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Monday, February 17, 2014

Boiling the Ocean: How a Manufacturer Leveraged the Criteria to Improve its Supply Chain

Posted on February 6, 2014 by Dawn Bailey

In 2012, Lockheed Martin Missiles and Fire Control (MFC) participated in the Baldrige Executive Fellows Program. As part of the program, John Varley and the other Fellows were given homework: identify a significant challenge in their organizations and use the principles of the Baldrige Criteria for Performance Excellence to achieve significant improvement.

Varley, vice president for Quality and Mission Success–at the 2012 Baldrige Award recipient that designs, develops, manufactures, and supports advanced combat, missile, rocket, and sensor systems for the U.S. and foreign military–knew that MFC’s most significant area of improvement was the supply chain. Over the past year, the economy had hit the U.S. Department of Defense (DOD) and its contractors hard, and as spending became tighter, the smaller subcontractors in the industry–those who support the large contractors–were hit the hardest.



According to Steven Sessions, supplier quality director and deputy, Quality Mission and Success, MFC has a multitier supply chain, with suppliers who have subcontractors and so forth, so there are several tiers of suppliers that support MFC. Sessions says when the economy began to squeeze the lower-level, smaller contractors, the tendency was not to lay off the person who created the parts but the person who was in charge of checking the quality of the parts. MFC has contractual relationships with the first line of its supply chain, but how do you assess the risk with lower-level tiers that farm out parts of their work?

Sessions said that MFC was already working on strategies to address supply chain issues when his colleague came back from a Baldrige Executive Fellows session with the idea for a project that “was pretty startling to colleagues.” Varley’s project focused on how to improve the entire DOD supply chain.

“[Such a project] was closer to boiling the ocean,” Sessions says. “We have 2,000+ suppliers, and now we would be taking on a project to help companies that are competitors improve their own organizations.”

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