CASE STUDY How Lockheed Martin reduced the gaps from quote to procurement by integrating fragmented information sources and automating processes Richard Daniel Project Management & Planning Operations Supervisor Lockheed Martin Martin Levesque Director of Professional Services [email protected]
How Lockheed Martin reduced the gaps from quote to procurement by integrating fragmented information sources and automating processes. See the full video at http://www.idatix.com/lockheed-martin-reducing-gaps-quote-to-procurement/
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CASE STUDY
How Lockheed Martin reduced the gaps from quote to procurement by integrating fragmented information sources and automating processes
Richard DanielProject Management & Planning Operations SupervisorLockheed Martin
Lockheed HQ Challenged Assembly Facility – find an electronic work instruction solution to prepare for increased rate of production on a major assembly
Disconnected Issues with Common Solutions
Lockheed HQ Challenged Assembly Facility – find an electronic work instruction solution to prepare for increased rate of production on a major assembly
Lockheed Assembly Facility Internal Challenge – solve procurement cost variance from quote to delivery
Disconnected Issues with Common Solutions
Lockheed HQ Challenged Assembly Facility – find an electronic work instruction solution to prepare for increased rate of production on a major assembly
Lockheed Assembly Facility Internal Challenge – solve procurement cost variance from quote to delivery
Lockheed realized that information was not guaranteed to flow accurately and consistently
Disconnected Issues with Common Solutions
Lockheed HQ Challenged Assembly Facility – find an electronic work instruction solution to prepare for increased rate of production on a major assembly
Lockheed Assembly Facility Internal Challenge – solve procurement cost variance from quote to delivery
Lockheed realized that information was not guaranteed to flow accurately and consistently
Select Implemented
MRP Modules
Manual Processes
External Stop-Gap
Tools
Productivity and Profit
Create RFQ
Buyer
PROCESS:PAPER FORM
Assign to Buyer
Senior BuyerPROCESS:EXCEL QUERY
PDS Approval
Material PlannerPROCESS:EMAIL
Send RFQ
Buyer
PROCESS:EMAIL/FAX
Receive Quote
Buyer
PROCESS:EMAIL/FAX
PROCUREMENT PROCESS: PRE-AUTOMATION
Send PO
Buyer
PROCESS:EMAIL
PO Approval
Escalation
PROCESS:MANUAL ROUTING
Create PO
Buyer
PROCESS:JDA
Approve Quote
Buyer
PROCESS:MANUAL REVIEW
Confirm Accept
Buyer
PROCESS:PHONE/EMAIL
Receive SHIP
Production ControlPROCESS:INVENTORY
END
Req. Created
Material PlannerPROCESS:JDA
START
PRE-AUTOMATION TOTAL PROCESSING TIME 88 MINUTES
PRE-AUTOMATION TOTAL CYCLE TIME 10.3 DAYSDAYSMINUTES
Distribute Reqs.
Senior BuyerPROCESS:MANUAL ROUTING
1 day .5 day 0 day .3 day
1 min 10 min 10 min 10 min 10 min 10 min 5 min
3 min3 min8 min 3 min 3 min 12 min
4 days .1 day 2 days .2 day 5 min 1 day
1 day.2 day
Create RFQ
Buyer
PROCESS:PAPER FORM
Assign to Buyer
Senior BuyerPROCESS:EXCEL QUERY
Send RFQ
Buyer
PROCESS:EMAIL/FAX
Receive Quote
Buyer
PROCESS:EMAIL/FAX
PROCUREMENT PROCESS: PRE-AUTOMATIONPO Approval
Escalation
PROCESS:MANUAL ROUTING
Create PO
Buyer
PROCESS:JDA
Approve Quote
Buyer
PROCESS:MANUAL REVIEW
PRE-AUTOMATION TOTAL PROCESSING TIME 88 MINUTES
PRE-AUTOMATION TOTAL CYCLE TIME 10.3 DAYSDAYSMINUTES
Distribute Reqs.
Senior BuyerPROCESS:MANUAL ROUTING
1 day
3 min 3 min 12 min
5 minutes .2 day0 day .3 day
10 min 10 min 10 min 10 min 5 min
1 day.2 day
Create RFQ
Buyer
PROCESS:EFORM
Assign to Buyer
Senior BuyerPROCESS:WORKFLOW
PDS Approval
Material PlannerPROCESS:WORKFLOW
Send RFQ
Buyer
PROCESS:WORKFLOW
Receive Quote
Buyer
PROCESS:EMAIL/FAX
PROCUREMENT PROCESS: POST AUTOMATION
Send PO
Buyer
PROCESS:EMAIL
PO Approval
Escalation
PROCESS:WORKFLOW
Create PO
Buyer
PROCESS:JDA
Approve Quote
Buyer
PROCESS:WORKFLOW
Confirm Accept
Buyer
PROCESS:PHONE/EMAIL
Receive SHIP
Production ControlPROCESS:INVENTORY
END
Req. Created
Material PlannerPROCESS:JDA
START
POST-AUTOMATION TOTAL PROCESSING TIME 48 MINUTES
POST AUTOMATION TOTAL CYCLE TIME 5.2 DAYSDAYSMINUTES
Distribute Reqs.
Senior BuyerPROCESS:MANUAL ROUTING
5 min 5 min 5 min
1 min 10 min 3 min 5 min 0 min 1 min
2 min3 min8 min 3 min 2 min 10 min
4 days 5 min 5 min 5 min 5 min 30 min
1 day5 min
Create RFQ
Buyer
PROCESS:EFORM
Send RFQ
Buyer
PROCESS:WORKFLOW
Receive Quote
Buyer
PROCESS:EMAIL/FAX
PROCUREMENT PROCESS: POST AUTOMATION
PO Approval
Escalation
PROCESS:WORKFLOW
Create PO
Buyer
PROCESS:JDA
Approve Quote
Buyer
PROCESS:WORKFLOW
POST-AUTOMATION TOTAL PROCESSING TIME 48 MINUTES
POST AUTOMATION TOTAL CYCLE TIME 5.2 DAYSDAYSMINUTES
Distribute Reqs.
Senior BuyerPROCESS:MANUAL ROUTING
2 min 3 min 10 min
5 min5 min5 min30 min5 min
5 min 0 min 1 min
1 day5 min
PRE-AUTOMATION TOTAL PROCESSING TIME 88 MINUTES
PRE-AUTOMATION TOTAL CYCLE TIME 10.3 DAYSDAYSMINUTES
PROCUREMENT PROCESS: PRE-AUTOMATION
POST AUTOMATION TOTAL PROCESSING TIME 48 MINUTES
POST AUTOMATION TOTAL CYCLE TIME 5.2 DAYSDAYSMINUTES
PROCUREMENT PROCESS: POST AUTOMATION
Requ
est f
or Q
uote
sPu
rcha
se O
rder
s
Quotes
Parts
ManufacturingInstructions
Parts
DeliverableParts
DeliverableParts
Payment
Invoices
AccountsPayable
Shipping/Receiving
Procurement
ManufacturingEngineering Shipping/
Receiving
Business Needs & Functions
Core Objectives for an Effective Solution
Be efficient and reduce expense● Eliminate slow, sequential “one-
person-at-a-time” processing● Eliminate duplication of work
Provide information access● Single-point access to complete
customer and vendor data regardless of source
Manage volume and variety● Excel forms, engineering documents,
associated data streams Compliance
● Facilitates enterprise controls and comply with regulations
Before iSynergy Implementation
Before iSynergy Implementation
Contracts Submits Quote to CustomerCustomer Approves Quote1
Before iSynergy Implementation
Contracts Submits Quote to CustomerCustomer Approves Quote1
Contracts stores quote data in XLSMRP generates REQ2
Before iSynergy Implementation
Contracts Submits Quote to CustomerCustomer Approves Quote1
Contracts stores quote data in XLSMRP generates REQ2
Procurement receives REQ for partsQuote pricing is unknown3
Before iSynergy Implementation
Contracts Submits Quote to CustomerCustomer Approves Quote1
Contracts stores quote data in XLSMRP generates REQ2
Procurement receives REQ for partsQuote pricing is unknown3
Buyer obtains new quotes and purchases parts
4
Before iSynergy Implementation
Contracts Submits Quote to CustomerCustomer Approves Quote1
Contracts stores quote data in XLSMRP generates REQ2
Procurement receives REQ for partsQuote pricing is unknown3
Buyer obtains new quotes and purchases parts
4
Financial Analyst finds discrepancy between Quotes
Engineering Documents are Auto-Associated to Requisitions
Priority Item Escalation Data and Document Integrity
Complete Package
RFQ
Automation Overview
Documents from MTO and outside MTO are presented together in one place Information is captured, indexed, cross-referenced, stored and presented to each
worker based on the immediate needs of their job function
1. Eliminates possibility of production delays caused by communication breakdowns across departments
2. Guarantees delivery of requisition/quote to contracts manager for approval of quote deviation
3. Eliminates possibility of vendors producing incorrect parts from outdated Part Data Sheets
4. Ensures Procurement process cannot move forward without required documentation being present
5. Eliminates financial exposure to production cost variances
Solution: Process Efficiency Gains
1. Solves long standing issue by developing a means for all buyers to see original quoted method, price and quantity of parts being ordered
2. Provides a visual indication of developing bottlenecks3. Allows Lockheed to gather multiple part number requisitions
into a single document to send to a vendor for quote
1There was time break between quote discovery and analysis kick off for Lockheed internal quote processing 2Projects ran concurrently with a one week offset3Per Business Finance Magazine
1) High Level Initial Review for quoting purposes1
2) Workflow Analysis Manufacturing Floor
3) Implementation Manufacturing Floor
4) Workflow Analysis AP & Procurement2
5) Implementation AP & Procurement
iSynergy Implementation BreakdownTASK DAYS TIMELINE