You take action to improve the on-time delivery performance of your suppliers
 
Shortage of parts is the most common reason for failing to deliver to customer schedules. Ensuring everyone in the supply chain delivers good quality items, on time and in full are now prerequisites for successful manufacturing businesses. Good companies can release considerable cash by reducing inventories, but this is only possible when all suppliers reliably deliver on time.
Key Issues
·         It is advisable to hold senior level discussions with suppliers to find ways of removing constraints and working more closely, to exploit each others’ strengths
·         Production schedules allowing the purchase of materials and production plans stating current production levels must be agreed with and be achievable by your suppliers
·         Rules should be agreed with suppliers on the level of production schedule changes that can be accommodated within defined time limits
·         Suppliers should be given ready access to your latest schedule and product release information, using a secure intranet connection
·         Suppliers must be paid on time, in accordance with contractual terms and conditions
·         The information you make available to suppliers; bills of materials, product definitions, production quantities, delivery dates, quality checks etc. MUST be accurate
·         Senior managers must have visibility of suppliers’ delivery records and regard any shortages as a serious matter that could impact customers
·         Having got the basic system in place, you might consider:
o      Asking suppliers to deliver in smaller quantities, as needed by your production operations
o      Using Kanbans, whenever possible, for controlling the delivery of parts
o      Arranging to receive all items pre-inspected and quality assured
o      Adopting adherence to schedule as one of your key performance measures
o      Providing experienced people to train suppliers in relevant new techniques
o      Implementing quality audits on suppliers, verifying the process capability of equipment and measuring systems and undertaking risk assessments
o      Reviewing the possibility of using clean, bespoke, robust, returnable containers to protect parts from environmental and physical damage during transportation
o      If necessary, taking responsibility for scheduling your work at supplier’s sites and moving parts through the supply chain
Factors for Success      
Factors to  Avoid
1.     Sharing information with suppliers and keeping it current
2.     Acting responsibly if changing schedules; parts cannot be made without materials
3.     Setting priorities based on the impact any shortfalls will have on your customers
4.     Working in partnership with suppliers to help overcome their problems
5.     Undertaking risk assessments and having contingency plans to resolve problems
1.     Changing schedules at short notice
2.     Expecting computer systems to push items through the supply chain
3.     Dealing with too many suppliers
4.     Moving to different suppliers without considering the impact on deliveries
5.     Being unaware of the impact relatively small changes can have on suppliers
6.     Not paying suppliers on time
Who does this apply to?
Senior managers, supplies managers, factory schedulers responsible for output
Realisable Benefits
Parts available when needed to build products and deliver on time to customers

Guides:

Logistics co-ordinationLogistics co-ordination

Logistics co-ordination

Uninterrupted material flowUninterrupted material flow

Uninterrupted material flow

Responding to changes in volumes and product mixResponding to changes in volumes and product mix

Responding to changes in volumes and product mix

Make versus buyMake versus buy

Make versus buy

The supplier approval processThe supplier approval process

The supplier approval process

Monitoring supplier performanceMonitoring supplier performance

Monitoring supplier performance

Sharing information with suppliersSharing information with suppliers

Sharing information with suppliers

Managing inventory throughout the supply chainManaging inventory throughout the supply chain

Managing inventory throughout the supply chain

Improving the delivery performance of suppliersImproving the delivery performance of suppliers

Improving the delivery performance of suppliers

Material flow and the factoryMaterial flow and the factory

Material flow and the factory

Production scheduling processProduction scheduling process

Production scheduling process

Calculating production capacityCalculating production capacity

Calculating production capacity

Visual managementVisual management

Visual management

Health and safetyHealth and safety

Health and safety

HousekeepingHousekeeping

Housekeeping

WasteWaste

Waste

Ensuring equipment is availableEnsuring equipment is available

Ensuring equipment is available

ChangeoversChangeovers

Changeovers

BottlenecksBottlenecks

Bottlenecks

Consistent manufacturingConsistent manufacturing

Consistent manufacturing