Original Date: 08/07/1995
Revision Date: 01/18/2007
Best Practice : Supplier Performance Evaluation and Review Program
Lockheed Martin Tactical Aircraft Systems (LMTAS) has established a new program, referred to as the Supplier Performance Evaluation and Review (SPEAR) Program, to monitor the performance of those suppliers whose performance falls below required levels. This effort highlights cooperation between LMTAS and the affected suppliers so satisfactory performance can be restored and long term relationships maintained.
LMTAS has established minimal acceptable quality and schedule performance criteria that its suppliers must meet. For quality, a supplier must maintain less than 2% rejections over each quarter and limit non-conformance costs to less than $2500. For a schedule, the supplier must maintain a concurrence level of 96% or higher. When these levels fall below the specified limits, the supplier becomes a candidate for the SPEAR Program.
At that time, the supplier must develop a corrective action plan that outlines actions it determines necessary to correct the deficiencies. Lockheed uses this plan to monitor progress of the resulting corrective actions. Provisions also exist in the program to allow both the supplier and LMTAS to work concurrently to solve disagreements and provide mutual resolution to the problems. Therefore, a reactive problem solving approach is used to correct the deficiencies instead of traditional methods that impose penalties when the supplier’s performance falters. If, however, acceptable improvement is not obtained, the supplier is transferred to an Approval/Withdrawn Status and made ineligible for new business.
The SPEAR Program promotes long-term cooperative relationships between LMTAS and its suppliers. It gives LMTAS rapid problem identification and resolution and provides an effective method for eliminating non- performing suppliers. The supplier not only is given the opportunity to remain a viable source to Lockheed through corrective action, but also benefits by the quality and schedule improvements made to its products. To date, 478 suppliers have been identified as SPEAR Program candidates with 106 of those placed in the program. Through active corrective action efforts, 83 of the 106 suppliers have been reinstated, with only 7 being removed from new business eligibility.
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Point of Contact for this survey.