Supplier Relationship Management - CIPS and Events/Best in... · Supplier Relationship Management ....
Transcript of Supplier Relationship Management - CIPS and Events/Best in... · Supplier Relationship Management ....
Des Balmforth - Head of Procurement, Radar & Advanced Targeting Alex Cumming - Senior Category Buyer Amie Blinkhorn - Senior Subcontract Buyer
Supplier Relationship Management
2 © 2014 Selex ES Ltd – All rights reserved
Agenda
• About us
• The Case Study • The Laser • The Challenge • The Solution • The Benefits • Message from REO
• Supplier Relationship Management
• The Timeline
• The Application
• The Result
Market Leadership
Radar & Advanced Targeting
• No1 in Airborne Infra-Red Counter Measures
• No1 in Airborne Laser Designators
• No1 in Airborne Radar (outside of the US)
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The Case Study The Laser
• The Customer is major US government contractor
• Established relationship
• Performance and reliability vital
• Prototype
• Suppliers needed with high attention to quality
• Optical devices with demanding standards • Optical category team (IPT) with right
procurement skill set
• Production with steep production ramp rate
5 © 2014 Selex ES Ltd – All rights reserved
The Case Study The Challenge
• Design issues with the complex assembly
• REO not able to consistently meet the design standard • Incorrect optical assembly manufacture • Contamination • Not production ready
• Shortfall in delivery
• REO pacing supplier on program
• Relationships strained
• Perceptions diminished
• Something needed to change
• The President of REO provided an “open door”
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The Case Study The Solution
• Red Team established • Good and rigorous planning
• Assessment of the problem
• Audit • Stakeholder analysis • Cross function involvement
• Recommendations • Improve manufacturing documentation • Change behaviour • Assembly training • Failure Reporting, Analysis and Corrective Action
System (FRACAS) • Use of SC21
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The Case Study The Solution
• Implementation • Full backing from REO Management • Sub-contract manager seconded to REO • Support from other functions • 146 step Action Plan
• Supplier development • Process documentation • Systems improvement • Investment in capital equipment • Personnel changes
• Customer • Visited REO • Opportunities for improvement • Support in process documentation • Visit to production facility.
8 REO Proprietary Information
Process Control Improvement
Reduced variation of assembly from 100% parts not meeting spec to 100% parts meeting specification in less than 1 year
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The Case Study The Benefits
• 146 step Action Plan largely completed within six months • Substantial overhaul of REO’s business • Considerably reduced defect rate to less than 3% of its peak value • Overall concession rates dropped 85% • Price reduction on the complex assembly was 10% • Reduction in REO’s other products averaging 17% • The yields more consistent which allowed reliable shipment of parts
• Selex ES exceeded the challenging delivery target from the customer • Follow-on order from the customer worth $70 million • Whilst uncovering issues can be embarrassing and painful, with the right
attitude and the right relationship any problem can be overcome to ensure a positive outcome for all.
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• Integrated Product Teams give the supplier a seat at our table
• Regular Business Reviews and Scorecards underpin each relationship and provide a framework for conversations
• Encouraging Supplier investment to reduce cost and time to market
• Bringing supplier solutions into the team through Technology Sourcing
Supplier Relationship Management
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Changing skillset, mind-set and approach
From ‘transactional’ to ‘value add’ Transactional workload has been reduced
Wide use of framework agreements and
scheduling tools Focus on Agreements, Scorecards and value
relationships From ‘buyers’ to ‘business people’
Better understanding of business drivers
Speaking the business language
Facilitating solutions
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The strengths of our application
• Example from a real programme
• A step change in with a supplier can result in a business result
• Tangible results for the business
• Openness with the supplier
• Working from Supplier’s Supplier to Customers’ Customer
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• Huge boost to the confidence of the team and their belief in this change
• Procurement are now better able to influence at the top table
• Changed perceptions from the business
• Able to celebrate the strength of our supplier relationships
Why was winning the CIPS award important?