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. |
