SIP - Goal
“Focus on quality of system and processes – not persons, price, or quotas.” Carl
Recap, SIP – Solution
So far, we have grasped the problem and provided the current state which identifies the reported issues are related to supplier/purchased materials. Described the history of supplier management and a bit about how we got to this point. In the last post, SIP-Solution, you became familiar with the COPQ escalation in the Supply chain as shown in the SiPoC diagram below. This drives us to identify issues early and resolve them quickly. We began to formulate a course of action by using a blended model problem-resolution process using well-known action plan cycles. We now have a method to determine the path of where we want to go. Defined our purpose to use the SIP process to focus on improving the supplied materials to the business. We are now in the planning phase …
At year 0, I wrote the white paper which kicked off the scale-up of the Supply Improvement Program, SIP. This is where the story begins, at year 0. SIP and data collection began 4-5 years previous…
Supply Improvement Program (SIP) Executive Summary
Identify areas within Mfg. Company supply chain with the highest opportunity for improvement.
Prioritize improvement opportunities negatively affecting customer satisfaction and product quality.
Install cross-functional and inter-company teams to work with suppliers and achieve process and product improvements.
Supplier remains in the program until performance benchmarks are achieved and proven sustainable.
SIP Objective
Use data to determine the best use of resources, drive decisions, and measure change effectiveness to improve product and supply quality.
SIP Goal
Focus on quality of system and processes – not persons, price, or quotas.
Support supplier’s quality management system (QMS) process development and growth.
Result expected: incrementally increase product quality and, by extension, customer satisfaction.
SIP IS
A partnership aimed at proactively improving quality.
Data-driven based on risks and results.
Creation of self-sustained improvement process environment where supplier proactively reviews customer quality data, identifies root cause, implements solutions, and communicates their actions.
Supplier shall continually reduce: defects, missed delivery dates, and COPQ.
SIP is NOT
A substitute for the ongoing quality process (i.e., Supplier Corrective Action Requests).
A replacement for existing technical discussions.
A commercial process (logistics, PO dates, pricing).
SIP Process
When the SIP system was developed, we created the program outline (shown above) and the process steps to ensure success (shown below). These outlines took a few revisions to get right and ensure a blend of cross-function and cross-company acceptance. While our goal was to create an improved customer and supplier relationship, we understand that we are not partners in the classical sense of sharing costs and profits. The relationship remained as Customer-Supplier where we, as a customer, paid for a product provided by the supplier. In that sense, there was an expectation the supplier would support the program we introduced. In almost every case, suppliers were very supportive and engaged in SIP with Mfg. Company.
Process Steps
DEVELOP
Gather supplier quality data (OTD, Acceptance, Cost, Risk).
Create understanding to define the issue and goal.
Review and adjust (at each repeat of the cycle).
MEASURE
Identify Suppliers with the highest opportunity (for improvement).
Measure Globally.
PLAN
Plan the Course of Action.
Limit to a manageable number of suppliers.
ACT
Locally Implement Supply Improvement Program (SIP) process.
Actively measure and report supply performance results.
Employ visual cues, roadmaps, charts, and performance targets.
REVIEW
Review and evaluate progress and effectiveness of actions.
Identify strengths and celebrate wins.
LEARN
Educate supply chain on quality improvement methods, processes, and solutions.
Train and develop to strengthen weaknesses.
Repeat
When a supplier is self-sustaining, then look for a new opportunity.
Implement at Supplier!
Measure Suppliers performance (OTD, Acceptance, Cost, etc.),
Provide actionable data of performance measure (details),
Pareto data (use 80/20 rule to select top issues),
Evaluate top issues and pick 3 to 5 workable issues (Product or Process),
Are issues workable? Not world peace issue…,
Contain the issue – don’t let it get worse,
Determine Root Causes: Propose Solutions (use of 7-Basic quality tools),
Implement Corrective Actions,
Measure the effectiveness of the solution and then adjust as needed,
Implement Preventive Actions (revise docs, methods, training, etc.),
Continue cycle (1-10) until performance is within expected ranges and sustainable.
Performance
The Supplier Improvement Program is designed and built on fundamental problem resolution principles. The principles employed are born from Deming, Toyota Production System, Lean, Six Sigma, and TQM teachings. Those tools were integrated to fit Mfg. Company and the environment.
A new purpose for SIP arose because of understanding the issues; To focus selected low performing supplier’s attention on the key issue[s] (Quality, Technology, Logistics, and Commerce) to improve Mfg. Company customer satisfaction. As you see, this was not an overnight transformation; it takes time, dedication, and perseverance on each project. Changes to system processes at both Mfg. Company and each supplier, all with unique cultures, languages, and levels of ISO integration.
For the previous 3 years, SIP was the only global tool employed to develop the supply chain. However, persistence and coaching finally began paying off and in year -1 the first successes were in hand. The chart below in ‘Picture This’ shows the relative success of SIP when compared to three sets of suppliers; (Black vertical lines indicate first SIP graduations)
Suppliers that have ‘graduated’ from SIP; completing the program successfully (SIP-Grads).
Suppliers that are actively engaged in SIP; started but, not complete (SIP-Active).
All other suppliers (All Other); not in SIP; receiving quality performance information.
Proven that by utilizing SIP the worst suppliers (SIP-Active) can be transformed into the best (SIP-Grads)!
Picture This
Summary
Alright, we are halfway through, still with me? With this fifth blog post, we have defined the problem of disruptions. Provided the current state which identifies the reported issues are related to supplier/purchased materials. Described the history of supplier management and a bit about how we got to this point. In the previous blog on Solution, we began to formulate a course of action by using a blended model problem-resolution process using well-known action plan cycles. In this blog, we formalized the process and described the steps to take. We now know how to get where we want to go. Then finally, based on previous years’ work, the results show the process worked to pull up the worst-performing supplier and enabled them to become the best in a sustainable way.
In the next blog, we will get into the nitty-gritty of SIP. You will see the measures utilized and how we used them. Share a bit of the challenge we faced getting to data and sharing information. Each week I will release/publish another blog based on the topics of SIP (Supply Improvement Program) as shown below. In the next post, I will share what we used as Measures for SIP.
Abstract (posted)
Problem (posted)
Opportunity (posted)
Solution (posted)
Goal (this post)
Measures
Analysis
Controls
Improvement
Results