When entrusting products to an OEM manufacturer, controlling the production schedule and ensuring delivery performance commitments are crucial. In addition to the legal constraints provided by contracts, we can also observe the OEM manufacturer’s regular work processes to more clearly assess whether their delivery performance commitments are reliable.
This article uses the example of a fire at an OEM manufacturer to discuss how to protect the customer’s rights and interests and ensure the smooth execution of delivery commitments.
Internally, they would take steps such as checking for casualties, assessing the extent of damage, evaluating the possibility of resuming production, preparing materials, and arranging emergency procurement. Externally, they would inform the bank, subcontractors, and customers, explaining the situation regarding the fire, and discussing the delivery schedule and deposit issues.
If the customer decides to transfer orders to other parties or wait for the resumption of production, the company will offer support and take responsibility for introducing other companies capable of producing the same products to the customer.
Finally, the article points out that even though the profit margins of operating an OEM manufacturer may be slim, investment in fire safety equipment is essential; otherwise, the frequency of fires will increase, impacting both OEM manufacturers and their customers
According to a local television news report in Taiwan, a manufacturer of water purifiers located in Taichung City suffered a devastating fire on the night of 1st December 2022. The entire factory was engulfed in flames, causing extensive damage to the buildings, production equipment, inventory, and nearly everything else. Such an unfortunate incident is something that none of us would wish to see or experience.
Thus, ensuring that the production facilities of contract manufacturers are not affected by fire disasters is an issue that cannot be ignored. It is necessary to provide assurance to purchasing agents that their supply chain will not be disrupted due to a fire at the manufacturers’ factory
According to local news reports in Taiwan, in May 2022, the government revised the fire safety laws once again. The fire safety regulations for factories are relatively stringent. Currently, they have been synchronised with those of European and American countries, achieving the same rigorous standards for inspection. At least one inspection visit is required to the factory each year.
The regulations stipulate that factories must employ a fire equipment engineer who holds a “fire equipment licence” or engage a fire equipment engineering company to comply with the government’s fire equipment inspection.
Although regulations are becoming stricter, OEM manufacturers do not accord sufficient importance to fire safety; the occurrence of a fire is unlikely to be an accident.
Whether the daily electricity usage or the equipment usage is overloaded, whether the transmission cables supplying electricity are old and require updating, whether ageing production machines and equipment are prone to spontaneous combustion, whether extension leads and power sockets are used improperly, and whether lithium battery-powered mobile devices are charged independently— all these safety measures implemented in daily operations will impact the likelihood of fires.
At the same time as this incident at the water filter company, we at Easywell Company take this opportunity to review our fire prevention and safety measures to ensure that our customers’ interests are not jeopardised due to fires.
1. Safety measures for mobile tools prone to spontaneous combustion.
The batteries used in forklifts are typically lead-acid batteries. As we often charge them at night, we take the following preventive measures to avoid battery spontaneous combustion accidents:
1.1 Installing overload safety devices on the charging receiver to automatically cut off power supply to the forklift and charging receiver in the event of battery combustion, thereby ensuring the first stage of safety.
1.2 Parking the forklifts outdoors to prevent indoor facilities from being affected in the event of combustion, thus prolonging the burning time.
1.3 Installing a suspended automatic type 10 ABC dry powder fire extinguisher on the forklift, which will automatically extinguish the fire in the event of forklift combustion.
1.4 Some of the transportation used by employees of Easywell Company consists of electric bicycles. To prevent the risk of self-ignition during charging, we place the charging stations and parking for electric bicycles outside, thereby minimising the risk of battery spontaneous combustion.
1.5 We also use safe power sockets.
When electric bicycles are charged outside, Easywell Company proactively installs safety sockets with automatic overload protection and requires our team members who ride electric bicycles to only plug them into the designated safe socket.
1.6 Lithium Battery Charging Zone
To mitigate the risk of overloading and self-ignition caused by nighttime lithium battery charging, which may result in fires, we have implemented several timer switches for equipment such as electric forklifts, rechargeable cordless drills, electric pallet jacks, electric scissor lifts, hydraulic lift platforms, and others. Each charging session is restricted to a maximum of six hours before automatically ceasing, thus preventing overcharging incidents even after the battery has reached full capacity.
2. Strictly control the improper use of extension leads
At the workplace or in employee accommodation, the use of extension leads should be strictly controlled or prohibited. This ensures that users do not overload the leads, which could lead to electrical fires due to exceeding the load between power outlets and the leads.
3. Use power leads that meet safety standards
The electrical wiring in the factory is regulated before subcontracting, and the use of power leads requires products with the correct markings.
4. Entrust licensed electricians to maintain all electrical equipment in the factory
In daily operations, if there are electrical faults or an increase in power demand, Easywell Company insists that subcontractors must hold a government-approved electrician’s licence.
5. Purchase adequate fire insurance annually
This ensures that in the event of a fire, the subcontractor can use the insurance payout as funds for a swift recovery.
6. Inspector checks important power usage daily
Every day, during a 10-minute break in the morning and afternoon, and after work, a designated person inspects whether important machinery has been properly shut down to prevent accidents caused by wire combustion due to abnormal power systems when left unattended.
7. Disseminating fire prevention precautions regularly
We require the management department to download one or more fire prevention information videos from YouTube for everyone to watch during the monthly education and training day to enhance everyone’s awareness of fire safety.
8. Conduct fire drills annually
Fire drills are a crucial issue for us, and we require every partner to use fire extinguishers and high-pressure fire hoses.
9. According to the law, licensed electrical technicians are employed each year to inspect all high and low voltage electrical circuits and equipment.
10. The entire plant is fitted with smoke detectors and automatic smoke extraction devices in compliance with the law.
11. Fire hydrants and fire hoses are installed throughout the plant in accordance with legal requirements.
12. Additional automatic fire sprinkler systems have been installed.
In addition to installing fire hydrants and fire hoses in accordance with regulations, we have also fitted automatic sprinkler systems on the ceiling in key working areas.
13. More comprehensive fire extinguishers and automatic power outage lighting equipment are installed than required by law.
14. Fire broadcasting system equipment is installed in compliance with the law.
15. Connect the fire broadcasting system to the security service centre.
In the event of a fire, the fire alarm signal is automatically sent through the fire broadcasting system and simultaneously relayed to the control centre of the security service company. The on-duty security personnel will also promptly notify Easywell’s management by phone and conduct on-site investigations while informing the fire department to take immediate fire-fighting actions.
16. Insist on using fire-resistant building materials.
To ensure the safety of personnel and property, Easywell Company insisted on using fire-resistant building materials when constructing and designing the plant, including the dormitories where foreign partners reside. For example:
(1) All wall partitions use calcium silicate boards.
(2) The ceiling is made of lightweight steel structure and calcium silicate board.
17. The generator and fire pump are installed in compliance with the law.
The installation of the generator is primarily to prevent the external power supply from being compromised by the fire source during a fire, which could lead to a power outage, rendering all fire-fighting equipment that relies on electricity useless. The automatic power switch, known as ATS, will activate the generator and automatically start the fire pump, ensuring that the fire system can operate normally during a fire.
18. No smoking is allowed throughout the plant.
Since its establishment, Easywell Company has strictly prohibited smoking within the plant, imposing heavy penalties for violators. There are warning signs displayed prominently stating, “A fine of 3,000 NTD will be imposed on guests who smoke in the plant.”
Of course, we also have a designated smoking area for smokers to indulge in their habit safely.
19. Important files are regularly backed up.
To prevent the computer hardware from being destroyed during a fire, resulting in the inability to recover software information after the hardware is restored, we regularly back up important files and utilise remote backups in different locations to ensure data security.
In order to be responsible to customers, shareholders, employees, and suppliers, we have established the following standard operating procedures (SOP) in the event of a fire:
Internal procedures:
(1) First, we will convene a meeting of all senior executives to discuss follow-up matters immediately after the fire has been extinguished.
(2) Check if there are any injuries among the staff. What is the extent of the injuries? Do they require medical attention?
(3) Assess the extent of the damage.
(4) Check for any shortage of raw materials needed to resume operations.
(5) Is it possible to resume work? How long will it take?
(6) Inform all employees that we will resume work and provide additional compensation to those who assist at the fire scene.
(7) Reach a consensus with partners on how to pay salaries during the period when work cannot be resumed, in order to alleviate their concerns.
(8) Determine whether it is necessary to prepare materials in advance.
(9) If materials need to be prepared, use backup ERP inventory software information to make decisions regarding the emergency procurement of materials and spare parts that are in short supply due to the fire.
External procedures:
The profit margins of operating an OEM factory are often slim, leading some owners to attempt to cut costs associated with fire prevention. Achieving optimal fire safety measures requires more investment compared to other companies, and this expenditure can diminish the OEM factory’s budget for research and development of new products, machinery, and other resources.
However, the cost of fire safety equipment presents a classic chicken-and-egg dilemma. Without increased investment in fire safety equipment, the risk of fire incidents will rise.
When a fire occurs, the OEM factory may never fully recover. Even if it manages to resume operations, considerable time is required to prepare, rebuild, and reassemble the original team. During this downtime, can the buyer tolerate a situation where there are no goods to sell? This situation once again tests the mutual understanding and tolerance between both parties.
“Welcome reproduction; please indicate the source.”
I. Preface With the rising focus on health and environmental awareness in modern society, water…
1. A Must-Read Before Selecting a Supplier List When choosing water filter cartridges, it is…
1. Understanding the Water Quality Test Fraud and Substitution Scandal at a Glance In June…
In recent years, with the increasing global demand for safe drinking water, the market demand…
Introduction In the past three years, due to the spread of the new coronavirus since…
1. Introduction In general, importers or distributors are more focused on distribution channels, marketing, and…