OE21 Guideline: 6.1c 

Supplier and Supply-Network Management

Strategic Objective:

Manage suppliers and supply chain results to maximize value to customers

Strategic Objective:

Select and optimize key suppliers and supply chain to meet requirements

Quality Objective:

Responsibility:

Lead: Operations Focus Team (OFT)  Support: Other focus teams

Strategic Objective:

Approved by: (Name) Chair, Leadership Focus Team (LFT)

Approved: MM-DDD-YY

VALUE ADDED

 

  1. Selects the best key suppliers and supply chains 

  2. Allocates or awards purchase orders/contracts to key suppliers

  3. Measures and manages performance of key suppliers and supply chains

  4. Implements improvement plans for key suppliers and supply chains

 

POLICY          6.0 COMMENTARY

The organization has adopted the Baldrige Framework Item 6.1c Supplier and Supply Network Management, and 7.1c Supply-Network Results as the internal policy, including the following sub-items:

 

6.1c Supply-Chain Management - The organization manages its suppliers and supply chain, including: 

 

  • Selecting qualified suppliers to meet operation needs, enhance performance and ensure customer satisfaction;

  • Measuring and evaluation of suppliers performance;

  • Providing feedback to suppliers to help them improve; and

  • Dealing with poorly performing suppliers

7.1c Supply-Chain Management Results - The organization measures, tracks and improves trends in key measures and indicators (results) of the performance of suppliers and the supply chain, including contribution to enhancing the organization's performance. Results are compared with competitors and other organizations with similar offerings, customer groups, and market segments.

PROCESS

6.1c_FLO.PNG

6.1c Flow Diagram (Figure 6.1c-1 Supplier and Supply-Chain Management)

Inputs to 6.1c Supplier and Supply-Chain Management

  • 6.1c-OFT-S1 Key Supplier/Partner Selection (survey)

 

  • 6.1c-OFT-S2 Key Supplier Performance (survey)

 

  • List of key suppliers, items provided, and contact information

  • List of key partners, what they provide, and contact information

  • Description of current Supplier and Supply-Chain Management systems (if applicable)

Measurement and Analysis Tools and Techniques

  • 6.1c-OFT-A1 Key Supplier Selection Analysis (.xlsx)

  • 6.1c-OFT-A2 Key Supplier Performance Analysis (.xlsx)

  • Procedures and tools for current Supplier and Supply-Chain Management systems (if used)

Outputs from 6.1c Supplier and Supply-Chain Management

  • Milestone 1 - Key Suppliers and Partners Assessment

  • Milestone 2 - Key Suppliers Performance Assessment

  • Milestone 3 - Supply Chain Design and Documentation

  • Milestone 4 - Supply Chain Management System Documentation

  • Milestone 5 - Supplier and SCM Operations Excellence Metrics

  • Milestone 6 -  Update Strategy Plan and Metrics

Implementation Instructions

START IMPLEMENTATION

 

Task 6.1c-1 Conduct Key Supplier/Partner Assessment - This Assessment is administered by the OFT and facilitator. The Assessment is associated with specific suppliers and partners, and includes these attributes:

 

  • Alignment

  • Strategic Fit

  • Vetted

  • Quality Requirements

  • Price Stability and Affordability

  • Delivery and Availability

  • Management and Continuity

  • Statistics

 

The key tools used for this assessment are:

 

6.1c-OFT-S1 Key Supplier/Partner Selection (survey) 

 

6.1c Key Supplier Selection Analysis (.xlsx)

 

Table 6.1c-1 presents implementation steps, actions, results and references for this assessment.

A_6.1c key supplier partners selection t

Table 6.1c-1 Implementation of Key Suppliers and Partners Assessment

DECISION: The OFT uses the Key Supplier/Partner Selection Assessment as a guideline for selecting the top key suppliers and evaluating the remaining suppliers. The OFT and LFT may then decide to eliminate the suppliers that are at or near the bottom of the Score in the Selection Analysis tab.

PROGRESS: You have reached Milestone 1 (good work). Input the status [20%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1c-2 Conduct Key Supplier Performance Assessment - This Assessment is administered by the OFT and facilitator. The Assessment is associated with specific suppliers and partners, and includes these attributes:

 

  • Availability

  • Budgeted Cost

  • Cycle Time or Schedule

  • Satisfaction

  • Quality

  • Workload or Output/Production Plans

  • Innovation

  • Statistics

 

The key tools used for this assessment are:

 

6.1c -OFT-S2 Key Supplier Performance (survey) 

 

6.1c-OFT-A2 Key Supplier Performance Analysis (.xlsx)

 

Table 6.1c-2 presents implementation steps, actions, results and references for this assessment.

A_6.1c key supplier performance analysis

Table 6.1c-2 Implementation of Key Suppliers Performance Assessment

DECISION: The OFT uses the Key Supplier Performance Assessment as a guideline for evaluating the key suppliers. The OFT and LFT may then decide to eliminate the suppliers that are at or near the bottom of the Score in the Analysis tab. The matrix scores may also be used as an indicator for supplier recognition, awards or award-fee contracts.

PROGRESS: You have reached Milestone 2 (good work). Input the status [40%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1c-3 Design and Document the Supply Chain System (if applicable). The OFT uses the 6.1a-OFT-A Process Designer (.xlsx) to help design a supply chain system (where applicable) and to determine the types and candidates for the key suppliers in the supply chain.

 

Where appropriate, the Supply Chain System is documented using the CFT 3.2 Product Service Requirements Specifications as a general format.

 

NOTE: The requirements for a typical Supply Chain commonly include:

 

  • Capabilities versus key supplier requirements specifications

  • Price versus competitive prices and requirements (short, long-term, life-cycle cost projections)

  • Product quality versus key supplier product specifications

  • Service quality versus key supplier service specifications

  • Support capabilities versus product/service support requirements

  • Delivery performance versus delivery requirements (current and projected)

  • Rapid response capability to create, adapt or improve anticipated products or services

  • Core competencies that keep supplier competitive, sustained, and of high value

  • Communications and Transaction Interactions – that build strong organizational relationships

  • Supply Chain Performance – ability to manage and improve inputs and outputs in the supply chain, using excellent processes and practices, including inventory, order-handling, delivery, process improvement, end-user relationships and satisfaction, and cost reduction practices

 

PROGRESS: You have reached Milestone 3 (good work). Input the status [60%] on the organization's OE21 Intranet Main page alongside the title of this standard.

​​​Task 6.1c-4 Document the Supply Chain Management System - The OFT follows instructions 1 through 12 to document and implement the Supply Chain Management system. The Inputs, Outputs, and Guidelines for Supply Chain Management normally include:

 

  • Input: Customer and Market requirements for SCM

  • Input: Supply Chain Management software system

  • Input: Inventory requirements

  • Input: Production and Inventory Facilities requirements

  • Input: Transportation requirements

  • Input: Customer satisfaction with products and services delivered

  • Output: Customer and Market requirements

  • Output: Inventory requirements

  • Output: Production requirements

  • Output: Transportation requirements

  • Output: Customer Satisfaction Assessment results and action plans

  • Output: Customer view of the value of delivered products and services

 

  • Guideline 1: If the organization is or will be the top tier "owner" of the supply chain, then the implementation of an off-the-shelf SCM System is highly recommended

 

  • Guideline 2: If the organization is or will be a supplier in a larger SCM system, then the suppliers in the chain may have to meet the SCM owner's supply chain requirements for production, inventory, distribution, and information.

PROGRESS: You have reached Milestone 4 (good work). Input the status [85%] on the organization's OE21 Intranet Main page alongside the title of this standard.

Task 6.1c-5 - Integrate Supplier and SCM Output into Operations Excellence Action Plan - The implementation of the tasks in this OE21 standard may include tasks that should be integrated into the 6.0-OFT-P Operations Excellence Action Plan. The OFT reviews the results of any of the OE21 process and project tools used, and as appropriate, the OFT integrates additional process or project data and information into the Operations Excellence Action Plan. This integration requires additional resources and approval of the added tasks, resources, schedules, and budgets for the plan. 

 

Task 6.1c-6 - Select 6.1c Key Supplier, Partner, and Supply Chain Metrics.


NOTICE: If the organization has an existing Performance Measurement System (PMS), then the internal process is followed to select and review 6.1c supplier, partner, and Supply Chain Management (SCM) measures. If the OE21 tools are used, the following guidelines apply.

 

Guideline 1 - Select Key Results Indicators (KRI). The KRIs are commonly called Key Performance Indicators (KPI). Examples of KRIs for 6.1c Supplier and Supply Chain Management are as follows:

 

  • Supply Chain Performance - % of suppliers in the SCM chain that meet all requirements

  • Key Supplier Performance - XYZ Supplier Delivery on schedule, within budget, to requirements

 

Guideline 2 - Table 6.1c-3 presents the implementation steps, actions, references, and instructions sources used for 6.1c results.

A_6.1c Key Suppliers Performance Metrics

Table 6.1c-3 Implementation of Key Suppliers Performance Results

Task 6.1c-7 - Review 6.1c Operations Excellence Metrics - Conduct regular (at least monthly) reviews of Standard 6.1c Measures. Reviews for KRIs are critical to show whether overall organization performance is moving toward target levels and key intended outcomes (KIO) for Workforce Excellence.  

Correlation: Where possible, the KRD (drivers) are correlated with KRI (indicators) to determine if and how much the KRD Action Plans are helping boost KRI performance. 


Regular performance reviews are conducted and attended by the Operations Focus Team. 

 

  • Figure 6.1c-2 provides an example KRI for 6.1c Supply Chain Management

 

  • Figure 6.1c-3 provides an example KRD for 6.1c Key Supplier Performance

PROGRESS: You have reached Milestone 5 (good work). Input the status [100%] on the organization's OE21 Intranet Main page alongside the title of this standard.

A-6.1c SCM KRI.PNG

Figure 6.1c-2 Example KRI for Standard 6.1c Supply Chain Results

A_6.1c KRD for Key Supplier.PNG

Figure 6.1c-3 Example KRD for Standard 6.1c Key Supplier Performance