Continuous improvement methods, supplier

The advent of ISO 9000 certification has helped bring the quality issue to a focus. While ISO 9000 emphasis is on documentation of methodology and performance to the documented methods, the discipline that results is a direct step toward improvements in reliability. Out of this seems to come a goal of continuous improvement. This is a sharp contrast to the high growth era that took place in the early 1980s when poor quality on the part of the equipment suppliers was a significant factor in the lack of reliability at the field operation level. 

PHB producers expect continued progress in fermentation processes and identification of lower cost feedstock to provide more reasonable material costs for niche markets. Longer term, crop-based production has potential to drive PHB costs to more competitive levels from improved productivity. P G for example, is investigating the manufacture of Nodax by plant-grown methods. The supplier states that this method could reduce Nodax prices to between 1.0-2.0 per kg. 

Suppliers in turn are on the hook for continuous cost reductions. In some large companies, this takes the form of an annual ritual. Each year, the buyer hands the supplier account manager a slip of paper. On the paper is a number — the percentage of reduction in price required to do business for another year. At most, these are incremental steps, amounting — if one is lucky — to a few percentage points improvement a year. This is sufficient to keep everyone happy. For supply chains to work effectively, this method of operating must change radically. 

---