Patrick S. Woods, C.P.M., CPIM
Patrick S. Woods, C.P.M., CPIM, Buyer, Fisher Controls International, McKinney, TX 75069, 214/548-3135
Overview: Do your suppliers know how they fit into your company's long term growth plan? Do they know how they were selected to provide products and services to your firm? Are they aware of new programs that your organization has implemented to lower total cost and increase quality? Good suppliers will want answers to all of these questions. As a purchasing professional, it is your duty and privilege to provide these answers and to exchange vital information which will enable your suppliers to become your partners.
Approximately ten years ago, a major U.S. Corporation, for purposes of this discussion will be called the PARTNERING LEADS to UNENDING SATISFACTION Co., or PLUS ( the actual company wishes to remain anonymous,) developed the "Supplier Quality Seminar," a two day interactive session to strengthen their customer/supplier partnerships and to answer the above questions.
Based on my experiences with the PLUS Co., this presentation will focus on "how to" present the event including marketing the idea internally, planning the agenda with key presentation items, inviting the supplier attendees and the overwhelming benefits. What better way to cement the partnering relationship in just two days!
Marketing The Idea Internally. The first step to success is to convince upper management that this idea is beneficial to your company and worth the investment. At the PLUS Co., upper management was represented by the Plant Manager, Quality Assurance Manager, Marketing Manager, Engineering Manager, Manufacturing Manager, P&IC Coordinator, ISO 9001 Administrator and of course, the Purchasing and Materials Manager. You must determine the key players in your company. By convincing these key players of the value of this program, we accomplished a two-fold purpose. First, they gave us permission to spend the time and energy on the event, particularly, the Purchasing and Materials Manager and Plant Manager. Second, we wanted each of these individuals and their departments to participate in the presentations, from a welcoming and introductory speech from the Plant Manager to function overviews from each of the internal departments, as the "Planning The Agenda" section below will illustrate.
In summary, after developing a rough draft of this two day event, arrange a meeting to present your ideas to management, including a list of benefits which will be covered in the last section.
Planning The Agenda. This is a critical starting point in your program, because a good, thorough agenda will win the support of management and will attract your supplier attendees, but a poor or lacking agenda will do the opposite. However, before you commit your agenda items on paper, take a few minutes to determine your real focus in customer/supplier relations and partnering. For instance, if your main focus is to certify your suppliers, then this section should be included in your program. In the Plus Co., quality improvement and supplier engineering support were hot topics so they were included in the agenda. At the Plus Co.'s upcoming seminar, inventory reduction (consignment of parts and JIT shipments) will be emphasized since this issue is now a hot topic with its parent company. Listed below is a suggested agenda based on past programs.
FIGURE 1-1 - SUPPLIER QUALITY SEMINAR AGENDA
8:00 a.m. - Welcome & Introductions
8:30 a.m. - Company History & Facility Info.
9:00 a.m. - Administration/Expectations
9:30 a.m. - Form Tour Groups
9:30 a.m. - Tour Of Facility
10:45 a.m. - Break
11:00 a.m. - Safety & Environmental
11:45 a.m. - Competitive Analysis
12:00 p.m. - Lunch
1:00 p.m. - Quality Improvement Process
1:30 p.m. - Supplier Capability Studies
2:00 p.m. - Marketing Prospectus
3:00 p.m. - Break
3:15 p.m. - What Drives Purchasing
4:15 p.m. - Supplier Presentation Criteria
4:30 p.m. - Adjourn
6:00 p.m.-? - Customer/Supplier Partnering Dinner
8:00 a.m. - Supplier Selection
8:30 a.m. - Supplier Performance
9:15 a.m. - Break
9:30 a.m. - Long Range Plans - Materials
10:15 a.m. - Supplier Engineering Support
11:15 a.m. - Long Range Plans - Quality
12:00 p.m. - Lunch
1:00 p.m. - Long Range Plans - Manufacturing
1:45 p.m. - Supplier Presentations
3:15 p.m. - Break
3:30 p.m. - Expectations Review / Critique
4:00 p.m. - Closing Comments / Adjourn
Although some of the agenda items listed above should be included in all seminar programs regardless of the nature of the company, others could vary depending on your firm's hot issues but as mentioned above, Supplier Quality should be the theme. Reviewing the items,
Welcome & Introductions. This is an obvious beginning to any seminar program in making the attendees feel welcome, to review the next two day's presentations, to introduce the presenters (or if not present, who will be presenting) and to answer any initial questions from the attendees. Note, it is preferable that you ask your plant manager, CEO or highest ranking official to do the introduction for two main reasons. First, it will give the attendees the opportunity to personally meet the captain of the ship and second, it will show that your firm's upper management is supportive and will commit to the customer/supplier relationship.
Company History & Facility Information. As with the first agenda item, this portion is an essential element of your seminar. Normally presented by the facilities or operations manager, this presentation will give your audience the opportunity to learn how and when your company was founded, what types of products or services are produced, what other sister facilities or parent corporations exist and the company's overall mission statement/corporate direction.
Administration/Expectations. Again, this should be a mandatory agenda item presented by the seminar facilitator which can be the purchasing/materials manager or a designated purchasing professional. The material presented is basic such as where the facilities; restrooms, telephones, smoking area - if non-smoking facility and refreshment areas are located as well as any housekeeping rules. For example, at the PLUS company, visitors are not allowed to wander outside the immediate area without a company escort and entry into the plant requires safety glasses and removal of jewelry and so these factors are normally emphasized in this section. Also, general expectations from the attendees are discussed such as open participation, questions and answers and to keep an open mind throughout the two day session.
Form Tour Groups/Tour The Facility. Regardless of your company, a thorough tour of your plant/offices and operation is a major boost to this program. In talking with past seminar participants, one of the highlights of the program was touring the Plus Company's operations. Although this seems like an easy task, please don't make the same mistake the Plus Company made in the early years. Early on, the program facilitators failed to properly line up enough tour guides and train them as to how to give an appropriate tour. What resulted was some confusion and the group finishing short of the allotted time. Please take the extra effort to properly select your tour guides, guidelines for the tour and the allocated amount of time.
When selecting the guides, be sure to get representatives from the key departments, manufacturing, operations, marketing, shipping, etc. who are good speakers and with past experience in conducting tours. Keep in mind that many of your supplier representatives may be visiting your facility for the very first time!
Safety & Environmental. Since the Plus Company is an OSHA VPP site, safety & environmental issues are normally presented by the Safety Manager both from the prospective of the customer as well as safety & environmental issues that the supplier should heed (to avoid heavy fines, plant shutdowns or even law suits) but your company may wish to substitute a more pertinent topic in this area.
Competitive Analysis. This is another optional area but has been a good topic for the Plus Company. This subject should normally be presented by your firm's marketing specialist or one who is familiar with market conditions. This area would cover such subjects as the customer's markets, list of major competitors and how to work with the customer to lower total product costs. Most importantly, this section emphasizes the importance of information protection (prints, specs, other details submitted to the supplier) from unauthorized individuals primarily, competitors.
Quality Improvement Process. This subject is presented by the Quality Assurance Supervisor and is a good overview of the Plus Company's QA/QC program. Key points covered include the establishment of a company wide Quality Improvement Team (Q.I.T.), measurement of the Price Of Nonconformance (PONC), communication/awareness and the implementation of ISO 9001. The suppliers are then shown how they can contribute to the success of the Plus Company in these areas. You may wish to utilize this section to explain your company's quality improvement process and how it relates to your suppliers. Remember, your seminar theme is quality!
Supplier Capability Studies. This subject is a subcomponent of Statistical Process Control (SPC) and relates to the supplier's process and whether it is in control to meet customer specifications. Again, if this area is important to your firm in that you rate your supplier's SPC capabilities, then you may wish to incorporate it in your program. Typically, your QA representative(s) will be the most familiar with this subject.
Marketing Prospectus. In many cases, suppliers may have provided products and services for years and had no idea as to the end products and services the customer provides, let alone, the application of their components. This topic is typically presented by the sales/marketing manager and is an overview of the customer's products and services and their present and future marketing plan (information that is not of a confidential nature.) This is a good opportunity for "show and tell." Pictures, samples, actual table displays of products for touch and feel are always helpful to the supplier attendees, particularly, if they can identify their subcomponents and how it relates to the end product(s).
What Drives Purchasing. This is a "must have" presentation provided by the Production & Inventory Control Manager. As is probably the case with your company, forecasts are erratic, schedules are always changing, parts and services are constantly being moved up ("you want it when?") or pushed out ("could we reschedule to the year 2010?") This presentation convinces the suppliers that the customer is not smoking that funny weed, but helps them understand why requirements change and how they can react in a timely manner.
Supplier Presentations & Criteria. One of the most important elements of the two day Supplier Quality Seminar is the opportunity for the supplier attendees to make presentations to the customer. Their presentations should include a brief introduction, overview of their company including parts and/or services provided, key markets, research and development and future strategies. This is also the supplier's opportunity to voice concerns in their relationship with the customer and well as any other questions or comments.
This item is normally covered by the seminar leader on the first day so that the suppliers have a chance to develop or fine tune their presentations. In fact, when initially inviting the suppliers, they are normally informed about this section of the program so that they may have the opportunity to bring handouts, brochures, overheads, etc.
Customer/Supplier Partnering Dinner. The Plus Company has always used this time as an opportunity to visit with the supplier on an informal basis. Normally, the dinner is supported by the entire purchasing staff, plant manager and all of the presenters. A bus or van is chartered so that all can travel to the restaurant together and this proves to be a very interactive session. During the two lunches and refreshment breaks as well, the purchasing staff also takes the opportunity to visit and dine with the attendees and this has proved to be very beneficial.
Supplier Selection/Performance. This part of the program can normally be split up and presented by two or three buyers who are good presenters. This is your opportunity to talk about your supplier selection and performance program as well as quality position. For instance, at the Plus Company, subjects normally discussed are supplier audits, ratings and the preferred supplier program.
Long Range Plans - Material/Quality/Manufacturing. Each of the respective department managers are asked to address their plans for the future and how they relate to the supplier base.
Expectations Review / Critique. This is the opportunity for the supplier attendees to critique the seminar and to determine whether the presentations met their expectations. Written evaluation forms should be distributed at the beginning of the program and at this time, the suppliers should be given opportunity to complete the evaluation. Their feedback is important in that it can be used in planning your next session(s).
Inviting The Supplier Attendees. The Plus Company's has found that there are more willing participants than open spaces. You will probably want to limit the class size to 25-30 total supplier representatives. Of these 25-30 people, you should normally invite 2 or 3 representatives from each firm, therefore, 10-12 companies will normally be represented. The purchasing manager and/or program facilitator will want to poll his/her purchasing staff to determine which companies would be good candidates. As a rule of thumb, you will want to spread out the supplier base so that you are not too top heavy in one commodity or industry. Within a given supplying firm, you will obviously want to invite plant mangers, quality assurance, sales engineering personnel as opposed to just the sales representative.
Supplier Quality Seminar Benefits. Throughout the past ten years, the Plus Company has reaped many benefits from their two day Supplier Quality Seminar. These benefits included key suppliers being well informed of the customer's history, operation and long term plans. Through the supplier presentations, purchasing was informed of the suppliers background, direction and concerns. With the program emphasis on quality, the suppliers recognized the importance of defect free products and services resulting from good quality assurance throughout their process. In order for the Plus Company to remain competitive in the world marketplace, the suppliers also appreciated that they must work to reduce cost, improve value and protect proprietary information. The overwhelming advantage, however, is that they were able to strengthen their supplier relationships in only two days! Good luck in planning your future Supplier Quality Seminar!