Supplier Alliance Focuses on Supply Chain Improvement

July/August 2007
Volume 1, Issue 5

Continuous Improvement (CI) initiatives have been a priority for prime contractors in the aerospace and defense industries for many years. But now, thanks to the Supplier Excellence Alliance (SEA), CI is taking hold at suppliers as well.

The SEA, formed in March 2003, is an industry partnership of leading aerospace and defense prime contractors, tier-one sub-contractors and suppliers. Its mission is to accelerate supply chain performance, expand supply chain capabilities and help build collaboration among suppliers that results in integrated supply chain solutions. Much of its work to date has centered around Lean and Six Sigma opportunities.

Tom Plungis, director, corporate subcontracts & supplier management for Lockheed Martin, is the president of the SEA this year. He says getting the industry together in this effort was vital to business success: “We’re doing more complex work, and that requires highly capable suppliers. Everyone is improving – it’s not that our supply chains aren’t trying to get better, it’s just that we’re not improving fast enough to meet the demands of the global marketplace.”

Although this effort has been initiated and sanctioned by the prime contractors, Plungis said it’s essential that it become led by suppliers. And that is resulting in significant changes in how many of these suppliers operate.

Michael G. Beason, chairman of the board of the SEA, says, “All suppliers will need to learn to partner with other suppliers, sometimes even competitors, in order to achieve the capacity to compete.”

“In the future,” he adds, “being the best supplier won’t be good enough. Building and managing an effective supply chain will be essential to success.”

To help suppliers improve their capabilities, the SEA has created a Lean Enterprise System Roadmap for use by the entire industry. One example is its Process Maturity Model (PMM), which focuses on the management and improvement of processes enterprise-wide. “We can’t just implement Lean techniques and expect them to stick,” says Beason. “We need to build our process capability – mature our processes – and create the foundation for sustaining the improvements we do make.”

Plungis says the SEA is focusing efforts overall on small and medium-sized suppliers. “We’re learning that we can achieve bigger results with smaller companies,” he explains. “When you implement a change in a large company, it only has an impact on a small portion of that organization. Most lead suppliers appreciate an integrated approach to improvement.”

This industry-wide roadmap for success is built around using continuous improvement in a meaningful, strategic way. In just a short time, the SEA is already seeing partner suppliers having good success. And in some parts of the country – including California, Florida, New York, Texas and Connecticut – the SEA offers support by obtaining workforce development funding to directly assist suppliers to offset as much as 50 percent of the costs.

“It’s really all about investing in your long-term health,” Plungis stresses. “From the Lockheed Martin perspective, we think suppliers should learn about what SEA is offering. It can allow suppliers to focus on the strategic elements of their business and to meet the competitive challenges they face daily.