2013 lean supplier chain_4_asq

in
Supply Chain Management
QUEXX
Quexx International Ltd.
Vancouver, April 23, 2013
Operational Excellence

Presenter
QUEXX
A.W.(Arc) Rajtar
M.Eng.(Mech.)
PROFESSIONAL PROFILE
35 years of professional experience
FIAT, TOYOTA, SPECTRUM, MIVI, LEVELTON, QUEXX
Training in:
QA/QC, TPS - LEAN, ISO 9001-series
( Poland, Italy, Australia, Japan )
ex
Supplier Quality Supervisor
Quality Assurance Manager
Purchasing Engineering Manager
TOYOTA AUSTRALIA
Quality Assurance Specialist
LEVELTON Consultants Ltd.
Managing Partner
QUEXX INTERNATIONAL LTD.
Supplier Development and Integration
LEAN 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
QUEXX
OBJECTIVE:
IMPROVED BUSINESS COMPETITIVENESS
THROUGH SUCCESFUL INTEGRATION
OF SUPPLY CHAIN WITH ALL ASPECTS
OF OPERATIONS INCLUDING COST,
QUALITY, DELIVERY, TIME TO MARKET,
AND OTHER KEY FACTORS AFFECTING
COMPANY PERFORMANCE.
DESIGN
OTHER
SERVICE
DELIVERY
PRICE
QUALIT
Y
CUSTOMER
SUPPLIERS

In house “sourcing”
QUEXX
Service
Design / Engineering
Quality Assurance Quality Control
Inspection
Delivery Testing
Purchasing
Kitting
Warehousing
Accounting Payroll
Methods
Systems
Training
Corporate Affairs
Strategy
Compliance
Legal
Project Management
Commodities
Cost Control
Strategy
Customer Support
Distribution Shipping
R&D
Marketing
Materials
Sales
Finances
HR
Quality Management
Buffering
Manufacturing
From….
in-house

R&D
Outsourcing
QUEXX
Product Design
Quality Assurance Testing
Purchasing
Kitting
Warehousing
Vision / Mission
Objectives
Compliance
Legal
Paint
Commodities
Product Development
Payables
Strategy
Distribution
Distribution
Assembling
Materials
Marketing
Finances
Quality Mgmt
Buffering
Supply
Chain
Management
Fisker
Karma
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
QUEXX
ENVIRONMENTAL
QUALITY
SAFETY
CONTRACTUAL REGULATORY STATUTORY
OPERATIONS
CORPORATE
LEGAL

AIM Process
QUEXX
ASSESS
APPROVE
DEVELOP
IMPROVE
MONITOR
INTEGRATE
MAINTAIN
MONITOR
MONITOR
CONTINUAL IMPROVEMENT - MONITORING
CONTINUAL IMPROVEMENT - PROCESSES
PLAN
CHECK
DOACT
Deming’s (PDCA) principles

QUEXX
Integration: Key areas
R&D
PURCHASING
&
SUPPLY
DESIGN
&
ENGINEERING
QA
&
QC
PRODUCT
and/or
SERVICE
MANUF’G
&
OUTSOURCING

QUEXX
Integration and Business
R&D
PURCHASING
&
SUPPLY
DESIGN
&
ENGINEERING
QA
&
QC
PRODUCT
and/or
SERVICE
MANUF’G
&
OUTSOURCING
$
(Profits)
E
(Environment)
T
(Time)

QUEXX
Integration: R & D
R&D
PRODUCT
and/or
SERVICE
Corporate
Vision
Mission
Objectives
Strategy
Market Research
Concept Definition
Competitiveness
Sustainability
Innovation and IP Protection
ROI / Profitability

QUEXX
Integration: Design and Engineering
DESIGN
&
ENGINEERING
PRODUCT
and/or
SERVICE
Design
Appearance and Performance
Safety, Durability and Quality
Regulatory and Statutory
Target Specification
Concept Design
Engineering
Manufacturability and Productivity
Facility and Resources
VA / VE and Quality
OHSMS and EMS
Logistics, Packaging, Traceability
Prototype

QUEXX
Integration: QA and QC
QA
&
QC
PRODUCT
and/or
SERVICE
Quality Assurance
Risk Analysis and Product FMEA
Quality Spec. (Levels and Criteria)
Durability and Reliability
Prototype Evaluation
Assembly Trials
Quality Control
ITP – Quality Planning
QFD - Inspection and Testing
Component FMEA and Traceability
Inspection Method and Equipment
Quality Performance
Troubleshooting

QUEXX
Integration: Purchasing and Supply
PURCHASING
&
SUPPLY
PRODUCT
and/or
SERVICE
Purchasing
Price – Cost
Strategic Sourcing
Supplier Development
Supplier Integration
Financing and Profit ability
Supply
Planning and Logistics
Stock Buffering, Rotation, Inventory
Scheduling and Communication
Identification and Packaging
Traceability and Certification

QUEXX
Integration: Manufacturing
PRODUCT
and/or
SERVICE
MANUF’G
&
OUTSOURCING
Production / Manufacturing / Fabrication
Facilities and Technology
HR: Education , Training, Turnover
Environment and Safety
QFD
Productivity and Profitability
Logistics
Planning and Scheduling
Communication and Monitoring
Power, Media , Consumables
Assembling and Traceability
Storage and Distribution

QUEXX
EXAMPLES
R&D
PURCHASING
&
SUPPLY
DESIGN
&
ENGINEERING
QA
&
QC
PRODUCT
and/or
SERVICE
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
Separate
people from
machines
Continuous
Flow
Takt Time
Pull System
JidokaJust-in-Time
Highest Quality – Lowest Cost – Shortest L/T

Example 1: Supplier Development
QUEXX
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 SUPPLIER7
QSA
TSA

QUEXX
TSA - TOYOTA SUPPLIER ASSESSMENT
Example 1: TSA
DELIVERY
AFTERMARKET
ASSESSMENT AND PERFORMANCE
OTHER
BEST
PRACTICE
SUPPLIER RATING
IN OUT QUALITY
P A
80% max.
(65% min.)
100% max.
20% max.
(no min.)
Plant
P = PERFORMANCE
A = ASSESSMENT
L = LOGISTICS
M = MANAGEMENT
SERVICE
R&DandOTS
ENGINEERING
PURCH’ING
P L P M

QUEXX
TOYOTA
Example 1: TSA – In-plant Quality Performance

QUEXX
Example 1: TSA – Report

2
5
4
3
QUEXX
Product Presentation
Product Testing and Evaluation
Vendor Certification
Vendor Quality Seminar
Vendor Quality Evaluation (VQE)
Partners in Quality
Superior Quality Award
1
6
7 BEST IN CLASS Award
Canada Business Excellence
Merit Award
Example 2: Vendor Quality Evaluation (VQE) Program
Vendor Induction Process Plan (VIP)
Company Profile:
Telecommunications,
Wireless
Wireline
Internet
Key customers:
General Public
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

QUEXX
Example 2: VQE – Vendor Quality Reports

QUEXX
Corporate Targets:
- 5 sigma quality (300 PPM)
- 26 inventory turns
Supplier Classification Process:
1) New supplier desk audit
2) On site supplier audit
3) Supplier quality survey
4) Quality Plan approval
5) PAP
6) 5-sigma quality
7) 100% JIT
8) Fit (to work together)
Example 3: Supplier Chain Management Program
Company Profile:
Design and
manufacturing of
specialty-engineered
marine hydraulics
and thermal systems.
Key customers:
Marine /Shipbuilding
Recreational Boats
Military
Transportation
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
QUEXX

QUEXX
Example 5: Supplier Management Process
Overall Degree
of Fulfillment
Fulfilment Category Categ
ory
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
QUEXX
Delivery Metric 45% Quality Metric 45%
Ok to ship 3 days before, 2 days
after
Parts Per Million (PPM) 60% Corrective Action Response 40%
The % Delivery On-Time is scored
accordingly:
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 scored
accordingly:
(Late if no closure after 30 days)
0 Late Occurrences 18 pts.
1 Late Occurrence 13 pts.
>4 Late Occurrences 0 pts.
Cost Reduction 5% Weighted Score Cust. Service 5%
5 point maximum based on
cost reduction initiatives.
Score determined by
Commodity Manager.
The Weighted Overall Score
is determined as follows:
90 – 100 points Excellent
80 – 89 points Acceptable
70 – 79 points Marginal
< 69 points Unacceptable
5 point maximum determined by
Supplier Quality
Manager/Engineer, Buyer
and/or Commodity Manager
Company Profile:
Plasma cutting
Welding
Arc Gouging
Brazing
Soldering
Hardfacing
Gas Control Equip’t
Key customers:
Construction
Fabrication
Heavy equipment
Manufacturing
Mining
Aggregates
Oil and Gas
Pipe and pipelines
Shipbuilding
Transportation

QUEXX
B2B
2B or not 2BR&D
PURCHASING
&
SUPPLY
DESIGN
&
ENGINEERING
QA
&
QC
PRODUCT
and/or
SERVICE
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

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…

R&D
PURCHASING
&
SUPPLY
DESIGN
&
ENGINEERING
QA
&
QC
PRODUCT
and/or
SERVICE
MANUF’G
&
OUTSOURCING
QUEXX
LEAN Supply Chain
LEAN
Supplier
LEAN
Customer
LEAN
Supplier -
Customer
“click”
LEAN
Supply
Chain
Link
LEAN
Supplier
LEAN
Supply
Chain

Supplier Development: Steps
QUEXX
P
D
C
A
ASSESSMENT DEVELOPMENT INTEGRATION IMPROVEMENT
PLAN
CHECK
DOACT
ANALYSE
“FIT” AND
PERFORMANCE
SELECT
“BEST FIT”
SUPPLIERS
IDENTIFY
IMPROVEMENT
OPPORTUNITIES
DEFINE
PERFORMANCE
TARGETS
IMPLEMENT
“BEST PRACTICE”
STRATEGIES
INTEGRATE
KEY INPUTS
AND OUTPUTS
IMPLEMENT
CAPA
MEASURE
PERFORMANCE
MEASURE
PROGRESS
MEASURE
EFFECTS
MEASURE
IMPROVEMENT
ASSIST
POOR
PERFORMERS
CORRECT
POOR
PERFORMANCE
ELIMINATE
OR IMPROVE
“POOR FIT”
CASES
STANDARDIZE
AND
MAINTAIN
SUCCESS
NOMINATE
SUPPLIERS
FOR
DEVELOPMENT
STAGES
S
T
E
P
S

QUEXX
Operational Excellence: Supplier Chain Integration
Think
Outside
the Box

This presentation was delivered by…
QUEXX International Ltd.
Management Consultants
Quality Management Systems
LEAN Management Techniques
Supplier Development
Ph.: (604) 728 3373
Cel.: (778) 628 6807
Fax.: (604) 469 6070
E-mail: mail@quexx.com
QUEXX

2013 lean supplier chain_4_asq

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