For the past couple of years the biggest issue within supply chains has been product availability. Those issues are ebbing somewhat (depending on the supply chain), and now many supply chains are being exposed for deficiencies in other factors such as product quality, lagging technology, and supplier legitimacy.
Supplier legitimacy is an issue that recently came to the forefront with the revelation in the airline industry that many jet engine parts may be unsafe. Many international airlines, and the biggest airlines in the U.S., fell victim to a distributor (AOG Technics) who sold engine parts with fake safety certificates. As the airlines now scramble to find and remove the parts purchased from AOG, it begs the question ‘how did they get scammed?’
The Wall Street Journal may have provided an answer in their October 4 article, Delta, Southwest Search for Jet Engine Parts Sold With Forged Safety Records. A reporter’s visit to AOG’s headquarters location in London revealed no such company existed at their listed address.
Why did it take a reporter to learn that no legitimate company existed at their stated location? It is unconscionable that no company that relied upon AOG ever paid a visit. Getting parts, as it turns out, even fake ones, was more important than getting a reliably high quality part for an item as important as a jet engine.
If you are a producer of any kind of product, how much do you know about your supply chain? Or, the companies you buy supplies from?
Think about your organization’s approach to your supply chain. When was the last time you visited your suppliers’ locations? Or evaluated your criteria for choosing a vendor? What type of analysis or audit did you conduct while there?
If you are careful about your suppliers and vet them continuously, then the situation experienced by the airlines might be something foreign to you. Just as importantly, your approach to vendor verification may be a significant differentiator between you and your competition.
We’ve learned that in situations such as this, many companies are hesitant to say what they do in terms of vendor verification. This is potentially a mistake. Think about the flip side: How do you build confidence with your customers that your supply chain practices are unassailable? This could be a strong competitive advantage for you.
How can you convince someone you sell a high quality product if you can’t prove that you hold your suppliers to a high quality standard? How you manage your supply chain may be your best kept secret. That shouldn’t be the case. If you have the proof that your quality is superior from the ground up and is a competitive advantage, then talk about it and impress your buyers.