Committing Your Supplier To Continuous Improvement

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Committing Your Supplier toContinuous ImprovementBrian TapajnaProgram Manager – Supplier Development and Continuous ImprovementHuntington Ingalls Industries –Newport News Shipbuilding Huntington Ingalls Industries / All Rights Reserved (2016)

Newport News Shipbuilding (NNS) Sole supplier of U.S. Navy Aircraft Carriers One of two builders constructing VirginiaClass nuclear submarines Exclusive provider of refueling services fornuclear-powered aircraft carriers Largest non-governmental provider of fleetmaintenance services to the Navy Largest industrial employer in Virginia –about 20,000 employees Home of one of the Western Hemisphere’slargest dry docks and cranes Huntington Ingalls Industries / All Rights Reserved (2016)

All photographs are produced by NNS Communications Creative Services and approved for public release Huntington Ingalls Industries / All Rights Reserved (2016)

Newport News Shipbuilding Spend DemographicJanuary 2013 thru December 2015 Huntington Ingalls Industries / All Rights Reserved (2016)

NNS - Supplier Management ProgramProcess ImprovementAll photographs are produced by NNS Communications Creative Services and approved for public release Huntington Ingalls Industries / All Rights Reserved (2016)

Cross Functional EffortSupply ChainProcurementProjectManagementRisk ngineeringSmall BusinessOffice Huntington Ingalls Industries / All Rights Reserved (2016)

Objectives:Tool Sets Share the Mission of Shipbuilding and Navy Link NNS and Supplier Processes Improve Communications, StreamlineProcurement and Foster Good RelationshipsTechnicalAssessment t &Development Approach Deployment Learning IntegrationBusinessManagement &Education Huntington Ingalls Industries / All Rights Reserved (2016)

Cost, Schedule& FinancialRisksTool SetsNew SupplierDevelopmentTechnical &Quality RiskSupply sEmergentNeed&SegmentationTechnicalAssessment &DevelopmentVettingOperationalProcessAssessment &DevelopmentBusiness Performance AssessmentWhat Improvement is Desired? Huntington Ingalls Industries / All Rights Reserved (2016)BusinessManagement &Education

DataAnalysis The process begins with Data Analysis in the form of inputs. Examples of inputs include the bi-annual Supply BaseAssessment, supplier and supply base spend projections, the supplier technical risk scores, and NNS departmental voice ofthe customer input.Select The Select process includes a vetting forum with NNS stakeholders to identify candidates and agree on the improvements weseek or the developmental needs of a supplier.Assess The Assess process includes the identification and execution of a tool set and associated resources to assist supplierdevelopment and continuous improvement.ActMeasureTrain The Act process includes mitigating the gaps and actions needing closure to meet NNS expectations. The Measure process provides feedback in the effectiveness of engagement and performance. The Train process continually encourages and assists suppliers to close the gaps identified during the assessment andworkshops through continued learning. Huntington Ingalls Industries / All Rights Reserved (2016)

Improvement Categories & Business DemographicsGrow / Diversification Existing supplier that we wish to source new productwith or more of the same for a competitive advantage.In addition, growth can come in the form of a newsupplier we have not previously done business withbut appear to offer significant advantage.Develop Existing supplier that we wish to source the sameproduct with for a continued competitive advantagebut require technical and/or operational assistance inunderstanding how to do business with NNS and/orthe technical requirements invoked by NNS orders.Maintain Existing supplier that we wish to continue sourcingthe same product with for a competitive advantagethat continues to build upon our relationship andexpectations.Intervention Existing supplier we must rely on but whoseperformance is adversely affecting quality, technicalissues, schedule or cost to the programsEngagement Deliberately Considers Business Type, Size, Products Huntington Ingalls Industries / All Rights Reserved (2016)

Engagement Strategies: Supplier as Your “Customer”IntroduceSuppliersOpen-ended questions to start the dialoguePromote the NNS Supplier Management ProgramShow Results: Deliver on promises and exceed expectationsImplement strong "front line" - initial contactFollow-up, in person or phone callDevelop two-way relationshipMake the Supplier an insiderBuild SupplierAwarenessTraining others to focus on engagement factorsNetwork the contact listImprove road shows and outreachDemonstrate productsMeet SupplierEstablish a web presenceRequirementsPositive attitude; create rapportEmbed in communiqué'sAssess the long-term valueInfluence supplier perceptionsRetain Suppliers inDeliver quality productsthe ProgramManage NNS expectationsMeet suppliers expectationsElements of a Partnership: Relationship Financial Ties Trust Operational / Standards Shared Strategic ObjectivesSet goalsDeliver on-timeInstall supplier confidenceEngage suppliersDeliver as promisedEstablish timelines for product deliveryOffer tours of NNSMeet and greet the people who do the workIncrease Supplier Navigate the Supplier through the processesEngagementCreate a pleasant storefront atmosphereDeliver as promisedInform the Supplier of future productsDeliver ahead of time, high qualityGo the extra mileExceed Supplier Be attentive to details; execute flawlesslyRequirements Be credible, take ownershipDeliver before promisedEstablish timeliness for product delivery Huntington Ingalls Industries / All Rights Reserved (2016)

Start-up / Selection Criteria What is the current and projected performance of the Supplier? What improvements do we desire? What are the pressing process areas of concern? What is the size, business type and demographics? Which tool set addresses the strengths, weaknesses, opportunities, threats? What resources are required, both of NNS and the Supplier? How will we introduce and instill Supplier confidence in our proposed approach? What are the Supplier’s ideas for engagement? Will the time invested produce a result for NNS, the Supplier, or both? Huntington Ingalls Industries / All Rights Reserved (2016)

The Partnering TeamSupplierQualityand/ orEngineeringManufacturingExtensionPartnership *Sales /ContractsProject rojectManager Huntington Ingalls Industries / All Rights Reserved (2016)Operations /Production* MEP Non-profit, nationwide network for local subjectmatter expert help, under the U.S. Department ofCommerce and the National Institute of Standards andTechnology

Measure AgainstNNS ProcessImprovements:Ex: RFQ, PO,EXOSTAR, VQ,Software, etc.Strategic SourcingEngineeringSupply Chain Management &EngineeringContinuous Improvement System (CIS)Identified ProjectsCategory Management TeamsIncorporateFeedback & Actionat NNSCommodity & ProgramBuying OfficesTrended against the Supplier BaselineMetrics: Ave. Unit Cost 5 Yr Spend & No. of Lines Delivery Performance Quality Performance Technical Aptitude Count of Exceptions to RFQ / PO Supplier’s Rating of NNSSupplier Development &Continuous ImprovementEngagementBuyer/Project Managers /Supplier Quality EngineersIncorporate Improvementsat the Supplier Huntington Ingalls Industries / All Rights Reserved (2016)

SDCIEngagementResultsAction PlanIndividualAction ItemsLinkedProcess tySupplier Eng.AdvocatesSupplierProcess andTechnicalTraining ModulesRisksandOpportunities Assists withthe NNSactionEngineeringSourceInspection Aware ofthe repeatpatternsand issuesSupplier:Training Subscriptions Huntington Ingalls Industries / All Rights Reserved (2016) Keepstrainingfresh

Typical Engagement OrderInitiate Appropriate Tool Set as NeededCommitmenttoContinuousImprovementAssessment &DevelopmentOn-LineTrainingSubscriberSetting theMinimumExpectation of aFirst Step inSuppliersIntro to NNSCommitment to CI12BusinessPerformanceAssessment andDevelopmentValue ChainAssessment &DevelopmentSupplierTechnicalAssessment rationalLeanAssessment &DevelopmentHealth of theSupplier / GapsShared BusinessProcess ReviewAssess andDevelopComplex &CriticalSuppliersTraining andClarity ofTechnicalRequirementsAssess 8Product FamilyLessonsTours & MeetRequirementsLearned Event& GreetMappingIn-PersonSpecificTrainingAssess Past toFuturePerformanceEncouragingVestedInterest &RelationshipsTargetedProcessAreas ofInterest91011 Start with the Appropriate tool set Apply the next tool set as needed Follow-up intervals of 3 months, 6months, 1 year“Rinse and Repeat!” Huntington Ingalls Industries / All Rights Reserved (2016)

Tool Set: On-Line Supplier Training New Suppliers are automatically enrolled Direct Suppliers to on-line content first, personal visits and travel second Connect Suppliers to process escapes and misunderstandings Introduction to the Purchasing Process RFQ - Format, Terms and Conditions, Vendor Quotes, etc Purchase Order and Work Release Coded Notes and Standard Clauses & Appendices Basic Drawing Requirements & Expectations Capacity and Resource Loading Flow Down Expectations to Sub tiers Use of eCommerce Tools EMI - Electromagnetic Interference, Intro, Flow-Down Corrective and Preventive Action Requests RFQ and PO Exception Reporting Shock Requirements Material Control Levels Welding Program / Welding and Brazing Procedure SubmittalScreen Captures Approved for use per Articulate End User License nter-09/content-copyright Huntington Ingalls Industries / All Rights Reserved (2016)

Tool Set: Commitment to Continuous ImprovementCommitment toImprovement inAssociated BusinessGoalsCustomer Feedback,Satisfaction & SupportEmployee Involvement& EmpowermentProcess ImprovementApproach & Tool Sets Huntington Ingalls Industries / All Rights Reserved (2016)

Tool Set: Value Chain Assessment & roResults: Top 10 Process Improvement Areas:Supplier:NNS: Manufacturing ExecutionSub-Tier MgmtDesign, Design Reviews, ChangesPlanning, Scheduling, Resource MgmteCommerce Tools and ProcessesProject and Program ManagementTraining - SupplierCommunications, Relationship BuildingRequest for Quote, Review, AcceptanceTechnical RequirementseCommerce Tools and ProcessesDesign, Design Reviews, ChangesPre and Post Production SoftwareScorecard, Open Order Reports, ReportsTechnical RequirementsTraining – NNSShip, Ship-in-Place; NNS ReceivingRequest for Quote, Review, AcceptancePurchase Order; Award ProcessInspection – Government Source Inspection Huntington Ingalls Industries / All Rights Reserved (2016)

Tool Set: Operational Lean Assessment & DevelopmentLEAN ENTERPRISE "BEST PRACTICES"ICOMMUNICATION SYSTEMSIIORGANIZATIONAL CULTURE & AWARENESSIIILEAN PRINCIPLES:1)2)3)4)5)6)7)8)Balanced ProductionPull SystemsQuality SystemsProcess ChangeoverStandard WorkWorkforce Training5S / Workplace OrganizationOperational FlexibilityIVCONTINUOUS IMPROVEMENTVSUPPLY CHAIN MANAGEMENTVIMANAGEMENT COMMITMENT / SUSTAINABILITY Huntington Ingalls Industries / All Rights Reserved (2016)

Tool Set: Technical Supplier Development WorkshopPurchase OrderLine Item RequirementsCoded NotesMil-SpecConfirmApplicationAction Huntington Ingalls Industries / All Rights Reserved (2016)

Tool Set: Lessons Learned EventReview the strengths and opportunities for improvement from past contractsCapitalize on Opportunities or Prevent Reoccurrence of Risks on New or Existing Contracts Huntington Ingalls Industries / All Rights Reserved (2016)

Results: Lessons Learned thus far - 10 Best Practice Pursue Lean and incorporate contingent processes for Emergent Work Commit to Improving Continuously Insist on a Clear Channel of Communication and Standardize Pathways / Process Make the Abnormal State Visible (5S tenet) Establish Clear Succession Plans for Continuity – for both People and Process! Define an Exit Strategy before you Turn on a Process (i.e. a new inspection step) Know your Procedures. Question your Procedures (and Process) Add Value at the Last Possible Moment where Value and Delivery is Defined by the Customer R-E-L-A-X: Lead, Manage and Work the Problem – through Fact, Tact, and Action Quality trumps Delivery Huntington Ingalls Industries / All Rights Reserved (2016)

Purpose-Driven ExcellenceSupplier Management Program Contributes to theOverall Supply Chain Management MissionProviding the Trades: Quality Products and Services Support Cost and Technical Requirements Meet Production Demands Enable Program Success Huntington Ingalls Industries / All Rights Reserved (2016)

Thank You!Your opinion is important to us!Please take a moment to complete thesurvey using the conference mobile app.Session: WP/34Committing your Supplier toContinuous ImprovementBrian TapajnaHII-Newport News [email protected] elements of this presentation may not be copied or distributed without the express written permission of Huntington Ingalls Industries and the author of this presentation Huntington Ingalls Industries / All Rights Reserved (2016)