how to establish an effective program · asq –cqa, cqe [email protected]. title: supplier...
TRANSCRIPT
SUPPLIER
CERTIFICATION
How to
Establish an
Effective Program
Ernesto J. Díaz - RiveraAugust 18, 2011
Four Points Sheraton & Casino, Caguas PR
AGENDA
Learning Objectives
Introduction
Regulatory Requirements
Supplier Certification Program Goals
Steps to succeed
Planning Phase
Initiation Phase
Execution Phase
Maintenance Phase
Program Benefits
Things to Avoid 2
LEARNING OBJECTIVES
Provide an introduction to most important
aspects of modern Supplier Certification
Program
Review key concepts for establish and
maintain a Supplier Certification Program
How win-win strategies can simultaneously
improve service and reduce costs
3
INTRODUCTION
What is a Supplier
Certification Program? Client – Supplier relationship where
cost, quality and delivery agreements
are encouraged to promote both parties
improvements
4
INTRODUCTION
What is a Supplier
Certification Program? Team effort (Client – Supplier) to
reduce the final product cost
Partners pursuing win – win situation
5
INTRODUCTION
Why a Supplier Certification
Program? Elimination of waste (Lean Manufacturing)
Reduce the JIC inventory (Just-in-Case)
Obtain product in the correct time frame
Obtain product in good conditions
Avoid extreme price fluctuations
6
INTRODUCTION
Why a Supplier Certification
Program? Minimum incoming inspections
Reduced inventory space
Eliminate premature payments because you
depends on supplier deliveries
Decrease internal and external cost because of
consistent quality
7
INTRODUCTION
The certification program requires a
significant amount of hard work to
qualify the suppliers, and strong
follow up to keep the program
pointed in the right direction
8
INTRODUCTION
How many certified supplier my
company needs?
9
INTRODUCTION
Definitions
Approved Supplier:
Supplier who has met minimum
qualification criteria and has been
approved to supply a required item
10
INTRODUCTION
Definitions
Preferred Supplier:
Approved supplier who is actively
participating in the certification
process.
Typically his quality history is
excellent
11
INTRODUCTION
Definitions
Certified Supplier:
“One who, after extensive investigation, is
found to supply material of such quality
that is not necessary to perform routine
testing on each lot received”. Pharmaceutical
Manufacturers Association
12
AGENDA
Learning Objectives
Introduction
Regulatory Requirements Supplier Certification Program Goals
Steps to succeed
Planning Phase
Initiation Phase
Execution Phase
Maintenance Phase
Program Benefits
Things to Avoid13
REGULATORY REQUIREMENTS
21 CFR 820 & 211
820.50 Purchasing controls
211.84 Testing and approval or rejection
of components, drug product
containers, and closures
14
AGENDA
Learning Objectives
Introduction
Regulatory Requirements
Supplier Certification Program Goals
Steps to succeed
Planning Phase
Initiation Phase
Execution Phase
Maintenance Phase
Program Benefits
Things to Avoid15
SUPPLIER CERTIFICATION
PROGRAM GOALS
16
Create a new culture management philosophy
Obtain product in the correct time frame
Obtain product in good conditions
Avoid extreme price fluctuations
PLANNING PHASE
ROADBLOCKS
Create an Appraisal Team
Collect Data from existing approved suppliers
Create a performance measurement system
Evaluate each supplier against the measurement
system
Perform a deep audit to the supplier quality
systems
Add new suppliers as needed
17
PLANNING PHASE
WHO WILL BE INVOLVED?
18
Purchasing
Planning & Scheduling(Logistics)
Design & Development Engineers
Production
Quality
PLANNING PHASE
PLANNING AND SOURCING
Create a Supplier Performance Ranking (SCOR)
19
Performance
Metric
Complexity
Measures
Configuration
Measures
Practice
Measures
Plan •Planning Costs
•Financing Cost
•Inventory days of
supply
•% order changes
•Production volumes
•Inventory cost
•Product volume by
channel
•# of supply chain
locations
•Planning cycle time
•Forecast accuracy
•Obsolete inventory
on hand
Source •Material
acquisition cost
•Source cycle time
•# of suppliers
•% of purchasing
spending by distance
•% of purchasing
spending by distance
•Supplier delivery
performance
•Payment period
Make •# of defects /
complaints
•Product quality
•# of SKU’s
•Upside production
flexibility
•Manufacturing
process steps
•Capacity Utilization
•Value add %
•Build to order %
•Build to stock %
•# of mfg. order
changes due to
internal issues
Delivery •Fill rates
•Line return rate
# of orders by
channel
% of line items
returned
•Delivery locations •% invoices
containing billing
errors
•Order entry
methods
SCOR = The Supply Chain Operations Reference
PLANNING PHASE
PLANNING AND SOURCING
20
Criteria to classify your suppliers
Quality
Delivery
Technical Support
Management Attitude
Cost
PLANNING PHASE
PLANNING AND SOURCING
Quality
Level of conformance to
standards
Measure your suppliers
consistently and report regularly
in a data based manner
21
PLANNING PHASE
PLANNING AND SOURCING
22
Delivery
Measure on time delivery
Minimized stocks (Lean
manufacturing)
Just-in-Time
Ship to use program
PLANNING PHASE
PLANNING AND SOURCING
23
Technical Support
Client - Supplier engineering
talent
Detect gaps in process
Help to improve process
PLANNING PHASE
PLANNING AND SOURCING
Management Attitude
Responsiveness
Interest demonstrated in your
end product
Ongoing communications
Demonstration of partnership
relationship24
25
Cost
Handling
Service
Inspection
Lost production time because
of rejects
PLANNING PHASE
PLANNING AND SOURCING
INITIATION PHASE
Criteria to start a supplier in the
Certification Program
Virtually no nonproduct–related
rejections for a significant time
period
No product related rejections for a
time period
No production-related negative
incidents for a stated time
period26
INITIATION PHASE
27
Criteria to start a supplier in the
Certification Program
Successfully passed a recent on-site
quality systems evaluation
Having a totally agreed on product
specification
Having a fully documented
process and quality systems
EXECUTION PHASE
28
System Administration
Create detailed procedures
Basic responsibilities
Purchasing – initial contact and
arrangements for future visits
R&D – review of basic specifications and
verify tolerance spreads
QA – accumulates historical data and
performance indices, and performs the
necessary evaluations.
EXECUTION PHASE
System Administration
Notify the management about the status of each vendor for each material or piece part
Its important that this system be accurate and responsive
Constant customer – supplier communication
An uninspected bad lot material in your approved stock is a time bomb 29
EXECUTION PHASE
30
System Administration
Reward the sources that are
certified
Recognition is great for motivation
EXECUTION PHASE
Quality Agreements It becomes imperative to develop an
agreement as to the ongoing methods of
control of the variable factors of the production
process involved
The greatest benefit is that an agreement
around quality gives the supplier clarity in
what is expected of him in this relationship
and gives the client clarity in what can be
expected from the supplier as to the levels of
quality being shipped31
EXECUTION PHASE
32
Quality Agreements Provides for formalizing the communication
protocol between client and supplier
Build a partnership
around quality will enable
both companies to become
more competitive through
elimination of redundant
inspections and over
checks
MAINTENANCE PHASE
33
Problem Solving Who is responsible of resolve an
unexpected problem?
First steps of the customer:
Increase the number of inspections
Send an auditor to supplier facilities
Perform more tests
Fill out a complaint report to supplier
MAINTENANCE PHASE
34
Client Supplier
Purchasing Sales
Engineering (R&D) Engineering
Quality Quality
Manufacturing Line Manager
Problem Solving
Second Step:
Client – Supplier Cross Functional
Team
MAINTENANCE PHASE
Post-certification Activities
Five areas to follow up
Continuing evaluation of the equipment
involved in the process is necessary
Process set up criteria
Adequate statistical process control methods
Self-audits by the supplier quality unit
Client must teach the supplier on what he
considers critical, important, and trivial
35
MAINTENANCE PHASE
36
Decertification and Recovery
Is the first lot rejected since they been
certified
What you do?
From here on, everything depends on
the severity of the problem
AGENDA
Learning Objectives
Introduction
Regulatory Requirements
Supplier Certification Program Goals
Steps to succeed
Planning Phase
Initiation Phase
Execution Phase
Maintenance Phase
Program Benefits Things to Avoid
37
PROGRAM BENEFITS
• Elimination of waste (Lean
Manufacturing)
• Reduce the JIC inventory (Just-in-
Case)
Obtain product in the correct time
frame
Obtain product in good conditions
Avoid extreme price fluctuations
38
PROGRAM BENEFITS
Minimum incoming inspections
Reduced inventory space
Eliminate premature payments because
you depends on supplier deliveries
Decrease internal and external cost
because of consistent quality39
THINGS TO AVOID
40
Select a supplier simply on the basis of
volume or cost
Different ambitions and goals between
appraisal group and management group
Lack of commitment from management
group
REFERENCES
R.A. Mass, J.O. Brown, J.L. Bossert. Supplier
Certification: a continuous improvement
strategy.
J.L. Bossert. The Supplier Management
Handbook, sixth edition.
D. Blanchard. Supply Chain Management: Best
Practices.
M. Hugos. Essentials of Suppliy Chain
Management. 41