MTD -- Privately-held manufacturer of outdoor power tools and equipment
Supplier Performance and Scorecards
MTD had a large supply base and was trying to get a handle on customer RMAs caused by purchased parts. Their supplier, parts, and quality information was managed in disparate systems on a plant-by-plant basis. Supplier charge-backs were handled by filling out a 3-part RDVM form – one for accounting, one for quality, and no one knows what was done with the third copy. Needless to say, it was an inefficient system that was costing MTD money and had potential to damage relationships with customers. MTD’s goal was not only to recover money from suppliers for the bad parts. More importantly, they needed to improve the process of working with suppliers. The end-goal was to reduce – or eliminate all together – the RMAs caused by purchased parts.
The IQS Solution provided MTD with a fact-based nonconformance management system and supplier scorecards which allowed MTD to charge back supplier-related RMA cost.
MTD recovered $6 million in the first six months of the program: 1% of their revenue. All of the scorecards and metrics were easily defensible, so MTD and its suppliers focused on solving problems, not debating data. The improved communication led to lower nonconformance issues and better overall product delivery.