Original Date: 06/05/2006
Revision Date: / /
Best Practice : Supply Chain Management
Rockwell Collins has implemented a proactive supply chain management system characterized by centralized policy, guidance, robust automation, and supplier feedback at senior-management levels. The automation has successfully allowed the company to redirect expertise to more strategic tasks that support supply chain development in earlier product design phases and supply chain monitoring.
Rockwell Collins’ Cedar Rapids facility is a global electronics manufacturer with approximately $1.3 billion of direct and indirect spending. Rockwell Collins set as its vision “a supply chain state characterized by hands-free, highly automated processes, with a scope that spans from product design through shipment to our customers and payment of our suppliers.” This highly automated process was a lofty but realistic goal given the company’s more than $1 billion purchase transactions a year. Another thrust of the automation of purchases was to transfer buyers from traditional tasks to more strategic functions such as supply chain capability roadmaps and proactive supply chain development and monitoring.
The Rockwell Collins vision had to be implemented by being highly integrated with suppliers that provided high- quality products on schedule. To support this, Rockwell Collins provided centralized strategy and tools that included processes and procedures, spend aggregation, enterprise supply agreements, and comprehensive e-business tools. Execution is decentralized and focused on execution of procurement in support of material resource planning, planning and scheduling, plant-unique procurements, and plant-procurement support. To work toward this vision, Rockwell Collins implemented a well-thought-out management structure with the Supplier Alliance Advisory Council (SAAC) comprised of managers from key suppliers, each of whom serve 3-year terms.
The SAAC provides valuable input into the future direction of supply chain strategies. Other opportunities are provided for supplier feedback and recognition at events such as the annual Suppliers Conference. Quarterly reviews with commodity teams and their leaders are conducted by Supply Chain Steering Team members who provide hands-on guidance and help link company goals and resources for these teams. Another element of the supply chain management structure includes an internal Best Practice Team that shares lessons learned and best practices. The 22 enterprise commodity teams consist of a cross-functional team responsible for the commodity management of material and services. The charter of the Cross-Functional Team is to identify, develop, and maintain a supply base (by commodity or technology) to meet or exceed customer needs. By most major metrics, these teams are accomplishing their goal. Between 2003 and 2005, on-time deliveries increased 5.5%, lead-times were reduced by 23%, shortage reduction was 30%, and suppliers linked directly to the SupplyCollins Web site or by portal-to-portal automation had increased significantly.
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