# Presentation: 451626

## Supplier ManagementEstablishing Supplier Management as a Strength 

**Thomas W. Thrailkill**
**Boeing Space & Intelligence Systems **
**Supplier Management**
**October 2008**

## Discussion Agenda

**The Integrated Defense Systems (IDS) Supplier Management Path Forward**
**Space & Intelligence Systems ****Supplier Management Initiatives**

## IDS Supplier Management Path Forward

***Create Opportunities - Capture Value - Ensure Performance***

## Slide 4

## Slide 5

## IDS Supplier Management Focus Areas

**Top 100 Supplier Performance Improvement**
**Supply Base Management**
**Supplier Partnership Initiative Lean Engagements**
**Common Buy Package **
**Supplier Program Manager Deployment**

**Market Strategies & Control Points**
**Strategic Make/Buy**
**Enterprise Capability Sourcing Strategies**
**Enterprise Supply Chain Strategies**
**Capture & Proposal Strategy, Execution & Transition**

**EAC / BAC**
**Alignment to Prime**
**Affordability expectation**
**Risks aligned and managed**
**Leverage Spend**
**Terms and Conditions**
**Supplier Diversity**
**Strategic Work Placement**
**Strategic Agreements**

**IDS Supplier Management Focus Areas**

***Create Opportunities - Capture Value - Ensure Performance***

**Notes:**
  While we are reacting well to some aspects of new program needs, this engagement usually starts near the middle of the Acquire New Business process, if not later.  This limits our engagement on development programs. 
  Our approach is to use time as an ally rather than an enemy – engaging early.  
 Standardized contracting approach will then ensure that we do not have value leakage. 
 Finally, SPM’s will ensure Often involvement and six sigma will measure critical processes. 
 We will provide functional excellence through: 
 Offering several suppliers to match technology needs allowing for competition and potential investment to help shape our solution;
  Market level sourcing approaches which allow for more competition than program level strategies – allows for true best-of-industry solution;
  Improved executability process and start-up tools

## Supplier Management as a Strength vs. Weakness

**The Integrated Defense Systems (IDS) Supplier Management Path Forward**
**Space & Intelligence Systems ****Supplier Management Initiatives**

## Improving S&IS Supplier Management

**Comprehensive competitive source selection process **
_**Standard buy package**_
**SOW format, SDRLS, Quality documents, Specs,**
**Data Item Descriptions, Program Reviews**
_**Standard checklists**_** for formal reviews**
_**Supplier Data Tool**_** (SDT) to manage SDRL process**
**EPIC system for electronic storage of subcontracts**
**Standard purchase contract format**
**Standard change order log and format**
**Shared subcontract ownership through dedicated IPT’s**
**DSAM Supplier Assessment Matrix**
_**Government participation at all formal reviews**_
**Standard performance metrics**
**Faster sourcing through use of ASAP**
**Boeing furnished material is the exception**
**More consistent same “face” representation for technical leadership**
**Internal Boeing Risk management requirements flowed to subcontractors**
**EScan tool provides Boeing visibility of supplier corrective actions **

**Supplier Quality post award requirements review **
**Quality surveillance plan to identify important features for sourcing**
**Open SDRL’s tracked in SDT**
**Supplier Program Managers assigned to key critical subcontractors**
**S&IS Supplier Enterprise Review Board**
**IDS Common SSOW / MRD**
**Capability Assessments**
**Development Supplier Assessment Model (DSAM)  ****& Leading Indicators**** **

**Improving S&IS Supplier Management**

_**Improvements through 2007**_

_**2008 Forward**_

## Considerable Evidence Current Supplier Management Approach Needs Improvement

**Cost of Non-Quality (CoNQ) ****Related to Supplier Performance**
**Wide Variation in how Suppliers ****are Managed Within the Program ****and Shared IPT Structure**
**Insufficient Visibility into Critical Space Processes & Control**
**Performance Metrics Production Oriented**

## S&IS Supplier Conferences Identified Management of Suppliers as an Area of Opportunity to Improve Execution
Multiple Interfaces between Boeing and the Supplier
Timely and Complete Product Definition Missing
Conflicting Requirements and Priorities
Lessons Learned are Not Consistently Carried Forward from Program to Program
No central person with the RAA responsibility to focus and direct the effort required from ALL functions needed to fully manage a supplier

- Multiple Interfaces between Boeing and the Supplier
- Timely and Complete Product Definition Missing
- Conflicting Requirements and Priorities
- Lessons Learned are Not Consistently Carried Forward from Program to Program
- No central person with the RAA responsibility to focus and direct the effort required from ALL functions needed to fully manage a supplier

**Supplier Conferences Confirmed Need for Improved Management Approach**

## Supplier Program Manager

**Focused interface with the Supplier  **
- Held accountable for execution (2-way interaction: Boeing and Supplier)

**SPM RAA:**
- Responsible for Supplier execution and product integrity
- Integrates and facilitates resolution of technical and business issues
- Establishes and evaluates performance measures, metrics and leading indicators
- Accountable for Supplier Improvement Plan and actions
- Collaborates with Supplier to understand their capabilities related to program requirements & future growth

******* Systems, Sub-systems, Units Suppliers **

**Supplier**** ***

***Formalized Through Program/Team Execution Plans***

## Supplier Program Manager  Attributes for Success

**IDS/S&IS experience has shown that successful SPM deployment depends upon: **
- Appropriate skills & experience level commensurate with the subcontract complexity
- Technical, programmatic and business acumen
- Balanced cross functional vs. singular subject matter concentration
- Mentoring and training from functions
- SPM and support team assigned with clearly defined RAAs
- Must address interfacing organizations (Program IPT, Shared IPT, Supplier, and Supplier Management)
- Documented and approved in Program Execution Plans, etc.
- Consistent and disciplined implementation
- Executive leadership endorsement

***Valued skill set and recognized career path***

## Supplier Enterprise Review Board Cross-Functional Review of Critical S&IS Suppliers

**Review current contract area performance parameters**
**Identify areas of greatest need**
- Problem statements
**Define improvement actions & determine best indicators to measure progress**
**Document in Supplier Improvement Plan (SIP)**
- Draw from “Best of Boeing”

**Standard Deck/specifics**
**DSAM (2-way)**
**AS9100 on-site reviews/audits**
**Award Fee **
**Process escapes/non-conformances**
**Contract status/definitization/changes**
**Capability assessments**
**Major milestone readiness**
**Change process cycle time**

**A – ****Performance**

**B – Needs**

**C – Actions & Progress Indicators**

**D - ****Improvement**

- MA

- Q / SQ

- Ops

- Eng

- SM

- Functional
- Tool Kit
- (Best of
- Boeing)

***Forum to Address Supplier Performance Issues Affecting Multiple Programs***

**Notes:**
This is relatively new for Boeing and we are beginning to focus more on substantive improvement plans for our key suppliers.

## IDS Common Supplier Statement of Work 

**Purpose:**
- To Deploy Boeing Best Practices to Suppliers:
**Finance - Earned Value Management**
**Mission Assurance**
**Program Management**
**Supplier Management**
**Systems Engineering**
- Drive common processes between Boeing and our suppliers
- Provide for common templates and tools in the execution of program objectives
- Align supplier execution strategy with program objectives

***Leveraging Proven Best Practices***

**Notes:**
IDS Supplier Management initiated a number of improvement actions, and one of which included capturing Best Practices from across Boeing in a document we could share with our larger suppliers.  That document called the Management Requirements Document was initially released in 2006, updated in 2007, and has now been transitioned to a Common Supplier SOW to be used on all Boeing IDS Subcontracts.

## Capability AssessmentsFocus Areas During Review

**General Factory Controls**
**Training programs and processes**
**Quality Controls and Quality Processes**
**Supplier Management/Control**
**Configuration/Change Management**
**Parts Materials and Processes (PMP)**
**Planning Processes**
**Assembly & Test Processes**
**Manufacturing Engineering**
**Supplier unique processes**

***Ensures ability to execute to Boeing/Customer standards***

## Development Supplier Assessment Model

**Development Supplier Assessment Model**

**Provides a Means for 2-Way Assessment of Supplier and Boeing Performance on Development Programs**
**Five key areas: Technical, Quality, Management, Cost, Schedule**
**Used by Integrated Product Team, SPM & Supplier Mgmt. to Improve Boeing and Supplier’s Performance**

## Summary

**IDS SM Executing a Path Forward...**
**S&IS Focus on Key Initiatives Reflects Our Determination to Improve Management of Suppliers **
- Improving functional discipline and establishing accountability for improved supplier program performance - SPMs
- Engaging both programs and functions in improvement activities - SERB
- Bringing Boeing Best Practices to S&IS Suppliers – MRD/SSOW
- Earlier & Periodic Assessments of Supplier Capabilities – DSAM & Capability Assessments

***Supplier Management as a Strength***