On Target Supplier (OTS)
What is an On Target Supplier?
An On Target Supplier (OTS) is an inventory supplier that is selected on the technical
and business needs of SPX and have been deemed critical to SPX’s success.
On Target Suppliers may be selected based upon the following:
- Supplier provides custom good or services
- Supplier provides large dollar amounts of product or services, generally $2,000,000 or greater
- Supplier performance poses a large risk in meeting SPX objectives
- Supplier poor performance history (cost, quality and/or delivery) but are still critical to SPX’s success
- SPX Business Units/Facilities and customer-directed suppliers are ineligible to be On Target Suppliers
How are SPX Suppliers evaluated?
Currently SPX evaluates suppliers in the following manner.
| Score Calculation: | Weight | Range/Deduction Value |
| Part Acceptance |
50.0% |
|
| plus On Time Delivery |
20.0% |
|
| minus Waivers/RPO/WRPO | deduct 1 for 1 | |
| minus Total SCARs | deduct 1 for 1 | |
| minus Delinquent SCARs | deduct 1 for 1 | |
| minus Rejected SCARs | deduct 1 for 1 | |
| Cost |
25% |
0—>5 |
| Supplier Relations (Trust, Management, Responsiveness) |
5.0% |
0—>5 |
|
100.0% |
In 2010, SPX will be launching a new supplier evaluation, focusing on inbound shipment compliance. Watch for this addition to the Supplier Report Card.
What does each of the evaluation categories mean?
Part Acceptance = Total number of parts received during calculation period – total number of parts rejected during calculation period.
On Time Delivery = Individual Purchase Order (P.O.) line date, plus part lead time on file at SPX which creates a Targeted Delivery Date (in working days). Upon receipt of P.O. line, that receipt is compared against the Targeted Delivery Date, within a window of 5 days early and 0 days late. If a P.O. line is not shipped complete, subsequent receipts will reduce the On Time Delivery percentage accordingly.
Waivers, Re-planned Orders and Waiver Re-planned Orders, that are supplier caused, will impact the supplier’s score. One point will be deducted from the supplier’s score for each instance.
Suppliers may be issued Supplier Corrective Action Reports for part specific non-conformances, system failures or other supplier performance gaps as identified by SPX. The supplier’s score will be impacted by one point for each SCAR issued, one point for each delinquent SCAR, and one point for each rejected SCAR.
Suppliers are rated subjectively from 0 to 5, 5 being the highest rating, by Commodity Managers regarding cost. Factors considered are overall pricing, rebates, year-over-year price reductions, etc.
Supplier Relations (Trust, Management, Responsiveness) are rated subjectively from 0 to 5, 5 being the highest rating, by Commodity Managers, Buyers, and Quality Assurance.
What are the different levels of supplier ratings?
The following levels and scores are utilized in supplier evaluation by SPX (highest to lowest):
- A supplier rating of Certified is given to all On Target suppliers that have achieved an On Target score greater than 90 for six consecutive months with receipt history.
A supplier rating of Preferred is given to all On Target suppliers that have achieved an On Target score between 80 and 89.99, for six consecutive months (discounting any months without receipt history). - A supplier rating of Approved is given to On Target suppliers that have achieved an On Target score between 70 and 79.99 for six consecutive months discounting any months without receipt history) and/or consideration factors.
- A supplier rating of Restricted is given to suppliers that have achieved an On Target score below 70 for six consecutive months (discounting any months without receipt history) or have proven to be incapable of meeting SPX requirements. Suppliers with this rating may also be dropped from the On Target Supplier Management program.
- Restricted suppliers are not to receive inquiries for new product unless the customer specifically instructs SPX to use the supplier and/or the supplier is the sole source for a product.
If necessary, a supplier may be manually placed on Probation. The Commodity Manager provides specific information to the supplier for the change in status, and will develop and document a performance plan, with timeline, to provide an opportunity for the supplier to improve.
SPX is pleased to announce the addition of the Supplier Report Card module on this site. Please visit the new section to view your individual SPX Supplier Report Card.
