Original Date: 08/07/1995
Revision Date: 01/18/2007

The Statistical Process Control (SPC) Supplier Certification program is an initiative under the Lockheed Martin Tactical Aircraft Systems (LMTAS) Supplier Relations Program requiring that all suppliers use statistical methods and techniques to analyze their processes and outputs for reducing costs and improving product quality.

LMTAS recognized that no other tool offers the opportunity to improve efficiency in all elements of cost more than SPC, not only in its own internal manufacturing processes and product output, but in the processes and output of its suppliers. In keeping with the supplier base focus to affect cost/schedule/quality, LMTAS initiated a volunteer program in 1988 for suppliers to use SPC, but met with only limited success.

Realizing that the program needed to be enforced, LMTAS initiated an 18-month effort to establish SPC as a contractual requirement with all suppliers to be certified by June 1992. The company blocked all non-certified suppliers from procurement consideration and required suppliers to become SPC certified before purchase order award. Unique to the program is that LMTAS did not dictate how SPC techniques are used, but did apply measures to assure the supplier's SPC system was effective.

LMTAS identified not only the requirements, but the beneficial gains achievable by the supplier through SPC. The program requirements are well defined and documented for both the administration of the program by LMTAS and the participation in the program by the suppliers. Workshops, conferences, and training sessions are held to clarify requirements and help the supplier base conform to the SPC Certification Requirements. The program has generated SPC approval requirements, certification requirements, continued certification requirements, and system controls. A certified supplier must have knowledge of SPC at all levels, have managements' involvement and participation at all levels, develop SPC procedures, understand process deviation, apply SPC effectively, and continually work to improve processes and products. The supplier is awarded SPC System Certification after successfully passing a self evaluation, an audit by LMTAS, schedule and performance evaluation, deficiency corrections, and certification that all requirements are met.

As of July 1995, 564 suppliers out of the supplier base of 602 have been SPC certified, with 31 additional suppliers committed to and working toward SPC certification. Benefits to the supplier have been increased business and increased profit margins. Improved supplier performance has contributed to the overall unit price reductions of 38%, although production rates are lower than in the past. LMTAS has improved their Purchased Material Acceptance Rate from suppliers from 96% to 99.9% the highest in the history of the plant. Their Purchase Order Delivery Concurrency has improved from 89% to 98% the highest in the history of the plant.

For more information see the Point of Contact for this survey.