Quality, Delivery and Cost (QD&C). These are the factors most used to determine
the value of a supplier. They are also
the aspects of performance that we can most easily calculate, compare and
analyze. A green supplier scorecard that
shows high OTD (on-time-delivery) and low DPM (defects per million), along with
competitive pricing is the dream of both Buyer and Supply Chain Manager alike.
In the high-stakes market of Military Defense products,
however, this is not quite enough. With
programs taking years to develop and often requiring decades of production and
support there is another critical factor in evaluating a critical
supplier. A company’s ability to
minimize risk over the life of the program is of epic importance.
Whether you are a Program Manager at a Defense OEM or a
Captain heading up a US Navy Program Office, mitigating risk is a daily
concern. Identifying companies who are
able to help you ensure your schedule does not slip and deliver at the
expected cost is critical to your success.
There are several aspects that a valued supplier can
utilize in mitigating your risk.
- Product Reliability & Dependability
a solid history of reliability through the performance of their products in the
field is crucial. Although new and
innovative products and technologies can help move a program forward, to invest
in these areas is risky unless the supplier has a strong base of product
Capability in the development and production of their products through repeatability
and variation reduction. Strong
adherence to process will minimize risk associated with variation in production
- Proven Pedigree
need a supplier that knows what it’s doing.
A solid foundation of supplying products to the Defense industry is a
must. These suppliers can help minimize
risk by leveraging their vast experience and get your product fielded faster.
- Strong Support
today’s environment of budget cuts and declining investment in new development
it is critical to find the suppliers who can provide expertise in the areas you
need. Partnering with you as an
extension to your own technical team, these suppliers can reduce risk by
applying valuable knowledge directly to the point of need.
- Business Stability and Long Term Continuity
an atmosphere of program uncertainty, you need a supplier who is invested in
the Defense Market, but is strong enough to withstand the ebb and flow of
governmental budgets. A supplier who is
over-leveraged in Defense could create risk by being “too big to fail” whereas
one who only dabbles in the industry might exit when times get hard.
Business managers will continue to fight the
headwinds of declining Defense budgets in the coming years and must make decisions
to ensure the success of the programs for which they have responsibility. One significant way to minimize uncertainty
and maximize potential is for key OEMs to make strategic decisions regarding
the suppliers they select. In addition
to Quality, Delivery and Cost factors like Reliability, Pedigree, Support and
Stability will play a large part in a program’s success.