Manufacturing plants can only thrive when they churn out high quality products. This is why most manufacturing plants offer a money-back guarantee on the sale of their items. However, the quality of the end product is profoundly affected by raw materials. If your suppliers don’t adhere to high quality standards, you’ll be stuck with products that no one wants to buy. Here are the costs of not getting it right:
Lawsuits
When customers buy your items, they do so because they need to use them. If the items they purchased fail to work as expected or put their lives at risk, your firm can be sued. In March this year, Kobe Steel LTD and Toyota Motors Corp were sued by customers for concealing the use of substandard metals in vehicle manufacturing. There is always the risk of getting sued if your suppliers do not meet industry quality standards. The lawsuits can cost your firm a fortune because of poor quality from third-party business entities.
Investors’ scare
When you use substandard materials in manufacturing, the cost of production will go high because you will have to rectify the mistake. Whenever the cost of production shoots, your company will lose the competition in the market because it has to sell at a high cost to make a profit. The fall of demand for your products will in turn force you to sell your products at a loss. No investor can be willing to put his money in a failing business.
Increased downtime
What happens if you receive materials you cannot use? You send them back. Your supplier will now have to send you new materials that meet your specifications. Sometimes, you might have to find a new supplier to fill the gap. All these activities will increase the downtime of your firm and lower your productivity.
High labor costs
Most employees are paid for every hour worked. If your employees have to re-do the job because the quality of the materials was inferior, you will pay double. Also, you might have to pay employees who came to work but couldn’t work because you were still waiting for high quality materials to be delivered. These inconveniences might seem small, but they increase the cost of goods sold.
Hike in Utility bills
Just like wages, you will spend double on utility bills if you have to re-do the work you thought was complete before you knew of the quality issue.
Bad Image
The only way a manufacturing company can keep its customers is by ensuring high quality. When your customers complain of inferior products, you not only lose them but also scare new prospects. Having a bad image can affect your credit worth badly. Even banks might not be willing to give you expansion loans when your firm is in a quality breach scandal.
Low sales volume
If you conceal the poor quality in your end products, you will not sell much. Customers know what high quality products look like and they cannot pay for inferior products. Even if you manage to successfully ‘fool’ them, it will not take long before quality assurance authorities catch up with you. When people begin to associate your brand with poor quality products, nobody will be willing to buy them.
Quality products are not made in the last stages of production. The whole process matters. If you want to manufacture products of high quality, begin by vetting your suppliers to ensure that they have quality assurance in place. The cost of high-quality raw materials can be high, but it is the only way you can get genuine products in the market and satisfy your customers’ needs.
If you need information about custom plastic manufacturing, contact Proto Plastics, they make quality products that will reduce your manufacturing cost.