1. Introduction to the IAQG SCMH “Supply Chain Management Handbook”
IAQG General Assembly
Melbourne, Australia
18 April 2007
Cherif Khelil
Safran
Dale Gordon
MPC
Susan Armtrong
UTC
Bernard Lauras
Airbus

2. Agenda
General presentation of “Supply Chain Management Handbook” objectives and concept
Presentation of SCMH projects that are well advanced

3. IAQG Strategy Foundations - Definitions
IAQG Strategy is to develop and promote implementation of Common Standards, Shared Auditing and Continual Improvement methods and tools:
Assuring Customer Satisfaction through On-Time, On-Quality Delivery of products and services, through the lifecycle
Delivering exactly what the customer ordered, exactly when we agreed to deliver it

4. Existing IAQG Standards today
Requirements to harmonise the Quality Management System
9100 – Aerospace Quality Management System (Design and Manufacturing)
9110 – Maintenance and Repair Stations
9120 – Stockists & Distributors
Requirements to raise Product Integrity
First Article Inspection
Variation Management of Key Characteristics
Non-conformance Management
Global Supplier Risk Management
Etc…

5. IAQG Objectives have recently evolved
Up to now, IAQG produced standards describing requirements
We need now to help suppliers to develop:
By helping them understanding our requirements
By providing guidance and best practices on how to fulfil requirements and achieve objectives and expectations
Up to Now:
Focusing on the WHAT
And Now:
Focusing on the HOW

6. New focus on “How” in particular through “SCMH”
What does SCMH mean ?
Supply Chain Management Handbook
What is the SCMH ?
A collection of guidelines, trainings, etc…
What are the Objectives of the the SCMH ?
Complementing existing standards
In some cases, need for new standards or standard improvement could be identified
How is the SCMH organised ?
Several Projects, addressing a specific process or activity
Provides links to 9100 series standards

7. New focus on “How” in particular through “SCMH”
The Supply Chain Management Handbook further explains the requirements in 9100:
Example
9100 states “The organization shall select suppliers which meet organization requirements”, but does not say how to assure or demonstrate that they meet these requirements”
The AAQG committed to developing this overarching standard at their meeting in March 05.
The document, Supplier Management 101, since renamed the Supplier Management Handbook, will contain both standards and ARP’s.
“Supplier Selection and Capability Assessment” is a guideline on how to assess supplier capability and select them

8. + Supply Chain Management Handbook Creation Concept AS/EN/JISQ 9100
Is Clarification of the standard needed to improve performance?
In which phase of a programme is it applicable: Supplier Selection, Product development & industrialisation, On Going (series) Production, or Change Control activity ?
Are there relevant existing industry standards or activities?
AS/EN/JISQ 9100
Requirements
Published Mat'ls
Work in Progress
Best Practices
None
Impact on Quality and Delivery performances?
Industry Enthusiasm?
Regulatory & Stakeholders Expectations?
Easy Implementation? +
A roadmap of how we’ll develop the handbook and some timing
SCMH
Development
Priority Setting

9. SCMH : A framework for organizing and integrating our work
New or revised IAQG standards
91xx
9131
9103
9102
9100
Requirements
9100 clarification
(in next revision)
Supply
Chain
Mgmnt
Handbook
Projects
Preference is to develop guidance material, not new requirements
IAQG guidelines on how to meet requirements

10. SCMH: A Facilitation Tool
Customer
Prime
Supplier
Subtier 1
Subtier 2
Subtier 11
Subtier 12
Subtier
SCMH facilitates the flow of expectations and solutions to all levels of the Supply Chain

11. Supply Chain Management Handbook
10 Projects identified, 4 with significant progress, 1 on hold, 2 with volunteers
Supply Chain
Management Handbook
Supplier Selection and Capability Assessment
Requirements and Flow Down
Process
Control
Work
Transfer
Significant progress
New Product Introduction
On hold
Product Verification and acceptance
Programme Management
On going approval and maintenance
No writing leader
Controlling Non Conforming Product
Supply Chain Management & performance Measures
Volunteers identified

12. “Supply Chain Management Handbook” Supplier Selection and Capability Assessment IAQG Leader: Cherif Khelil – Safran

13. Supplier Selection & Capability Assessment
Objective
To build a common model to assess the Maturity of a Supply Chain to achieve sustainable On Time & On Quality delivery objectives

14. 10 processes + 1 transversal one Titles consistent with 9100 when possible *
* Red titles coming from 9100, black titles when clarification needed or no requirements
1. Sales & Operation Planning
2. Contract requirement flow down (Customer related Process)
3. Design and development
4. Suppliers sourcing selection & qualification (Purchasing process)
5. Plant, material, skills & capacity planning & scheduling
(Planning of product realisation)
6. Order Management (Internal & external logistic management)
7. Manufacturing (Production and service provision)
8. Supplier operational management (Purchasing process)
9. Control of non conforming product and corrective action
(Product Quality and Delays)
10. Customer Support (Control of service operations)
11. Business Management and Customer Satisfaction Monitoring

15. Supplier Development if deemed necessary
Supplier Maturity Assessment
per Supply Chain Process
Example
Four levels of maturity (Maturity model CMMI like)
Undefined : No Process, Method, Tools/ No Process, Method, Tools/ and Appropriate Behaviours
Defined
Applied
Optimising: Implemented and optimised, continuous improvement
Four domains assessed:
People & Organisation
Processes
Tools & Data
Performances Metrics
Non Conformity
Non Conformity 1 1 2 2 3 3 4 4
Undefined
Undefined
Defined
Defined
Applied
Applied
Optimizing
Optimizing
Management
Management
People & Organization
People & Organization
No clear Accountability
No clear Accountability
Expert firefighters
Expert firefighters
Clear accountability
Clear accountability
Multifunctional team
Multifunctional team
No Problem solving
No Problem solving
Areas of potential
Supplier Development if deemed necessary
Cross functions
Cross functions
Highly Skilled
Highly Skilled
skills
skills
Highly skilled
Highly skilled
Process
Process
Reactive needs
Reactive needs
Ad hoc firefighting
Ad hoc firefighting
Root cause process in
Root cause process in
Mature process for root
Mature process for root
Customer Stimulus
Customer Stimulus
actions
actions
place
place
cause & preventive
cause & preventive
Process playbooks
Process playbooks
actions
actions
Limited preventive actions
Limited preventive actions
Expectation
Supplier
performance
Tools & Data
Tools & Data
Manual : Fax e
Manual : Fax e - -
mail
mail
Multiple Data base
Multiple Data base
Integrated database, clear
Integrated database, clear
Internal & external
Internal & external
workflows, internal
workflows, internal
collaboration.
collaboration.
Spreadsheet
Spreadsheet
collaboration
collaboration
Real time intelligent
Real time intelligent
workflows
workflows
Performance
Performance
No measurement of
No measurement of
Measuring performance
Measuring performance
Performance drives action
Performance drives action
3+ regular review of
3+ regular review of
Performance
Performance
plans
plans
metrics effectiveness
metrics effectiveness
Metrics
Metrics

16. Matrices exist for all processes
Risk based analysis and supplier selection decision
Matrices exist for all processes
Supplier Assessment Results
Decision to select or not based on risk analysis like 9134 “Supply Chain Risk Management guideline”
(Special action plan if not capable but need to select)
Each Company may apply weighting to each process as appropriate to their Product, Customer, Risks, etc…

17. “Supply Chain Management Handbook” Requirements and Flowdown IAQG Leader Larry Weng - Boeing Report by Dale Gordon - MPC

18. Requirements and Flowdown
Objective
To publish best practices and guidelines on how to ensure requirements are well identified, flowed down to suppliers and agreed upon between customer and suppliers.

19. Requirements and Flowdown

20. Requirements and Flowdown - Table of Contents
Sec
9100
Table of Contents
Sec
9100
Table of Contents
2.1
7.4.2
Purchasing Information
2.2
7.4.2a
Requirements for Approval
2.3
7.4.2b
Requirements for personnel
2.4
7.4.2c
Requirements for a quality management system
2.5
7.4.2d
Requirements for technical data
2.6
7.4.2e
Requirements for acceptance
2.7
7.4.2f
Requirements for test specimens
2.8
7.4.2g
Requirements for nonconforming product
2.9
7.4.2h
Requirements for changes
2.10
7.4.2i
Requirements for right of access
2.11
7.4.2j
Requirements for flow down to sub-tiers
2.12
7.4.1
Purchasing Process
2.13
7.4.1a
Register of approved suppliers
2.14
7.4.1b
Supplier performance review
2.15
7.4.1c
Supplier corrective action
2.16
7.4.1d
Use of customer-approved special process sources
2.17
7.4.1e
Authority for disapproval of sources
2.18
7.2.1
Requirements Related to the Product
2.19
7.2.1a
Requirements for delivery and post-delivery activities
2.20
7.2.1b
Requirements not stated by the customer
2.21
7.2.1c
Regulatory or statutory requirements
2.22
7.2.1d
Requirements determined by the Organization
2.23
7.2.2
Review of Requirements Related to the Product
2.24
7.2.2a
Requirements for Product
2.25
7.2.2b
Contract or order requirements
2.26
7.2.2c
Ability to meet defined requirements
2.27
7.2.2d
Evaluation of risk
2.28
Records of review
2.29
Undocumented requirements
2.30
Requirement changes
2.31
7.2.3
Customer Communication
2.32
7.2.3a
Communication of product information
2.33
7.2.3b
Handling of customer order enquiries
2.34
7.2.3c
Customer Feedback
All subchapters of chapter 2 have been broken down to 9100 requirements

21. Requirements and Flowdown Content Structure
Generic
Expectation
Specific Expectations
How to demonstrate compliance
Best Practices

22. Requirements and Flowdown Content Structure
Specific to the product type
34 Templates have been populated
Specific to the Buyer and Seller

23. “Supply Chain Management Handbook” Process Control Education Package about 9103 (Variation Management of Key Characteristics) IAQG Leader: Bernard Lauras - Airbus

24. 9103 - Variation Management of Key Characteristics - Education package
Objective
Promote benefits of IAQG Standard 9103 (Variation Management of Key Characteristics) and gain broader acceptance
Increase skills for all people involved in 9103 deployment
Reason
The application of 9103 will help resolve the main contributors to quality non-conformance in aerospace, but is not sufficiently and adequately deployed (lack of buy in, lack of skills)

25. 9103 - Variation Management of Key Characteristics - Education package
9103 education package technical content completed
Key Characteristics are the main ones guaranteeing full Customer satisfaction, that means ensuring all his needs are effectively & permanently met

26. “Supply Chain Management Handbook” Process Control Root Cause Analysis and Problem Solving IAQG Leader: Bernard Lauras - Airbus

27. Root Cause Analysis and Problem Solving
Objective
Propose methodology to improve the way escapes and problems are managed (including communication between all actors - engineering, MRB, supplier, customer, etc...) to reduce their impacts, contain them as far upstream as possible and prevent recurrence.

28. Root Cause Analysis and Problem Solving
Reason
Our suppliers (and even sometimes our organisation) do not deliver correct Root Cause Analysis and Problem Solving results
This is because:
We have not set criteria about what makes an acceptable corrective action plan
We continue to accept bad answers (even if say we will not, reality of life makes us accepting )
People (internal and external) do not have the Root Cause Analysis culture, do not know any process or do not have the proper skill-sets
Cultural change required to overcome the situation

29. Proposed “9 Steps” harmonised Process
Objectives
of the 9 steps
defined
Communication is a key aspect
All methods basically do the same thing, although with different focus, for example DMAIC has a stronger data focus, whilst 8D has a stronger people focus (and also has the unique ‘contain’ step).

30. “Supply Chain Management Handbook” Work Transfer Management (AAQG) IAQG Leader Susan Armstrong - UTC

31. Work Transfer Management
Objective
To provide guidelines for the exercising of effective risk and management control when changing the source of supply of a component, a component package or an assembly across a company or its external supply chain.

32. Work Transfer Management
Supplier A
Supplier B
Going to talk about whats probably the most visible part of the IAQGs work- its initiatives, particularly the documents it produces
You may be aware of the Standards that the IAQG produces but the IAQG also produces Guidelines
Many of the initiiatives to produce these documents start off as global activities, others start within one of the IAQG sectors and then move to become world wide documents.
Reasons:
Unsuccessful work transfer is a major problem for the industry We have not standardised process to do it

33. Work transfer Management
Document issued describing
Main phases required in the decision making process to ensure all risks are identified and mitigated
Main activities to be conducted and action owners
Decision gates, including project closure and lessons learned

34. Phase 1 Proposal & Feasibility Phase 4 Execution of Plan
Work Transfer Management Phases & Gates:
Gate 1
Gate 2
Gate 3
Gate 4
Phase 1 Proposal & Feasibility
Phase 2 Develop Business Case
Phase 3 Detail Planning
Phase 4 Execution of Plan
Phase 5 Project Closure
Proposal & Feasibility
Gate Review
Team Launch and develop charter
Source Selection
Risk Assessment
Business Case
Gate Review
Detail Planning
Knowledge Transfer pre-move
Gate Review
Project Management
Technical Review Requirements
Production Readiness Review
FAI / LAI
Knowledge transfer
Gate Review
Identify Continuous Improvement opportunity
Capture Lessons Learned
Recognize team performance
Post implementation review
Templates
WT Project Proposal Form
Gate Check List
Project Charter
Risk Assessment Business Case
Gate Check List
Project Plan
Transfer checklist
Gate Check List
Production Readiness Review Check List
AS9102 FAI/LAI
Gate Check List
Closure Form

35. Conclusions
All SCMH produced material is available through any IAQG member
Please review data and give feedback to SCMH focals:

36. Contacts Product Realisation Processes Supply Chain Process Capability
AAQG: Susan Armstrong - UTC
APAQG: Kouichi Watanabe - IHI
EAQG: Bernard Lauras - Airbus
Supply Chain Process Capability
AAQG: Larry Weng - Boeing
EAQG: Cherif Khelil - Safran