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.

Delivery

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 priority.
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.

Another program 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.

Another arrangement 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

material problems. 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 operations.

To Be Continued

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