Supplier Relationship Management - CIPS and Events/Best in... · Supplier Relationship Management . 14 ... • Working from Supplier’s Supplier to Customers’ Customer . 18 •

Des Balmforth - Head of Procurement, Radar & Advanced Targeting Alex Cumming - Senior Category Buyer Amie Blinkhorn - Senior Subcontract Buyer

Supplier Relationship Management

2 © 2014 Selex ES Ltd – All rights reserved

Agenda

• About us

• The Case Study • The Laser • The Challenge • The Solution • The Benefits • Message from REO

• Supplier Relationship Management

• The Timeline

• The Application

• The Result

Market Leadership

Radar & Advanced Targeting

• No1 in Airborne Infra-Red Counter Measures

• No1 in Airborne Laser Designators

• No1 in Airborne Radar (outside of the US)


The Case Study The Laser

• The Customer is major US government contractor

• Established relationship

• Performance and reliability vital

• Prototype

• Suppliers needed with high attention to quality

• Optical devices with demanding standards • Optical category team (IPT) with right

procurement skill set

• Production with steep production ramp rate


The Case Study The Challenge

• Design issues with the complex assembly

• REO not able to consistently meet the design standard • Incorrect optical assembly manufacture • Contamination • Not production ready

• Shortfall in delivery

• REO pacing supplier on program

• Relationships strained

• Perceptions diminished

• Something needed to change

• The President of REO provided an “open door”


The Case Study The Solution

• Red Team established • Good and rigorous planning

• Assessment of the problem

• Audit • Stakeholder analysis • Cross function involvement

• Recommendations • Improve manufacturing documentation • Change behaviour • Assembly training • Failure Reporting, Analysis and Corrective Action

System (FRACAS) • Use of SC21


The Case Study The Solution

• Implementation • Full backing from REO Management • Sub-contract manager seconded to REO • Support from other functions • 146 step Action Plan

• Supplier development • Process documentation • Systems improvement • Investment in capital equipment • Personnel changes

• Customer • Visited REO • Opportunities for improvement • Support in process documentation • Visit to production facility.

8 REO Proprietary Information

Process Control Improvement

Reduced variation of assembly from 100% parts not meeting spec to 100% parts meeting specification in less than 1 year


RMA’s


On-Time Delivery Improvement


The Case Study The Benefits

• 146 step Action Plan largely completed within six months • Substantial overhaul of REO’s business • Considerably reduced defect rate to less than 3% of its peak value • Overall concession rates dropped 85% • Price reduction on the complex assembly was 10% • Reduction in REO’s other products averaging 17% • The yields more consistent which allowed reliable shipment of parts

• Selex ES exceeded the challenging delivery target from the customer • Follow-on order from the customer worth $70 million • Whilst uncovering issues can be embarrassing and painful, with the right

attitude and the right relationship any problem can be overcome to ensure a positive outcome for all.

12

The Case Study The Message

13

• Integrated Product Teams give the supplier a seat at our table

• Regular Business Reviews and Scorecards underpin each relationship and provide a framework for conversations

• Encouraging Supplier investment to reduce cost and time to market

• Bringing supplier solutions into the team through Technology Sourcing

Supplier Relationship Management

14

Changing skillset, mind-set and approach

From ‘transactional’ to ‘value add’ Transactional workload has been reduced

Wide use of framework agreements and

scheduling tools Focus on Agreements, Scorecards and value

relationships From ‘buyers’ to ‘business people’

Better understanding of business drivers

Speaking the business language

Facilitating solutions


The Timeline



The strengths of our application

• Example from a real programme

• A step change in with a supplier can result in a business result

• Tangible results for the business

• Openness with the supplier

• Working from Supplier’s Supplier to Customers’ Customer

18

• Huge boost to the confidence of the team and their belief in this change

• Procurement are now better able to influence at the top table

• Changed perceptions from the business

• Able to celebrate the strength of our supplier relationships

Why was winning the CIPS award important?

THANK YOU FOR YOUR ATTENTION

Selex ES Ltd Sigma House - Christopher Martin Road, Basildon Essex SS14 3EL Tel: +44 (0) 1268 823400 www.selex-es.com

Any Questions?

Supplier Relationship Management - CIPS and Events/Best in... · Supplier Relationship Management . 14 ... • Working from Supplier’s Supplier to Customers’ Customer . 18 •

Documents