Original Date: 08/07/1995
Revision Date: 01/18/2007
Best Practice : Supplier Statistical Process Control
The goal of the Lockheed Martin Tactical Aircraft Systems (LMTAS) Supplier Statistical Process Control (SPC) program is to ensure that the company’s suppliers use SPC techniques to reduce cost and improve product quality. In March 1988, the Variability Reduction (VR) Committee formed a supplier SPC subcommittee, and a supplier conference for SPC was held the same month. The two-year voluntary program that followed met with very limited success. Therefore, in August 1990, LMTAS decided to make SPC a purchase order requirement that would go into effect in January 1991.
A Supplier SPC Team was formed to work with the supplier base for certification, with a secondary goal of reducing the number of suppliers from 1784 to a more manageable number. In November 1990 the Supplier SPC purchase order requirement was created. This requirement document was called “Appendix Y” and it became effective as a contract requirement in January 1991 with supplier certification due by June 1992. In March 1991 all suppliers who had not submitted a SPC implementation plan were locked out from all procurements resulting in a gradual reduction in the supplier base from 1784 to 600 vendors.
Appendix Y establishes the framework necessary for a supplier to set up SPC and obtain certification. It is not a "how-to" document. For SPC system approval a supplier must define their SPC implementation procedures and develop a milestone plan. SPC certification requires a system certification with quarterly reports and a product certification with an annual re-audit. The LMTAS supplier SPC team must verify that the supplier has management involvement and participation, has responsibility established, has the SPC system proceduralized, has knowledge of SPC at all levels, applies SPC techniques effectively, and is working to improve processes and products. While the team does not dictate how SPC techniques are used, they are charged with assuring that the supplier’s SPC system is effective. Supplier SPC system level approval requires a facility wide implementation of SPC on all key processes and a system that focuses on processes rather than being part-number specific, emphasizes monitoring capability, and pursues continuous improvement. For product level certification, the supplier must demonstrate and maintain minimum capability for all key characteristics of the certified part or family of parts. The control characteristics and key characteristics must be in control and can show a Cpk of 1.33 or 99.9%.
LMTAS Supplier SPC administrative requirements and procedures in addition to Appendix Y include a Material Department Instruction and a Buyers’ SPC Handbook. Under Appendix "Y" a requirements matrix by supplier category outlines the requirements and identifies applicable paragraphs by supplier category. The purpose of the MCI is to delineate the responsibility of the Buyer, Supervision, and the SPC Team in administering the Supplier SPC Purchase Order requirement (Appendix Y) and for tracking supplier conformance.
The Buyers’ Handbook is published to help the Buyer administer supplier SPC purchase order requirements, and it contains a copy of the requirements, procedures, work instructions, Memoranda of Understanding, directives, and sample forms, letters, and charts.
Implementation of this system has reduced the supplier base to approximately 600, raised the purchased material acceptance rate from suppliers (yield to stock) to 99.9%, transitioned acceptance inspection from LMTAS to the supplier facility, raised purchase order delivery concurrence to 98%, and reduced supplier cost while being in a low rate production environment. It should be noted that contracts are not rebid for those suppliers demonstrating consistently high quality and effective cost control.
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