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5.07 - Supplier Development and Integration

To obtain maximum economic benefit from JIT systems (see guide 5.05) it is necessary to work with suppliers to help them develop their manufacturing and distribution systems. Total materials flow management, sometimes called logistics, at lowest cost and maximum reliability, is the goal. The total materials flow chart(s) must be made visible - a key business process.

Supplier Development Input / Output Analysis

 

 

 

 

 

 

 

 

Supplier Development Programme

 

 

 

 

 

 

 

 

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Zero Defects

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Commitments to conformance

Unambiguous Specifications

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JIT delivery

Quantitative appraisal techniques

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Packaging to Specification

Analysis of suppliers

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Minimum Lead time

Supplier performance monitoring

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Flexibility on batch sizes

Training

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Flexibility to design modification

Action team

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Competitive pricing

Early warning of changes

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Support for product design

Designer / supplier meetings

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Shared economic benefits

Manufacturing systems Engineering Skills

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Reduced paperwork and NVA

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Bar codes for packaging identification

The supplier development process must systematic and involve the setting of targets with regular reviews. Professional manufacturing systems engineers must work with their suppliers, processes, systems and controls to judge their limitations and opportunities for improvements

Step by Step Procedure

  • Carry out ‘Make / Buy’ and ABC analysis on ALL parts to focus actions
  • List all suppliers and potential suppliers
  • Pareto analysis grouping against:
    • Value of items purchased
    • Geographical location / travel lead time logistics
    • Reliability of supply record
    • Quality history
    • Price
    • Type of service provided (e.g. turned parts)
    • Robustness of processes used (service and manufacturing)
    • Process capability and equipment / machinery
  • Rationalise and simplify to minimise the complexity of the supply logistics problem - reduce number of suppliers, reduce interface paperwork, implement regular call-off of small batches against levelled schedule
  • Put as many items as possible on Kanban loops between customer and supplier (see guide 5.18)
  • Integrate customer and supplier scheduling and planning activities.
  • Measure the effectiveness of selected supplier through a regular visit programme using and eight factor assessment.
  • Audit engineering change and manufacturing change control procedures used by supplier and insist on involvement
  • Apply Design for Assembly (DFA) to reduce the number and complexity of components

Typical Measures of Performance for Suppliers (Eight Factor Assessment)

Supplier : ‘Able Suppliers Ltd’
S. Q. A. : ‘Grade C’

Buyer : ‘Adam Buyer’

Factor

Visit 1

Score

Visit 2

Score

Visit 3

Score

Next Visit / Actions

1- Tooling

6

7

8

2- Attitude

5

4

7

3- Planning

1

9

9

4- Response

6

3

7

SPC & FMEA within six months

5- Controls

2

4

6

6- Plant

1

6

7

New plant on order

7- Quality

0

7

8

100% inspection until SPC & FMEA

8- Handling

0

8

8

Total

21

48

61

The introduction of QFD, FMEA and SPC is monitored; design for assembly reduces the number of component parts.

  • Comparing the scores of competing suppliers enables the identification of the most capable and leads to close relationships and a reduced supplier base.
  • The first target is to put the high value supply items onto a JIT Kanban loop with the factory (see guide 5.05)
  • Development seminars are used to launch the introduction of new methodologies into the supplier’s business and promote a new mood of co-operation and trust. Meetings between designers and suppliers are introduced to ensure that all aspects of Design for Manufacture (DFM) are considered. Suppliers are built into new product project introduction teams.
  • Ensure suppliers introduce training in support of continuous improvement practices against measures of performance in the factory.

Central to the supplier development programme is the Zero Defects policy and this involves continuous improvement towards total quality control and conformance which will eventually make the need for inspection of bought-out and finished parts obsolete.

 
Further Reading