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Supply Chain Process Capability & Product Realization Process Strategy Streams. IAQG General Assembly San Diego, April 7, 2006. Barbara O’Dell The Boeing Company IAQG Stream Leader Supply Chain Process Capability. Bernard Lauras Airbus European Sector leader Product Realisation Process.

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supply chain process capability product realization process strategy streams

Supply Chain Process Capability& Product Realization ProcessStrategy Streams

IAQG General Assembly

San Diego, April 7, 2006

Barbara O’Dell

The Boeing Company

IAQG Stream Leader

Supply Chain Process Capability

Bernard Lauras

Airbus

European Sector leader

Product Realisation Process

sub tier control as a source of risk to regulators and customers
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

Supplier doesn’t know how to control their (sub-tier) suppliers

Sub Tier system insufficient to detect & prevent non-conformance

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)

scmh provides a framework for organizing and integrating our work
SCMH provides a framework for organizing and integrating our work

Stand alone requirements

(9102, 9131, 9103, etc)

Supply

Chain

Mgmnt

Handbook

Industry best practices on how to meet requirements

Supplier Mgmnt Life Cycle

Pre Production

Validation

Ongoing

Approval

Change

Mgmnt

Supplier

Selection

No Change

From Montreal

9100

Requirements

slide4

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

scmh chapters have been renumbered and include product realization activities
SCMH chapters have been renumbered and include Product Realization Activities

6.0 Controlling

Non-Conf Product

7.0 Work Transfer

Management

9.0 On going Approval

And Maintenance

3.0 New Product

Introduction

4.0 Process

Control

2.0 Requirements

and Flowdown

1.0 Supplier Selection

& Capability Assessment

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

slide6

For every “chapter” in the Handbook

We’ll 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 toan industry standard document (910X standard). Maturity assessment may be developed here. Implementation Process should be defined here (pilot phase as required).

Phase3: 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.

supply chain process capability have been tasked chapters 1 and 2
Supply Chain Process Capability have been tasked Chapters 1 and 2

6.0 Controlling

Non-Conf Product

7.0 Work Transfer

Management

9.0 On going Approval

And Maintenance

10.0 Program

Management

3.0 New Product

Introduction

4.0 Process

Control

2.0 Requirements

and Flowdown

1.0 Supplier Selection

& Capability Assessment

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

chapter 1 s upplier selection and capability assessment
Chapter 1 - Supplier Selectionand Capability Assessment

& Maintenance

& Maintenance

Project Management

Project Management

product

product

Controlling Non-Conf

Controlling Non-Conf

Work Transfer Management

Work Transfer Management

On going Approval

On going Approval

and Acceptance

and Acceptance

Supply Chain Mgt and

Supply Chain Mgt and

Product Verification

Product Verification

Supplier Selection

Supplier Selection

Process Control

Process Control

Requirement & Flow down

Requirement & Flow down

New Product Introduction

New Product Introduction

& Capability assessment

& Capability assessment

Performance Measures

Performance Measures

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

O

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 /

New product introduction /LCM

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

Supplier Development

Supplier Development

Planned change management

Planned change management

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 and services

Post Delivery Support

Order Management (internal & external)

Order Management (internal & external)

Inventory planning & optimization

Inventory planning & optimization

Logistic Management

Logistic Management

Non Conformity Management

Non Conformity Management

slide9

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

1

1

2

2

3

3

4

4

Non Conformity

Non Conformity

Undefined

Undefined

Defined

Defined

Applied

Applied

Optimizing

Optimizing

Management

Management

No clear Accountability

No clear Accountability

Expert firefighters

Expert firefighters

Clear accountability

Clear accountability

Multifunctional team

Multifunctional team

People & Organization

People & Organization

No Problem solving

No Problem solving

Cross functions

Cross functions

Highly Skilled

Highly Skilled

skills

skills

Highly skilled

Highly skilled

Reactive needs

Reactive needs

Ad hoc firefighting

Ad hoc firefighting

Root cause process in

Root cause process in

Mature process for root

Mature process for root

Process

Process

actions

actions

place

place

cause & preventive

cause & preventive

Customer Stimulus

Customer Stimulus

actions

actions

Process playbooks

Process playbooks

Limited preventive actions

Limited preventive actions

Manual : Fax e

Manual : Fax e

-

-

mail

mail

Multiple Data base

Multiple Data base

Integrated database, clear

Integrateddatabase, clear

Internal & external

Internal & external

Tools & Data

Tools & Data

Expectation

Supplier

performance

workflows, internal

workflows, internal

collaboration.

collaboration.

Spreadsheet

Spreadsheet

collaboration

collaboration

Real time intelligent

Real time intelligent

workflows

workflows

No measurement of

No measurement of

Measuring performance

Measuring performance

Performance drives action

Performance drives action

3+ regular review of

3+ regular review of

Performance

Performance

Performance

Performance

plans

plans

metrics effectiveness

metrics effectiveness

Metrics

Metrics

slide10

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…

slide11

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
slide12

Brainstorm of Causes

Affinitize Causes

Supplier

Customer

C & S

Reqts Def

Contr. Rev

Change Mgt

Customer

C & S

Supplier

Chapter 2: Requirements & Flowdown

Suppliers Produce Non-conforming Product because they do not understand the requirements or do not receive the requirements. WHY?

slide13

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
chapter 2 requirements and flowdown
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
product realization activities have been tasked chapters 3 4 and 7
Product Realization Activities have been tasked Chapters 3, 4 and 7

6.0 Controlling

Non-Conf Product

7.0 Work Transfer

Management

9.0 On going Approval

And Maintenance

10.0 Program

Management

3.0 New Product

Introduction

4.0 Process

Control

2.0 Requirements

and Flowdown

1.0 Supplier Selection

& Capability Assessment

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

chapter 3 new product introduction
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
chapter 3 new product introduction18
Chapter 3 – New Product Introduction
  • Status:
    • Benchmarking performed:
      • Dell computers
      • Toyota USA
      • Knowles (Medical)
    • Lessons learned and brainstorming have produced Sub-chapters headings
chapter 3 new product introduction19
Chapter 3 – 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

3.0 New Product Introduction

chapter 3 new product introduction20
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
chapter 4 process control
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
chapter 4 process control22
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
chapter 4 process control 9103 deployment constraints
Chapter 4 - Process Control9103 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) => engagement within all levels and functions of the supply chain
chapter 4 process control further actions
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
chapter 4 process control interconnection between several topics
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

chapter 4 process control26
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

chapter 4 process control proposed short term action plan
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)
slide28

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
chapter 7 work transfer
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
chapter 7 work transfer30
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
supply chain management handbook next steps
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