Tag: audit

What’s a Living Wage?

A question that comes up often when sourcing abroad is determining what the living wage is and how well suppliers stack up.

Article 23 of the United Nations Universal Declaration of Human Rights states that “everyone who works has the right to just and favorable remuneration ensuring for himself and for his family an existence worthy of human dignity.” And, it’s even noted that Plato and Aristotle discussed the concept as they both argued for “an income that considers needs, particularly those that ensure the communal good.”

How are Living Wages calculated?

“A living wage is the minimum income necessary for a worker to meet their basic needs. This is not the same as subsistence which refers to a biological minimum. Needs are defined to include food, housing, and other essential needs such as clothing. The goal of a living wage is to allow a worker to afford a basic but decent standard of living. Due to the flexible nature of the term ‘needs’, there is not one universally accepted measure of what a living wage is and as such it varies by location and household type.”

Social Accountability International identifies the Living Wage calculation as follows:

To verify wages for suppliers, auditors check records over a period of time and conduct employee interviews. Applicable standards include SA8000, ISO 26000, various or organizational-specific such as WalMart or the Electronics Industry Citizenship Coalition.

Social Accountability International posts Living Wage Reports for various areas within China, Africa, Vietnam, etc.  View the SAI page here. 

Within the United States, MIT provides Living Wage estimates based on states here. 

To learn more about supplier social audits and view example example reports, visit Pro QC’s website. 

Avoiding Product Recalls

downloadOver the years, we’ve had our share of inquiries related to organizations seeking to resolve a recall situation.  While many of these calls are reactive, a proactive approach is recommended to avoid the cost and overall impact to stakeholders.

How can you avoid product recalls? 

Know Product Safety Requirements –  Avoiding recalls generally starts with product design and specification development. Due diligence is required to determine if any applicable testing is required depending on the market in which it will be sold. Contacting a testing lab for a general inquiry is worth the time and effort. Researching ANSI and ASTM standards is also advised.  A third party’s expertise can also be leveraged here and specifications development/testing can be outsourced.

Know Your Suppliers – Supplier selection is a critical component in the quality process. Verifying suppliers and performing an on-site evaluation adds an additional level of assurance. Considerations include:

Quality: It’s What’s Driving the Global Automotive Industry

A report issued by McKinsey & Company predicting trends up through 2020 in the global automotive industry identifies four challenges that will affect the industry’s growth.  With these four challenges in mind, we offer quality solutions that effectively hedge or otherwise prepare those working within the industry.

  • Complexity and cost pressure
  • Diverging markets
  • Digital demands
  • Shifting industry landscape

“To capture future growth and find profit from these challenges – and to mitigate their risks – OEMs cannot simply turn to their traditional toolbox. They need to review and adjust their strategic priorities, deploy the appropriate investments and resources, and develop new skills to execute these strategic objectives.”

The automotive aftermarket faces it’s own challenges as well, discussed in detail within the Aftermarket Outlook 2020 report.  According to the report, challenges include:

Challenges_Aftermarket

Verifying Suppliers… What You Want To Know

Verify-SuppliersAs a follow-up to an an article we posted in March, we wanted to go into more specifics regarding on-site supplier verification.

As noted, it’s not always cost effective to do a comprehensive ISO based or general QMS audit for each supplier you’re considering working with. But, there are basic questions looming that you need to make the right decisions…

One option for supplier verification is a basic on-site check.

What you find out:

  • Factory information
    • Type of ownership, address & contact information
  • Production Capacity (Annual Basis)
    • Category, total capacity, units shipped & % capacity
  • Export Markets
    • U.S., EU, South America, etc. & % volume
  • Key Clients (Past Year)