Affecting the value chain through supplier kaizen

In the aerospace industry, typically 60 percent of a product's cost and 70 percent of the lead time are due to purchased material. To affect price and customer responsiveness, improvement initiatives must be extended into the supply chain. Many companies have developed supply base management systems that include long-term agreements with suppliers, partnering with suppliers in risk taking and product design, information sharing, and quality and delivery rating systems. The premise is that suppliers are an extension of the factory. But to take full advantage of customer-supplier relationships, the suppliers must be "developed" in the same manner as a manufacturing unit. Supplier kaizen is a method of bringing suppliers to the same level of operations as the parent company, through training and improvement projects, to ensure superior performance and nurture the trust that is required for strong partnerships. This article describes Sikorsky Aircraft's use of kaizen to improve its supply base management.