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METALCRAFT SUPPLIER SCORECARD

Group 2:
ABHISHEK SINGH
PANKHOORI VIDYA
PRADEEP JARHAD
SHAHBAAZ SYED
SHALINI DUBEY
ABOUT THE COMPANY

Established in 1967

Tier 1 supplier of automotive parts to various vehicle manufacturers like GM, Ford,
Chrysler

80,000 employees in 27 countries, 84 plants around the world

80% of the total sales comes from North America

2001: Revenue = $12.8 billion, Net Income = $30 million

Sourcing of around 1 millions parts per plant per day


AUTOMOTIVE SUPPLY CHAIN

Tier 3 Supply Raw Materials


Supplier

Tier 2 Convert raw material to basic automotive components


Supplier

Tier 1 Assemble components into modules (Eg: Metalcraft)


Supplier

Produce finished automobile


OEM
KEY ISSUES IN THE INDUSTRY

Heavy warranty cost was eating up the profit margin.

Defects caused delay in production line-(increasing reschedule, overtime and


expedited delivery cost)

Chrysler: spent $2.7 billion a year on auto repair bills

Ford: approx. $4bn and GM: approx. $5bn on warranty repairs

Managing upstream supplier cost


CASE SCENARIO

Mark Mueller,
Autoparts Commodity Purchasing
Ellie Smith, Quality Electroparts Inc
Supervisor Agent

Caltek Darell Bonds, Product


Inc Engineer

Mark Letcher,
Corporate Supplier
Development Manager

Rubber Vent Hose Vendor WHO??


SUPPLIER BULLETIN
REVITALIZATION NOTIFICATION

Greater emphasis on Quality ratings as compared to that in 1999

Revised hierarchy of approvals required for Yellow and Red suppliers

Necessity of 3rd party Quality Management System Eg: TS16949


METALCRAFTS SOURCING PROCESS

Product Engineer: Copy of


Detailed Component
Basic set of
drawing drawing shared
requirements received
shared with suppliers
Engineering with the and RFQ issued
drawing designed buyer
Forwarded to
Supplier or
prototype
fabrication shop
Sourcing Evaluation of quotations
decision
made, i. Cost Analysis
supplier ii.Tooling Analysis
chosen iii.Historical quality and
delivery performance
SOURCING DECISIONS BEFORE
SCORECARD
BUYER DECISION-MAKER

MANUFACTURING
PRODUCT ENGINEER
PLANT MANAGER

Sometimes, the opinions might differ; Buyer


makes the sourcing decision based on
conflicting information
SUPPLIER EVALUATION

Green
Preferred Supplier
Quality Score > 70
Overall Quality
Quality Rejects Yellow
Defect Rates Non-Preferred
Quality Manager approval
Timing Score: 50 - 69
Ability to meet the promised date
Red
Non-Preferred
Delivery Managements approval
Score < 50
Deliver parts on time Selected only if sole supplier
ADVANTAGES
Helps
Supplier supplier
Aggregate Objective Quantitative performance Product continuously
Supplier metric for evaluation monitor and
analysis of
and
quality
Performance Sourcing Quality and improve their
identification improvement
Data Decisions defects process
of areas of by 44% through real-
attention
time data

Development
of collaborative
relationship
Buyer has the
liability to favor one
supplier

Restricted number
of suppliers

DISADVANTAGES

Difficulty in price
negotiation

Shorter supplier
relationship
development
RESPONSIBILITY AT METALCRAFT

Supplier selection ( from green


category only) Quality check of parts
Issues request for RFQs Continuous Defect Analysis
Negotiations with suppliers for Vendor grading (Quality)
BUYER maximum price reduction QC Quality check of received
Vendor Evaluation ENGINEER order
Rejections (If required)
Getting components shipped to
various Metalcraft facilities around
the world

Vendor Evaluation (Score


Develop design and engineer Card)
drawing for new components Supplier Relationship
Raising requisition to the buyer Management
Evaluation of performance of Technical Assistance to
DESIGN components
SD Suppliers
ENGINEER Quality control of Component ENGINEER Selection approval for
Design Yellow and Red category
suppliers
Buyer
1.% Price
reduction
Supplier 1.2. Final price Quality department
relative to targets 1. Exclusion of one
1.NegotiatingQR/ time spikes
PPM number &
Retaining rating to maintain the
limits
2. No Incentives of the
SCORECARD - troubleshooting various
2. No direct
involvement
INCENTIVES OF participants
PARTICIPANTS influencing the
use of the Managers
SD Engineer scorecard
1.Ease of access 1)Selection of
to historical data. strategic partners
2.To zero in best for new projects
supplier 2) Increase
Product visibility of issues
engineers
1.Evaluating for
prototype
sourcing

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