Supplier Ship to Stock.
Quality Assurance & Quality Management Systems.A decision to allow a supplier to directly ship to stock or direct to a production line is based on an assessment of the following:
– Risk posed due to failure to detect problems in advance of use
– The % confidence in subsequent in-process testing
– Confidence in the ability of a supplier to provide “right first time product”
– Costs and lead-time advantages versus retaining traditional incoming inspection activities
– The control regime in place, i.e. level of supplier auditing, level of supplier finished product inspection, …
– The demonstration by a supplier of tight process controls, e.g. Cp, Cpk, low standard deviation across specification testing, …
There are clear benefits associated with progressing a supplier onto a ship to stock process.
– The cost and resource requirements associated with incoming inspection and testing can be eliminated or at least significantly reduced.
– The lead time from supplier to use is reduced.
– Inventory levels are reduced, with resulting financial savings due to holding lower stock levels, the risk associated with inventory damage are reduced, lower WIP handling and transport costs, there are lower costs associated with implementing technical changes to product as WIP levels are lower.
– By implication, a supplier providing ship to stock or ship to line, has a high quality, high reliability, low variability process, which results in low failure rates and low levels of returns.
– The ability to continually deliver to performance requirements allows the supplier to focus on improvement and value enhancement to the mutual benefit of supplier and customer. The alternative is a focus on correcting defects, addressing CAPA’s, replying to audit deficiencies, etc..