- Monitoring the performance of suppliers periodically to take appropriate measures for each performance level.
- Ensuring that suppliers who are supplying products to Datalogic always reach the company's specified performance level.
3.5.2. Flow chart
No. Flow chart
0 1
2 3 4
5
Activities -
Organizational Unit / Roles
Start of the procedure Data collection for supplier performance evaluation
Record supplier performance Review Supplier’s performance and action Acknowledgement, award Warning letter/
Improvement plan/
Meeting/ On-site audit/
Dis- Qualification
LAB
R
6 Close of the procedure
Figure 3.6: Flow chart of monitoring Supplier’s performance
(Tan Min, 2017) 3.5.3. Analysis process
The evaluation of supplier performance is done once a year for any supplier. One year is counted from the month of signing contract.
❖ Phase 1: The supplier performance data will be taken from the QlikView tool (a tool that stores all the vendor's performance data automatically, set up to calculate performance according to the company's formula).
❖ Phase 3: The supplier's performance score is calculated based on 2 factors: and OTD,
according to the following formula:
VDR= 0.7* +0.3*OTD (Core)
Figure 3.7: Formula for calculation the supplier's performance score.
(Datalogic S.p.A, 2017) Explain:
- In the above formula,
Datalogic use the KPI ratio of PPM to calculate. Determine KPI of PPM based on the following table:
Table 3.2:
Determine KPI of PPM
(Datalogi c S.p.A, 2017) PPMKPI
0-1000 1.001-5.000 5.001-10.000 10.001-20.000 20.001-50.000 50.000
- Vendor on-time delivery (OTD) performance is a measurement of shipments which are received (or expected) accordingly to specific parameters:
o OTD to commit: last statistical date Page 38
o OTD to service level: lead time/ last request date
o OTD to request: last request date Calculation Rules:
Table 3.3: Calculation Rule OTD rate of DL (Datalogic S.p.A, 2017)
KPI OTD to commit
OTD to service level
OTD to request
Confirmation efficiency
- Depending on the VDR score, activities require improvement as follows:
o 80-99 cores: requiring suppliers to have an improvement plan to achieve 100 points.
o 50-80 cores: auditing supplier, requires planning and implementing improvement activities to reach over 80 cores within the next 3 months.
o < 50 cores: considering phase out suppliers.
3.5.4. Evaluation implementation
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❖ Good point:
- Using QlikView tool helps to evaluate supplier performance quickly and accurately. Datalogic has activities to apply to each point levels. These make control and improve supplier more effective. The quality of input products is getting better and better.
- All members work consistently according to the established quality control and evaluation procedures.
- There is always effective back and forth support between SQM and CM to limit the bad problems.
- The re-evaluation of suppliers is always on schedule.
❖ Limitations:
- Luu Quoc Tam (personal communication on November 09th, 2019) commented that: “Some vendors are not willing to cooperate when their performance is underestimated. They provide the necessary delay information. And if these suppliers were requested to stop trading, it would affect the production plan.”.
- The opinion of Phan Qui Vu (personal communication on November 10th, 2019) is:
“Too dependent on vendor's available performance results on QlikView tool.
SQEs hardly know how to calculate OTD and points.” 3.6.
SOP of audit supplier 3.6.1. Purpose
Describing the supplier audit process. In order to audit more effective and as a result in helping suppliers improve continuously, the quality of Datalogic's products is also improved.
3.6.2. Flow chart
No.
0
Supplier Quality qualitySupplier Process/
Page 40
1 2 3 4 5 6 7 8 9
Define the Audit Program Perform the Audit
Draw up the Audit Report and share it
Archive Audit Report NCs closing
Define actions needed
Check effectiveness of the Cas and close the NCs
Auditors evaluation Close of the procedure
Figure 3.8: Flow chart of auditing supplier (Cantelli & Dal Re, 2018)
3.6.3. Analysis process
❖ Auditing and re-auditing of Datalogic are carried out according to this process. This procedure is applied to all cases: assessment of new suppliers, assessment of old suppliers in some cases (technology changes, location changes, major suppliers having changes, changes in organizational structure, supplier changes, reduced performance).
❖ Phase 1: based on the performance of the supplier. Every year SQM will be make the list of important suppliers need to audit and send it to SQE. SQE will in charge of the audit directly.
❖ Phase 2: at this stage SQE must first devise an audit plan, including:
- Scope and purpose;
- Audit team members;
- Date, place and time of the audit;
- Reference documents.
This is
followed by an audit based on
“Production Process Audit check list” and
“Supplier Self- Evaluation and SQE
Verification”.
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❖ Phase 3: SQE will conduct a report on the audit trip and send it to SQM and supplier. Standards of the report include:
- The report must be a true record of the Audit;
- The report is normally available within two weeks of the closing of the investigation phase;
- The report must always include all the findings.
❖ Phase 4,5: if Non-Conformities (NCs) are found, process/activity owners shall:
- Requesting improvement activities to eliminate NC.
- Dissecting and finding the root cause. Identifying all improvement activities needed to eliminate NC and prevent NC of the same type.
- Actions must be effective and commensurate with each risk encountered.
❖ Phase 6: If a CA has been defined, Auditor must verify its effectiveness.
- The person conducting the verification activity should be independent from the process and the actions taken.
- The actions are effective if all parties are satisfied and agreed that no further actions need to be taken.
3.6.4. Evaluation implementation
❖ Good point
- Develop a comprehensive list of suppliers who need annual audits, and a detailed audit plan.
- Auditing procedures and processes are carefully prepared. This preparation will help to create an accurate audit result.
❖ Limitations
- Auditor's auditing skills are only quite good. Need to improve skills to save audit cost, audit time, as well as achieve higher audit performance.
- Auditing or re-auditing documents of the supplier after being sent to related parties, SQE is self-archiving. It is very difficult to find and proofread audit and re-audit documents when needed if the SQE is in charge of quitting or for some other reason.