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Corrective action reports
- 1. SCHEDULE & DELIVERY MANAGEMENT Prepared by: Bonita Dunham and Bert Santiago 1
- 2. OBJECTIVES: • Define Corrective Action (C/A) and Root Cause • Identify when to issue CARs • Define levels of Corrective Action • Identify contractual requirements impacting Schedule & Delivery Management in support of Corrective Action Request issuance • Provide examples C/A issuance 2
- 3. CAR Definition : A request for root cause remedy of a contractual noncompliance 3
- 4. Root Cause Definition : That condition, action, or lack of action that led to the problem occurring. Note: Root cause has been identified when effective corrective action will prevent problem recurrence 4
- 5. WHAT? • Actions taken to eliminate conditions that resulted in a contractual noncompliance – Root cause of noncompliance should be identified – Efforts are to the extent of precluding recurrence of non-compliant condition 5
- 6. • • • • WHY (DCMC requirements) Directly impacts contractor delivery performance CARs identified as Output of surveillance effort Tool to facilitate timely delivery Rationale that supports surveillance activity 6
- 7. WHY (DCMC requirements) • Supports “Right Time” metrics 1.1.2 Improve on Time Deliveries 1.1.3 Reduce Outstanding Deliveries 1.1.8 Improve ratio Alerts/Delinquencies 7
- 8. • • • • • WHEN On time delivery rate is < 90% Data analysis indicates contractual noncompliance trend Do not issue CAR for EACH delinquency Root cause analysis identifies processes contributing to poor delivery rates Contractor is non-responsive to previous CARs (escalation…) 8
- 9. HOW • • • • DLAD 5000.4 PROCAS Any employee can initiate a CAR Maintain a record of all CARs issued, followup and close-out actions C/A implementation and effectiveness of contractor actions shall be verified Four Levels of Corrective Action 9
- 10. • LEVEL I – – – – contractual noncompliance requires no special attention directed to working level personnel may be verbal or written 10
- 11. • LEVEL II – written request – systemic non-compliances – directed to contractor mgmt responsible for the process – Inform CAT of issuance 11
- 12. • LEVEL III – – – – – serious non-compliances to contractor top mgmt. Gov’t may pursue contractual remedies coordination w/ ACO & Cmdr prior to issuance issued by Team Leader or above copy buying activity & cognizant Gov’t ofc at prime as applicable – Contractor immediately placed on the CAL until C/A is verified and CAR closed out 12
- 13. • LEVEL IV – involve contractual remedies – must be issued by ACO, countersigned by Team Chief or above – copy of CAR and all correspondence to buying activities. – proper coordination between CAOs, Districts, HQ, customers and other affected Gov’t activities before issuance 13
- 14. • LEVEL IV(cont’d) – assure all resolution efforts are in concert – contractor immediately placed on the Contractor Alert List (CAL) until C/A verification and CAR close-out 14
- 15. DLAM 8000.5, PROCAS • CAO management maintain visibility of all LEVEL II and above CARs • Escalation, due to non-responsiveness to lower level CARs, as determined by the Contract Administration Team 15
- 16. Contractual Requirements • Although schedule violation is basic area of Production related C/A, manufacturing processes, (such as Manufacturing planning, MRP II, work measurement, material handling, integrated product development and facility management) are likely to be found as the root cause areas. 16
- 17. Contractual Requirements • Contractor’s requirement relative to many floor level manufacturing processes are covered in Contract requirements referencing Quality. 17
- 18. Contractual Requirements • BOTTOMLINE: Do not limit applicability of “contract requirements” based on functional area (i.e. quality or production)... compliance to contract requirements includes compliance to the delivery schedule. 18
- 19. Contractual Requirements • Complete contract review must be done -to identify contractor obligations under the contract -to identify contractual noncompliances -reference applicable contractual requirements in CARs 19
- 20. Contractual Requirements • FAR 9.103 Policy “…contracts shall be awarded to responsible…contractors only.” 20
- 21. Contractual Requirements • FAR 9.104.1 General Standards “To be determined responsible, a … contractor must…be able to comply with the required or proposed delivery or performance schedule…” 21
- 22. Contractual Requirements • FAR 46.105 Contractor Responsibilities “The contractor is responsible for carrying out its obligation under the contract by…” 22
- 23. Contractual Requirements • FAR 46.105 Contractor Responsibilities “Tendering to the Government… supplies or services that conform to contract requirements…” 23
- 24. Contractual Requirements • FAR 46.105 Contractor Responsibilities “The contractor may be required to provide and maintain an inspection system or program for the control of quality that is acceptable to the Government...” 24
- 25. Contractual Requirements • FAR 46.105 Contractor Responsibilities “The control of quality by the contractor may relate to, but is not limited to...” “Manufacturing processes, to ensure that the product is produced to and meets the contract’s technical requirements;…” 25
- 26. Contractual Requirements • FAR 46.105 Contractor Responsibilities “…Procedures and processes for services to ensure that services meet contract performance requirements…” 26
- 27. Defense Priorities Allocation System (DPAS) Requirements 15 CFR 700.13(d)(2) states in part, “….shipment or performance will be delayed, the person must notify the customer immediately, give the reasons for the delay, and advise of a new shipment or performance date. 27
- 28. Contractual Requirements MIL-Q-9858A Quality System Requirements Para 1.3 Summary “The program shall assure adequate quality throughout all areas of contract performance…” 28
- 29. • Contractual Requirements • MIL-Q-9858A Quality System Requirements • Para 1.3 Summary “All supplies and services under contract, whether manufactured or performed within the contractors plant or at any other source shall be controlled at all points necessary to assure conformance to contractual requirements…” 29
- 30. Contractual Requirements • MIL-Q-9858A Quality System Requirements • Para 1.4 Relation to Other Contract Requirements • “The contractor is responsible for compliance with all provisions of the contract and for furnishing specified supplies and services which meet all the requirements of the contract.” 30
- 31. CRITERIA CONDITIONS AND SITUATIONAL EXAMPLES 31
- 32. Verbal or Level I - Situation A • While reviewing a random sample of purchase orders, the functional specialist notices DPAS not being flowed down to sub-vendors from prime contractor • The functional specialist discusses the requirement with the contractor’s purchasing agent, who acknowledges omission and immediately issues P.O. modification to correct the error. • Corrective action is furthered by the contractor amending his work instructions/procedures, requiring flow-down of DPAS requirements 32
- 33. Level II - Situation A • Functional Specialist notices a negative trend in Ontime delivery performance • Further analysis reveals consistent problem with (sub)vendor material having to be reworked after Gov’t rejection in receiving inspection. • Reworked material comes from same sub-vendor, and is routinely received weeks after the planned in-house receipt date. 33
- 34. Level II - Situation A (con’t) • Production functional specialist coordinates with the Quality specialist and issues a written CAR based on the negative delivery performance trend and the consistently late receipt of deficient subvendor product. • The Production functional specialist’s root cause analysis identifies concern in the area of purchase issuance i.e. are P.O.s being issued with adequate lead time…how is the prime contractor controlling his subcontractor 34
- 35. Level II - Situation A (con’t) • Intensity of functional surveillance is increased until an acceptable corrective action response is received, implemented and validated. 35
- 36. Level III - Situation A • Contractor is non-responsive to previously issued Level II CARs, as evidenced in Gov’t documentation • Continued missed internal milestones, due to late receipt of sub-vendor product 36
- 37. Level III - Situation A • Situation is coordinated with CAT members • CAR is escalated by written issuance to head of contractor organization, noting that continued inaction may lead to more severe measures 37
- 38. Verbal or Level I - Situation B • Contractor processing/working hardware not identified in daily schedule/bucket. Conflict to internal procedures. • Currently not impacting overall delivery status however trend of working around/outside daily schedule could have negative impact on contract delivery schedule. 38
- 39. Level II - Situation B • Contractor continuing to process work outside daily schedules/buckets. Still not impacting contract delivery schedule, however in violation of internal procedures and production plan. Internal tracking of hardware becoming difficult to manage, monitor and identify. 39
- 40. Level II Situation B (con’t) • Prior to issuance, coordinate action/activity with CAO team. Explain impact. • CAR issued to Production/Manufacturing Manager with copy to production line supervisor. (Good idea to copy the contractor’s Quality Assurance department) 40
- 41. Level III - Situation B • Contractor’s lack of action relative to previous activity have now caused a delinquent posture to delivery schedule. Identifying and tracking hardware most difficult. The problem extends beyond main production line to spare part activity, retrofit effort, and impacting inventory accuracy. 41
- 42. Level III Situation B (con’t) • Unsure of contractor’s ability to ship end items due to the lack of identification and tracking ability. Build up/cushion of assets no longer available. • Contractor not able to provide a valid “get well” date. 42
- 43. Level IV - Situation B • Contractor’s lack of action now impacts delivery posture (contract delinquency) • Lack of action adversely impacting associated systems (inventory management, BOM accuracy, release quality, financial inaccuracies, etc.) 43
- 44. Points to Remember • Corrective action cannot be accomplished without understanding contractual requirements • Corrective action efforts will be ineffective without ROOT CAUSE ANALYSIS Reference Root Cause Analysis Guide - Definitions - Process Focus - Methods 44
- 45. Points to Remember • CAR = request for root cause remedy of contractual noncompliance • Adequacy of stated C/A determined via follow-up verification of implementation and objective evidence of compliant condition. • Root Cause identification is Government and contractor concern. 45
- 46. Points to Remember • Root cause analysis will uncover Manufacturing process areas contributing to the nonconformance – promotes modified surveillance efforts by the Industrial Specialist – promotes increased process understanding by the Industrial Specialist – promotes evaluation of process efficiencies and effectiveness by the Industrial Specialist or Industrial Engineer 46
- 47. • • • • Examples Workshop: CAR written formats (Levels II thru IV) CAR documentation (all levels) Root cause analysis Methods PROCAS opportunities 47
- 48. “Give me a lever long enough….. And singlehandedly, I’ll move the world ” Archimedes 48
Hinweis der Redaktion
- Conceptually in the DCMC scheme of things when we speak of corrective action we are always looking for root cause remedy…since our definition references “contractual noncompliance” the inference is that the request is made to the contractor. Logically speaking no matter the specifics of the problem, if we manage to correct or remove the cause of the problem it is not likely to reoccur …unless there are process changes i.e. manpower/people, machinery/equipment, methods, material. You gain awareness of process changes during process surveillance Understanding this concept is key in understanding process management, determining effective corrective action and performing follow-up surveillance.
- In that we are requesting corrective action from the supplier, we would expect the contractor to address actions taken to eliminate the conditions that resulted in (root cause of) the non-compliant condition. The supplier’s corrective action efforts should be extensive enough to prevent the noncompliance from happening again. (In short here we are defining what constitutes EFFECTIVE CORRECTIVE ACTION…in other words this is the expected activity by the supplier in addressing our request for corrective action).
- WHY do we issue Corrective Action Requests? Per our DCMC requirements (i.e. ONE BOOK 5.1) when contractual non- compliances impact delivery performance we are to seek improvement/compliance/correction from the contractor. Our performance of (delivery) surveillance provides us with the opportunity to identify contractual non-compliances. Surveillance may uncover contractual noncompliances which should be addressed via a corrective action request (i.e. CARs can result from/be an output of surveillance activity). A corrective action request is a tool to influence the contractor towards remedying the root causes of his contractual non-compliances, so as to meet the contractual requirement of timely delivery. Trend analysis of past non-compliances serves as a gauge for subsequent surveillance effort. Additionally corrective action tracking will likely result in recurring monitoring by the Gov’t…this effort should be noted in your Risk Handling plan (reference S&DM guidebook)
- Since corrective action efforts are based on correcting contractual noncompliances including delivery performance, our efforts to achieve effective (root cause) corrective action will conceptually improve the contractors delivery performance and will be reflected in the metrics.
- Per the the Schedule & Delivery Management chapter of the One Book...Moderate & High Risk suppliers must include “requesting corrective action for a suppliers production schedule & control system”. Caution against issuing a CAR for each delinquent schedule. Recommend you first collect data then do analysis (trend). Based upon you results, take the appropriate action. REMEMBER: Multiple Level I’s, for same/similar non-compliance, may be an indicator of a larger/systemic problem. Per the One Book, Schedule & Delivery Management chapter we are to use “the PROCAS methodology to identify processes contributing to poor delivery rates, analyze those processes for root causes…eliminate/minimize the effects of the root causes” Also when a contractor has been non-responsive to previous CAR issuance we are to escalate the corrective action effort.
- (This chart is self explanatory…) Per the PROCAS chapter of the One Book…any employee can initiate a Corrective Action Request. We are to maintain a record (i.e.. A log or Database) of all CARs issued (verbal or written CARs). The record should document issuance, follow-up and closeout activity related to each CAR. RECOMMEND: use “integrated” (multi-functional) facility CAR log, which promotes opportunity for plant-wide trend analysis. The follow-up effort includes verifying the implementation of the stated C/A along with verifying the effectiveness of the contractors actions i.e. has the problem been resolved to the point of non-recurrance. There are 4 levels of C/A and are noted as follows…(next chart)
- (self explanatory)
- self explanatory
- (SELF EXPLANATORY) Gov’t contractual remedies may equate to reductions in progress payments, cost disallowances, cure notices, show cause letters or business management system disapprovals. FOOD FOR THOUGHT: When addressing contractual remedies, remember each functional discipline has their own area of responsibility i.e. when the I/S collects and analyses data identifies a series of concerns, and provides a recommendation to the ACO for the action, the ACO must be willing to take appropriate actions to convey to the contractor that business is not going to be “as usual”. CAL is currently inactive...DCMC is addressing the concern
- SELFEXPLANATORY
- SELF EXPLANATORY CAL is currently inactive...DCMC is addressing the concern. As soon as the system is up and running, direction will be provided.
- REMEMBER we are required to maintain documentation of all CARs…which includes Level 1. Trend analysis of level I’s may point to systemic problems warranting issuance of level II.
- Schedule is the primary violation in production related non-compliance…however care must be exercised in the realization that the manufacturing processes that attributed to the non-compliance must be subject to Industrial Specialist surveillance to verify prevention of recurrence, process efficiency and effectiveness.
- Recognize that “contractual Quality requirements” are the lead into manufacturing process contract requirements and may be the referenced contract violation. Manufacturing processes must function appropriately in order to produce conforming products, on time…which are (BOTH) contractual requirements. The accomplishment of on time delivery is precede by efficient and effective manufacturing process operations that adequately respond to process changes without compromising the objective of timely output (delivery).
- Ideally the pursuit of root cause corrective action needs to be a collaborative effort between Industrial Specialists and Quality Assurance Specialists and Industrial Engineers. The focus for the Industrial Specialist is on schedule impact and the efficiencies in contractor operations to respond to situations without negatively affecting timely delivery. The Quality Assurance Specialist is innately involved at process level and may identified issues that may ultimately be the cause of schedule problems. The QAS can serve as a valuable resource to assess the effectiveness of contractor C/A efforts and provide a heads of circumstances likely to affect delivery. Additionally the Industrial engineer serves as a valuable resource in understanding, evaluating process efficiency and effectiveness.
- Must stress the importance of complete contract review. we never want to embarrass ourselves by issuing a CAR for a requirement that is not a part of the contract…not to mention the potential legal ramifications that can arise from such an fraction on our parts. The following slides are provided to familiarize you with some note worthy contractual call outs, including Federal Acquisition regulation (FAR) references and many traditionally thought of as only pertaining to Quality Assurance but in actually have application to the Schedule & delivery Management world, as well. Certainly what is presented here is not all inclusive…. Remember the corrective action process requires that we “do our homework”…starting with the clear understanding of what the contractor is bound to under the contract- that he accepted.
- LEAD IN SLIDE…FOR NEXT
- Contracts are awarded on the basis of a supplier being able to comply with contract requirements I.e. delivery or performance schedule. The expectation exists for the contractor to maintain his responsible status in order to provided what is contracted for in the contract (included on time delivery)
- (lead in slide…flow to next slide)
- “tendering” equates to providing/supplying/delivering…. “Conformance to the contract” includes “tendering…by the contractually specified date”
- How does this relate to delivery? If there are quality issues that are the root cause of a schedule noncompliance the contractor has not only violated schedule but has violate other contractual requirements…
- Remember the ROOT CAUSE to many delivery problems are manufacturing processes. this reference is provided to show that the FAR mandates “…control of manufacturing processes to ensure that the product
- The contractor is responsible for maintaining procedures and processes that ensure services meet contract performance requirements…contractual performance requirements include on time delivery
- NOTE: “THE PERSON” as referenced in the DPAS reference refers to whoever accepted the order…more appropriately identified as “the Supplier”
- Although the reference pertains to “Quality System Requirements” the requirement includes “all areas of contract performance” which most certainly includes assurance of providing procurements on time...
- This reference outlines the requirements that both prime and sub-contractors are expected to control efforts, associated with the contracted supplies or services, to assure conformance to contractual requirements….ON TIME DELIVERY is a contractual requirement.
- This reference, from Mil-Q, further under scores what we already know - that the contractor is responsible for compliance to all aspects of the contract…including timely (on-time) delivery
- The following slides will provide you with two situational examples…progressing from level I thru IV CARs. Discussion is encouraged….
- Violation: DPAS and Mil I (work instructions)
- Schedule & Deliver Management chapter of the one book requires issuance of CAR to Production Schedule and Control System when On time deliver rate is less than 90%
- This is a prime example of an “integrated” corrective action effort where the areas of non-compliance affect both the QA arena and Schedule & Delivery Management concerns CAR is issued against the contractors production schedule and control system and prime control over subs (Mil-Q requirements)
- Contract noncompliance: No delivery impact at this time, however violation to supplier’s internal procedures for scheduling daily work. Also violation of FAR 46.105, Contractor Responsibilities (ref: slide 27) Contractor’ build plan provides a 30 day lead time between part manufacture and sale. There is a 30 day supply of assets (cushion) prior to contract delivery. Working outside their daily schedule creates a breakdown within the manufacturing processes because of ??????? I DON’T UNDERSTAND THIS BERT
- Situation continues, no remedy taken by the contractor. In addition to previous conditions, now the internal tracking of hardware becomes a problem. Violation to contractor’s work instructions/procedures.
- As a help to the reader, you may want to add (continued) at the bottom ot the slide. Will do The extension of this problem now goes beyond the production line, impacting many of the support processes (see slide 43)
- At this point, the supplier’s ability to identify and track the hardware is difficult. Paperwork must be annotated to document the “work arounds”. Get well dates are difficult to identify because the contractor’s records may not be accurate. Inventory/assets counts may not be accurate.
- The importance of knowing the contractual requirements cannot be over emphasized. We can not readily identify violations with first understanding/knowing what is required in the contract. We may find ourselves educating the contractor on what he signed up to. Please refer to the Root Cause Analysis Guide, which provides definitions and methods by which to conduct Root Cause Analysis. At this point review the guide …Methods will be explored during the workshop .
- This chart serves as a bulleted review of areas explored during the module…these are points to stress….
- Please refer to the Root Cause Analysis Guide, which provides definitions and methods by which to conduct Root Cause Analysis