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Just-In-Time Formula?
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Supplier Communications

Due to the high material cost content of the product we manufacture, a great deal of effort has gone into improving the performance of our suppliers and the relationship we have with them. To improve this relationship, we look for way s to better communicate with them and vice versa so we can better understand each other's needs and expectations.

Our communication efforts include providing suppliers with our MRP work sheets which they utilize to plan requirements for material they supply us. This provides the supplier with increased visibility relative to our busi­ness needs and allows the supplier to adjust their future capacity to accommodate these needs.

Our training program, which was previously mentioned, is another vehicle we utilize to communicate with our suppli­ers. In addition to transferring technical information concerning the subject matter; i.e., SPC, SMED, etc., we also have the opportunity to educate the suppliers regard­ing our business philosophy, expectations, needs, plans, etc. The courses we choose to offer are those which we believe will benefit ourselves as well as our suppliers, and so we guide this form of communication in the direction which is most advantageous to us.

We have formed teams with suppliers of custom parts (i.e., machining, sheet metal and plastics) to discuss ways to improve quality, delivery, clarity of prints, etc. relating to that particular commodity. The teams consist of at least one representative from each supplier in'that commodity base as well as various Coulter representatives. The topics involve problems common to the suppliers and the type of material they are producing. This forum has resulted in excellent dialogue and real improvements in quality and the business relationship in general.

On a regular basis, suppliers make technical presentations to our engineering personnel. This exchange forms another channel of communication with our suppliers. Subjects such as surface mount technology, precision sheet metal, injection molding, etc. are covered with our engineers during these presentations. The two-way communication which results has helped to provide technical information, but, more importantly, has cemented relationships be­tween our engineers and suppliers.

We have initiated a Supplier Advisory Council which consists of the top management of six significant suppliers, large and small businesses, representing various com­modities. The purpose of this council is to use the suppliers as a sounding board for new programs we plan to imple­ment and to provide feedback on those business practices we currently have in place. Due to the small number of participants, the dialogue is direct and very useful in gauging changes we need to consider in our programs which affect supplier relations. This forum is excellent to foster two-way communication which is candid and honest.

Partnership

The previously mentioned communication efforts are criti­cal to the partnership relationship we build with our suppliers. We have about 50 suppliers whom we consider partnership suppliers and another 40 suppliers whom we rank as key suppliers. Most of our training programs and communication efforts are directed to our partnership suppliers since the bulk of purchasing expenditures are placed with these suppliers.

The philosophy we utilize with our partnership suppliers is one of continuous improvement and providing resources to help them improve their performance. Annual goals involving quality, service and delivery are set for each commodity base. If a supplier has difficulty meeting these performance targets, we work with the supplier to imple­ment a corrective action plan. We find it is more economical to work with a supplier toward improvement than to cut business ties with them. Obviously after considerable effort if steady improvement is not discerned, other actions must be taken.

We work hard to direct additional business to our best performing partnership suppliers. This is their reward for their efforts in making our JIT Materials program a success. This strategy also helps us to keep our supplier base focused on as few suppliers as we can possibly have and still meet our goals.

Master Schedule

Another area which is important to our JIT Materials program is the master scheduling area. Due to its profound effect on the planning and manufacturing areas in general, it is critical that master planning be in synchronization with all these functions. The master schedule is con­structed such that the daily rates of our demand pull lines are fixed in the schedule for at least one month. This ensures that our MRP system will properly plan all our feeder line requirements as well as final assembly. Con­stant communication with our sales people as well as our manufacturing people ensures that we hold the daily rate steady as long as possible so that the rebalancing of our production lines is minimized.

The communications with all interested parties help to keep our finished goods inventory extremely low which is further helped by the flexibility and response of the manu­facturing organization. The challenge here is acquisition of the necessary parts and material since the demand pull lines typically can respond with the needed overtime.

Focused Factory

Within the last year, Coulter has revised its manufacturing organization to implement the focused factory concept. The buyer/planners were placed in the focused factories to better support the tactical material requirements of the production organizations. A core or central materials organization was kept in place to provide strategic direction such as supplier selection, supplier quality assurance, etc.

The intent here was to bring the supplier scheduling under the direct control of the manufacturing operations so that total accountability for the production of instruments is centered with one entity. This is another effort to make the materials organization effective in supporting the JIT manufacturing operation.

Conclusion

As you can see, there is no "one" magic formula for attaining a Just-In-Time Materials status in an organization. What the formula consists of is a series of interrelated programs implemented by good people who are well-trained and motivated. Some programs work better in some companies than they do in other companies, and the challenge is to find the "right" mix for your particular situation.

For balance of this article, click on the below link:

Lean Manufacturing Articles and go to Series 01


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