Solving Problems With Root Cause Corrective Action

by Liberty Electronics

Solving Problems With Root Cause Corrective Action

When a project goes astray, one of the most important ways to get it back on track is to find out exactly what went wrong. Using supporting data and facts, root cause corrective action (RCCA) is one way to resolve the issue. The RCCA method finds and eliminates the cause of a detected nonconformity, permanently resolving it.

RCCA isn’t about fixing an individual mistake – it’s a series of actions that positively change or modify the system’s performance for the long term. It looks at the big picture and targets the weakest parts of a system that are more likely to cause failure.

Because RCCA aims to make a systemic change, it’s critical to address contributing causes since they could become a future root cause. Ultimately, RCCA can help create better products, gain a competitive advantage and improve customer satisfaction.

Implementing Root Cause Corrective Action

When implementing RCCA and determining potential solutions, there are five factors to consider:

  • Viability: The solution must be compatible with the company’s schedule and resources.
  • Effectiveness: Before choosing a solution, determine whether it will be effective in solving the problem.
  • Team Involvement: Those affected by the problem should be included in the process of formulating the solution.
  • Big Picture: Focus on systemic issues and address problems that affect the entire organization.
  • Contingency Plan: Come up with a plan based on anticipated success and have a backup strategy in mind.

You should also ask questions like:

  • Will the corrective action lower the risk of event recurrence to an acceptable level?
  • Does everyone involved accept the solution?
  • Are there any opposing effects that might make the action unacceptable?
  • Does the corrective action fit within organizational constraints?

Once the action has been implemented, it’s time to evaluate whether it was as effective as expected. Using predefined criteria to measure results will help assess the effectiveness of the RCCA, helping your team solve similar issues in the future.

Ensuring Team Buy-in

One of the most significant considerations when determining the effectiveness of RCCA is how successfully the team worked together toward implementing the solution. The most critical areas of team collaboration are knowledge facilitation and the team’s willingness to challenge assumptions and critically evaluate the direction of the analysis.
Another important factor is the inclusion of leadership and team members from outside the area of focus. Doing so brings a fresh perspective to the root cause analysis, which helps teams think outside of typical patterns to determine the most suitable RCCA.

No matter the complexity of the issues you’re facing, Liberty Electronics®, a relationship-based business, can partner with you to help find solutions for your upcoming programs. With over 35 years of leadership in our field, we specialize in supporting aerospace, defense, rail, transportation and nuclear energy industries by providing products including:

  • Electronic wiring harnesses
  • Box builds
  • Electrical cable assemblies
  • Electrical cabinet assemblies
  • Electrical panel assemblies
  • Electromechanical assemblies

In addition to our dedication to success, quality service and on-time delivery, we’re a relationship-based supplier that values cooperation over competition and are based in Franklin, PA. To build a long-lasting relationship, contact us on our website or via email about working together.

Liberty, Independence, and Reshoring

by Liberty Electronics

In an interesting convergence, the new United States Mexico Canada Agreement (USMCA) trade deal has taken effect within days of celebrating Independence Day here in the United States of America.  The new deal replaces the old North American Free Trade Agreement (NAFTA) that was implemented on January 1, 1994.  While the net effect of NAFTA has been the subject of spirited debate, there are two unfortunate realities. First, the US trade deficit with these countries increased from $17 billion to over $177 billion per year, and over 800,000 US jobs were displaced during NAFTA’s 26-year existence.  Likewise, and worse for Americans, since China joined the World Trade Organization (WTO) in 2001, 3.4 million US jobs have been displaced, and the annual US trade deficit with them peaked in 2018 at over $400 billion.  To add insult to injury, trade with China has strengthened a totalitarian regime that oppresses the Chinese people and views the United States as an obstacle to their global ambitions.

In achieving the goal of helping to level the playing field, the new USMCA deal and others that could follow will likely increase the costs of goods produced in what were previously identified as “low cost regions.” In addition to trade deal changes, the costs of “low cost region” supply chains have been severely impacted by things like increased tariffs, the COVID-19 pandemic, natural disasters, wage growth, energy costs, and destabilizing factors, which include crime and the threat of armed conflict.

So as Americans celebrate Independence Day this year, many US companies are declaring independence from offshore supply chains.  The Thomas Industrial Survey, for example, recently reported that 64% of manufacturers are likely to bring production and sourcing to North America, and this number has been growing.  The Institute for Supply Management reports that nearly 75% of companies are reporting supply chain disruptions due to the coronavirus.  It’s no wonder more and more firms are reshoring.

Numerous case studies reveal that manufacturers that reshore can expect to reap improvements in a number of areas, including product quality, lead times and delivery, inventory costs, innovation and faster product development, and reduced threat of theft of intellectual property and supply interruptions, among other benefits.  As a result, manufacturers are looking to achieve a reduction in the Total Cost of Ownership (TCO) of the products that they begin to source domestically.

In our experience with our customers, reshoring, and even changing suppliers within the same country for that matter, can be a daunting task.  There are tools and methodologies, however, that we find make the process much less susceptible to potential pitfalls, and minimize both the cycle time and cost of the project.  

Robust configuration management and ERP systems, for example, are essential to get the right products at the right time.  Hundreds, thousands, and even more parts need to be ordered and delivered at the correct revisions and at the right times in order to ensure supply continuity.  Early collaboration, gold standard assemblies, both physical and digital, and even reverse or re-engineering can be key, especially to uncover and address “tribal knowledge” that is not captured in the technical documentation.  Both the ability to quickly scale capacity, and rapid tooling development, including using 3-D printing, can also help ensure a smooth process.

Ultimately, we’ve found that our commitment to your success is the key factor in getting your products moved from an incumbent supplier in a timely and cost-effective manner.  If you are looking to reshore your products to a US EMS contract manufacturer, we invite you to consider Liberty Electronics.  Let freedom ring!

Sources:

https://reshoringinstitute.org/reshoring-knowledge-library/reshoring-case-studies/
https://ideas.repec.org/a/elg/rokejn/v2y2014i4p429-441.html
https://monroeengineering.com/blog/study-reveals-which-manufacturing-companies-are-reshoring-the-most-jobs/
https://www.newsweek.com/china-trade-deficit-has-cost-us-millions-jobs-across-all-50-states-report-1184426
https://www.thebalance.com/u-s-china-trade-deficit-causes-effects-and-solutions-3306277

 

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How the Right Contract Manufacturer Can Benefit Your Bottom Line

by Liberty Electronics

Lack of capacity, along with rising operating costs and increased competitive pressures, have caused companies to explore the option of contract manufacturing for their products. Contract manufacturing outsources certain manufacturing operations to a third-party, passing on the responsibility for materials, capital, equipment, staff, and software.

Contract manufacturing allows businesses to shift their focus away from fabrication and assembly and place more emphasis on core business-related tasks such as design, development, integration, and testing. Contract manufacturing is especially ideal for companies that do not possess:

  • In-house capability and/or expertise to reliably produce a certain element or multiple elements of existing or planned products
  • Sufficient capacity to keep up with demand
  • Contingency in the budget to accommodate unforeseen circumstances during production
  • The ability to coordinate the different variables required for product creation, including raw material procurement, design, fulfillment, and delivery

Although contract manufacturing is a beneficial and valuable tool for businesses, specific steps still need to be taken to ensure the outsourcing process is as cost-effective as possible.

Is Outsourcing Tactical or Strategic?

Tactical outsourcing and strategic outsourcing are driven by different factors.

Tactical outsourcing is an approach usually employed by organizations that are seeking a short-term fix and or limited cost reductions. Companies that use tactical outsourcing tend to do so based on criteria such as cost and available delivery dates. This type of outsourcing also allows businesses to hand off limited scopes of work to gain expertise and or capacity.

Tactical outsourcing is viewed as relatively straightforward, as it is based more on immediate need. For example, an OEM may outsource overflow manufacturing to keep up with demand. A company may also outsource to free up capital funds being spent on non-core functions.  Such a move can prevent the need for expending capital on additional floor space and equipment.

Strategic outsourcing, on the other hand, is much more involved, and much more impactful. In contrast to tactical outsourcing, which can be reactive and often short-term in nature, strategic outsourcing involves a more long-term focus. This type of outsourcing allows businesses to hand off functions that either cannot be performed by their organization or are difficult to control and manage.

During this type of outsourcing, decisions are made based on myriad factors and can be considerably more complex than tactical outsourcing. For instance, it often involves the restructuring of an organization based on core competencies and external relationships. Strategic outsourcing might also entail retraining certain employees to do more value-added work.

A strategically outsourced contractor is not just a vendor, but is also a partner in many ways. In a strategic outsourcing partnership, both parties have a significant stake in the relationship. The client frees up money and resources to focus on core business concerns, while the contract manufacturer offers their own core expertise that can improve the production process and maybe even the product itself. In such a relationship, the partners share risks and share investments, ultimately reducing the negative, and amplifying the positive effects on both parties.

Other benefits companies gain from a strategic outsourcing partnership include:

  • Lower internal department handling costs
  • Reduced inventory
  • Increased capacity
  • Access to state-of-the-art processes/technology
  • Increased market competitiveness
  • Reduced training/workforce costs and responsibilities
  • Access to a lower cost structure

One of the primary goals that strategic outsourcing seeks to achieve is a reduction in the total cost of ownership (TCO).

What Should You Measure?

Knowing what metrics to use also plays a substantial role in contract manufacturer selection. Financial and operational (or non-financial) metrics represent two particular parameters that need to be considered.

  • Financial metrics

Outsourcing essentially boosts economic value added (EVA) by significantly reducing operating and capital costs, while inventory reduction, increased turns, and reduced equipment, facility, and personnel costs affect the return on assets (ROA). Financial metrics are used to predict, capture and assess the economic impacts of the outsourcing initiative. They should also be used to evaluate and select the right contract manufacturer. Examining the strength of their bottom line and balance sheet, for example, is a crucial element of selecting the right outsourcing partner.

  • Operational metrics

Money isn’t everything when it comes to metrics. Manufacturing success may be further evaluated by measurements such as on-time delivery, cycle times, quality, and reliability. These parameters can ultimately affect time-to-market (TTM), and overall customer satisfaction with the final product.

A Trusted Contract Manufacturing Partner

Selecting the right contract manufacturer can free up precious resources for more challenging or pressing tasks, which can ultimately improve a company’s productivity and ability to innovate. Liberty Electronics draws on decades of experience to solve complex challenges related to manufacturing, engineering, and quality. We work closely with our clients to offer superior contract manufacturing services, making us a true consultative partner.

 

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How to Successfully Switch Suppliers [Video]

by Liberty Electronics

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Scott Anderson of Liberty Electronics shares best practices and the importance of a multidisciplinary team in the process of switching suppliers. This includes ensuring adequate production capacity, consistent OTD, and dual-sourcing supply to avoid supply chain disruption. To learn more about how Liberty works with customers on supply chain management and switching suppliers, check out our blog and video below.

Mark: Welcome to another episode of Wired Success presented by Liberty Electronics. Today I’m here with Scott Anderson. My name is Mark Cessar.

Scott is the Director of New Business Development here at Liberty and we are here to talk about switching suppliers. So, Scott, why are we talking about switching suppliers today?

Scott: Well, thank you, Mark. It’s good to be with you again.

There have been a number of studies recently that show that actually a majority of O.E.Ms are considering switching to new suppliers. In some cases they’re looking to avoid tariffs or supply disruptions, and in other cases they’re looking to increase capacity or improve quality. Unfortunately, switching suppliers, though, is a risky business.

Liberty has worked with a number of customers over the years who’ve transitioned business to Liberty from an old supplier, and we’ve learned some lessons and developed some best practices that we’d like to share today.

Mark: Is there any one thing that stands out above others in terms of best practices in switching suppliers?

Scott: Well, I’d say, like much of manufacturing, it is really important to focus on the process and also in having a multidisciplinary team that’s responsible for and accountable for the process.

Mark: So, let’s talk about the process. What are some key elements?

Scott: Well, first, one thing that’s critical in contract manufacturing is getting the configuration right. Does the finished physical product match the technical documentation? Unfortunately, some suppliers make changes to the product without updating the documentation. So, for example, they might substitute a component without updating the bill of material, or they might switch out a tool or change a tool setting without updating the documentation. So, we found it’s critical to have a gold standard of the finished product. So whether it’s a physical gold standard or whether it’s a digital gold standard, something to validate the configuration against and also having a multidisciplinary review of the technical documentation and the process.

Second, sharing forecast information with the supplier and having a supplier that has a robust ERP system is important to making sure that the components are arriving when they need to be there to support the transition and also to ensure that there is adequate production capacity to meet the demand. Then, third, it’s also important to have some type of supply redundancy so whether that’s some safety stock to cover a few months of the transition or possibly some parallel production with the old supplier to cover that period it’s kind of a belt and suspenders approach that might not be necessary, but there’s really little downside.

Mark: Is there anything else that Liberty has picked up over the years that could help an O.E.M. in this process of switching suppliers?

Scott: Well, Mark, there are a couple things that we’ve picked up on that are key, and one is the ability to be nimble. Invariably in these transitions something unforeseen pops up and it’s important to have lean processes to be able to respond quickly and also to minimize the cost impact. Second, and probably most important, is commitment on the part of the supplier to the success of the transition. In other words, having a supplier that’s willing to do whatever it takes to make this happen for the customer.

Mark: Well, thank you for your time today, Scott and thank you for tuning in to another episode of Wired Success presented by Liberty Electronics.

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Advantages of Moving Up the Bill of Materials [Video]

by Liberty Electronics

Moving up The Bill of Sale Thumbnail Liberty | Advantages of Moving Up the Bill of Materials [Video], Liberty Electronics®

The Bill of Material is a critical component of the planning process in manufacturing for any industry. In this episode of Wired SuccessMark Cessar talks with Liberty’s Programs Director, Troy West about what moving up the Bill of Materials is and how this approach to procurement can benefit OEMs in terms of ease of installation, capacity, costs, and inventory reduction.

Mark:
Hi, my name is Mark Cessar and I am here today with Troy West for another discussion on Wired Success presented by Liberty Electronics. Troy has worked for the company for 19 years as our Programs Director. He is from Butler County, Pennsylvania. So, today’s topic for discussion is “advantages of moving up the bill of materials.” So to start, why would a system supplier want to outsource a higher level assembly as a strategy, versus cable and harness assemblies?

Troy:
Well, the main reason a supplier would want to source a chassis or box build as opposed to a harness would be the ease of installation. So, when they get a harness or cable assembly, they have to take that assembly and install it in whatever their unit is: the chassis, the box… and that can be a fairly labor-intensive process. So by having it come to them as a completed unit, then they may simply have to bolt that chassis into their assembly that they will sell to an OEM and it’s already tested; it’s already inspected, and therefore it helps save on their labor costs.

Mark:
So let’s talk about capacity. How can this approach help this area?

Troy:
Well for a system supplier, you know, if they’re able to outsource the chassis for example– if I can give an example– there is a customer I know of that had a large harness they were procuring from us that had about 90 wires going to a single terminal block. And the original intent was that they would terminate to that terminal block at their facility. However they did not have the labor available for that. So after a couple months of receiving assemblies that way, they decided to have the terminal block included in our bill and have us do the termination. And it saved them– according to them– about six hours per unit for the installation.

Mark:
All right, what about cost? What are the implications there?

Troy:
There are several factors that can be impacted by this for cost. One of which would be a reduction in inventory for the system supplier to carry, as well as the number of PO’s that would be issued by the supplier, as well as the receiving and warehouse activities to manage all of those components.

Mark:
You mentioned inventory reduction. Can you explain that a little bit more?

Troy:
Yeah we can work with the system supplier to potentially have a pull or vendor-managed inventory system set up so that they would only need to pull those items as required. As well as it would reduce the number of part numbers that they would need to carry in their inventory and the cost associated with having them in their inventory and purchasing them.

Mark:
So last but not least, what effect can this strategy have on the design process?

Troy:
Well, if the system supplier is able to modify their design to make it easier for installation, that can impact quite a bit. Their remaining labor, for example, they might have the harness at present exit the chassis and go to switches or terminal blocks or whatever that would need to be hooked up afterward, and they might be able to modify the design so it’s connected and to make that chassis a plug-and-play type assembly. So,drop it in, hook up a few connectors, and you’re done with it as opposed to installing it and then running a bunch of wires wherever they need to go.

Mark:
Well thank you try thank you for tuning in to another episode on wired for success presented by Liberty Electronics. Thanks again, Troy

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Wire Braiding: Machine Versus Premade Options

by Liberty Electronics

Braided coverings and shieldings are an excellent way to make wiring configurations neat and uniform. Braiding gives wires more flexibility and a longer lifespan and can also offer a layer of electric protection or abrasion resistance. Although there are two different types of wire braiding widely used in the industry,  machine braiding and premade (or slide-on) braiding, machine braiding offers more versatility, cost savings, and consistency, and should be something a contract manufacturing partner should be able to do in-house.

Braided covers, made from materials like kevlar, polyamide, and nomex, provide abrasion resistance and protect the wiring configurations inside from damage. Braided shielding, made from nickel or copper plated with tin or silver, offers electrical protection by providing electromagnetic or radio frequency shielding. Braided covers and shields can be obtained either commercially, in pre-cut and pre-sized sleeves, or in-house, using braiding machines that weave over the product to fit its exact specifications.

Each type of braiding carries its own advantages and disadvantages. For example, slide-on braiding can be convenient and cheap, as it comes prepared and already sized. Slide-ons can be applied to an assembly quickly and easily. Some complicated or unusually-shaped assemblies, however, may not fit into a standardized size or they may not have a free end to slide the premade braiding onto. These premade braids limit the manufacturer to only being able to cover or shield certain assemblies.

In these situations, machine braiding is a better option, offering the ability to custom size the braiding around a wiring assembly. This creates a perfect fit every time, not limiting the manufacturer to standardized sizes and is often ultimately more cost effective, providing exactly what is needed and producing a more secure and durable product.

Sometimes, the manufacturer can even utilize a slide-on braid and finish the needed modifications with machine braid, should the fit of the slide-on not be adequate. This can secure premade braiding into something more neat and customizable, and offer extra protection for the assembly.

Custom, in-house machine braiding is a process an experienced supplier will be familiar with. With eight braiding machines currently in use, Liberty, for example, works to ensure the best protection for its products. These machines allow the company to produce either coverings or shieldings with all standard materials, including nylon, ceramic, and metal.

The versatility and cost-effectiveness of custom machine braiding creates flexible, long-lasting cable assemblies that might otherwise be difficult to shield, generating products that are uniform, protected, and secure. Liberty’s ability to provide these assemblies to clients shows the company’s own commitment to excellence, and its desire to fit the customer’s exact needs from the initial design to the finished, braided details.

What braiding issues have you seen with either machine or premade wire braiding? Let us know in the comments below. For questions about out braiding process or our quality standards, please reach out for further details.

2021 Industry Outlook – Aerospace & Defense

by Liberty Electronics

Liberty Electronic’s Industry Outlook series analyzes the market for trends suppliers at all levels of the supply chain should watch. In this installment, we break down Aerospace and Defense trends. 

With a difficult 2020 behind us, this year’s relaxed COVID-19 restrictions herald the airline industry’s long road to recovery with returning travel. Though the commercial sector faces some challenges, there is hope for aerospace manufacturers and suppliers with solid industry projections in the defense sector due to defense spending remaining largely unaffected in countries across the world. The global political climate and recovering pandemic economies will mean there is much to be seen in 2021, but aerospace and defense (A&D) companies and suppliers can be on the lookout for three major trends this coming year.

Space exploration and military activity is projected to remain stable.

The pandemic did not shake any eyes from space with lots of activity planned for 2021. After a tough year for space exploration with many launches postponed, this year will be busy as space programs across the globe adapt to delayed launch dates and declining launch costs. Space investments remained steady at 25.6 billion in 2020, meaning more contracts can be expected in 2021 after some large deals in 2020. June saw a 187 million dollar deal between NASA and Northrop Grumman to begin design and execution of the Habitation and Logistics Outpost projected to launch in 2023 and a 160 million dollar deal between the Pentagon and SpaceX to launch two Falcon 9 rockets by the end of 2023. Multiple contracts have been awarded to A&D companies for defense projects in spite of a decrease in deal activity due to the pandemic, though that is expected to increase as 2020’s uncertainty abates. Already the industry has seen some major contracts such as the U.S. Air Force and Lockheed Martin for F-16 Fighting Falcon, the U.S Army and Honeywell for CH-47 Chinook helicopters, Flight Control Systems and Aerovironment for Raven unmanned aircraft and more. From these contracts suppliers can expect a steady revenue stream from continued military and space exploration efforts.

Commercial air travel anticipates a slow and steady recovery.

Though it may be several years until air traffic returns to pre-pandemic levels, there has been an increase since the beginning of the pandemic and as an effective vaccine becomes available. This adjustment in the market means 2021 will be an adjustment year for this side of the industry. Now, leisure travel appears to be leading demand as the business sector continues to refrain from any kind of travel, though overall travel is still 50 percent lower than pre-pandemic levels as of April 9. This cut in passenger traffic has caused airlines to cancel or postpone investment projects, narrowing their focus on near-term cash flow in order to pay off debts and create a security fund for the future. Fewer deals will be made with aerospace and defense manufacturers in 2021, though this number may continue to grow as airlines transition into this new type of market left in the wake of COVID-19.

Aerospace supply chains can expect accentuated focus on resilience.

With only 60-70 percent of aircraft utilized around the globe since the pandemic began, manufacturers will be hard pressed to win contracts for new projects. This means companies will need to try new methods of ensuring the supply chain’s efficiency. An outlook report from Deloitte suggests that companies can use strategies like reshoring, vertical integration and an increase in cyber defenses as methods of transforming the supply chain into a more resilient network. The continued restrictions on international traffic could see reshoring as a preventative measure in the instance of another pandemic wave shutting down borders, while increased cost competition for commercial contracts could see a push for offshoring. A push towards the digital appears to be inevitable if A&D companies expect to succeed in future sustainability. This means the industry will be more data-driven, have a focus on implementing and creating new technologies and develop a more collaborative atmosphere to achieve these goals.

Moving Forward in a Post-Pandemic World

With a continued transition in the commercial sector, aerospace and defense manufacturers and companies will increase their focus on space exploration and government contracts. Increased military and technological investments from government entities will mean a consistent market from government spending while the commercial sector gets back on its feet. Because of this market shift, companies will need to ensure the supply chain’s resilience and dynamism in order to stay relevant. Implementing different and creative strategies will be the industry’s way to identify top players and solidify their leadership in the future. In the meantime, there remains much to be seen in 2021 as the effects of the pandemic continue to surface.

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