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Supply Chain development can be loosely defined as the process of working collaboratively with suppliers to improve or expand their capabilities. An example may be teaching a supplier how to manufacture a type of item that they never manufactured before for the purposes of giving you the option to buy, rather than make, that item.
MEP recognizes and addresses the interdependency between large OEMs and the smaller companies that make up their supply chains. Large companies seek to reduce the risk, including cost, in their supply chains. MEP works with supply chains to increase their flexibility to better meet the needs of their larger customers and to increase and enhance strategic supplier relationships.
The MEP system is uniquely positioned to be the resource of choice for increasing the competitiveness of U.S.-based supply chains by offering a network of assistance providers throughout the country, consistent delivery approaches to implementing Lean, Quality, and other performance improvement programs for manufacturers; and the flexibility to customize services and products to meet varying needs. MEP is the only organization whose mission is to improve the competitiveness of U.S. manufacturing.
Smaller manufacturers supply to large Original Equipment Manufacturers (OEMs) or their first-tier suppliers. MEP has a long track record of improving the competitiveness of these suppliers through a wide array of services. In addition, MEP works with OEMs and large first-tier suppliers to understand their expectations regarding supplier performance. MEP translates that knowledge into enhanced awareness and performance among suppliers.
Domestic suppliers that are lean are highly valued in supply chains because they are faster, more flexible, cost competitive, and less likely to fail. These attributes provide a competitive advantage when compared to distant low-cost overseas suppliers. MEP is recognized for delivering results in Lean and having Lean experts on staff across the country.
Supply chains cross state boundaries and suppliers support multiple OEMs. An effective national supply chain improvement strategy must support suppliers across the country, deliver consistent services and results, and be capable of customizing services to meet regional and company or location-specific needs. The MEP system is the organization providing consistent Lean services combined with opportunities for growth to suppliers from coast-to-coast.
In today's global economy, U.S. manufacturers’ competitiveness depends on far more than the activities that occur within factories. It depends on the performance of the full value chain. Helping manufacturers meet the growing challenges to their international competitiveness will require MEP to focus not only on expanding service to traditional manufacturers themselves, but also on improving the performance of companies in related sectors that affect the cost of manufacturing and impact the ability of manufacturers to bring their products to world-wide markets.
For more information about Supply Chain Development, contact your local MEP center or NIST MEP:
As global competition continues to challenge U.S. manufacturers, OEM's are recognizing speed and flexibility in their supply chains is key to reducing their supply chain risk. OEM's are realizing what's fundamental to flexibility is time-based competitiveness with a robust, cost-effective, U.S. supply chain. Domestic suppliers can win---but only if they optimize their value streams to their customer and drive out waste!
OEM's want improved quality, delivery, and cost reductions. Traditional approaches to supplier development have had mixed success. Suppliers are often asked to improve, and have tried to comply, but without a clear roadmap and enterprise-wide view, results are uneven and often not sustained. Traditional methods not only sub-optimize results, but the spirit of collaboration, trust, and competing together is often missing. Supplier ownership is essential to drive and sustain change generating stronger, bottom line results. To overcome problems with traditional strategies, MEP, with the thought leadership from the Wisconsin Manufacturing Extension Partnership (WMWP) and several progressive-thinking OEM's, developed Accelerate, a supplier improvement solution, now emerging as a national model.
The Accelerate model begins when an OEM nominates a supplier to participate. The supplier recommends a value stream to optimize and the supplier and OEM agree and sign a project charter that defines roles, responsibilities and a timeline.
MEP is a neutral coach and mentor, providing support when the supplier's Lean-ness gap is determined, i.e. where Lean methods could be applied. Value Stream Mapping (VSM) is used to identify areas for improvement and to establish the existing MCT, or Manufacturing Critical-path Time, the typical amount of calendar time from when a manufacturing order is created through the critical-path, until the first single piece of the order is delivered to the customer. It's measured in calendar days and includes all order entry, manufacturing, and logistics shipments. A future VSM and MCT is also established as a goal along with an action plan.
MCT has been developed and proven with nationally known OEM's over the past decade. It is a robust metric to drive all other traditional supplier metrics of quality, delivery and pricing. Traditional metrics don't typically reveal problems like shipping from finished goods inventories or costs reductions from margin (very risky!). A short MCT means the supplier is Lean, flexible, and can shift and respond quickly to demand changes. MCT is a time-based, universal measurement, which can relieve suppliers of having to deal with multiple measures and different OEM measurement systems.
The next step is to close the Lean-ness gap by applying Lean tools to achieve the future MCT. The supplier takes ownership of the project, deciding what Lean changes to make and implementing those changes. WMEP assists and guides the supplier with the identification of the Lean-ness gap and implementation. MEP maintains complete confidentiality, and the supplier chooses what is shared with the OEM. Establishing a Lean Culture ensures the improvements are sustained.
Accelerate Program Success Stories
- Focus on implementation and results for the supplier;
- Co-investment by all parties-everyone has a stake in it;
- Freedom for the supplier to decide what changes to make and where to make them;
- Use of a charter to delineate responsibilities and expectations of all parties;
- Confidentiality, with the supplier choosing what information to share with the OEM;
- Creation of a collaborative, strategic relationship with the OEM that allows both to compete globally;
- Use of a single time-based metric, instead of being based on margin;
- Joining in a national model with MEP support/expertise;
- Lean Culture to sustain improvements and spread continuous improvement to all other areas.