Original Date: 05/01/2000
Revision Date: 01/18/2007
Information : Supplier Rating System
In 1993, Northrop Grumman Defensive Systems Division (DSD) created a Supplier Management Program designed to minimize incoming inspection, reduce the company’s supplier base, and develop a supplier recognition program to reward superior performance. The previous system required personnel to manually calculate supplier ratings and reports. No integration existed with the company’s inspection, quality, or procurement systems. As a result of organizational mergers in 1996, Northrop Grumman DSD’s supplier base had grown to approximately 4,000.
Key to the Supplier Management Program is the Integrated Supplier Rating System (ISRS), which measures supplier performance for delivery and quality. The ISRS was designed to allow for continuous improvement by utilizing tables that permit thresholds to be raised as performance improves. A unique aspect of the ISRS is the integration of data into the company’s procurement and quality systems. Features of the ISRS include: Automated lockout for unapproved or disapproved suppliers, as well as suppliers with poor ISRS product ratings.
Electronic approvals by management to override automated lockout for suppliers with poor ISRS product ratings.
ISRS report cards for suppliers.
Automatic utilization of ISRS quality performance data to determine the acceptance testing necessary for each product received.
Since implementing the ISRS, Northrop Grumman DSD has reduced its supplier base to less than 1,200. In addition, the supplier rating system provides quality assurance (QA) with the flexibility to perform supplier analyses at varying levels (e.g., part, commodity, supplier, site) for the current month as well as three-, six-, or 12-month periods.
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