Sole Source has become prevalent in the Supply Chain for highly engineered critical parts/ components for a variety of reasons – volume, favorable pricing, depletion of legacy sources, etc.  However, Sole Source parts/ components (hereafter simply referred to as parts) are also one of the biggest risks for Supply Chain disruption.  Sole Source parts are like Eagles, they need to be understood on a case-by-case basis. In a series of posts, I will share one potential approach to mitigate Supply Chain risk for Sole Source parts based on best practices learned over many years from experts in Supply Chain management.  This is intended for the designers/ OEMs from a requirement flow-down assessment evaluation.  The end game is to identify and group similar parts by material and processes, such that if a disruption occurs in a Sole Source part, suppliers making similar parts can be brought up to speed quickly and produce it. That is, even if a specific Part Number is Sole Sourced, there is at least one other supplier making similar parts with similar processes, such that the Processes are Dual Sourced even though the individual part numbers are Sole Sourced. It sounds simple and logical! It is logical, but it is not simple due to the complexity of the parts being produced.  If it were so easy, there wouldn’t be so many issues with Sole Source parts! It does require being proactive and investing some time up-front, however, not only will it mitigate risk, but it may also reveal opportunities for negotiating improved contracts.

To start this journey with me, pick a sole source part and document the requirements and manufacturing routing using the ‘Qual form 5’ on the SAE ITC ASPQP website as a template:

Link to SAE ITC ASPQP webpage with Qual form 5

Yes – this is an aerospace form for standard parts, but experienced Materials and Process Engineers will readily recognize that this format can be genericized into a template applicable to other critical parts.  Experienced engineers have developed many different forms to succinctly capture the kinds of information represented in this one, but this format is simply one of the best I’ve seen.  Start with the drawing and the sub-tiered specifications and standards.  It is okay if you can’t fill out all the details or the ‘how.’  The important starting point is capturing the requirement flow-down for critical and special processes used to manufacture, test and inspect a part.

In the next post, we will look at how to evaluate this information with regard to mitigating Sole Source Supply Chain disruption.  

Congratulations to all those who joined me on the Sole Source Parts/ Components (hereafter simply referred to as parts) Supply Chain Risk Mitigation journey by completing Step 1 – Map the processes (Lean and Six Sigma principles are a key foundation for Supply Chain Risk Mitigation!) Gathering and analyzing data is essential to identifying opportunities. Step 2 for mitigating supply chain risk associated with Sole Source parts is to evaluate and understand the processes.  Are there any that jump out at you as to why the part is Sole Source – based on the unique capabilities of the manufacturer/ suppliers – or – is it more a matter of volume/ contract negotiations/ business decisions that have driven the part to be Sole Sourced? Even if the part is Sole Sourced based on business decisions, are there processes that particularly stand out in terms of difficulty or complexity in terms of finding ‘alternative sources’ for the process?  For example, does the process require custom tooling – like for castings or composites?  Does a process require specialized equipment – like forging?  Does the process require specially trained and/ or certified personnel – like soldering to IPC J-STD-001?  It is helpful to categorize and ‘bucketize’ these processes.  This is a key step for identifying potential alternative sources which are ‘capable’ of performing the process. The way the Performance Review Institute has grouped ‘Special Processes’ into different ‘Commodities’ is a great example:

Link to PRI eAuditnet description and login

eAuditNet is web-based software that supports and improves efficiency in the auditing and accreditation systems of industry managed programs administered by the Performance Review Institute. eAuditNet is developed and maintained by PRI for the benefit of industries where safety and quality are shared values, implementing a standardized approach to quality assurance.

In addition, eAuditNet houses the online Qualified Manufacturers List (QML), which is a searchable database of accredited companies. Procurement can use the QML, at no obligation or cost, to identify and contact companies that may become part of their supply chain, confident that they have demonstrated quality assurance proficiency in their field of expertise.

When a Sole Source goes down, perhaps because of natural disasters like flooding, fire, or for a myriad of other reasons, the last thing you want is to start from scratch on getting a new source up and running.  Being able to quickly identify alternative sources that are capable of the key processes is essential to an expedient recovery.  Even fundamental aspects such as the supplier having the right quality system can save considerable time and effort.

In the next post, we will go one step further and identify ‘Similar To’ part numbers focusing on form, but not forgetting the importance of fit and function. 

Sole Source has become prevalent in the Supply Chain for highly engineered critical parts/ components for a variety of reasons – volume, favorable pricing, depletion of legacy sources, etc.  However, Sole Source parts/ components (hereafter simply referred to as parts) are also one of the biggest risks for Supply Chain disruption.  In this last article in a series of posts, I will conclude by summarizing how the identification of ‘Similar To’ parts and strategic placement/ procurement of those parts can be used to develop a Dual Process Strategy as Supply Chain Risk Mitigation for Sole Source by Part Number.

In Step 1 and Step 2 we mapped, evaluated and categorized the manufacturing processes.  In Step 3, we look to identify ‘Similar To’ parts based upon ‘Form’ - the materials, geometry and manufacturing processes used. To use an example applicable to multiple industries, there may be similar parts used for gearboxes on different model programs, but the number of pieces to be manufactured for a specific part number (PN-A) each year is too low from a business contract perspective to have more than one vendor approved.  However, if another supplier is approved to make the ‘Similar To’ parts (PN-B & PN-C) for the other gearbox models, and the supplier who makes PN-A is unable to deliver, then the supplier who makes PN-B & PN-C may be able to come up to speed and make the PN-A parts in a crisis if needed based on similarity of form and process capabilities.  There are additional factors to be considered, such as if there are special manufacturing restrictions based upon military programs or off-set agreements, but this demonstrates the general concept. These are not new concepts, but new analytical and software tools are being continuously developed and improved upon to make doing ‘should cost’ and similarity assessments easier.  The key takeaway is that the engineers know how to do this, but they need management buy-in on being proactive in the analysis and supported in the strategic placement of the parts for an overarching robust Supply Chain strategy. OEMs and suppliers might both be pleasantly surprised by potential new opportunities!

In this series of posts, we have been focusing on the Process and Manufacturing Risks, but this is just a subset of a larger Part Risk Assessment Grouping & Oversight (PRAGO), which also takes into account the Part Design Risks and Application Risks.  I hope this information is useful and helpful.  For more information, email info@lausdeopublishing.com