Supply Chain Process Capability

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Supply Chain Process Capability Product
Realization ProcessStrategy Streams

• IAQG General Assembly
• San Diego, April 7, 2006

Bernard Lauras Airbus European Sector
leader Product Realisation Process
Barbara ODell The Boeing Company IAQG Stream
Leader Supply Chain Process Capability
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Sub Tier Control as a Source of RiskTo
Regulators and Customers
No Change From Montreal
Poor Control of Sub Tiers is viewed as a Risk
Source of Non-Conforming Product
Methods used by Suppliers to Control Sub-Tiers
are not well understood
Sub Tier system insufficient to detect
prevent non-conformance
Supplier doesnt know how to control their
(sub-tier) suppliers
Reduced level of interaction with Sub Tiers
compared to with suppliers
Few industry standards and Best Practices
published on how to perform excellent supplier
control . No common vocabulary or scoring
(Lack of Transparency)
(Lack of Visibility)
3
SCMH provides a framework for organizing and
integrating our work
No Change From Montreal
9100 Requirements
4
Supply Chain Process Capability Name changed from
Sub Tier Process Control
No Change From Montreal
Often, the value stream includes companies
operating at many levels, and one standard should
be consistently applied
Ideal Stream
Typical Stream
OEM
OEM
First Tier
First Tier
OEM
Sub Tier
Sub Tier
Sub Tier
First Tier
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SCMH chapters have been renumbered and include
Product Realization Activities
1.0 Supplier Selection Capability Assessment
2.0 Requirements and Flowdown
5.0 Product Verification
Acceptance
8.0 Supply Chain Mgmnt and Performance Measures
10.0 Program Management
In work by Product Realization Stream
In work by Supply Chain Process Capability Stream
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For every chapter in the Handbook Well follow
this roadmap
Phase 1 Collect aerospace and other industry
best practices, standardize the knowledge agree
on core requirements
Phase 2 Create best practice material first,
then mature into a guideline or to an industry
standard document (910X standard). Maturity
assessment may be developed here. Implementation
Process should be defined here (pilot phase as
required).
Phase 3 Standardized training provided by
industry accepted trainers
Phase 4 Implementation Process. Depending on
guideline vs 910X decision, the document may be
deployed company by company, or by standardized
audit checklist, or by industry certification as
part of the ICOP/9104 system. Implementation
must include maturity assessment.
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Supply Chain Process Capability have been tasked
Chapters 1 and 2
1.0 Supplier Selection Capability Assessment
2.0 Requirements and Flowdown
5.0 Product Verification
Acceptance
8.0 Supply Chain Mgmnt and Performance Measures
In work by Product Realization Stream
In work by Supply Chain Process Capability Stream
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Chapter 1 - Supplier Selectionand Capability
Assessment
IAQG SCMH Chapters
Supply Chain Processes
Sales Volume Option Forecasting
Sales Volume Option Forecasting
Contract requirement flow down
Contract requirement flow down
New product introduction /LCM
New product introduction /
SC design major Components sourcing
SC design major Components sourcing
Suppliers sourcing selection qualification
Suppliers sourcing selection qualification
Sales Operation Planning
Sales Operation Planning
Manage the Supply Chain
Manage the Supply Chain
Master Scheduling sequencing
Master Scheduling sequencing
Planned change management
Supplier Development
Planned change management
Supplier Development
Performance Monitoring and Decision support
Performance Monitoring and Decision support
Plant, material, skills capacity planning
Scheduling
Plant, material, skills capacity planning
Scheduling
Manufacturing
Manufacturing
Post Delivery Support
Post Delivery Support and services
Order Management (internal external)
Order Management (internal external)
Inventory planning optimization
Inventory planning optimization
Logistic Management
Logistic Management
Non Conformity Management
Non Conformity Management
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Chapter 1 - Supplier Maturity Assessment per
Supply Chain Process
Example

• Four levels of maturity (Maturity model CMMI
  like)
• Undefined No Process, Method, Tools/ No
  Process, Method, Tools/ and Appropriate
  Behaviours
• Defined
• Applied
• Optimising Implemented and optimised, continuous
  improvement

• Four domains assessed
• People Organisation
• Processes
• Tools Data
• Performances Metrics

4
3
2
1
4
3
2
1
Non Conformity
Non Conformity
Optimizing
Applied
Defined
Undefined
Optimizing
Applied
Defined
Undefined
Management
Management
Multifunctional team
Clear accountability
Expert firefighters
No clear Accountability
Multifunctional team
Clear accountability
Expert firefighters
No clear Accountability
People Organization
People Organization
Highly Skilled
Cross functions
No Problem solving
Highly Skilled
Cross functions
No Problem solving
skills
skills
Highly skilled
Highly skilled
Mature process for root
Root cause process in
Ad hoc firefighting
Reactive needs
Mature process for root
Root cause process in
Ad hoc firefighting
Reactive needs
Process
Process
cause preventive
place
actions
cause preventive
place
actions
Customer Stimulus
Customer Stimulus
actions
actions
Process playbooks
Process playbooks
Limited preventive actions
Limited preventive actions
Internal external
Integrated database, clear
Multiple Data base
Manual Fax e
-
mail
Internal external
Integrated database, clear
Multiple Data base
Manual Fax e
-
mail
Tools Data
Tools Data
collaboration.
workflows, internal
collaboration.
workflows, internal
Expectation Supplier
performance
Spreadsheet
Spreadsheet
collaboration
collaboration
Real time intelligent
Real time intelligent
workflows
workflows
3 regular review of
Performance drives action
Measuring performance
No measurement of
3 regular review of
Performance drives action
Measuring performance
No measurement of
Performance
Performance
metrics effectiveness
plans
Performance
metrics effectiveness
plans
Performance
Metrics
Metrics
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Chapter 1 - Decision making process
Standard Questionnaire and Assessment results
independent from the size of company and
product/project criticality
Supplier Assessment Results

• Decision to select or not based on risk analysis
  like 9134 Supply Chain Risk Management
  guideline
• (Special action plan if not capable but need to
  select)

Each Company to apply weighting to each process
as appropriate to their Product, Customer, Risks,
etc
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Chapter 1 Supplier Selection Capability
Assessment

• Deliverables by Seville
• Agree on the definition of the 15 Supply Chain
  Mgmnt processes
• Agree on the maturity matrix concept and finalize
  its content
• Conduct pilot assessments, using the maturity
  matrix and model, in all sectors
• Finalise decision matrix and questionnaire
• Actions to be completed later
• Validate questionnaire and Maturity Model during
  on the pilot phase
• Publish questionnaire and Maturity Model decision
  matrices
• Issue training package
• Identify Requirements,Guideline and Best Practices

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Chapter 2 Requirements Flowdown
Suppliers Produce Non-conforming Product because
they do not understand the requirements or do not
receive the requirements. WHY?
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Chapter 2.0 Requirements and Flowdown
2.0 Requirements and Flowdown 2.1 How to clearly
identify and communicate requirements throughout
the supply chain 2.2 How to generate a shared
understanding of the requirements 2.3 How to
manage revisions to requirements after initial
contract/purchase order release
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Chapter 2 - Requirements and Flowdown

• Deliverables by Seville
• Connect to others doing similar work (Missile
  Defense Agency, Space Quality Improvement
  Council) to see if we can combine efforts
• Communicate our work to others (AIA, ASQ)
• Collect best practices and white papers from
  aerospace and other industries
• Actions to be completed later
• Benchmark Medical Device Industry and SEA on
  Requirements Flowdown
• Publish guidelines/best practices by June 07

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Product Realization Activities have been tasked
Chapters 3, 4 and 7
1.0 Supplier Selection Capability Assessment
2.0 Requirements and Flowdown
5.0 Product Verification
Acceptance
8.0 Supply Chain Mgmnt and Performance Measures
In work by Product Realization Stream
In work by Supply Chain Process Capability Stream
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Chapter 3 New Product Introduction
No Change From Montreal

• Background
• The Aerospace Industry developed a successful
  product introduction process based on a 20-80
  outsource ratio and the industry has migrated to
  a 80-20 outsource ratio
• This change was gradual and a change in the
  product introduction process was not undertaken
• Corrective Action proposed
• Develop a product introduction process that
  accurately predicts supplier performance at
  production levels

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Chapter 3 New Product Introduction

• Status
• Benchmarking performed
• Dell computers
• Toyota USA
• Knowles (Medical)
• Lessons learned and brainstorming have produced
  Sub-chapters headings

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Chapter 3 New product introduction

• 3.0 New Product Introduction

3.1 Pre-production Process validation (product
specific) 3.2 Review of Quality Planning
including Key Characteristics 3.3 Product and
Process Qualification 3.4 Pre-approval of test
methods (where applicable) 3.5 FAI (9102) 3.6
Design Change Requirements 3.7 Product Maturity
Assurance
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Chapter 3 - New product introduction

• Deliverables by Seville
• Confirm sub-chapters headings, resolve overlaps
  with other chapters
• Collect best practices from IAQG and other
  companies
• Actions to be completed later
• Publish guidelines/best practices by June 07

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Chapter 4 - Process Control
No Change From Montreal

• 9103 (Variation Management of Key
  Characteristics) not sufficiently and adequately
  deployed

• Value not clearly identified or understood
• All functions to be involved, not only Quality

Lack of buy-in

• Training required
• Need to explain how to apply 9103 based upon
  supplier product complexity

Lack of skills
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Chapter 4 - Process Control

• Since Montreal, EAQG has worked on 9103 education
  package
• Common part (key concepts with IAQG banner) for
  all companies using the training
• Some area to be adapted by each company when
  training its staff or its suppliers (examples,
  tools, forms, etc)
• Education package content
• Will focus on value of doing it and risks and/or
  costs of not doing it
• Should take difficulties of doing it into
  consideration
• Work is on going

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Chapter 4 - Process Control 9103 deployment
Constraints

• Application of 9103 should be risk oriented (not
  used if no added value, should focus on the
  results, not on the tool or the process)
• More chance to succeed if convinced of business
  value than if strict mandate Improve
  communication and learn more from supplier
  experience and constraints
• 3 ways of flowing 9103 down (deployment drivers)
  ?

• Mandated (high risk product and/or existing key
  characteristics)
• Guideline
• Best practices sharing

Mandate from customer
At supplier own initiative or supplier development

• Need to create a global culture (prime,
  suppliers) rather than one way (mandate) gt
  engagement within all levels and functions of the
  supply chain

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Chapter 4 - Process ControlFurther Actions

• Measure the effectiveness of 9103 deployment and
  its benefits on the overall business
• Build on lessons learned
• See how to define key characteristics
• Introduce concept of FAI stage 1 (initial) and
  stage 2 (confirm capability at ramp up)
• Evaluate how to use 9103 results to optimize
  design for manufacturing

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Chapter 4 - Process ControlInterconnection
between several topics
Global Process Control brainstorming We can
build from 9103 but shall not limit to it and
shall not consider it as the only key factor of
success
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Chapter 4 - Process Control
4.0 Process Control 4.1 Variation management of
Key Characteristics (9103) 4.2 Root cause
analysis and problem Solving 4.3 Process
capability and control 4.4 Design for
Manufacturing and Relation with Manufacturing
Capability 4.5 Process Change Requirements 4.6
Industrial Capability and Capacity Assessment 4.7
First Article Inspection 4.8 Special Process
Control
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Chapter 4 - Process ControlProposed Short Term
Action plan

• Deliverables by Seville
• Finalize 9103 education package
• Be ready for deployment of the 9103 training
• Actions to be completed later
• Start to work on Root Cause Analysis and Problem
  solving
• Evaluate the effectiveness of 9103 deployment
• Reviewing opportunity for Process Control
  improvement based on feedback from deployment
  (industry expectations)
• Build on 9103 (evolution of the standard or
  complementary standards or methodology)

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Chapter 7 Work Transfer
Supplier A
Supplier B

• Unsuccessful work transfer is a major problem
  for the industry and we feel it is one of our
  priorities
• We have not standardised process to do it

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Chapter 7 Work Transfer

• Collected Industry Best Practices (Benchmarking)
• Dell computers
• Toyota USA
• Knowles (Medical)
• Standardize Knowledge and Lessons learned
• Pre-transition Program Planning
• Pre-production meeting(s) upfront effort
• Multidiscipline Team (Agreement quality, eng.,
  purch.)
• Capture Hidden Factory Last Article audit
  (product and process)
• Receiving Supplier Process Capability
  Assessment
• Supplier Development as required

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Chapter 7 Work Transfer

• Deliverables in Seville
• Confirm sub-chapters headings
• Identify overlaps, existing/needed standards
• Collect best practices from IAQG and other
  companies
• Actions to be completed later
• Develop a transition process from best practices,
  ensuring risks are identified and mitigated prior
  to the work transfer decision and launch
• Publish guidelines/best practices by June 07

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Supply Chain Management HandbookNext steps

• Finalize Chapter Headings and Sub Chapter titles
  and content/objectives to eliminate overlaps,
  improve clarity and integration (June 06)
• SAE has provided a public web space for our
  team to communicate with the general public on
  our progress. We will populate this web space in
  coordination with the IAQG communications team

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