Academia

(A) At my organisation Purchasing is not exactly trained in quality issues. There are some aspects of quality that naturally defaults to purchasing for example: Purchasing should always make sure that when purchasing steel or thread the material should always be accompanied by a certificate of conformance or an MTR. This is all done as part of the process not because all buyers know the importance of it; there is never any formal training that's ever given to them.

(B) I think training purchasing on the importance of quality and the major roll that they play in the process, can help with the process continuous improvement. The process can always gain from the wealth of knowledge that these buyers have of the industry and it can help buyers as well when performing vendor evaluations, to know what to look for in a quality vendor.


(A) Our customer service requirements are the biggest influence on our inventory holding levels. We deal with offshore oilrigs located all over the globe that may need parts or equipment delivered in a matter of hours. Keeping a crew offshore costs a great deal of money a $10 repair part or tool can force our customer to keep a fully paid crew idle at an offshore jobsite for days costing them thousands of dollars in the process. In some cases private jets and helicopters have been hired to deliver a $2000 part to some of these locations. With such heightened sense of urgency we absolutely cannot afford not to have inventory to fill such orders.

(B) Our inventory levels are suitable for our customers; we calculate the opportunity cost of loosing a customer vs. Inventory holding costs. Keeping the customer happy always wins. Judging by the explanation in A, Keeping inventory is justifiable.

The two main methods of supplier selection at my company are Quality and vision alignment. We pride ourselves in producing the highest quality products in the oil and gas industry we have managed to maintain that reputation by purchasing high quality materials and sub components.

The only problem that we have experienced is the lack of total cost of ownership calculation. This is an area that we need to look into and put into consideration when selecting suppliers in the future.

Yes we have routine order products and performance problem products in my organisation.

Our routine order products are Locomotive bearings that we use as subcomponents in most of our products. We buy these bearings on a blanket PO from a single source supplier. Most of our problem products are mostly outsourced services such as machining when the machined parts come back from the vendor they at times are non-conforming when checked by QC department.


We generally have a small pool of suppliers; these approved vendors were thoroughly vetted and are continuously vetted and audited to make sure that our business needs remain aligned. If we reduce the number of suppliers this may have a negative impact on our day-to-day business because some of the processes are slow and complicated that one supplier may not be sufficient to meet our requirements.


We outsource most of our thread cutting processes. Vendors have different licences to cut threads at times the licences overlap, so it is a wise thing to keep a large pool of approved vendors, than to scramble when an order is placed for threads that your small list of suppliers are not licenced to cut.


My organisation engages in supplier certification. We have faced a number of problems in the implementation of this program. One that stands out was that involving suspicions of "Patent infringements" due to information sharing with one of our suppliers.

My organisation designs and makes equipment for the Oil and gas industry. Few years back our Engineering R&D department was working on a high strength plastic to replace some commonly used metals that took long to machine. To archive this they worked with an internationally recognised company that specialises in plastics.

After a few years we learnt that our competitor had switched their comparable products to a plastic similar to the one we had help develop. It also turned out that their supplier was a subsidiary of our supplier suggesting they took our idea and developed their own product line that they marketed to our competition. The legal team is still working on it.


Supplier Certification has improved our organisation immensely. We have seen a reduction in Non-conforming products. Our suppliers check for quality of products and certify them before they send the products to us. This has resulted in less redundant work for QC department so they can be redeployed to do other assignments.

We have managed to reduce the number of suppliers, which has helped ease, the complications of supplier communication and payments. Production has also gained a lot from the delivery predictability as there is more information sharing with our suppliers.