1. This case illustrates how complex it is to implement quality standards across a global supply chain. To minimize quality problems, what steps can a supplier and its customer take prior to signing a contract?

2. Develop three morals of this story. Consider the perspectives of the manufacturer and the supplier and explain how they might conflict with each other.

3. Why do you think this conflict might be the case?

4. What are the advantages and disadvantages of using third-party quality assurance services?

AmeriCal Manufacturing, Inc* (AMI), an American manufacturing firm located in the Midwest, recently partnered with a supplier in China. The supplier provides power transmissions, bearings, and specialty components to a variety of industries, including the aerospace industry. After receiving some of these parts, AMI realized they did not meet all of AMI’s specifications. The company then contracted with a third-party quality assurance firm to inspect the Chinese supplier.

To verify that the products shipped to AMI conformed to specifications, the firm sent an experienced quality engineer to the supplier’s manufacturing plant to assess the plant’s processes. Using AMI’s specifications and work instructions, the engineer reviewed the documents that accompanied the manufacturing work orders. He followed a standardized checklist for inspecting each part and determining how it was manufactured, noted any deficiencies, and communicated them to AMI. He then worked with the supplier to correct the problems.

The engineer discovered that there were differences in how the supplier and AMI gauged the product’s specifications. To resolve this problem, the supplier changed its methods of gauging specifications to match AMI’s methods. It was then able to conduct statistical studies on the production runs and make the adjustments needed so the product conformed to AMI’s specifications.

Ultimately, the engineer was able to finish the project within a reasonable amount of time, educate the supplier about the customer’s expectations, and provide it with some quality management tools. This type of scrutiny and interaction would have been almost impossible or too costly without a third party quality assurance service.