LEAN AEROSPACE INITIATIVE

SUPPLIER MANAGEMENT SELF-ASSESSMENT TOOL

VERSION 1.0

Center for Technology, Policy and Industrial Development

Massachusetts Institute of Technology
Cambridge, Massachusetts

March 15, 2004

FOR MORE INFORMATION: Please contact:

Dr. Kirk Bozdogan

Tel: 617 253-8540
Fax: 617 258-7845
E-MAIL: BOZDOGAN@MIT.EDU

©Massachusetts Institute of Technology, 2004

 LEAN AEROSPACE INITIATIVE

TABLE OF CONTENTS
I INTRODUCTION

II USER GUIDE

III STRUCTURE OF THE CAPABILITY MATURITY MATRICES

IV SELF-ASSESSMENT PROCESS

V DEFINITION OF THE CAPABILITY MATURITY MATRICES

APPENDICES
APPENDIX A: GLOSSARY

APPENDIX B: LINKS TO OTHER LEAN AEROSPACE INITIATIVE (LAI) PRODUCTS

APPENDIX C: LINK TO "II.D MANAGE SUPPLY CHAIN" LIFECYCLE PROCESS IN

THE LEAN ENTERPRISE SELF-ASSESSMENT TOOL (LESAT)

APPENDIX D: ROADMAP: MAJOR BUILDING BLOCKS

APPENDIX E: SELF-ASSESSMENT PROCESS: OPERATIONAL GUIDELINES

APPENDIX F: LIST OF CONTRIBUTORS AND ACKNOWLEDGMENTS

I. INTRODUCTION

This document contains Version 1.0 of the SUPPLIER MANAGEMENT SELF-ASSESSMENT TOOL developed by the Supplier
Networks Working Group of the LEAN AEROSPACE INITIATIVE (LAI). LAI is a unique partnership between many leading US aerospace
enterprises, federal government agencies led by the US Air Force, organized labor and MIT. More detailed information about LAI can be
obtained from the website: http://web.mit.edu/lean
http://web.mit.edu/lean
The SUPPLIER MANAGEMENT SELF-ASSESSMENT TOOL ("SELF-ASSESSMENT Tool" for short) represents a framework that
companies can utilize to conduct a self-assessment of how much progress they have made in developing and implementing lean supply
chain management capabilities and practices. In addition, the tool can be used to establish future performance targets and identify
further improvement opportunities.

The tool is intended for use by a cross-section of an enterprise's top-level as well as mid-level leadership who are collectively
responsible, in one way or another, for supply chain management. This includes people from virtually all parts of the enterprise in
engineering, manufacturing, contracting, quality, procurement, supplier development, and other areas. As it will become increasingly
apparent in examining this document, designing and managing lean supplier networks takes the entire enterprise, in sharp contrast with
the traditional practice of consigning supply chain management functions narrowly to the traditional procurement, material or purchasing
department.

This tool represents the second major module of LAI's SUPPLIER NETWORKS TRANSFORMATION TOOLSET ("SUPPLIER
TOOLSET" for short). The other major module is the ROADMAP Tool for building lean supplier networks. The ROADMAP Tool lays out a
structured process ("how-to") for evolving lean supply chain management capabilities in order to build lean supplier networks. Both the
ROADMAP Tool and the SELF-ASSESSMENT Tool are integrated and should be used jointly. They together make up VERSION 1.0 of
the SUPPLIER TOOLSET, which has been developed primarily for use by the primes (system integrators) and major suppliers in the
aerospace industry.

SUPPLIER TOOLSET VERSION 1.0 is issued at this time, following a process of both alpha-testing and beta-testing by aerospace
companies. Meanwhile, additional work is under way towards developing two more modules: DESK REFERENCE and RESOURCE
GUIDE. The DESK REFERENCE provides a concise compilation of research-based concepts and principles underlying lean supply
chain management. The RESOURCE GUIDE, aimed primarily at medium and small size suppliers in early stages of lean
implementation, provides a compilation of references to basic lean principles and practices, implementation tools and methods, lean
delivery organizations, and related material. These two additional modules will be incorporated into VERSION 2.0 of the SUPPLIER
TOOLSET.

FIGURE 1 gives an overview of the completed SUPPLIER TOOLSET, encompassing the two major modules making up Version 1.0 and
the additional two modules that will be added for Version 2.0.

The SUPPLIER TOOLSET is developed by LAIís Supplier Networks Working Group. A list of the participants and contributors is
provided in APPENDIX A.

FIGURE 1 : SUPPLIER NETWORKS TRANSFORMATION TOOLSET

FIGURE 1 gives an overview of the completed SUPPLIER TOOLSET, encompassing the two major modules making up Version 1.0 and
the additional two modules that will be added for Version 2.0.

The SUPPLIER TOOLSET is developed by LAIís Supplier Networks Working Group. A list of the participants and contributors is
provided in APPENDIX A.

FIGURE 1 : SUPPLIER NETWORKS TRANSFORMATION TOOLSET

ROADMAP
ROADMAP
for
for building
building lean
lean
supplier
supplier networks
networks
How-to,
How-to, who,
who, when,
when,
where
where

RESOURCE
GUIDE
For smaller
suppliers
(Lean diagnostic; SUPPLIER
SUPPLIER
DESK
DESK “yellow pages”) MANAGEMENT
MANAGEMENT
REFERENCE
REFERENCE Core concepts SELF-ASSESSMENT
SELF-ASSESSMENT
Principles TOOL
TOOL
Principles
References What,
What, current
current state,
state,
References
Glossary future
future state
state
Glossary

OBJECTIVE: Develop integrated lean supplier networks

transformation toolset
II. USER GUIDE
A. What is the Purpose of this Tool?

The purpose of this tool is provide enterprise leadership – both top-level and mid-level leadership from across the enterprise -- with a
framework that they can use to assess how far the enterprise has come in developing and implementing lean supply chain management
capabilities and practices. The tool can also be used to identify future improvement targets, priorities and opportunities.

B. To Whom is this Tool Targeted?

The tool is intended for use by those responsible for supply chain design and management in the aerospace industry, although it is
expected to find wider applicability across many other industries. More specifically, this tool is targeted at a cross-section of an enterprise’s
top-level as well as mid-level leadership who are collectively responsible, in one way or another, for supply chain management. This
includes people from virtually all parts of the enterprise – engineering, manufacturing, contracting, quality, procurement, supplier
development, and other areas. As it will become increasingly apparent in examining this document, designing and managing lean supplier
networks “takes the entire enterprise,” in sharp contrast with the traditional practice of narrowly consigning supply chain management
functions to the traditional procurement, material or purchasing department.

C. How is this Tool being Disseminated?

This tool is being disseminated through the LEAN AEROSPACE INITIATIVE (LAI) website:
http://web.mit.edu/lean
D. On What Body of Knowledge is this Tool Based?

This tool, as well as the companion implementation ROADMAP Tool, draw on basic lean concepts and practices that are derived from
research performed by the LEAN AEROSPACE INITIATIVE (LAI) over the past decade. These tools also incorporate other published
research results.These lean concepts, summarized in the DESK REFERENCE (in-progress), govern the design, development and
management of lean supplier networks. These lean concepts, translated into a set of mutually-reinforcing principles and practices, support
the meta-principle underlying the concept of building lean supplier networks: Design, develop and manage the supplier network to optimize
dynamic competitive advantage through efficient, customer-focused, creation of value for all stakeholders over the entire product lifecycle.

E. What Processes and Functions does the Tool Cover?

The tool covers the “core process” domain encompassing all enterprise-wide functions, practices, organizational approaches and methods
employed in designing, developing and managing the enterprise’s interactions with its entire supplier network, including all internal
organizational structures and processes related to supply chain management. It covers such areas as subcontract management,
procurement (material, purchasing) operations, supplier quality initiatives, supplier certification and development programs. It also covers all
suply chain design and management functions related to product development, manufacturing and sustainment operations. Further, it
encompasses related enterprise-wide strategic decisions (e.g., make-buy, strategic partnerships), as well as tactical initiatives (e.g., flowing
lean to lower-tier and subtier suppliers, Internet-enabled reverse auctions), and operational activities (e.g., incoming inspection, Kaizen
events with suppliers). Finally, the tool is intended for use by a program-enterprise (i.e., an enterprise engaged primarily in one program or
product) or by a multi-program enterprise (i.e., an enterprise that is engaged in developing, producing or sustaining multiple programs or
products).

F. What are the Defining Features of this Tool?

This tool identifies eight overarching lean practices governing the design and management of supplier networks, and gives a definition of
each overarching practice, highlighting its link to underlying lean principles. For each overarching practice, the tool further provides
illustrative diagnostic questions, lists a sample of lean indicators and suggests potential metrics, to help with the self-assessment process.
The eight overarching practices are broken down into thirty (30) enabling practices. The capability maturity matrix is built for these thirty (30)
The tool covers the “core process” domain encompassing all enterprise-wide functions, practices, organizational approaches and methods
employed in designing, developing and managing the enterprise’s interactions with its entire supplier network, including all internal
organizational structures and processes related to supply chain management. It covers such areas as subcontract management,
procurement (material, purchasing) operations, supplier quality initiatives, supplier certification and development programs. It also covers all
suply chain design and management functions related to product development, manufacturing and sustainment operations. Further, it
encompasses related enterprise-wide strategic decisions (e.g., make-buy, strategic partnerships), as well as tactical initiatives (e.g., flowing
lean to lower-tier and subtier suppliers, Internet-enabled reverse auctions), and operational activities (e.g., incoming inspection, Kaizen
events with suppliers). Finally, the tool is intended for use by a program-enterprise (i.e., an enterprise engaged primarily in one program or
product) or by a multi-program enterprise (i.e., an enterprise that is engaged in developing, producing or sustaining multiple programs or
products).

F. What are the Defining Features of this Tool?

This tool identifies eight overarching lean practices governing the design and management of supplier networks, and gives a definition of
each overarching practice, highlighting its link to underlying lean principles. For each overarching practice, the tool further provides
illustrative diagnostic questions, lists a sample of lean indicators and suggests potential metrics, to help with the self-assessment process.
The eight overarching practices are broken down into thirty (30) enabling practices. The capability maturity matrix is built for these thirty (30)
enabling practices, by defining five distinct capability maturity levels. These five capability levels, which are defined in a cumulative manner,
are explained later in this document. The 30x5 capability maturity matrix contains 150 individual “cells”. The tool defines the key lean
concepts and practices characterizing each “cell.” The fully-developed capability maturity matrix provides the central self-assessment
framework.

The results are presented in the form of eight tables corresponding to each one of the eight overarching practices. Thus, users of this tool
can conduct a self-assessment to see where an enterprise currently is along the five-level capability maturity scale for each one of the
enabling practices, which can be rolled-up to the overarching practice level, as well as to the enterprise level, to gauge the enterprise’s “as-
is” state along its journey in evolving lean supplier networks. The users can also identify, for each practice, the desired “future” level (“to-be”
state) that it wishes to achieve. The comparison of the “as-is” and “to-be” states defines the “gap” that needs to be bridged through
proactive steps. Thus, using the tool helps to identify concrete improvement opportunities. As detailed later in this document, a quantitative
self-scoring system may be employed in using this tool. Often, the dialogue and cross-learning within an enterprise in the process of using
this tool may prove even more important than the numerical self-scoring results.

G. How does this Tool Differ from other Existing Tools?

All of the currently available supply chain management self-assessment models, including this one, make use of variants of capability
maturity matrices. However, this tool has principal distinguishing features that set it apart from the other models.

This tool defines the governing overarching and enabling lean supply chain management practices and then defines, for each practice, the
more specific strategic, tactical and operational lean characteristics of that practice at each maturity capability level. This approach differs
from that commonly used by other tools, which typically describe expected capability levels for specific processes. Such a "process-centric"
approach suffers from a fundamental weakness, however, since currently existing processes are expected to be transformed as a direct
result of the self-assessment process focusing on practices cutting across individual functional, process or organizational silos.

Also, in the other tools, the attributes of chosen processes at different capability maturity levels based on “best practices” derived largely
from benchmarking activities. “Best practices” cannot be plucked away from one industrial context and inserted into another. Although
generally instructive, best practices have a relatively short shelf-life, especially in an environment of fast clockspeed changes sweeping an
entire industry. Since best practices are relatively short-lived, the robustness of the overall model over time becomes suspect. Finally, it
would generally be more comforting to know if best practices are grounded in some basic principles or if they are research-validated.

Lastly, this tool offers a substantially different view of supplier networks, compared with the outdated supply chain orientation of other tools.
The perspective taken in this tool is that of the customer company designing, evolving and managing its supplier network. When the term
“supply chain management” is used in this document, it is mostly for ease of communication, since the term has gained common usage.
However, the clear preference running throughout this document is to think and act in terms of supplier networks or integrated value
networks. The main reason is that this latter term captures in a more substantive way the letter and spirit of building lean supplier bases –
stressing not top-down hierarchical relationships and linear single-directional information flows but rather the creation of closely-knit,
mutually-advantageous,collaborative relationships and multi-directional information flows throughout the supplier network, while balancing
cooperation and competition. This is more closely aligned with the lean view of building learning organizational networks, focusing not
narrowly on “point solutions” (e.g., eliminating waste) but rather on “system solutions” (i.e., efficient creation of value throughout the
network for all stakeholders).

Supplier networks are defined here to cover the direct production major critical suppliers of individual enterprises, as well as the lower-tier
and subtier suppliers supporting their major suppliers. This is because an enterprise’s interactions with its suppliers are not confined
narrowly to its relationships with its major or critical suppliers. They also include the “vertical” interactions between its major suppliers and
the supporting second-tier and subtier suppliers, as well as all “horizontal” interactions across the entire supplier network. The task of
designing, managing, coordinating or facilitating such interactions and relationships is essential to the central mission of the enterprise,
which is to create and deliver value to all of its stakeholders, focusing on the customer. The nature, dimension and degree of the strategic
importance of these relationships are a function of the types of interdependencies that might exist, currently or in the future, between the
enterprise and its supplier network. While the emphasis is on “direct suppliers” – those that directly support the enterprise’s central mission
of developing, producing and supporting its main products – the tool is less explicit regarding “indirect” suppliers, delivering a variety of
supporting goods and services (e.g., office supplies, data processing, payroll accounting, security services, etc.). However, the tool is
sufficiently robust in terms of its applicability to the management of “indirect” suppliers as well.
stressing not top-down hierarchical relationships and linear single-directional information flows but rather the creation of closely-knit,
mutually-advantageous,collaborative relationships and multi-directional information flows throughout the supplier network, while balancing
cooperation and competition. This is more closely aligned with the lean view of building learning organizational networks, focusing not
narrowly on “point solutions” (e.g., eliminating waste) but rather on “system solutions” (i.e., efficient creation of value throughout the
network for all stakeholders).

Supplier networks are defined here to cover the direct production major critical suppliers of individual enterprises, as well as the lower-tier
and subtier suppliers supporting their major suppliers. This is because an enterprise’s interactions with its suppliers are not confined
narrowly to its relationships with its major or critical suppliers. They also include the “vertical” interactions between its major suppliers and
the supporting second-tier and subtier suppliers, as well as all “horizontal” interactions across the entire supplier network. The task of
designing, managing, coordinating or facilitating such interactions and relationships is essential to the central mission of the enterprise,
which is to create and deliver value to all of its stakeholders, focusing on the customer. The nature, dimension and degree of the strategic
importance of these relationships are a function of the types of interdependencies that might exist, currently or in the future, between the
enterprise and its supplier network. While the emphasis is on “direct suppliers” – those that directly support the enterprise’s central mission
of developing, producing and supporting its main products – the tool is less explicit regarding “indirect” suppliers, delivering a variety of
supporting goods and services (e.g., office supplies, data processing, payroll accounting, security services, etc.). However, the tool is
sufficiently robust in terms of its applicability to the management of “indirect” suppliers as well.

H. How is the SELF-ASSESSMENT TOOL Linked to Enterprise-Level LAI Products, as well as to the
ROADMAP Tool?
The links between the SELF-ASSESSMENT TOOL and a portfolio of LAI-generated enterprise-level products are discussed in
Appendix C.

The Lean Enterprise Model (LEM)

Transitioning to Lean: A Guide for Leaders (also known as the TTL Roadmap)
The Lean Enterprise Self-Assessment Tool (LESAT)
The summary “wall-chart” version of the ROADMAP Tool, outlining the main building blocks and implementation steps, is given in Appendix
D (" ROADMAP: MAJOR BUILDING BLOCKS"). Ideally, the use of the SELF-ASSESSMENT TOOL should be integrated with the use of
the enterprise-level tools, as well as with using the ROADMAP Tool. In fact, the SELF-ASSESSMENT TOOL and the ROADMAP Tool
should be used in conjunction with each other. In particular, it is recommended that the self-assessment be conducted as a key
implementation step in the Strategic Planning block of activities outlined in the ROADMAP Tool.
III. STRUCTURE OF THE CAPABILITY MATURITY MATRICES
The SELF-ASSESSMENT TOOL defines the following eight overarching lean practices:

1.0 Design supplier network architecture – Design the size, structure and composition of the supplier network to ensure
efficient
creation of value for all stakeholders.

2.0 Develop complementary supplier capabilities -- Develop complementary supplier capabilities to enhance the portfolio
of
core competencies in the extended enterprise.

3.0 Create flow and pull throughout the supplier network -- Create synchronized flow throughout the supplier network
to
evolve a “pull”-based production system that ensures continuous flow maximizing the advantage of speed

4.0 Establish cooperative relationships and effective coordination mechanisms -- Develop a differentiated
set of
relationships with suppliers including supplier partnerships and strategic alliances, while balancing cooperation and competition, to optimize
network-wide performance.

5.0 Maximize flexibility and responsiveness -- Integrate processes, practices and information flows across the supplier
network to maximize network-wide flexibility, adaptability and responsiveness to cope effectively with sudden external developments.

6.0 Pursue supplier-integrated product and process development – Integrate suppliers early into the design
process to ensure delivery of best lifecycle value.

7.0 Integrate knowledge and foster innovation – Create knowledge-sharing processes and foster innovation across the
supplier
network to ensure continuous flow of innovative solutions benefiting the customer and other enterprise stakeholders.

8.0 Demonstrate continuous performance improvement – Institutionalize formal processes and reward systems for
continuous improvement throughout the supplier network to deliver best value to all stakeholders on an on-going basis.
In addition, the SELF-ASSESSMENT TOOL defines five capability maturity levels, as summarized below. These capability levels are cumulative. This
means that in order for an organization to score itself at Level IV, for instance, it must show evidence that it has in fact already mastered the lean
attributes associated with Levels I through III.

For the purposes of this assessment tool, the five capability levels are defined as follows:

LEVEL DESIGNATION DESCRIPTION

Very little or some awareness of this practice; sporadic improvement activities may be underway in a few areas – In
general, there is very little awareness of lean supply chain management principles or practices; hierarchical supplier
I TRADITIONAL
base; arm’s length and often adversarial relationships; build-to-print environment; supply chain management
concentrated in purchasing department; little alignment of supply chain design with corporate core competencies.

General but limited awareness; informal and piecemeal approach deployed in a few areas focusing on specific projects
with varying degrees of effectiveness and sustainability – In general, there is limited linking of supplier strategy to
corporate vision, goals and objectives; the supplier base is rationalized, but there is limited congruence between
internal and supplier-based core competencies; cross-functional commodity teams are established for supplier
II ADOPTER
selection; stress is placed on supplier compliance with established quality systems and standards; limited two-way
communication links with specific suppliers; limited visibility into supplier processes; some teaming or partnering with
specific suppliers having a high impact on strategic objectives; long-term purchase agreements (LTAs) introduced to
focus on affordability and cost reduction.

A systematic approach is deployed in specific areas, functions and processes, with appropriate metrics; varying stages
of implementation across most areas, exhibiting varying degrees of success; some deployments are still in relatively
early stages – In general, supplier strategy is linked to corporate vision, goals and objectives; some congruence of
core competencies across supplier base; emphasis on reducing transaction costs; basic EDI and related IT/IS
infrastructure systems developed; effective supplier development efforts, largely focusing on eliminating waste and
reducing sources of process variation across suppliers, through value stream mapping and analysis (VSM/A); supplier
advisory councils; long-term relationships are established with selected certified suppliers; early involvement of
III PERFORMER
suppliers in the design process; delegation of greater responsibility to key suppliers; synchronization of production
decisions over the supplier network, with some implementation of just-in-time (JIT) delivery and point-of-use stocking;
technical knowledge of selected suppliers is incorporated into design, production and sustainment processes;
technological capabilities of selected suppliers are
aligned with internal technology roadmaps.

On-going deployment, refinement and continuous improvement across the enterprise, facilitated by the use of
appropriate metrics, exhibit mastery of the applicable principles and practices; lean deployments in all appropriate
areas, functions and processes demonstrate a mature, well-developed approach – In general, there is a shared
strategic vision across the supplier network; core competencies aligned internally and across suppliers; supplier
IV REFORMER network seen as a critical enabler of corporate competitive advantage; supplier selection largely on “best value” basis;
cooperative relationships with suppliers based on mutual long-term obligations; major suppliers integrated early into
the design process; Internet-enabled information infrastructure is in place; key suppliers are incentivized to adopt
innovative solutions through sharing of cost savings; technology roadmaps are proactively aligned with those of key
suppliers; mutually-defined metrics used to drive continuous improvement across the supplier network.
 Exceptional, well-defined, innovative approach is fully deployed across the extended enterprise (internal and external
value streams); recognized as exhibiting world-class excellence – In general, supplier strategy is seen as a central
core competence to enhance corporate competitive advantage; shared vision, goals and objectives throughout the
supplier network; products, processes and supplier networks are designed concurrently; focus on transformation of the
V TRANSFORMER
entire extended enterprise; supplier network aligned to maximize flexibility and responsiveness; supplier-based
innovations nurtured through mutually-beneficial contractual arrangements; electronic integration of the supplier
network; dynamically optimizing core competencies across the supplier network to ensure efficient creation of of
lifecycle value for all enterprise stakeholders.

The supply chain design and management capability maturity matrices are presented in a series of eight (8) tables, for each of the eight overarching
lean practices governing the design and management of supplier networks. For each overarching practice, the tables provide a definition, diagnostic
questions, illustrative lean indicators, and potential metrics.

Each overarching practice is broken down into a number of enabling practices. All told, thirty (30) enabling practices have been identified. The eight
tables, taken together, define a capability maturity matrix with 30 rows (enabling practices) and 5 columns (capability levels), representing 150
individual “cells.” Each “cell” contains a description of the specific lean attributes characterizing a particular capability maturity level for a given
enabling practice. These lean practices and attributes refer to illustrative characteristics expected to be exhibited by a representative sample of
aerospace enterprises at each level or way-station along the lean journey, while recognizing that the journey itself is a continuous one extending well
beyond Level V. Also, key “information technology” enablers are identified at each level,
as appropriate, in recognition of the transformative power of the Internet and related information and communications technologies
transforming supply chain management practices across many industries.
IV. SELF-ASSESSMENT PROCESS
The self-assessment process by using this tool is detailed in Appendix E (Hyperlink) and summarized here. In general, it is expected that self-
assessment will be performed as part of a larger structured process linked to the corporate strategic and operational planning cycle. The results of
self-assessment should provide guidance to the organization in refining and adjusting its continuous improvement plans.

Generally speaking, the internal self-evaluation process should involve three main groups engaged in the design and management of supplier
networks. The first encompasses organizations directly involved in supply chain management (e.g., procurement, quality management, strategic
sourcing, product sourcing, strategic planning and program interface, finance, contracting and information services). The second includes
organizations indirectly engaged in supply chain management activities, such as engineering, manufacturing, and other functional entities with
technical responsibilities affecting suppliers (e.g., materials technology, standard materials, build-to-print, key characteristics, design attributes,
supplier control drawings). The third group covers major direct production suppliers (e.g., major outside production, purchased outside production,
systems and equipment suppliers) which may be surveyed, as appropriate, to assess the extent to which the external supplier perspective is in line
with the internal self-assessment.

Participants in the assessment process should include enterprise leaders and delegated representatives from all disciplines responsible for supply
chain management and related functional areas, including, but not limited to, such specific functional areas as engineering, manufacturing,
procurement, contracting, forecasting, ordering, scheduling, logistics, external and internal transportation, receiving, inspection, and information
systems.

Those with responsibility for conducting the self-assessment task within the organization should carefully plan and execute the task. A suggested five-
step process is outlined below:

STEP 1: Preparation for self-assessment – Identify the key stakeholders throughout the enterprise who should participate in the self-assessment
process and make sure they are sufficiently well-informed about the purpose, self-assessment vehicle being used, and why this is a worthwhile effort.
A top-level enterprise leader should champion this step and provide oversight to the entire process.

STEP 2: Facilitated kickoff meeting -- Establish a “core team” and select a team leader (i.e., facilitator) to coordinate the self-assessment process. The
first important task of this core group should be to organize an initial kickoff meeting, by inviting all of the relevant participating stakeholders from
across the enterprise. The process should be “owned” by all of these stakeholders. At the meeting, the group should establish firm ground rules,
develop guidelines for organizing and conducting the self-assessment process, agree on specific timelines, and provide specific instructions for
performing the self-assessment process. The “core team” should coordinate the process, collect and tabulate the results, and capture lessons
learned, identify improvement opportunities, and develop a plan of action concentrating on priority improvement targets.

STEP 3: Self-Assessment – Examine the SELF-ASSESSMENT TOOL and conduct self-assessment across the enterprise. Make sure the “core team”
provides the needed assistance to the relevant organizational units, teams or individuals across the enterprise. The results should be provided to the
“core team” for tabulation. Those conducting the self-assessment should be instructed to perform the requested self-scoring, as well as the definition
of the desired improvement targets, immediate improvement opportunity areas, and prioritization of improvement opportunities.

STEP 4: Review Meeting – Reconvene the participants after the self-assessment process has been completed in a wrap-up meeting to review the
results. The meeting should be organized to review all of the tabulated scores, discuss the desired improvement targets, prioritize the suggested
improvement opportunity areas, and develop an integrated action plan for implementation.

Self-assessment should be based on verifiable evidence. More detail on the types of evidence required can be found in Appendix E. Above
everything else, it should be remembered that more important than the resulting numerical scores is the dialogue and cross-learning across the
enterprise that this process will generate. The entire process should be on a “no blame or attribution” basis to ensure open and honest
communication. The results of the self-assessment process should not be used to punish or reward specific organizational units or individuals. Rather,
the results should be used to enhance the overall capability and performance of the enterprise across the entire supplier network.
performing the self-assessment process. The “core team” should coordinate the process, collect and tabulate the results, and capture lessons
learned, identify improvement opportunities, and develop a plan of action concentrating on priority improvement targets.

STEP 3: Self-Assessment – Examine the SELF-ASSESSMENT TOOL and conduct self-assessment across the enterprise. Make sure the “core team”
provides the needed assistance to the relevant organizational units, teams or individuals across the enterprise. The results should be provided to the
“core team” for tabulation. Those conducting the self-assessment should be instructed to perform the requested self-scoring, as well as the definition
of the desired improvement targets, immediate improvement opportunity areas, and prioritization of improvement opportunities.

STEP 4: Review Meeting – Reconvene the participants after the self-assessment process has been completed in a wrap-up meeting to review the
results. The meeting should be organized to review all of the tabulated scores, discuss the desired improvement targets, prioritize the suggested
improvement opportunity areas, and develop an integrated action plan for implementation.

Self-assessment should be based on verifiable evidence. More detail on the types of evidence required can be found in Appendix E. Above
everything else, it should be remembered that more important than the resulting numerical scores is the dialogue and cross-learning across the
enterprise that this process will generate. The entire process should be on a “no blame or attribution” basis to ensure open and honest
communication. The results of the self-assessment process should not be used to punish or reward specific organizational units or individuals. Rather,
the results should be used to enhance the overall capability and performance of the enterprise across the entire supplier network.
 1. DESIGN SUPPLIER NETWORK ARCHITECTURE:
DEFINITION: Design the size, structure and composition of the supplier network to ensure the efficient creation and delivery of value to all
enterprise stakeholders, focusing on the customer.
Diagnostic Questions
Lean Indicators
Potential Metrics
Key Enabling Practices
1.1 Assure supplier strategy
linked to corporate vision,
goals and objectives
· Does the size, structure and composition of the supplier network reflect the enterprise vision and make-buy strategy?
· Does the design of the supplier network reflect a proactive effort to balance in-house capabilities with supplier-based
core competencies to optimize the creation and delivery of best value?
· Are cross-functional commodity or sourcing teams established for streamlining and selecting suppliers?
· Is supplier process capability measured and effectively utilized?
· Structure and composition of supplier network are linked to corporate vision and strategy.
· Make-buy and strategic sourcing decisions are firmly grounded in integrated set of criteria
reflecting strategic corporate objectives.
· Supplier network strategy reflects a differentiated strategy designed to maximize value creation.
· Core competencies are aligned throughout the extended enterprise.
· Percent of direct suppliers selected on past performance or best value basis
· Ratio of total number of lower-tier suppliers to major suppliers
· Percent of direct purchase dollars placed to preferred or certified suppliers
· Percent of total end-product cost consisting of supplier-provided parts, components and materials
· Trends in the total unit cost of the enterprise’s primary product (in constant dollars)
· Trends in the profitability of the supplier network (in constant dollars) Clear Scores
Current Desired
Capability Levels State State
LEVEL I
TRADITIONAL
LEVEL II
ADOPTER
LEVEL III
PERFORMER
LEVEL IV
REFORMER
LEVEL V
TRANSFORMER
2.4 4.3
· There is little or no · There is limited linking of · Supplier strategy is linked · Supplier strategy · Supplier strategy
evidence of a supplier supplier strategy to to corporate vision, goals directly reflects represents a direct 2 3
strategy linked to corporate vision, goals and objectives. corporate vision, extension of corporate
well-defined corporate and objectives. · Supplier strategy is seen goals and objectives. vision, goals and
vision, goals and · Supplier strategy is as an important enabler of · Supplier strategy is objectives.
objectives. seen as an enabler of improving competitive seen as a crucial · Supplier strategy is
· Supplier strategy improving cost and advantage. enabler of improving seen as a central core
focuses mainly on quality performance. · There is isolated sharing of corporate competitive competence to
reducing the cost of · There is very limited vision and commitment advantage. enhance corporate
discrete procurement sharing of a common across the supplier base. · There is some shared competitive
functions (e.g., order vision or commitment vision and commitment advantage.
placement, invoicing, across suppliers. across the supplier
inventory management, base.
materials handling).
 · The design of the
1.2 Design supplier network
based on strategic mapping supplier network
does not reflect a
of core competencies
strategic mapping
internally and across of core competencies
suppliers. internally or across
suppliers.
·  Mapping of core
competencies is
confined to internal
manufacturing
processes.
· There is little correlation
between internal and external
supplier-based core
competencies.
·  The supplier network
is characterized by a
large number of direct
production suppliers
with multi-tiered top-down
management and control.
· Supplier network design · Supplier network design · Supplier network · Supplier network
reflects limited reflects some design reflects an design reflects a 2 4
consideration of core consideration of internal explicit consideration proactive
competencies internally and current (or required) of current and comprehensive
and across specific core competencies of required core strategic mapping of
suppliers. selected suppliers. competencies current and required
· Mapping of core · Core competencies of internally and across core competencies
competencies internally selected suppliers in major critical suppliers. internally and across
and across specific defined technologies or · Internal and external the supplier network.
suppliers focuses on manufacturing processes core competencies of · Supplier network
discrete manufacturing are documented. suppliers in key design strives to
processes. · There is some technologies are well optimize portfolio of
· There is limited correlation defined. core competencies
correlation between between current (or · Core competencies internally and
internal and external required) internal core internally and across throughout the
supplier-based core competencies and those suppliers are aligned. supplier network.
competencies. of selected suppliers. · Recognition is given · Products, processes
· Limited recognition is · Some recognition is given to concurrent design and supplier network
given to concurrent to concurrent design of of products, are designed
design of products, products, processes and processes and concurrently.
processes and supplier supplier network. supplier network.
network · Supplier network
design is seen as an
important enabler of
corporate competitive
advantage.
 · Sourcing decisions are
1.3 Select suppliers based on
not linked to make-buy
criteria optimizing core criteria based on
competencies internally and evaluation of core
across suppliers . competencies.
· Little evidence of an
1.4 Segment suppliers into
attempt to develop a
differentiated categories procurement strategy
based on their relative geared to different
strategic importance in categories of suppliers.
creating value
· Little or no effort made to
segment suppliers into
different categories, in
terms of their relative
importance and related
criteria.
· Sourcing decisions · Sourcing decisions
reflect make-buy criteria reflect make-buy
based on limited criteria based on
evaluation of core evaluation of core
competencies. competencies internally
and across selected
suppliers.
· Some key suppliers are
selected based on past
performance and “best
value,” while a majority of
suppliers of standardized
items are selected using
competitive bids.
· Limited effort is made to · Direct suppliers are grouped
classify direct suppliers into different categories for
into different groups for evolving tailored or
the purpose of developing differentiated
tailored procurement procurement and supplier
strategies. integration strategies.
· Supplier strategy is largely · Supplier strategy is aimed
aimed at reducing largely at reducing
transaction costs at transaction costs at the
program (product) level. business unit or enterprise
· Direct suppliers grouped level.
largely into such · Supplier segmentation
categories as major criteria consider a number
teaming partners and all of factors, such as relative
others. economic importance and
degree of criticality of
procured items in terms of
overall program (product)
cost and performance
· Sourcing decisions · Sourcing decisions
reflect make-buy reflect make-buy 3 5
criteria based on a criteria based on a
thorough evaluation of comprehensive
core competencies evaluation of current
internally and across and required core
major critical suppliers, competencies internally
focused on delivery of and across suppliers,
best value to the focused on creation of
customer. best lifecycle value for
· A relatively high all stakeholders.
number of major · A majority of major
critical suppliers, critical suppliers and
and some subtier many subtier suppliers
suppliers, are are selected on the
selected on the basis basis of past perf. and
of past performance “best value,” focused
and “best value.” on value creation.
· Supplier selection is · Multiple sourcing is
made by enterprise used for highly
-level cross-functional standardized items,
teams focused on while dual sourcing is
delivering best lifecycle used for selected
value to the customer. technologically mature
high-volume
components, and sole
sourcing is limited to
selected complex high-
technology
subsystems.
· Supplier selection is
made by enterprise-
level cross-functional
teams focused on
value creation for all
stakeholders.
· Direct suppliers are · Highly tailored or
grouped into different differentiated 3
categories on the basis supplier integration
of formalized supplier strategies and practices
segmentation criteria for are implemented, based
developing procurement on formalized
and supplier integration stratification and
strategies. segmentation of the
· Supplier strategy is supplier network.
aimed at reducing · Supplier strategy is
internal and aimed at minimizing
external coordination coordination costs and
costs at the enterprise creating value.
level. · Supplier stratification
· Supplier stratification and segmentation
and segmentation criteria reflect such
criteria employ formalized additional factors as
methods considering mutual economic
such additional factors dependence and speed
as transaction frequency of technological change.
and volume, and degree
of complexity of
purchased components.

1.5 Create internal organizational
structures and basic
infrastructure systems for
efficient management of
supplier network
Lean Indicators
Evidence
Opportunities
· Procurement is centralized
into a material or purchasing
organization supporting
engineering and production
operations.
· One set of uniform
processes and procedures
govern procurement
operations.
· Procurement operations
focus on discrete functions
(e.g., order placement,
inventory control, inspection
procedures, materials
handling).
· Procurement is typically
centralized at the
enterprise level and
serves as a service
center supporting
engineering, production
and post-sale customer
support functions.
· There is limited integration
between the procurement
organization and
engineering,
manufacturing, quality,
contracting and related
functions.
· Limited use of Electronic
Data Interchange (EDI)
focuses on routine
exchange of business
information with specific
suppliers.
· Procurement operations
are typically centralized at
the business unit level to
achieve economies of
scale in purchasing.
· Matrixed relationships
are established between
procurement operations · Matrixed relationships
and key functional
organizations (engineering,
manufacturing, quality).
· Basic EDI and related IT/IS
infrastructure systems are
developed to support an
enterprise’s ERP system
and to enable some · Basic IT/IS infrastructure
capability for technical
data exchange with selected
suppliers.
· Procurement operations · Procurement operations
(organized at the (organized at the 2 5
business unit level for business unit level for
large multi-divisional large multi-divisional
enterprises) are aligned enterprises) are
internally and across integrated internally and
major critical suppliers. across the supplier
network.
and incentives are put in · Matrixed relationships
place to align and incentives are
procurement operations created to integrate
across business units, procurement operations
programs (product across business units
platforms) and major and programs (product
critical suppliers. platforms), as well as
across the supplier
supports integrated ERP network.
system, assures database · Basic IT/IS infrastructure
commonality, and enables systems are developed
technical data exchange to ensure seamless
internally and across information flow internally
major critical suppliers. and across the supplier
network.
 2. DEVELOP COMPLEMENTARY SUPPLIER CAPABILITIES:
DEFINITION: Develop complementary supplier capabilities -- Develop complementary supplier capabilities to enhance the portfolio of
core competencies in the extended enterprise.

Diagnostic Questions
· Are formal processes in place for evaluating and monitoring supplier capabilities?
· Are there supplier training and education initiatives aimed at improving supplier capabilities?
· Is supplier process capability effectively utilized?
· Are there joint problem-solving teams established with key suppliers?
· Are supplier development efforts linked to corporate strategic priorities in product development, production or customer
support?

· Supplier capabilities are well understood, effectively utilized, and strategically developed.
· Lean practices, tools and methods are deployed throughout the supplier base.
Lean Indicators · Supplier-generated suggestions for improvement are implemented.
· Dedicated (relationship-specific) investments are made to help improve supplier capabilities unique to the relationship.

· Percent of direct purchase dollars placed to preferred or certified suppliers

Potential Metrics
Key Enabling Practices
2.1 Perform evaluation of
complementary supplier
capabilities
· Number of supplier-generated suggestions for improvements that are implemented
· Percent of dedicated (relationship-specific) investments made by suppliers accounted for by the enterprise’s own
investment in asset-creating, mutually-beneficial, opportunities for improving supplier performance and productivity
LEVEL I
TRADITIONAL
· Little formal evaluation of
process capabilities
internally or definition of
required complementary
supplier capabilities.
· Measurement of supplier
capabilities limited to
tracking supplier
performance limited to cost,
quality and delivery.
Capability Levels
LEVEL II
ADOPTER
· Evaluation of capabilities
focuses largely on internal
design, tooling and
manufacturing processes.
· Supplier performance,
quality or process
capabilities are evaluated
using supplier rating
systems for specific
suppliers.
· Emphasis is placed on
supplier compliance with
established quality
systems and standards.
LEVEL III
PERFORMER
· Internal as well as external · Internal and
supplier-based
complementary capabilities
are defined and evaluated
through benchmarking,
focusing on selected
technology or process areas
(e.g., supplier high-speed
machining capabilities
complementing internal
flexible production · Extensive documentation
processes).
· Formal supplier rating and
evaluation methods are
implemented for qualifying
key suppliers based on such
performance measures as
cost, quality, delivery and
customer satisfaction.
Clear Scores
Current Desired
State State
LEVEL IV
REFORMER
LEVEL V
TRANSFORMER
2 4
· Both internal and
complementary supplier complementary supplier 2 4
capabilities are evaluated capabilities are evaluated
by employing formal on an on-going basis
benchmarking or other across the supplier
qualification methods, network by employing
covering many specific formal benchmarking or
technology or process other qualification
areas, focusing on major methods, including third-
suppliers. party audits, covering a
spectrum of technology
and evaluation of and process areas in
supplier-based technical design engineering,
and business process tooling, manufacturing
capabilities have been and testing.
performed for major · A comprehensive
suppliers. understanding of the
portfolio of
complementary
capabilities throughout
the extended enterprise,
covering all direct
production suppliers, is
developed.
 · There is little or no
2.2 Deploy basic lean concepts
dissemination of key lean
to suppliers to enhance principles and practices to
network-wide performance suppliers; any initial lean
efforts concentrate on
specific internal
manufacturing processes
to improve quality (e.g., first-
time yield).
· Specific suppliers are asked
to improve their processes
to improve quality, cost and
delivery performance.
· Major emphasis is placed
on cost reduction and
quality improvement.
· Main approach is issuing
demands to suppliers for
specific types of
performance improvement.
· Dissemination of basic
lean principles and
practices is limited to
specific major suppliers.
· Focus is on critical or
selected value added
processes internally and
across specific suppliers.
· Major emphasis is placed
on eliminating waste and
improving quality by
concentrating on discrete
parts and components.
· Main approaches used
include deploying “tiger
teams” to train specific
suppliers or assigning off-
site production personnel
to work with individual
suppliers. individual
suppliers.
· Some lean concepts and
practices, as well as
selected
Six Sigma methods, are
deployed to selected major
suppliers through supplier
councils, workshops and
seminars.
· Focus is largely on factory
floor design and
manufacturing processes.
· Emphasis is placed on
eliminating major sources
of waste and reducing
process variation, focusing
on specific programs or
products.
· Main approach entails
specifying value to the
customer, identifying the
value stream, making
products flow continuously
in response to customer
pull and pursuing perfection.
· Basic lean concepts and
practices, as well as key
Six Sigma methods, are
deployed to major critical
suppliers through
workshops, special
seminars and executive
training programs.
· Focus is on fundamental
improvement of critical
enterprise-wide
processes.
· Stress is placed on
elimination of waste,
reducing product and
process variation, and
creating continuous flow
throughout the enterprise
(i.e., in both manufacturing
and “beyond the factory
floor” operations) with
the goal of creating value
for all enterprise
stakeholders.
· Central driving concept
is delivering best value
to the customer.
· Basic lean concepts and
practices, as well as 3 4
complementary Six
Sigma methods
focusing on reducing
process variation, are
deployed throughout the
supplier network through
workshops, conferences,
seminars, executive
educational programs
and on-site training
initiatives.
· Focus is on
transformation of the
entire extended
enterprise
(program enterprise,
multi-program
enterprises
encompassing supplier
networks).
· Central driving concept
is efficient creation of
value for all enterprise
stakeholders throughout
the enterprise value
stream.

· Little or no attempt is made
2.3 Align and develop critical
to align and improve critical
internal and external internal and supplier-based
supplier capabilities capabilities.
· Primary emphasis is on
development of discrete
internal capabilities related
to supply chain management
(e.g., order release, materials
handling, inventory
management).
· There is limited alignment
and improvement of
specific capabilities
internally and across
selected suppliers.
· Limited efforts focus on
linking of enterprise’s
procurement functions
with order management
functions of specific
suppliers (e.g., RFP/RFQ
preparation time,
production planning,
capacity planning).
· Limited technical
assistance is provided to
specific suppliers through
data transfer and isolated
on-site training.
· Some mutual performance · Tangible mutual
improvements are performance
documented through improvements are
alignment and development achieved through
of selected key capabilities alignment, streamlining
internally and across some and development of key
major suppliers, in terms of capabilities internally and
cost, quality and delivery. across major critical
· Emphasis is put on such suppliers.
areas as quality assurance, · Emphasis is put on key
engineering data exchange, engineering,
testing, and coordination of manufacturing, tooling,
production schedules. testing and laboratory
· Technical assistance is functions.
provided to some suppliers · Mutual technical
through workshops and on- exchange, training and
site training programs. joint problem-solving
teams are established to
align and develop key
capabilities.
· Significant performance
improvements are 1 4
achieved through
extensive efforts to
align, streamline and
develop key internal and
external supplier
capabilities across the
supplier network.
· Emphasis is put on
key functional areas,
technologies, design-
manufacturing-
procurement interfaces,
and key business
processes.
· Proactive mutual
technical exchange,
training and joint
problem-solving teams
stress formal classroom
instruction and workplace
training.
 · Enterprise management
2.4 Create dedicated assets in
does not understand or
the extended enterprise endorse the idea of making
dedicated investments in
creation of specific assets
that are unique to the
particular relationships
with its suppliers.
· Enterprise management
position is that suppliers are
responsible for any or all
types of investments they
need to make if they want to
keep their supplier status.
· It is an exception, rather
· Enterprise management · Dedicated (relationship-
evidences only limited
interest in making
dedicated (relationship-
specific) investments in
suppliers.· Such dedicated
investments are limited to
specific asset-creating
opportunities (e.g., · Examples of such
improving the know-how
of technical personnel of
specific suppliers to
develop closer two-way
communications).
than the rule, when the
enterprise makes such
dedicated investments in
suppliers to help resolve
technical problems they
may be facing.
specific) investments are
made by the enterprise in a
few selected suppliers, are
typically small in magnitude,
and have resulted in
measurable performance
improvements.
dedicated investments
include helping selected
suppliers make investments
in facilities within proximity
of the enterprise’s
production operations to
reduce inventory and
transportation costs.
· Dedicated investments
are made by the
enterprise in a number of
its major critical suppliers
and have resulted in
tangible performance
improvements.
· Examples of such
dedicated investments
include helping suppliers · Examples of such
make investments in
customized information
technologies, tooling,
manufacturing processes,
and testing and laboratory
instruments.
· Dedicated investments
are made by the 2 4
enterprise in a
progressively growing
number of its major and
critical suppliers and
have resulted in
significant performance
improvements.
dedicated investments
include, in addition,
helping suppliers make
customized investments
in such areas as
composite fabrication
methods, high-speed
machining equipment,
laser forming of titanium
and similar advanced
technologies.

Lean Indicators

Evidence

Opportunities
3.0 CREATE FLOW AND PULL THROUGHOUT THE SUPPLIER NETWORK:
DEFINITION: Create synchronized flow throughout the supplier network to effect the development of a “pull”-based production system
employing lean practices, where the right parts are delivered to the right place at the right time and where products flow
continuously and efficiently, without interruption, to maximize the strategic advantage of speed.

· Are there controlled and repeatable supplier processes?

Diagnostic Questions
· Do supplier-provided raw materials, detail parts, subsystems and assemblies delivered just-in-time (JIT) in response to the
enterprise’s “pull” from the suppliers?
· Is warehousing minimized or eliminated through the use of point-of-use stocking and delivery?
· Is supplier kitting utilized to minimize time and effort to locate parts, parts handling, and parts storage?
· Is the enterprise’s production scheduling system integrated with with the release and management of purchase orders by
procurement personnel?
· Do suppliers have real-time access to customer company’s production schedules and requirements forecasts to ensure
just-in-time delivery of raw materials, detail parts, or kitted assemblies to the point of use with no prior source or incoming
inspection?

· Controlled and repeatable supplier processes are in place.

· Open and timely communications with suppliers are established.
· Seamless integration of information flow exists throughout the supplier network.
Lean Indicators · Processes and flows are visible to all stakeholders in the enterprise value stream, including all suppliers· Production and
delivery are synchronized throughout the supplier network.
· “Pull” system is institutionalized throughout the enterprise value network, from the customer’s customer to the supplier’s
supplier.

· Manufacturing and assembly cycle time for the enterprise’s primary product.
· Order-to-delivery lead time for supplier-provided materials, parts and components.
Potential Metrics · Supplier throughput time for critical supplier-provided materials, parts and components.
· Number of work stoppages or work-around incidents within the enterprise’s facility due to production problems faced by
suppliers Clear Scores
Current Desired
Capability Levels State State
Key Enabling Practices LEVEL I
TRADITIONAL
LEVEL II
ADOPTER
LEVEL III
PERFORMER
LEVEL IV
REFORMER
LEVEL V
TRANSFORMER
3.3 4.8

3.1 Deploy lean practices, tools
and methods throughout the
supplier network
· There is little or no
deployment of lean
practices to suppliers.
· Suppliers showing some
interest in lean principles
and practices are typically
referred to third party
providers of lean services
(e.g., accelerated
improvement workshops
[AIWS], Kaizen events).
· There is limited · Proactive deployment · Comprehensive
deployment of lean
· Deployment of lean
practices concentrates on of lean practices deployment of lean 3 5
practices, tools and concentrates on major practices to the entire
selected major suppliers,
methods to specific through selective use of critical suppliers as well supplier network is
suppliers. value stream mapping and as on selected subtier institutionalized, using
· Emphasis is placed on analysis (VSM/A). suppliers, employing value stream mapping
reducing waste, improving · Emphasis is placed on value stream mapping and analysis (VSM/A).
quality, and improving aligning factory flow and analysis (VSM/A). · Emphasis is placed on
delivery to schedule. processes to reduce · Emphasis is placed on developing continuous
· Focus on such elementary supplier lead time. striving to create flow throughout the
lean concepts as: reducing · Focus is on such additional continuous flow internally supplier network.
waste, visual order (6S), lean practices as standard and across major critical · Deployment of lean
root cause analysis (“Five work, load leveling, line suppliers. practices focuses on
Whys”), mistake proofing balancing and setup · Focus is on such both factory floor
(Poka-Yoke), self- reduction. additional lean practices processes and “beyond-
verification, and total · Supplier workshops and asTakt time, cellular the-factory-floor”
productive maintenance hands-on supplier training manufacturing, single- operations and business
(TPM). programs are used to piece flow, and practices, including
· Supplier workshops are deploy lean practices. development of multi- engineering functions of
organized to disseminate functional work teams to suppliers.
lean practices. evolve a “pull”-based · Lean deployment office
production system made works closely with third-
possible by just-in-time party providers of lean
(JIT) production and implementation services
delivery. and other organizations
· Lean deployment office to flow lean practices to
and support system is subtier suppliers.
established for on-going
deployment of lean
practices to suppliers

· Little or no effort is made · Limited set of
3.2 Evolve controlled and
to identify, map and improve improvements are
repeatable supplier critical supplier design, achieved in critical
processes manufacturing and business manufacturing processes
processes. of specific suppliers.
· There is little visibility into · Major emphasis is placed
supplier process capabilities. on reducing manufacturing
· There is extensive waste, process variation.
supplier-responsible · Focus is on process
defects, non-conformances, mapping, process
and high cost of scrap and capability analysis, fixing
rework across the supplier problems at their source,
network. and related methods to
improve process
capability of specific
suppliers.
· Compliance is required
with such aerospace
quality standards and
requirements as AS9000,
AS9100 and SAE9100.
· Some improvements are
achieved in critical
manufacturing processes of
selected suppliers.
· Major emphasis is placed
on both reducing and
preventing manufacturing
process variation.
· Primary focus is on
deployment of key methods
to reduce process variation,
such as identifying and
eliminating all sources of
defects, building-in rather
than inspecting-in quality,
control charts, and failure
modes and effects analysis
(FMEA).
· Process-focused supplier
workshops and supplier
training programs build upon
already established supplier
certification initiatives.
· Tangible improvements · Critical supplier design,
are achieved in critical manufacturing and 3 5
manufacturing and business processes are
product development significantly improved
processes of major across the supplier
critical suppliers. network.
· Major emphasis is · Major emphasis is
placed on both placed on preventing
preventing and reducing and reducing process
process as well as as well as product
product variation. variation, through
· Primary focus is on integrated efforts across
improving both design enterprise business units
and manufacturing dealing with the same
processes, with particular suppliers.
stress on factory layout, · Primary focus is on
workflow design, and improving both design
shop-floor control. and manufacturing
· Placement of resident processes, with particular
engineers is stress on robust design
institutionalized across methods (e.g., Taguchi
key suppliers to help methods), quality
evolve controlled and function deployment
repeatable processes. (QFD), design structure
matrices (DSM), Design
of Experiments (DOE),
and strategic design of
manufacturing systems.
 · Communication links
3.3 Establish open and timely
between the enterprise and
communications with its suppliers are largely
suppliers confined to one-way flow of
contractual requirements.
· Communication between
the enterprise and its
suppliers is limited to
contractual transactions.
3.4 Synchronize production and · There is little or no
synchronization of
delivery throughout the production and delivery with
supplier network. suppliers.
· There is extensive source
and/or incoming (receiving)
inspection of supplier-
provided materials and
parts; there is no “just-in-
time” (JIT) deliveries to
stock or point-of-use.
· All deliveries are based on
contractually-specified
delivery schedules; a large
percentage of parts are
expedited.
Lean Indicators
Evidence
· There is limited two-way
communication links are
established with specific
suppliers.
· Limited use of Electronic
Data Interchange (EDI)
focuses on routine
business transactions,
such as order processing
and flowdown of quality
and performance
requirements.
· There is limited exchange
of demand forecasts and
production schedules with
specific suppliers.
· Production and delivery
schedules of specific
suppliers are synchronized
with the enterprise’s build
schedule and safety stock
requirements.· Major
approach used is
flowdown of directives to
specific suppliers
specifying contractual as
well as need-based
delivery targets.
· There is limited source
inspection but extensive
incoming (receiving)
inspection, with tiny
percentage of all supplier
shipments delivered to
stock or point-of-use.
· Formal communication
links are established with
some suppliers.
· Basic IT/IS infrastructure
allows timely access by
suppliers to the enterprise’s
internal build schedules,
forecasts of demand for
materials, and need-based
supplier delivery
requirements.
· Read-only e-business
capability provides
suppliers ready access to
upcoming sourcing
requirements and
engineering specifications
for new parts and
components.
· Data exchange format and
protocols are harmonized
internally within the
enterprise.
· Production and delivery
schedules, as well as lead
times, are proactively
synchronized across
selected suppliers.
· Major approach used
entails two-way mutually-
advantageous exchange of
production plans, process
improvement initiatives,
and lead time reduction
targets.
· Key suppliers are delegated
inspection functions to
facilitate on-time delivery.
· There is some
implementation of JIT
delivery and point-of-use
stocking.
· Internet-enabled formal
communication links are
established with major
critical suppliers allowing
real-time two-way
communication. · IT/IS
infrastructure enables
technical data exchange
with suppliers, as well as
sharing of production
schedules, material
requirements, delivery
schedules, and financial
transactions with suppliers.
· IT/e-business capability
enables inventory visibility
across major critical
suppliers. · Processes and
flows are visible across
suppliers; customer
feedback is continuously
obtained and shared
internally as well as with
suppliers.
· Extensive efforts focus
on closer synchronization
of production and delivery
schedules internally and
across major critical
suppliers.
· Major emphasis is
placed on targeted
efforts to reduce supplier
lead times for critical-path
items, as well as on close
communication links
across major critical
suppliers.
· There is extensive
implementation of JIT
delivery to point-of-use
with no source or
incoming inspection.
· Internet-enabled formal
communication links 3 4
enable real time
integration of information
flows throughout he
supplier network.
· IT/IS infrastructure
enables technical data
exchange with suppliers,
as well as sharing of
requirements, orders,
deliveries, and financial
transactions.
· IT/e-business capability
enables efficient
procurement of high-
volume standardized
items and multi-tier
inventory visibility.
· Internet-enabled third
party logistics providers
are fully integrated into
supply chain
management process.
· Comprehensive efforts
are in place to bring 4 5
about
a tight and smooth
integration of production
and delivery schedules,
as well as lead times,
internally and across the
supplier network.
· Major emphasis is
placed on aggressive
lead time reduction
targets as well as on
seamless information
flows throughout the
multi-tiered supplier
network.
· There is extensive use
of JIT delivery to point-
of-use with no inspection
throughout the supplier
network.
· Internet-enabled third
party logistics providers
are fully integrated into
supply chain
management
process.
Opportunities
4.0 ESTABLISH COOPERATIVE RELATIONSHIPS AND EFFECTIVE COORDINATION
MECHANISMS:
DEFINITION: Develop and implement effective, differentiated, sets of relationships with suppliers, including supplier partnerships and strategic
supplier alliances, to improve network-wide performance and thereby build dynamic long-term competitive advantage by optimizing
mutual-benefits throughout the supplier value stream.
Diagnostic Questions
Lean Indicators
Potential Metrics
Key Enabling Practices
· Is it strongly understood and communicated by top management that competition between firms has been replaced by
competition between networks of firms?· Is there a differentiated supplier strategy in place for different supplier segments?
· Are cooperative relationships in place with key suppliers involving extensive information sharing, cost sharing and risk
sharing?
· Have partnerships and strategic alliances with suppliers been created to strengthen the customer company’s long-term
competitive advantage?
· Does the customer company have in place incentivized cost reduction strategies with suppliers involving target costing and
sharing of cost savings?
· Are suppliers integrated early into the customer company’s integrated product teams (IPTs)?
· Partnerships and strategic alliances have been created with key suppliers to leverage performance improvement throughout
the supplier network.
· Mutually-beneficial cooperative relationships have been established with suppliers.
· Suppliers are active partners in key business decisions and strategic planning activities.
· Suppliers are incentivized to reduce cost through innovative contractual arrangements allowing for the mutual sharing of
cost savings.
· Suppliers have leading role in integrated product teams (IPTs) of the enterprise (customer company) and are generally
integrated early into the design and development process.
· Percent of total direct production purchase dollars placed under long-term purchase agreements (LTAs) with suppliers.
· Percent of all suppliers which regularly share information with the customer company (e.g., on strategic direction, business
plans, process improvements, production schedules, quality performance, otherwise proprietary financial information).
· Procurement cost per dollar of direct production purchases.· Profitability of suppliers.
Clear Scores
Current Desired
Capability Levels State State
LEVEL I
TRADITIONAL
LEVEL II
ADOPTER
LEVEL III
PERFORMER
LEVEL IV
REFORMER
LEVEL V
TRANSFORMER
2.7 4.7

4.1 Implement management
processes ensuring
effective differentiated
relationships with suppliers
4.2 Establish partnerships and
strategic alliances with key
suppliers to achieve
performance improvement,
shared mutual benefits, and
long-term competitive
advantage
· Supply chain management
consists of “silo”
purchasing (procurement,
materials) department
· Commodity-based strategic
procurement, reflecting
basically a common (same)
supplier strategy (i.e., one that
is tailored to address different
needs associated with for
various categories of
suppliers).
· Supplier coordination is
accomplished largely
through use of the market
mechanism, involving
competitive, lowest-bid,
subcontracting.
· Short term contracts,
exhibiting very little mutual
commitment, represent
prevalent practice.
· Supplier relationships are at
arm’s length.
· Suppliers are typically
handed down across-the-
board cost (price) reduction
mandates.
· Procurement · Cross-functional teams
organizational structures focusing on specific
and processes are aligned commodity or sourcing
across the enterprise to areas have evolved
effect cost savings. differentiated
· Leveraged buying of high- supplier relationships.
volume items is a · Supply chain management
prevalent practice. is integrated across the
enterprise.
· Supplier advisory councils
are created.
· Some long term purchase · Cooperative supplier
agreements (LTAs) with relationships are established
selected key suppliers are with selected suppliers,
introduced to focus on stressing extensive
affordability and cost information exchange and
reduction. joint problem solving. · LTAs · Supplier partnerships
· LTAs are established to are established with all key
secure price stability in suppliers.
light of possible future · Supplier advisory councils
price fluctuations, to are actively utilized as a
reduce cost, and to enable forum for on-going
mutually-beneficial information exchange and
performance for eliciting ideas and
improvements. suggestions for mutual
performance improvement.
· There is strong ·Mutually-beneficial
recognition that relationships are 3 5
competition between established with key
firms has been replaced suppliers providing
by competition between customized, complex,
networks of firms. high-technology
· Differentiated supplier engineered parts,
relationships are based components or
on weighing of such subsystems.
factors as the strategic · Key suppliers are active
importance of suppliers, participants in major
degree of mutual business decisions and
economic dependence, strategic planning
complementarity of activities.
capabilities, and · Internet-driven
technology clockspeed. procurement of standard
commodity items is used
to minimize transaction
costs.
· A differentiated set of
strategies and practices
been put in place for
other suppliers.
· LTAs and supplier
partnerships are
· Strategic supplier
alliances are in place, 3 4
established with major based on long-term
suppliers across the mutual trust and
product lifecycle. commitment.
· Strategic supplier
reflect a clear alliances involve a high
understanding of long- level of information
term mutual obligations. sharing, risk sharing &
benefit sharing.
· The enterprise
(customer company)
and its strategic partners
share a common fate.

4.3 Establish common
objectives, as well as roles
and responsibilities, to
enhance performance
throughout the extended enterprise
Lean Indicators
Evidence
Opportunities
· There is little awareness or
sharing of common
objectives with suppliers
· Build-to-print practices
characterize the prevalent
environment, where suppliers with key suppliers, whose
are relegated to performance
of well-specified or routine
tasks.
· There is little, if any, sharing
of a common vision or
commitment across
suppliers.
· There is limited · There is sharing of common
congruence of common objectives with key
objectives with selected suppliers,
suppliers. with which mutual
· Focus is on affordability performance metrics have
been established.
inputs are sought early in · There is some risk and
the design process. benefit
· Selected certified sharing with selected
suppliers are delegated suppliers.
greater responsibility · There is limited supplier
(laboratory functions, participation in the
testing, production). enterprise’s product
development process.
· Common objectives, as · Common objectives,
well as mutual roles and roles an responsibilities, 2 5
responsibilities, are and mutual long-term
established for all direct obligations are clearly
production suppliers and understood and shared
are clearly communicated. throughout the supplier
· Key suppliers are network.
involved early in the · There is mutual sharing
requirements definition, of cost-savings or
design, development and greater efficiency
product support process. benefits resulting from
incentivized
implementation of lean
practices throughout the
supplier network.
· Incentivized lean
implementation
initiatives include cost
and lead-time reduction
efforts, as well as quality
improvement steps,
using target costing and
value engineering
methods.
5.0 -- MAXIMIZE FLEXIBILITY AND RESPONSIVENESS :
DEFINITION: Processes, practices and information flows are integrated across the supplier network to maximize both operational and tactical
flexibility (e.g., setup time, changes in specifications, design changes), as well as strategic adaptability and responsiveness to
external developments (e.g., market shifts, broader technological changes).
Diagnostic Questions
Lean Indicators
Potential Metrics
Key Enabling Practices
· To what extent does the enterprise management consider flexibility and responsibility as a strategic weapon?
· Have mutually-beneficial arrangements with suppliers been implemented to ensure flexibility and responsiveness to
unforeseen production shifts or broader market-driven changes?
· Are there visible processes and information flows in place across the supplier network to ensure quick adaptation to both
planned and unexpected changes, regardless of their origin?
· Does the enterprise have rapid deployment capabilities established explicitly to help resolve unexpected supplier-related
problems?
· Open and timely communications with suppliers are established.
· Seamless integration of information flow exists throughout the supplier network.
· Processes and flows are visible to all stakeholders in the enterprise value stream, including all suppliers.
· Streamlined processes exist across suppliers enabling flexibility and responsiveness.
· Problems are systematically identified and fixed at the source across the supplier network by using data and root
cause analysis.
· Product development cycle time
· Manufacturing and assembly cycle time for the enterprise’s primary product
· Order-to-delivery lead time for supplier-provided materials, parts and components
· Supplier throughput time for critical supplier-provided materials, parts and components
· Number of work stoppages or work-around incidents within the enterprise’s facility due to production problems faced by
suppliers
· Responsiveness of the supplier network to unscheduled changes (e.g., design changes, changes in product mix and
volume) within the lead time (i.e., using the on-dock date as the point of reference)
· Number of parts waiting repair due to lack of availability of the required materials or items owing to parts obsolescence or
diminishing manufacturing sources
· Number of suppliers that could not achieve capacity expansion to meet on a timely basis the enterprise’s previously
communicated and mutually-agreed-upon requirements for materials, parts and components
· Time required to modify production rates throughout the supplier network in response to changes in customer demand
rate (Takt time)
Clear Scores
Current Desired
Capability Levels State State
LEVEL I
TRADITIONAL
LEVEL II
ADOPTER
LEVEL III
PERFORMER
LEVEL IV
REFORMER
LEVEL V
TRANSFORMER
2.7 4.3

5.1 Identify and rapidly resolve
constraints and bottlenecks
across the supplier network
to ensure continuous flow
5.2 Design the contracting
process to enable flexibility
and adaptation to changing
requirements
· There is prevalence of a
reactive approach to
removing constraints and
bottlenecks.
· Process flows and
information flows are not
visible across suppliers.
· Contracting with suppliers
typically involves a
formalized, sequential and
lengthy process from initial
identification of qualified
suppliers to final contract
award and post-award
subcontract management
processes.
· Supplier contracting typically
involves competitive
lowest-cost subcontracting
with no provisions for
economic incentives.
· The dominant form of
contracting involves
variants of cost-plus-fixed-
fee (CPFF) or firm-fixed-
price subcontracting.
· Defense-related
subcontracting typically
involves extensive flow-
down of mandatory clauses,
non-mandatory but
necessary clauses, and
purely negotiable clauses.
· The enterprise makes ad
hoc use of subject matter
experts to help remove
specific production,
quality or delivery
problems across major
and critical suppliers.
· There are isolated and
largely reactive efforts in
place to reduce supplier
lead times for critical-path
items.
· Visibility of process and
information flows is
limited to specific
suppliers.
· Contracting with suppliers
entails largely a multi-step
process, involving mostly
cost-based contracts but
also using, to a limited
extent, price-based
contracts.
· There is limited use of
best value contracting,
and/or contracting based
on past performance, with
specific suppliers.
· Contracts typically
establish minimum
performance requirements
and, in specific instances,
include incentive reward
provisions for any risk-
taking, cost reduction,
delivery and technical
achievements beyond the
minimum requirements.
· Defense-related
subcontracting often
involves a considerable
number of flowdown
clauses.
· There is proactive use of
multi-skilled teams to
address major production
constraints and bottlenecks
across selected suppliers.
· Proactive efforts by the
enterprise are in place to
reduce supplier lead times
for critical-path items.
· There is visibility into
process and information
flows across selected
suppliers.
· Contracting with suppliers
entails a streamlined
process involving mainly
cost-based contracts but
also using some price-
based contracts.
· Some suppliers are given
specific incentives to adopt
measures enhancing their
flexibility and
responsiveness.
· There is active use of price
commitment curves for
selected suppliers.
· There are selected waivers
from established or
mandatory requirements
under existing defense
acquisition regulations (e.g.,
cost or pricing data,
competition in
subcontracting, quality
assurance, program
reporting requirements).
· There is rapid deployment · Joint customer-supplier
of multi-skilled teams to rapid deployment teams 3 4
cope with unexpected are used on an on-going
supplier-related problems basis to monitor,
across direct production anticipate and resolve
suppliers. constraints and
· There is clear visibility bottlenecks throughout
into process and the supplier network.
information flows across · There is complete
direct production visibility into process
suppliers. and information flows
across the supplier
network.
· Long-term contracts are · Multi-year contracts with
established with major contingent reward 2 4
suppliers. systems and intellectual
· Contracting process is property rights provisions
designed to enable are used across the
flexibility and adaptation supplier network.
to changing · Contractual measures
requirements. are in place to maximize
· There is extensive use of supplier flexibility and
individualized multi-year responsiveness.
price commitment · Cost savings are shared
curves and sharing of at all levels to incentivize
cost-savings with key suppliers to reduce cost
suppliers. and foster innovation.
· Subcontracting · Subcontracting
procedures are procedures are
streamlined, significantly completely streamlined,
limiting the number of with minimal flowdown of
mandatory, not contractual clauses to
mandatory but suppliers.
necessary,
and purely negotiable
clauses.
 · Relatively small variability
5.3 Ensure network wide flexibility
in customer or market
and adaptation to planned as demand upstream is
well as unanticipated amplified throughout the
changes and disruptions supplier network (bullwhip
effect).
·There is excess inventory or
parts shortages, excess or
insufficient capacity, long
backlogs or expedited
shipments – indicating
considerable network-wide
vulnerability to upstream
demand variability.
· Little or no effort is made
to resolve negative impact
of sudden disruptions.
· There is very little evidence
of product mix or volume
flexibility.
· Suppliers often ration limited
supplies to customers and
“game” expected shortages
by inflating their material
requirements.
Lean Indicators
Evidence
Opportunities
· There is reactive · There are close working · Flexibility and · The enterprise’s supplier
approach to elimination relationships with major responsiveness across network is strategically 3 5
of “bullwhip” effects customer(s) and key the supplier network is aligned to maximize
and/or sudden disruptions suppliers to anticipate and seen as a strategic flexibility and
in supply channels. resolve negative effects of weapon. responsiveness.
· There is limited visibility demand variability. · Internal functions are · Capabilities ensure
into upstream demand · Customer and supplier aligned to interface with maximum operational
variability patterns. relationships represent suppliers more effectively. and tactical flexibility
· Order batching is team-based rather than ·There are close working with both the
commonly practiced to bilateral arrangements. relationships with both customer(s) and
save transportation costs. · Flexible work processes are customers and key suppliers.
· Flexible work processes used in many areas suppliers to anticipate · Visible processes and
have been piloted in some internally. and mitigate negative real-time information
areas. · Supplier development effects of upstream as flows ensure quick
· Limited evidence of initiatives implementing well as downstream adaptation to planned
product mix or volume lean principles stress demand variability. or unexpected changes
flexibility across major greater flexibility, adaptation · Information sharing and throughout the supplier
suppliers to to sudden market shifts, synchronized forecasting network, including all
accommodate customer and responsiveness. methods are used to subtier suppliers.
company’s requirements. avoid order batching and · Long lead-time supply
to discourage forward- lines are shortened
buying by suppliers. through operational
· Multi-level inventory efficiencies.
management systems are
used to optimize
inventory control across
the supplier network.
6.0 PURSUE SUPPLIER-INTEGRATED PRODUCT AND PROCESS DEVELOPMENT:
DEFINITION: Create products by employing multifunctional teams, including major and selected subtier suppliers, pursuing integrated,
concurrent, development of products and processes to ensure the delivery of best lifecycle value in terms of introducing a
system at the right time and the right price offering best value in mission effectiveness, performance and affordability and
retains these advantages throughout its service life.

· To what extent are key suppliers and their lower-tier suppliers integrated into the enterprise’s product, process and
business development efforts?
· Are key suppliers collocated, physically or virtually, with the technical personnel of the enterprise in conjunction with
Diagnostic Questions joint design and development efforts?
· Has an information infrastructure been established to ensure seamless flow of information between the enterprise and
its suppliers?

· Early supplier integration into design and development.

· Architectural innovation resulting from seamlessly integrated design and development teams including major suppliers as
well as selected subtier suppliers.
Lean Indicators · Flow down of key characteristics throughout the supplier network.
· Collaborative distributed design and development teams linked together through seamless information flow and common
tools and methods.

· Percent of total engineering design hours performed by suppliers.

· Percent of integrated product teams (IPTs) led by supplier partners.
· Number of Class I engineering change orders, total rework cost due to engineering changes as percent of total development
Potential Metrics cost, and total schedule-slip due to engineering changes.
· Percent of all engineering drawings released at critical design review.
· Product development cycle time.
· Product development cost as percent of total expected lifecycle cost-of-ownership.
Clear Scores
Current Desired
Capability Levels State State
Key Enabling Practices LEVEL I
TRADITIONAL
LEVEL II
ADOPTER
LEVEL III
PERFORMER
LEVEL IV
REFORMER
LEVEL V
TRANSFORMER
2.5 4.3

6.1 Integrate suppliers early into
design and development
processes and teaming
structures
6.2 Progressively delegate
greater design and build
responsibility to key suppliers
to achieve fast and flexible
product development, reduce
cost and improve quality
· Little or no attempt made to
engage the participation of
suppliers early in the design
and development process.
· The predominant culture is
retaining suppliers on a
“build-to-print” basis
employing competitive
bidding.
· Centralized control of
design and development
process.
· Little or no delegation of
design or design-build
responsibility to suppliers.
· Suppliers generally brought
under contract after the
design process has been
completed and before full-
scale production.
· Suppliers retained on a
“build-to-print” basis
employing competitive
bidding.
· Limited participation of · Selected major suppliers
suppliers in early phases participate early in the
of the design process. design
· Selected major suppliers process under a teaming
are invited to participate arrangement involving joint
during the design phases responsibility for design and
to solicit their advice on development.
producability. · Relationships are
· Limited knowledge of constrained by existing
supplier technological corporate boundaries and
capabilities. contractual workshare
agreements.
· Procurement plays an
intermediary role in linking
design engineering teams
and suppliers.
· Limited delegation of · Some suppliers given
design or design-build greater design and
responsibility to suppliers development responsibility
to minimize costs. for particular (“black box”)
· Majority of suppliers are components or subsystems.
brought under contract · Selected suppliers delegated
after completion of responsibility for integration
detailed design and before of progressively more
full-scale production. complex components or
subsystems.
· Major suppliers directly
participate early in the
design under a teaming
arrangement, involving
extensive collaboration
and knowledge-sharing.
· Strategic, tactical and
operational cooperation
and information sharing
among the participating
organizations.
· Procurement/purchasing
facilitates collaboration
and information exchange
between design
engineering teams and
suppliers.
· Major suppliers
delegated responsibility
for design, development
and system integration of
more complex
components or
subsystems.
· Suppliers are actively
encouraged to submit
innovative design
solutions.
· Design-to-cost is an
established practice.
· Considerable
outsourcing of detailed
design and development
of particular (“black box”)
components or
subsystems to
preferred/certified
suppliers.
· Key suppliers, and
selected subtier suppliers 2 4
are seamlessly integrated
into design and
development teams
following initial down-
select.
· Collaborative design
used with joint
configuration control.
· Early supplier integration
that
fosters innovation
(product,
process).
·Target costing (pricing)
utilized, with explicit
benefit-sharing
arrangements.
· Selected suppliers given
lead responsibility for
specific integrated
product teams (IPTs).
· Seamless exchange of
knowledge among all
team
members.
· Key suppliers given
greater share of design, 3 5
build, testing and system
integration responsibility.
· Collaborative design and
development teams
established with suppliers
where the product
(component, subsystem)
system architecture is
integral rather than
modular in relation to the
platform being designed
and built.
· Safeguards are put in
place for retaining
competitive advantage
(e.g.,
by not becoming
knowledge-
dependent on suppliers,
while pursuing greater
dependence for additional
capacity only).

6.3 Create information
infrastructure and shared
tools for collaborative design
and development with
suppliers, as well as for
electronic engineering data
exchange
6.4 Flow down key
characteristics and “hold-to”
information throughout the
supplier network
· No information
infrastructure or shared
tools for collaborative
design and development
with suppliers.
· Ad hoc use of Computer-
aided –engineering (CAE)
and/or computer-aided-
design CAD) tools.
· Little or no electronic
exchange of engineering
data with suppliers.
· Design process mostly
undocumented and
inconsistent.
· Knowledge about supplier-
based manufacturing
capabilities is incomplete,
inconsistent, and not
integrated into internal
product development
processes or data libraries.
· Product features,
manufacturing processes,
and assembly characteristics
that affect the product’s
performance, function, fit
and form (i.e., Key
Characteristics) are not an
established or normal part
of the product development
process or culture.
· Considerable variation
exists in critical product
parameters, resulting in
significant costs due to
scrap, rework, repair or
failure.
· “Build-to-print” technical
data handed down to
suppliers contain
inconsistencies and errors.
· CAE/CAD tools and
libraries utilized to enable
the use/reuse of standard
designs, preferred parts
and components.
· Limited use of electronic
data interchange with
selected major suppliers,
mostly to flow down
engineering requirements
and technical
specifications.
· Limited capture of
information on supplier
manufacturing processes
for integration into
enterprise’s IT/IS system.
· Use of KCs confined
largely to major suppliers.
· Major attention paid to
KCs for critical fabrication,
subassembly or assembly
processes to reduce
product variation.
· Disconnects between key
system-level performance
requirements, functional
specifications, and
technical requirements
(e.g., dimensions,
geometry, interfaces).
· Characteristics of
manufacturing or assembly
processes (e.g., tolerance
chains) not well linked to
system-level requirement.
· Infrastructure in place
enabling concurrent design
and development process,
through 3D parametric
solids with integrated tools
and techniques, electronic
simulation, and collaborative
engineering.
· IPTs include key suppliers
in collaborative design and
development.
· Sub-tier suppliers generally
not electronically integrated.
· Use of KCs is an
established practice;
definite effort is made to
avoid the clutter of
conventional dimensions
and tolerances, where only
a few things are considered
really important, and where
the quality focus is
broadened beyond
geometry.
· KCs are established to meet
customer performance
requirements or safety-
related requirements.
· Key control characteristics
are defined at detailed parts
and manufacturing level to
deliver the higher-level KCs,
which are flowed down to
major suppliers.
· Internet-enabled
information infrastructure
in place.
· Design and development
occurs through real-time
technical information
exchange with and across
major suppliers and
selected sub-tier
suppliers.
· Virtual design review,
within an environment of
3D model definition,
electronic simulation,
and computer-delivered
work instructions.
· Integrated analytical
techniques (e.g., stress,
weights, dynamics);
dimensional
management; hardware
variation control;
geometry assurance;
self-locating structures.
· Majority of lower-tier
suppliers have
IT/IS capability for direct
access.
· Key characteristics are
well-defined and routinely
· Well-established,
flowed down to major
suppliers and to selected
lower-tier suppliers.
· A disciplined structure
relates higher-level KCs · Well-established
(assembly fit and finish)
to lower-level KCs
(individual part fit and
finish) at detailed part
level.
· Implementation of KCs
is enabled by technical
definition of specific
tolerance levels (i.e., Cpk
levels).
· Enterprise recognizes
that achievement of top-
level KCs requires the
achievement of lower-
level KCs.
· Majority of subtier
suppliers still remains
largely the responsibility
of major critical suppliers.
· Digital design and
manufacturing 3 4
environment created by
Internet-driven product
development
infrastructure (ePD).
· Product design and
development occurs
through real-time
information exchanges
within and across
organizational
boundaries.
· One configuration
source for all product
data, containing all
engineering drawings,
process specifications,
quality control
specifications, and
material requirements,
available worldwide.
· Common development
processes, tools and
shared resources are
used.
disciplined structure and 2 4
process for flowing down
KCs both internally and
throughout the supplier
network.
processes are in place
for flowing down KCs
beyond geometry, fit and
finish, more broadly
encompassing the
flowdown of
procurement
requirements for
standard parts,
engineering-controlled
material specifications,
approved raw material
manufacturers and their
products, and other
specifications required
by engineering drawings,
design standards and
process definitions.
Lean Indicators

Evidence

Opportunities
 7.0 INTEGRATE KNOWLEDGE AND FOSTER INNOVATION:
DEFINITION: Establish formal and informal processes for knowledge-sharing with suppliers, facilitate technology transfer with and across
suppliers, and incentivize both product and process innovation across the supplier network, to ensure continuous flow of
innovations to deliver best value to the customer.

Diagnostic Questions
· Are the technology roadmaps of the customer company linked to those of its major suppliers?
· Are formal processes and procedures in place for monitoring, nurturing and tapping supplier-based sources of knowledge
and innovation?
· Are there joint research and technology development initiatives in place with key suppliers?
· Are suppliers incentivized to offer solutions that would drive down product cost and enhance value to the customer?
· Is there a well-defined and communicated intellectual property rights strategy in place vis-à-vis the suppliers?

· Technology roadmaps aligned across the supplier network.

Lean Indicators · Knowledge repositories exist for open access and rapid knowledge sharing throughout the supplier network.
· Incentivized processes and mechanisms for fostering and capturing supplier-based innovations are in place.

Potential Metrics
Key Enabling Practices
7.1 Create internal organizational
structures and processes to
leverage supplier-based
knowledge and innovation
· The number and strength of patents developed through joint R&D efforts with suppliers as well as through technology
alliances among suppliers
· Percent reduction in unit cost due to supplier-based innovations
· Number of cases where the customer company served as the “lead user” for supplier-generated innovations Clear Scores
Current Desired
Capability Levels State State
LEVEL I
TRADITIONAL
LEVEL II
ADOPTER
LEVEL III
PERFORMER
LEVEL IV
REFORMER
LEVEL V
TRANSFORMER
2.8 4
· Primary emphasis is on · There is limited visibility · Formal (codified) design · Formal processes and · Formal processes and
developing internal into manufacturing and and manufacturing know- organizational structures organizational structures 2 3
knowledge and innovations. design knowledge base & how of major suppliers is are in place for are in place for
· The differences between capabilities of major documented. documenting and knowledge integration
data, information and suppliers. · There is an awareness and accessing supplier-based and management across
knowledge are not generally · There is limited some understanding of know-how and knowledge suppliers.
understood or appreciated. classification and intellectual property rights base. · Enterprise acts as “lead
documentation of issues and ways of dealing · There is an established user” of supplier based
supplier-based tacit with them. framework for intellectual innovations.
(experience-based) know- property rights.
how and knowledge.

7.2 Establish mutually-beneficial · There is little evidence of

contractual arrangements to
nurture and capture supplier-
based innovations to reduce
costs, improve quality and
· Suppliers are typically
shorten time-to-market
incentivized contracting with
suppliers specifically aimed
at capturing and/or nurturing
supplier-based innovative
ideas.
handed down well-defined
tasks and their ideas are not
sought.
· There are limited or
isolated contractual
· There is integrated problem
solving & knowledge-
· Key suppliers are
incentivized to adopt
· Mutually-beneficial
contractual arrangements 3 4
provisions for soliciting sharing with selected innovative solutions incentivize capturing and
suggestions from suppliers through through sharing of cost nurturing supplier-based
suppliers to pursue incentivized contracting to savings. innovations.
performance reduce costs. · Supplier ideas on product · Enterprise is proactively
improvement goals. · Supplier suggestions or and process encouraging and
· The suggestions of only ideas focus on relatively improvements, as well as rewarding its suppliers
a few specific suppliers short-term performance on design, tooling and for introducing
are sought for the purpose improvements. supportability, offer long- architectural and/or
of making performance term benefits in terms of modular innovation into
improvements. meeting lifecycle their products or
affordability goals. systems.

7.3 Create knowledge transfer
mechanisms for open and
rapid access throughout the
supplier network
· Information or knowledge
exchange with suppliers is
limited to vertical flowdown
of contractual requirements.
· Suppliers have no or very · Knowledge-exchange with
incidental access to
enterprise’s technical or
business knowledge base
and only when they run into a
serious problem related to
their performance.
· There is limited incidence
of bilateral information
and knowledge exchange
with specific suppliers.
suppliers largely involve · Selected suppliers are
trouble-shooting specific
supplier-based
manufacturing problems.
· Technical knowledge of
selected suppliers is
incorporated into design,
production and sustainment
processes.
provided access to internal · Key suppliers are
engineering and
manufacturing personnel for
resolving production-related
problems.
· Knowledge repository is · The knowledge
created for monitoring repository enables open 3 5
and accessing design, access and rapid
process and technology knowledge- sharing
knowledge resident over throughout the supplier
the supplier network. network.
· Electronic bulletin boards
provided ready access allow knowledge-sharing
to knowledge repository in a way similar to "open
to help them improve courseware” practices at
their own understanding universities, with a
of supplier-based know- particular
how and knowledge they focus on improving the
can mobilize to achieve know-how of lower-tier
performance suppliers.
improvements.

7.4 Ensure ongoing alignment of · There is little evidence of

technology roadmaps across
the supplier network in
pursuance of a common
strategic vision
developing technology
maps internally or aligning
them across suppliers.
· Suppliers have little if any
exposure to, or knowledge
of, key technological
developments that may be
impacting their businesses.
· There is isolated
information sharing with
·Technological capabilities
of selected suppliers are
specific suppliers on aligned with internal
future technological technology roadmaps.
directions and ·There is some sharing of a
requirements. common strategic
· Most of the supplier base technological vision with
has limited exposure to selected suppliers.
new technological · Most of the supplier base
developments, mostly has some exposure to new
through word-of-mouth. technological
developments, through
trade journals or
associations, attendance at
conferences, or customer-
provided training programs.
· Technology roadmaps
are proactively aligned
· Joint R&D, risk-sharing
with those of key
suppliers.
· A common strategic
technological vision is
shared with a relatively · There is proactive
few key suppliers.
· Most of the supplier
base has exposure to
new technological
developments through
proactive industry and
government initiatives,
including regional
Centers of Excellence,
as part of a broad effort
to elevate the
technological literacy
and capability of the
aerospace supplier base.
and benefit-sharing 3 4
arrangements are in
place with selected
suppliers for developing
new technologies.
dissemination of
information across the
supplier network on new
technological
developments and their
implications for the
design, development,
production and support
of aerospace systems.

Lean Indicators

Evidence

Opportunities
 8.0 DEMONSTRATE CONTINUOUS PERFORMANCE IMPROVEMENT:
DEFINITION: Formal processes have been established throughout the enterprise value stream, encompassing both customers and suppliers,
for continuous performance improvement to create and deliver best lifecycle value.

Diagnostic Questions
· Are formal processes established within the enterprise as well as throughout the supplier network for achieving
continuous improvement?
· Are the goals and strategic directions of the enterprise clearly defined and linked to the continuous improvement
objectives, and widely communicated throughout the enterprise value stream?
· Is benchmarking routinely and proactively employed as part of the continuous improvement process?
· Is there a closed-loop continuous improvement system in place throughout the extended enterprise?
· Are there performance metrics in place driving the continuous improvement process?
· Is there supportive evidence demonstrating the achievement of continuous improvement?
· Are continuous improvement results linked to reward systems?

· Jointly-established targets have been developed for continuous improvement at all levels and in all phases of the product
lifecycle.
· Processes are defined and controlled throughout the extended enterprise.
· Proactive initiatives are in place for identifying and sharing beneficial, innovative, practices throughout the supplier network.
Lean Indicators · Continuous benchmarking is performed.
· Mutually-beneficial continuous performance improvement processes (CPI) throughout the extended enterprise are
demonstrated.
· Problems are identified and fixed at the source without apportionment of blame.

Potential Metrics · Customer satisfaction (e.g., initial acquisition/purchasing cost/price, lifecycle cost of ownership, performance, mission
(Includes all previous metrics within the effectiveness, reliability, up-time, upgradability, ease and cost of maintenance)
supplier networks domain) · Number of defects per million opportunities
Key Enabling Practices LEVEL I
TRADITIONAL
· There is little evidence of
8.1 Develop and analyze effective
metrics for continuous
metrics to identify network- improvement internally or
wide continuous improvement across suppliers.
opportunities · Performance measures
track internal cost, quality
and schedule.
Clear Scores
Current Desired
Capability Levels State State
LEVEL II
ADOPTER
LEVEL III
PERFORMER
LEVEL IV
REFORMER
LEVEL V
TRANSFORMER
2 4.7
· There are identified and · Metrics for continuous · Mutually-defined metrics · Mutually-defined metrics
accepted metrics for cost, improvement are defined for continuous are used for tracking 2 5
quality and cycle time and communicated internally improvement are used progress and for
internally and across and across selected internally and across identifying new
specific suppliers. suppliers. major suppliers. opportunities for
· There is limited · Periodic benchmarking is · Benchmarking is used on improvement internally
benchmarking used to used to gauge performance an on-going basis. and throughout the
establish targets. against specific metrics. supplier network.
· Continuous
benchmarking is
institutionalized
throughout the supplier
network.

8.2 Incentivize mutually beneficial
continuous improvement of
products and processes
throughout the supplier
network over the entire
product lifecycle
8.3 Capture, communicate and
apply experience-generated
learning across the supplier
network
Lean Indicators
Evidence
Opportunities
· There is little incentive for
identifying and pursuing
improvement opportunities
internally or across suppliers. across specific suppliers.
· Performance improvements
by suppliers are demanded,
not incentivized or rewarded.
· There is no established
process for capturing and
communicating lessons
learned to suppliers.
· Experience-generated
learning consists mostly of
past cases of supplier
performance problems.
· Suggestions for
improvement are
encouraged internally and
· Improvements focus
largely on incremental
process improvements.
· There is limited
documentation and
sharing of lessons learned
with suppliers.
· Experience-generated
learning consists mostly
of supplier-based
manufacturing process
difficulties or failures and, performance.
to a limited extent, of
specific success stories.
· Formal processes are in · Formal processes are in · Formalized closed-loop
place for soliciting and place for soliciting and processes are in place 3 4
rapidly implementing rapidly implementing throughout the supplier
suggestions for continuous mutually beneficial network for mutually-
improvement, internally and lifecycle improvement incentivized performance
across selected suppliers. suggestions across key improvements over the
· Improvements cover both suppliers. product lifecycle
manufacturing and business · Improvements cover, · Lifecycle improvements
processes. product design focus on continual
and lifecycle technological upgrading
support. of existing products and
systems.
· Experience-generated · Proactive processes are · Proactive processes are
lessons learned are captured in place for capturing and in place for capturing and 1 5
and shared across selected communicating rapidly communicating
suppliers. experience-based new knowledge
· Experience-generated knowledge internally and throughout the supplier
learning largely emphasizes across major suppliers. network.
success stories pertaining · Experience-generated · Experience-generated
to supplier delivery learning encompasses learning encompass
success stories, internally design, production and
and across suppliers, lifecycle support
pertaining to design, innovations both
manufacturing and cost internally and across the
performance. supplier network.
· Possible changes in
enterprise vision, goals
and strategy are
communicated to
enterprise leadership
based on actual data for
continuous
improvement.
 Current Desired
MATURITY MATRIX SCORE SUMMARY SHEET State State
1.0 Design supplier network architecture – Design the size, structure and composition of the supplier network to ensure efficient
creation of value for all stakeholders. 2.4 4.3

2.0 Develop complementary supplier capabilities -- Develop complementary supplier capabilities to enhance the portfolio of core
competencies in the extended enterprise. 2 4

3.0 Create flow and pull throughout the supplier network -- Create synchronized flow throughout the supplier network to evolve
“pull”-based production system that ensures continuous flow maximizing the advantage of speed 3.3 4.8

4.0 Establish cooperative relationships and effective coordination mechanisms -- Develop a differentiated set of relationships with
suppliers including supplier partnerships and strategic alliances, while balancing cooperation and competition, to optimize 2.7 4.7
network-wide performance.

5.0 Maximize flexibility and responsiveness -- Integrate processes, practices and information flows across the supplier network
to maximize network-wide flexibility , adaptability and responsiveness to cope effectively with sudden external developments. 2.7 4.3

6.0 Pursue supplier-integrated product and process development – Integrate suppliers early into the design process to ensure
delivery of best lifecycle value. 2.5 4.3

7.0 Integrate knowledge and foster innovation – Create knowledge-sharing processes and foster innovation across the supplier
network to ensure continuous flow of innovative solutions benefiting the customer and other enterprise stakeholders. 2.8 4

8.0 Demonstrate continuous performance improvement – Institutionalize formal processes and reward systems for continuous
improvement throughout the supplier network to deliver best value to all stakeholders on an on-going basis. 2 4.7
 2.4 2 3.3 2.7 2.7 2.5 2.8 2

Des
ign
Maturity Matrix Summary Chart
sup
6 plier Cooperative Supplier- Integrate
net Complementary Create flow / relationships / Maximize integrated knowledge / Continuous
wor supplier pull throughout effective flexibility and product / foster performance
k capabilities network coordination responsiveness process dev. innovation improvement

5
Score

2.4 2 4.8 4.7

3.3 2.7 2.7 2.5 2.8 4.7 2
Cooperative Maximize Supplier-Integrate
4.3 4.3 4.3
4 Complementary Create flow / pull relationships / flexibility and integrated knowledge / Continuous
Design supplier 4
supplier throughout effective responsivene product / foster4 performance
network capabilities network coordination ss process dev. innovation improvement

3.3 Desired
3 State
2.7 2.7 2.8
2.4 2.5
2
2 2

0
Design Complementar Create flow / Cooperative Maximize Supplier- Integrate Continuous
supplier y supplier pull relationships / flexibility and integrated knowledge / performance
network capabilities throughout effective responsivenes product / foster improvement
network coordination s process dev. innovation
 2.4 2 3.3 2.7 2.7 2.5 2.8 2

Des
Maturity Matrix Summary Chart
ign
sup Current
plier Cooperative Supplier- Integrate State
net Complementary Create flow / relationships / Maximize integrated knowledge / Continuous
wor supplier pull throughout effective flexibility and product / foster performance
k capabilities network coordination responsiveness process dev. innovation improvement

2.4 2 3.3 2.7 2.7 2.5 2.8 2

Cooperative Maximize Supplier- Integrate
Complementary Create flow / pull relationships / flexibility and integrated knowledge / Continuous
Design supplier supplier throughout effective responsivene product / foster performance
network capabilities network coordination ss process dev. innovation improvement

Design supplier network

Continuous performance improvement Complementary supplier capabilities
5

Integrate knowledge / foster innovation Create 0

flow / pull throughout network

Supplier-integrated product / process dev. Cooperative relationships / effective coordination

Maximize flexibility and responsiveness
 APPENDIX A

GLOSSARY

AIW: Accelerated Improvement Workshop.

AS9000: Aerospace Basic Quality System Standard

AS9000 Appendix 1: Aerospace Basic Quality System Standard, Checklist -- AS9000 Audit Summary and Supplier Profile Instructions.

AS9100: Quality Systems -- Aerospace -- Model for Quality Assurance in Design, Development, Production, Installation and Servicing.

Batch-and-queue production: Production system where large lots (numbers) of an item are made through a production run to reduce production
cost and then have to wait in a queue or are moved forward to the next operation before they are actually needed there, thus resulting in excess
inventories that are wasteful.

Business-to-Business: Business-to-business communication of product requirements, engineering drawings, and ordering and delivery of parts
by using electronic data exchange (EDI) and/or the Internet (e.g., Exostar, Commerce One)

Certified suppliers: Preferred subcontractors or suppliers of parts and components that have been designated by a customer company as having
met minimum performance standards based on a formalized evaluation of the suppliers’ processes, capabilities and past quality and delivery
performance. Suppliers are typically accorded “bronze”, “silver” and “gold” certification.

Competitive advantage: Creation of a competitive edge over existing or potential competitors exhibited by higher profitability, market share,
growth or greater benefits to enterprise stakeholders by enhancing the enterprise’s market position, efficiency and capabilities through strategies
driving low cost production and higher productivity, product differentiation, accumulating new assets, building distinctive capabilities and offering
superior value to customers.

Concurrent engineering: A structured approach to simultaneous development of a product and related processes such as tooling, testing,
manufacturing and assembly in order to meet customer expectations involving close coordination and synchronization of all pertinent functions and
lifecycle perspectives within a cooperative, sharing and trust-based environment.

Core competency: The particular set of capabilities, collective learning, skills and technologies of an enterprise that differentiate it from its main
competitors and serve as the basis for its achieving growth, diversification into new lines of business, and value creation for its customers and
other stakeholders.

Customer: A stakeholder who is a recipient of a product or service produced by an enterprise. Customers may be internal or external to an
organization. External customers, those in the marketplace, represent the main reason for the existence of an enterprise. Internal customers
represent the primary reason for the existence of a functional area or a department within an enterprise, as downstream recipients of products or
services in the enterprise value stream.

DOE: Design of Experiments (used, for example, to analyze the implications of various combinations of design variables in order to find
out whether any particular set of specifications is technically feasible.

DSM: Design Structure Matrix (a tool useful for representing and analyzing task dependencies, for instance in designing a product or
system, so that changing the order of tasks by partitioning the matrix can help streamline the tasks in order to minimize cycle time).

e-business: Electronic business; generally refers to electronic transactions among businesses, such as between the prime (system
integrator) and its suppliers.

Enterprise: An economic entity consisting of one or more organizational units engaged in the creation and delivery of value to its multiple
stakeholders.

Extended enterprise: All of the entities along an enterprise’s value stream, extending from the customer’s customers to the suppliers’ suppliers,
engaged in the design, development, manufacturing, certification, distribution and after-sales sustainment of a product or a family of products.
organization. External customers, those in the marketplace, represent the main reason for the existence of an enterprise. Internal customers
represent the primary reason for the existence of a functional area or a department within an enterprise, as downstream recipients of products or
services in the enterprise value stream.

DOE: Design of Experiments (used, for example, to analyze the implications of various combinations of design variables in order to find
out whether any particular set of specifications is technically feasible.

DSM: Design Structure Matrix (a tool useful for representing and analyzing task dependencies, for instance in designing a product or
system, so that changing the order of tasks by partitioning the matrix can help streamline the tasks in order to minimize cycle time).

e-business: Electronic business; generally refers to electronic transactions among businesses, such as between the prime (system
integrator) and its suppliers.

Enterprise: An economic entity consisting of one or more organizational units engaged in the creation and delivery of value to its multiple
stakeholders.

Extended enterprise: All of the entities along an enterprise’s value stream, extending from the customer’s customers to the suppliers’ suppliers,
engaged in the design, development, manufacturing, certification, distribution and after-sales sustainment of a product or a family of products.

Five Whys: Taichi Ohno's practice of asking "why" five times whenever a problem was faced in order to identify its root causes so that effective
solutions could be defined and implemented to rectify the problem and prevent it from happening again.

FMEA: Failure Modes and Effects Analysis.

Incentive Contracts: These are contractual arrangements where the contract design explicitly includes a variety of incentive provisions designed
to motivate the contractor (agent) to exert the right types and levels of effort that would best serve interests of the customer (principal). Incentives
may include incentive or award fees that would be provided to the contractor conditional upon pre-determined performance targets (cost,
schedule). They may further take the form of greater profits to the contractor if certain pre-determined cost targets are met, through sharing of the
cost savings above and beyond the pre-specified targets.

Integrated product and process development (IPPD): Concurrent development of products and manufacturing processes to ensure design and
development for manufacturability and assembly, by avoiding or substantially reducing costly rework cycles resulting from engineering changes,
redesign and unanticipated production problems.

Integrated Product Team (IPT): A cross-functional team established for product design and development that typically encompasses cross-
functional specialists spanning a number of disciplines or skills, from design and engineering to manufacturing, quality management, procurement
and supply chain management, representatives of key suppliers, as well as customer representatives.

IT/IS: Information Technology/Information System; generally used to refer to the information infrastructure enabled by recent, on-going and
converging developments in information technologies and systems.

Just-in-time (JIT): Producing or conveying only the items that are needed by the next process, when and where they are needed and in the right
quantities needed, as part of a “pull-based” (kanban) production system that stresses continuous flow with minimal inventory throughout the
extended enterprise.

Kaizen: The Japanese term for "continuous improvement"; it related to continuously improving a process in incremental steps, such as by
identifying and removing waste.

Kanban: A container, card or other device used to authorize the production or movement of an item, where all production and movement of parts
and material take place only as required by a downstream operation.

Lead Users: Lead users are those organizations that make use of a novel product, process or service far in advance of the marketplace and, as
result, derive significant early benefits by obtaining a solution to a need, also faced by others, much earlier than others do.

Lean enterprise: An integrated entity that efficiently creates value for its multiple stakeholders by employing lean principles and practices.

Lifecycle: Time period covering the entire lifecycle of a product or system, from concept development to design and development, production,
operations and support phases until the product is retired from service.

Long-term agreements: Purchase agreements between a customer company and its suppliers for three or more years --defining, as appropriate,
both prices and quantities as well as purchasing options, terms and conditions -- generally reflecting a mutual long-term commitment benefiting
both the customer company and its participating suppliers.

Poka-Yoke: Mistake proofing.

QFD: Quality Function Deployment.

Single-piece flow (one-piece flow, continuous flow): Production process wherein items are produced and moved to the next processing step
one piece at a time, such that each process makes only the one piece that the next process needs and the transfer batch size is one. It contrasts
with batch-and-queue production, defined earlier.

Six S (6S): Lean tool for workplace organization to ensure visual order so that orderly and standardized operations become the norm in the
workplace environment (sort, straigthen, shine, standardize, safety, sustain). The term originally stems from five Japanese words (sort, straighten,
Lifecycle: Time period covering the entire lifecycle of a product or system, from concept development to design and development, production,
operations and support phases until the product is retired from service.

Long-term agreements: Purchase agreements between a customer company and its suppliers for three or more years --defining, as appropriate,
both prices and quantities as well as purchasing options, terms and conditions -- generally reflecting a mutual long-term commitment benefiting
both the customer company and its participating suppliers.

Poka-Yoke: Mistake proofing.

QFD: Quality Function Deployment.

Single-piece flow (one-piece flow, continuous flow): Production process wherein items are produced and moved to the next processing step
one piece at a time, such that each process makes only the one piece that the next process needs and the transfer batch size is one. It contrasts
with batch-and-queue production, defined earlier.

Six S (6S): Lean tool for workplace organization to ensure visual order so that orderly and standardized operations become the norm in the
workplace environment (sort, straigthen, shine, standardize, safety, sustain). The term originally stems from five Japanese words (sort, straighten,
shine, systematize, sustain).

SPC: Statistical Process Control.

Stakeholders: Individuals or groups that can affect or are affected by the activities of an entity or organization, including such direct or latent
parties as customers, shareholders, employees and suppliers which typically contribute valuable resources in exchange for expected delivery of
value to them.

Strategic supplier alliances: Close business relationships between a customer company and its participating suppliers with congruent longer-
term goals, designed to enhance their individual and collective competitive advantage by providing for mutually-advantageous sharing of
information, resources, technologies, skills or risk for the purpose of developing new technologies or products, manufacturing, marketing or
delivery of services to customers.

Total Cost of Quality: Total cost related to source and/or incoming inspection for defects or non-conformances, cost of line stoppage in the
manufacturing process due to parts failure, cost of scrap and rework, and cost of repair due to product failure in the field outside design and
engineering specifications (i.e., mean time between failure).

TPM: Toyota Production Model (also known as TPS -- Toyota Production System).

Value: Particular worth, utility, benefit or reward that is expected, created or delivered in exchange for contributions of resources, work,
investment, commitment or other intangible assets required for the performance of a purposeful activity or economic undertaking by an entity or
organization such as an enterprise.

Value stream: The set of all specific end-to-end and linked activities, processes and functions necessary to transform raw materials into a finished
product delivered to the customer, where the end-to-end stream of activities extend from the customer’s customers to the suppliers’ suppliers.

Value stream mapping: Visual representation of all material, information and time flows, throughout a product’s or an enterprise’s value stream,
facilitating a clear understanding of all end-to-end linked activities as well as the flows connecting them in order to identify sources of waste
anywhere along the value stream.

Value stream analysis: Identification and definition of sources of waste in a product’s or enterprise’s value stream and the diagnosis of the
means for eliminating waste, as part of a larger process of defining both the “current state” and the “desired state” of specific value stream for
achieving lean transformation resulting in efficient creation of value for all enterprise stakeholders.
 APPENDIX B

LINKS TO OTHER LEAN AEROSPACE INITIATIVE (LAI) IMPLEMENTATION PRODUCTS

The Lean Aerospace Initiative (LAI) has developed a portfolio of product that may be found helpful in developing a broader enterprise-level
understanding of lean transformation tools and methods, as enterprises get ready to make use of this particular tool. These enterprise-level
LAI products include the following:

· The Lean Enterprise Model (LEM), representing a structured enumeration and description of lean principles and
practices at the enterprise level – the “whats” of lean -- as well as a web-based reference library containing
research-based findings and benchmarking results on lean practices at all levels organized for easy access;

· “Transitioning to a Lean Enterprise: A Guide for Leaders,” generally referred to as the TTL, which provides a structured
framework -- the “how-to” roadmap – for achieving lean transformation at the enterprise level; and,

· The Lean Enterprise Self-Assessment Tool (LESAT), an enterprise-level self-assessment framework for gauging an
enterprise’s progress along its lean journey – current state of “how it performs its business” -- with reference to key
integrative lean processes and practices arrayed in terms of a staircase of different (cumulative) capability levels.

These LAI-developed tools can be accessed from the LAI website noted earlier (http://web.mit.edu/lean). The SELF-ASSESSMENT Tool
presented in this document is linked to LESAT – while LESAT is a self-assessment tool at the total leadership level, the SELF-
ASSESSMENT Tool concentrates on the more specific “domain” of managing supplier networks. For a more detailed discussion of how the
SELF-ASSESSMENT Tool links up with LESAT, please see Appendix C.

Also, the ROADMAP is linked to TTL -- while TTL is a guide for lean transformation at the total enterprise level, the ROADMAP is a guide
for the more specific task of building lean supplier networks. They are both framed as a “guide” in the sense that they respectively suggest
a structured process that firms can follow, not a pre-determined or lock-step process they must follow. That is, companies can tailor their
own path forward in developing lean supplier networks, using the ROADMAP basically as a guide.

Finally, the DESK REFERENCE is loosely linked to the LEM. In addition to providing a structured enumeration of lean principles and
practices at the enterprise level, the LEM serves as an electronic library enabling ready access to LAI-generated and related research
results organized in the form of “data sheets” linked to specific practices. The DESK REFERENCE, on the other hand, provides an
exposition of lean principles and practices related to managing supplier networks, by drawing on a broader, as well as a more up-to-date,
knowledge base from both LAI and other sources.
 APPENDIX C

LINK TO "II.D MANAGE SUPPLY CHAIN" LIFECYCLE PROCESS IN THE

LEAN ENTERPRISE SELF- ASSESSMENT TOOL (LESAT)
This supplier-networks-focused self-assessment tool complements the Lean Enterprise Self-Assessment Tool (LESAT), an enterprise-level self-
assessment tool developed by LAI. Version 1.0 of LESAT was released in August 2001.

LESAT divides enterprise-level processes into three main groups: Lean transformation/leadership; lifecycle processes; and enabling infrastructure.
Lean transformation/leadership encompasses: Enterprise strategic planning, adoption of the lean paradigm, focusing on the value stream, developing
lean structure and behavior, creating and refining the transformation plan, implementing lean initiatives, and focusing on continuous improvement.
“Lifecycle processes” include the core enterprise processes employed from product conception to post production support: business acquisition and
program management, requirements definition, product and process development, supply chain management, production, and product distribution and
service support. Enabling infrastructure includes those processes, systems and organizational structures that are required for achieving enterprise
transformation and for performing lifecycle processes (e.g., financial system, common tools and systems, information infrastructure).

The direct “hook” connecting this tool to LESAT is the sub-process within “lifecycle processes,” designated as “II.D. Manage Supply Chain” (See
Appendix A). In Version 1.0 of LESAT, the enterprise-level definition of “II.D. Manage Supply Chain” consists of three high-level lean practices:

II.D.1 – Define and develop supplier network

II.D.2 - Optimize network-wide performance
II.D.3 - Foster innovation and knowledge-sharing throughout the supplier network.

Beyond the “one-to-one” linkup between the tool and the supplier networks sub-process within LESAT, many other links can also be envisioned to
other processes/sub-processes within LESAT. These interfaces remain to be more explicitly and completely defined in the future.

Click Here for the full Lean Enterprise Self-Assesment Tool (LESAT)

II D. Supply Chain Management – Internal enterprise core competencies are aligned with those of
suppliers such that the customer value chain is optimized throughout the extended enterprise.

Diagnostic Questions
· Have the number of suppliers been reduced to a level that can be effectively managed?
· Do contractual arrangements enable supplier flexibility and adaptation to both expected and unexpected
changes?
· Are in-house capabilities balanced with supplier capabilities to optimize network-wide performance?
· Have opportunities for supply chain development been fully exploited?
· Are constraints and bottlenecks throughout the extended enterprise identified and rapidly resolved to ensure
continuous flow?
· Are supplier partnerships and strategic alliances established to strengthen dynamic competitive advantage?
 Capability Levels Scores
LP# Lean Practice LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V

H.D.1. Define and Develop
Supplier Network
Core competencies aligned
across supplier network
Large number of direct
suppliers in an hierarchical
structure. There is little
evidence of a defined
supplier strategy and limited
knowledge of the
relationships within the
supplier network.
The supplier base has
been rationalized to focus
on key suppliers with high
impact on strategic
objectives.
Supplier network is defined
based on strategic analysis
of value creation processes
internally and across
suppliers.
Strategic outsourcing Supplier network is
and make-buy decisions defined, developed and
focus on achieving an integrated to ensure
optimal combination of efficient creation of value
core competencies both for enterprise stakeholders
within the enterprise and over the entire product
across the supplier lifecycle.
network

· The supplier network is defined and developed in line with the strategic plan to ensure efficient creation of value for all
enterprise stakeholders.
Lean Indicators · Supplier expertise and capabilities complement enterprise core competencies; unnecessary overlap and duplication have
(Examples) been removed.
· Supplier network is flexible and can quickly adapt to changing requirements and unanticipated disruptions.

Evidence
Opportunities
H.D.2. Optimize Network-
wide Performance
Partnering with key
suppliers and optimizing
processes to achieve
customer value customer
value
Supplier relationships are at
arm’s-length and adversarial.
Purchasing department
manages a large number of
short-term, lowest-bid
contracts.
Formal processes are in
place for supplier
assessment and approval.
Long-term purchase
agreements focus on cost
reduction. Limited visibility
into supplier business
processes.
Common objectives, roles
and responsibilities are
established and
communicated, with a few
supplier partnerships or
strategic alliances in place.
Early involvement of key
suppliers in design and
development.
Strategic alliances with Supplier capabilities are
key suppliers dynamically optimized to
emphasize a high ensure efficient value
degree of information- creation and building
sharing, risk-sharing & durable competitive
benefit sharing. For advantage, creating
others a differentiated flexibility and
set of strategies and responsiveness to shifts in
practices are in place. the marketplace.
Production and delivery
are synchronized across
the supplier network.

· Formal processes are in place for supplier assessment and approval.§ Roles and responsibilities are clearly defined in contractual
Lean Indicators relationships, risk and reward shares are agreed upon.
(Examples) · Production and delivery are synchronized throughout the supplier base to ensure continuous flow, with minimal waste.

Evidence
Opportunities
Primary focus on internal Internal organizational Technology roadmaps Knowledge transfer Mutually-beneficial
capabilities, with little structures and processes include suppliers in mechanism is created arrangement are
H.D.3. Foster Innovation cognizance of tacit are established to pursuance of common for open and rapid established to foster
and Knowledge- (experience-based) or explicit leverage supplier-based strategic vision. Shared access throughout the innovation across
Sharing throughout (formal) knowledge across knowledge and innovation. metrics for continuous supplier network. suppliers. A process for
the Supplier suppliers. improvement are utilized. on-going communication
of needed changes in
Network vision, strategy, metrics
and implementation is in
place.

· Long-term collaborative relationships are established and maintained where possible.

Lean Indicators · Processes to facilitate sharing and transfer of innovation, knowledge and technology are deployed.
(Examples) · A mutually beneficial continuous improvement process is established throughout the supplier network over the
entire product lifecycle.
Evidence
Opportunities
 APPENDIX D

ROADMAP: MAJOR BUILDING BLOCKS

2.0 3.0
1.0 ESTABLISH LEAN
DEFINE VISION DEVELOP SUPPLIER
NETWORK CULTURE AND
STRATEGIC PLAN INFRASTRUCTURE

6.0 4.0
STRIVE FOR + CREATE AND REFINE
CONTINUOUS LEAN IMPLEMENTATION
IMPROVEMENT PLAN
5.0
IMPLEMENT LEAN
INITIATIVES
Click Here to access the Roadmap for Building Lean Supplier Networks ("Roadmap Tool")
 APPENDIX E

SELF-ASSESSMENT PROCESS: OPERATIONAL GUIDELINES

It is expected that self-assessment will be performed by following a regular schedule, linked to the corporate planning cycle. The results of a
particular self-assessment process should provide guidance to the organization in refining and adjusting its continuous improvement plans.

Participants in the assessment process should include enterprise leaders and delegated representatives from all disciplines responsible for
supply
chain management and related functional areas, including, but not limited to, such specific functional areas as engineering, manufacturing,
procurement, forecasting, scheduling, logistics, external and internal transportation, receiving, inspection, and information
systems.

For those who have the responsibility for facilitating the assessment process within the organization, it is important to recognize that the
assessment process can be organized to consist of several steps that need to be carefully planned and executed:

· Guidelines for organizing the self-assessment process and conducting the kickoff meeting
· Instructions for performing the self-assessment
· Collecting the self-assessment results.

A. Guidelines for Organizing the Self-Assessment Process and Conducting the Kickoff Meeting

1. Preparation

· All of the enterprise-wide “stakeholders” should be provided a copy of the Supplier Management Self-Assessment Tool and
they should all be briefed about the purpose and scope of the internal self-assessment process. These “stakeholders” should
include (illustrative): the Supply Chain Management Executive and the appropriate Level I and the Level II managers
representing the cross-section of functional areas identified earlier.
· A core team coordinating the self-assessment process and a team leader (“Facilitator”) should be designated to make
sure that the process is well planned and executed.
· Common ground rules should be defined for performing the self-assessment assessments (e.g., cannot be at Level III - Performer
unless all previous lean attributes have been mastered, stressing, in particular, the need to demonstrate convincing evidence in
justification of the self-scoring results. Also establish rules for resolving internal conflicts or inconsistencies in the self-scoring process.
· Although this is basically designed as an internal self-assessment tool, enterprises might certainly consider retaining the services of
independent third-party evaluators of how the suppliers actually view the enterprise’s supply chain management practices or
capabilities.
Such external data sources might provide potentially useful information that can be blended with the internal self-assessment results.
· Everyone participating in the self-assessment process should be made to understand that the self-assessment process, and the
results
derived from it, will not be used as a means of measuring the performance of specific organizational units or individuals. To obtain the
best
results, the self-assessment task should be designed and executed as a self-scoring process on a “no blame or attribution” basis.

2. Kickoff Meeting

· The facilitator should schedule the meeting for at least two (2) hours.
· The facilitator should decide ahead of time with the Lean Director (if the enterprise has such a formally-defined position) the nature
and
extent of participation of the Level II managers.
· The facilitator should conduct a prior review meeting with Lean Director.
· The facilitator should make sure the Lean Director is informed that all the data to be collected will be provided to him (her). The core
team
should provide any assistance in this connection, as needed.
capabilities.
Such external data sources might provide potentially useful information that can be blended with the internal self-assessment results.
· Everyone participating in the self-assessment process should be made to understand that the self-assessment process, and the
results
derived from it, will not be used as a means of measuring the performance of specific organizational units or individuals. To obtain the
best
results, the self-assessment task should be designed and executed as a self-scoring process on a “no blame or attribution” basis.

2. Kickoff Meeting

· The facilitator should schedule the meeting for at least two (2) hours.
· The facilitator should decide ahead of time with the Lean Director (if the enterprise has such a formally-defined position) the nature
and
extent of participation of the Level II managers.
· The facilitator should conduct a prior review meeting with Lean Director.
· The facilitator should make sure the Lean Director is informed that all the data to be collected will be provided to him (her). The core
team
should provide any assistance in this connection, as needed.
· A clear schedule of the self-assessment timeline, with due dates for the completed assessments and the dates of the final meeting,
should be developed. The agreement of the participants to this timeline should be obtained.

3. Running the Kickoff Meeting

At the kickoff meeting the facilitator might use the following agenda (illustrative):
· Opening remarks;
· Slide presentation of what the tool is and why the enterprise should use it;
· Outline score-keeping methods (electronic);
· Review logistics; when and where to send the scores, and related matters.

4. Things to Remember (Illustrative)

· In the opening remarks the facilitator might want to make sure the participants understand that an important by-product of the self-
assessment process might well be inputs they might wish to provide to the preparation of Lean implementation plans across the
enterprise for the next planning cycle and that the resulting plan will be reviewed with the division or enterprise manager at a later
scheduled date.
· During the slide presentation the facilitator might show what outside supplier companies are expected to contribute to the assessment
process, explain the mechanics of the scoring process, and provide any materials that the participants might find particularly useful.
· The agreement of the participants at the meeting to the self-assessment timeline and scheduled due-dates should be obtained
· The meeting should define a “help desk” assistance process to address any questions or issues the participants might face later as
they
work their way through the self-assessment process.
· The meeting should ensure that the participants agree on the meaning of terms and they share a common “language” in approaching
the
self-assessment process.

B. Guidelines for Implementing the Self-Assessment Process (Addressed to the Participants)

1. Notes

· Two or more meetings of the core team, along with all of the participants, may be required. Meeting dates should be determined and
communicated. These meetings may require a total of approximately 5-8 hours
· The tool has eight sections , one for each overarching practice. The efforts of more than one organizational or functional unit are likely
to
be required in completing each overarching practice.
· Refer to the User Guide at the beginning of this document and to the Glossary (Appendix A) for quick help.
· Provide everyone with copies of the latest version of the tool.

2. The Self-Assessment Process:

· Complete the assessment by sections.

· Read the lean definitions, diagnostic questions, lean indicators, potential metrics, and lean attributes at different capability levels.
· Then read the enabling practices and descriptions of Levels 1-5 for each particular enabling practice.
· Discuss the levels among the participants and develop a consensus score.
· Record the score in the appropriate location in the scoring sheets. Be sure to place the actual score in the current level place as
indicated.
· Complete the scoring for each of the lean practices in each of the eight sections.
· Once the scores are entered for a given section (overarching practice), determine the averages for that section and record them where
indicated on the scoring sheets.
· Develop and record some ideas for suggested actions for making improvements for your business units.
· Continue to work by sections until the entire task has been completed.
· Send the completed data to the facilitator.

It should be noted that even though the process just outlined makes references to self-scoring and scoring results, often the real value of the
 · Provide everyone with copies of the latest version of the tool.

2. The Self-Assessment Process:

· Complete the assessment by sections.

· Read the lean definitions, diagnostic questions, lean indicators, potential metrics, and lean attributes at different capability levels.
· Then read the enabling practices and descriptions of Levels 1-5 for each particular enabling practice.
· Discuss the levels among the participants and develop a consensus score.
· Record the score in the appropriate location in the scoring sheets. Be sure to place the actual score in the current level place as
indicated.
· Complete the scoring for each of the lean practices in each of the eight sections.
· Once the scores are entered for a given section (overarching practice), determine the averages for that section and record them where
indicated on the scoring sheets.
· Develop and record some ideas for suggested actions for making improvements for your business units.
· Continue to work by sections until the entire task has been completed.
· Send the completed data to the facilitator.

It should be noted that even though the process just outlined makes references to self-scoring and scoring results, often the real value of the
self-assessment process is the internal, cross-enterprise dialogue and learning it generates. This should be firmly kept in mind as the
enterprises go through the self-assessment process.

3. Levels of Evidence Required:

In performing the self-assessment, participants should give serious thought to what types of evidence can be demonstrated to substantiate the
scoring results. The following types of evidence should be considered:

· Documentation – documented evidence that can be verified.

· Observation – testimony by the participants based on their personal observation, which can be cross-checked at the point of
application
(organizational unit, people directly involved).
· Robust evidence – testimonial evidence provided by at least three people other than the participants, at the point of application
(organizational unit, people directly involved).
· “Hard” evidence – quantitative metrics data that can be presented in support of the scoring decision.

C. Collecting the Self-Assessment Results

The self-assessment results are assembled for each section (overarching practice), one enabling practice at a time. The results are then
“rolled-up” to obtain scores at the overarching practices level. When they, in turn, are “rolled-up”, an overall enterprise-level score is obtained,
gauging the capability maturity level of the enterprise’s total supply chain management operations. As pointed out earlier, enterprises may or
may not choose to use a weighting system in their self-assessment process. No weighting means all overarching practices, and all enabling
practices supporting a particular overarching practice, have the same weight. This is certainly simple and straightforward. However, enterprises
have the option of attaching weights to each overarching practice, and to the specific enabling practices supporting that overarching practice.
The use of a weighting system, of course, would suggest that not all overarching practices, or enabling practices supporting a given
overarching practice, are of equal importance. If a weighting system is used, the sum of all weights at the overarching practices level, or at the
enabling practices level, must add up to unity (i.e., 1.00).

A wrap-up meeting should be scheduled to ensure that the overall results of the self-assessment are shared among the participants and that
the group maximizes cross-learning. Lessons learned should be captured and disseminated. Shown below is an illustrative agenda for
organizing and running such a wrap-up meeting, having made the necessary prior arrangements (e.g., logistics, room, food, etc.). Such a wrap-
up meeting could take anywhere up to six (6) hours.

7:30- 7:45 Introductions; overview of the day

7:45- 9:00 Discussion of scoring results and lessons learned for Tables 1-3
9:00- 9:15 Break
9:15-10:30 Discussion of scoring results and lessons learned for Tables 4- 6
10:30-11:00 Discussion of scoring results and lessons learned for Tables 6-8
11:00-12:00 Review and discussion of the total emerging picture from the self-assessment process and implications for the future
12:00-12:45 Working Lunch – Continuing discussion
12:45- 1:30 Review and discussion of future improvement targets and priorities
1:30- 3:00 Review and discussion of programmatic implications of the overall results – roles and responsibilities, “parking lot”
issues requiring further investigation or information, definition of specific “go forward” steps
3:00- 4:30 Align meeting results & actions with enterprise lean implementation plans for the next planning cycle(s).

In running the wrap-up meeting, following types of points should be noted:

· Follow the agenda

· Ensure open and honest discussion
· Obtain consensus
· Make sure the participants understand that they all individually and collectively “own” this tool and the resulting insights, plans and action
steps represent their consensus “product” that will benefit the extended enterprise.
 9:00- 9:15 Break
9:15-10:30 Discussion of scoring results and lessons learned for Tables 4- 6
10:30-11:00 Discussion of scoring results and lessons learned for Tables 6-8
11:00-12:00 Review and discussion of the total emerging picture from the self-assessment process and implications for the future
12:00-12:45 Working Lunch – Continuing discussion
12:45- 1:30 Review and discussion of future improvement targets and priorities
1:30- 3:00 Review and discussion of programmatic implications of the overall results – roles and responsibilities, “parking lot”
issues requiring further investigation or information, definition of specific “go forward” steps
3:00- 4:30 Align meeting results & actions with enterprise lean implementation plans for the next planning cycle(s).

In running the wrap-up meeting, following types of points should be noted:

· Follow the agenda

· Ensure open and honest discussion
· Obtain consensus
· Make sure the participants understand that they all individually and collectively “own” this tool and the resulting insights, plans and action
steps represent their consensus “product” that will benefit the extended enterprise.
 APPENDIX F

LIST OF PRINCIPAL CONTRIBUTORS AND ACKNOWLEDGMENTS

This tool has been developed by the Lean Aerospace Initiative’s Supplier Networks Working Group, which brings together key
people from industry, government and MIT with professional interest and/or responsibility for various aspects of supply chain
design, development and management. The Working Group represents a continuation of LAI’s Supplier Networks Team (1993-
2002), focusing on research and implementation.

The Supplier Networks Working Group is chaired by three co-leads:

Dr. Kirkor Bozdogan, Massachusetts Institute of Technology, Cambridge, MA

Mr. Hamid Akhbari, US Air Force, C-17 System Program Office, Wright-Patterson Air Force Base (WPAFB), OH
Mr. Kerry Frey, Lockheed Martin Aeronautics, Fort Worth, TX.

Dr. Bozdogan has had principal responsibility for leading and coordinating the Group's efforts. He has authored original and
subsequent versions of the tool, facilitated the Group's meetings, incorporated the Group's feedback, and provided configuration
control for the tool over time. The list of principal contributors includes those members of the Group listed below who have
participated in two or more of the following meetings of the Group directly concentrating on the development of this tool:

• January 30-February 1, 2001 -- Lean Aerospace Initiative Supplier Networks Team Workshop ("Building Internet-Enabled
Integrated Value Networks"), Cambridge, MA, hosted by the Massachusetts Institute of Technology.

• May 30-June 1, 2001 -- Supplier Networks Working Group Meeting, Cambridge, MA, hosted by the Massachusetts Institute of
Technology.

• June 27-29, 2001 -- Supplier Networks Working Group Meeting, Irving, TX, hosted by Northrop Grumman Integrated Systems.

• December 10-12, 2001 -- Supplier Networks Working Group Meeting, Fort Worth, TX, hosted by Lockheed Martin Aeronautics
Co.

• July 15-17, 2002 -- Supplier Networks Working Group Meeting, Fort Worth, TX, hosted by Lockheed Martin Aeronautics Co.

• October 29-31, 2002 -- Supplier Networks Working Group Meeting, Lakewood, CA, hosted by Boeing Integrated Defense
Systems (formerly Boeing Military Aircraft and Missile Systems), C-17 Program, Long Beach, CA.

• June 3-4, 2003 -- Supplier Networks Working Group Meeting, Renton, WA, hosted by The Boeing Commercial Airplanes Group.

• August 26-28, 2003 -- Supplier Networks Working Group Meeting, Cambridge, MA, hosted by the Massachusetts Institute of
Technology.

David Abbett, Northrop Grumman Integrated Systems, Irving, TX

Hamid Akhbari, US Air Force, C-17 System Program Office, Wright-Patterson Air Force Base (WPAFB), OH
Charles Ballard, Boeing Integrated Defense Systems, St. Louis, MO
Peggy Berry, Boeing Integrated Defense Systems, C-17 Airlifter, Long Beach, CA
Robert J. Blanchette, US Department of the Navy, Naval Air Systems Command (NAVAIR), Joint Strike Fighter System Program
Office, Lakehurst, NJ
Kirkor Bozdogan, Lean Aerospace Initiative, Massachusetts Institute of Technology, Cambridge, MA
Kelly Brown, US Air Force Research Laboratory (AFRL), Materials and Manufacturing Directorate, Manufacturing Technology
Division, WPAFB, OH
John Crabill, US Air Force Research Laboratory (AFRL), Materials and Manufacturing Directorate, Manufacturing Technology
Division, WPAFB, OH
Tim Christopherson, Raytheon Systems, Tucson, AZ
Christopher Darden, Northrop Grumman Integrated Systems Sector, El Segundo, CA
• June 3-4, 2003 -- Supplier Networks Working Group Meeting, Renton, WA, hosted by The Boeing Commercial Airplanes Group.

• August 26-28, 2003 -- Supplier Networks Working Group Meeting, Cambridge, MA, hosted by the Massachusetts Institute of
Technology.

David Abbett, Northrop Grumman Integrated Systems, Irving, TX

Hamid Akhbari, US Air Force, C-17 System Program Office, Wright-Patterson Air Force Base (WPAFB), OH
Charles Ballard, Boeing Integrated Defense Systems, St. Louis, MO
Peggy Berry, Boeing Integrated Defense Systems, C-17 Airlifter, Long Beach, CA
Robert J. Blanchette, US Department of the Navy, Naval Air Systems Command (NAVAIR), Joint Strike Fighter System Program
Office, Lakehurst, NJ
Kirkor Bozdogan, Lean Aerospace Initiative, Massachusetts Institute of Technology, Cambridge, MA
Kelly Brown, US Air Force Research Laboratory (AFRL), Materials and Manufacturing Directorate, Manufacturing Technology
Division, WPAFB, OH
John Crabill, US Air Force Research Laboratory (AFRL), Materials and Manufacturing Directorate, Manufacturing Technology
Division, WPAFB, OH
Tim Christopherson, Raytheon Systems, Tucson, AZ
Christopher Darden, Northrop Grumman Integrated Systems Sector, El Segundo, CA
Richard DeLappe, Boeing Commercial Airplanes, Renton, WA
Wendy Engstrom, Boeing Commercial Airplanes, Renton, WA
Kerry Frey, Lockheed Martin Aeronautics Co., Fort Worth, TX
James Gilbert, California Manufacturing Technology Center (CMTC), Gardena, CA
Julia Gissel, Boeing Integrated Defense Systems, C-17 Airlifter, Long Beach, CA
James Hester III, Textron Systems, Wilmington, MA
E. J. Kenworthy, US Air Force Research Laboratory (AFRL), Materials and Manufacturing Directorate, Manufacturing Technology
Division, WPAFB, OH
Jerry Khoury, California Manufacturing Technology Center (CMTC), Torrance, CA
John Klempay, US Air Force Research Laboratory (AFRL), Materials and Manufacturing Directorate, Manufacturing Technology
Division, WPAFB, OH
Mary McCullough, Rockwell Collins, Cedar Rapids, IA
Ronald McDonald, Boeing Space and Communications, Canooga Park, CA; Raytheon Aircraft Integration Systems, Waco, TX; L-3
Communications, Waco, TX
John McLauchlin, Rolls-Royce Corp., Indianapolis, IN
Susan Moehring, TechSolve, Inc., Cincinnati, OH
Jeffrey Picard, Textron Systems, Wilmington, MA
Todd Powell, US Air Force, Flight Training System Program Office, Joint Primary Aircraft Training System, WPAFB, OH
Robert Reifenberg, US Air Force Research Laboratory (AFRL), Materials and Manufacturing Directorate, Manufacturing
Technology Division, WPAFB, OH
Collin Reeves, Raytheon Systems, Plano, TX
Delton Robinson, Rockwell Collins, Cedar Rapids, IA
George Reynolds, Northrop Grumman Electronic Systems, Linthicum, MD
Gregory Staley, US Air Force, F/A-22 System Program Office, WPAFB, OH
Dale Williams, General Electric Aircraft Engines, Cincinnati, OH
Leland Williams, Boeing Aerospace Support, San Antonio, TX
Ken Willingham, Raytheon Systems, Plano, TX

Finally, the technical assistance provided by The Boeing Company, Integrated Defense Systems Division, C-17 Airlifter Program
(Long Beach) in presenting this tool in an Excel format is gratefully acknowledged. In particular, special thanks are owed to Renee
Kortum for accomplishing this important task and to Julie Gissel for making this happen. Further thanks are extended to
Christopher Glazner, Graduate Student Research Assistant with the Lean Aerospace Initiative at MIT, for introducing last minute
programming and editing improvements.