6.1c Supplier & Supply-Chain

Management

Case Study

Note: This Case Study refers to specific OE21 surveys and tools (spreadsheets or docs). Please try the link(s) below to learn more about these surveys and tools:

 

6.1c Supplier and Supply Chain Management

Assumption: The (Elafino Sports Center) organization has implemented the OE21 6.1c Supplier and Supply Chain Management process steps. The following are the results and outcomes:

The Elafino Sports Center contracts with key suppliers that support its main services, including:

 

  • Hockey: Hockey Instructors are contract employees who have professional hockey experience and ability to lead and manage all hockey-related services (games, events, training)

 

  • Figure Skating: Figure Skating Instructors are contract employees who have professional figure staking experience and recognition (such as former Olympic competition).

 

  • Fitness Center:  Equipment maintenance contractors are suppliers that provide fitness center equipment and supplies.

 

  • Rinks:  Zamboni ice machine, Janitorial, and Concession Stand workers are contracted with outside suppliers, to keep Rinks ready for customer use, service and events.

 

  • Other:  Other outside suppliers include:

    • Security guards for parking and inside the center

    • Restaurant franchise owners and employees who lease and operate the Restaurant in the center

    • Party Room - individuals that rent these small rooms for various purposes or events

    • Center Management Software contractor who provides and maintains the Elafino Sports Center management information system

 

Before the Elafino Sports Center began operations, they had no process for selecting good suppliers and no process to monitor their ongoing performance. They just advertised for the openings and solicited bids from anyone interested in the Elafino service region.

 

After implementing OE21 Guideline 6.1c Supplier and Supply Chain Management, the Elafino Operations Focus Team conducted a series of Key Supplier Performance Assessments (surveys), which produced ratings (1-5) and improvement suggestions for each of the key suppliers (hockey, figure skating, fitness center, rinks, and other suppliers).

KEY SUPPLIER SELECTION

The OFT-7A Key Supplier Selection Assessment (survey) was used to collect ratings of the Operations Focus Team and supply managers. Selection ratings for each key supplier were collected for each of the following:

  • Technical Capability

  • Strategic Fit

  • Recommendations and References

  • Quality

  • Price

  • Delivery or Availability

  • Risk

The ratings for each of these supplier indicators were input into the Key Supplier Selection Matrix as shown in Figure 6.1c-3 below. 

Figure 6.1c-3 Key Supplier Selection Matrix (example)

The results of the Key Supplier Performance Assessments indicated less than satisfactory ratings (1, 2 or 3 of 5 max) for two of the key suppliers, leading to the following activities:

 

  • Fitness Center Equipment Maintenance Contractor, who was not keeping the equipment in good working order, clean, lubricated and ready for customer use. The OFT knew that this contractor must be replaced. The OFT and Procurement Manager terminated that contractor and opened a solicitation for a new contractor. They found five (5) qualified equipment maintenance contractors and used the Key Supplier Selection survey and matrix tools to select the most qualified contractor. That contractor took over the fitness center maintenance activities.

 

  • Janitorial Services Contractor - This contractor was not reliable and was missing 2 or 3 cleaning days per month. There were also a high number of customer and employee complaints about unclean restrooms in the Center. The OFT needed to replace this contractor. The OFT and Procurement Manager terminated the contractor and opened a solicitation for a new contractor. They found nine (9) qualified janitorial service contractors and used the Key Supplier Selection survey and matrix tools to select the most qualified contractor. That contractor took over the janitorial services, and the results were near perfect: (on time; very clean restrooms, fully stocked with tissue) and they kept the Center floors as clean and safe as possible.

KEY SUPPLIER PERFORMANCE ASSESSMENT

The OFT-7A Key Supplier Performance Assessment (survey) was used to collect ratings of the Elafino Operations Focus Team and supply managers. Performance ratings for each key supplier were collected quarterly for each of the following:

  • Availability

  • Budgeted Cost

  • Cycle Time or Schedule

  • Satisfaction

  • Quality

  • Workload

  • Innovation

 

The most recent Elafino Key Supplier Performance Matrix (Figure 6.1c-4) resulted a very low performance rating (120 points out of 350 maximum) for Supplier 6, the Rinks maintenance suppliers. These suppliers were placed on notice to improve their performance or be replaced.

Figure 6.1c-4 Key Supplier Performance Matrix (example)

The Elafino Operations Focus Team inputs Supplier Metrics into the Performance Measurement System (PMS), using the OE21 PMS Operations Excellence Metrics (Excel workbook) tool. Each month they data and attended performance reviews of the following supplier-related metrics:

 

  • Key Suppliers Performance Score. The total score for 1 to 10 suppliers; computed on the Key Suppliers Performance Matrix spreadsheet.

 

  • Organization satisfaction with supplier outputs (1-5 rating)

 

  • Supplier rework or defect-correcting hours (%) versus

 

The Elafino OFT continues timely and appropriate action to drive measures towards the goals. When measures rise to targets, the OFT will normally raise the goals (targets) higher.

 

Figure 6.1c-5 (below) is an example Trend Chart for this OE21 Guideline.​

Figure 6.1c-5 Example Trend Chart for Standard 6.1c Supplier Results

The Elafino LFT (IT Manager) published the 6.1c Supplier and Supply-Chain Management output results on the Elafino INTRANET, and notified all focus teams and managers of these updates.