Supplier quality is
the most important aspect of our JIT Materials program and is based
on satisfying our customers' needs. We saw the quality of our
incoming material improve significantly when we reduced our supply
base simply because we kept only the best suppliers and no longer
did business with the companies which provided us with quality
problems. The supplier SPC training and implementation of these
concepts into supplier operations also helped improve supplier
quality as well. We continue to support and reinforce statistical
process control as part of the suppliers' operations.
One of the programs
utilized to enhance supplier quality is the early supplier
involvement in the design of new products. Purchasing engineers are
assigned to this task and act as catalysts between the suppliers and
the design engineers. The custom parts supplier is selected before
the design is complete and efforts are made to incorporate the
supplier's recommendations into the design so that the design
requirements are within the capabilities of the supplier's process.
This not only improves the manufacturability, and therefore the
quality of the part, but it also helps speed product to market.
Another facet of
the supplier quality effort is our Supplier-to-Stock (STS) program.
Based on a history of defect-free material, an evaluation of the
supplier's process and his quality system, parts are approved to
move directly to stock without going through the incoming inspection
operation. The program is part-number specific and has grown to the
point where more than 70% of the active part numbers purchased have
qualified for this program. The results of improved quality gained
from this program are readily measured since we track quality
problems that we encounter during our manufacturing operations and
find fewer problems with Supplier-to-Stock (STS) parts than with
parts which go through our incoming inspection function.
As part of any JIT
Materials effort, on-time delivery to the demand pull manufacturing
lines is critical. Once quality issues are under control, improving
the issue of on-time deliveries in the proper quantities becomes a
There are a number of programs utilized to implement just-in-time
deliveries and one of the most effective from a longer term
perspective is to permit suppliers to schedule their own deliveries
based on Coulter-supplied material requirements planning sheets.
This scheme provides the supplier with total visibility of our
requirements to better plan capacity needs. Additionally, the
supplier has more ownership in the delivery dates committed to since
the dates are planned by the supplier rather than imposed by
Coulter. An added bonus we discovered was the reduction of lead time
by suppliers who realized from their planning efforts that parts
take significantly less time to manufacture than the "official"
lead times they published to the business community in general.
utilized to improve delivery to the manufacturing lines is the
Supplier-to-Line effort. Once a part has been approved
supplier-to-stock (i.e., no inspection required), the logistics of
getting that part to the point of use as effectively as possible is
worked out with the supplier. Each part offers its own challenges as
to the best method of delivery to the point of use. About one third
of the parts used in manufacturing qualify for this program. The
logistics and packaging of the parts vary significantly. One of the
most successful schemes is to control the Supplier-to-Line (STL)
parts by having them delivered in kit form. The kit is assigned a
part number and may have as many as 130 different parts in the kit.
The planning of all parts in the kit is controlled by one part
number, and the packaging of the kit is such that it is easily
broken down into the components needed by each work station on the
demand pull line.
We utilize the "breadman"
concept to control lower value parts which are in the manufacturing
area as "floor stock." The parts involved must be qualified for the
STS program (i.e., no inspection needed) to be part of the breadman
program. The supplier's representative goes directly to the
manufacturing floor and fills bins with parts to predetermined
inventory levels. This is an extremely efficient method to handle
low value parts since there is no inspection, receiving, stocking
or picking by Coulter personnel and the billing is weekly rather
than with each shipment.
which has helped in the timely delivery of parts to the
manufacturing floor and increased our inventory turns as well is the
establishment of two in-plant stores at Coulter. Both carry
significant supplier inventories so that any material shortages
caused by any number of reasons can be quickly satisfied by these
on-site locations. This is a significant advantage to help satisfy
Obviously, the fact that the inventory is owned by the supplier
helps our inventory turns calculation. This really became a win/win
situation with the supplier since he was able to gain more business
because of his proximity and accessibility to manufacturing
To Be Continued
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Lean Manufacturing Articles and go to Series 01