Presentation on theme: "SCHEDULE & DELIVERY MANAGEMENT"— Presentation transcript:
1 SCHEDULE & DELIVERY MANAGEMENT Corrective ActionsSCHEDULE & DELIVERY MANAGEMENTPrepared by: Bonita Dunham and Bert Santiago
2 OBJECTIVES: Define Corrective Action (C/A) and Root Cause Identify when to issue CARsDefine levels of Corrective ActionIdentify contractual requirements impacting Schedule & Delivery Management in support of Corrective Action Request issuanceProvide examples C/A issuance
3 A request for root cause CAR Definition:A request for root causeremedy of acontractualnoncomplianceConceptually in the DCMC scheme of things when we speak of corrective action we are always looking for root cause remedy…since our definition references “contractual noncompliance” the inference is that the request is made to the contractor.Logically speaking no matter the specifics of the problem, if we manage to correct or remove the cause of the problem it is not likely to reoccur …unless there are process changes i.e. manpower/people, machinery/equipment, methods, material. You gain awareness of process changes during process surveillanceUnderstanding this concept is key in understanding process management, determining effective corrective action and performing follow-up surveillance.
4 Root Cause Definition: That condition, action, or lack of action that led to the problem occurring.Note: Root cause has been identified when effective corrective action will prevent problem recurrence
5 WHAT?Actions taken to eliminate conditions that resulted in a contractual noncomplianceRoot cause of noncompliance should be identifiedEfforts are to the extent of precluding recurrence of non-compliant conditionIn that we are requesting corrective action from the supplier, we would expect the contractor to address actions taken to eliminate the conditions that resulted in (root cause of) the non-compliant condition.The supplier’s corrective action efforts should be extensive enough to prevent the noncompliance from happening again.(In short here we are defining what constitutes EFFECTIVE CORRECTIVE ACTION…in other words this is the expected activity by the supplier in addressing our request for corrective action).
6 WHY (DCMC requirements) Directly impacts contractor delivery performanceCARs identified as Output of surveillance effortTool to facilitate timely deliveryRationale that supports surveillance activityWHY do we issue Corrective Action Requests?Per our DCMC requirements (i.e. ONE BOOK 5.1) when contractual non- compliances impact delivery performance we are to seek improvement/compliance/correction from the contractor.Our performance of (delivery) surveillance provides us with the opportunity to identify contractual non-compliances.Surveillance may uncover contractual noncompliances which should be addressed via a corrective action request (i.e. CARs can result from/be an output of surveillance activity).A corrective action request is a tool to influence the contractor towards remedying the root causes of his contractual non-compliances, so as to meet the contractual requirement of timely delivery.Trend analysis of past non-compliances serves as a gauge for subsequent surveillance effort. Additionally corrective action tracking will likely result in recurring monitoring by the Gov’t…this effort should be noted in your Risk Handling plan (reference S&DM guidebook)
7 WHY (DCMC requirements) Supports “Right Time” metricsImprove on Time DeliveriesReduce Outstanding DeliveriesImprove ratio Alerts/DelinquenciesSince corrective action efforts are based on correcting contractual noncompliances including delivery performance, our efforts to achieve effective (root cause) corrective action will conceptually improve the contractors delivery performance and will be reflected in the metrics.
8 On time delivery rate is < 90% WHENOn time delivery rate is < 90%Data analysis indicates contractual noncompliance trendDo not issue CAR for EACH delinquencyRoot cause analysis identifies processes contributing to poor delivery ratesContractor is non-responsive to previous CARs (escalation…)Per the the Schedule & Delivery Management chapter of the One Book...Moderate & High Risk suppliers must include “requesting corrective action for a suppliers production schedule & control system”.Caution against issuing a CAR for each delinquent schedule. Recommend you first collect data then do analysis (trend). Based upon you results, take the appropriate action. REMEMBER: Multiple Level I’s, for same/similar non-compliance, may be an indicator of a larger/systemic problem.Per the One Book, Schedule & Delivery Management chapter we are to use “the PROCAS methodology to identify processes contributing to poor delivery rates, analyze those processes for root causes…eliminate/minimize the effects of the root causes”Also when a contractor has been non-responsive to previous CAR issuance we are to escalate the corrective action effort.
9 HOW DLAD 5000.4 PROCAS Any employee can initiate a CAR Maintain a record of all CARs issued, follow-up and close-out actionsC/A implementation and effectiveness of contractor actions shall be verifiedFour Levels of Corrective Action(This chart is self explanatory…)Per the PROCAS chapter of the One Book…any employee can initiate a Corrective Action Request.We are to maintain a record (i.e.. A log or Database) of all CARs issued (verbal or written CARs). The record should document issuance, follow-up and closeout activity related to each CAR. RECOMMEND: use “integrated” (multi-functional) facility CAR log, which promotes opportunity for plant-wide trend analysis.The follow-up effort includes verifying the implementation of the stated C/A along with verifying the effectiveness of the contractors actions i.e. has the problem been resolved to the point of non-recurrance.There are 4 levels of C/A and are noted as follows…(next chart)
10 LEVEL I contractual noncompliance requires no special attention directed to working level personnelmay be verbal or written(self explanatory)
11 LEVEL II written request systemic non-compliances directed to contractor mgmt responsible for the processInform CAT of issuanceself explanatory
12 LEVEL III serious non-compliances to contractor top mgmt. Gov’t may pursue contractual remediescoordination w/ ACO & Cmdr prior to issuanceissued by Team Leader or abovecopy buying activity & cognizant Gov’t ofc at prime as applicableContractor immediately placed on the CAL until C/A is verified and CAR closed out(SELF EXPLANATORY)Gov’t contractual remedies may equate to reductions in progress payments, cost disallowances, cure notices, show cause letters or business management system disapprovals.FOOD FOR THOUGHT: When addressing contractual remedies, remember each functional discipline has their own area of responsibility i.e. when the I/S collects and analyses data identifies a series of concerns, and provides a recommendation to the ACO for the action, the ACO must be willing to take appropriate actions to convey to the contractor that business is not going to be “as usual”.CAL is currently inactive...DCMC is addressing the concern
13 LEVEL IV involve contractual remedies must be issued by ACO, countersigned by Team Chief or abovecopy of CAR and all correspondence to buying activities.proper coordination between CAOs, Districts, HQ, customers and other affected Gov’t activities before issuanceSELFEXPLANATORY
14 LEVEL IV(cont’d) assure all resolution efforts are in concert contractor immediately placed on the Contractor Alert List (CAL) until C/A verification and CAR close-outSELF EXPLANATORYCAL is currently inactive...DCMC is addressing the concern. As soon as the system is up and running, direction will be provided.
15 DLAM , PROCASCAO management maintain visibility of all LEVEL II and above CARsEscalation, due to non-responsiveness to lower level CARs, as determined by the Contract Administration TeamREMEMBER we are required to maintain documentation of all CARs…which includes Level 1. Trend analysis of level I’s may point to systemic problems warranting issuance of level II.
16 Contractual Requirements Although schedule violation is basic area of Production related C/A, manufacturing processes, (such as Manufacturing planning, MRP II, work measurement, material handling, integrated product development and facility management) are likely to be found as the root cause areas.Schedule is the primary violation in production related non-compliance…however care must be exercised in the realization that the manufacturing processes that attributed to the non-compliance must be subject to Industrial Specialist surveillance to verify prevention of recurrence, process efficiency and effectiveness.
17 Contractual Requirements Contractor’s requirement relative to many floor level manufacturing processes are covered in Contract requirements referencing Quality.Recognize that “contractual Quality requirements” are the lead into manufacturing process contract requirements and may be the referenced contract violation.Manufacturing processes must function appropriately in order to produce conforming products, on time…which are (BOTH) contractual requirements.The accomplishment of on time delivery is precede by efficient and effective manufacturing process operations that adequately respond to process changes without compromising the objective of timely output (delivery).
18 Contractual Requirements BOTTOMLINE: Do not limit applicability of “contract requirements” based on functional area (i.e. quality or production)... compliance to contract requirements includes compliance to the delivery schedule.Ideally the pursuit of root cause corrective action needs to be a collaborative effort between Industrial Specialists and Quality Assurance Specialists and Industrial Engineers. The focus for the Industrial Specialist is on schedule impact and the efficiencies in contractor operations to respond to situations without negatively affecting timely delivery.The Quality Assurance Specialist is innately involved at process level and may identified issues that may ultimately be the cause of schedule problems. The QAS can serve as a valuable resource to assess the effectiveness of contractor C/A efforts and provide a heads of circumstances likely to affect delivery. Additionally the Industrial engineer serves as a valuable resource in understanding, evaluating process efficiency and effectiveness.
19 Contractual Requirements Complete contract review must be done -to identify contractor obligations under the contract-to identify contractual noncompliances-reference applicable contractual requirements in CARsMust stress the importance of complete contract review. we never want to embarrass ourselves by issuing a CAR for a requirement that is not a part of the contract…not to mention the potential legal ramifications that can arise from such an fraction on our parts.The following slides are provided to familiarize you with some note worthy contractual call outs, including Federal Acquisition regulation (FAR) references and many traditionally thought of as only pertaining to Quality Assurance but in actually have application to the Schedule & delivery Management world, as well. Certainly what is presented here is not all inclusive….Remember the corrective action process requires that we “do our homework”…starting with the clear understanding of what the contractor is bound to under the contract- that he accepted.
20 Contractual Requirements FAR Policy“…contracts shall be awarded to responsible…contractors only.”LEAD IN SLIDE…FOR NEXT
21 Contractual Requirements FAR General Standards“To be determined responsible, a …contractor must…be able to comply with the required or proposed delivery or performance schedule…”Contracts are awarded on the basis of a supplier being able to comply with contract requirements I.e. delivery or performance schedule.The expectation exists for the contractor to maintain his responsible status in order to provided what is contracted for in the contract (included on time delivery)
22 Contractual Requirements FAR Contractor Responsibilities“The contractor is responsible for carrying out its obligation under the contract by…”(lead in slide…flow to next slide)
23 Contractual Requirements FAR Contractor Responsibilities“Tendering to the Government… supplies or services that conform to contract requirements…”“tendering” equates to providing/supplying/delivering….“Conformance to the contract” includes “tendering…by the contractually specified date”
24 Contractual Requirements FAR Contractor Responsibilities“The contractor may be required to provide and maintain an inspection system or program for the control of quality that is acceptable to the Government...”How does this relate to delivery?If there are quality issues that are the root cause of a schedule noncompliance the contractor has not only violated schedule but has violate other contractual requirements…
25 Contractual Requirements FAR Contractor Responsibilities“The control of quality by the contractor may relate to, but is not limited to...”“Manufacturing processes, to ensure that the product is produced to and meets the contract’s technical requirements;…”Remember the ROOT CAUSE to many delivery problems are manufacturing processes. this reference is provided to show that the FAR mandates “…control of manufacturing processesto ensure that the product
26 Contractual Requirements FAR Contractor Responsibilities“…Procedures and processes for services to ensure that services meet contract performance requirements…”The contractor is responsible for maintaining procedures and processes that ensure services meet contract performance requirements…contractual performance requirements include on time delivery
27 Defense Priorities Allocation System (DPAS) Requirements 15 CFR (d)(2)states in part, “….shipment or performance will be delayed, the person must notify the customer immediately, give the reasons for the delay, and advise of a new shipment or performance date.NOTE: “THE PERSON” as referenced in the DPAS reference refers to whoever accepted the order…more appropriately identified as “the Supplier”
28 Contractual Requirements MIL-Q-9858A Quality System RequirementsPara 1.3 Summary“The program shall assure adequate quality throughout all areas of contract performance…”Although the reference pertains to “Quality System Requirements” the requirement includes “all areas of contract performance” which most certainly includes assurance of providing procurements on time...
29 Contractual Requirements MIL-Q-9858A Quality System RequirementsPara 1.3 Summary“All supplies and services under contract, whether manufactured or performed within the contractors plant or at any other source shall be controlled at all points necessary to assure conformance to contractual requirements…”This reference outlines the requirements that both prime and sub-contractors are expected to control efforts, associated with the contracted supplies or services, to assure conformance to contractual requirements….ON TIME DELIVERY is a contractual requirement.
30 Contractual Requirements MIL-Q-9858A Quality System RequirementsPara 1.4 Relation to Other Contract Requirements“The contractor is responsible for compliance with all provisions of the contract and for furnishing specified supplies and services which meet all the requirements of the contract.”This reference, from Mil-Q, further under scores what we already know - that the contractor is responsible for compliance to all aspects of the contract…including timely (on-time) delivery
31 CRITERIA CONDITIONS AND SITUATIONAL EXAMPLES The following slides will provide you with two situational examples…progressing from level I thru IV CARs.Discussion is encouraged….
32 Verbal or Level I - Situation A While reviewing a random sample of purchase orders, the functional specialist notices DPAS not being flowed down to sub-vendors from prime contractorThe functional specialist discusses the requirement with the contractor’s purchasing agent, who acknowledges omission and immediately issues P.O. modification to correct the error.Corrective action is furthered by the contractor amending his work instructions/procedures, requiring flow-down of DPAS requirementsViolation: DPAS and Mil I (work instructions)
33 Level II - Situation AFunctional Specialist notices a negative trend in Ontime delivery performanceFurther analysis reveals consistent problem with (sub)vendor material having to be reworked after Gov’t rejection in receiving inspection.Reworked material comes from same sub-vendor, and is routinely received weeks after the planned in-house receipt date.Schedule & Deliver Management chapter of the one book requires issuance of CAR to Production Schedule and Control System when On time deliver rate is less than 90%
34 Level II - Situation A (con’t) Production functional specialist coordinates with the Quality specialist and issues a written CAR based on the negative delivery performance trend and the consistently late receipt of deficient sub-vendor product.The Production functional specialist’s root cause analysis identifies concern in the area of purchase issuance i.e. are P.O.s being issued with adequate lead time…how is the prime contractor controlling his subcontractorThis is a prime example of an “integrated” corrective action effort where the areas of non-compliance affect both the QA arena and Schedule & Delivery Management concernsCAR is issued against the contractors production schedule and control system and prime control over subs (Mil-Q requirements)
35 Level II - Situation A (con’t) Intensity of functional surveillance is increased until an acceptable corrective action response is received, implemented and validated.
36 Level III - Situation AContractor is non-responsive to previously issued Level II CARs, as evidenced in Gov’t documentationContinued missed internal milestones, due to late receipt of sub-vendor product
37 Level III - Situation A Situation is coordinated with CAT members CAR is escalated by written issuance to head of contractor organization, noting that continued inaction may lead to more severe measures
38 Verbal or Level I - Situation B Contractor processing/working hardware not identified in daily schedule/bucket. Conflict to internal procedures.Currently not impacting overall delivery status however trend of working around/outside daily schedule could have negative impact on contract delivery schedule.Contract noncompliance:No delivery impact at this time, however violation to supplier’s internal procedures for scheduling daily work. Also violation of FAR , Contractor Responsibilities (ref: slide 27)Contractor’ build plan provides a 30 day lead time between part manufacture and sale. There is a 30 day supply of assets (cushion) prior to contract delivery.Working outside their daily schedule creates a breakdown within the manufacturing processes because of ??????? I DON’T UNDERSTAND THIS BERT
39 Level II - Situation BContractor continuing to process work outside daily schedules/buckets. Still not impacting contract delivery schedule, however in violation of internal procedures and production plan. Internal tracking of hardware becoming difficult to manage, monitor and identify.Situation continues, no remedy taken by the contractor.In addition to previous conditions, now the internal tracking of hardware becomes a problem.Violation to contractor’s work instructions/procedures.
40 Level II Situation B (con’t) Prior to issuance, coordinate action/activity with CAO team. Explain impact.CAR issued to Production/Manufacturing Manager with copy to production line supervisor. (Good idea to copy the contractor’s Quality Assurance department)
41 Level III - Situation BContractor’s lack of action relative to previous activity have now caused a delinquent posture to delivery schedule. Identifying and tracking hardware most difficult. The problem extends beyond main production line to spare part activity, retrofit effort, and impacting inventory accuracy.As a help to the reader, you may want to add (continued) at the bottom ot the slide.Will doThe extension of this problem now goes beyond the production line, impacting many of the support processes (see slide 43)
42 Level III Situation B (con’t) Unsure of contractor’s ability to ship end items due to the lack of identification and tracking ability. Build up/cushion of assets no longer available.Contractor not able to provide a valid “get well” date.At this point, the supplier’s ability to identify and track the hardware is difficult. Paperwork must be annotated to document the “work arounds”.Get well dates are difficult to identify because the contractor’s records may not be accurate. Inventory/assets counts may not be accurate.
43 Level IV - Situation BContractor’s lack of action now impacts delivery posture (contract delinquency)Lack of action adversely impacting associated systems (inventory management, BOM accuracy, release quality, financial inaccuracies, etc.)
44 Points to RememberCorrective action cannot be accomplished without understanding contractual requirementsCorrective action efforts will be ineffective without ROOT CAUSE ANALYSISReference Root Cause Analysis Guide- Definitions- Process Focus- MethodsThe importance of knowing the contractual requirements cannot be over emphasized. We can not readily identify violations with first understanding/knowing what is required in the contract. We may find ourselves educating the contractor on what he signed up to.Please refer to the Root Cause Analysis Guide, which provides definitions and methods by which to conduct Root Cause Analysis.At this point review the guide …Methods will be explored during the workshop .
45 Points to RememberCAR = request for root cause remedy of contractual noncomplianceAdequacy of stated C/A determined via follow-up verification of implementation and objective evidence of compliant condition.Root Cause identification is Government and contractor concern.This chart serves as a bulleted review of areas explored during the module…these are points to stress….
46 Points to RememberRoot cause analysis will uncover Manufacturing process areas contributing to the nonconformancepromotes modified surveillance efforts by the Industrial Specialistpromotes increased process understanding by the Industrial Specialistpromotes evaluation of process efficiencies and effectiveness by the Industrial Specialist or Industrial Engineer
47 CAR written formats (Levels II thru IV) CAR documentation (all levels) Examples Workshop:CAR written formats (Levels II thru IV)CAR documentation (all levels)Root cause analysis MethodsPROCAS opportunitiesPlease refer to the Root Cause Analysis Guide, which provides definitions and methods by which to conduct Root Cause Analysis
48 “Give me a lever long enough… “Give me a lever long enough….. And single-handedly, I’ll move the world”Archimedes