Issue link: https://iconnect007.uberflip.com/i/1357726
20 SMT007 MAGAZINE I APRIL 2021 a location that has higher labor costs, but the other costs are lower. It's important to under- stand what goes into cost accounting. Really effective supply chain management under- stands where price comes from: cost is an ele- ment of price, but it's not the only element. Holden: Have you been able to inject your expe- riences as a quality manager into your teach- ings? Rodgers: Oh, absolutely. We oen talk about the cost of quality. You can buy a cheap com- ponent, but what about internal failure rates, or warranty costs? ese must be considered. I used to really hate the idea of incoming inspec- tion, and I always looked for ways to charge that back to our suppliers. Now, I understand that doing an occasional audit of incoming material is a good idea. But if I have to do more than an audit, I'm going to be really angry at our suppliers because that's a cost of quality. Some might even call that a hidden cost of quality. I want our students to remember that when they think about the total cost of something that they're buying. It doesn't just end with the P.O. Matties: Did you find a way to charge it back? Rodgers: Yes. A lot depends on how much power you have as a buyer, but if you're a small-time purchaser you may have a lot more trouble. Matties: I completely agree with you. e cost of inspection of somebody else's process is a failure of their process. Rodgers: Absolutely. Many of our sup- pliers would say, "You don't have to do incoming inspection; we'll do outbound inspection." at's the wrong answer. Wrong, wrong, wrong! You get qual- ity by testing and by having good pro- cesses. In many cases, it's harder for smaller companies, but if we could actu- ally teach our suppliers how to achieve quality, it's better for everybody. Matties: is is a big push for us in 2021. We're calling it the year of continuous improvement, and we've introduced the simple formula: X = X c – 1. If you can take your current process and reduce it by one, whatever it happens to be— one rotation, one spin, one iteration—and you just live this over and over, everybody wins. Rodgers: at sounds good to me. Again, that's consistent with the spirit of continuous improvement. Matties: Absolutely. Because you're right, if you're doing outbound inspection, you're just a sorting device. You're not building quality. Rodgers: You're spending time and labor on your side doing testing, which is going to add to your cost. It just creates the same pressures. Honestly, if we're going to play that game, I'd rather do the inspection myself than rely on you. But again, it's the wrong answer. Holden: Do you meet with your university peers who are also teaching supply chain? What's their background?