Supply Chain Process Capability & Product Realization Process Strategy Streams IAQG General Assembly San Diego, April 7, 2006 Barbara O’Dell The Boeing Company IAQG Stream Leader Supply Chain Process Capability Bernard Lauras Airbus European Sector leader Product Realisation Process Sub Tier Control as a Source of Risk To Regulators and Customers Poor Control of Sub Tiers is viewed as a Risk Methods used by Suppliers to Control Sub-Tiers are not well understood Reduced level of interaction with Sub Tiers compared to with suppliers (Lack of Visibility) Source of NonConforming Product Supplier doesn’t know how to control their (sub-tier) suppliers Few industry standards and Best Practices published on how to perform excellent supplier control . No common vocabulary or scoring Sub Tier system insufficient to detect & prevent nonconformance (Lack of Transparency) SCMH provides a framework for organizing and integrating our work Stand alone requirements (9102, 9131, 9103, etc) 9100 Requirements Supply Chain Mgmnt Handbook Industry best practices on how to meet requirements Supplier Mgmnt Life Cycle Supplier Selection Pre Production Validation Ongoing Approval Change Mgmnt Supply Chain Process Capability Name changed from Sub Tier Process Control Often, the value stream includes companies operating at many levels, and one standard should be consistently applied Ideal Stream Typical Stream OEM OEM First Tier First Tier OEM Sub Tier Sub Tier First Tier Sub Tier SCMH chapters have been renumbered and include Product Realization Activities 1.0 Supplier Selection & Capability Assessment 4.0 Process Control 7.0 Work Transfer Management 2.0 Requirements and Flowdown 5.0 Product Verification & Acceptance 8.0 Supply Chain Mgmnt and Performance Measures In work by Product Realization Stream In work by Supply Chain Process Capability Stream 3.0 New Product Introduction 6.0 Controlling Non-Conf Product 9.0 On going Approval And Maintenance 10.0 Program Management For every “chapter” in the Handbook We’ll follow this roadmap Phase 1: Collect aerospace and other industry best practices, standardize the knowledge & agree on core requirements Phase 2: Create best practice material first, then mature into a guideline or to an industry standard document (910X standard). Maturity assessment may be developed here. Implementation Process should be defined here (pilot phase as required). Phase 3: Standardized training provided by industry accepted trainers Phase 4: Implementation Process. Depending on guideline vs 910X decision, the document may be deployed company by company, or by standardized audit checklist, or by industry certification as part of the ICOP/9104 system. Implementation must include maturity assessment. Supply Chain Process Capability have been tasked Chapters 1 and 2 1.0 Supplier Selection & Capability Assessment 4.0 Process Control 7.0 Work Transfer Management 2.0 Requirements and Flowdown 5.0 Product Verification & Acceptance 8.0 Supply Chain Mgmnt and Performance Measures In work by Product Realization Stream In work by Supply Chain Process Capability Stream 3.0 New Product Introduction 6.0 Controlling Non-Conf Product 9.0 On going Approval And Maintenance 10.0 Program Management Sales Volume & Option Forecasting Project Management On going Approval & Maintenance Supply Chain Mgt and Performance Measures Work Transfer Management Controlling Non-Conf product Product Verification and Acceptance Process Control New Product Introduction Requirement & Flow down Supply Chain Processes IAQG SCMH Chapters Supplier Selection & Capability assessment Chapter 1 - Supplier Selection and Capability Assessment O Contract requirement flow down Manage the Supply Chain Planned change management Supplier Development Performance Monitoring and Decision support O New product introduction //LCM O SC design & major Components sourcing O O Suppliers sourcing selection & qualification O O O O O O Sales & Operation Planning O Master Scheduling & sequencing O Plant, material, skills & capacity planning & Scheduling Manufacturing O O O O O Post Delivery Post Delivery Support Support and services Order Management (internal & external) O O Inventory planning & optimization Logistic Management Non Conformity Management O O O O O O O Chapter 1 - Supplier Maturity Assessment per Supply Chain Process Four levels of maturity (Maturity model CMMI like) 1. Undefined : No Process, Method, Tools/ No Process, Method, Tools/ and Appropriate Behaviours • Processes 2. 3. Defined Applied • Tools & Data 4. Optimising: Implemented and optimised, continuous improvement Four domains assessed: • People & Organisation • Performances Metrics Non Conformity Management People & Organization Process 1 Undefined No clear Accountability 2 Defined Expert firefighters No Problem solving skills Reactive needs Customer Stimulus 3 Applied 4 Optimizing Clear accountability Multifunctional team Cross functions Highly Skilled Highly skilled Ad hoc firefighting actions Root cause process in place Process playbooks Mature process for root cause & preventive actions Limited preventive actions Tools & Data Manual : Fax e-mail Spreadsheet Expectation Supplier performance Performance Metrics Multiple Data base No measurement of Performance Measuring performance Integrated database, clear workflows, internal collaboration Internal & external collaboration. Performance drives action plans 3+ regular review of metrics effectiveness Real time intelligent workflows Chapter 1 - Decision making process New product Introduction Life Cycle Management 1 Undefined People & Organization Contract Requirement 1 Flow down Undefined Sales Volume & Option People & Organization 1 Forecasting Undefined 2 Defined 2 Defined 2 Defined 3 Applied 3 Applied 3 Applied 4 Optimizing Process People & Organization Process Supplier Assessment Results Tools & Data Process 4 Optimizing 4 Optimizing Standard Questionnaire and Assessment results independent from the size of company and product/project criticality… Tools & Data Performance Metrics Tools & Data Performance Metrics Performance Metrics Each Company to apply weighting to each process as appropriate to their Product, Customer, Risks, etc… Decision to select or not based on risk analysis like 9134 “Supply Chain Risk Management guideline” (Special action plan if not capable but need to select) Chapter 1 : Supplier Selection & Capability Assessment • Deliverables by Seville – Agree on the definition of the 15 Supply Chain Mgmnt processes – Agree on the maturity matrix concept and finalize its content – Conduct pilot assessments, using the maturity matrix and model, in all sectors – Finalise decision matrix and questionnaire • Actions to be completed later – Validate questionnaire and Maturity Model during on the pilot phase – Publish questionnaire and Maturity Model decision matrices – Issue training package – Identify Requirements,Guideline and Best Practices Chapter 2: Requirements & Flowdown Brainstorm of Causes Affinitize Causes Suppliers Produce Non-conforming Product because they do not understand the requirements or they do not receive the requirements. . . . . . . . . WHY? People do not have necessary training or knowledge to flow everything that is required Supplier submits errors in the drawing/specs, but we don't correct it promptly Special process houses don't have access to our specs! Except where they are also first tier suppliers, or where we have given them a KUTD distribution of hard copies. 9100 oversight by some CRBs is sometimes insufficient to detect the lack of compliance to Contract review and requirements flowdown sections of 9100 Does confidentiality agreements prevent the CRB from being able to do this well? Contract review process is not robust enough, not 2 way communication with customers that gets things really discussed and defined. We've trained them not to "bother us". Customer gives the wrong revision level of a drawing or spec to a supplier or doesn't ensure the supplier is aware of changes to drawings or specs Customers are not reviewing all the orders (especially on repeats) except where they have non-conformances Purchase Order review by the customer to ensure the correct notes are applied to the contract is not robust The inspection was done to the plan, not to the requirements! Non-conformance . drawing calls out a flag note for 1/2 " arrow, and planner made a plan for a smaller arrow. Hardware is produced and shipped before the PO (and all the requirements) are available in a complete documented project Verbal instructions which conflict with requirements are given to save time in our process. Problems with the KUTD system Process spec changes occur, but we don't get every supplier input and confirmation of their ability to meet the change People who own the task of PO requirement review, how do they know how to do it, how do they know if they have done, no feedback and what tools are they using to do it well? Complex and complicated specs that refer us to other specs and tables and graphs Most of these positions have high turnover and so planning is data entry, and/or so is contract review not really anything more than data entry. Mfg planning errors don't result in a plan that will meet requirements even when it is fully followed Process changes occur in the middle of the product realization process. How do we communicate this in real time through the whole value chain? What if the subsub-tier hardware has already been built? Only a problem if the spec change, inspected to current revision vs the revision under which it was purchased. All the necessary requirements aren't flowed. C&S 7.2.2 Suppliers accept work they cannot meet requirements 7.2.2 People who own the task of PO review, how do they know how to do it? Contract review process is not robust enough, not 2 way communication Do a better job of discussing requirements on some major projects Suppliers Produce Non-conforming Product because they do not understand the requirements or do not receive the requirements. WHY? Process spec changes without supplier input and confirmation of their ability to meet the change Ambiguous terms and acronyms, ….leads to assumptions Complex and complicated specs Customers are not reviewing all the orders (especially on repeats) People do not have the training or knowledge to flow all that is required 7.2.2 9100 oversight by some CRBs is sometimes insufficient to detect the lack of compliance 7.2.2 Supplier misunderstands requirements 7.2.2 Supplier agreed to meet requirements they couldn't meet 7.4.2a,e &f Access to specs by subtiers. . The first tier is responsible to identify and send the required data. 7.4.2a Specification Pull system is a problem .. suppliers overloaded We aren't connecting the quality customer with the quality supplier Suppliers don't want to question customers and risk losing the work. High turnover ... planning & contract review nothing more than data entry. 7.4.2j Sub tiers are getting the suppliers interpretation of what the customer's requirements are, not the accurate flowdown. Purchase Order review by the customer to ensure the correct notes are applied to the contract is not robust Poor communication with sub-tier suppliers ... not getting specs Requirements change, with no required a change incorporation request or date. Supplier wasn't even notified of the change. Sub tier certs aren't flowed to the ultimate customer. The inspection was done to the plan, not to the requirements and plan was wrong Problems with the KUTD system We aren't connecting the quality customer with the quality supplier and ops with ops, only the pa to pa. Suppliers are accepting work when they cannot meet requirements and we fail to detect this prior to contract award and production start…preproduction validation We have trained our suppliers to respond to schedule at the expense of quality and completeness. When we deliver our requirements late, it puts them in a crunch! When we are in a hurry, we tend to make more mistakes 2.0 Requirements and Flowdown Team Leader: Barb O’Dell Team Leader: Barb O’Dell Team Members: Gordon Rosner, Arne Logan, George Udris, Jarie Hermie, Wes Wilkey Team Leader: Gayle Roland Team Member: Jay Park, Michelle Pierce, Dave Trucksis Customer gives the wrong revision level of a drawing or spec to a supplier or doesn't ensure the supplier is aware of changes to drawings or specs Mfg planning errors don't result in a plan that will meet requirements even when it is fully followed Reqts Def 7.2.1 Requirements Definition Special process houses don't have access to our specs! Process spec changes without supplier input and confirmation of their ability to meet the change All the necessary requirements aren't flowed. Complex and complicated specs Ambiguous terms and acronyms, ….leads to assumptions Contr. Rev Change Mgt 7.2.2 Contract Review Customers are not reviewing all the orders (especially on repeats) People do not have the training or knowledge to flow all that is required Purchase Order review by the customer to ensure the correct notes are applied to the contract is not robust 7.4.2 Change Management Requirements change, with no required a change incorporation request or date. Supplier wasn't even notified of the change. Problems with the KUTD system Process changes occur in the middle of the product realization process. Supplier submits errors in the drawing/ specs, but we don't correct it promptly Customer gives the wrong revision level of a drawing or spec to a supplier or doesn't ensure the supplier is aware of changes to drawings or specs 7.2.2 Contract Review Contract review process is not robust enough, not 2 way communication Do a better job of discussing requirements on some major projects We aren't connecting the quality customer with the quality supplier 6.2.2 Resources Suppliers don't want to question customers and risk losing the work. 7.2.2 PO Review 7.2.2 People who own the task of PO review, how do they know how to do it? 7.2.2 Suppliers accept work they cannot meet requirements 7.2.2 9100 oversight by some CRBs is sometimes insufficient to detect the lack of compliance 7.2.2 Supplier misunderstands requirements 7.2.2 Supplier agreed to meet requirements they couldn't meet 7.4.2 Flow Down 7.4.2a,e &f Access to specs by subtiers. . The first tier is responsible to identify and send the required data. 7.4.2a Specification Pull system is a problem .. suppliers overloaded 7.4.2j Sub tiers are getting the suppliers interpretation of what the customer's requirements are, not the accurate flowdown. Poor communication with sub-tier suppliers ... not getting specs Supplier 2.3 How to manage revisions to requirements after initial contract/purchase order release Sub tiers get PO exceptions, and they will cert to that exception. That isn't caught by the ultimate customer. The cert explicitly states that they aren't meeting all requirements, but our system may routinely file them instead of validating them. Supplier submits errors in the drawing/ specs, but we don't correct it promptly Customer & Supplier 2.2 How to generate a shared understanding of the requirements Process changes occur in the middle of the product realization process. Customer 2.1 How to clearly identify and communicate requirements throughout the supply chain Team Leader: John Skokos Team Members: Dale Gordon Special process houses don't have access to our specs! Customer Access to specs by subtiers. . First tier can go to "pull", but subtiers cannot. (CITIS/BPN network) The first tier is responsible to identify and send the required data. What is our oversight of first tier suppliers and their ability to do this well? Supplier Customer Customer & Supplier Supplier agreed to meet requirements they couldn't meet or weren't positive they could meet Poor communication with suppliers around SPDM (drawing push system) and our oversight doesn't always detect that they haven't accessed the system regularly. Specification Pull system is a problem for suppliers to multiple customers, they feel overloaded with the challenge of checking for all the spec updates: Get over it, that's your job, and you get paid to do it. How do suppliers approve/reject the change. Supplier Supplier misunderstands the requirement: bad drawings, unclear drawings, old specs. Do new suppliers get all the info? What about from inside to the supply base? Supplier C & S Customer All the necessary requirements aren't flowed. Chapter 2.0 Requirements and Flowdown 2.0 Requirements and Flowdown 2.1 How to clearly identify and communicate requirements throughout the supply chain 2.2 How to generate a shared understanding of the requirements 2.3 How to manage revisions to requirements after initial contract/purchase order release Chapter 2 - Requirements and Flowdown • Deliverables by Seville: – Connect to others doing similar work (Missile Defense Agency, Space Quality Improvement Council) to see if we can combine efforts – Communicate our work to others (AIA, ASQ) – Collect best practices and white papers from aerospace and other industries • Actions to be completed later – Benchmark Medical Device Industry and SEA on Requirements & Flowdown – Publish guidelines/best practices by June 07 Product Realization Activities have been tasked Chapters 3, 4 and 7 1.0 Supplier Selection & Capability Assessment 4.0 Process Control 7.0 Work Transfer Management 2.0 Requirements and Flowdown 5.0 Product Verification & Acceptance 8.0 Supply Chain Mgmnt and Performance Measures In work by Product Realization Stream In work by Supply Chain Process Capability Stream 3.0 New Product Introduction 6.0 Controlling Non-Conf Product 9.0 On going Approval And Maintenance 10.0 Program Management Chapter 3 – New Product Introduction • Background: The Aerospace Industry developed a successful product introduction process based on a 20%-80% outsource ratio and the industry has migrated to a 80%-20% outsource ratio This change was gradual and a change in the product introduction process was not undertaken • Corrective Action proposed: Develop a product introduction process that accurately predicts supplier performance at production levels Chapter 3 – New Product Introduction • Status: – Benchmarking performed: • Dell computers • Toyota USA • Knowles (Medical) – Lessons learned and brainstorming have produced Sub-chapters headings Chapter 3 – New product introduction 3.0 New Product Introduction 3.1 Pre-production Process validation (product specific) 3.2 Review of Quality Planning including Key Characteristics 3.3 Product and Process Qualification 3.4 Pre-approval of test methods (where applicable) 3.5 FAI (9102) 3.6 Design Change Requirements 3.7 Product Maturity Assurance Chapter 3 - New product introduction • Deliverables by Seville: – Confirm sub-chapters headings, resolve overlaps with other chapters – Collect best practices from IAQG and other companies • Actions to be completed later – Publish guidelines/best practices by June 07 Chapter 4 - Process Control • 9103 (Variation Management of Key Characteristics) not sufficiently and adequately deployed Value not clearly identified or understood All functions to be involved, not only Quality Lack of buy-in Training required Need to explain how to apply 9103 based upon supplier & product complexity Lack of skills Chapter 4 - Process Control • Since Montreal, EAQG has worked on 9103 education package: • – Common part (key concepts with IAQG banner) for all companies using the training – Some area to be adapted by each company when training its staff or its suppliers (examples, tools, forms, etc…) – Education package content: Will focus on value of doing it and risks and/or costs of not doing it Should take difficulties of doing it into consideration Work is on going Chapter 4 - Process Control 9103 deployment Constraints Application of 9103 should be risk oriented (not used if no added value, should focus on the results, not on the tool or the process) More chance to succeed if convinced of business value than if strict mandate: Improve communication and learn more from supplier experience and constraints 3 ways of flowing 9103 down (deployment drivers) ? Mandated (high risk product and/or existing key characteristics) – –Guideline –Best practices sharing Mandate from customer At supplier own initiative or supplier development Need to create a global culture (prime, suppliers) rather than one way (mandate) => engagement within all levels and functions of the supply chain Chapter 4 - Process Control Further Actions • Measure the effectiveness of 9103 deployment and its benefits on the overall business • Build on lessons learned – – – See how to define key characteristics Introduce concept of FAI stage 1 (initial) and stage 2 (confirm capability at ramp up) Evaluate how to use 9103 results to optimize design for manufacturing Chapter 4 - Process Control Interconnection between several topics “Global Process Control” brainstorming : We can build from 9103 but shall not limit to it and shall not consider it as the only key factor of success Product performances (requirements) KC = key Characteristics New product introduction R = Results Industrial Capability Design for Manufacturing R R KC KC Design changes Variation Management of Key Characteristics (9103) R Product Maturity Work transfer KC Process changes Chapter 4 - Process Control 4.0 Process Control 4.1 Variation management of Key Characteristics (9103) 4.2 Root cause analysis and problem Solving 4.3 Process capability and control 4.4 Design for Manufacturing and Relation with Manufacturing Capability 4.5 Process Change Requirements 4.6 Industrial Capability and Capacity Assessment 4.7 First Article Inspection 4.8 Special Process Control Chapter 4 - Process Control Proposed Short Term Action plan • Deliverables by Seville: – Finalize 9103 education package – Be ready for deployment of the 9103 training • Actions to be completed later – Start to work on Root Cause Analysis and Problem solving – Evaluate the effectiveness of 9103 deployment – Reviewing opportunity for Process Control improvement based on feedback from deployment (industry expectations) – Build on 9103 (evolution of the standard or complementary standards or methodology) Chapter 7 – Work Transfer Supplier A Supplier B • Unsuccessful work transfer is a major problem for the industry and we feel it is one of our priorities • We have not standardised process to do it Chapter 7 – Work Transfer • Collected Industry Best Practices (Benchmarking) – Dell computers – Toyota USA – Knowles (Medical) • Standardize Knowledge and Lessons learned – Pre-transition Program Planning • Pre-production meeting(s) – upfront effort – – – – Multidiscipline Team (Agreement: quality, eng., purch.) Capture Hidden Factory – Last Article audit (product and process) Receiving Supplier Process Capability & Assessment Supplier Development – as required Chapter 7 – Work Transfer • Deliverables in Seville: – Confirm sub-chapters headings – Identify overlaps, existing/needed standards – Collect best practices from IAQG and other companies • Actions to be completed later – Develop a transition process from best practices, ensuring risks are identified and mitigated prior to the work transfer decision and launch – Publish guidelines/best practices by June 07 Supply Chain Management Handbook Next steps • Finalize Chapter Headings and Sub Chapter titles and content/objectives to eliminate overlaps, improve clarity and integration (June 06) • SAE has provided a “public web space” for our team to communicate with the general public on our progress. We will populate this web space in coordination with the IAQG communications team