MANAGING THE SUPPLY CHAIN PROCESS AT ROLLS-ROYCE

by

James A. Eiden

A thesis submitted in partial fulfillment of the requirements for the degree of

Master of Business Administration

North Central College

1998

North Central College

Abstract

MANAGING THE SUPPLY CHAIN PROCESS AT ROLLS-ROYCE MOTOR CARS:

AN ANALYSIS

by James A. Eiden

Professor Richard Slovacek

A thesis presented on the supply chain process at Rolls-Royce Motor Cars Ltd. Specific focus will

be on how Rolls-Royce Motor Cars Ltd. can improve their problem tracking process as well as how

to improve supplier relationships for better performance. Recommendations will be made on the

benefits of implementing a computerized defect entry system in place of current card system.

Recommendations will be made on how to improve supplier relationships.

TABLE OF CONTENTS

Acknowledgments.................................................................................................................................................iiGlossary.................................................................................................................................................................iiiOverview................................................................................................................................................................1

History.............................................................................................................................................................1Decline.............................................................................................................................................................5Turnaround.....................................................................................................................................................5

Previous Vendor/Supply Chain Process...........................................................................................................7Current Supply Chain Process............................................................................................................................8Quality Information Feedback Process (QUIF)............................................................................................11BOCQA Problem Resolution...........................................................................................................................15Quality Workbench program............................................................................................................................17Recommendations for QUIF Improvement..................................................................................................18Recommendations for improving supplier relationships..............................................................................20Recommendations for further research..........................................................................................................23

Acknowledgments

The author wishes to express sincere appreciation to my family for their support. A special thank

you goes to Michelle.

In addition, special thanks to Colin Yeomans, Howard Musker, Mick Howell, Bob Edwards, Roger

Hunt, Paul Maxsted, and John Minshull of Rolls-Royce Motors Cars Ltd., in Crewe, England.

ii

Glossary

BOCQA. Bought Out Complete Quality Assurance. The acronym used for the Rolls-Royce

purchasing quality assurance group that resolves defects with vendors.

QUIF / QIF. Quality Information Feedback. The acronym used for the manual card system used

to find and track defects.

ZCAR. Zone Concern Action Report.

iii

Overview

This paper will make specific recommendations on improving the communication process of

addressing defects discovered on the assembly line. Specific recommendation will address how a

computer system installed at the production level can facilitate faster response through the supply

chain back to the supplier if necessary. This proposed system would be linked to the current Quality

Workbench Program that currently tracks suppliers by various categories.

In addition, specific recommendations will be made to improve relationships between Rolls-Royce

and suppliers. These recommendations are aimed at helping to improve Rolls-Royce’ leverage to

resolve product defect issues with suppliers.

History

Rolls-Royce was officially started on March 23, 1906i, when Charles Rolls and Henry Royce agreed

to jointly produce an automobile that could be considered the best in the world. Originally, Rolls-

Royce Motor cars only produced high performance engines and chassis’. Other companies then

worked on the customization of the body and interior coachwork per the request of each customer.

In 1907, Charles Rolls started the aircraft engine business. Rolls died when a Wright plane he was

riding in crashed in 1910.ii During World War I, Rolls-Royce accounted for half of Britain’s total

aircraft engine output.iii

Bentley Motor Cars was purchased by Rolls-Royce in 1931. Bentley vehicles were high

performance sportier vehicles whose reputation was earned on the fledgling automobile racing

circuits.

Henry Royce died on April 22, 1933, after a long illness.iv The company continued despite the loss

of both founders.

Due to the war effort, car production was halted in 1939, and the company concentrated on airplane

engine production. Rolls-Royce produced the Merlin engine that powered the Spitfire and Hawker

Hurricane fighters.v

After the war, when Rolls-Royce resumed automobile production it was decided to produce the

entire vehicle in-house including custom interior coachwork.

In the Post-war years, Rolls-Royce continued to focus on two industries, aerospace, and

automotive. Rolls-Royce was as renowned for making airplane engines for civilian and military

aircraft as it was for producing the finest crafted automobiles.

In 1966, Rolls-Royce won a bid to produce 555 jet engines for Lockheed’s new L-1011 Tristar

airplane. Rolls-Royce lowered its bid to prevent General Electric from winning the contract. In

addition, Rolls-Royce was faced with financial penalties written into the contract as production was

delayed due to correcting design flaws. On November of 1970, Rolls-Royce turned to the British

Government for assistance. The British Government lent Rolls-Royce £60 million (approximately $

98.928 million, 1997 US dollars1). Two days later, the House of Commons announced that Rolls-

Royce would be nationalized.vi

In 1973, the automobile operations were spun off as a separate company and stock issued to return

it to the private sector. The aerospace division was kept in control of the British government. In

1980 Rolls-Royce was seriously weakened by the effects of a recession. Higher interest rates and a

strong pound made the cars more expensive and demand declined.vii

1 Calculation based on rate as of February 6, 1998. 1.6488 US Dollars for every British pound.. This rate was found on the CNN Website. http://www.cnn.com/travel/currency/index.htm

2

In September of 1980, Vickers plc purchased 90% of Rolls-Royce stock.viii Vickers was a

conglomerate with concentration in the defense industry. Thus the automobile operations were

again linked to the defense industry. There were now two separate Rolls-Royce entities, one under

receivership of the British government that produced jet engines, and the other the automobile

operations owned by Vickers plc. The automobile company was able to license the Rolls-Royce

name to continue the association of the name to the distinctive cars produced.ix.

As of the writing of this document, Rolls-Royce Motors Ltd. remains under the ownership of

Vickers plc. Vickers plc has publicly announced it’s intent to sell Rolls-Royce and is currently

entertaining offers.

3

The following table shows the models produced throughout history by Rolls-Royce.

Rolls-Royce Bentley10hp 2 cylinder (1904-1906) 3 litre (1921-1926)15hp (1904-1905) 6 ½ litre (1926-1930)30hp (1904-1906) Speed Six (1921-1930)20hp (1905-1906) 4 ½ litre (1927-1931)V8 Legalimit (1905-1906) 8 litre (1930-1931)Silver Ghost (1907-1925) 4 litre (1931-1934)20hp (1922-1929) 3 ½ litre (1933 - 1936)Phantom I - Derby (1925-1929) 4 ¼ litre (1936-1939)Phantom I - Springfield (1926-1931) Mark V (1939-1941)Phantom II (1929-1935) Mark VI (1946-1953)20/25 (1929-1936) R Type (1953-1955)25/30 (1936-1938) R Type Continental (1952-1955)Phantom III (1936-1939) S Series (1955-1959)Wraith (1938-1939) S Series Continental (1955 - 1959)Silver Wraith (1947-1959) S2 (1959-1962)Silver Dawn (1949-1955) S3 (1962-1966)Phantom IV (1950-1956) T Series (1965-1977)Silver Cloud (1955-1959) T2 (1977-1981)Silver Cloud II (1959-1962) Mulsanne (1980-1987)Silver Cloud III (1962-1966) Mulsanne Turbo (1982-1985)Phantom V (1959-1968) 8 (1984 - ?)Phantom VI (1968-1991) Continental ( 1984 - Present)Silver Shadow (1965-1977) Turbo R (1985 - Present)Silver Shadow II (1977-1980) Mulsanne S (1987 - Present)Silver Wraith II (1977-1980) Continental R (1991 - Present)Camargue (1975-1986) Brooklands (1993 - Present)Corniche (1971-1987) Turbo S (1994 - Present)Silver Spirit (1980-1989) Azure (1995 - Present)Silver Spirit II (1989-1993) Continental T (1996 - Present)Silver Spirit III (1993-Present) Turbo R Sport (1996 - Present)Silver Dawn (1996 - Present) Brooklands Trophy special (1997 - Present)

Turbo RT (1997 - Present)Azure (1995 - Present)

Silver Spur II Touring limousine produced by Muliner Park Wardx

Rolls-Royce Motor Cars Ltd. manufactures 3 model lines, Rolls-Royce, Bentley, and Muliner Park

Ward vehicles. Rolls-Royce models are intended as chauffeur driven vehicles. Bentley models are

4

designed for the sports car enthusiast who like to drive themselves. Muliner Park Ward produces

custom, one of a kind vehicles, for those who can afford the commission of such vehicles.

Decline

In 1980, when Rolls-Royce Motors Ltd. was purchased by Vickers, the automobile company had

produced 3,018 vehicles. By 1983, production had dropped to 1,567 units.xi From that point,

Rolls-Royce began to grow again. During the decade of the 1980’s, Rolls-Royce enjoyed a 12% -

14% annual growth rate in sales. In 1990, the company sold 3,333 cars internationally.

The period between 1991 to 1992 was a time of severe hardship for the company. Rolls-Royce lost

$150 million during the 24 month period.xii The world wide recession during this period had a big

impact on Rolls-Royce sales. During its peak, Rolls-Royce experienced 1,200 units in sales in

North America. A year later, during the 1991-1992 period, sales dropped in North America 800

units to only 400 vehicles sold. Worldwide, sales dropped to 1,728 units.xiii

Turnaround

In 1991, Rolls-Royce Motors Ltd. hired Michael J Donovan as Director-Strategic Planning and

New Programs. Under Donovan’s direction, the company began the process of turning itself

around.xiv

5

Donovan’s strategy relied on three key goals:

1. Maximize profitability by increasing productivity and reducing the sales break-even point to 1,300 units per year from 2,700 units per year.

2. Anticipate and exceed customer expectations in quality craftsmanship, reliability, safety and comfort.

3. Continual commitment to concentrate on the core business of designing, developing, and building the best cars in the world.xv

To achieve these goals, the following changes were implemented:

1.Rolls-Royce consolidated its operations from two factories into it's Crewe facility.

2.Reduced employment from 5,700 employees to 2,400 employees in five years.

3........................................Reduced management from seven layers to four.

4...............Reduce inventory levels so that production is equal to demand.xvi

Rolls-Royce implemented the TQM (Total Quality Management) philosophy of change. It

established cross-functional teams across the organization. The changes facilitated communication

through the organization. Barriers were broken down and a collaborative environment was

encouraged.

As a result of Rolls-Royce efforts to implement TQM, the Bentley Brooklands was developed in 10

months rather than 2 ½ years for previous models. Problems have been reduced from 150 defects

to 47 defects that need to be corrected before cars are shipped.xvii

6

Previous Vendor/Supply Chain Process

Since its inception, Rolls-Royce prided itself on making the entire car by hand using the best

materials available. Every part was created on site. Even nuts and bolts were forged by Rolls-

Royce. There was no major supplier for parts to speak of as every item that became part of the car

was hand made on site.xviii As time progressed, Rolls-Royce began to use suppliers. More research

is needed to find the exact dates when Rolls-Royce began to use suppliers. In 1991, during the

change process, Rolls-Royce turned to outsourcing as part of its strategy.

7

Current Supply Chain Process

The need for change at Rolls-Royce has required the need for the company to look for suppliers for

parts rather than to continue to produce them internally. The objective is to find suppliers who can

produce parts while at the same time maintaining the passion for quality and adherence to Rolls-

Royce standards. Companies that specialize in making parts can do it more efficiently than Rolls-

Royce can internally.

Rolls-Royce is generally not considered a competitor to other automobile manufacturers. Rolls-

Royce and Bentley cars are luxury items and compete with other luxury items such as houses,

yachts, and diamonds.

The problem for Rolls-Royce is that approximately 50 cars are produced per weekxix. Since Rolls-

Royce does not mass produce cars on a scale as other automobile manufacturers, it is difficult for

the company to command attention from its suppliers. Currently, Rolls-Royce is currently using

600 suppliers to provide over 10,000 parts per vehiclexx. The suppliers are the same companies who

supply the mass production car companies with auto parts and thus their focus is on satisfying the

needs of the high volume car manufacturers rather than a company such as Rolls-Royce. In this

respect, Rolls-Royce competes with other car manufacturers for suppliers, not for customers.

8

Rolls-Royce undergoes a demanding process to source vendors and parts for its vehicles. The

purchasing function of the company employs engineers who work within purchasing to serve as

liaisons to source parts from vendors. This team is known as BOCQA (Bought Out Complete

Quality Assurance). BOCQA is the Quality Assurance function that is part of the purchasing

function. They are responsible for supplier relations and resolving defects caused by suppliers.

These engineers are experienced in the specifications and tolerances of auto parts as well as

experienced in working with parts suppliers. Along with being a link to the suppliers and the

production line, they also have been involved with the development of parts to fit criteria developed

by the designers when new vehicles are in the process of coming into production.

The purchasing engineers are responsible for finding the right suppliers to provide the part

according to the exact specification. This means they are an important part of product

development. Along with product development for parts, these engineers are also the

communication link from the production line to resolve any defects or issues arising from the parts

being installed on the line.

Rolls-Royce standards and tolerances are typically more stringent than those of other automobile

manufacturers who may be using the same type of part. Rolls-Royce looks for the highest quality of

each type of part that will be used in the car. For instance, Rolls-Royce will use the best tire on the

market for its vehicles as well as the best radio system currently available, etc.

9

The process for bringing in a new part from a supplier is as follows. The purchasing engineer

receives the specification for the part from the designer. With this information, the engineer then

works to find a supplier that can produce the part according to the specification and tolerances as

set forth by the design team with input from the purchasing engineer. The engineer either uses a

current supplier who can manufacture the part, or has to retain a new supplier to produce the part.

After a supplier is found, the engineer works closely with the supplier to develop a prototype part

that meets the strict specification required by Rolls-Royce. Once the prototype is developed, it is

refined by the supplier based on response from the Rolls-Royce purchasing engineer. The engineer

works closely with the production line to get feedback on the performance of the part.

If the part passes the tests, then Rolls-Royce places the initial order for the part to be delivered to

the Crewe facility. When the first shipment arrives, it is set aside for testing to ensure it passes the

tests before being installed on the production line. If the part does not pass, it is rejected and sent

back to the supplier for re-work. If the part does pass, it is sent to the production line as needed.

Once the part has been accepted, it is sampled periodically as it arrives into the receiving dock for

testing. Besides sampling, feedback from the production line is also used to monitor performance of

the part.xxi

10

Quality Information Feedback Process (QUIF)

The Quality Information Feedback Process (QUIF), was a method developed to facilitate

communication and ownership of problems found in the production line. The goal of the process

was to ensure all defects were addressed before the vehicle leaves the factory. It is more cost

effective to address defects at the production facility rather than having to address it at the dealer.

The process is a manual process of documenting problems on the line, assigning ownership, and

following up to ensure defects are addressed when they are found.

The process is enterprise wide and involves dealers as well. A manual card system is used to

document defects found. Yellow cards are used by the dealers, Blue cards are used by the testing

and rectification function, and Pink cards are used in production.

The following flowchart shows an overview of how cards flow through the enterprise.

QIF Process Overview

BOCQA*Suppliers

DealersFront Desk / Back Desk

QMS

Test & Rectify

Production

Yellow Cards

Yellow Cards

Blue Cards

Pink Cards

Pink Cards

11

Pink cards are the ones that BOCQA must address with suppliers as defects are found on the

production line. When a defect is found, a card is filled out with all the details of the defect. The

defect is recorded by the associate who finds it. In addition to documenting the defect, the associate

who finds the problem assigns an owner who the associate thinks is responsible for solving it. If it is

a supplier problem, then an associate in BOCQA is named on the card. If the error occurred

upstream in the assembly process, then an associate in the responsible area is named. This is part of

the effort to assign ownership to ensure that problems are resolved before the vehicle leaves the

plant.

The card has the following sections to be filled out:

Section Description

Model Circle the model type affected by the defect.

Date Fill in the date defect was found.

Reported By

Name of person who found defect.

Tel. No. Extension of person who found defect.

VIN Fill in the vehicle identification number of the car the defect was found on.

Op.No. Operation Number. At what step in the assembly process/procedure was the defect found.

Defect In this section the symptom of the problem is recorded.

Error In this section the possible cause of the problem is recorded.

Owner In this section, the person who found the defect records where he/she thinks the defect occurred in the process. This could be the supplier, or a process upstream in the assembly process. This isn’t always correct, but it is a step in helping to track down where the error occurred

Sketch This is on the reverse side of the card where the associate who found the defect can illustrate the problem by drawing a schematic of the problem.

Other Information

This is also on the reverse side of the card. The associate can enter any additional information that may help to resolve the defect.

xxiii

12

The top half of the card is filled out. The card travels along the assembly process with the vehicle

until it is resolved. In sub-assembly and body areas, the card remains until the problem is fixed.

When a problem is fixed, the bottom half of the card is filled out explaining the resolution of the

problem. If a defect is recurrent, then one card per shift is made. xxiv

Cards are periodically sorted and routed to those who have been assigned to own it. There are

bulletin boards placed strategically throughout the facility. On these boards are tally sheets and

cards showing the problems. The tally sheet shows weekly number of problems as well as a running

cumulative total of the defects occurring in a particular area. This is done to help visualize the

problems at any given point.

13

Defects are also given a level assignment based on the following table:

Level Description

0 (Zero) Resolution is achieved through the re-instatement of the Best Current Practice. This could be achieved through training, coaching or equipment re-setting. No change to the process or product is necessary. However, some error proofing of the process can be introduced to avoid the error recurring.

1 Resolution is achieved through minor process changes by the Team Leader (i.e. changes to the Best Current Practice) that do not impact the Engineering Operating Standard. The Team Leader is supported by the Process Engineer.

2 Resolution requires major process changes or minor product design change. The Process Engineer or Zone Engineer takes responsibility for the change. All problems at this level must be accompanied by a Zone Concern Action Report (ZCAR)

3 Resolution requires major product design change. The Zone Engineer takes responsibility for the change. Significant expenditure is required to solve the problem.

xxv

14

BOCQA Problem Resolution

The following diagram shows the process used by BOCQA to address defects as they are forwarded

from production.

QIF BOCQA Interface

Product Concern- Definition?- Rejection- Rework- Audit Defect- Defect

Raise QIF Card- Part to NCFM Table

Raise QIF Cards- Pt No.- Extra HPU- Work Center

Allocate 'R'- Who?

Receival by BOCQA- Collect?- Where?- Phone call?- Frequency?

BOCQA

Appropriateimmediate action- Re Insp- Supplier Rework- Rework In House- Root Cause Analysis- Corrective Action- 3rd Party Rework

Rework?Use as is?Concession /

Production PermitFit

Rework Parts

Reject

Feedback

Rework Authorization& Monitoring Process

Supplier Monitoring & Corrective Action Template

Yes

No

Yes No

Yes

No

At what stage is Non-Comformance Raised?

Or

Before a card is raised, production determines whether they should reject, re-work, audit the defect,

or raise a defect card. If it is determined that a card should be raised, it is filled out and the problem

is forwarded to BOCQA. Once the problem is received by BOCQA, BOCQA then begins to

investigate the problem to confirm it is a supplier issue, and who within BOCQA should follow up.

Upon investigating, the owner within BOCQA makes determinations based on the problem along

with input from production on how to address the problem. Should there be re-inspection of the

15

parts in inventory? Does the supplier need to re-work the part so it conforms. Should Rolls-Royce

re-work the part and bill it to the supplier? Or should a 3rd party re-work the part if the supplier has

sub-contracted the work to a third party.

BOCQA also performs root cause analysis to find the true cause of the problem and how it

occurred. BOCQA along with feedback from production determines the appropriate corrective

action.

If it is determined that the supplier must re-work the part, or a 3rd party must re-work the part,

BOCQA becomes directly involved to ensure the problem is addressed and it does not recur.

The difficulty arises with BOCQA in communicating and working with suppliers to resolve issues.

Suppliers generally are more concerned with higher volume customers than Rolls-Royce, and it

becomes difficult for Rolls-Royce to get redress from suppliers. BOCQA is also under time

constraints as the vehicle or subsequent vehicles may have to be pulled off the line, or the

production line may have to stop to fix the part. In addition, Rolls-Royce is measuring the cost

associated with the defect. Rolls-Royce uses £32/hr to measure the cost of the defect.

Additionally, some suppliers have sub-contracted the work to 3rd party vendors which complicates

and extends the time it takes for BOCQA to resolve the issue. BOCQA must work through two

levels of suppliers to track down and solve the problem.

If BOCQA does in fact get the supplier to listen to what the problem is, the difficulty may then be

compounded as Rolls-Royce accepts nothing but perfection for the quality of the vehicles they

produce and expect no less from the suppliers and parts used.

16

Quality Workbench program

The Quality Workbench program is an Oracle® based Client-Server software system developed by

Computer Sciences Corporation (CSC) according to system analysis and design of Rolls-Royce.

Used by the Quality Engineers within the Purchasing function, the Quality Workbench System is a

measurement tool used to track supplier performance. Performance can be viewed by supplier, by

product number, cost per part per supplier, by warranty and other views. The Quality Workbench

system can also track reject information and trends.

The Quality Workbench team can track trends of where, why, when a part was rejected and who

the supplier is. The system can also track trends of internal departments. The system can track

trends based on cost/hours/warranty. The system illustrates the direct financial impacts of rejected

parts and short-term and long-term cost impacts incurred by Rolls-Royce due to rejected parts.

Information used by the Quality Workbench system is fed by other existing databases. By using

information from other databases, redundant entry of already existing information is avoided. The

Oracle® system is fed by existing databases on the Mainframe and AS/400 computer systems

currently in use by Rolls-Royce. At some point in the process, entry from the cards used in the

QUIF process are entered into the system to incorporate defects occurring on the production line.

From the Mainframe system, bill of material, vendor and part information, inspection information,

work-in-progress, scrap, rework and cost per hour data is fed to the Quality Workbench system.

The AS/400 feeds warranty information to the Quality Workbench system in addition to other

information.

There are approximately 2,000 problems per week. The system can measure the number of weeks a

problem has not been addressed.

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Recommendations for QUIF Improvement

To improve the performance of the QUIF system, it is recommended that Rolls-Royce automate the

process. Workstations can be installed at various strategic points in each zone. These workstations

would be linked into the Quality Workbench system to get immediate measurement of the problems

and status. In addition, by using an electronic tracking system at the production level, it could also

be used as a communication vehicle to send electronic notifications to BOCQA and other

departments who need to address defects.

The entry screens would look similar to the card that is currently being used. Each category on the

card would be translated into a field on the screen where entry can take place. A printer could also

be placed at each workstation. By using a printer, the problems could also be printed and posted on

the boards as they were before. Defects could also be printed in card format as well as listing each

problem by zone and posted on the boards.

Using workstations at the production level would improve communication, save time, and increase

productivity. Improving communication would occur by have the workstations linked to an e-mail

system. Once a problem is entered, it could be electronically forwarded to the owner. Saving time

and increasing productivity would occur by not having to sort the cards or trying to interpret

someone’s handwriting. In addition, keying errors would be reduced by having those who have

found the problem enter it at the source.

Implementing an electronic, computerized system could also be an effective tracking device for

ownership. Those who get e-mailed with defects could receive them with different priorities. A

level one priority could tie into a paging system where the zone manager and or the BOCQA

associate could receive an immediate page to address a defect as it is occurring on the production

floor.

18

The system could measure how many open defects are being sent to department and associate. It

could help level out the handling of problems if one BOCQA associate is receiving too many

defects. Others in BOCQA can then help address them and distribute the work load.

19

Recommendations for improving supplier relationships

The following recommendations could be implemented to improve the relationships with suppliers

and response to defects from suppliers.

Rolls-Royce should look for smaller more entrepreneurial suppliers who are willing to

accommodate Rolls-Royce’ needs as a supplier. Smaller companies are on the growth track and

will value their customers more than larger established suppliers who are only focused on high

volume customers. More research would be needed to make a determination as to what sales level

of supplier should be pursued as a supplier. Companies that are too small may be more riskier to

use. Smaller companies may have more of a risk of bankruptcy.

Using companies that are smaller than the high volume suppliers, but larger than a startup firm are

the ones that should be pursued. These type of firms may be rare in the auto industry.

Rolls-Royce can develop a true strategic partnership with preferred suppliers selected. By a true

partnership, Rolls-Royce can offer valuable assistance in helping the company become more

productive. Rolls-Royce has gained valuable knowledge on best industry practices as it underwent

a turnaround. This valuable information could be used to help smaller suppliers who can implement

best practices as they grow. Rolls-Royce could also offer to let the supplier use Rolls-Royce in it’s

advertising for additional business. Rolls-Royce would be given authority to approve ads before a

supplier would launch it.

Since Rolls-Royce is producing a luxury item, premium pricing for parts could be used as well.

Rolls-Royce may want to pay a little more for parts to compensate vendors for running smaller

production runs. This premium could also be a way to help Rolls-Royce ensure that the supplier is

following higher quality standards since it is being compensated for producing low volume parts.

Rolls-Royce could also incorporate service levels into supplier contracts. Service level agreements

would impose financial penalties on suppliers for not fixing defects in a timely manner. If a supplier

does not address a problem within a certain period of time, Rolls-Royce would receive a discount or

20

a rebate from the supplier until the problem is fixed. Since the supplier would be paid a premium to

begin with to produce the part, the supplier would be more willing to address defects in a timely

manner.

The following table is based on support concepts of levels and response time. This could be used as

an example of how a computerized QUIF system could be used for requiring suppliers to respond to

defects in a timely manner.

Service Level Resolution

1. Requires temporary relief within 2 hours and a permanent fix within 24 hours.

2. Requires temporary relief within 24 hours, and a permanent fix within 48 hours.

3. Requires temporary relief within 72 hours and two weeks for a permanent fix.

4. This is more of a suggestion on how to improve the process and no time frame is set for implementation.

The QUIF computerized system could also be linked to strategic partners of Rolls-Royce. They

could electronically receive defect notices related to their particular part electronically. This would

help BOCQA to effectively work with suppliers as the supplier would receive the same notice that

BOCQA received. This reduces misinterpretation as the supplier could see exactly what the defect

was found on the production line. BOCQA would be given the discretion to electronically forward

these notifications to the supplier.

Once a defect arrived electronically at the BOCQA associate’s computer, the BOCQA associate

could make the determination whether to forward the notice to a supplier. If it is forwarded to the

supplier, the BOCQA associate could then contact the supplier and discuss the problem as BOCQA

and supplier are looking at the same information. This could help reduce the frequency of traveling

to suppliers for the purposes of problem resolution.

21

Security would need to be added to the system. Issuing user Id’s to log onto the system at the

production level, as well as id’s at BOCQA could be used to limit access. In addition, a separate

server could be set up that would transmit defects to the appropriate supplier. This server would

not be able to accept any inbound inquiries, it would only allow information to be transmitted. This

would add security and prevent intrusion.

For security purposes, it may be possible for only Team Leader level associates to enter information

onto the online QUIF system. This would be a way to limit access if this is a concern.

The system could be DOS based and used PC’s could be used as a pilot project to test the concept

in a cost effective manner. QUIF flowcharts could be used to determine how the defect information

is routed. In a sense, the analysis has already been done using the “Quality Information Feedback

Process Guidelines” document as reference.

Implementing a handful of used PC’s as well as two PC’s in BOCQA and one at a supplier could be

used for the pilot to test the feasibility of the system and how information is being input. This

would be a stand alone system and not tied into any other systems for testing and security purposes.

If it is determined that it could feasibly be integrated into the Quality Workbench system, then

security would need to be implemented to ensure intrusion is prevented.

If a pilot is determined to be successful, then an improved interface could be added in future

versions to accommodate schematics and other features that would help bring problems to light..

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Recommendations for further research

Further research is needed to determine cost savings of implementing a system. Research would

also be needed to determine if implementing a computerized QUIF would be feasible. Additional

research would be needed to assess how such a system would interface with the Quality Workbench

system.

Research is also needed to assess current computer systems used by Rolls-Royce. It may be more

feasible for Rolls-Royce to modify a current system to create an online QUIF system rather than

creating a whole new system. A similar system has been shown in the United States on a television

ad for Microsoft. This ad shows the Freightliner company using an online system in production

where they can view the blueprints of the vehicle at the production line. A production person can

select the part in the blue print and create a problem ticket associated with that part. Contacting

Microsoft to see how this works might be of benefit to Rolls-Royce. This system may only need

some modifications to work in the Rolls-Royce environment.

Research would be needed to determine if a system would actually improve communication and

increase the performance of getting defects resolved. Training of production staff needs to be done

to see what impacts on the production line such a system would have.

Research would also be needed to determine if implementing recommendations for strategic

partnerships with suppliers is feasible and appropriate in the auto industry. There may be some best

practices in this area that could be researched. Assessments would need to be made to determine if

this could reduce defects at the Rolls-Royce production line.

23

END NOTES

24

4

i International Directory of Company Histories, v.1 1988, p194.

ii International Directory of Company Histories, v.1 1988, p194.

iii International Directory of Company Histories, v.1 1988, p194.

iv International Directory of Company Histories, v.1 1988, p194.

v International Directory of Company Histories, v.1 1988, p195.

vi International Directory of Company Histories, v.1 1988, p195.

vii International Directory of Company Histories, v.1 1988, p195.

viii International Directory of Company Histories, v.1 1988, p195.

ix International Directory of Company Histories, v.7 1993 p456.

x Darkforce Internet Web site http://www.darkforce.com

xi International Directory of Company Histories, v.1 1988, p195.

xii Industry Week, Jan 17, 1994 v 243 n2 p15(3) “The Rescue of the Gilded Lady” Brian S. Moskal.

xiii Industry Week, Jan 17, 1994 v 243 n2 p15(3) “The Rescue of the Gilded Lady” Brian S. Moskal.

xiv Industry Week, Jan 17, 1994 v 243 n2 p15(3) “The Rescue of the Gilded Lady” Brian S. Moskal.

xv Industry Week, Jan 17, 1994 v 243 n2 p15(3) “The Rescue of the Gilded Lady” Brian S. Moskal.

xvi Industry Week, Jan 17, 1994 v 243 n2 p15(3) “The Rescue of the Gilded Lady” Brian S. Moskal.

xvii Industry Week, Jan 17, 1994 v 243 n2 p15(3) “The Rescue of the Gilded Lady” Brian S. Moskal.

xviii Company induction with Colin Yeomans, Spetember 29, 1997. Crewe England.

xix Based on interviews with Colin Yeomans, Howard Musker, Mick Howell, and Bob Edwards of Rolls-Royce in Crewe, England September 29 - October 1, 1997.

xx Based on interviews with Howard Musker, Mick Howell, and Bob Edwards of Rolls-Royce in Crewe, England September 29 - October 1, 1997

xxi Based on interviews with Howard Musker, Mick Howell, and Bob Edwards of Rolls-Royce in Crewe, England September 29 - October 1, 1997

xxii Rolls-Royce Quality Information Feedback Process. Issue 1. June 13, 1997. Page 4.

xxiii Rolls-Royce Quality Information Feedback Process. Issue 1. June 13, 1997. Page 4.

xxiv Rolls-Royce Quality Information Feedback Process. Issue 1. June 13, 1997. Page 3.

xxv Rolls-Royce Quality Information Feedback Process. Issue 1. June 13, 1997. Page 8.

xxvi Rolls-Royce QIF BOCQA Interface handout given during interviews in Crewe, England September 29 - October 1, 1997