Agile Electric: Quality Issues in a Global Supply Chain
If OEM decides to make a complete recall, the associated costs would be charged to the tiered suppliers; especially a higher potion on Automek and then Agile. Automek takes the risks on Agile, the manufacturer has no previous experience on producing this critical part, with the major purpose of reducing the cost. Moreover, it was the Automek's responsibility to carefully audit the qualification and capability of the lower tiered suppliers. But, it turns out that it was the failure of the tier four supplier caused the major defect on the final part, which causes the potential recalls. Agile is also responsible for the damages because Agile offers ECPL-the tier three supplier- to produce the PCB, which is the most critical component for the actuator assembly by previously knowing that the PCB that ECPL usually make has a different standard comparing to the one Automek requires. The tier three and four suppliers have minor responsibility because of their lack of experience dealing with North American automobile companies with different quality standards. Moreover, their unwillingness about making any implementation and changes to corporate with the upper stream suppliers makes the situation even more complex and difficult to fix.
The internal quality practices are having major role in this case, even considering all the supply chain members. Automek should be responsible for the quality of the final part which delivered from Agile, who is expected to manage the its quality in proper way. The quality for the outsourced components should be audited and monitored by both Automek; Agile is responsible to narrow the quality and process gaps between lower and higher tier suppliers. The final product in this case is produced extremely dependent among each suppliers, whose quality management would affect the quality chain in dramatic ways. It is the ORM's responsibility to test the...
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