘handled’ in the first few minutes is telling. Have they thought this out? Do they try to put you at ease (you need to do that for them also) while the conference room is filling? Are you greeted by most that come in? Or, do they have to make several calls trying to get people to attend an opening meeting. I expect to be briefly introduced to the principals that I will be working with. (I typically send an agenda indicating that this should be done first thing and schedule 15 minutes to 30 minutes for the initial introduction and review as to the purpose of the visit. Any longer cuts into on the floor time for the audit, also it causes less disruption to the suppliers business.) If I am presenting data or information (quality audit objectives, verification audit, rejects, review of quality & delivery, etc.) then I typically fax or e-mail before arrival so that the company can have the data available for everyone to see.
On the subject of putting them at ease: You will get little accomplished if the supplier feels that you are the lead representative for the Inquisition. From the first moment try to develop a rapport and a positive, goal directed relationship. Most people at your suppliers feel comfortable in this role. After all isn’t that why they are your supplier, they are solving a ‘problem’ (providing product, service, expertise, etc.) that you cannot solve yourself? Make the most of their expertise by developing a positive win-win attitude with them.
If there is a problem to be discussed, I typically ask to have an operator and their supervisor at the opening meeting (depending on the problem). If I sense opposition to this it implies that management may be trying to filter information to and from employees. Makes me wonder why. (X theory management style, incompetent operator?) If the hourly employee (operator, tool & die maker, etc., i.e. process ‘owner’) is at the meeting, but edgy, then they may not be comfortable in the same room with management, again I wonder why. If they are there, appear at ease, attentive and can contribute easily, it says volumes for the participative style of management, their training methods, and willingness to share leadership. I often ask directed (and direct) questions; politically correct questions are not part of my forte. If a defensive attitude comes up I may be pushing too hard or it may be a warning of something else going on. An example of this in a meeting format, especially when something doesn’t seem to ring true is to start the why questioning method (Poka-Yoke). This can make some management very uncomfortable as you near a root cause, especially if the root cause may be their lack of follow-up. Any well-versed quality professional tends to keep their mouths shut since they may have already asked the questions and they likely already know where the questions are headed. Recognizing this, I try to direct the ‘why’ questions to management.
Time spent observing the process and talking to operators is often the most valuable time that can be spent while in the facility working a specific problem or performing an audit. If the purpose of the visit is a first time quality system audit, I may take a little more time in the opening (and closing) meeting so that they have a clear understanding the scope and results of the audit.
The supplier has already given me a strong impression of their management style, commitment and value that they place on customers (and employees) in the first 5 minutes on their grounds. This initial impression is seldom wrong when you know what to look for and keep an open mind in interpretation. Don’t misunderstand, I do not base my entire evaluation on the first 5-minute impression and then work to try to support this ‘feeling’, but experience has taught me that this first impression is seldom wrong (Adam was right!). There have been only a few occasions where the first impression was not a good indicator of the strength of the suppliers’ commitment to quality (seldom, but often enough to cause one to keep an open mind).
The sum total of the visit should be to provide my company with an evaluation of the strength of the suppliers’ current quality system, commitment to quality, and most importantly a prediction of the ability of the company to constantly improve. The rote part of assigning numbers to indicate compliance to specific requirements really is a minor part of the audit and these numbers can be highly misleading to management. A high number in this case means only that they have satisfactory documentation and that they follow it well. I can teach most any 5th grader to perform this type of fill-in-the-number audit. If this is all that the auditor does then they are doing both the supplier and their host company a disservice.
The management attitude of the supplier is most important, but it is also the most difficult to report in objective terms, especially to the suppliers management. Trip reports to your company should always include this information. Your own management may need to be briefed on the meaning of the report since it is often not presented in a way that lends itself to a quick glance. To make it as easy as possible for my management to understand the trip, the beginning of the report, of course, states the intent of the supplier visit. The next heading will usually be RECOMMENDATIONS (or SUMMATION) which gives a quick distillation of the results. If I am recommending that we not do business with the supplier, I say so straight out. Do not be afraid to state this if you feel strongly. I have felt that way a few times, said so and the supplier was used anyhow due to other issues (sole source, best price, etc.). In every case the supplier ended up causing many problems and we eventually got out after spending much to correct the problems. Your company is paying you to tell the truth and to use your head. After a couple of episodes where your recommendations are overridden or ignored your management may start paying attention. If you don’t relate what you have seen and felt, then you are partly to blame for use of a substandard supplier and later others have someone to pin blame on. I hope that your company has moved beyond this but everyone relapses to finger pointing behavior at times.
The next and largest section is DETAIL where I go into the objective data supporting how the recommendations were formed. The objective data is support for the things that have been noted whether they be attitude and/or the specifics noted. Ex: quantity sampled, number of defects (if any), areas sampled, people met, and any other pertinent observations. The main purpose of this area is as background and an accurate appraisal of where the supplier is and possible recommendations for improvement. Seldom does management read this section since it could possibly be several pages, but it is necessary to keep as part of the suppliers file for subsequent trips by yourself and others. Also, if a numerical rating is taken from a ‘canned’ audit sheet, this is the area that I describe the rating.
I typically send the supplier a copy of the trip report unless there is a strong recommendation for not doing business with them. Then I will simply send a ‘thank you for your time’ note.
Norman Black5 Minute Rulepg 1 of 4