Profit Improvement through Supplier Enhancement

Ralph R. Pawlak

• Publisher: CRC Press
• Year: 2017
• eBook ISBN:
  9781351788540
• Topic: Negocios y empresa
• Subtopic: Toma de decisiones

This book deals with the improvement of suppliers in order to increase a company's top and bottom-line. The enhancement of suppliers can be accomplished in a series of steps when conditions warrant intervention. They can also be generated through direct quality mentoring when the supplier does not have the basic skills or abilities to adequately address impending problems. Also included are guideline activities which will aid in achieving and attaining improved profitability and competitiveness in the world market. Packed with examples, problems, and forms to allow easy establishment of systems, makes the information presented more easily understood, interesting, and useful.

Chapter one

Introduction

One of the key causes of losses in profitability is the lack of attention to supplier effects on the top and bottom line. This may be due to the relative inexperience of administrators or the lack of interest in what may appear to be a mundane subject. It is important to recognize that there is potential for profit improvement in capturing the low-hanging fruit obtainable through supplier improvement. Therefore, businesses large and small could improve profitability through the application of supplier enhancement modifications.

Perceptive managers recognize that commonplace problems can be initiated by both internal and external suppliers. There are conventional suppliers of services or products that are employed by other organizations, whereas internal suppliers are those that are encountered within a home organization. Both of these supplier types will be discussed in detail in the following chapters. The recommendations in this book are applicable to both internal and external supplier bases.

The primary cause of many project, manufacturing or service problems is the failure to affect corrective change once a problem has been recognized. This is true for problems created by both internal and external supplier sources as well. Unless providers are held accountable for the provision of meaningful controllable solutions to the problems encountered, you can be relatively confident that the same problems will reappear in the future. Each time any one of these repeat problems occurs someone ultimately incurs an unnecessary monetary loss.

This book provides tools that can be employed to gain control of problematic supplier situations. These tools are applicable to all types of supplier problems whether they are created at Tier 1, Tier 2 or a local interdepartmental location. The tools are useful in determining both the cause of supplier-related problems as well as the actions that are to be initiated to prevent the recurrence of similar problems.

Features

Some of the features of this book are as follows:

•Presents real-life examples from over 200 suppliers

•Provides steps for resolutions to supplier problems

•Shows corrective considerations applicable to internal or external supplier problems

•Explains the methods used to discover supplier problems

•Specifies the information required at supplier quality meetings

•Outlines corrective steps to be required of suppliers

•Defines the methods to be used at supplier symposiums

•Contains forms that identify clues to resolve problems

•Explains sample audits to attain and control process and product flow

•Describes the methods used to manage improvements

•Sets the path for optimal supplier problem resolution

•Proposes methods to help unproven suppliers

•Provides audit forms for supplier rating and evaluation

•Explains the Trilogy of Supplier Enhancement concepts of initial material checking (Do Check), ensuring quality (Don’t Create), and establishing criteria for securing defective materials (Do Hold)

•Provides basic questions to identify the sources of problems and to give an indication of the necessary corrective actions to be taken

•Provides adequate spacing between paragraphs to allow the reader to add notes that may be personal or beneficial to their individual circumstances

Means of supplier improvement

The following sequence of information is provided to deliver the route by which the reader can understand and improve their performance through supplier enhancement. The main path of understanding is best described as follows:

•The differences between internal and external suppliers and the common methods to improve both performance and relationships are provided.

•The book explains how to use simple techniques to identify and simplify supplier problems and how to innovate significant solutions.

•Information is given to delineate the differences between qualified suppliers and those who are less experienced.

•The presented material supplies an understanding of how supplier improvements can substantially improve top- and bottom-line performance.

•Forms and examples illustrate how to use a quality management approach to facilitate supplier improvements.

•A series of worksheets are presented that can be applied to the solution of specific supplier problems.

•An appendix is provided to define terms with which the reader may not be familiar.

Allow me to repeat the following sentence, as it is intended for those who may have not read the Preface. Since supplier enhancement may seem to be a dry subject to some, the book is loaded with actual supplier examples, photographs, audits, lists, and problems to compliment the information presented and make it more easily understood, interesting, and useful. The book also contains a significant number of example audit worksheets that have been applied to different departments in various countries and locations.

Flow path of the book

The contents of the book are presented in the following sequence so that the reader can secure the information efficiently. Some terms used within the book may be new to the reader. Most will be self-explanatory, but novel words will be defined in the Appendix.

Chapter 1: Introduction. This chapter provides the basis for the need to address supplier enhancement. It also contains an outline or flow path of the information that is presented. The investigation involves looking at the conditions that exist during discussion and evaluation in order to act on supplier problems. It identifies some features that affect the customer–supplier relationship. These features are listed as background material. The study addresses the conditions that were found to exist and proposes the necessary corrective actions. It also contains an outline or flow path of the information that is presented.

Chapter 2: Problem history. This chapter introduces the need for generating supplier improvements. It contains a presentation of a sample of problems created by suppliers. The chapter relates the importance of collecting data to pinpoint problems and the methods of resolving those problems that will be explained in the ensuing chapters.

Chapter 3: Need for enhancement. This chapter relates the information gleaned during a study to address supplier problems and subsequent improvements. It contains what was found to be the best and worst actions practiced by the supplier base, the problems encountered and the key actions taken to soundly form and establish corrective practices.

Chapter 4: Supplier credentials. This chapter describes the types of suppliers that are encountered by a customer. It describes the differences and similarities of those that may be involved in the manufacture of a product or the provision of a service. Examples are given of supplier traits, with a focus on the differences that are to be considered. Descriptions are given of instances of supplier inefficiency, inaction or impertinence that result in ineffectiveness and dollar loss. The chapter contains examples of the destructive activities of unfit suppliers. It introduces some supplier control and improvement concepts that will be discussed in later chapters.

Chapter 5: Supplier elements. This chapter contains a description of the preferred supplier characteristics that should be considered when acquiring a supplier. “Mom and pop” shops versus small and large manufacturers are examined. The mammoth leader corporations are also studied in terms of their use of quality tools, their responsiveness, and their achievements. The severity of supplier-induced problems is described as a function of their expertise. Also discussed are the necessary steps to be taken to achieve supplier approvals and enhancements.

Chapter 6: Course of action. This chapter describes those actions that can be taken depending on the supplier’s circumstances. The chapter suggests an innovative technique for accepting supplied components or assemblies without any additional in-house inspection at the receiving location. It also suggests specific employee actions to ensure product integrity. Included is an example of a problem resolution sheet that can be used to drive corrective actions. These actions are determined by conducting different types of meetings, which are described. The dialog indicates actions that can be taken to resolve any supplier problems that may arise. The chapter relates the importance of helping suppliers to utilize design failure mode and effect analysis (DFMEA), process failure mode and effect analysis (PFMEA), and control plans to improve their quality systems. Unqualified suppliers that do not currently have use of these tools must be developed to ensure successful operations.

Chapter 7: Record keeping. A chapter on record keeping is provided to focus attention on supplier errors and problem resolutions. It is important to define the problem, to describe the failure mode encountered, the process flow plan, the product containment method, and the date code interpretation. All of these are critical to creating and maintaining correct records. The chapter also lists three important supplier attributes that should be available at the supplier location. The use of DFMEA, PFMEA, and control plans will be instrumental in their improvement and development. Suppliers that do not possess these attributes will require guidance and help to develop.

Chapter 8: Supplier readiness. Process and supplier improvements are created by rectifying adverse conditions and addressing them in the product or process control plan. Supplier readiness is a means of determining the supplier’s inclination to deliver the desired product on time, in the amounts required and in an acceptable condition. This chapter deals with those considerations that are to be evaluated when a supplier is being considered for a new activity or contract. Otherwise, the information can be used to qualify a new supplier for approval. In addition, the observations can be used to evaluate why a supplier may be supplying a product that is not satisfactory. This is a good start for those that have no formal system and can provide insight into areas that were not formally considered. (Forms and examples are included.)

Chapter 9: Opportunities for improvement. The center of attention in this chapter is how to provide some less experienced suppliers with the expertise to improve their systems. The problem discussed is that of receiving mixed parts, which can cause line jams, improper assembly, and related safety problems. The conditions explained will lead to improvements in both the supplier’s and the customer’s systems and the quality of the product that the customer receives.

Chapter 10: Problem resolution aids. This section provides a simple method to allow inexperienced or inept suppliers to improve their problem-solving activities. The chapter more fully explains why defective materials should not be accepted at the job site. Once acceptable materials have been received, it is necessary to perform specific operations with the methods and tools provided. After any operation is satisfactorily accom...

Table of contents

• Cover
• Half-Title
• Title
• Copyright
• Contents
• Dedication
• Acknowledgments
• Chapter 1 Introduction
• Chapter 2 Problem history
• Chapter 3 Need for enhancement
• Chapter 4 Supplier credentials
• Chapter 5 Supplier elements
• Chapter 6 Course of action
• Chapter 7 Record keeping
• Chapter 8 Supplier readiness
• Chapter 9 Opportunities for improvement
• Chapter 10 Problem resolution aids
• Chapter 11 System evaluation
• Chapter 12 Other requirements
• Chapter 13 Tools for improvement
• Chapter 14 Useful audit criteria
• Chapter 15 Summary
• Appendix
• Index