Quality Recovery and Rework - When It All Goes Wrong

When Quality is the Target, but not the Result, what do you do?

While Quality may be the overarching goal of all production, stuff happens, resulting in non-conforming parts. This results in failure verification, rework, recalls, sorting, kitting, retest, relabeling and pipeline management, which are facts of life in the manufacturing, assembly and production world we live in.

So, when it all goes wrong, what do you do?

In a previous article in this series, we discussed the process. Briefly, you must:

1. Assess exposure and manage risk at each stage of the fulfillment process;

2. Figure out what went wrong (root cause);

3. Fix it at the factory and get it back on line ASAP;

4. Figure out what you're going to do about all the material in transit, at customer assembly and inventory locations, and already sold through to an end user.

Your people are the experts on your products and on your customers, so there is no way around these experts being intimately involved in root cause analysis and in figuring out what has to be done at the factory. You can hire consultants and/or facilitators to streamline the process to getting to root cause and solution, but the experts and management must take ultimate responsibility for parts 1, 2 and 3.

There is far more flexibility in the 4th part. This is the tedious, messy and time-consuming part of the job, and is generally not a core competency of the organization in trouble. Ultimate customer satisfaction depends on competent and rapid execution of failure verification, sorting, reworking, testing, labeling, packaging, pipeline management and crisis logistics.

Options and Alternatives:Most Project Managers and Quality Managers do not realize that there are companies that can take over the most tedious and frustrating parts of the recovery process. With that in mind, let's examine your options and their consequences:

1. Keep it all in-house (subtle, but potentially far-reaching negative ramifications) - The Good News: The people who are most likely to be familiar with the problem, the product and its quirks are right there, concerned and capable. The Bad News: The engineers, technicians, logistics personnel, production personnel, management and facilities all generally have full-time jobs that keep them busy 10 to 16 hours a day, just to meet set schedules and deadlines to keep the company moving on its projected path. It is these same people who are going to be tasked to take on this additional, unexpected and often significant workload at the expense of their current assignments. This tends to mortgage the company's future, but the urgency and necessity of getting though the crisis overshadows this concern for the moment. Everyone pitches in, does what it takes, and in the excitement, fails to look up long enough to consider, much less do, the sensible thing. The results of this approach are mistakes in the recovery and a hurried or unfinished release of the next project, each leading to additional crisis and continuing the spiral of missed product cycles, poor quality, low yields, and substandard product.

2. Write a check - Outsource parts of the crisis - This is almost universally unrecognized as an alternative, but from a business perspective, it is the only way to go. If you are in Quality Management or Project Management, your company expects you to make decisions that are best for the company and its bottom line. Often, you are so focused on getting the problem solved with resources you know and trust that you don't stop to consider the alternatives - especially the alternatives you are unaware of.

Early in my career, I was unaware that there were organizations that specialized in rework, or "Quality Recovery". I suffered terribly through many miserable reworks, often supervising a bunch of random unskilled temps in hastily set up warehouses with processes that evolved as the rework progressed. I remember that a task as simple as keeping track of labeled boxes, matching serial numbers on the box labels to serial numbers on the unit labels was unmanageable. I remember starting one rework three separate times because the assembly instructions were being interpreted in unpredictable ways by the operators, and we couldn't keep track of which units were done by which operator. I'm sure anyone with any time in the business can relate to these expensive frustrations.

Happily, there are companies who are really good at this tedious and high-risk stuff, and make it a high point of your relationship with your customer, in spite of the crisis situation. The customer memory of the pain is short, and the memory of the way it was handled scores big points because the rework was managed with the same level of competence and closure exhibited by your manufacturing process.

I was fortunate to stumble onto a couple of great Quality Recovery providers as I was confronted with a particularly bloody rework situation involving recurring firmware upgrades with confirming test, and with mandatory label tracking of the upgrades on pipeline inventory. I took a deep breath and decided I was going to take a half hour and look for help. I was lucky that day. While a crisis is never much fun, these people made it a lot less brutal, and as I analyzed the comparative burdened rates of my engineering and technical staffs, it was actually a less expensive route. Of course, I still had to pay the burdened rates at the same time I paid the recovery people, but then I was paying my burdened engineering rates for true engineering work that was making me a much higher return on the dollars (at least in theory) than working on unplanned rework lines.

Three very important questions as you approach parts 1 and 4 of the problem resolution process are:

1. Is this so small and straightforward that it won't take much from our regular duties? If the answer to this is no or unknown, the next question is:

2. How much of this project can we write a check for so we can stay on target on our existing programs and at the same time get credit for competent management of our rework/recovery liabilities?

3. Who will make us look especially good to our customer in this time of crisis through their core competencies in rework management and recovery activities?

Note that often, several layers within steps 1-4 in the problem resolution outline are happening in parallel, and it would be best to get your recovery specialist involved as soon as you have answered the first question as a part of step 1.

Cautions: It is critical that steps 1-3 of the problem resolution outline are completed by your people in a very complete way, or you will pay more for your recovery efforts than you have to, whether you do it yourself or outsource. The recovery efforts can be no better than the instructions and materials provided. If inaccurate or incomplete information is provided to the recovery organization from your team, their recovery efforts will be wasted until they either figure it out for themselves or you intervene with the appropriate amount of finished staff work.

Similarly, due diligence must be applied to your selection of a production/quality recovery/rework service. Let's face it, RESULTS are the name of the game. This is difficult to assess on your first trial, but there are indicators to look for: I look for the following attributes:

1. Response time - I was usually in a big hurry by the time I got to step 3. Customer reps were breathing down my neck, demanding a schedule and daily reports. I needed help FAST! My best recovery providers were able to get people, facilities and equipment in place, ready to train in four to eight hours.

2. Location flexibility - I often had material strung out across the US, and sometimes in pipelines in Singapore, Malaysia, Hungary, Scotland, Italy, Hong Kong, Korea, China and Thailand. Again, my favorite rework suppliers were able to accommodate me where I needed them to be in most cases, often within a day or two of my request.

3. A very lean corporate structure - this will tell you that the emphasis is on recovery management, which is where you need the real expertise. My three favorite providers had only three permanent employees - a President, Vice President and an administrative assistant.

4. Skilled Contract Labor - I'll again refer to my favorite folks - They have pools of previously tested skilled labor all over the US, Canada and Mexico. The real strength and core competency is in the ability to effectively set up, properly prep and manage these people.

5. Facilities - informal and formal relationships with several facilities in many locations and the ability to travel all over the world to set up similar operations wherever I needed them.

6. A well-defined compensation structure - While this might not seem important, I assure you that if your rework provider has to spend a lot of time recovering money from his clients, he is not going to be as focused on the actual core competencies that you really care about. Expect to pay in full upon completion. NOTE: Do not treat this like a normal supplier because this is not a normal supplier. This is the guy who can save you. If you treat him well, you will be treated well. Some providers require a deposit to get started, some set up an escrow account, some just need to be paid upon completion, and some work with combinations of these payment plans, depending on the nature and scope of work. Don't trot out the 30-60-90 discount program. It's really inappropriate, and you'll risk rejection by the people most likely to make you a success.

How do I go about looking for a good quality recovery service?

Start with your favorite search engine and try the following keywords: Rework, Quality recovery, Quality Rework, Quality repair, Quality problems

There will be a high percentage of very specialized returns for this kind of search that will have nothing to do with what you're looking for (ball grid array [bga], IR reflow, quality fender repair, etc.) but you'll be able to spot the possibilities by the description. This can be a little tricky because these Quality Recovery guys are not the best marketers on the planet. When you find a likely prospect, give them a call and run down the elements above with them. When you find the right guy, it will be well worth the effort.

If you have a logistics or kitting provider, like Banta or CTI, they will often accommodate you in certain situations. I have found them to be generally less flexible and less influenced by my urgencies, and generally a little more expensive than their leaner counterparts that specialize in this kind of work, but they have the advantage of already having an arrangement with you (payment channels, contracts, etc.), and they may have some of your non-conforming material inventory already in their facilities.

If you are thinking that this might be a good idea for your next emergency, don't wait for that next emergency to start. Find a rework provider and establish a relationship with him now. Get all of the payment arrangements worked out with your company so you are ready to focus on the emergency when it happens. Take some time today to make your life easier when that next inevitable critical situation rears its ugly head and stares you in the face.

Kent Walters is a former employee and manager for several major suppliers of complex electronic subassemblies to the big players in the computer industry (Compaq, Dell & HP). He was a technical and engineering manager for Conner Peripherals, Seagate Technology, IBM and Hitachi, following a long tenure at Hughes Aircraft in artificial intelligence and business systems analysis. Mr. Walters currently runs Technical Transfusion, a consulting service assisting many companies all over the United States on their technical support concerns, with a focus on hands-on technical support in the Houston, Texas area. See http://www.TechnicalTransfusion.com.

A Gift: One source the author will personally endorse (because they have saved his butt on numerous occasions for which he owes them big time) is MIH Management, Inc. - http://www.mihmgt.com. They follow the model outlined to the letter. If you can't use them for whatever reason, look at their website and use them for an example - look for someone who is singing the same tune. Other resources can be found at http://www.reworkinfo.com