Hi friends

I just thought of putting this piece to the forum so that the discussion can be useful to many guys. The subject I selected is Supplier Development. Today, all the major auto OEMS have their own system of supplier selection, evaluation, performance monitoring and then the Corrective action loop. Supplier development is the last part of this cycle, wherein the gaps observed from each supplier are attacked and then the system is put in place towards continual improvement. Many SQEs in my past experience, would focus mainly on the system to be in place and they just do not bother to look at the bigger picture to help the supplier as well as the customer in reality.

In my view, the real supplier development need to be drawn by aligning the QMS to the business goals. This would help cascade down to the root and all the efforts spent at the root would aim for the top line aligned to the mission/vision statements.

I can put the following major activities towards real supplier development

1) Decide on the strategic goals (from mission statement, customer surveys and industry analysis) after study & identifying the gaps to the present performance. This would align the goals at the organisation level.

2) Identify targets clearly (SMART)

3) Then identify the processes which are key to achieve these goals (business as well as operation processes) and group the processes

4) Then identify measurable targets for each process

5) As a last step, focus the Kaizen teams' effort to improve the process performance

This way, all the kaizens in the organisation are aimed at the overall business results, customer expectations and benchmark with the industry leaders.

These steps if followed, the benefits can be seen to both supplier as well as the client orgnizations.

I welcome views from the forum with different approaches followed by different OEMs across different geographies.

Please let me know the approach is correct or any tailoring (improvement) is required. May be a few of the links or different concepts as an attachment would help me to fine tune my thinking. Is there any other structured methodology available readily..??

I welcome participation

Suresh

Good topic! I'll be interested in seeing the responses.

My first impression is the SQE has little personal or professional incentive to help improve any supplier for a couple of reasons:
generally, an SQE is tasked with short-term solutions whereas true supplier development is a long-term Change Management solution which often entails a major shift in the culture of the target organization
most OEMs are imbued with their own "throw away" philosophy which says "replace with new - don't bother to fix" which is equally applied to products and suppliers
supplier development is a two-way course - even top consultants recognize there are target clients with such internal dysfunction at the upper level of the organization that achieving anoptimum business and quality management system is not cost and time effective.The solutions you outline are pretty good, but I fear they are way beyond the scope of the pay grade of the average SQE - meaning the OEM would have to substantially revamp its SQE program, adding specialists who would move in once a "fixable" supplier is identified, which depends on someone making a strong business case (versus a philosophical one) to OEM top management that it is more profitable to go to that expense instead of replacing the supplier. Part of replacing the supplier has to be augmented with a much more aggressive "supplier approval" process to winnow out potentially dysfunctional suppliers. A major part of such a process would be deemphasis on initial gross price of goods and focused on "net cost of goods in place" [after deducting the soft costs of incoming inspection, returns, supplier development, SQE activity, defective goods slipping through the cracks and triggering expensive future recalls of products containing defective goods from that supplier, etc., etc.]

Bottom line:
I'm sorry to say supplier development/improvement may be a worthy goal, but more effort should be expended on creating and following criteria for selecting worthy suppliers, ensuring there is wide publicity about the criteria for would-be suppliers to "benchmark" their own operations BEFORE applying for selection as a supplier in that chain. For those who say there IS such a system, I respond the OEM's still buy on initial price, not overall quality.

Wes

Thanks a lot for your thoughts on the subject. Is there any other structured way to carryout real supplier development? Any other approaches which are proven in the past with suppliers..

I would like to see more debate on the topic from the forum..

Thanks once again

Suresh

The will and interest to develop suppliers are in ones heart or within an organizations culture and corporate strategy. I doubt one can do a good job if they are forced to carry it out by systems such as TS.

The Japanese did a good job over here and in Singapore beginning from the nineteen seventies. Good local subcontractors whom they believed they can work with were given technological support, training, market support (assured purchase of your products) and even financial support in the form of soft loans etc. Many of these companies are now listed in the local stock exchange but they still moved around (loyally) with these MNCs' wherever they moved to provide support. Classic example of a long term relationship.

It was and still is a good win/win strategy.

Another thread I would like to resurrect...
At our last ISO/TS audit we were given an OFI for 7.4.1.2 Identification of Supplier Development to TS. My question is what documentation would satisfy a CB that we have taken steps to develop our Key Suppliers with the goal of achieving TS certification, when we know they are not going to? They are ISO 9001 we monitor their PPM, OTD, and other factors monthly.
They receive a detailed Supplier Scorecard Monthly, and incoming inspection is based on their overall score for that month....
Supplier audits are one thing, but with our location it can be very expensive, especially in today's market.
Anyone else in this situation and if so how did you resolve this?
thanks;)