Supply Chain Visibility and Global Quality Assurance

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Supply Chain Visibility andGlobal Quality
Assurance

• Braddock Cunningham
• CTO, eBridge Solutions

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The Emergence of Global OperationsProblem at
Hand

• Designing, sourcing, manufacturing, selling and
  delivering new products rapidly for world-wide
  markets are today's realities.
• Your suppliers are located in North America,
  Europe and China.
• Your customers are in the U.S., Europe and Japan.
  
• Your factories are in Brazil, Europe and North
  America.
• Your development engineers are in Europe, India
  and North America.
• Cash is tight - you must deliver your product at
  your target price and brace yourself for margin
  erosion when competition sets in.

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The Emergence of Global OperationsProblem at
Hand

• Two Methods for Dealing with todays global
  operations
• Outsourced Manufacturing
• Separation of Manufacturing Into Distinct Levels
• One or a combination of both of these methods are
  used in most situations requiring complexities
  to be dealt with in Supply Chain Operations. The
  SCOR model provides a systematic approach for
  providing solutions to these issues.

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The Emergence of Global Operations
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Method 1 Outsourced Manufacturing

• Firms with strong brand awareness may decide to
  focus on what they do best-product design and
  marketing.
• End Result
• The Company decides to discontinue internal
  manufacturing effort and outsource to a third
  party provider for part or all of their
  manufactured goods.

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Method 2 Manufacturing Layer Separation

• Lower levels which require less skilled
  techniques can be sent to other parts of the
  world where resources are far cheaper. Higher
  levels such as final assembly still reside within
  location like the United States.
• End Result
• Less skilled processes are off-shored while more
  skilled processes remain in their original areas.

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A Single Common DenominatorQuality Management

• The ability to access and consolidate product
  quality information is hampered.
• Many of the resources responsible for product
  auditing are external.
• Task of collecting and consolidating data may
  seem insurmountable.
• Even in a best case scenario, the quality
  consolidation effort is tremendous.
• Time lag associated with audit consolidation and
  resolution can result in monetary costs and
  reduced customer satisfaction.

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SCOR Applicability in Global Quality Management
Effective Product Quality Management within the
Distributed Model at an affordable cost.
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Global TQM Derived from SCOR
Global TQM through Collaborative and Cooperative
Design
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Global TQM Derived from SCORPLAN

• Supplier Enrollment and Qualification process
• Product Design process
• Identify, Assess and Aggregate SC Resources
• Implement Platform and Standards for assessing
  adherence to quality levels/metrics
• Establishing Method for Communication of
  standards, procedures, spec changes, etc.

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Global TQM Derived from SCOR SOURCE

• Manage/Monitor Supplier Qualification,
  Performance and Certification
• Communicate Product Designs/Bids/Specs
• Manage/Monitor Sourcing Process
• Communication of standards, procedures, spec
  changes, etc.

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Global TQM Derived from SCOR MAKE

• Produce and Test Products
• Manage/Communicate Rules/Metrics/Compliance
• Manage/Monitor Production Network
• Quality Auditing throughout manufacturing
  processes
• Communication and Aggregation of Quality
  Information DURING production process nimble

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Global TQM Derived from SCOR DELIVER

• Assess Deliver Performance
• Manage Import/Export Requirements
• Quality Auditing Throughout Distribution Chain
  (DCs, receiving docks, carriers, etc.)
• Assessment of product quality from manufacturing
  location to end consumer and everything in
  between
• Catching Issues while still in the Delivery Chain
  Important
• Real-time analysis of this data!

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Global TQM Derived from SCOR RETURN

• Identify Product Condition/Nature of Issues
  Quickly
• Determination of Responsible Party
• Association and Management of Charge backs
  Return Authorizations
• Assigning Rework Costs
• Manage Debit/Credit/Allowance Memos
• Deriving Total Cost for Returns Aggregated
  throughout System
• Find Common issues (contractors, countries,
  styles, carriers, etc)
• Track these costs and manage the
  invoicing/crediting processes
• Goal Reduce Rejected Shipments in the first
  place!

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Liz Claiborne

• A Quality Case Study

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The Historical Situation

• Orders are filled at outsourced facilities around
  the world.
• Quality inspections are performed prior to
  leaving the manufacturing locations.
• The shipments are again inspected after reaching
  the distribution centers.
• The Challenge
• How to aggregate the quality inspection
  information?
• The fact that much of the manufacturing effort is
  outsourced
• Disparate technologies are used throughout
  manufacturing and distribution
• QA managers needed a low cost alternative to
  consolidate QA data

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Other Options Why Not?

• ERP systems such as SAP, JD Edwards and Oracle
• ARIBA and other supply chain integration systems
• Continue manual methods
• Full system integration for each location

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Meeting the Challenge

• How to approach Quality Management holistically,
  when all aspects of the supply chain have to be
  considered from Planning to Returns?
• How to aggregate the quality inspection
  information, given the fact that much of the
  manufacturing effort is outsourced?
• Disparate technologies are used throughout
  manufacturing and distribution.
• QA managers needed a low cost alternative to
  consolidate QA data.

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Meeting the Challenge

• Liz Implemented a centralized Web-Based System
• Hosted Externally
• Available to 100 of outsourced locations
  (contractors, DCs, etc.)
• Implemented a method for integrating to data from
  ALL outsourced locations
• Managed all five aspects of the Quality Process
  from SCOR

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The Integrated Solution
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The Integrated Solution

• Open Source Software i.e. inexpensive/affordable
  
• Distributed cost structure across
  supply/distribution chain
• Flexible approach to integration

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(No Transcript)
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Example Dashboard (Liz Claiborne)
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ROI

1. Ability to pinpoint locations / subcontractors /
   regions that are performing below standards for
   improvement / corrective measures.
2. Ability to pinpoint distributors / transportation
   vendors that seem to cause higher defect levels
   than others for improvement / corrective
   measures.
3. Capability of charging back responsible parties
   for defects where appropriate (i.e. corporate no
   longer having to absorb such costs internally).
4. Ability to highlight products / styles that seem
   to have higher defect levels across all sites to
   support RD review and possible corrective style
   resolution.
5. Ability to lower overall corporate defect levels
   and improve customer satisfaction.

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ROI

• Liz Claiborne, Inc. recognized over 750,000 in
  ROI in Six (6) Months!
•  
• Previously, Liz absorbed these costs due to a
  lack of real-time information and visibility into
  QA activities throughout distribution-chain.
• Based on system being live for over one year
  and then a six month window of measurement

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Conclusion

• 75 Reduction in overall Defect rates within 18
  months.
• Recognition of Quality efforts are not just
  during building, but have to be handled during
  Plan, Source, Delivery and Returns in order to
  achieve Substantial ROI and overall Success.
• Holistic Approach across all aspects of the
  supply chain enabled a solution that created
  visibility into complete quality picture.
• In Lizs case, up to three weeks of time were
  stripped from the quality process per order.
• One years estimated ROI excess of 1 million.

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eBridge Solutions Serving the Entire Supply Chain
Total Supply Chain Management
www.ebridgesolutions.com
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eBridge Solutions Serving the Entire Supply Chain
SupplierBRIDGE- iSOURCE (Design) SupplierBridge
iSource is part of the powerful SupplierBridge
software suite that helps simplify the new
product design process. iSOURCE workflows all
aspects of designing a new product incorporating
appropriate security roles and collaboration of
all data/information involved in the process with
the end goal of preparing a sourcing packet in
sight. SupplierBRIDGE- iECC (Enrollment,
Compliance and Certification) SupplierBridge
iECC is designed to centralize and automate the
enrollment and ongoing management of
certified/authorized suppliers for your
organization. The software manages enrollment and
oversees regulation compliance among a company's
many vendors and suppliers.
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eBridge Solutions Serving the Entire Supply Chain
SupplierBRIDGE- iSOURCE SupplierBridge iSource
is part of the powerful SupplierBridge software
suite that helps simplify vendor sourcing.
iSource provides real-time deployment of sourcing
packets, requests for quotes (RFQs) and requests
for proposals (RFPs) to selected suppliers,
automated emails to suppliers, communication
between suppliers and sourcing departments and
more. iSource also enables suppliers to
electronically accept a sourcing bid, saving time
and money.
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eBridge Solutions Serving the Entire Supply Chain
SupplierBRIDGE- ScheduleFLEX MFG SupplierBridge
ScheduleFLEX MFG is part of the powerful
SupplierBridge software suite that provides a
complete MTO/BTO production management
application and finite scheduling system.
ScheduleFLEX is an innovative, flexible process
scheduling solution that offers ERP power at a
price you can afford. ScheduleFLEX is a complete
manufacturing production system that is both
Affordable and Flexible. For customer driven
production processes in the BTO and MTO
marketScheduleFLEX is the solution!
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eBridge Solutions Serving the Entire Supply Chain

• Solve(IT)2 from Order Logistics - Order,
  Warehouse, Transportation, and Installation
  Management for Stocked, Make-to-Order, and
  Engineer-to-Order Product
• All order management steps from processing
  customer inquiries and quotes to routing
  shipments and selecting carriers.
• Warehouse management from receiving and picking
  product to load and ship product.
• Receive and verify product at customer site and
  install, if necessary.
• Invoicing customer.
• Manage Deliver business rules, performance,
  information, finished product inventories,
  capital assets, transportation, product life
  cycle, and import/export requirements.

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eBridge Solutions Serving the Entire Supply Chain

• Solve(IT)2 from Order Logistics
• Return of Raw Materials and Receipt of Returns of
  Finished Goods
• All Return Defective Product steps from source
  identify product condition, disposition product,
  request product return authorization, schedule
  product shipment, and return defective product
  and deliver authorized product return, schedule
  return receipt, receive product, and transfer
  defective product.
• All Return Maintenance, Repair, and Overhaul
  product steps from source identify product
  condition, disposition product, request product
  return authorization, schedule product shipment,
  and return MRO product and deliver authorize
  product return, schedule return receipt, receive
  product, and transfer MRO product.

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eBridge Solutions Serving the Entire Supply Chain
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eBridge Solutions Serving the Entire Supply Chain
Additional Contact Information Braddock
Cunningham Website www.ebridge.ws Email brad.cu
nningham_at_ebridge.ws Office (864)
322-6286 [phone]