The challenge
This global automotive OEM (car manufacturer) was suffering with part quality, supply issues and lack of visibility of capacity within the supply chain. These issues were causing stoppages in the build programme and poor warranty performance. This negatively affected profitability, the customer experience and customer retention. The root cause of these issues stemmed from a lack of control over the supply-base and suppliers not conforming to approved processes and methods.
The OEM also wanted to embark on a new, challenging build programme to support their growth target. In order to de-risk the OEM’s supply chain and prevent costly line stoppages, which industry figures show can cost up to $1.3m per hour, the OEM needed to make sure that its suppliers would be able to deliver the increased volumes at the required quality standard.
The OEM sought to improve its supply chain management capability. So far, it had not been able to resolve the supplier quality issues despite deploying internal resource to solve them. Recognising this, and seeing unacceptable risk in their plan to ramp up production, the OEM sought out specialist external expertise to conduct a review of their supply base and put an effective supplier development assessment and framework in place.
The client required an action plan that would bring suppliers back to Production Part Approval Process (PPAP) standard and assess their operational capacity to deal with the planned increase in volumes. This included assessing suppliers internal processes to ensure that the standards could be met and won’t degrade over time. The client was also looking for a different approach – one that could help them deploy and adopt a new and systematic way of working that would improve best practice, including day-to-day assessments and the management and improvement of supplier performance, and ensure supplier compliance can be maintained for the long term.
How we helped
Unipart Consultancy created a 9 step assessment utilising Unipart’s ‘Ten(d)-to-Zero’ methodology to rapidly assess the current compliance of supplier processes and provide a detailed report and suite of KPIs. A team of specialist Consultants conducted initial assessments across 75 key suppliers that were affecting the Manufacturer’s supply chain. From the output of these assessments our Consultants worked with each supplier to develop a 90-day improvement plan that would be closely monitored.
95% of the assessed suppliers, who were previously believed to be compliant, were found to be non compliant. Where necessary immediate containment was put in place to protect the OEM from sub standard parts.
Each 90 day plan involved intervention activities that would return supplier parts performance back to PPAP standard. Additional insights from each assessment highlighted the individual Supplier’s operational capability and capacity to handle increases in volume.
Benefits
- All non-compliant suppliers (95%) returned to a compliant status within 12 months
- Over 150 issues, that had the potential to impact production through Line Stoppages, were identified and resolved before the risks could materialise – preventing significant cost to the Manufacturer
- The customer now has a repeatable assessment process to continue to improve Supplier performance and develop insights about their suppliers.