Lower Tier Supplier Management

May 22, 2014

The Government continues to place more attention on how Primes are managing their supply base including three and four levels down. The Prime bears the responsibility, risk, etc. but has limited options to have adequate oversight, surveillance, or influence to ensure accurate data and repeatable processes. Sometimes suppliers are also competitors, further complicating communication and oversight. The further down the supply chain, the more difficult it is to understand data, schedule, impacts, risks and opportunities. Primes can’t always talk to these lower levels without engagement of their supplier. Inadequate EV flow down to the lower level suppliers and the lack of knowledge of the lower level tier suppliers creates problems for the entire supply chain. In many cases because the EVM immaturity of the supplier, this compounds the third tier supplier. EV process is viewed as hard and expensive for the smaller companies, and the prime becomes frustrated with inaccurate data. So how can lower tier supplier management be improved? Flow down of specific EV requirements that the lower tier suppliers can perform with tools and process offerings that can make a difference in getting the quality and consistency of the EV reporting. Then integration into the upper tiers becomes more beneficial.

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