Extending Quality into the Global Supply Chain

When Alberto Contador and Lance Armstrong stood on the podium at the end of the Tour de France this year, one of the biggest winners not standing beside them was Trek Bicycle Corporation. The Waterloo, Wis.-based manufacturer provided the bicycles that Armstrong rode to seven consecutive Tour victories, and they were back again this year with the carbon-fiber marvels that helped propel Contador and Armstrong into first and third place, respectively, in Paris.

Trek started out with five employees making hand-built steel touring frames in a rented barn in Waterloo in 1976. Today, Trek has long since expanded beyond the barn into modern research, engineering and manufacturing facilities in Waterloo, where the company still produces high-end carbon frames. At the same time, like many manufacturers, Trek has formed partnerships with overseas suppliers in Taiwan and the People's Republic of China that provide components, frames and some fully assembled bikes.

Quality is of supreme importance in the bike industry, of course — no one wants to think about defect issues while they're riding on a sliver of rubber at 40-plus miles per hour down a twisting mountain road — and Trek has been working to drive quality back into its supply chain to ensure that every product coming into its facilities from overseas is up to spec every time. To that end, the company has ramped up the involvement of its supplier quality group with all the new products being developed in Asia. As part of that effort, the company has been working with key suppliers to deploy a system that will give the quality team in Waterloo real-time insights into product quality before a component or frame even leaves the factory in Taiwan or Mainland China.

Quality in Real Time

Julie Wilhelm, supply chain quality manager with Trek, says that, in the past, the bike manufacturer did not have visibility into quality issues until products arrived at its U.S. facilities, when it was too late to take corrective action. "It was the same cause all the time," Wilhelm says. "We hadn't reviewed what the supplier was doing thoroughly enough, and we didn't always provide them with the best specification." Trek was already using a quality solution called ProFicient from InfinityQS International for statistical process control (SPC) within its own facilities, but the company had no way of extending the quality process out to its suppliers' plant floor.

That changed when Wilhelm learned about the eSPC solution that InfinityQS launched in 2006. eSPC is a hosted solution that can connect disparate, far-flung manufacturing locations within a single enterprise or across a supply chain to a shared database of quality data. That allows quality managers and engineers at a central location to analyze supplier quality data and evaluate incoming materials prior to delivery. "Because eSPC is Web-based and was meant to work with suppliers, I latched onto it," says Wilhelm, who had worked with the solution provider's offerings both at Trek and in a previous quality role at Rayovac Corporation.

The functionality that drew Wilhelm to eSPC included the potential to gain real-time access to all key dimensions of Trek's products being manufactured by suppliers. The company's engineers would be able to view those data as they were generated in trend chart format and do capability or other analyses, or download the data for further processing. The solution also provided for real-time alerts via e-mail so that Trek's quality staff on the ground in Asia could learn about developing issues immediately, allowing them to show up at the supplier the same day if necessary to deal with problems before any product left the plant.

Cultural Awareness

Beginning in late 2007, Trek initially targeted four suppliers to begin working with eSPC — two in Taiwan, two in Mainland China. The company chose to start with suppliers of higher-end product and focused initially on just one parameter, weight, which is crucial in its top-end bicycles. "We sold it to them from the angle that they were key vendors and that weight is crucial, so they could get onboard with us and start collecting the weight data to stay at the high end of our business," Wilhelm explains.

She adds that Trek chose these specific suppliers in part because they were more proactive in seeking new ways to work with the bike manufacturer. "There are other companies that would have been tougher to work with because they are very much inspection-based and they didn't see the value in investing money upfront to prevent defects," she says. "We purposely picked companies that were more willing to work with us and do what we need. So knowing the culture of the company you're dealing with is very beneficial."

Deploying the software and having it pull data directly from the suppliers' production line did present some minor difficulties specific to the locale. For example, the relevant gauges were manufactured in Asia, and the manuals were in Chinese, so it took some time to understand how to connect the equipment into the software. More significantly, progress in getting the deployment fully rolled out was affected by the amount of time that Wilhelm was able to spend on the ground at the suppliers' facilities making adjustments or improvements.

Wilhelm, who travels to Asia to visit the suppliers at least five times a year, says that, in retrospect, she would have recommended training Trek's staff in Asia to provide more of the front-end support for the deployment of the software. "We relied too much on me being there to fix small issues that came up, or to make improvements," she says. "Our people could have handled that if we had given them the training upfront, although we're working on that now."

Protecting the Brand

Trek started the project by collecting data on product weight from the suppliers' assembly lines, but the company has since expanded the data they are managing through eSPC. For example, the quality team developed a test to proof load all the forks — the part of the bicycle that holds the front wheel and permits steering — to ensure zero construction defects before this critical component leaves a supplier factory. Data from these tests are fed into eSPC, alerting Trek's quality and engineering staff to issues with a given part, but also allowing them to access data on every single fork at any time. "It helps us sleep better knowing that our bikes are undergoing these tests, that we're tracking them and that we know exactly what happened to each one," Wilhelm says.

The company's plans call for further using eSPC to manage the key dimensions on components and bikes coming in from suppliers, as well as data from additional tests that will be put in place to ensure compliance with applicable consumer safety requirements. Trek also is looking to extend use of the solution to additional high-end vendors with more critical products, such as the carbon components, and eventually to any key supplier for OEMed or aftermarket products.

For companies looking to extend their quality management programs out onto their Asian suppliers' plant floor, Wilhelm recommends carefully considering the infrastructure within the vendors' facilities. "Their Internet connections are generally a lot slower than ours, they don't always have their buildings wired like we do, and obviously access to the Internet is key with eSPC," she notes. And she repeats her suggestion to ensure that local team members are trained up on the solution prior to the deployment. "Getting the support staff trained on the ground before you implement would help move the project a lot faster, changes could be made faster and you could expand its use a lot faster," she advises.

The benefits from the project for Trek have been two-fold. First, it has prevented defective product from leaving the suppliers' facilities — many of those products would have been uncovered during a check when it reached Trek in Wisconsin, but two months would have been lost while the goods were in transit across the Pacific. The system also is preventing products intended for the aftermarket — products that go directly into a warehouse and then onto the dealer's floor — from reaching the market, which helps protect the Trek brand name.

Wilhelm further believes that using the eSPC solution will have additional cost benefits down the road. "If the vendors buy into it and start using it even further upstream in their processes, they'll end up saving money and hopefully pass that along to us, and then we can pass that on to our customers as well."