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Old 1st August 2016, 14:58   #1
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Default Maruti Suzuki cracks down on suppliers over quality

Good move by the largest car manufacturer of India!!

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Maruti Suzuki India Ltd will stop offering contracts to suppliers that fail to meet its zero-defect policy as part of the nation’s largest car maker’s efforts to avoid frequent and costly vehicle recalls.

“About quality, we worked in terms of percentage for two decades and then we moved to PPMs (parts per million). But now, we tell all our suppliers that PPM is no longer acceptable. Zero-defect is what we want from you. It should become a norm. Only those vendors with us will go to Gujarat who have the quality levels we want them to deliver,” said Deepak Sethi, executive director (supply chain), Maruti Suzuki India

In the agreement between Maruti and its vendors, the onus for vehicle recall is on suppliers. If a component is found faulty and the vehicle is recalled because of that, the supplier is supposed to bear the expenses. Since the auto component industry functions at multiple levels—where a tier-III vendor supplies tier-II, who in turn supplies the tier-I vendor, and then the component reaches an OEM —chances of defects passing undetected are high. In India, the situation is worse as tier-II and tier-III vendors are often financially weak and are unable to invest sufficiently in people, technology and machinery.
http://www.livemint.com/Companies/EN...r-quality.html

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Old 2nd August 2016, 10:29   #2
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I think it is unfair practice. This is passing all the blame and buck for recalls to somebody whom you have engaged in first place.


MSIL has all the right to demand zero defect product from it's suppliers. But making them accountable from recalls is utterly unfair. What MSIL needs to do is improve on quality control and reject the spare parts which do not meet their quality standards before even they are bolted in the car.


If this this trend is taken forward then the secondary or tertiery supplier can say that all *responsibility of a recall goes to the manufacturers of machine which produces the spare part.


MSIL should own up to the recalls and improve their quality control rather than passing the buck. Shame on you MSIL
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Old 2nd August 2016, 11:20   #3
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Default Re: Maruti Suzuki cracks down on suppliers over quality

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Originally Posted by vikrantj View Post
Shame on you MSIL
For trying to improve quality?

If Maruti cars are full of niggles, would we buy them? No. We pay money and expect Maruti to deliver a perfect product for our money. If not, we expect them to own up the repair costs by means of warranty or other compensations. Or do we consider it as our responsibility to have tested the car before we took delivery and hence relieving Maruti from their liabilities?

Similarly, Maruti pays money to their vendors and is only expecting them to deliver the quality they demand or pay up for the loss. Remember, Maruti is not forcing this on the vendors, they can always choose not to renew business with Maruti Suzuki.
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Originally Posted by vikrantj View Post
What MSIL needs to do is improve on quality control and reject the spare parts which do not meet their quality standards before even they are bolted in the car.
How would they test each and every part before bolting them on to the car? Take the case of airbags, which has been the biggest recall in recent times - there is just no way for the car manufacturer to test each part. It is the supplier who has to test it in batches and ensure the quality meets the requirements.

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Originally Posted by vikrantj View Post
I think it is unfair practice. This is passing all the blame and buck for recalls to somebody whom you have engaged in first place.

MSIL has all the right to demand zero defect product from it's suppliers. But making them accountable from recalls is utterly unfair.
Contrasting opinions. How do they demand quality, if the vendor is not made accountable for the decrease of quality. Verbal requests are just not done, and spending millions in testing each and every part doesn't make sense either.

In most cases, there are multiple vendors to choose from, so a vendor can either deliver the quality Maruti demands or pack up and leave space for someone who can do.

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Originally Posted by vikrantj View Post
If this this trend is taken forward then the secondary or tertiery supplier can say that all *responsibility of a recall goes to the manufacturers of machine which produces the spare part.
Isn't it how it works? If a machine the vendor uses gives them faulty parts, do you think they will stick to it? They will either give their business to some other machine vendor, or even sue them for losses!

Last edited by CrAzY dRiVeR : 2nd August 2016 at 11:22.
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Old 2nd August 2016, 11:56   #4
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Default Re: Maruti Suzuki cracks down on suppliers over quality

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Originally Posted by vikrantj View Post
I think it is unfair practice. This is passing all the blame and buck for recalls to somebody whom you have engaged in first place.


MSIL has all the right to demand zero defect product from it's suppliers. But making them accountable from recalls is utterly unfair. What MSIL needs to do is improve on quality control and reject the spare parts which do not meet their quality standards before even they are bolted in the car.


If this this trend is taken forward then the secondary or tertiery supplier can say that all *responsibility of a recall goes to the manufacturers of machine which produces the spare part.


MSIL should own up to the recalls and improve their quality control rather than passing the buck. Shame on you MSIL
All parts supplied by vendors would under routine QC check. But it is impossible to tell about reliability. Certain parts would show defects after usage. It is the responsibility of vendors to do proper R & D, ensure zero defect and supply parts. This move by Maruti would definitely help to overall quality. Vendors won't take anything for granted because of strict norms.
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Old 2nd August 2016, 12:04   #5
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Default Re: Maruti Suzuki cracks down on suppliers over quality

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Originally Posted by vikrantj View Post
I think it is unfair practice. This is passing all the blame and buck for recalls to somebody whom you have engaged in first place.
I guess you are not from a manufacturing industry. All companies work this way. In some cases may not be entire debited for the recall but could be some sharing between the manufacturer and the vendor/supplier.
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Old 2nd August 2016, 12:14   #6
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Yes I am not from manufacturing industry. But I am saying this intuitively. So now if the vendor passes all the QC checks of MSIL and still that part fails will the onus of recall go to the vendor. Secondly the vendor tests his part standalone but that part in tandem with hundreds of other parts from different vendors is a different ballgame. This is exactly the situation at MSIL level. They are responsible for the car as a whole so any failures or recalls is MSIL responsibility.
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Old 2nd August 2016, 12:22   #7
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Default Re: Maruti Suzuki cracks down on suppliers over quality

Won't zero defect parts be more expensive? especially because supplier would have to take up the warranty calls from the field too?
And what if the design itself is not good enough?
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Old 2nd August 2016, 12:24   #8
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Default Re: Maruti Suzuki cracks down on suppliers over quality

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Originally Posted by Dr.Naren View Post
Good move by the largest car manufacturer of India!!
Indeed a great move.

This shows the commitment, responsibility and the kind of best practices that the MSIL intends to set across its vendors.

How I wish others, especially Tata, could follow suit than simply riding on their high horses of being an "Indian" brand that works for Indian consumers.
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Old 2nd August 2016, 12:42   #9
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Default Re: Maruti Suzuki cracks down on suppliers over quality

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Originally Posted by vikrantj View Post
I think it is unfair practice. This is passing all the blame and buck for recalls to somebody whom you have engaged in first place.What MSIL needs to do is improve on quality control and reject the spare parts which do not meet their quality standards before even they are bolted in the car..
.
.
. Shame on you MSIL
Are you Serious?

You are saying, that if you buy a product from the market, its the buyers responsibility to do QC?
In that case, shame on buyers if their car is defective. Its their job to do the QC at purchase time and reject if the product is low quality
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Old 2nd August 2016, 13:04   #10
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Default Re: Maruti Suzuki cracks down on suppliers over quality

I think this is a good move as it will ensure better quality of the overall product (vehicle) that MSIL will sell.
This can also been seen in terms of a RACI (Responsible, Accountable, Consulted, Informed) matrix - while the supplier is indeed "Responsible" for part quality, MSIL is "Accountable" as it is part of their larger product design and they will still do their part and interface with the end customer to resolve the issue when it comes to recalls.
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Old 2nd August 2016, 13:36   #11
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Quote:
Originally Posted by tsk1979 View Post
Are you Serious?

You are saying, that if you buy a product from the market, its the buyers responsibility to do QC?
In that case, shame on buyers if their car is defective. Its their job to do the QC at purchase time and reject if the product is low quality
Please read my post again since I have never said end user is responsible for defective product as you are indicating in your post. I am saying MSIL is responsible for defective product. Secondly MSIL is not buying parts from the market but getting it manufactured from the vendor which they themselves have appointed and the part is as per their design, so it is imperative for them to do a QC of their incoming part.
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Old 2nd August 2016, 14:05   #12
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Default Re: Maruti Suzuki cracks down on suppliers over quality

This is just Maruti exercising its dominant market to squeeze suppliers and offload its costs onto them. Most Auto manufacturers demand visibility into the cost of the respective components, and use that to then push cost targets onto the manufacturers leaving them minor margins, forcing them to cut costs anywhere and everywhere, leading to issues in design & manufacturing as the focus is on cost. Maruti wants to have their cake (low costs) and eat it too (no liability)

Is it fair to ask someone to be liable for something greater than the purchase you are making? If you sell a car to someone, and that car catches fire and burns down the buyer's house, is it fair for the buyer to ask you for compensation for his house?

In an ideal world with strong Tier 2& 3 Suppliers, this would have lead to increased costs on either QC or Insurance which would have ended up costing maruti all the same. But since these are smaller players, someone who is desperate enough for the volumes will agree, and declaring bankruptcy and starting again in India is not a big issue, and maruti gets to find a scapegoat for its liability.
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Old 2nd August 2016, 14:10   #13
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Default Re: Maruti Suzuki cracks down on suppliers over quality

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Originally Posted by vikrantj View Post
I think it is unfair practice. This is passing all the blame and buck for recalls to somebody whom you have engaged in first place... MSIL should own up to the recalls and improve their quality control rather than passing the buck. Shame on you MSIL
Whoa... !! These are really strong words.

In more appropriate words, the proposal by MSIL is called "demanding accountability". This is industry wide practice not confined only to automobile sector (accpetable defect ratio may vary).

Quote:
responsibility of a recall goes to the manufacturers of machine which produces the spare part
You should really get some experience in manufacturing sector and then you'll be able to understand what most of us are trying to share. You definitely are not aware of periodic maintenance and its relationship with Quality control.
Quote:
MSIL is not buying parts from the market but getting it manufactured from the vendor which they themselves have appointed and the part is as per their design, so it is imperative for them to do a QC of their incoming part.
Boss, you should really get awareness of design process for car and its parts, else you'll keep floating in random direction.

No OEM designs 'all' parts for its products. For large number of parts, specifications are shared to specialist suppliers and suppliers are responsible for design and manufacture of those parts. That said, even if OEM has designed a part, its liability lies only for flaws related to design; for manufacturing related flaws the manufacturer must be held accountable.

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Originally Posted by greenhorn View Post
This is just Maruti exercising its dominant market to squeeze suppliers... and maruti gets to find a scapegoat for its liability.
Based on my experience in working with suppliers in manufacturing sector, I can discuss on this topic for as long as anyone wants to. But I would request that you read this first.
http://www.nhtsa.gov/nhtsa/announce/...nesummary.html
http://www.nhtsa.gov/PR/FirestoneRecall

Last edited by AutoNoob : 2nd August 2016 at 14:31. Reason: added last quote
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Old 2nd August 2016, 14:34   #14
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Default Re: Maruti Suzuki cracks down on suppliers over quality

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Originally Posted by vikrantj View Post
I think it is unfair practice. This is passing all the blame and buck for recalls to somebody whom you have engaged in first place.
MSIL has all the right to demand zero defect product from its suppliers. But making them accountable from recalls is utterly unfair. What MSIL needs to do is improve on quality control and reject the spare parts which do not meet their quality standards before even they are bolted in the car.
Although MSIL may take every possible measure to make sure that no defective components make their way to the production cars, however there is a possibility of some defects remaining hidden during inspections and then show up only when they put to regular use. They are called latent defects. The position of law is clear that the onus of curing latent defects rest with the manufacturers alone.

MSILís words are razor clear that in case a recall has been affected owing to a defective component, then the onus of rectification should lie on the component maker itself and not on the first level and second level buyers.

Quote:
Originally Posted by vikrantj View Post
If this this trend is taken forward then the secondary or tertiery supplier can say that all *responsibility of a recall goes to the manufacturers of machine which produces the spare part.
Well, I believe MSIL is only exercising its legal rights and not passing on any buck to anyone. They are in effect protecting the interests of their customers who buy MSIL cars trusting the brand value and should help saving unnecessary harassment to the owners during the service life of the vehicle. .


Quote:
Originally Posted by vikrantj View Post
Shame on you MSIL
Well not to be. MSIL is scrupulously making sure that all gaps leading to poor quality control are plugged. We need to congratulate them for this initiative rather than blaming them. What would be your reaction to Tata cars which break down amidst nowhere without any obvious reason?
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Old 2nd August 2016, 14:42   #15
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Default Re: Maruti Suzuki cracks down on suppliers over quality

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So now if the vendor passes all the QC checks of MSIL and still that part fails will the onus of recall go to the vendor.
I think there's a confusion between Recall and Warranty Claims. The recall is when a particular batch has some problems unlike warranty claim or failure . There's a huge cost for the manufacturer as well brings a bad name to cover such recalls. What Maruti is doing is correct , there should bring more onus on the component suppliers which are increasingly becoming assembly suppliers .

Last edited by Turbanator : 2nd August 2016 at 14:52.
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