John.harnagel

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John.harnagel

  1. 1. Space Exploration Supplier Program Management Supplier Program Management | NASA PM ChallengeSupplier ProgramManagementImproving Supply Chain PerformanceJohn Harnagel, BoeingBOEING is a trademark of Boeing Management Company.Copyright © 2008 Boeing. All rights reserved. 2005 MHG08 125125.ppt |1
  2. 2. Discussion Topics Supplier Program Management | NASA PM Challenge Business Environment Driving Supplier Program Manager’s Boeing Supplier Program Management Approach and Concept of Operations Alignment of Boeing Program Management with Supplier Management Improved Boeing Program Management Results Leadership Support and Key Message SummaryCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt |2
  3. 3. Business Environment Supplier Program Management | NASA PM Challenge Customers and program supply chains are more global, multiple tiered, and very complex on most projects today Programs reliance on supply chain is increasing and likely will continue Sourcing strategies for programs require more collaboration and early supply chain involvement Cost, schedule, quality, risk management, and predictive performance indicator metrics are very critical at all supply chain tiers Mergers, acquisitions, divestitures are constantly changing the supply chain Supplier relationships and integration with programs are critical to success Supply chain management skills changing from traditional functional roles and responsibilitiesCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt |3
  4. 4. Increasing Reliance on SupplierPerformance Supplier Program Management | NASA PM Challenge Past Present Future Boeing Vision 2016 Traditional Value Chain “Our entire enterprise will be a Manufacturing Mgmt Focus lean operation, characterized by the efficient use of assets, Vertically integrated high inventory turns, capabilities excellent supplier Limited outsourcing management, short cycle times, high quality, and low transaction costs.” Supply Chain Mgmt Focus Prime flow down provisions Systems-of-Systems Leading vs. lagging performance metrics Risk management Decreased internal production Supplier integration Increased subcontract complexity Cost reduction for production programs Cost containment for development programsCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt |4
  5. 5. Supply Chain Business Model Supplier Program Management | NASA PM Challenge Changing Model Mix Changing Relationships60% Business models require Multifaceted Production multiple relationship Partnership- Development environments . . . style50% relationships Support expanding relationship affects 20% 40 % LSI how we work together40% Relationship Team30% 50% 50%20% Transactional 30% 10%10% Simple0% 2000 2005 2010 est. Parts Major Systems Subcontract Management Supplier commitments Purchase types Copyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt |5
  6. 6. Best Practice Alignment Supplier Program Management | NASA PM Challenge Supplier Management Best Practices Business Offer – SM Management Process – SM Planning Supplier Integration – Early Supplier and SM Involvement – Common Source Selection – Supplier Integrated into Decisions Organization – Supplier Relationships – Organization Responsibility Create and Review Program Execution – Affordability and Cost Target Business Plan and Control – Supplier Requirements – Configuration Management Risk, Issue and – Metrics and Performance Review Opportunity Mgmt – Integrated Schedule and Cost Help Needed and – Supplier Quality Mgmt Independent Reviews – Sub-tier Supplier Management – Risk, Issue, and Opportunity Mgmt Program – Supplier Continuous Improvement Communication – Communication Supplier Program Managers Support Implementation of Program Management and Supplier Management Best PracticesCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt |6
  7. 7. SPM Role in the Supplier Management Life Cycle Supplier Program Management | NASA PM Challenge Manage Supply Base Affordable Customer Negotiate Define Manage High QualityRequirements and Award Supplier Select Source Supplier ProductsMake-or-Buy Purchase Requirements Performance Delivered Decision Contracts On-time Pre-Award Award Post-Award Product need/ Proposal evaluation Metrics definition requirement identification Risk evaluation Design definition/requirements Make or buy decision PRB - source selection Focus on schedule, quality and cost Risk assessment Phase books Communication Source list Negotiations Maintenance of subcontract Selection criteria Folios Baseline/change Buy-to-package preparation P.O. definitization Management Proposal instructions Award (P.O. issued) Risk management PRB - bidders list Continuous improvement Initiatives RFP release Copyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt |7
  8. 8. Where are SPMs needed? Supplier Program Management | NASA PM Challenge SPM deployment is dictated by: – Complexity of procured parts/program – Criticality of procured parts, level of change activity – Stage/maturity of program, length of program – Dollar amount committed to suppliers – Risk, issue and opportunities with suppliers – Overall program health – Program or supplier strategic importance to boeing – Program product organization chart structure – Program RAA structure – Program transition from advanced systems to programsCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt |8
  9. 9. Value of SPMs to the Program Supplier Program Management | NASA PM Challenge Allows the IPT lead and team to concentrate on integration and engineering issues Creates a point person for issues with the supplier both for technical and business issues Provides consistent communication with each major program partner Provides person devoted to analyzing trends to ensure risk mitigation is implemented Coordinates and prioritizes changes as development programs progress Works with all IPTs and Partners to ensure program successCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt |9
  10. 10. Integrated Product Team Structure Roles Supplier Program Management | NASA PM Challenge Supplier Program Management Supplier Program Manager (SPM) • Manages supplier cost, schedule, technical performance • Supplier management plans, strategies, and processes • Risk, issues and opportunity mgt • Advocate for lean+ supplier activities • Cost account manager • Overall supplier program performance Shared Roles • Supplier Relationship Supplier Administration • Proposal Activity Supplier Technical Oversight Procurement Agent (PA) • Change Board Activity Engineering/Technical • Corrective Actions • Identification of potential suppliers • Award Fee administration • Manages Overall IPT Cost, Schedule, • Negotiations • Briefings and Reviews Technical Performance • Executes contracts • Early Supplier Involvement • Advises SPM on Technical Cost • Commitment authority Schedule Performance of Supplier • Strategic contracting • Determine Supplier Technical Requirements and Competence • Contracting strategy • Participates in Technical Baseline ControlCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 10
  11. 11. Organizational Structures – IPT Options Supplier Program Management | NASA PM Challenge SPMs can fit into IPT Lead (SPM) organizations several ways – IPT lead – IPT member SM&P Other – Work across several IPTs Engineering PA Functions – Work across several programs – Direct report to IPT Lead Program Manager (Engineer) SM&P Other Engineering SPM Functions PACopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 11
  12. 12. SPMs Improve Program Performance Capturing Value with Business/Technical Balance Supplier Program Management | NASA PM Challenge BAC-EAC Full-rate Production Programs BAC-EAC Low-rate Production and SDD Programs SPMs Deployed No SPM SPMs Deployed No SPMBAC-EAC BAC-EAC 2006 Various Full Rate Production Programs 2006 Various Low Rate Production and SDD Programs PMBP Scores With and Without SPMs Better financial performance on programs with SPMsPMAP Score – Statistical difference shown Significantly higher PMBP scores W/O SPMs SPMs – Aggregate score 1.2 points or Business Offer Business Plan Help Needed and Organization Program Execution Comm and Risk, Issue Supplier and Integration 44% higher Ind. Review Control Opp. Mgt. Copyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 12
  13. 13. Specific SPM Program Results Supplier Program Management | NASA PM Challenge Impact to Supplier Integration – A single Boeing program focal which partners with the supplier to establish a stronger relationship and mitigation plans to issues – Better implementation on change activities – fewer surprises – A positive working together environmentCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 13
  14. 14. Specific SPM Program Results(continued) Supplier Program Management | NASA PM Challenge Benefits to Boeing and to Supplier – Predictable and approved cost and schedule impacts on changes – Shorter cycle time to implement change related to risk/issues – A better understanding on the leading indicators related to CAM reports and variance analysis – A single Boeing program focal for all supplier related questions and concerns – A stronger teaming alliance between boeing and the supplier – Implementation plans related to cost, schedule, technical and quality are effectively coordinated and worked Customer Benefits Through Improved Supply Chain ResultsCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 14
  15. 15. IDS Deployment of SPMs Supplier Program Management | NASA PM Challenge SPMs by Level (2006 and 2007) SPM IDS Population 2007 Number of SPMs Number of SPMs 2006 4 5 6 K L M 2005 2006 2007 Level Year Top Ten SPM Sites by Population SPMs by DivisionNumber of SPMs Number of SPMs Engagement Philadelphia Long Beach El Segundo Seal Beach Huntington Operations Huntsville Network & Advanced Precisiion Anaheim St. Louis Systems Systems Systems Wichita Support Mobility Seattle Beach Space Copyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 15
  16. 16. SPM Skills Needed Supplier Program Management | NASA PM Challenge Skills and attributes for SPMs – Technical and business acumen Engineering bachelors degree or equivalent demonstrated technical ability preferred Business or finance masters degree desired – Experience: Level 4 (9-13 yrs), level 5 (14-19 yrs), level 6 (20+ yrs) – Experience working with suppliers – Communication – Creative problem solving, decision making – Increase productivity understanding (lean/six sigma) – Risk, issue and opportunity management – Project management – Supply base understanding – Leadership – charts the course, set high expectations, inspires others, finds a way, delivers results SPM has been defined as one of six Critical Skills by the IDS Leadership TeamCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 16
  17. 17. SPM Career Path Options Supplier Program Management | NASA PM Challenge Engineering Specialist or Manager Program Management Supplier Management Specialist SPM Levels 4,5,6,K,L,M IPT Lead EngineeringOther Functional Posting or Rotation Specialist ProgramCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 17
  18. 18. Tailored SPM Training and Approach Supplier Program Management | NASA PM Challenge Initial Training (First Month) Long Term Training – SMU Overview Course (1 day) – Complete SPM Workshop (Program to be deployed in – Development of a Supplier 2007 by LTD) Management Plan (1 day) – SMU – Shadow Procurement Agent (Practices, Application Strategy) (1 day) – Leadership, Program – Specific Process Tools Access Management, Risk, Issue and and Usage Opportunity Management, – Mentor/Protégé relationships Productivity with current SPMs – Mentor/Protégé relationships with current SPMs 3 Month Training – Begin SPM Workshop (In class and work assignments)Copyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 18
  19. 19. Leadership Support for SPMs Supplier Program Management | NASA PM Challenge John Tracy, VP of Engineering Operations and Technology: “As we work more as an LSI, its critical that our suppliers clearly understand our engineering requirements and develop systems that meet them. The Supplier Program Managers are in a pivotal position to assure that our integrated systems will meet our customers needs.” Steve Goo, VP of PM&BE: “Supplier Management is very important to programs today and will be even more important in the future. I believe one of the most valuable things a person can do to prepare themselves to be a Program Manager is to be a Supplier Program Manager. It is a key step along the Program Manager career development path.“ Pat Finneran, President Support Systems: “Program Management, Supplier Management and Systems Engineering are key competencies needed to lead the execution of any program. The skill and experience an employee will gain as a Supplier Program Manager will position them for future growth in the organization and position our company to continue to excel.”Copyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 19
  20. 20. Summary Supplier Program Management | NASA PM Challenge Today’s programs are complex, high tech, and global with extensive supply chains Supply chains are continually changing requiring focused attention Program performance is reliant on supply chain performance at all tier’s and does not stop at first tier only Boeing supplier program manager’s approach is improving performance Shared Destiny is Mission SuccessCopyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 20
  21. 21. Copyright © 2008 Boeing. All rights reserved. MHG08 125125.ppt | 21

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