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	<title> &#187; costs</title>
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		<title>Containment Cost Savings</title>
		<link>http://continentalproservices.com/continentaltimes/2009/05/07/containment-cost-savings/</link>
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		<pubDate>Thu, 07 May 2009 14:42:03 +0000</pubDate>
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				<category><![CDATA[Quality]]></category>
		<category><![CDATA[containment]]></category>
		<category><![CDATA[costs]]></category>

		<guid isPermaLink="false">http://continentalproservices.com/continentaltimes/?p=138</guid>
		<description><![CDATA[<p>Dave Jensen thinks the OEM auto makers are trying to strangle their own suppliers. Dave has been a quality manager for a midwestern automotive parts manufacturer for <a href="http://continentalproservices.com/continentaltimes/2009/05/07/containment-cost-savings/"  >&#187;&#187;</a>]]></description>
			<content:encoded><![CDATA[<p>Dave Jensen thinks the OEM auto makers are trying to strangle their own suppliers. Dave has been a quality manager for a midwestern automotive parts manufacturer for almost 20 years. His world and his business relationship with his customers are both changing. &#8220;The OEMs negotiate prices all the way to the bone, then they hold our feet to the fire with outrageous containment costs for the slightest quality issue,&#8221; Dave says.</p>
<p><span id="more-138"></span></p>
<p><img alt="" src="http://i518.photobucket.com/albums/u344/newo333/continentaltimes/worried_businessman.jpg" class="alignright" width="215" height="324" />Dave&#8217;s company has been producing components for the &#8220;Big Three&#8221; for years. They have done very well for themselves by producing good quality products at a reasonable cost. However, as the auto industry evolves into a global marketplace, they are beginning to feel the sting of the cost reductions imposed by their customers. These constraints eventually start to affect the quality of the product. &#8220;We just don&#8217;t have enough time or resources to shake all the bugs out of a new component launch,&#8221; Dave explains. &#8220;We know where the issues are, we just have to fix them on the fly.&#8221;</p>
<p>Last summer Dave and his staff ran into just this sort of problem. Several components for a new customer vehicle were launched with intense pressure, reduced staff, and tight budget concerns. A rush to production almost always leads to issues of quality, and they had their share on this product line. Before long the customer complaints were steadily piling up on almost every part on the product line. They were staring down the barrel at a costly mandated containment. &#8220;It was a nightmare, and we could not wake up!&#8221; Quality Engineer Jeff Stone says.</p>
<p>After one component went into a mandated containment program, they decided to put the other components into &#8220;Self-Imposed Containment&#8221; in an effort to avoid the limited selection of very expensive service providers. Their quality problems were workable, but they needed more time, and they were surely headed for a mandate on the other components. </p>
<p>Dave found a way to reduce some of these headaches. He was able to negotiate a more cost-effective service rate with a smaller Sorting and Inspection Firm that could be more responsive to their needs. The reduced cost allowed them to allocate more resources to their known issues. The service provider&#8217;s feedback kept them aware of how Dave and his staff were doing, and the customer complaints nearly disappeared. &#8220;They even found a few issues we didn&#8217;t know existed,&#8221; Dave says. He was able to utilize his Quality Supplier&#8217;s engineers to help find and eliminate the root causes of their issues and to put safeguards in place to catch anything that fell through the cracks.</p>
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