Lean Six Sigma / Operational Excellence

Perspective: Yes, there is a supplier lean metric

By Paul Ericksen, for IndustryWeek

Apr 02, 2019

The RFQ process for today’s OEMs does not have a consistent way of defining a supplier’s overall capabilities. For example, there is currently no metric for supplier lean-ness. And if there was, OEM purchasing departments are not positioned to get credit for the improvements in it can have on OEM overheads. But as I’m going to discuss, a metric for supplier lean-ness does exist and could be collected through the RFQ process, a process that hasn’t changed much since the advent of the purchasing function.

An indicator of supplier lean-ness is the supplier’s “true” lead time. And here I need to state that suppliers don’t have lead times. Instead, the parts and products they manufacture have lead times. There already exists a proven metric for “true” lead time called Manufacturing Critical-path Time (MCT), whose definition follows:

“The typical amount of calendar time from when a manufacturing order is created through the critical-path until the first, single end-item of that order is delivered to the customer.”

if you can’t reduce MCTs by days or weeks, you are either very lean or aren’t really working on what needs to be worked on.

Read the full story, "Yes, there is a supplier lean metric - and it's very useful," at www.industryweek.com.

Get breaking industry news delivered right to your inbox.
Sign up for the daily Plant Services Smart Minute newsletter.