Special Report: How Eaton uses software
Software customization was so important, the company wrote its programs itself
By Maria Varmazis -- Purchasing, 9/19/2007 12:37:00 PM
Best-in-class companies use software to eliminate the confusion and delays related to paper processes. Eaton decided to create their own programs to fit their specific needs. Eaton buyers and suppliers can log on to a web-based portal called Supplier Select, through which they can access Eaton-specific programs, such as supplier evaluator WISPER (Worldwide Interactive Supplier Performance Evaluation Resource) or inventory tracker Supplier Vis. As these programs have been deeply integrated into every step of supplier and inventory monitoring, the information and feedback displayed in the software is instantly collected, meaning buyers and suppliers can see results and reports in real-time.
The fact that programs like WISPER are so intricately woven into the product quality assurance process is central to its widespread adoption and success, say Eaton's director of commodity management and supplier performance, Jeff Thompson. The tool, which launched in early 2002, "goes way beyond a scorecard," Thompson says. It can monitor and control plant-level workflows as well as record product quality-related data.
For example, it can redirect an incoming component to a plant for inspection or inventory. If the part needs inspection, WISPER tells the receiving inspector what specifically needs to be inspected on that part and helps him record his findings into the system, which all ties into WISPER's supplier performance monitoring. The software can perform a similar operation if a plant needs to file a discrepant materials report (DMR) as well, which gives suppliers real-time feedback on defective parts as well as a way to monitor supplier action to correct the cause of the defects.
Mark Ramser, manager of supplier performance, says that since WISPER touches on almost every step of the way for a product, the data it collects is used "to track what suppliers and what plants are processing various steps of corrective action processes, what parts are slowest and what sites are having the most bottlenecks in certain areas."
This is the heart of the WISPER system, he says, where the program interfaces with product quality testing—discrepant materials reporting and the corrective action system. The moment an Eaton employee finds a defective part and enters a discrepancy material report into WISPER, Eaton buyers or quality engineers are notified instantly with the part number of the defective component. From there, the quality engineer can instantly notify the appropriate supplier with a DMR. The interaction between the quality engineer and supplier follows the quality assurance 8D process and occurs entirely through WISPER so progress can be tracked.
The data doesn’t just sit idle after that. “Based on the number of rejections of DMR, WISPER creates a PPM number—so all these different corrective actions and DMR are compiled to create a supplier performance report,” says Ramser. Best of all, suppliers have full access to their performance through WISPER so they can see how they are doing from Eaton’s perspective.
Since WISPER is web-based and customized to Eaton-specific processes, it’s been easy to roll-out across the company’s global sites—a big plus especially as the company grows through acquisition. “When we bring a new plant into the organization, a lot of this information is in different places—a spreadsheet here or there and it’s not really pulled together,” Thompson says. “WISPER allows us to bring it all into one place so that we know where the information is and when there are issues we have the documentation in place so we can go back and look at it.” All plants are on the same page with suppliers, as each supplier has a profile page with information like quality assessment or supplier audit results that every Eaton employee can access.
Software is never a cure-all for process problems, though it can help speed along improvements. Eaton’s simplification of supplier interaction with WISPER along with a push for better quality control yielded big results—in just four years, the company reduced supplier PPM defects by 50%. “There were a lot of initiatives across the board to improve quality, it wasn’t just WISPER,” Ramser says. “But WISPER does give us the information we need to use our resources more effectively.”
That’s the same philosophy in the truck group of Eaton, says its director of materials, Robert Conway. In early 2005, the group wanted to implement a min/max inventory replenishment strategy. Part of their implementation plan was to create the program Supplier Vis, made specifically for the trucking division. Supplier Vis helped Eaton implement a min/max system across global trucking sites by allowing Eaton worker as well as suppliers to track inventory levels in real-time.
| The 8D Process—‘Eight-Disciplines Problem Solving’ D1: Assemble a cross-functional team of experts D2: Define the problem. D3: Implement and verify interim containment actions as needed. D4: Identify and verify the root cause. D5: Choose and verify permanent corrective actions (PCAs). D6: Implement and validate PCAs. D7: Prevent recurrence of the root cause. D8: Recognize the efforts of the team. |
The universality and consistency of using one system to communicate between Eaton and suppliers means everyone is looking at the same data, and seeing the same overall picture. Prior to using Supplier Vis, inventory data used to be fragmented within Eaton operations, muddled in paperwork. Centralizing the data has—as process automation often does—greatly improved the efficiency of Eaton’s processes and reduced paperwork-related snags.
Conway can cite several examples of success within the truck group that he’s seen since implementing min/max with Supplier Vis. “After six months of implementation in our clutch division, we had an 80% reduction in invoice holds, which was a huge benefit to our suppliers,” says Conway. The clutch division also saw an eight to nine day improvement in inventory days on hand, he says.
Both Eaton and its suppliers are excited about the opportunities presented by Supplier Vis, simply because the speed of the information being shared allows them to maintain more nimble operations. “Truck has a market that goes up and down, it’s very cyclical, and we have struggled in the past managing the movement as quickly as we needed to in our inventory,” says Conway. “This tool allows us to quickly look at what we are going to set our levels on based on different min/maxes and on market, it lets us predict where we think the inventories should go so we can respond a lot more quickly.”
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