By Kevin R. Maromonte
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Extra resources for Corporate Strategic Business Sourcing
The history of cycle-times; the time span from the date the source was awarded the purchase orders to the contractual delivery date (again for products similar to those that would be provided to the sourcing company), will determine the cycle-time improvement trend. Assume the source reports a 6 percent annual reduction to product cycle times. If purchase orders from two years ago for the products show cycle times of sixteen weeks, and the Production Services 29 same product is currently being delivered by the source in fourteen weeks, the source’s cycle-time improvement trend would be verified as 6 percent annually (based on sixteen to fourteen weeks being a 12 percent reduction, divided by the two-year period equaling 6 percent annually).
For example, the sourcing company may require production status reports to be submitted periodically by the source. Of course, the quality and delivery timeliness of these submittals is important; they need to be complete, accurate, and submitted on schedule to the company. Also, the sourcing company may require data collected during production operations to be submitted as it is generated through the course of a production contract. For example, dimensional, statistical process control, or test data may be required by the company’s contract to be submitted as it is generated by the source.
This is done by dividing each source’s performance level by that of the best-performing source. 3 the delivered product yield percentage for each source is divided by the highest yield level being achieved by one of the available sources, and the ratio is entered on the SBS Quality Performance Matrix. 3, 96 percent, is divided by the highest yield level of 98 percent being achieved by External Source ‘‘B’’. 98 for External Source ‘‘A’’ (96 percent divided by 98 percent). 00, since it is the best-performing source.