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Cairo 02 Supplier Control

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Cairo 02 Supplier Control
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INTERNAL CERTIFICATION
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Page 1: Cairo 02 Supplier Control

INTERNAL CERTIFICATION

Page 2: Cairo 02 Supplier Control

EXTERNAL SUPPLIER EVALUATION & SELECTION

• Quality and Reliability• Willingness to Work Together - Responsiveness• Technical Competence• Commitment to Continuous Improvement• Geography• Price

- Total Acquisition Costs

- Processing Economics

Page 3: Cairo 02 Supplier Control

IMPORTANCE OF SUPPLIER QA

• Amount of Purchased Product Increasing

• Poor Supplier Quality Increases Cost

• Buyers and Suppliers Are More Interdependent

• Other Factors# Cost Reduction# Inventory Control# Schedule Demands

Page 4: Cairo 02 Supplier Control

SUPPLY CHAIN MANAGEMENT

• External Customers– Sales and Operations Planning– Smoothing Customer Demand– Developing JIT Customers

• External Supplier Relationships– Evaluation, Selection & Consolidation– Certification– Supplier Development– Vendor Managed Inventories

Page 5: Cairo 02 Supplier Control

SUPPLIER ACTIVITIES

Outsourcing Out-partnering

Product/Capacity Buys Process/Capability Buys

Reduced Direct CostFlexibility

Name RecognitionExcess Capacity

Access to Technical ExpertiseMarket Information

RationalizationLatest Technology and Processes

Page 6: Cairo 02 Supplier Control

EXTERNAL SUPPLIER CONSOLIDATION

• Sole Source vs.. Single Source

• Benefits– Simpler Traceability– Increased Communication– Ability to Focus on Process

• Concerns:– Traditional Focus on First-Cost

Page 7: Cairo 02 Supplier Control

TQM OBJECTIVE• Foster a long-term relationship with a small

number of suppliers

• Because suppliers are chosen for the long term it is important to have:– Supplier Policy– Supplier Evaluation and Selection Methodology– Planning– Certification– Continuous Improvement

Page 8: Cairo 02 Supplier Control

CHANGING RELATIONSHIPS

Traditional Relationship - Adversarial

New Relationship - Long Term - Mutual Benefit - Fewer Suppliers - Better Suppliers

Page 9: Cairo 02 Supplier Control

• Primary Tasks– Evaluate Solicitations – Evaluate Supplier Capability– Conduct Post Contract Award Activities– Monitor Status of Delivered Product

• Program Organization– Engineers & Quality Assurance

• Data Base Management

• Primary Tasks– Evaluate Solicitations – Evaluate Supplier Capability– Conduct Post Contract Award Activities– Monitor Status of Delivered Product

• Program Organization– Engineers & Quality Assurance

• Data Base Management

ORGANIZING A SUPPLIER PROGRAM

Page 10: Cairo 02 Supplier Control

SUPPLIER

EVALUATION

SUPPLIER CERTIFICATION

PROGRAM

SUPPLIER CONTROL

ACTIVITIESSUPPLIER

SELECTION

SUPPLIER QUALITY ASSURANCE

Page 11: Cairo 02 Supplier Control

Supplier Control PlanningSupplier Control Planning

Page 12: Cairo 02 Supplier Control

ADDRESS THE SIXMAGIC QUESTIONS

WHO?

WHAT?

WHY?

WHERE?

WHEN?

HOW?

Answer These QuestionsAnd You Will Have A Good Plan!!

The Keys to an ExcellentSupplier Control Plan

Page 13: Cairo 02 Supplier Control

WHY?

WHY DO WE NEED TO ENSURE SUPPLIERQUALITY?

WHY IS THIS IMPORTANT?

POLICY STATEMENT BY TOP MANAGEMENT WOULD BE APPROPRIATE HERE!

Page 14: Cairo 02 Supplier Control

WHO?

Who Is In Charge

Who Is Responsible For Specific Duties

How Do These Offices Interrelate

Page 15: Cairo 02 Supplier Control

WHAT ?What Is To Be Done To Ensure Effective Supplier Control?

Maintain Certification Program

Monitor Solicitations

Participation In Pre & Post Contract Award Activities

Evaluate & Approve Contract Data Requirements List items (CDRLS)

Participation In FAAT

Etc.

Page 16: Cairo 02 Supplier Control

WHAT ARE YOUR RESOURCES?

Financial Budget

Availability Of Personnel

Computer Support

Data Base Management

Page 17: Cairo 02 Supplier Control

WHERE?

Where Will The Activities Identified In This Plan Occur?

At Your Facilities?

At The Suppliers Facilities?

Page 18: Cairo 02 Supplier Control

WHEN?

WHEN SHOULD IDENTIFIED ACTIVITIES OCCUR?

SEQUENCE OF EVENTS

Page 19: Cairo 02 Supplier Control

HOW?

How Will The Identified ActivitiesBe Accomplished

Reference More Detailed Procedures

Page 20: Cairo 02 Supplier Control

ISO 9000 RequirementsISO 9000 Requirements

Page 21: Cairo 02 Supplier Control

Paragraph 7.4.1: The Purchasing Process

Paragraph 7.4.2: Purchasing Information

Paragraph 7.4.3: Verification of Purchased Product

Paragraph 8.4: Analysis ofData

ISO 9000 - 2000 REQUIREMENTS

Page 22: Cairo 02 Supplier Control

Supplier CertificationSupplier Certification

Page 23: Cairo 02 Supplier Control

Elements of a Certification Program:• Quality Management System

• New Product/Technology/Service Control

• Sub-Supplier Management

• Process Operation & Control

• Quality Data Program

• Human Resources Involvement

• Customer/Performance Assessment

SUPPLIER CERTIFICATION

Page 24: Cairo 02 Supplier Control

• Good (Pass)• Bad (Fail)

• Poor• Weak• Fair• Marginally

Qualified• Qualified• Outstanding

AttributeAssessment

VariableAssessment

ATTIBUTE OR VARIABLE ASSESSMENT

Page 25: Cairo 02 Supplier Control

SUPPLIER DEFINITIONS

Approved Supplier:Minimum QualificationApproved To Supply Required Item

Preferred Supplier: Approved, Participating In Certification ProcessQuality History Is ExcellentMay Pull Samples For Customer TestingProvides Lot-specific Certificates Of Analysis

Certified Supplier:Extensive InvestigationNot Necessary To Perform Routine Testing

Partner

Page 26: Cairo 02 Supplier Control

APPROVED

CERTIFIED

PARTNER

DIRECT MATERIAL SUPPLIERS

EXTERNAL SUPPLIER CERTIFICATION

PREFERRED

Page 27: Cairo 02 Supplier Control

Tec

hn

olo

gy

Dev

elo

pm

ent

Strategic Business Alignment

Approved

Certified

Partner

SUPPLIER MATRIX

Page 28: Cairo 02 Supplier Control

BUYER-SUPPLIER RELATIONSHIPS

Arm’s-LengthRelationships

Acceptance ofMutual Goals

Buyer-Supplier Spectrum of Relationships

ConfrontationTraditional Relationship

ConfrontationSuspicion

Outsourcing

Full PartnershipNew Relationship

CooperationTrust

Out-partnering

Page 29: Cairo 02 Supplier Control

KEY RATING CRITERIA

QUALITY

DELIVERY

TECHNICAL SUPPORT

MANAGEMENT ATTITUDE

COST

QUALITY

DELIVERY

TECHNICAL SUPPORT

MANAGEMENT ATTITUDE

COST

Page 30: Cairo 02 Supplier Control

GENERAL CERTIFICATION CRITERIA

No Product Rejections For Significant Period

No Non-Product Rejections For Stated Period Of Time

No Production- Related Negative Incidents For A Stated Period Of Time.

Passed A Recent On-site Quality System Evaluation

A Totally Agreed On Specification

Timely Copies Of Certificates Of Analysis, Inspection Data, And Test Results.

Stable and In Control Processes

Page 31: Cairo 02 Supplier Control

BULK PROCESS INDUSTRIES

Compare Supplier’s Test Results With Your Tests

Compare Results Statistically

Page 32: Cairo 02 Supplier Control

PIECE PART INDUSTRIES

Process Capability AnalysisDefects Per Million

Monitor SPC Data

Rolled Throughput Yield

Page 33: Cairo 02 Supplier Control

DATA COLLECTION FOR CERIFICATION

Process AnalysisInput SpecificationsActivity PerformedOutput Specifications

Performance DataPerformance Capability StudiesExpected Defect Level

Page 34: Cairo 02 Supplier Control

SYSTEM ADMINISTRATION

An Established Procedures

Established Quality System

Evaluation Criteria

Trained Personnel

Page 35: Cairo 02 Supplier Control

QUALITY REQUIREMENTS

ISO 9000 - 1994

ISO 9000 - 2000

SIX SIGMA

Page 36: Cairo 02 Supplier Control

QUALITY ASSESSMENT

Evaluate Entire Quality System

An Agreed Upon Criteria• ISO 9000• ISO 9000 Plus

Professional Audit• Audit Plan• Trained / Competent Assessors• Identify Deficiencies• Corrective Action Audit (If Necessary)• Audit Report

Page 37: Cairo 02 Supplier Control

Manufacturing Facilities

Quality Program

Technical Support & Human Resources

Material Control

Process Control

Communication

TYPICAL SUPPLIER EVALUATION CRITERIA

Page 38: Cairo 02 Supplier Control

QS-9000 CRITERIA

Same 20 Elements Identified By ISO 9000: 1994

Each Element Has Been Expanded

Additional ElementsProduction Part Approval ProcessContinuous ImprovementManufacturing Capabilities

Chrysler, Ford, General Motors Requirements

Page 39: Cairo 02 Supplier Control

(CP)2 CRITERIA

Same 20 Elements As ISO 9000:1994

Additional Criteria Identified For Each Element

Assessment Criteria And Metrics For Each Element

Additional Elements:

Customer SatisfactionQuality CostsWarranty PerformanceEthics

Business PlanningSafetyEnvironmentalContinuous Improvement

Page 40: Cairo 02 Supplier Control

Supplier Quality System ReviewProcess

Supplier Quality System ReviewProcess

Page 41: Cairo 02 Supplier Control

Provide Supplier Clearly WordedDocumentation & Evaluation Criteria

Supplier Conducts Self Audit

Implement Corrective Action & Improvements

Evaluation Team Conducts Audit

Audit Report

Supplier Response : Continuous Improvement Plan Soon After Receiving Audit Report

Follow-up Audit To Monitor Progress And Reevaluate

THE OVERALL PROCESS

Page 42: Cairo 02 Supplier Control

QUALIFICATIONS FOR QS AUDIT TEAM LEADER

Membership In A Quality, Supply ManagementManufacturing Or Engineering Council/team

Or Experience As A R&QA Engineer, Supplier Quality Engineer, Or Commodity Manager

Member On At Least Two Previous Supplier Qs AuditTeams

QA Training - Being A Certified Qs Lead Auditor Is A Good Idea

Page 43: Cairo 02 Supplier Control

Supplier Control Supplier Control

Page 44: Cairo 02 Supplier Control

Pre-award

Solicitation Review

Post-award

M&TE Review & Approval

Review & Approve Quality Plans(Identified In The Contract)

First Article Test (FAAT)

Production Audit(s)

Monitor Key Metrics• Rolled Throughput Yield• SPC Charts• Process Capability Studies

Monitor ECPsRFWs/RFDs

Monitor Items ReceivedDelivery Schedule

SUPPLIER RATING

SUPPLIER CONTROL AssistanceTraining SupportConsultation

Quality StandardsISO Certified/CompliantSix Sigma

Constant Feedback

Page 45: Cairo 02 Supplier Control

Solicitation ReviewSolicitation Review

Page 46: Cairo 02 Supplier Control

Identify Responsible Individual

Develop Solicitation Review Procedure

Maintain Solicitation File

Ensure Requirements Are Properly Identified

MONITOR ADEQUACY OF SOLICITATIONS

Page 47: Cairo 02 Supplier Control

IDENTIFY RESPONSIBLE INDIVIDUAL

• REVIEW THE SOLICITATIONS

• COMMUNICATE WITH SOLICITATION POC

• MAINTAINS FILES

• MONITORS AMENDMENTS

Page 48: Cairo 02 Supplier Control

DEVELOP & MAINTAIN PROCEDURE

WHY?

WHO?

WHAT? WHERE?

WHEN?

HOW?

Why Is This Important & Needed

Responsibilities

Tasks to Done

Location of Review & Files

Frequency of Review Process

Methodology for Performing the Review

Page 49: Cairo 02 Supplier Control

ENSURE REQUIREMENTS AREPROPERLY LISTED

•Quality System Requirements• SPC • Criteria For Quality Plans Clearly Stated• Quality Manual Approval• Approval of SPC General & Detailed Quality Plans• Acceptance of Inspection Equipment (AIE) Methodology • First Article Acceptance Test (FAAT) Methodology• FAAT Report Distribution• “Sample” Ammunition Data Card Distribution• Proper Warranty Clauses• Proper Rework and Repair Clauses• Proper Distribution of Lot Acceptance Test Reports

Page 50: Cairo 02 Supplier Control

COMMUNICATE WITH SOLICITATION POC

• IDENTIFY DISCREPANCIES

• MAINTAIN RECORDS

• FOLLOW-UP

Page 51: Cairo 02 Supplier Control

Pre-Award EvaluationPre-Award Evaluation

Page 52: Cairo 02 Supplier Control

Item Importance

Quality History

Total Cost

Delivery History

Facilities

Experience

EVALUATION OF SUPPLIERS

Is This a CertifiedSupplier?

Page 53: Cairo 02 Supplier Control

EVALUATING SUPPLIER CAPABILITIES

• Qualify Design

• Qualify Manufacturing Process

– Prior Performance– Process Capability– Quality Survey– Approved Supplier Lists

Page 54: Cairo 02 Supplier Control

SUPPLIER RATINGS

• Consider Quality, Price and Schedule

• Supplier Rating Plan must be– Clearly defined and communicated– Contains only necessary information– Economical to implement– Practical in coverage of materials, parts, or services– Maintainable– Auditable

Page 55: Cairo 02 Supplier Control

ITEM IMPORTANCE

Pencils & Paper Can Be Purchased From Anybody

Important Items Require More Control

Page 56: Cairo 02 Supplier Control

SUPPLIER QUALITY HISTORYISO Compliant / Certified?

Six Sigma?

Previously Supplied Product?

History Of Waivers & Deviations?

Quality Deficiency Reports (QDRs)?

Corrective Action Responsiveness?

Page 57: Cairo 02 Supplier Control

COST $$$

Always Important

Total Life Cycle Costs?

Page 58: Cairo 02 Supplier Control

DELIVERY HISTORY

Percent Of Deliveries Made On Time

Percent Of Deliveries With Correct Amount

Shipping Invoices Properly Completed

Correct Billing

Page 59: Cairo 02 Supplier Control

FACILITIES

Building Floorspace

Special Tooling Requirements

Safety Considerations

Test Facilities

Accessibility

Availability Of Personnel

Page 60: Cairo 02 Supplier Control

EXPERIENCE

Has The Supplier Built A Similar Item Before?

Management Experience

Technical Experience

Page 61: Cairo 02 Supplier Control

Post-Award AssistancePost-Award Assistance

Page 62: Cairo 02 Supplier Control

POST-AWARD ASSISTANCE

A Formal Meeting To Ensure Supplier Properly Understands:

• All Specification Requirements • All Drawing Requirements• Implementation of SPC • SPC Plan Requirements• SPC Flow-down Requirements• Special Processes• Contractual Requirements• FAAT Requirements• LAT Requirements• Production Audit

Page 63: Cairo 02 Supplier Control

Gage Review and ApprovalGage Review and Approval

Page 64: Cairo 02 Supplier Control

GAGE REVIEW AND APPROVAL

Supplier Needs to Identify All Gages Used to Inspect Major, Special and Critical Characteristics

These Gages Need to Be Evaluated & Approved

Appropriate / Capable

Approval Before FAAT

Page 65: Cairo 02 Supplier Control

SPC Plan Review and ApprovalSPC Plan Review and Approval

Page 66: Cairo 02 Supplier Control

SPC PLAN REQUIREMENTS

General And Detailed Plans

Clearly Stated In Solicitation

Page 67: Cairo 02 Supplier Control

WHAT WILL THESE PLANS DO

Each Plan Answers The Five Magic Questions

General SPC Plan Describes OverallSPC Program

The Detailed Plan Describes SPC Operations For Specific Production Line

Page 68: Cairo 02 Supplier Control

EVALUATING SPC PLANSMake Sure Plans Comply WithAll Requirements

May Set The Stage For FurtherContractual Compliance Issues

Approve General Plan Before FAAT

Approve Detailed Plan Before Production

BE TOUGH!!

Page 69: Cairo 02 Supplier Control

First Article Acceptance Test(FAAT)

First Article Acceptance Test(FAAT)

Page 70: Cairo 02 Supplier Control

FIRST ARTICLE ACCEPTANCE TEST

(FAAT)

Can the Supplier Produce the Item?

• Requirements Usually Spelled Out in the Spec• Approved Gages & Equipment• SPC Plans (General & Detailed ) Approved• Measurement & Performance Requirements• Be Tough• Now Is the Time to Cut Your Losses

Page 71: Cairo 02 Supplier Control

DIMENSIONAL REQUIREMENTS

All Dimensions Identified On DrawingsMust Be Inspected

The Number Of Samples To Be InspectedNormally Established By Specification

All Dimensions Must Be In Compliance

Gages Used Need To Be Properly ApprovedCalibrated, Capable And Appropriate

Page 72: Cairo 02 Supplier Control

BALLISTIC TESTING

Requirements Probably Established By Specification

May Require Specific Test Equipment

Environmental Conditioning

Ballistic And Dimensional Failures Are Equal

Page 73: Cairo 02 Supplier Control

Production AuditProduction Audit

Page 74: Cairo 02 Supplier Control

THE PRODUCTION AUDITNot a Surprise - Established Criteria, Detailed Audit Plan

All Specification & Drawing Requirements Accomplished?• Purchase Order Development• Incoming Inspection• Gages - Approved, Appropriate, Capable & Calibrated• In-process Inspection• SPC Operations• Process Control• Final Inspection• Check All Critical Characteristics• Check Significant Number of Major Characteristics• Destructive & Non-destructive Tests

Write a Useful Audit Report

Focus On The Product Not The Quality System!

Page 75: Cairo 02 Supplier Control

THE AUDIT PLAN

Tell The Supplier Exactly What Will Happen

Who

What

When

Where

How

No Surprises

Page 76: Cairo 02 Supplier Control

PURCHASE ORDER DEVLEOPMENT

Must Reflect All Specification And Drawing Requirements

Flow Down Of SPC Requirements

Plus All ISO 9000 Requirements

Page 77: Cairo 02 Supplier Control

INCOMING INSPECTION

Incoming Material Invoices ReviewedTo Ensure Correct Item Has Arrived

Do The Invoices Match The Purchase Orders?

Is Incoming Material Handled & Stored Properly

Receiving InspectionAre Proper Characteristics InspectedAre The Right Gages Being UsedAre Gages Calibrated

Page 78: Cairo 02 Supplier Control

GAGESHave They Been Properly Approved

Calibrated

Capable

Appropriate

Check Calibration LabReview Gage Linearity DataTraining RecordsCompliance With StandardsReview Procedures

Page 79: Cairo 02 Supplier Control

INPROCESS INSPECTION

In Accordance With Spec. & Drawing Requirements

Documentation & Product Identification

In Accordance With IS0 Requirements

Inspection Data Sheets Done Correctly

Sampling Done Correctly

Page 80: Cairo 02 Supplier Control

SPC OPERATIONS

Compliance With General And Detailed Plan Requirements

Charts Being Done Correctly

Out-of-control Situations Properly Identified

Control & Centerlines Being Evaluated On Regular Basis

Process Capability Studies Being Done & Reviewed

Vendor SPC Data Evaluated Properly

Page 81: Cairo 02 Supplier Control

PROCESS CONTROL

Procedures

Suitable Work Environment

Effective Training

Preventive Maintenance

Non-conforming Material

Necessary Items Not Beyond Shelf Life

Page 82: Cairo 02 Supplier Control

NON-DESTRUCTIVE TESTS

Training Records

Compliance With Standards

Procedures

Proper Equipment

Page 83: Cairo 02 Supplier Control

FINAL INSPECTION

Compliance With Specification & Drawing Requirements

Appropriate Equipment Being Used

Data Sheets Are Properly Completed

Page 84: Cairo 02 Supplier Control

CHECKING CHARACTERISTICS

All Criticals

Most Majors

Ensure Compliance With All Specification And Drawing Requirements

Watch Operations During Several Cycles If Possible

Page 85: Cairo 02 Supplier Control

Changes, Waivers, and DeviationsChanges, Waivers, and Deviations

Page 86: Cairo 02 Supplier Control

• Configuration Control Board

• Established Procedure

• Input From Customers

• Review Based on Engineering & Quality Assessment

• Arguments Must Have Proper Statistical Support

• Data Base Management

CHANGES, WAIVERS,& DEVIATIONS

Page 87: Cairo 02 Supplier Control

REQUIRE PROPER STATISTICAL JUSTIFICATIONS

Paired Comparisons

Confidence Intervals

Null Hypothesis

Required Sample Sizes

Paired Comparisons

Confidence Intervals

Null Hypothesis

Required Sample Sizes

FACT BASED DECISIONS!!

Page 88: Cairo 02 Supplier Control

Monitor Key MetricsMonitor Key Metrics

Page 89: Cairo 02 Supplier Control

• Rolled Throughput Yield

• SPC Data

• Other Metrics

KEY METRICS

Page 90: Cairo 02 Supplier Control

Throughput YieldThroughput Yield

Page 91: Cairo 02 Supplier Control

NOMENCLATURE

Number Of Operation Steps = m Defects = DUnit = UOpportunities For A Defect = OYield = Y

Page 92: Cairo 02 Supplier Control

BASIC RELATIONSHIPS

Total Opportunities (TOP) = U X O

Defects Per Unit (DPU) = D/U

Defects Per Unit Opportunity (DPO) = DPU/O = D/(U X O)

Defects Per Million Opportunities (DPMO) = DPO X 106

Page 93: Cairo 02 Supplier Control

DISTRIBUTION OF DEFECTS IN MANUFACTURED PRODUCT

Non-Randomly Occurring Defect

Randomly Occurring Defect

Example

Result

Conclusion

Wrong part in manualinsertion parts bin

Every board contains same wrong part insame location.

Defects are easier todetect/diagnose & are less likely to be sent tonext operation

Mixed parts in manualinsertion parts bin.

Probability of a boardcontaining wrong part isequal to proportion of wrong parts in bin

Defects are harder todetect/diagnose and are more likely to be sent to next operation

Page 94: Cairo 02 Supplier Control

GENERAL CHARACTERISTICS OF DPU

Directly Proportional To:• Parts Count • Lines of code• Die Area

Product Built In Plant Having Best Process Controls Will Have The Lowest Defects Per Unit Level

Page 95: Cairo 02 Supplier Control

DEFECTS PER UNIT

Defect Prevents Product From Fulfilling Physical And Functional Requirements Of The Customer

A Unit• A Measure Of Volume Of Output• Observable & Countable• Is An Individual Measurement - Not An Average

Number of Defects Found at Any Review Point

Number of Units Processed Through That Review PointDefects Per Unit =

A Count of All Defects - Not a Measure of the Consequences of The Defect

Page 96: Cairo 02 Supplier Control

PREDICTING THE QUALITY OF PRODUCTS

FTY = e-DPU DPU = -ln FTY

Estimation of units containing “q’ defects (where “q” is not limited to zero)

If we use the Poisson distribution

Becomes

(DPU)q e -DPU

q!

x e-

x!P{x} =

Page 97: Cairo 02 Supplier Control

YIELD RELATIONSHIPS

Throughput Yield : YTP = e-DPU

Defects Per Unit: DPU = -ln(Y)

Rolled Throughput Yield: YRT = m YTPi

Total Defects Per Unit: TDPU = -ln(YRT)

Normalized Yield: Ynorm =

Defects per Normalized Unit: DPUnorm = -ln(Ynorm)

i=1

mYRT

Page 98: Cairo 02 Supplier Control

PROBABILITY OF DEFECTS IN MANUFACTURED PRODUCT

GIVEN: (1) Average DPU For This Product Is One (DPU=1)(2) Defects are randomly distributed

What Is The Probability of Zero Defects In This Unit?

Page 99: Cairo 02 Supplier Control

YIELDProbability with zero defects

Y = P(x = 0) =e-x

x! e-= = e-D/U = e-DPU

Specification Limit

Probability of Defect= 1 - e-DPU

Yield = e-DPU

Page 100: Cairo 02 Supplier Control

THE HIDDEN FACTORY

Customer Quality

Operation

NotOK

Scrap

Verify

Rework

Operation

NotOK

Scrap

Verify

Rework

Ytp

Throughput Yield

Ytp

Throughput Yield

Non-Value Added(The Hidden Factory)

Value Added(The Visible Factory)

ProducersQuality

Supplier Quality

Yrt = Ytpi

m

i=10

Page 101: Cairo 02 Supplier Control

IMPLICATIONS OF THE HIDDEN FACTORY

Y e eTP

DPU

3679

1 0 . = 1.6321

.

1.63 Equivalent Units Must Be Produced To Get Out 1 Good Unit

Every Occurrence Of A Defect Within The Manufacturing Process Requires Time To Verify, Analyze, Repair And Re-verify

Average Cycle Time Per Unit Is Directly Proportional To The Total Number Of Defects Per Unit

Cycle Time = Work In ProcessThroughput

Page 102: Cairo 02 Supplier Control

#1

#6

#2

#7

#5

#9

#4

#8

#3

#10Final Insp..

Process Yield is 93.17% - Right??????

A FACTORY WITH 10 PROCESSES

NOT QUITE!!!

1200 Good & 88 BadItems [93.2%Found OK]

Page 103: Cairo 02 Supplier Control

COMPARISON OF YIELDS

Y = SU

= 12001288

= .931677

S = Number of Units That PassU = Number of Units Tested

Throughput Yield Analysis Tells UsYTPI = .47774

.4774 .932Why Not???

Page 104: Cairo 02 Supplier Control

ROLLED THROUGHPUT YIELD

Operation Defects UnitsDPU(D/U)

Throughput Yield(YTPI = e-D/U = e-DPU)

12345678910

57518726

2882703588

523851334

1202252243943894234

1200

0.009560.088130.053890.059900.023810.115230.086960.078300.149570.07333

0.990490.915640.947530.941860.976470.891160.916720.924690.861080.92929

Sum of

Operation Steps = 479 6676 0.73868 0.47774 (YRT)

47.9 667.6 0.07387 0.73868 =TDPU TDPU = -ln(YRT)

Avg.. ofOperation Steps

=

Page 105: Cairo 02 Supplier Control

HOW MANY UNITS PRODUCED?

UNITS PRODUCED = 1 + (1 - e-DPU)

= 1 + (1 - e-73868)= 1 + (1 - .477744)= 1 + .5222558= 1.52

To Achieve 100 Conforming Units, 152 ( 1.52 X 100) Would Need To Be Produced

Page 106: Cairo 02 Supplier Control

SPC DataSPC Data

Page 107: Cairo 02 Supplier Control

SUMMARY OF PROCESS CAPABILITY STUDIES

Primary SPC Metric

Maintain Data Base

Insure Supplier Is Taking Action• Unacceptable Cpks• Marginal Cpks• Too Long As Unacceptable Or Marginal• Disturbing Trends

Clearly Established Triggers - Can Effect Certification

Page 108: Cairo 02 Supplier Control

OTHER SPC DATA

Maintain Current Copies Of SPC Plans

Not Necessary To Have Copies Of All SPC Charts

Have Representative Sample• Audits• Corrective Action Situations• Special Requests

Page 109: Cairo 02 Supplier Control

COMPARE SPC DATA

Receiving Inspections, Field Reports, Etc.Should Compare With CPK Data

If Not, Why Not?

Page 110: Cairo 02 Supplier Control

Other MetricsOther Metrics

Page 111: Cairo 02 Supplier Control

Provide AssistanceProvide Assistance

Page 112: Cairo 02 Supplier Control

JOINT PLANNING

• Economic Planning

# Value Not Conformance

# Optimize Quality Cost• Technological Planning• Managerial Planning

• Economic Planning

# Value Not Conformance

# Optimize Quality Cost• Technological Planning• Managerial Planning

Page 113: Cairo 02 Supplier Control

Statistical InferenceSPCDesign of Experiments (DOE)SamplingAll Quality Management ConceptsSix Sigma Black Belt Other Certifications • X-Ray• Soldering• Etc.

TRAINING

Page 114: Cairo 02 Supplier Control

PROBLEM SOLVING

Technical Expertise

Operations Research

Master Black Belt Assistance

Page 115: Cairo 02 Supplier Control

KEEP THE SUPPLIER INFORMED

Changes From Your Customer

Changes in Operations

Changes in Production Requirements

Remember This Is a Partnership - If Your SupplierDoes a Good Job, Then You Look Good!!

Page 116: Cairo 02 Supplier Control

ASSIST WITH SIX SIGMA PLAYER CERTIFICATIONS

Champions

Master Black Belts

Black Belts

Green Belts

Page 117: Cairo 02 Supplier Control

CHAMPIONS

Senior Managers Who Define The Projects

Do Whatever Troubleshooting Is Required

At Start Of GE Program Some Business Leaders Were Champions

Now A GE Business Has 7 - 10 Champions

Not Required To Work Full Time In The Quality Program

Suppose To Devote As Much Time As Necessary To Make Sure Program Succeeds

Training Length: 1 Week

By Spring 1999 Every Officer And Every Senior Executive Was A Champion

Page 118: Cairo 02 Supplier Control

MASTER BLACK BELTSFull-time Teachers With A Good Deal Of Quantitative Skills

Teaching And Leadership Ability

Review And Mentor Black Belts

Length Of Training: At Least 2 Weeks

In Spring Of 1999 GE Had 700 Master Black Belts

Certification After Overseeing At Least 10 Black Belts Who Get Certified &

Approved By The Business Champion Team

Page 119: Cairo 02 Supplier Control

BLACK BELTSFull Time Quality Executives

Lead Teams That Focus On Key Processes

Report Results Back To The Champion

Responsible For Measuring, Analyzing, Improving, And Controlling Key Processes

By Spring 1999 There Were 4,500 Black Belts At GE

To Be Certified Must Be Approved By Business Champion Team

Page 120: Cairo 02 Supplier Control

SIX SIGMA BLACK BELTS

Mentor

Teach

Coach

Transfer

Identify

Influence

Page 121: Cairo 02 Supplier Control

GREEN BELTS

Personnel Who Take Part In Black Belt Projects On Part-time Basis

Must Continue To Use Six Sigma Tools In Regular Jobs

Page 122: Cairo 02 Supplier Control

TYPICAL SIX SIGMA TRAINING CURRICULUM

Week 1Six Sigma Overview & Process ImprovementProcess MappingQuality Function Deployment (QFD)Failure Mode and Effects Analysis (FMEA)Organizational Effectiveness ConceptsBasic Statistics Using MinitabProcess CapabilityMeasurement System Analysis

Week 2Review of Key Week 1 TopicsStatistical ThinkingHypothesis Testing (F, t, etc.)CorrelationPassive Multi-Vari Analysis & Regression (simple)Team assessment

Week 3Design of ExperimentsRegression AnalysisFacilitation Tools

Week 4Control PlansStatistical Process Control (SPC)Advanced Process ControlMistake-ProofingTeam DevelopmentWrap-Up of Tools

Page 123: Cairo 02 Supplier Control

Evaluating Delivered ProductEvaluating Delivered Product

Page 124: Cairo 02 Supplier Control

• Supplier History• Criticality of Part• Warranty History• Supplier Process Capability• Manufacturing Process• Availability of Skills/Equipment

• Supplier History• Criticality of Part• Warranty History• Supplier Process Capability• Manufacturing Process• Availability of Skills/Equipment

EVALUATING DELIVERED PRODUCT

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LOGISTICS MANAGEMENT SYSTEM

InternalLogistics

InboundLogistics

OutboundLogistics

(Physicaldistribution)

Plants

OrganizationSupplier Customer

The span of the logistics management system

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CONTINUOUS IMPROVEMENT

• Motivation

• Analyze Losses

• Provide Technical Assistance

• Training

• Long-Term

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SUMMARYBe Involved At The Start Participate in Selection of SuppliersParticipate in Post Contract Award Activities

Post Award MeetingsM&TE ApprovalQuality Plan Review & ApprovalFAATProduction AuditsReview & Approval of ECPs, RFDs, & RFWsMonitor Key MetricsProvide Assistance

Ensure Expertise Through Product TeamsMaintain Data Base

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SUPPLIER CERTIFICATION

Consider levels of supplier capability:

•Probationary

•Approved

•Certified

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THE AUDIT PROGRAM

DEFINED

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“Do Unto Yourself What Others Will Do Unto You”

Find Your Problems Before The Customer Does

IMPORTANT INTERNAL AUDIT CONCEPTS

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AUDITOR’S MISSION STATEMENT:

To Provide Evaluations That Are:

• Independent

• Uniform

• Consistent

To an Agreed Upon Standard

&

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CLEARLY ESTABLISHED CRITERIA

Everyone Should Know The Standard Against Which The Audit Will Be Conducted• ISO 9000 - 1994• ISO 9000 - 2000• QS 9000• ISO 9000 Plus• Product Specification• Product Drawings• Military Standards, Handbooks, Publications, etc.

NO SURPRISES!!

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A PUBLISHED SCHEDULE

Quality System Requirements - Annual Schedule Will Work

Production Audit - 1st Week Of Production (Before Customer Arrives)

Follow-Up Audits - An established time period plus notification well prior to audit.

NO SURPRISES !!!

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THE AUDITING GROUP

Independent Of Groups Being Audited - If Possible

Well Trained And Knowledgeable

Can Be A Full Time Job

Must Have Full Support Of Management

Somebody Must Audit The Audit Group

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PROGRAM OBJECTIVE

To Obtain Sufficient Evidence

To Evaluate Compliance

With a Standard

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PURPOSE OF AN AUDIT

A Management Tool

To Make Improvements

An Audit Can Determine:

• Future Purchases

• Certify the Organization

• Register the Organization

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DEFINITIONAn Audit Is:• A Planned Systemic Process Performed

by Independent, Trained Personnel In Accordance With Previously Prepared “Game Plan”

• Results Are Documented

• Corrective Actions Are Taken

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• Top Management

• Auditor

• Auditee

ELEMENTS OF AN AUDIT

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• PROCESS

• PRODUCT

• QUALITY SYSTEMS

CLASSES OF AUDITS

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CLASSES OF AUDITS(CONTINUED)

• PROCESS

• PRODUCT

• QUALITY SYSTEMS

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CLASSES OF AUDITS(CONTINUED)

• Process

• Product

• QUALITY SYSTEMS

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• ORGANIZATION

• LEAD AUDITOR

• SUBJECT MATTER EXPERTS

• Team Members

ORGANIZATION OF AN AUDIT TEAM

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ORGANIZATION OF AN AUDIT TEAM

(continued)

• Organization

• Lead Auditor

• Subject Matter Experts

• TEAM MEMBERS

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DUTIES

• Team Members* Objectivity

* Analysis

* Alertness

* Ethics

• Lead Auditor* Responsibility

* Management

* Decision Making

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AUDITOR CONDUCT AND SKILLS

• Technical Knowledge

• Audit Training

• Good Communication Skills

• Attitude of Helpfulness

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AUDITOR CONDUCT AND SKILLS

• Technical Knowledge

• Audit Training

•Good Communication Skills

•Attitude of Helpfulness

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AUDIT IMPLEMENTATION

• Audit Initiation• Preliminary Meeting• Audit Planning• Pre-Audit Review• Performing the Audit• Reporting Results• Audit Conclusion, Including

* Follow-Up* Corrective Action

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AUDIT INITIATION

• Purpose & Location

• Reference Standards

• Schedule

• Guidelines

• Report Distribution

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• REGULATORY

• STANDARDS

• Internal Documents

REFERENCE STANDARDS

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REFERENCE STANDARDS(CONTINUED)

•Regulatory

•Standards

• INTERNAL DOCUMENTS

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• IDENTIFICATION OF TEAM MEMBERS

• DATES AND LOCATIONS OF THE AUDIT

• Schedule and Assignments

• Meetings

• Report Distribution

• Escorts

• Necessary Documents

SPECIFIC AREAS TO ADDRESS

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SPECIFIC AREAS TO ADDRESS(CONTINUED)

• Identification of Team Members

• Dates and Locations of the Audit

• SCHEDULE AND ASSIGNMENTS

• MEETINGS

• Report Distribution

• Escorts

• Necessary Documents

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SPECIFIC AREAS TO ADDRESS(CONTINUED)

• Identification of Team Members

• Dates and Locations of the Audit

• Schedule and Assignments

• Meetings

• REPORT DISTRIBUTION

• Escorts

• Necessary Documents

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SPECIFIC AREAS TO ADDRESS(CONTINUED)

• Identification of Team Members

• Dates and Locations of the Audit

• Schedule and Assignments

• Meetings

• Report Distribution

• ESCORTS

• NECESSARY DOCUMENTS

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COMMITMENT TO:

• Facilities

• Documents

• Personnel

• Top Management

• Corrective Actions Taken

• Preventive Actions Taken

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AUDIT PLANNING

• Brief the Audit Team

* Audit Scope

* Identification of Auditors and Auditee

* Schedule

* Standards and Procedures

• Initiate Working Papers

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• Brief the Audit Team

• Initiate Working Papers

AUDIT PLANNING(CONTINUED)

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PRE-AUDIT REVIEW

• Review Documents

• Continue Preparation of Working Papers

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• Management in-Brief

• Plant Tour

• Operational Meeting

• Audit Operations

• Daily Written Records

PERFORMING THE AUDIT

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PERFORMING THE AUDIT(CONTINUED)

• Management in-Brief

• Plant Tour

• Operational Meeting

• Audit Operations

• Daily Written Records

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PERFORMING THE AUDIT

• Management in-Brief

• Plant Tour

• Operational Meeting

• Audit Operations

• Daily Written Records

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• PUT PERSON AT EASE

• EXPLAIN WHY HE IS BEING QUESTIONED

• Learn What He Does

• Analyze What He Does

• Determine a Tentative Conclusion

• Explain the Next Step

INTERVIEWS

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INTERVIEWS (CONTINUED)

• Put Person at Ease

• Explain Why He Is Being Questioned

• LEARN WHAT HE DOES

• ANALYZE WHAT HE DOES

• Determine a Tentative Conclusion

• Explain the Next Step

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• Put Person at Ease

• Explain Why He Is Being Questioned

• Learn What He Does

• Analyze What He Does

• DETERMINE A TENTATIVE CONCLUSION

• EXPLAIN THE NEXT STEP

INTERVIEWS (CONTINUED)

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TYPES OF FINDINGS

• Findings or Observations

• Systemic or Isolated Problems

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DETERMINING ACCEPTABILITY

• Unconditional Approval

• Conditional Approval

• Conditional Nonapproval

• Unconditional Nonapproval

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FINAL OUTBRIEF

• Last Opportunity to Dispute Findings

• Senior Management Present

• No Surprises

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• Purpose and Scope

• Applicable Game Plan Details

• Referenced Documents

• Audit Findings and Observations

• Recommendations (Internal Audit Only)

• Corrective Actions

FINAL WRITTEN REPORT

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• CORRECTIVE ACTION REQUESTS

• Follow-up (Corrective Action) Audits

• Close-Out

• Records

FOLLOW-UP ACTIONS

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• Corrective Action Requests

• FOLLOW-UP (CORRECTIVE ACTION) AUDITS

• CLOSE-OUT

• RECORDS

FOLLOW-UP ACTIONS

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CORRECTIVE ACTION EVALUATION

• Correct the Problem

• Determine Its Affect on Past Performance

• Take Immediate Temporary Corrective Actions

• Take Permanent Action to Prevent Recurrence

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AUDITOR REQUIREMENTS AND QUALIFICATIONS

* Communicate * Plan * Control * Gain Cooperation * Lead

*Administer * Work Independently * Good Attitude * Reach Decisions * Adaptable * Good Impression* Intelligent * Emotionally Stable* Good Character * Technical Training in Area of Expertise

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AUDITOR TECHNICAL TRAINING

• Nondestructive Inspection & Test Training

* Eddy Current Testing * Heat Treatment Processes * Liquid Penetrant Testing * Welding Inspection

* Magnetic Particle Test Methods * Soldering Inspection * Radiographic Test Methods * Ultrasonic Test Methods * Drawing & Blueprint Reading

• Quality Assurance* Software Quality Assurance (32 hours)* Geometric Dimensioning and Tolerancing (40 hr.)* Weibull Risk and Uncertainty Analysis (24 hrs)* Principles of Metrology (40 hrs)* Statistical Process Control, (24 hrs)

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AUDITOR TECHNICAL TRAINING (Continuing)

• Configuration Management* Configuration Management (40 hrs)* Material Review Board Procedures (4 hrs)

• Procurement* Defense Contracting for Technical Personnel (40 hrs)* Procurement Integrity (8 hrs)* Government Contract Law (24 hrs)

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AUDITOR TECHNICAL TRAINING (Continuing)

• Design Control* Design Review (24 hrs)* Reliability by Design (40 hrs)

• General* Report Writing (24 hrs)* Basics of Explosive Safety (24 hrs)* Effective Written Communication (15 hrs)* Safe Assembly of Component Explosives (32 hrs)* Hazardous Waste Training (8 hrs)

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MEETINGS

• Nightly Team Meetings

• Inform Auditors

• Share Information and Findings

• Change Audit Schedule

• Morning Reviews With Auditee

• Keep the Auditee Informed

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PRELIMINARY MEETING

• Initiated by Correspondence

• Between Lead Auditor and Auditee

• Define Responsibilities

• Identify Requirements

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PRELIMINARY MEETING(CONTINUED)

• Initiated by Correspondence

• Between Lead Auditor and Auditee • Define Responsibilities

• Identify Requirements

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AUDIT TYPES

•Internal - First Party

• External - Second Party

- Third Party


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