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Supplier Capability Maturity Model - Case Study at 2011-01-2298

Published
DivgiWarner 09/13/2011

Dipak Annasaheb Vani, Ashwin koppikar and Manjunath Aribenchi

DivgiWarner Pvt. Ltd.

Copyright © 2011 SAE International

doi:10.4271/2011-01-2298

• Practices are repeated and reproduced across the entire

ABSTRACT supplier community.
This case study covers the supply chain management • Best practices are transferred rapidly across suppliers for
experience of a leading Drivetrain System Solution Provider maximum benefits.
in India. They have a global supplier base of 121 suppliers
• Variations in performing best practices are reduced, and
spread over 12 countries, handling different commodities like
castings, forgings, machined parts, sheet metal parts, • Practices are continually improved with quantitative
electrical and electronics parts and powder metal parts. feedback to enhance their capabilities.

Supply Chain Management is vital in sustaining INTRODUCTION

competitiveness in a global market. A committed supply
chain is an integral part of the overall value chain of an The Supplier Capability Maturity Model, Supplier-CMM, is a
organization. Intent of the supply chain management is to guideline for implementing supplier development practices.
utilize systems and processes to develop, monitor and control These practices continuously improve the capability of the
supplier performance. supplier base and sustain the capability at World-Class levels.
Supplier CMM establishes an integrated system of quality
Divgi-Warner Pvt. Ltd. based in Pune, India, has developed a practices that matures through increasing alignment with
framework called Supplier Capability Maturity Model, customer's business objectives, performance, and changing
Supplier CMM. The primary objective of this framework is to needs. Supplier CMM aims to improve the overall supplier
improve capabilities of suppliers and to meet customer standard which also includes improving its Product Quality
expectations by focusing on the level of knowledge, skills which is very significant but it is merely a part of the overall
and process abilities. This paper will describe Divgi-Warner's development. These capabilities can be the level of
experience and techniques associated with the Supplier knowledge, skills and process abilities available for
Capability Maturity Model over the last seven years. It performing activities that fulfill a Customer's supply needs.
touches upon the key steps to achieve business excellence in Besides this, the work ethics and business approach that a
Supply Chain Management. customer follows also play an important role in defining its
capability. Though these factors seem insignificant, they
It includes: actually assist a supplier to meet his time deadlines.
1. Supplier Selection Process (Plan)
In order to measure and improve capability, the supplier-base
2. Supplier Development Process (Do) must be divided into constituent competencies. Each
3. Supplier Performance Monitoring Process (Check) competency represents a unique integration of knowledge,
4. Supplier Up-gradation Process (Act) skills, and process abilities acquired through specialized
education and work experience. Each Customer needs to
The Supplier Capability Maturity Model methodology, design its supply-chain to include these competencies
delivered the following benefits for Divgi-Warner to fulfill its required to perform its business activities. The competency
vision of product leadership: can be characterized by its capability - the profile of
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knowledge, skills and process abilities acquired or developed improvement. This can be described as an integration of the
by the customer. following 5 aspects:

The Supplier CMM discussed in this paper follows the

framework of TS 16949-based Quality Management System. Repeatability & Reproducibility
It describes an evolutionary improvement path intended to At the initial level, the organization typically does not
achieve a mature infrastructure of practices. It focuses only provide a stable environment for developing new products.
on those vital set of practices that provide the next The development process is unpredictable and unstable
foundational level for upgrading the supplier-base. By because the process is constantly changed or modified as the
working diligently to install them, the customer can steadily work progresses. A fundamental premise of the process
improve its supply-chain and make lasting gains in maturity framework is that, a practice cannot be improved if
performance and competitiveness. Strategic implementation it cannot be repeated. REPEATABILITY AND
of this model draws attention even towards those practices REPRODUCIBILITY are the hallmarks of a mature
that are minute yet generally overlooked although they affect organization.
the performance substantially.
During the least mature state of an organization, proven
The Supplier CMM described here aims to attain certain practices are repeated only sporadically. The most common
predefined aspects of maturity. These will act as the impediment to repeatability is a committed delivery date &
benchmark as well as motivational guidelines in framing the uncontrolled change of requirement changes. The first step in
structure of the model. These maturity aspects, when very helping an organization is to help it to remove impediments
broadly classified can be described as: that keep them from repeating successful development
practices.
• Repeatability & Reproducibility
• Disciplined Foundation To Repeat Good Practices Disciplined Foundation to Repeat Good Practices
This aspect of maturity stresses that the organizations must
• Documentation & Integration of Identified Good Practices establish a foundation on which they can deploy common
• Performance Monitoring (Quantitative) processes across the organization. A stable environment is
essential for advanced practices. The primary objective is to
• Deployment of Corrective Actions enable people to repeat practices (e.g. a standardized RFQ
process with suppliers) they have used successfully. To
Therefore, Supplier CMM is a tool to attain these goals enable this repeatability, managers must get control of
systematically. Since this cannot be done overnight, Supplier commitments and baselines. To establish a repeatable
CMM introduces concepts and practices in stages making capability is to establish basic management practices within
them easier to implement and monitor. Each progressive level each unit or project. Only when this management discipline is
produces a unique transformation in the Supply Chain culture established, will the organization have a foundation on which
by making it more powerful for developing, motivating, it can deploy its common processes.
organizing, and upgrading its supplier base. To be very brief,
the various stages or tiers of implementing the Supplier Documentation & Integration of Identified Good
CMM are:
Practices
Stage 1. Suppler Selection The focus here is on documenting the standard processes,
integrating them into a common process, and training the
Stage 2. Supplier Development entire organization. (For example, the Supplier Manual)
Stage 3. Supplier Monitoring
Measures of the critical practices are defined and collected
Stage 4. Supplier Up-gradation into a repository for analysis (again, say, the Supplier
Performance Measurement System). When the organization
Although the steps involved in these stages can be described defines a standard process, it has laid the foundation for
here, they can be subjected to modifications based on the systematic continuous improvement. These processes are
needs of the organization involved. used to help the managers, team leaders, and development
team members perform more effectively.
NEED FOR SUPPLIER CMM
It was seen that improved practices cannot survive unless the Setting the Goal & Performance Monitoring
organization's behavior is changed to support the (Quantitatively)
development. Consequently, a framework was designed to This factor ensures that the organization establishes metrics
enable an organization to achieve continuous process for products and processes and measures results. Projects
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achieve control over their products and processes by details of the product cost with the provided split-up format.
narrowing the variation in their process performance to fall These are some of the basic checkpoints for comparing the
within acceptable boundaries. The development process is quotations. In addition to the above requirements, the
also made predictable because the process is measured and suggestions for cost reduction are also welcome in the RFQ
operates within measurable limits. When these limits are form. These forms follow specific standard formats and it is
exceeded, action is taken to correct the situation. Customer expected from the supplier to comply with them and provide
and the Supplier begin managing their relationship through the necessary information without failure.
data that describes the supplier's performance. The
performance of the supplier is trended over time (say a six- On the basis of quotations received, a supplier is shortlisted.
month rolling average) so that historical performance of the If the selected supplier happens to be a new supplier he has to
process can be used to predict and manage its future perform a self assessment process by using the following:
performance.
(1) Questionnaire Form (2) Supplier Risk Assessment Form
Deployment of Corrective Actions (3) EHS System Assessment Form
Here, the entire organization is focused on continuous
process improvement. Now, the organization has the means 1) Questionnaire Form
to identify weaknesses and strengthen the process
proactively, with the goal of preventing the occurrence of The questionnaire form consists of details regarding the
defects. Customer and the supplier organization would use company profile, principal suppliers, customers, project &
their profound, quantitative knowledge to make continuous process planning, quality standards, internal PPM, customer
improvements in their interactive and overlapping processes. complaints, process capability, continuous improvement
Based on data, they can identify which processes can benefit programs and some other relevant details. This helps in
the most from the improvements. These improvements can deciding whether the supplier would be able to perform the
involve actions ranging from adjustments to existing assigned task within the stipulated time while maintaining the
processes to the deployment of new technologies. In addition, quality standards. It also indicates the work culture and ethics
the supplier organization uses its data to identify its most which are also important aspects that affect the product
persistent defects. The root causes of these defects are quality.
analyzed and actions are taken to eliminate their occurrence
with verification review by the customer. 2) Supplier Risk and Quality System Assessment Form

After highlighting the necessity for Supplier CMM model, let It is an in-depth assessment of the quality procedures
us discuss in details the four stages of this model. followed, the risks involved and the current financial position
of the supplier. The analysis takes into account features like
quality systems, resource management, preventive &
STAGE 1- SUPPLIER SELECTION predictive maintenance, timely process audits etc. Each
PROCESS parameter is judged on a scale of 0 to 3 where a score of 3
Supplier selection is the starting process of the Supplier means proper evidence of compliance. A score of 2 stands for
CMM and being the first phase, it serves as the platform for evidence with minor non-compliances and 1 with major non
the next phases. The intention behind supplier selection compliances. While a score of 0 says that no evidence of
process is identifying the best supplier on the basis of quality, compliance exists.
cost and the process requirement. It is extremely important to
select the best supplier from the beginning because the To assess the financial status of supplier organization, a Z-
groundwork done in the initial stages help in reducing the score (financial score) is calculated which indicates that the
workload in the development and up-gradation stages later. company is either safe, needs monitoring or risky. A Z-score
>=2.9 indicates that the company is safe while a Z-score
The supplier selection process starts with identification of the between 1.22 and 2.89 means monitoring is required while a
part that has to be outsourced. The next step is making a list Z-score <=1.21 indicates that high risk is involved.
of the potential suppliers for the above mentioned part. All
the potential suppliers are invited to participate in the quoting 3) EHS System Assessment Form
process. Suppliers are required to use the forms supplied in
the Request For Quotation (RFQ). The RFQ form aims at Environment Health & Safety (EHS) ensures whether the
providing required information about the product to be processes carried out by supplier are environment friendly
outsourced along with annual demand and other terms. This and as per the health & safety norms. The EHS policy of the
gives a brief idea to the supplier about the business they are supplier is observed and a score is calculated. On the basis of
about to undertake. Besides this, the form intends to seek the score a risk rating is assigned and the supplier is asked to
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take corrective action to bring the suspected process within d. Product and Process Validation
the desired norms. e. Production

After the supplier self assessment of newly identified supplier The first step of the supplier development process is to
is complete, a decision is taken whether onsite assessment is finalize the APQP time plan with the supplier and review it
required or not. If the decision is “YES” then the onsite periodically. Once APQP timeline and plan is finalized, Team
assessment is carried out in a way similar to that done by the Feasibility Commitment is done and the supplier is asked to
supplier in the self assessment process. Subsequently a rating submit the balloon drawing with the ISIR format (without
is done on a scale of 3 and if the score calculated is >=2 the inspection results) covering all the specifications mentioned
supplier is approved. If the score is < 2, the supplier is asked in the technical drawing. This ensures that the supplier has
to undertake corrective actions to improve the score by understood the customer requirements. After the Team
providing appropriate suggestions. After verification of the Feasibility Commitment, the supplier starts process design
effective implementation of the corrective action, the supplier and development, and submits 3 samples within the agreed
is included in the vendor list. time-plan along with the balloon drawing and completed
ISIR. ISIR stands for Initial Sample Inspection Report which
The next step is carried out for both, the old and the new gives a detailed inspection result of all the specifications as
supplier, which involves Feasibility Review and Supplier mentioned on technical drawing of the samples submitted. It
Team Feasibility Commitment. This ensures that the supplier also checks whether the sample is within the desired
is capable of delivering the desired product & the customer specification limits or not. Ballooning is a method of
requirements are communicated properly. assigning a unique number to a characteristic mentioned on
the product drawing. It acts as an input for an ISIR.
Refer Appendix 1 for Supplier Selection Process Flowchart. Ballooning makes it easy to trace dimension/characteristic on
the drawing and ensures that all the design requirements are
STAGE 2- SUPPLIER DEVELOPMENT measured.
PROCESS The in-house cross verification of the samples is done by the
The supplier development process follows the supplier customer to ensure the samples meet the design requirements.
selection process and is extremely important as the part The acceptance norms and gauging requirements are also
outsourced is developed in this step. The main function of the finalized at this stage. If the samples do not meet the design
supplier development is to ensure that the part is specifications, the supplier is asked to correct/ revisit his
manufactured while keeping all the quality standards in mind internal processes and advised to take appropriate corrective
and as per the given specifications. It is a very long process measures. The initial batch is called PPAP, (Production Part
and requires periodic reviews & communication between the Approval Process) batch. Clearance for this PPAP production
two parties. Advanced Product Quality Planning (or APQP) is given, if the samples are found okay the self assessment for
process is followed for new product development with the readiness of PPAP is performed. For this assessment a special
suppliers. Before moving ahead with the development kind of check sheet, WAR (We Are Ready) is used which
process, it is better to have a brief flash on APQP model. indicates the readiness of PPAP and evaluates whether onsite
assessment of PPAP is required or not. The intent of WAR is
Advanced Product Quality Planning (or APQP) is a to verify production readiness of a supplier prior to the start
framework of procedures and techniques used to develop of production. It also understands, identifies open issues and
products in industry, particularly the automotive industry. sets action plans for them. It verifies whether the supplier has
APQP serves as a guide in the development process and also met all the 5-M i.e. Man, Material, Method, Machines &
a standard way to share results between suppliers and Measurement requirements to start the production
automotive companies. APQP covers three aspects: successfully. This also covers packaging, work instructions &
Development, Productionization and Product Launch. documentation etc. clearing even the smallest doubts. A
detailed introspection of processes is done by using PPAP
APQP checks the feature like design robustness, design checklist. The checklist consists of design records, design
testing & specification compliance, production process FMEA, process flow diagrams, process FMEA,
design, quality inspection standards, process capability, measurement, process capabilities and other relevant details.
production capacity, production part approval, product After satisfactory compliance to all 19 quality documents
packaging, product testing and operators training plan. APQP (mentioned in PPAP) the production process is validated &
model utilizes five major phases: approved by signing the Part Submission Warrant (PSW).
a. Plan and Define Program
The PPAP is extremely significant as it lays the foundation
b. Product Design and Development for smooth running of the serial production processes. The
c. Process Design and Development PPAP is a pro-active approach to ensure that suppliers of
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components comply with the design specification and can run defects and their monthly recurrence. In case, the actions
consistently without affecting the customer line and being employed have been effective, the 8-D is closed. The
improving the product quality. PPAP ensures that you will records are of all these activities are maintained for future
achieve the right quality from the first time itself. Thus in a reference.
nutshell, if PPAP is done diligently, then the serial production
process becomes free of errors and hassles. In case the Defect Matrix indicates recurrence of the defects
then, the supplier or defect is tagged as a chronic. The
The PPAP review results are communicated to the supplier chronic tag is also given in monthly evaluation. So, the
and if required he is asked to implement corrective actions. actions that are taken to correct them would be discussed in
Otherwise the PPAP is approved and the consent to start the the Monthly Performance Monitoring Process.
serial production is given. The performance of the supplier is
monitored keeping the quality and delivery aspects in mind (ii) Monthly Performance Monitoring:
for the next six months. This performance report then acts as
the guideline for supplier monitoring and up-gradation. This is the most important aspect of performance monitoring.
It is never beneficial to take corrective actions after the
Refer Appendix 2 for Supplier Development Process supplier has deviated beyond the promised performance. It
Flowchart leads to wastage of time, money and material. Hence, a
continuous watch on the supplier performance becomes
STAGE 3- SUPPLIER PERFORMANCE mandatory. Here, Performance is often ambiguous with the
term Product Quality. Although quality is an important
MONITORING aspect, Performance covers overall supplier capability
This is another important aspect of the CMM. The including knowledge & skill levels and work ethics.
development of supplier is only the initial phase of the CMM.
It is equally important to monitor the supplier performance In Monthly Performance Monitoring, the data is collected
regularly. This ensures consistent supplier performance to from the MRP (Material Resource Planning) system and
match the desired specifications. This process actually based on which a Monthly Report Card and Defect Matrix are
consists of rating the suppliers on the basis of their prepared for each supplier. The Monthly Report Card
performance and subsequently taking corrective actions if monitors the supplier's Quality, Delivery and Value
they under-perform. To make it effective, it is necessary to Improvement Points.
carry out these ratings on a regular basis so as to expose any
discrepancy at an early stage. Quality: Quality is given a weightage of 40 points out of 100
in the Monthly Report Card. The number of rejections is used
Refer Appendix 3 for Supplier Monitoring & Up-Gradation to calculate the PPM defect rate. Further, quality scores are
Process Flowchart given on the basis of this PPM defect rate.

The Supplier Performance Monitoring can be effectively Delivery: Delivery is also given a weightage of 40 points out
implemented in an industry as a 3-tier system. This 3-tier of 100. This is calculated on the basis of On Time Delivery
system comprises of (i) Regular Supplier Complaints, (ii) Performance which is the ratio of actual quantity and the
Monthly Performance Card and (iii) Annual assessments scheduled quantity for the given period.
for chronic aspects.
Value Improvement: It is given a weightage of 20 points out
All these tiers are rather complementary to each other. Let's of 100. This is further divided into 4 sub-levels with equal
discuss these aspects individually: weightage of 5 points each. These levels are a) Quality
System Basics Implementation b) TS-16949 Certification c)
(i) Regular Supplier Complaints: On-Time 8-D Response d) Lean Manufacturing Techniques
Implementation.
This is the very basic element of performance monitoring. As
non-conformities in the incoming inspection are observed, The results thus obtained are communicated to the respective
complaints are raised on the purchased material. Then the suppliers on or before the 10th day of every month. The score
supplier is asked to make the root cause analysis and take card result alerts the customer as well as the supplier about
appropriate corrective actions (CA) by using 8-D problem any minute fluctuation in their performance. This triggers the
solving technique. 8-D is a problem solving tool which corrective actions to be taken well in advance to mitigate any
involves a multi-disciplinary team to identify the root cause further interruptions in the production process. On the basis
and implement CA. Refer appendix 4 for 8D format. Further, of these evaluations the suppliers are rated. The suppliers
the effectiveness of the CA is verified through the Defect depicting continuous aberrations are tagged as ‘Chronic’.
Matrix. The Defect Matrix is a tabular representation of
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These chronic suppliers are handled with due care and Only the assigned officials from the supplier's side attend
seriousness. They are provided with the Action Plan for these training sessions. The suppliers are invited in groups for
corrective and preventive measures so as to improve their the training in which the first phase is conducted in the class
performance. Besides this, they are also identified as the rooms. For better learning, they are shown practical
candidates for the annual assessments. In case no implementation of good practices on the shop floor.
improvement is seen, an onsite visit becomes necessary. They
are invited to attend Quality System Basics (QSB) training Then, these practices are effectively transferred to all the
and also shown practical implementation on the customer supplier's employees. This is assured by providing teaching
shop floor for better understanding. modules to the participants who attend the training sessions.
The suppliers are also provided with useful forms-formats
(iii) Annual Assessments: and other resources that are already in use at the customer's
end.
Annual Assessments are similar to rigorous audits carried out
by officials assigned by the company. They are carried out One of the significant training sessions is on Quality System
annually and specifically on those suppliers who are tagged Basics (QSB). It incorporates the following 10 key initiatives
as ‘Chronic’. Top priority is given to such chronic suppliers. to establish world class quality.
A detailed Audit Plan is made. Then an on-site visit to the
supplier production unit is made, where the above plan is 1. Fast Response Meeting
implemented. The personal visit helps in gathering root
causes for the short comings in the supplier's performance. 2. Control of Non-Conforming Product
These evidences are presented in the form of an assessment 3. Layered Process Audits
report, which are communicated to the supplier as well as
utilized to frame an effective Action Plan. According to this 4. Standardized Operations
plan the actual causes of defects are attacked without any
5. Standardized Operator Training
ambiguity.
6. Error Proofing Verification
STAGE 4 - SUPPLIER UP-GRADATION 7. RPN Risk Reduction
Supplier Up-gradation deals with the efforts put in to improve
supplier practices. The quantitative results obtained from the 8. Contamination Control
previous phases act as guidelines in this phase. Sometimes,
9. Supply Chain Management
the practices of the supplier improves certain practices of the
customer, hence it's a two way process benefiting everyone. 10. Verification Station
Supplier up-gradation is not a single process but a series of
practices put in together with varied intentions. Supplier Quality Improvement Group (SQIG)
A structured approach is essential to accomplish desired
Refer Appendix 3 for Supplier Monitoring & Up-Gradation results. The first step is to lay down a foundation around
Process Flowchart. which the entire process revolves. This provides stability and
the impetus to speed up the entire process. DivgiWarner uses
Let us go through some of these practices in detail: this concept and has designed a multi disciplinary approach
for supplier up-gradation.
Supplier Training:
Supplier Quality Improvement Group (SQIG) is formed for
It is important to empower the supplier with the latest and making continuous improvement in the supplier quality. It
proven practices. To ensure this, supplier training sessions are consists of team members from various departments such as
essential. These training sessions are conducted for effective quality, manufacturing, engineering, logistics, supplier
collaboration and healthy customer-supplier relationships. technical assistance, supplier development and other relevant
fields.
Each Supplier Training Program focuses on one of the basic
aspects such as: SQIG team meets weekly to discuss
1. Quality: PPAP, SPC, MSA, Control Plan, FMEA etc. 1. Supplier complaints & 8D status

2. Delivery: Lean Manufacturing, JIT (Kanban) etc. 2. Action Plan for chronic suppliers quality, delivery issues.

3. Value improvement: TS-16949, 8-D problem Solving, 3. PPAP status of new developments.
Cost Reduction, RPN, Kaizen, QSB etc.
4. Review of onsite audit status
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Figure 1. Shop floor training of QSB elements

Figure 2. Shop floor Supplier PPM trend chart- 6 months rolling average (Period: July-2009 to Dec-2010)

5. Review of supplier training As a result of the conscious efforts of the SQIG team the
PPM defect rate reduced drastically in 2010 as compared to
SQIG team monitors the supplier PPM and analyzes the top 5 2009. The PPM rate was 8248 in July 2009 and reduced
contributors to the PPM defect rate. Action plans are drastically to 1240 in December 2010.
formulated to improve their PPM scores. SQIG team also
provides onsite technical assistance and required training to Annual Supplier Conference
the chronic suppliers. Annual Supplier Conferences are organized to strengthen the
relationship between the customer and the suppliers. An
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Figure 3. Annual Supplier Conference

Figure 4. Supplier Scorecard (Jun 2009-Dec 2009)

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Figure 5. Defect Tracking Sheet-2009

Annual Supplier Conference is conducted every year and best At the end, they participate in a signing campaign in which
suppliers are recognized & rewarded. the suppliers commit to improve their overall performance.
This sets new targets for the suppliers to achieve in the next
Here, the supplier manual is distributed and best practices are financial year. It is a mutual agreement which aims at
shared using video clips or documentary films. It gives the strengthening the relationship between the customer and the
suppliers an opportunity to incorporate these practices, which supplier.
adds value to the current process. Further, it increases the
profitability of the customer as well as the supplier.

Supplier appreciation is also an important aspect of the

supplier conference. The top 3 suppliers are identified on the
basis of performance in Quality, Delivery and Value
Improvement as per the rolling average scores. They are
rewarded for the outstanding work done by them and
encouraged to sustain this performance in future.
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Figure 6. Supplier Scorecard (Jan 2010-Jun 2010)

CASE STUDY - SUPPLIER UP- As the performance of the supplier was consistently hovering
in the marginal zone, it was essential to identify the root
GRADATION cause and take corrective action.
Supplier Up-gradation is a key aspect of supplier CMM. To
illustrate the practicality of the up-gradation scheme we are The above tabular representation is the defect tracking sheet
citing a practical example as a case study. The efforts done by for the year 2009 for the mentioned supplier. It is clearly
DivgiWarner and the supplier are reflected in the shift of the evident that plating, rust, dent, damages and burr in parts are
overall supplier rating from marginal to excellent. the major areas of concern. The DivgiWarner SQIG team
collaborated with the supplier and provided technical
The above scorecard illustrates the performance of Supplier assistance for various process improvements. The supplier
X in the period Jul-Dec 2009. The performance of the was given extensive training on implementing QSB tools as
supplier is quite low in quality while the delivery scores are Quality was identified as the primary area of concern. As a
comparatively better. The low score obtained in Quality result of the continuous training sessions and the monitoring
decreased the overall supplier rating and it was rated as process, the performance of the supplier started improving
marginal in the period Jul-Dec 2009. slowly.
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Figure 7. Defect Tracking Sheet-2010

These are the performance details of Supplier X for the Some of the objective benefits of the Supplier CMM can be
period Jan-Jun 2010. A shift from the marginal zone to the summarized as:
excellent zone can be seen. This shift was only because of
continuous focus on supplier up-gradation. Structured Approach: Supplier CMM follows a structured
approach by forming a multi-disciplinary team like SQIG to
The defect sheet shows a considerable reduction in the PPM resolve supplier problems in an efficient manner.
defect rate in the year 2010 for Supplier X. The areas of
concern identified namely plating, rust dent, damages and Standardized Methods: Development of standard forms and
burr in parts appear to have reduced drastically. flowcharts for example RFQ, supplier selection flowchart;
helps in easy implementation and reduces overall
CONCLUSION development lead-time.

Supplier CMM is observed to be an ideal tool for supplier Supplier PPM Reduction: This framework has delivered an
development and up-gradation. It follows a Plan, Do, Check 85% improvement in Supplier PPM at Divgi-Warner. It
and Act approach which establishes an integrated system of reduced the Supplier PPM drastically from 8248 PPM in
quality practices and improves the overall supplier standards. July-09 to 1240 PPM in Dec-2010.
This model ensures that these quality practices are repeated,
reproduced and rapidly transmitted throughout the supplier Culture of Continuous Improvement: A data driven scheme is
community. The Supplier CMM also monitors the variation followed for periodic tracking and reviewing of the supplier's
in performing best practices and strives for their continuous data using monthly scorecard & defect matrix. This helps in
improvement. setting better standards and making continuous
improvements.
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Customer Supplier Relationship: The relation between the ISIR

customer and supplier is strengthened through collaboration Initial Sample Inspection Report
as multi-disciplinary teams interact with their counterparts in
the respective organizations.
8-D
It is an advanced problem solving technique to
The supplier CMM utilizes systems and processes to develop,
investigate the root cause and take necessary
monitor and control supplier's quality & delivery standards.
corrective actions for the same.
Planning and execution of the entire supply chain process has
improved by using the Supplier CMM model. Use of tools
and techniques like APQP, PPAP, Scorecard, Defect Defect Matrix
Tracking Sheet, Supplier Training, Technical Assistance and It is a tabular plot of the PPM rating of the suppliers
Timely Supplier Appreciation helps to improve supplier recorded on a monthly basis.
capability & maturity.
CPM
Complaints on Purchase Material
REFERENCES
1. Crosby, Philip B. (1979). Quality is Free. McGraw Hill. CA
Corrective Action
2. ISO technical specification: ISO/TS16949
3. AIAG's Advanced Product Quality Planning (APQP)
CMM
Manual
Capability Maturity Model
4. AIAG's Production Part Approval Process (PPAP) Manual
MRP
CONTACT INFORMATION Material Resource Planning
Deepak A. Vani
DivgiWarner Ltd.
75, General Block, MIDC Bhosari.
Pune-411 026, INDIA.
[email protected]
Cell No: +91 97678 99277

ACKNOWLEDGMENTS
The authors wish to acknowledge Mr. Jitendra Divgi for his
encouragement to write this paper. The authors also wish to
acknowledge DivgiWarner's supplier development team for
its assistance in implementing the Supplier CMM Model.

Special acknowledgement is given to Mr. Amitabh Vajpayee

and Mr. Anupam Dhamija for their valuable help in
compiling all the ideas together in the form of a paper

ABBREVIATIONS
RFQ
Request for Quotation

PPM
Parts Per Million

APQP
Advance Product Quality Planning

PPAP
Product Part Approval Planning
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APPENDIX
Appendix 1: Supplier Selection Flowchart
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Appendix 2: Supplier Development Flowchart

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Appendix 3: Supplier Monitoring and Up-gradation

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Appendix 4: 8-D Problem Solving Form

*this is a single page of the actual format to give a brief idea about its content.
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