Overview
LQATS – Lyons Quality Audit Tracking System
GradeCard® Supplier Performance Management System
 
LLMS – Lyons Laboratory Management System
GPM – Global Performance Monitoring System

GlaxoSmithKline

Case Study
This Case Study describes the implementation and results of the Supplier Performance Measurement System at GlaxoSmithKline (GSK), RTP North Carolina, which was the precursor to GradeCard®.

Situation
GSK is a worldwide pharmaceutical manufacturing company ranked second in the world in size and market penetration. GSK originally reviewed all commercially available supplier performance measurement systems (SPMS). GSK was unable to find a satisfactory commercial solution. Therefore, in the spring of 1997, Mr. Lyons, an expert software design engineer, was hired to create a supplier performance measurement system that would address grave problems of poor supplier on-time deliveries, quality, and service inadequacies. A decentralized manufacturing operation and corporate sales structure compounded the problem of creating an integrated enterprise solution.

Approach
The first step was to meet with staff from the QA, Manufacturing, Purchasing, Production Control, Warehouse, and Production Planning departments. Following a series of meetings, the stakeholders defined the following supplier performance criteria measures:

Quality – incoming and work-in-process product rejections
Delivery – timeliness and quantity variances of product shipments
Service – responsiveness, quality team deployment, and internal shop floor improvement plans
Additionally, the new system operated in real-time, and automatically fed information from data contained within the in-house legacy system. Subjective service data was gathered across the enterprise using minimal staff resources. Design and implementation of the system was team-based with each collaborating department committing manpower as needed. The procurement department funded the project and assumed project leadership. From inception to rollout, the system took less than one year to create and implement at an estimated cost of $100,000.
Results
Cost savings per year was approximately $500,000
120 suppliers for multiple components were reduced to 25 critical suppliers over a 3-year time period
Staff growth was eliminated and a buyer-planner concept was implemented
A ‘Perfect Order’ concept was put in place and tracked
Supplier overall performance improved from 68% at inception to 92% at the end of the third year
Supplier/GSK staff workshops were implemented semi-annually to share best practices among suppliers and to fuel the continuous improvement practice
Supplier personnel were co-located at GSK with buyer-planners. They processed purchase orders, managed inventory levels, and were given access to GSK planning data on an 18-month horizon for the components they produced
The system was implemented ahead of schedule and within budget
Additional Information
Mr. Lyons left GSK in 2001 to start Lyons Information Systems, Inc.® GradeCard® incorporates Mr. Lyons’ experience at GSK but is a more robust software system. GradeCard® delivers more information that is useful to bringing discipline to supplier performance and increased profits to the enterprise.
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