Situation Analysis
The lacking performance of Navistar’s supplier, Trimco, resulted in the delivery of low-quality components or kits that were missing specific parts. However, the company remained an essential partner, and “Navistar: Supply Management” describes it as key (5). The reason lay in the lacking quality control procedures conducted by Trimco, which led to occasional mistakes during shipping. In addition, according to “Navistar: Supply Management,” the company struggled to maintain training levels due to high turnover and to match the changing specifications of new Navistar models. The latter could not abandon the partnership and so had to ensure that Trimco performed quality improvement procedures.
Trimco was QS9000 certified, but its quality standards were lacking regardless, implying a need for a reassessment. Among the requirements outlined by “QS-9000 Requirements,” nonconforming product control, handling, storage, and delivery, internal quality, and training might have required a review. Trimco was facing a double problem of high turnover, which may have been associated with the work environment, and poor inventory management, which resulted from a lack of automation. These issues led to instances where parts were manufactured incorrectly or delivered with mistakes in type or quantity.
The shortages that resulted from the errors could be attributed to the Just-In-Time system that the two partners employed. However, the system was appropriate due to the nature of Navistar’s work. As the truck manufacturer offered custom designs and frequently introduced last-minute adjustments, it could not maintain a stock of parts that were not scheduled for immediate use. The issue of potential changes also prevented Trimco from delivering the parts earlier, disallowing an extension of the deadline. Nevertheless, the system could have been improved with a focus on efficiency.
Alternatives
The first option concerns the improvement of Trimco’s inventory and delivery management systems. According to “Navistar: Supply Management,” the supplier’s computer systems were limited, an issue that manifested in the occasional mistakes and failures (5). As such, an update to its capacities would have allowed it to minimize problematic incidents and monitor the progress of part production. The timely updates regarding missing or defective parts would have been passed on to the manufacturing team and compensated before the shipment departed. The initiative would not require significant changes on Navistar’s side, though the truck producer would benefit from improved communication regarding its needs.
There were two viable solutions to the issue of communications between the two partners. The first would be to increase the connectivity between the two entities. The use of compatible modeling tools and the employment of the Internet to transfer orders and specifications would have facilitated the process considerably. However, the difficulties involved in the process made another option, the delegation of an engineer to the Trimco facility, equally or more desirable. The worker would remain employed with Navistar and act as a liaison between the two companies, transferring orders directly and helping the supplier’s staff adjust to new specifications.
When considering the situation with the high turnover rate at Trimco, Navistar should have investigated the reason. The truck producer presumably did not have the same issue, suggesting that the cause was internal rather than external. Assuming that was the case, Navistar should have applied pressure to the supplier and demanded that the company resolve the concerns. A QS9000 audit in the internal quality category would have helped reveal the main problems. After the resolution of the issues, Trimco would be able to put more time and effort into staff training and improve the overall quality of its output. Thus, a significant part of the concerns would be resolved, and the partners could look into the improvement of the supply chain.
The strategy should have been adjusted to improve agility and allow for faster and more flexible responses to changes in demand. Trimco and Navistar should have established closer collaboration so that they would know about each other’s circumstances. The supplier should also have worked on expanding its production or design capabilities if those were insufficient for accommodating Navistar’s needs. The Just-In-Time approach employed by the two companies could benefit from some improvements. If Navistar finalized its designs at an earlier stage, Trimco would have more time for production and quality assurance.
Recommendations
As Trimco’s financial state cannot be determined from the circumstances of the case study, the recommendations will consider the less expensive options and operate using the available information. Trimco should be audited for its internal environment issues using the QS9000 standard. It should then take steps to improve its work environment and improve turnover, putting more emphasis on training after the situation stabilizes and the staff no longer quits. Navistar should station an employee at its supplier and have him or her serve as an intermediary to communicate orders and required specifications. If possible, Trimco should expand its computer network to improve its inventory and delivery logistics and minimize human error, both accidental and willful. Navistar should reorganize its design procedures to allow the supplier more time to respond to changes and produce the required number of details that pass quality inspections.
Implementation Plan
Navistar should exert pressure on Trimco within the boundaries of the contract between the two entities, but if the situation is unforeseen, action beyond its provisions may be necessary. It is unlikely that the document includes clauses for the specific difficulties that characterize Trimco, and so the truck manufacturer should begin discussions with the supplier’s management directly. Mr. Ramsz should describe his concerns to Trimco’s executives and offer the list of recommendations outlined above. They represent a significant issue, and the likely failure of Trimco to correspond to QS9000 standards may be used as leverage to convince the company’s leadership that change is necessary.
The audit should take place before any concrete measures take place, as a considerable amount of information is not available. Its primary area should be internal quality, but nonconforming product control and handling, storage, and delivery also require attention. While Trimco is QS9000 certified, the issues that have surfaced since the last inspection imply that compliance failures have surfaced. Once data on the most prominent concerns is available, more detailed decisions on the specific actions that should be taken to improve Trimco’s supplying situation can be made.
Once sufficient information is available, the recommendations should be put into practice. The resolution of the working environment issues should be left to Trimco, though an eventual look into their turnover rates may be warranted to check its progress. Navistar can dispatch an employee immediately after the liaison position is confirmed with Trimco management. It should also ensure that the supplier purchases adequate computer equipment and installs it in a timely fashion. The adjustment of Navistar’s development schedules should occur independently of Trimco’s changes, with the new deadlines being implemented for the next order.
Works Cited
Navistar: Supply Management. 2010, QS-9000 Requirements (per ISO Element Adopted). EESemi.com, Web.