Supplier Management Establishing Supplier Management as a Strength
Supplier Management Establishing Supplier Management as a Strength Thomas W. Thrailkill Boeing Space & Intelligence Systems Supplier Management October 2008 Copyright © 2008 the Boeing Company. All rights reserved
Discussion Agenda § The Integrated Defense Systems (IDS) Supplier Management Path Forward § Space & Intelligence Systems Supplier Management Initiatives Copyright © 2008 the Boeing Company. All rights reserved 2
IDS Supplier Management Path Forward People Early Supplier Involvement Contracting and Risk Management Improve Supplier Performance Systems & Tools Create Opportunities - Capture Value - Ensure Performance Copyright © 2008 the Boeing Company. All rights reserved 3
Copyright © 2008 the Boeing Company. All rights reserved 4
Copyright © 2008 the Boeing Company. All rights reserved 5
Copyright © 2008 the Boeing Company. All rights reserved 6
IDS Supplier Management Focus Areas Early Supplier Involvement Contracting and Risk Management § Market Strategies & Control Points § Strategic Make/Buy § Enterprise Capability Sourcing Strategies § Enterprise Supply Chain Strategies § Capture & Proposal Strategy, Execution & Transition § § § § § EAC / BAC Alignment to Prime Affordability expectation Risks aligned and managed Leverage Spend Terms and Conditions Supplier Diversity Strategic Work Placement Strategic Agreements Improve Supplier Performance § Supplier Insight and Control using Six Sigma § Top 100 Supplier Performance Improvement § Supply Base Management § Supplier Partnership Initiative Lean Engagements § Common Buy Package § Supplier Program Manager Deployment Create Opportunities - Capture Value - Ensure Performance Copyright © 2008 the Boeing Company. All rights reserved 7
Supplier Management as a Strength vs. Weakness § The Integrated Defense Systems (IDS) Supplier Management Path Forward § Space & Intelligence Systems Supplier Management Initiatives Copyright © 2008 the Boeing Company. All rights reserved 8
Improving S&IS Supplier Management Improvements through 2007 - Comprehensive competitive source selection process - Standard buy package SOW format, SDRLS, Quality documents, Specs, Data Item Descriptions, Program Reviews - Standard checklists formal reviews - Supplier Data Tool (SDT) to manage SDRL process - EPIC system for electronic storage of subcontracts - Standard purchase contract format - Standard change order log and format - Shared subcontract ownership through dedicated IPT’s - DSAM Supplier Assessment Matrix - Government participation at all formal reviews - Standard performance metrics - Faster sourcing through use of ASAP - Boeing furnished material is the exception - More consistent same “face” representation for technical leadership - Internal Boeing Risk management requirements flowed to subcontractors - EScan tool provides Boeing visibility of supplier corrective actions 2008 Forward - Supplier Quality post award requirements review - Quality surveillance plan to identify important features for sourcing - Open SDRL’s tracked in SDT – Supplier Program Managers assigned to key critical subcontractors – S&IS Supplier Enterprise Review Board – IDS Common SSOW / MRD – Capability Assessments – Development Supplier Assessment Model (DSAM) & Leading Indicators Copyright © 2008 the Boeing Company. All rights reserved 9
Considerable Evidence Current Supplier Management Approach Needs Improvement • Cost of Non-Quality (Co. NQ) Related to Supplier Performance • Wide Variation in how Suppliers are Managed Within the Program and Shared IPT Structure • Insufficient Visibility into Critical Space Processes & Control • Performance Metrics Production Oriented Copyright © 2008 the Boeing Company. All rights reserved 10
Supplier Conferences Confirmed Need for Improved Management Approach § S&IS Supplier Conferences Identified Management of Suppliers as an Area of Opportunity to Improve Execution § Multiple Interfaces between Boeing and the Supplier § Timely and Complete Product Definition Missing § Conflicting Requirements and Priorities § Lessons Learned are Not Consistently Carried Forward from Program to Program § No central person with the RAA responsibility to focus and direct the effort required from ALL functions needed to fully manage a supplier Copyright © 2008 the Boeing Company. All rights reserved 11
Supplier Program Manager § Focused interface with the Supplier § Held accountable for execution (2 -way interaction: Boeing and Supplier) Supplier * * Systems, Sub-systems, Units Suppliers SPM RAA: • Responsible for Supplier execution and product integrity • Integrates and facilitates resolution of technical and business issues • Establishes and evaluates performance measures, metrics and leading indicators • Accountable for Supplier Improvement Plan and actions • Collaborates with Supplier to understand their capabilities related to program requirements & future growth Formalized Through Program/Team Execution Plans Copyright © 2008 the Boeing Company. All rights reserved 12
Supplier Program Manager Attributes for Success § IDS/S&IS experience has shown that successful SPM deployment depends upon: § Appropriate skills & experience level commensurate with the subcontract complexity § Technical, programmatic and business acumen § Balanced cross functional vs. singular subject matter concentration § Mentoring and training from functions § SPM and support team assigned with clearly defined RAAs § Must address interfacing organizations (Program IPT, Shared IPT, Supplier, and Supplier Management) § Documented and approved in Program Execution Plans, etc. § Consistent and disciplined implementation § Executive leadership endorsement Valued skill set and recognized career path Copyright © 2008 the Boeing Company. All rights reserved 13
Supplier Enterprise Review Board Cross-Functional Review of Critical S&IS Suppliers A. Review current contract area performance parameters A – Performance B. Identify areas of greatest need • § Problem statements C. Define improvement actions & determine best indicators to measure progress D. Document in Supplier Improvement Plan (SIP) A. Draw from “Best of Boeing” • • • B – Needs • • • C – Actions & Progress Indicators D - Improvement Standard Deck/specifics DSAM (2 -way) AS 9100 on-site reviews/audits Award Fee Process escapes/nonconformances Contract status/definitization/changes Capability assessments Major milestone readiness Change process cycle time MA Q / SQ Ops Eng SM Functional Tool Kit (Best of Boeing) Forum to Address Supplier Performance Issues Affecting Multiple Programs Copyright © 2008 the Boeing Company. All rights reserved 14
IDS Common Supplier Statement of Work § Purpose: § To Deploy Boeing Best Practices to Suppliers: § Finance - Earned Value Management § Mission Assurance § Program Management § Supplier Management § Systems Engineering § Drive common processes between Boeing and our suppliers § Provide for common templates and tools in the execution of program objectives § Align supplier execution strategy with program objectives Leveraging Proven Best Practices Copyright © 2008 the Boeing Company. All rights reserved 15
Capability Assessments Focus Areas During Review § General Factory Controls § Training programs and processes § Quality Controls and Quality Processes § Supplier Management/Control § Configuration/Change Management § Parts Materials and Processes (PMP) § Planning Processes § Assembly & Test Processes § Manufacturing Engineering § Supplier unique processes Category Section Lead Factory Controls Focus Gap Area Lead Assessme nt ESD Controls Lab Maintenance Equipment Controls (SPC) Calibration Controls & Delinquency Rates Equipment Qualification & Certification Process Focus Gap Section Shelf Life Material Controls Category Area Lead Assessme Lead Lab Environment Controls (Humidity/Temp) nt Tool Control & Certification Training Alarms (humidity, temp, dew point on ovens, chambers, freezers, Gn 2) Electronic Assembler Certifications Flight vs. Non Flight controls Test Technician Certifications Tooling/Tool Control Inspector Training Packaging & Handling General Electronic Assembler Training School Safe Move Process Estimated Years of Experience with space qualified hardware Command media - Training course code Documentation Culture/RAA (Quality focus, stove-piped thinking, attention to detail Chip Capacitor installation Training Quality Control & Quality Process Jumper Wire installation Training Inspection Check List Certifications recorded in centralized tracking system Audit of inspectors by QAE (Monthly) Certifications to space standard solder specifications (NASA & MIL-STD) Mfg Engineer/Process Engineer Estimated Years of Experience with space qualified hardware Work Instruction Culture/RAA (Quality focus, stove-piped thinking, attention to detail Escape Documentation Process MRB Planning Controls Photo Process Quality Metrics Planning Thoroughness CABs/RCCA Data Recording (temp. start/stop, torque values etc. ) Quality Data Systems REA Work Instruction Review & Signoff Move Safe Process Planner Certification Process Packaging & Handling Red Line Process Estimated Years of Experience with space qualified hardware Document Control (Storage & to Retrieval) Culture/RAA (Quality focus, stove-piped thinking, attention detail Drawing Clarity Configuration Management Planner Verification Engineering Change Release Process Packaging and Handling on drawings Estimated Years of Experience with space qualified hardware Culture/RAA (Quality focus, stove-piped thinking, attention to detail Ensures ability to execute to Boeing/Customer standards Copyright © 2008 the Boeing Company. All rights reserved 16
Development Supplier Assessment Model § Provides a Means for 2 -Way Assessment of Supplier and Boeing Performance on Development Programs § Five key areas: Technical, Quality, Management, Cost, Schedule § Used by Integrated Product Team, SPM & Supplier Mgmt. to Improve Boeing and Supplier’s Performance Copyright © 2008 the Boeing Company. All rights reserved 17
Summary § IDS SM Executing a Path Forward… Early Supplier Involvement Contracting and Risk Management Improve Supplier Performance § S&IS Focus on Key Initiatives Reflects Our Determination to Improve Management of Suppliers § Improving functional discipline and establishing accountability for improved supplier program performance - SPMs § Engaging both programs and functions in improvement activities SERB § Bringing Boeing Best Practices to S&IS Suppliers – MRD/SSOW § Earlier & Periodic Assessments of Supplier Capabilities – DSAM & Capability Assessments Supplier Management as a Strength Copyright © 2008 the Boeing Company. All rights reserved 18
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