2013 lean supplier chain_4_asq
DESCRIPTION
LEAN Supply Chain - Supplier Development and Performance MonitoringTRANSCRIPT
inSupply Chain Management
QUEXX
Quexx International Ltd.Vancouver, April 23, 2013
Operational Excellence
Presenter
QUEXX
A.W.(Arc) RajtarM.Eng.(Mech.)
PROFESSIONAL PROFILE35 years of professional experience
FIAT, TOYOTA, SPECTRUM, MIVI, LEVELTON, QUEXXTraining in:
QA/QC, TPS - LEAN, ISO 9001-series( Poland, Italy, Australia, Japan )
ex Supplier Quality SupervisorQuality Assurance Manager
Purchasing Engineering ManagerTOYOTA AUSTRALIA
Quality Assurance SpecialistLEVELTON Consultants Ltd.
Managing PartnerQUEXX INTERNATIONAL LTD.
Supplier Development and IntegrationLEAN Techniques
Quality Management Systems
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Operational Excellence: LEAN in Supply Chain Management
Supply Chain Integration
QUEXX
OBJECTIVE:
IMPROVED BUSINESS COMPETITIVENESSTHROUGH SUCCESFUL INTEGRATION OF SUPPLY CHAIN WITH ALL ASPECTSOF OPERATIONS INCLUDING COST, QUALITY, DELIVERY, TIME TO MARKET, AND OTHER KEY FACTORS AFFECTING COMPANY PERFORMANCE.
DESIGN
OTHER
SERVICE
DELIVERY
PRICE
QUALITY
CUSTOMER
SUPPLIERS
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Operational Excellence: LEAN in Supply Chain Management
In house “sourcing”
QUEXX
Service
Design / Engineering
Quality Assurance Quality ControlInspection
Delivery Testing
Purchasing
KittingWarehousing
Accounting Payroll
MethodsSystems
Training
Corporate AffairsStrategy
Compliance
Legal
Project Management
CommoditiesCost Control
Strategy
Customer Support Distribution Shipping
R&DMarketing
Materials
Sales
Finances
HR
Quality Management
Buffering
Manufacturing
From….
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Operational Excellence: LEAN in Supply Chain Management
in-house
R&D
Outsourcing
QUEXX
Product Design
Quality Assurance Testing
Purchasing
KittingWarehousing
Vision / MissionObjectives
Compliance
Legal
Paint
Commodities
Product Development
PayablesStrategy
Distribution
Distribution
Assembling
Materials
Marketing
Finances
Quality Mgmt
Buffering
SupplyChain
Management
FiskerKarma
Body
Accounting
Parts
Shipping
HR
To….
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Operational Excellence: LEAN in Supply Chain Management
in-house
shared
Payroll
Delivery Mgmt
QC / Inspection
outsourced
Production Eng’g & Planning
Sales Service
Training
/ Engineering
Integration of Management Systems
QUEXX
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ENVIRONMENTAL
QUALITY
SAFETY
Operational Excellence: LEAN in Supply Chain Management
CONTRACTUAL REGULATORY STATUTORY
OPERATIONS
CORPORATE
LEGAL
AIM Process
QUEXX
ASSESS
APPROVE
DEVELOP
IMPROVE MO
NIT
OR
INTEGRATE
MAINTAINMO
NIT
OR
MO
NIT
OR
CONTINUAL IMPROVEMENT - MONITORING
CONTINUAL IMPROVEMENT - PROCESSES
PLAN
CHECK
DOACTDeming’s (PDCA) principles
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Operational Excellence: LEAN in Supply Chain Management
QUEXX
Integration: Key areas
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Operational Excellence: LEAN in Supply Chain Management
R&D
PURCHASING&
SUPPLY
DESIGN&
ENGINEERING
QA & QC
PRODUCTand/orSERVICE
MANUF’G&
OUTSOURCING
QUEXX
Integration and Business
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Operational Excellence: LEAN in Supply Chain Management
R&D
PURCHASING&
SUPPLY
DESIGN&
ENGINEERING
QA & QC
PRODUCTand/orSERVICE
MANUF’G&
OUTSOURCING
$(Profits)
E(Environment)
T(Time)
QUEXX
Integration: R & D
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Operational Excellence: LEAN in Supply Chain Management
R&D
PRODUCTand/orSERVICE
Corporate VisionMissionObjectivesStrategy
Market ResearchConcept Definition CompetitivenessSustainabilityInnovation and IP ProtectionROI / Profitability
QUEXX
Integration: Design and Engineering
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Operational Excellence: LEAN in Supply Chain Management
DESIGN&
ENGINEERINGPRODUCTand/orSERVICE
DesignAppearance and PerformanceSafety, Durability and QualityRegulatory and StatutoryTarget SpecificationConcept Design
EngineeringManufacturability and ProductivityFacility and ResourcesVA / VE and QualityOHSMS and EMSLogistics, Packaging, TraceabilityPrototype
QUEXX
Integration: QA and QC
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Operational Excellence: LEAN in Supply Chain Management
QA & QC
PRODUCTand/orSERVICE
Quality AssuranceRisk Analysis and Product FMEAQuality Spec. (Levels and Criteria)Durability and ReliabilityPrototype EvaluationAssembly Trials
Quality ControlITP – Quality PlanningQFD - Inspection and TestingComponent FMEA and TraceabilityInspection Method and EquipmentQuality PerformanceTroubleshooting
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Integration: Purchasing and Supply
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Operational Excellence: LEAN in Supply Chain Management
PURCHASING&
SUPPLY
PRODUCTand/orSERVICE
PurchasingPrice – Cost Strategic SourcingSupplier DevelopmentSupplier IntegrationFinancing and Profit ability
Supply Planning and LogisticsStock Buffering, Rotation, InventoryScheduling and CommunicationIdentification and PackagingTraceability and Certification
QUEXX
Integration: Manufacturing
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Operational Excellence: LEAN in Supply Chain Management
PRODUCTand/orSERVICE
MANUF’G&
OUTSOURCING
Production / Manufacturing / FabricationFacilities and TechnologyHR: Education , Training, TurnoverEnvironment and SafetyQFDProductivity and Profitability
LogisticsPlanning and SchedulingCommunication and Monitoring Power, Media , ConsumablesAssembling and TraceabilityStorage and Distribution
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EXAMPLES
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Operational Excellence: LEAN in Supply Chain Management
R&D
PURCHASING&
SUPPLY
DESIGN&
ENGINEERING
QA & QC
PRODUCTand/orSERVICE
MANUF’G&
OUTSOURCING
QUEXX
Example 1: TPS: 14 Management Principles (LEAN)
1. …. “a long-term philosophy, … even at the expense of short-term financial goals”
11. ….“respect … suppliers and partners by challenging them and helping them improve” Heijunka Standard Work Kaizen
Stability
Stop process and fix problems
Separatepeople from machines
Continuous Flow
Takt Time
Pull System
JidokaJust-in-Time
Highest Quality – Lowest Cost – Shortest L/T
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Operational Excellence: LEAN in Supply Chain Management
Example 1: Supplier Development
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TOYOTASUPPLIER DATABASE
SUPPLIER DEVELOPMENT
APPROVED SUPPLIER
TOYOTA SUPPLIER ASSESSMENT
QUALITY SYSTEM ASSESSMENT
QA - APPROVED SUPPLIER
1
4
3
2
6
5
8 SUPPLIER OF THE YEAR AWARD
PREFERRED SUPPLIER 7
QSA
TSA
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Operational Excellence: LEAN in Supply Chain Management
QUEXX
TSA - TOYOTA SUPPLIER ASSESSMENT
Example 1: TSA
DELIVERY
AFT
ER
MA
RK
ET
ASSESSMENT AND PERFORMANCE
OTHER
BESTPRACTICE
SUPPLIER RATING
IN OUT QUALITY
P A
80% max.(65% min.)
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Operational Excellence: LEAN in Supply Chain Management
100% max.
20% max.(no min.)
Plant
P = PERFORMANCEA = ASSESSMENTL = LOGISTICSM = MANAGEMENT
SE
RV
ICE
R&
D a
nd O
TS
EN
GIN
EE
RIN
G
PURCH’ING
P L P M
QUEXX
TOYOTA
Example 1: TSA – In-plant Quality Performance
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Operational Excellence: LEAN in Supply Chain Management
QUEXX
Example 1: TSA – Report
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Operational Excellence: LEAN in Supply Chain Management
2
54
3
QUEXX
Product PresentationProduct Testing and Evaluation
Vendor CertificationVendor Quality Seminar
Vendor Quality Evaluation (VQE)Partners in Quality
Superior Quality Award
1
67 BEST IN CLASS Award
Canada Business Excellence Merit Award
Example 2: Vendor Quality Evaluation (VQE) ProgramVendor Induction Process Plan (VIP)
Company Profile:Telecommunications,WirelessWirelineInternet
Key customers: General Public
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Operational Excellence: LEAN in Supply Chain Management
0
QUEXX
PERFORMANCE CATEGORIES Max. Score
* QUALITY OF DELIVERY (25%)
* QUALITY OF PRICING (10%)
* QUALITY OF CUSTOMER SERVICE (25%)
* QUALITY OF PRODUCTS (40%)_________________________________________TOTAL “SERVICE” = 60%TOTAL “PRODUCT” = 40%
Example 2: VQE - Criteria
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Operational Excellence: LEAN in Supply Chain Management
QUEXX
Example 2: VQE – Vendor Quality Reports
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Operational Excellence: LEAN in Supply Chain Management
QUEXX
Corporate Targets:- 5 sigma quality (300 PPM)- 26 inventory turns
Supplier Classification Process:1) New supplier desk audit2) On site supplier audit3) Supplier quality survey4) Quality Plan approval5) PAP6) 5-sigma quality7) 100% JIT8) Fit (to work together)
Example 3: Supplier Chain Management ProgramCompany Profile:Design and manufacturing ofspecialty-engineeredmarine hydraulics and thermal systems.
Key customers: Marine /ShipbuildingRecreational BoatsMilitaryTransportation
Process: A cross-functional team evaluates suppliers.
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Operational Excellence: LEAN in Supply Chain Management
Company Profile:Design and manufacture of hose, ducts, flexible connectors, boots, bellows and special shapes made from a wide range of materials.
Key customers: automotive, military, aerospace, dairy
Process:Suppliers approved by Quality and Purchasing.Quarterly performance ratings of key suppliers.Non-certified suppliers self-assess every year.
Supplier Evaluation Criteria:Cost: 10% (competitive pricing, VA engineering, customer service)Delivery: 25% (100% on time = max 7 days early, 0 days late)QMS: 25% (on-site survey: ISO 9001/QS9000/16949 / AS9100 / ISO17025)Quality: 40% (100% OK, samples OK and on time, NCRs effective and on time)
Example 4: Supplier Performance Evaluation
QUEXX
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Operational Excellence: LEAN in Supply Chain Management
QUEXX
Example 5: Supplier Management Process
Overall Degree of Fulfillment
Fulfilment Category Category
90% – 100% Entirely Fulfilled A
80% - 89% Mostly Fulfilled A/B
70% - 79% Partly Fulfilled B
60% - 69% Not Completely Fulfilled B/C
<60% Not Fulfilled C
Company Profile:Flat steel products, steel plates, tool steel, special steel profiles, rails, pipes, wires, construction elements.
Area: Criteria:Quality: 60% (defect rate in ppm)Logistics: (quantity, deadlines)Costs: (price, performance)Corp.Affairs: 40% (complaints, coop’n)Prod. Devel’t: (ideas/innovations)Enviro Mgmt: (enviro-responsible)
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Operational Excellence: LEAN in Supply Chain Management
Key customers: Key customers: automotive, white goods, oil and gas,construction
Example 6: Performance Measurement - Supplier Scorecard
QUEXX
Delivery Metric 45% Quality Metric 45%Ok to ship 3 days before, 2 daysafter
Parts Per Million (PPM) 60% Corrective Action Response 40%
The % Delivery On-Time is scoredaccordingly:
95.00%-100% 45 pts.90.00%-94.99% 35 pts.80.00%-89.99% 25 pts.70.00%-79.99% 15 pts.50.00%-69.99% 5 pts.<50.00% 0 pts.
Score based on PPM Reject Rate:000-500 PPM 27 pts.501-1000 PPM 22 pts.1001-1500 PPM 18 pts.1501-2000 PPM 15 pts.2001-2500 PPM 12 pts.2501+ PPM 0 pts.
Responsiveness is scoredaccordingly:(Late if no closure after 30 days)
0 Late Occurrences 18 pts.1 Late Occurrence 13 pts.2 Late Occurrences 9 pts.3 Late Occurrences 6 pts.4 Late Occurrences 3 pts.>4 Late Occurrences 0 pts.
Cost Reduction 5% Weighted Score Cust. Service 5%
5 point maximum based oncost reduction initiatives.
Score determined byCommodity Manager.
The Weighted Overall Scoreis determined as follows:
90 – 100 points Excellent80 – 89 points Acceptable
70 – 79 points Marginal< 69 points Unacceptable
5 point maximum determined by Supplier QualityManager/Engineer, Buyerand/or Commodity Manager
Company Profile:Plasma cutting WeldingArc GougingBrazing SolderingHardfacingGas Control Equip’t
Key customers: ConstructionFabricationHeavy equipmentManufacturingMining AggregatesOil and GasPipe and pipelinesShipbuildingTransportation
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Operational Excellence: LEAN in Supply Chain Management
QUEXX
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Operational Excellence: LEAN in Supply Chain Management
B2B2B or not 2B
R&D
PURCHASING&
SUPPLY
DESIGN&
ENGINEERING
QA & QC
PRODUCTand/orSERVICE
MANUF’G&
OUTSOURCING
Outsourcing: Risks
QUEXX
• OFF-SHORE SOURCING = LOSS OF LOCAL SUPPLIER FOREVER
• DISCLOSURE = LOSS OF PRIOPRIETARY INFORMATION
• SHARED IP
• SECURITY CONCERNS
• LOSS OF TECHNOLOGICAL ADVANTAGE
• REDUCED GOODWILL
• OUTSOURCING = LOSS OF CAPABILITY
• COMPROMISED QUALITY
• WEAKENED GROWTH POTENTIAL
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Operational Excellence: LEAN in Supply Chain Management
Outsourcing: Benefits
QUEXX
• COST REDUCTION(optimization, focus on core strengths)
• SYNERGY(access to new technologies or markets)
• MORE COMPREHENSIVE INFORMATION(customer- focused planning, market intelligence)
• SHARED CREATIVITY(pooling knowledge and talent, parallel experimentation)
• COMPETITIVE ADVANTAGE(leverage critical capabilities, institute quantum change)
• BUSINESS PARTNERS(increase business strength, market penetration and domination)
• and more…
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Operational Excellence: LEAN in Supply Chain Management
R&D
PURCHASING&
SUPPLY
DESIGN&
ENGINEERING
QA & QC
PRODUCTand/orSERVICE
MANUF’G&
OUTSOURCING
QUEXX
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Operational Excellence: LEAN in Supply Chain Management
LEAN Supply Chain
LEANSupplier
LEANCustomer
LEANSupplier -Customer“click”
LEANSupply ChainLink
LEANSupplier
LEANSupply Chain
Supplier Development: Steps
QUEXX
P
D
C
A
ASSESSMENT DEVELOPMENT INTEGRATION IMPROVEMENT
PLAN
CHECK
DOACT
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Operational Excellence: LEAN in Supply Chain Management
ANALYSE“FIT” AND
PERFORMANCE
SELECT“BEST FIT”SUPPLIERS
IDENTIFYIMPROVEMENT
OPPORTUNITIES
DEFINEPERFORMANCE
TARGETS
IMPLEMENT“BEST PRACTICE”
STRATEGIES
INTEGRATEKEY INPUTS
AND OUTPUTSIMPLEMENT
CAPA
MEASUREPERFORMANCE
MEASUREPROGRESS
MEASUREEFFECTS
MEASUREIMPROVEMENT
ASSISTPOOR
PERFORMERS
CORRECTPOOR
PERFORMANCE
ELIMINATEOR IMPROVE“POOR FIT”
CASES
STANDARDIZEAND
MAINTAINSUCCESS
NOMINATESUPPLIERS
FORDEVELOPMENT
STAGES
STEPS
QUEXX
© 1996-2013 Quexx International Ltd. 1-604-728 3373 Page: 33
Operational Excellence: Supplier Chain Integration
Think Outside the Box
This presentation was delivered by…
QUEXX International Ltd.Management Consultants
Quality Management SystemsLEAN Management TechniquesSupplier Development
Ph.: (604) 728 3373 Cel.: (778) 628 6807 Fax.: (604) 469 6070E-mail: [email protected]
QUEXX
© 1996-2013 Quexx International Ltd. 1-604-728 3373 Page: 34