Quest for Gold is a supply management strategy that will give Bell Equipment and our suppliers the competitive advantage necessary to deliver the best equipment in the world. For us to compete successfully in a global market, our suppliers must share our world-class vision and make a commitment to continuous improvement.
Quest for Gold will help us develop relationships through a supplier evaluation process that promotes communication and continuous improvement throughout the entire product cycle. Involvement, commitment, trust, cooperation and teamwork are the underlying principles that will guide our Quest for Gold.
The Rating System
Suppliers are evaluated in six key areas: Quality, Delivery, Cost, Warranty, Flexibility and Technical Support.
Ratings for Quality, Delivery, Warranty and Cost are calculated and provided to suppliers on a quarterly basis. Minimum ratings for each classification of Gold, Silver, Bronze or Conditional are reviewed and established annually.
Ratings for Flexibility and Technical Support are calculated and provided to suppliers once per year. Suppliers’ performance on these factors is evaluated via a questionnaire completed by a team of Bell personnel including supply management, operations, quality and product development. The rating is a numeric value from 1 to 10 (10 being the highest rating), and is derived from an average of the scores from the questionnaire.
The quality rating provides the supplier statistical evidence of the quality of their product delivered to Bell. The rating is expressed in defective parts per million (ppm) by comparing the total number of rejects to the total parts received.
The delivery rating provides the supplier with statistical evidence of the supplier’s ability to meet the delivery dates and specified quantities. The delivery rating is derived from early or late deliveries. Delivered quantities must match ordered quantities. Material that is received outside of a specified delivery "window" will be considered either early or late, and will affect the delivery rating. The rating is expressed as a percentage of orders delivered on time.
Cost Index Rating
The cost index rating is a measurement tool that provides information about suppliers’ pricing performance. The cost index is derived by comparing the current average invoice price versus the average invoice price paid during the same period the previous year.
Over and above the Cost Index rating, suppliers are also awarded Bonus points annually for any Savings Initiatives put forward and implemented
The Warranty rating evaluates the supplier’s warranty performance and shows the total claim amount as a percentage of their total spend.
Technical Support Rating
It is important for suppliers to provide technical support in proportion to the complexity of their product. Expectations include introduction of new and existing product, fabrication and assembly line support, design and process change information, manufacturing and design improvements, field problem resolution, test support, environmental responsibility, and supply management support, including lead time.
The supplier’s commitment is only partially fulfilled when quality parts leave their facility on time. Our expectations of outstanding customer service, prior to manufacturing and after delivery to our customers, are very high.
The flexibility rating is an analysis of the supplier’s initiative, responsiveness, attitude and communication performance. The flexibility rating seeks to measure a supplier’s commitment to excellence through product performance and through the working relationships of their people with ours. Supplier flexibility should be customer focused with a commitment to continuous improvement.
Because of our distance from many of our suppliers, as well as the challenges of long lead times to our off-shore customers, lead time improvements and flexibility in frozen zones are important aspects of overall supplier flexibility.
Quarterly, suppliers will receive a report of their performance in Quality, Delivery, Warranty and Cost. Yearly, the Supplier Performance Summary will be sent to the Suppliers showing their overall performance in the Quest for Gold program.
Purchased materials represent a significant part of our total manufacturing cost. In order to compete in the global environment, Bell Equipment and its valued suppliers must be committed to continually reducing total cost in the following areas:
Inventory, packaging and material handling
Freight and duty
Our customers expect us to reduce or maintain overall costs by decreasing our cost of quality, increasing productivity and efficiency, and working for improvement throughout the supply chain. We must continue to work together to meet the ever-increasing expectations of our customers.
Objectives and Evaluation
The objectives of Quest for Gold are to:
Develop mutually beneficial and profitable relationships with our suppliers, allowing us to achieve our mission in the marketplace.
Implement quality improvement and cost management to control total material cost.
Continuously measure performance, reward suppliers for improvement, and recognize suppliers for outstanding efforts.
Strengthen communications between Bell Equipment and our valued suppliers.
Extend additional business opportunities to suppliers who demonstrate continuous improvement.
Maximize our technological strength by utilizing suppliers’ technical support, innovation and expertise.
Utilize early supplier involvement to embrace proactive quality planning as a routine part of business.
Evaluation and Recognition
Recognition of supplier performance is an integral part of the Quest for Gold program. The following describes the recognition program for each classification:
A supplier who meets or exceeds Bell’s Gold performance standards and has a high impact on customer satisfaction. Gold suppliers will be recognized at the annual Supplier Conference, and their names placed on the list of Gold suppliers on the Bell external website. They will be candidates for Supplier of the Year, and preferred for future business and new designs.
A supplier who meets Bell’s Silver performance standards and is working toward Gold status. Silver suppliers will be recognized at the Supplier Conference, and will be candidates for Supplier of the Year. They will be considered for future business and new designs.
A supplier who meets Bell’s minimum performance standards. Bronze suppliers will be considered for future business and new designs.
A supplier who does not meet Bell’s performance standards and is a potential candidate for reduction. Conditional suppliers will receive no formal recognition.
Considerations of new and existing designs
Our goal is to build strong partnerships with suppliers. In order to achieve this goal, suppliers must have favourable supplier performance ratings. These ratings will be used by product engineering, quality engineering, supply management and others in selecting suppliers for the development of new and existing designs. When products are single sourced and the supplier has maintained favourable ratings, we will adopt this supplier’s product whenever possible. In cases where we have chosen to maintain multiple suppliers, the Quest for Gold ratings will be strongly considered in awarding new business.
The future belongs to those companies that excel at leveraging their competitive advantages. We must work closer together with suppliers to bring superior products to the marketplace by:
Focusing on customer satisfaction
Continuously improving product
Bell Equipment has an excellent supplier base that today gives us a competitive edge. Quest for Gold will ensure an unmistakable advantage for Bell Equipment and our business partners into the future.