1. Supplier Partnership Presented by Dr. Joan Burtner Certified Quality Engineer Associate Professor of Industrial Engineering and Industrial Management Mercer University

2. ETM 627 Fall 2014 Dr. Joan Burtner, Associate Professor of Industrial Engineering Slide 2 Introduction Supplier quality can substantially affect the cost of a service or product “Customers and suppliers have the same goal – to satisfy the end user” Deming’s influence – –Stop awarding business based on price alone – –Develop long-term relationships by using single suppliers Other trends after 1980 – –Just-in-time philosophy – –Continuous process improvement – –Acceptance of ISO 9000

3. ETM 627 Fall 2014 Dr. Joan Burtner, Associate Professor of Industrial Engineering Slide 3 Customer and Supplier Partnering Long-term commitment – –Problem solving takes time – –Total organizational involvement required – –Suppliers may be reluctant to make large investments without long-term commitment Trust – –Non-adversarial relationship required – –Open and frequent communication strengthens the relationship Shared vision – –Need to satisfy the final customer – –Each partner should understand the other’s business – –Mutual strategic planning will benefit both parties

4. ETM 627 Fall 2014 Dr. Joan Burtner, Associate Professor of Industrial Engineering Slide 4 Sourcing Sole: The organization is “forced” to use only one supplier. Single: The organization chooses to select one supplier for an item when more than one supplier is available. – –Potential advantages: reduced business and production cost, better end product with reduced variability, better accountability, more loyalty – –Potential threat: delivery disruption Multiple: The organization uses two or more suppliers for a specific item. – –Competition will result in better quality, better service, lower costs – –May eliminate disruption of supply due to strikes, etc.

5. ETM 627 Fall 2014 Dr. Joan Burtner, Associate Professor of Industrial Engineering Slide 5 Selection Decisions Decision #1: produce in-house or outsource If decision to outsource is chosen – –Develop criteria for selection – –Send multifunctional team to assess suppliers before making final choice

6. ETM 627 Fall 2014 Dr. Joan Burtner, Associate Professor of Industrial Engineering Slide 6 Certification Starts after supplier begins shipment of the product Based on mutually-developed unambiguous specifications Relies on a predetermined process for dealing with nonconformities Requires that the supplier has a fully-documented quality system Identifies who is responsible for conducting inspections and tests Suppliers may be decertified as a result of major problems

7. ETM 627 Fall 2014 Dr. Joan Burtner, Associate Professor of Industrial Engineering Slide 7 Supplier Rating System Supplier rating system is designed to provide – –Metric: overall rating of supplier performance – –Systematic communications regarding quality, service, and delivery – –Factual record of problems for corrective action – –Positive relationship between customer and supplier Successful supplier rating system requires – –Internal structure to implement and sustain the rating program – –Regular and formal review process – –Standard measurement system for all the suppliers

8. ETM 627 Fall 2014 Dr. Joan Burtner, Associate Professor of Industrial Engineering Slide 8 Contact Information Email: Burtner_J@Mercer.edu Email: Burtner_J@Mercer.edu US Mail: US Mail: Mercer University School of Engineering 1400 Coleman Avenue Macon, GA Phone: (478) 301- 4127 Phone: (478) 301- 4127