2013 lean supplier chain_4_asq

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

© 1996-2013 Quexx International Ltd. 1-604-728 3373 Page: 2

Operational Excellence: LEAN in Supply Chain Management

Supply Chain Integration

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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



In house “sourcing”

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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….



in-house

R&D

Outsourcing

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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….



in-house

shared

Payroll

Delivery Mgmt

QC / Inspection

outsourced

Production Eng’g & Planning

Sales Service

Training

/ Engineering

Integration of Management Systems

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ENVIRONMENTAL

QUALITY

SAFETY


CONTRACTUAL REGULATORY STATUTORY

OPERATIONS

CORPORATE

LEGAL

AIM Process

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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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Integration: Key areas



R&D

PURCHASING&

SUPPLY

DESIGN&

ENGINEERING

QA & QC

PRODUCTand/orSERVICE

MANUF’G&

OUTSOURCING

QUEXX

Integration and Business



R&D

PURCHASING&

SUPPLY

DESIGN&

ENGINEERING

QA & QC


MANUF’G&

OUTSOURCING

$(Profits)

E(Environment)

T(Time)

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Integration: R & D



R&D


Corporate VisionMissionObjectivesStrategy

Market ResearchConcept Definition CompetitivenessSustainabilityInnovation and IP ProtectionROI / Profitability

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Integration: Design and Engineering



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

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Integration: QA and QC



QA & QC


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



PURCHASING&

SUPPLY


PurchasingPrice – Cost Strategic SourcingSupplier DevelopmentSupplier IntegrationFinancing and Profit ability

Supply Planning and LogisticsStock Buffering, Rotation, InventoryScheduling and CommunicationIdentification and PackagingTraceability and Certification

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Integration: Manufacturing




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



R&D

PURCHASING&

SUPPLY

DESIGN&

ENGINEERING

QA & QC


MANUF’G&

OUTSOURCING

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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



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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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.)



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

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TOYOTA

Example 1: TSA – In-plant Quality Performance



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Example 1: TSA – Report



2

54

3

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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



0

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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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Example 2: VQE – Vendor Quality Reports



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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.



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

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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)



Key customers: Key customers: automotive, white goods, oil and gas,construction

Example 6: Performance Measurement - Supplier Scorecard

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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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B2B2B or not 2B

R&D

PURCHASING&

SUPPLY

DESIGN&

ENGINEERING

QA & QC


MANUF’G&

OUTSOURCING

Outsourcing: Risks

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• 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



Outsourcing: Benefits

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• 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…



R&D

PURCHASING&

SUPPLY

DESIGN&

ENGINEERING

QA & QC


MANUF’G&

OUTSOURCING

QUEXX



LEAN Supply Chain

LEANSupplier

LEANCustomer

LEANSupplier -Customer“click”

LEANSupply ChainLink

LEANSupplier

LEANSupply Chain

Supplier Development: Steps

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P

D

C

A

ASSESSMENT DEVELOPMENT INTEGRATION IMPROVEMENT

PLAN

CHECK

DOACT



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

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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


Leadership & Management

2013 lean supplier chain_4_asq