Opportunity: In response to low first pass yield, a manufacturing plant identified the gaps within their supplier quality and quantified the impact to the bottom-line.
Solution: The team used downtime reporting, operation data and cycle time analysis to identify the top five suppliers contributing to lost revenue; the quality expectations of each supplier should be “Clearly Defined and Measured” through a management system. This component of the overall business downtime should account for little to no losses of revenue because controls should be in place to measure the quality of raw materials coming into the plant.
Results: A “Supplier Quality Management” program was implemented to address the root causes of quality defects. The operation unit realized a 20% decrease of cycle time due to the corrective actions identified by performance measurement.
Impact: $2 million