What happened to the 100% on-time delivery requirement?

[Karen R]

We're in the process of instituting a major upgrade of our purchasing software, and the team developing the purchase order module has asked me about the requirement for on-time delivery (hard to believe, I know!).

Under QS, we addressed the requirement for 100% on-time delivery performance from our subcontractors by creating a blanket statement that printed on every PO - "XXX Company requires 100% on-time delivery on all items. Of course that was overkill, but it wasn't a problem at our facility because of the way we ordered and received, pretty much everything was on time.

Now corporate is thinking they need to apply this statement to all POs issued by the company for everything - a hard coded field that can't be changed. In looking at the TS standard tho, there is no longer that 100% requirement and I don't think we want to paint ourselves into the corner with the potential of having to explain what we do when office supplies are late.

Understanding that we need a process to track performance of vendors who meet the definition of supplier (formerly subcontractor) and address anything we have defined as being a concern... is the statement on the PO necessary? What is Purchasing's responsibility?

 

[AllanJ]

I don't think we want to paint ourselves into the corner with the potential of having to explain what we do when office supplies are late.

Understanding that we need a process to track performance of vendors who meet the definition of supplier (formerly subcontractor) and address anything we have defined as being a concern... is the statement on the PO necessary? What is Purchasing's responsibility?

You are, of course, right not to get into a corner on this.

It would seem more sensible for your prime concern to be for those items which are incorporated into the deliverable product furnished for the customer. This would also include consumables required for essential processes e.g. starters, enzymes, catalysts for chemical/ food processes, weld rods. But, I would exclude bulk supplies such as fasteners, screws, labels as they can always be repurchased using economic order quantity principles.

Items that may involve considerable expense and inventory costs should also be a prime concern for on-time delivery as should those requiring considerable storage space and associated costs (e.g. controlled temperatures/ environments.) Perishables, such as fruit and similar foodstuffs are obvious targets for on-time delivery.

Hope this helps

 

[Karen R]

Thanks. I'm not sure from my conversations yesterday whether the text can be coded to specific products. We can manually add per PO, but that's not a system fix, so I don't trust that.

Did we ever believe that such blanket statements on POs were actually doing anything for us? I'm really doubting there's any value in the statement whatsoever.

 

[Howard Atkins]

I agree that these blanket statements are :ca:

Ask the purchasing people if they have different series of orders. Some systems have different types of orders with different texts which can then be allocated to specific parts.

Another way is if you have supplier guidelines put it in there and the acceptance of these means you don't need to write it each time.

Allan,
Such products

Perishables, such as fruit and similar foodstuffs are obvious targets for on-time delivery

in my opinion the more important aspect is the sell by date,

This is in fact a serious issue that you don't receive pastes, adhesives ete that you have to throw away after 2 months because they arrived to near their expiry date.

 

[Rob Nix]

Good points all. We have a "hard coded" statement in our "terms and conditions" at the end of the PO that states "we expect 100% on time deliveries from our suppliers". The old QS-9000 requirement that we REQUIRE 100% on time delivery - when everyone knows that is NEVER fully achievable - is a bit of nonsense. We got past the audit by that little bit of wordsmithing.

IMO, though, adding any "statement" like that is simply redundant, since the PO already has a due date, and any dummy knows we're not just kidding about the date. It's not like your saying, "the due date is June 10, but if it arrives July 2nd, that's OK".

 

[Karen R]

Excellent point, Rob, and my thougths exactly - isn't that what the due date meant to begin with? I like the "expect" - much better than require.

... Anyone have any examples of how they're applying this element successfully (a.k.a. value-added?)

 

[AllanJ]

Allan,
Such products
in my opinion the more important aspect is the sell by date,

This is in fact a serious issue that you don't receive pastes, adhesives ete that you have to throw away after 2 months because they arrived to near their expiry date.

Yes, Howard, you are right if one is not further processing such stuff. I am not sure what our original poster's business is. If, though, she works for, say, Heinz or Sara Lee, processing food for the reatil market, the "use by" is more valid than the "sell by". Either way, we seem to agree don't let the stuff perish for sake of late delivery, especially if you have bought foodstuffs "from the farm" f.o.b. the farmyard gate.

 

[vanputten]

I beleive that any statement of "on time" is meaningless without a defintion of "on time." Is one year early or one year late "on time?" 3 days early and 1 day late? What is the formula? Once we put a numerical target on one process, those that run the process wil do what they can to meet the numerical target. This can lead to sub-optimation of a process. Since the system is made up of inter-realted processes, making one process excellent may not do the system any good. You have sub-optimized. Be careful with numerical targes as they can hurt the system. Employees may drive to their own numerical target at the expense of another process or department.

"On Time" deleivery is a classic problem especially when it is not defined. This is one reason I beleive it was dropped from TS 16949. It really is not meaningful since we can define "on time" in many, many ways. Work on this issue first before even considering whether some text on a PO is useful.

Regards, Dirk

 

[nutzz]

New to the site...Can't believe the wealth of information I have stumbled on. The Cove is definitely a jewel! But I digress, as a supplier to the big three we have to use their definition of "on time":
" 4.30 Scheduling subcontractors (ISO/TS 16949:2002 cl. 7.4.3.2)
In support of Ford's expectation of 100% on-time delivery, the organization shall also
require 100% on-time delivery from subcontractors.
In-house premium freight expenses related to subcontractor late deliveries should be
monitored and shall be minimized." So depending on the product manufactured and for whom it is manufactured, they may also have a definition for "on time".

 

[Howard Atkins]

Welcome to the cove and please continue in the way you have started!

New to the site...Can't believe the wealth of information I have stumbled on. The Cove is definitely a jewel! But I digress, as a supplier to the big three we have to use their definition of "on time":
" 4.30 Scheduling subcontractors (ISO/TS 16949:2002 cl. 7.4.3.2)
In support of Ford's expectation of 100% on-time delivery, the organization shall also
require 100% on-time delivery from subcontractors.
In-house premium freight expenses related to subcontractor late deliveries should be
monitored and shall be minimized." So depending on the product manufactured and for whom it is manufactured, they may also have a definition for "on time".

I think that this in fact is what we agree on:
"shall also require 100% on-time delivery from subcontractors."

We all require this, we all require a fortune but we don't get it.
This reminds me of a discussion with a customer that wanted me to sign an agreement on 0 PPM, when I hesitated he said this is the target
Every one can agree to the target.

Where is the get in any of these statements