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Lean Manufacturing Articles

STEP THREE-SUPPLIER CO-DESTINY

Step Three's objective is to establish a long-term relation­ship based on trust, cooperation, and teamwork with key suppliers. The statement referenced earlier from the au­tomotive supplier indicated it would not compromise its commitment to a co-destiny relationship with suppliers. "Long-term relationship between purchaser and supplier is necessary for best economy. How can a supplier be in­novative and develop economy in his production pro­cesses when he can only look forward to short-term business with a purchaser?"

One speaker manufacturer had 12 different suppliers worldwide for the same metal stamping. Their operations leader realized this was preventing the company from partnering with the suppliers on new product introduc­tions, and from gaining leverage on price or in meeting changes in demand driven by their customers. Their sourcing organization was given the charter to reduce the number of suppliers to a maximum of two. They pro­ceeded to conduct a survey of metal stamping suppliers worldwide to gain process knowledge, establish bench­mark processes, and compare component costs. The sourcing organization was able to reduce the number to three for all company sites. The selected suppliers are ex­pected to consistently achieve optimum performance in quality, price, new product and technology development, and delivery. In an environment of mutual benefit and support, targeted costs for new products are established with the supplier, and annual supplier improvement targets related to quality, price, product development, and delivery are agreed upon and tracked at least monthly. The selected suppliers must provide statistical evidence of quality control with each shipment. "We must take a clear stand that price of services has no meaning without adequate measure of quality."

To Be Continued

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

Lean Manufacturing Articles and click on Series 14


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