the czech supplier development programme quality assessment and development tools vladimír braun...
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The Czech Supplier Development Programme
Quality assessment and development tools
Vladimír [email protected]
8 June, 2004
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The assessment is an integral part of the supplier development programme
The assessment was corner stone of the initial phase of the supplier programme
Pre selection of suppliers
Initial Assessment
Self improvement
plans
Second Assessment
Selection for further assistance
To identify areas for
improvement
To select suppliers for
further assistance
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The assessment tool
Requirements to the assessment tool and the methodology
• Holistic view – all important aspects have to be assessed
• Identification of areas for improvement – as a basis for the self improvement plans
• Scoring system – for selection of suppliers for further assistance
• Based on renowned and trusted methodology
• Potential to be used as part of an internal business planning and continuous improvement
EFQM Excellence model, used as a FRAMEWORK
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European Foundation for Quality Management
Founded by 14 major European companies
BT plc KLM Royal Dutch Airlines
Robert Bosch GmbH Nestlé AG
Bull SA Philips Electronics NV
Ciba-Geigy AG Ing. C. Olivetti & C.S.p.A.
Dassault Aviation Renault
AB Electrolux Gebr. Sulzer AG
Fiat Auto Spa Volkswagen AG
As a reaction on movement in Japan and the United States
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European Foundation for Quality Management
1
6
Argentina: 1
South Africa 1
8
35
2415
1
1
2
1
7159
11
124
75
61439
66
4
9 8
2
7
4
15
4974
19
3
Around 700
members in 50
countries 2
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The EFQM Excellence model
Leadership
10%Policy & Strategy
8%
Processes
14%
People
9%
Partnerships & Resources
9%
People Results
9%
Society Results
6%
Customers Results
20%
Key perform
ance Results
15%
Learning and Improvement
ResultsEnablers
The EFQM Excellence Model is a registered trademark of EFQM.
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Applications of the model (assessment and self assessment)
Based on Facts
Based on Feelings
Low requirements High requirements on the process
Questionnaire
Matrix
Forms
Simulation of Award
Workshop
Source: EFQM.
These three options were
combined together
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Process of the first assessment
Process used for the first assessment (Business Review)
External assessment Self assessment
Discussion of resultsListing of Strengths and Areas for improvement
Selection of priorities according the company strategyAgreement of a basis for the action plan
Firs
t D
ayS
econ
d D
ay
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Specific tools used during the assessment
1. The Checklist (Questionnaire)
2. The Scoring Guide (Matrix)
3. The Self assessment workbook (Questionnaire)
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The Checklist
• Structured according the nine criteria of the EFQM Excellence model
• Questions were tailored to the sectors assessed
• Used by trained assessors
5. Processes 0 1 2 3 4
5.1. Production Control
5.1.1. Clear work instructions in place
5.1.2.Key processes are described and regularly revised
Imput from the Scoring quide
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The Scoring Guide (Matrix) - Example
5.1.1 Clear work instructions in place
0 = no instructions
1 = Sporadic instructions available
2 = Instructions issued and maintained for all products and production activities according to QM system
3 = 2 + employed visual aids and physical samples of good and bad products
4 = 3 + People actively involved in process of instructions correction, update and improvement
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The Scoring Guide (Matrix) - Example
5.2.8 Statistic Process Control (SPC) methods in use
0 = no evidence of statistic methods and skills
1 = some evidence statistics in place
2 = Statistical evaluation of production process is standard procedure; documented;
3 = 2 + management is fully aware and provides incentives for active use of SPC
4 = 3 + SPC in place used for actual process control
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The self assessment workbook
Inspired management of the company through the set of questions - example
The result was list of areas for improvement as seen by the management of the supplier
The self assessment served as an Ice breaker and involved management to the process of development.
5b_3 Is the new process introduction or process change managed and controlled? Are changes reported to all stakeholders and necessary training organised?
5c_1 Are new products and services designed and developed based on customer needs and expectations?
5d_1 Are products (services) delivered and serviced according to customer needs?
5e_1 Are customer relationships managed, monitored and evaluated in order to enhance them?
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The Workshop
Findings from the external assessment and the self assessment were discussed during the workshop the next day
External assessment Self assessment
Discussion of resultsListing of Strengths and Areas for improvement
Selection of priorities according the company strategyAgreement of a basis for the action plan
Firs
t D
ayS
econ
d D
ay
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Results of the first assessment
List of areas for improvement was agreed at the end of the assessment
Management selected 5 areas as a basis for the self improvement plans
Pre selection of suppliers
Initial Assessment
Self improvement
plans
Second Assessment
Selection for further assistance
List of areas for improvement
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The Second assessment
Purpose of the second assessment – to provide data for selection of the suppliers for further assistance
The selection criteria
• Overall level of the company – measured by results of the questionnaire, based on findings from the fist and the second assessment
• Ability to improve – measured by ability to complete the agreed self improvement plan
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Scoring for “Overall level” was based on weights of the criteria from the EFQM excellence model
Theoretical maximum of 1000 points is assigned to each criterion through its weight
Learning and Improvement
Leadership
10%Policy & Strategy
8%
Processes
14%
People
9%
Partnerships & Resources
9%
People Results
9%
Society Results
6%
Customers Results
20%
Key perform
ance Results
ResultsEnablers
15%
The EFQM Excellence Model is a registered trademark of EFQM.
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The results allow to sort and select the suppliers
The Final score, which the suppliers received from the assessment
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
100
200
300
400
500
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Results per criterion
The suppliers did not measure customers’ and peoples’ perception and they also struggled with business planning.
0%
10%
20%
30%
40%
50%Le
ader
ship
Pol
icy
&S
trat
egy
Peo
ple
Par
tner
ship
& R
esou
rces
Ppr
oces
ses
Cus
tom
ers
Res
ults
Peo
ple
Res
ults
Soc
iety
Res
ults
Key
Res
ults
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Strengths of the suppliers
Most of the best scores were achieved in the criterion “Processes” where some of the companies have been already certified according to the latest quality standards.
Particular the most developed areas were• Quality system certification• Quality system maintenance• Lot traceability• New product introduction procedure• Assessment and evaluation of suppliers
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Areas for improvement per Criterion
Leadership
The vision development and communication is usually a problem for all leaders in Small and Medium Enterprises. They do not understand why they should formulate it and share it with their people. It would probably be one of partial barriers stopping them progressing with real continuous improvement because the company staff are not involved and they do not see the overall direction behind day-to-day operations.
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Areas for improvement per Criterion
Policy & Strategy
Clear and structured business planning seems to be an exclusive skill of only the most advanced companies.
Generally, SMEs are not practicing any strategic planning exercises that could provide them with a deeper understanding of their further development priorities. Even those who presented well-shaped business plans were not fully aware of the main benefits and the sense of the business planning process for the management.
As a logical consequence of this weakness many companies are not sufficiently skilled to set a proper balanced set of performance metrics. They also have no experience with linking strategic and operational metrics and targets.
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Areas for improvement per Criterion
People
The deficiency in strategic planning is also projected into long-term planning of human resources with respect to the strategic development of their knowledge.
Many companies are focusing only on the operational issues in this area. It causes a gap between their long-term ambitions in high value-added sectors.
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Areas for improvement per Criterion
Partnership & Resources
The general weakness of all SMEs, including those on the top of the scoring list, is cash-flow management. SMEs often do not understand the need for modelling and planning long-term cash flow. Consequently they could be at serious risk in the case of successfully gained larger contracts from MNCs. Another option emerging from this weakness is inefficient cash-management and low effectiveness of the company capital.
Long term capacity planning is an analogy to the cash flow modelling issue and strategic HR planning. A number of companies are not able to measure their current capacity utilisation and elaborate any qualified estimates for the future.
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Areas for improvement per Criterion
Processes
Productivity closely bound to lead-time measurement and reduction together with work in progress optimisation and reduction. Many companies have a lack of information about lead-time and about their production progress.
Lack of capacity planning is reflected also in low focus on capacity utilisation including focus on tools and techniques like set up time reduction. This tool is not applicable elsewhere, but for instance for plastic injection moulding sector it is vital for future competitiveness.
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Areas for improvement per Criterion
Results
The areas that scored “0” for more than 50% of companies are falling into “Results”, especially in the criteria of “Customers Results”, “People Results” and “Key Performance Results”.
This reflects the lack of working sensibly with the results of the data. Many companies do not observe their trends. They also do not perform benchmarking. In addition to this they do not link corrective activities with under achievement of targets that are usually not well defined.
Consequently the continuous improvement process and the PDCA (plan-do-check-act) circle are hardly observable as a standard practice at SMEs.
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Some specific areas with the lowest score in each criterion from Enablers
Leadership• Leaders develop and communicate the vision, misson and
values (Average = 39%)
Policy&Strategy• Strategic targets cascaded down to lower levels (27%)
People• People are involved and participating on management and
continuous improvement (Average = 37%)• Planning of human resources (Average 39%)
Partnership&Resources• Cash flow management, planning and projection (35%)
Processes• Set up time reduction (where applicable) (28%)• Lead time reduction, WIP monitoring and reduction (29%)• Visual communication of results in use (35%)
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Some of the areas with the lowest score were among those with the highest improvement.
Leaders develop and communicate vision and mission
Number of companies at satisfactory level (2 and above) increased for 8 as a result of the self improvement plans
1.4. Leaders develop and communicate the mission, vision and values
3
26
11
301
20 19
30
05
1015202530
0 1 2 3 4
Degree of evaluation
No
. of
Su
pp
liers
Business review 1 Business review 2
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Some of the areas with the lowest score were among those with the highest improvement.
Set up time reduction
Number of companies at satisfactory level (2 and above) increased for 4 as a result of the self improvement plans
5.5.4. Setup time reduction
9
17
2 20
7
14
6
20
0
5
10
15
20
0 1 2 3 4
Degree of evaluation
No
. o
f S
up
pli
ers
Business review 1 Business review 2
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Some of the areas with the lowest score were among those with the highest improvement.
Visual communication of results in use
Number of companies at satisfactory level (2 and above) increased for 10 as a result of the self improvement plans
5.1.9. Visual communication of results in use
1714
10
20
129
20
20
0
5
10
15
20
25
0 1 2 3 4
Degree of evaluation
No
. o
f S
up
pli
ers
Business review 1 Business review 2
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Summary – Key themes of the assessment
• The tool based on renowned method
• The content and the application should be tailored according the sector and local situation (It is beneficial to involve customers, Multinational companies, in definition of requirements)
• Management of the suppliers should be involved in the process of definition and selection of the areas for improvement.
• Identified areas for improvement need to be converted to the development plans.
Thank You for your attention
Vladimir Braun