NPI Sourcing is key activity of the New Product Introduction (NPI) process. Depending upon the criticality of the sub-system/component/service to the product NPI Sourcing can involve a number of steps and phases. For organizations that rely on suppliers for a large number of sub-systems, components and manufacturing/assembly, NPI sourcing and related Supplier Development can be the most important aspect of the NPI process.
NPI Sourcing comes into picture when organizations tend to use existing or new suppliers for the following when designing, building and introducing new products
- Contract Manufacturing/Assembly
- Production Equipment
- Production Services
- Logistics Services
NPI Sourcing Need
New Product Introduction (NPI) is one the most common phases during which organizations find the need for qualifying new components/subsystems/services from existing and new suppliers.
The need for new component/capital equipment/services suppliers can originate from engineering/manufacturing teams with workflows as shown below.
Supplier selection for new components/capital equipment/services follows identifying and qualifying new and existing suppliers for specific NPI Sourcing need. Sourcing evaluation can be conducted by using traditional RFP/RFQ processes as well as detailed quantitative and qualitative assessments. One such assessment is shown below.
In most cases new suppliers as well as existing suppliers require a helping hand to come up to speed and be ready to perform at the level needed. This support can be structured as “Supplier Development” activities and can be in the form of training, investments, and supplier quality engineering. Supplier development activities can based on audits and assessment of supplier capabilities.
Supplier Development needs based on Supplier Audit
Supplier Development needs based on Supplier Capability Assessment
It is important that suppliers achieve the level of required readiness before volume production begins. One of our favorite readiness tools is Production Part Approval Process (PPAP).
Once the supplier in full engaged in a production setting continuous feedback in the form of periodic performance reports should be shared with suppliers.
A more qualitative performance assessment based internal feedback also provides an opportunity for suppliers to understand where improvement opportunities as an active supplier.
These improvement programs can be structured as A3 Report or 8D process as shown below