Exercise Quality Management

Transcription

1 Exercise Quality Management 10 Quality Management in Procurement Dipl.-Ing. Janko Kukolja Dipl.-Ing. Janko Kukolja Production Metrology & Quality Fraunhofer Institute for Production Technology IPT Steinbachstraße 17, D Aachen, Tel.: +49 (0) Fax: +49 (0) URL: Quality Management in Procurement E 10 page 0

2 Contents of the exercise 10 Quality management of procurement Goal of the exercise Supplier strategy Procurement goods- portfolio Procurement sources- portfolio Complete portfolio Evaluation portfolio of combined procurement Continuous Supplier assessment Procurement performance measurement Quality performance measurement Logistic performance measurement Supplier classification Page 1 Dipl.-Ing. Janko Kukolja Tel: janko.kukolja@ipt.fraunhofer.de Raum 126, Fraunhofer IPT Quality Management in Procurement E 10 page 1

3 Introduction Procurement strategy QMagreements Supplier assessment Supplier search Supplier selection Supplier contraction First sample order and inspection Pilot order and inspection Order of mass production Feedback of field data Page 2 Goal of this exercise Basically there is a task in procurement of quality management which is to minimize the external failure risk for the customer and respectively for the running production with the least efforts. This means on the one hand to integrate the suppliers in the development and production. On the other hand the suppliers have to be rated continuously in regard to their performance, so to enable the company to overview the suppliers abilities and quality. By practicing this, problems with the suppliers may be identified at an early stage. A further effect on basis of the evaluation is, the customer can select the qualified suppliers (the one with positive rating) out of his suppliers pool to replace the suppliers with problems. This exercise shall thus be initially presented, how to select the qualified suppliers systematically for needed parts. As second step is to implement and execute the continuous supplier assessment once a supplier starts with the delivery. Quality Management in Procurement E 10 page 2

4 Strategy selection Procurement goods-portfolio High Bottleneck goods Strategic goods Technical complexity Standard goods Leverage goods Low Volume of procurement High Page 3 Supplier strategy Procurement goods-portfolio The Company SpeedoCart manufactures and markets Go-Carts. Amongst others, the Go-Carts production requires springs and complex electronic controllers for the motor: Required springs: 20,000 pieces Price per piece: 0.65 Euro Required electronic controllers: 500 pieces Price per piece: Euro SpeedoCart has fixed the limits of 17,000 Euro between high and low volume to valuate the purchase volume. Task: Compile the informations from the procurement goods-portfolio and define the type of each individual goods. Quality Management in Procurement E 10 page 3

5 Strategy selection Procurement sources-portfolio High Bottleneck sources Strategic sources Supply risk Standard sources Leverage sources Low Influence on the supplier High Page 4 Procurement sources-portfolio Currently SpeedoCart procures from the following suppliers: Up to now springs are only bought from MacSpring. Since the supplier is producing in the USA, it arises a high supply risk due to the sea transportation. The turnover amounts to 250,000 Euro per year. The electronic controllers are presently only purchased from Schubert & Co. The supplier is about 50 km away from SpeedoCart and there is not any difficulty in delivery so far. The annual turnover amounts to 150,000 Euro in total. As long as the annual turnover from suppliers exceeds 20% and up, SpeedoCart evaluates his own influence on him as high. Task: Compile the information from the procurement sources-portfolio and define the type of each supplier. Check and evaluate the position of the suppliers in the total portfolio afterwards. Quality Management in Procurement E 10 page 4

6 Strategy selection Complete portfolio Strategic goods Leverage goods Bottleneckgoods Standard goods Standard sources Bottlenecksources Leverage sources Strategic sources Page 5 Complete portfolio The results of the complete portfolio run out of the procurement source- and procurement goods-portfolio together. It enables an estimation, whether a supplier takes up an adequate position in the protfolio or not. To minimize efforts, an efficient procurement garantee must be provided for the suppliers who deliver simple products. Important and complex goods however require a close cooperation with the suppliers. Quality Management in Procurement E 10 page 5

7 Strategy selection Combined procurement Procurement sources-portfolio High Bottleneck- sources Strategic sources Supply risk Standard sources Leverage sources Low Influence on the supplier High Page 6 Evaluation portfolio of combined procurement Both suppliers have advanced their product portfolio. Now MacSpring also produces electronic controllers, which are 5.00 Euro more expensive than those from Schubert & Co. Schubert & Co. has incorporated with a sub-supplier, by whom the company is able to offer springs at the price of 0.77 Euro per piece. In order to reduce the overall number of suppliers, SpeedoCart has to decide, which supplier it wants to concentrate on. Task: Check which supplier constellation is the most suitable one from the strategic point of view. Assumption: Turnover and amount of procured goods stay the same. Quality Management in Procurement E 10 page 6

8 Strategy selection Combined procurement Strategic goods Leverage goods Bottleneckgoods Standard goods Standard sources Bottlenecksources Leverage sources Strategic sources Page 7 Quality Management in Procurement E 10 page 7

9 Continuous supplier assessment Procurement 40 Quality 30 Logistics 20 Technology 5 Soft facts 5 Price 85 Quality performance 90 Logistics performance 80 Current technology position 30 Cooperation 60 Proportion in total index Initiative for cost reduction 15 QM system 10 Logistics system 20 Compliance with requirements RMA management Proportion in sub area index (here: technology) Page 8 Continuous supplier assessment SpeedoCart carries out a continuous supplier assessment. Thereby a supplier acquires a total index figuring from the sub areas (Procurement, quality, logistics, technology and soft facts). The sub areas are formed in turn by sub categories (for example logistics performance and logistics systems for the part logistics). The key data can vary depending on the company. The example of SpeedoCart showing in the picture shall be used for the classification of suppliers in the course of this exercise. Note: All values are figured in percentage. Quality Management in Procurement E 10 page 8

10 Continuous supplier assessment - Procurement Sub categories of procurement Price < 85% than target 100 Absolute percentage on the lowest level Part of the evaluation Procurement Price Initiative for cost reduction Part on the evaluation Price In comparison with target value In comparison with other suppliers Tendency Price 86 to 90% from target Price 91 to 95% from target Price 96 to 100 % from target > 5% cheaper than other suppliers +/- 5% of other suppliers > 5% higher than other suppliers 60 Page 9 Procurement performance measurement For the sub categories of procurement the value of the lowest level will be first determined (e.g. when the price is inbeween 91% and 95% from the target value, then the value of 90% will be determined for the category in comparison with target value ). This value with the proportion of the upper category will be then multiplied (example: 90% x 65% = 58.5%). This shall be hence practiced for all categories until it results finally in total. Quality Management in Procurement E 10 page 9

11 Continuous supplier assessment - Quality Sub categories of quality Quality performance 90 Recognized failures in assembly 80 Rating via picture 1 QM-system 10 Field failures of brought-in parts 20 Rating via picture 2 and 3 Page 10 Quality performance measurement The key data of the category quality can be calculated analogously to the other key data. By means of the graphs the degrees of performance can be determined at the lowest level. Quality Management in Procurement E 10 page 10

12 Continuous supplier assessment - Quality Picture 1: Recognized failures during assembly degree of performance [%] recognized failures during assembly ppm = parts per million [ppm] Page 11 Quality Management in Procurement E 10 page 11

13 Continuous supplier assessment - Quality Picture 2: Field failure evaluation of procured parts within the first year of utilization degree of performance [%] field failures ppm = parts per million [ppm] Page 12 Quality Management in Procurement E 10 page 12

14 Continuous supplier assessment - Quality Picture 3: Field failures of procured parts within the first year of utilization Schubert Müller GmbH G&P AG Qrtl. 2. Qrtl. 3. Qrtl. 4. Qrtl. Page 13 Quality Management in Procurement E 10 page 13

15 Continuous supplier assessment - Logistics Sub categories of logistics +/- 2 hours ahead /behind target > 6 hours ahead target 90 2 to 6 hours behind target 80 Logistics performance 80 Delivery reliabilty 95 6 to 12 hours behind target 60 Logistics systems 20 Information about transportation status 5 Forecast > 95% correct 100 Forecast 85 to 95% correct 90 Forecast < 85% correct 0 Page 14 Logistics performance measurement The key data of the category of logistics can be calculated analogously to the other key data. Quality Management in Procurement E 10 page 14

16 Continuous supplier assessment - Classification After the assessment of a supplier whose classification is effected according to the below schema Overall percentage 100% - 95% 95% - 85% 85% - 75% < 75% Accepted Classification of suppliers Preferred Accepted Restriced Desource Page 15 Supplier classification After the assessment of a supplier whose classification is effected according to the below schema. The supplier Schubert & Co. shall be now for the delivery of springs for the fourth quarter of the year. SpeedoCart provides following information: - The target price for the springs is at 0.83 Euro. Schubert & Co. offers them for 0.77 Euro. - The average price for springs at the market is 0.87 Euro. - The price tendency at Schubert & Co. is rated with 97%. - The initiative for cost reduction is rated with 98%. - In the fourth quarter 20,000 springs were delivered and assembled. - One defect spring was found during the assembly. - The information for the definition of the number of field failures is presented in picture 3. - The QM system at Schubert & Co. was 100% evaluated in the last audit. - The delivery time was exceeded for 1.5 hours on the average of 200 forecasts over the transport status were correct. - The logistic system was rated with 97%. - The indexes from the sub areas were already calculated: 99% for technology and 93% for soft facts. Quality Management in Procurement E 10 page 15