SUPPLIER QUALITY ENGINEERINGAsia Pacific Supply Chain Management OfficeDell Computer Corporation IPO On Board TrainingSupplier Management ProcessPrepared by: Eric HohSUPPLIER QUALITY ENGINEERINGDell Confidential2Asia Pacific Supply Chain Management OfficeContentQuality Management PlanningDesign ReviewSurveillance and Follow-up AuditingNew Product Readinesss ReviewSupplier Quality PerformanceClosed Loop Corrective ActionsMaterial PurgesSupplier Engineering Change NotificationsQuarterly Business ReviewsContinuous Improvement ProcessProcess/Tools LocationsSUPPLIER QUALITY ENGINEERINGDell Confidential3Asia Pacific Supply Chain Management OfficeSUPPLIER MANAGEMENT PROCESSSUPPLIER QUALITY ENGINEERINGDell Confidential4Asia Pacific Supply Chain Management OfficeRolesStrategic Commodity TeamMonitor Suppliers lead-time, delivery, price, service, quality, and inventory velocity.GSQEStrategic development and management of global Suppliers quality capabilities. Develop and manage commodity specific process/tools.Keep RSQE team abreast of corporate quality management strategies and practices.Regional SQEManage the regional facilities of global Suppliers on a sustaining basis.Provide regular feedback to GSQE team on Supplier status/progress.SUPPLIER QUALITY ENGINEERINGDell Confidential5Asia Pacific Supply Chain Management OfficeSupplier Management PlanningOverviewThese are unique by commodity - particularly on Dell-designed vs. Supplier-designed productsInclude specific policies, plans on:Quality goalsEngineering change notificationsCLCA expectationsFailure analysisTestingOut of box auditsProcess flow chartsetcSQE works with JQE to jointly input and manage this planGQAM ensures the plan is being utilized at all supplier sitesSUPPLIER QUALITY ENGINEERINGDell Confidential6Asia Pacific Supply Chain Management OfficeSupplier Management PlanningOverall ObjectivesOutline product-specific differences between new and old models.Emphasize key areas in the SQS and the Quality Agreement.Create management escalation path for risky Supplier products.Describe component operation.Review the audit results.Efforts toward meeting Dell quality expectations and requirements.Planned end of life by Supplier.Component release risk assessment.Component application by regions/LOB/platform.Potential impact to IFIR or LRR.RTS assessment and recommendation.Suppliers plan to support Dell line and field goals.Supplier manages the overall plan and provides timely updates.SUPPLIER QUALITY ENGINEERINGDell Confidential7Asia Pacific Supply Chain Management OfficeSupplier Management PlanningQuality Management Plan (Tool G)GeneralProduct differences from previous models/partsCritical contactsOrganizationQualified personnelTraining programProcess documentationProduct/process flow chartsProcess detailsSUPPLIER QUALITY ENGINEERINGDell Confidential8Asia Pacific Supply Chain Management OfficeSupplier Management PlanningQuality Management Plan - continuedProcess development/qualification/validationProcess capabilityGage R&RCompatibility testing (cooperative development)Process optimizationDocument change control Engineering drawings, ECN policyQuality inspection documentsProcess detail documentation SUPPLIER QUALITY ENGINEERINGDell Confidential9Asia Pacific Supply Chain Management OfficeSupplier Management PlanningQuality Management Plan - continuedQuality ControlFirst article inspectionKey control characteristics monitoringKey operating parameters monitoringReliability testing (may be extended)Mean time between failures (MTBF)Dell acceptance reliability test (DART)Out of box audit (OBA)Approved sub-Supplier list (approved vendor list)Source inspectionSub-Supplier managementMaterial purgingCritical component list with sub-Supplier informationSUPPLIER QUALITY ENGINEERINGDell Confidential10Asia Pacific Supply Chain Management OfficeSupplier Management PlanningQuality Management Plan - continuedProblem SolvingFailure analysis methodsTechniques usedQuality Performance MetricsProduction line performanceAnnual field failure ratesFactory audit resultsContinuous ImprovementCIP programClosed loop corrective action systemSUPPLIER QUALITY ENGINEERINGDell Confidential11Asia Pacific Supply Chain Management OfficeDesign ReviewDone prior to RTS and/or mass productionA checklist containing:Review audit results and corrective actionsReview First Article Inspection resultsReview reliability test resultsEnsure critical components are approvedReview training recordsReview pilot build dataetcSQE works with JQE to ensure supplier is ready for mass productionGQAM ensures each supplier site has met Dell requirements prior to RTSSUPPLIER QUALITY ENGINEERINGDell Confidential12Asia Pacific Supply Chain Management OfficeDesign ReviewTo prevent Supplier quality issues.Dell-designed products - SQEs attend and participate in the design review meeting with Dell component engineering teams.For Supplier-designed products - SQEs attend Supplier product design reviews with STR, and determine if the product meets Dell specs/requirements.SUPPLIER QUALITY ENGINEERINGDell Confidential13Asia Pacific Supply Chain Management OfficeSurveillance and Follow-up AuditingSurveillance AuditsRoutine audit to ensure ongoing suitability and effectiveness of the system, product and processes.Usually conducted on a pre-scheduled basisAudit Score of 90% - Once per year (Class A Supplier)Audit Score of 90% - Based upon the severity of the audit findingsFollow-up AuditsNew or changed processes, corrective or preventive actions been implemented, or other significant changes that occur with the system, product, or processes.May be scheduled at any time based on the need SUPPLIER QUALITY ENGINEERINGDell Confidential14Asia Pacific Supply Chain Management OfficeNew Product Readiness ReviewOverviewA commodity-specific checklistDone prior to RTS and/or mass productionSQE works with JQE to ensure supplier is ready for mass productionGQAM ensures each supplier site has met Dell requirements prior to RTSSUPPLIER QUALITY ENGINEERINGDell Confidential15Asia Pacific Supply Chain Management OfficeNew Product Readiness ReviewContent (Tool H)Quality Agreement approved/signedQuality Management Plan fully utilizedQuality metrics set upGeneral data collectionOpen corrective actions resolved or put on closure planDesign issues resolvedSUPPLIER QUALITY ENGINEERINGDell Confidential16Asia Pacific Supply Chain Management OfficeNew Product Readiness ReviewContent (Tool H) - continuedProcesses/productValidated and qualifiedDocumentedDocuments for manufacturing are approved and deployed to usersQuality controlTest methods and tools validated/controlledProduct performance/reliability testing completedHandling, storage, and delivery methods in placeOrganization is staffed and trainedSUPPLIER QUALITY ENGINEERINGDell Confidential17Asia Pacific Supply Chain Management OfficeNew Product Readiness Review New Product ExpectationsEach successive new product perform at a better rate than its predecessorInfluencing the design as much as possible prior to launchQuick feedback and corrective action at new product launch to drive a steep slope on the learning curve.SUPPLIER QUALITY ENGINEERINGDell Confidential18Asia Pacific Supply Chain Management OfficeNew Product Readiness ReviewFirst article inspectionsPrior to producing production unitsUnder production conditionsSupplier to provide data including key control characteristics, Cp/Cpk studies, functional testing, reliability testing, . Source inspectionsAt Suppliers facility by Dell approved representativeUntil meets the commoditys quality goalsCosts to be the responsibility of SupplierSUPPLIER QUALITY ENGINEERINGDell Confidential19Asia Pacific Supply Chain Management OfficeSupplier Quality PerformanceMetricsIFIR: Initial Field Incident RateThe percentage of commodity replaced within the first 30 days from product invoice date (in DPPM).IFIR = Qty of Comm. Replaced / Qty of Comm. Shipped x 1,000,000VIFIR: Verified Initial Field Incident RateThe rate of verified failures for the commodity field replacement rate based on what is returned and tested as a result of dispatch within the first 30 days from product invoice date (in DPPM). VIFIR = (Qty Fail / Qty Test) x IFIRSUPPLIER QUALITY ENGINEERINGDell Confidential20Asia Pacific Supply Chain Management OfficeSupplier Quality PerformanceMetricsLRR:Line Reject RateThe percentage of line replacement at EMR for a particular commodity in a specified date range (in DPPM).LRR = Qty of Comm. Replaced / (Qty of Comm. Shipped + Qty of Comm. Replaced) x 1,000,000VLRR: Verified Line Reject RateThe rate of verified defects for the commodity line replacement rate based on EMR and Supplier test results for a specified date range (in DPPM).VLRR = Qty of Comm. Verified / (Qty of Comm. Shipped + Qty of Comm. Verified) x 1,000,000SUPPLIER QUALITY ENGINEERINGDell Confidential21Asia Pacific Supply Chain Management OfficeSupplier Quality PerformanceMetricsDPHU: Defects Per Hundred UnitsThe rate of all defects logged at all routing stations through factory build in a specified date range.DPHU = Total Build Defects / Total Systems Passed Station 5600 x 100Other MetricsOrder and Delivery: Ship-to-Target.Installation and Operation: Combined Initial Field Incident Rate (CIFIR)Service: Dell Service Provider On-Time First Time Fix (DSP OTFTF)SUPPLIER QUALITY ENGINEERINGDell Confidential22Asia Pacific Supply Chain Management OfficeSupplier Quality PerformanceReviewQuarterly Business Review (QBR)Dell Procurement Management and Supplier ManagementUtilizes supplier scorecard for driving improvementsQuality ForumSupplier Quality, Procurement, LOB Quality, and OperationsCommodity historical trends, quality improvement effortsOps ReviewProcurement Executives and other Dell ExecutivesHigh level procurement initiatives. Quality metrics are used to show trends vs. goalsSUPPLIER QUALITY ENGINEERINGDell Confidential23Asia Pacific Supply Chain Management OfficeClosed Loop Corrective Actions (Tool I)Structural and disciplined quality improvement process/toolIntended to capture major, high priority issues.Entire team of SQE/JQE/GQAM work together to close issuesOnline system for communication with suppliers via ValueChainSUPPLIER QUALITY ENGINEERINGDell Confidential24Asia Pacific Supply Chain Management OfficeClosed Loop Corrective Actions7 StagesIssue descriptionContainmentRoot cause analysisCorrective action planPreventive actionVerification of effectivenessReview for closureSUPPLIER QUALITY ENGINEERINGDell Confidential25Asia Pacific Supply Chain Management OfficeClosed Loop Corrective ActionsThe FormSUPPLIER QUALITY ENGINEERINGDell Confidential26Asia Pacific Supply Chain Management OfficeClosed Loop Corrective ActionsWhen should it be initiatedDell Customer Experience (External Failure)Problem within a key account presenting significant exposureIFIR rate consistently or significantly beyond established goalsDell Factory (Internal Failure)Significant excursion requiring purge or resulting in line downLRR rate consistently or significantly beyond established goalsRepetitive failure of root cause identified on prior CASUPPLIER QUALITY ENGINEERINGDell Confidential27Asia Pacific Supply Chain Management OfficeClosed Loop Corrective ActionsWhen should it be initiated - continuedSupplier Internal Performance Metrics (Suppliers Internal or IQA Failure) Internal quality performance yield rate consistently or significantly beyond established goalsContinuity of supply issues as the result of internal process yieldContinued poor performance on quality systems, process, and/or product audits Significant failure in meeting the Quality Management Plan and Quality AgreementSUPPLIER QUALITY ENGINEERINGDell Confidential28Asia Pacific Supply Chain Management OfficeClosed Loop Corrective ActionsProcedureSUPPLIER QUALITY ENGINEERINGDell Confidential29Asia Pacific Supply Chain Management OfficeMaterial PurgesRemoves defective or suspect material from all Dell sites worldwideInitiated by Dell Manufacturing Quality Engineer (MQE)Approved by correspondent Global SQE Supplier must implement the CA request immediatelySUPPLIER QUALITY ENGINEERINGDell Confidential30Asia Pacific Supply Chain Management OfficeSupplier Engineering Change Notifications(Tool J)Any supplier changes to form, fit, function, or appearanceDell must be notified in writingForm is provided - may be customized by commodityRequired number of days notice will vary by commoditySQEs should be the conduit for any supplier changes - not Dell manufacturing or engineeringSCT to approve the supplier changesSQE works with JQE to ensure Dell is notified of supplier changesSUPPLIER QUALITY ENGINEERINGDell Confidential31Asia Pacific Supply Chain Management OfficeSupplier Engineering Change NotificationsThe FormSUPPLIER QUALITY ENGINEERINGDell Confidential32Asia Pacific Supply Chain Management OfficeQuarterly Business Reviews (QBR)Managed by the SCT/Commodity ManagersStrategic suppliers (Top 30+) on a quarterly basisIncludes measurements for Quality, Cost, Service, Technology, and SupplyQuality sections of the scorecards are specific by commoditySQE and GQAM participate in QBRsSUPPLIER QUALITY ENGINEERINGDell Confidential33Asia Pacific Supply Chain Management OfficeContinuous Improvement Process (CIP) PurposeThe CIP ensures the quality results targeted for a particular supplier are actually achievedIt is an analytical tool, founded on open feedback and root cause failure analysisTakes the guesswork out of quality managementSUPPLIER QUALITY ENGINEERINGDell Confidential34Asia Pacific Supply Chain Management OfficeContinuous Improvement Process (CIP)General GuidelinesGoal is to use the CIP for Dells Top 30 hardware suppliersWork in partnership with supplier and cross-functional Dell team to set and achieve goalsPut CIP in place as a supplier passes through the ramp stage into full volumeNone stop process to gain greater and greater improvementSUPPLIER QUALITY ENGINEERINGDell Confidential35Asia Pacific Supply Chain Management OfficeContinuous Improvement Process (CIP)StepsTeam formationProcess mappingData collectionPareto analysisFailure analysis/root causePlan corrective actionsForecast improvementImplement corrective actionsFactory cut-in datesPerformance reportingLessons learnedCommunicationAll team members involved - SQE/JQE/GQAMSUPPLIER QUALITY ENGINEERINGDell Confidential36Asia Pacific Supply Chain Management OfficeContinuous Improvement Process (CIP)(Tool K)SUPPLIER QUALITY ENGINEERINGDell Confidential37Asia Pacific Supply Chain Management OfficeSummaryFoundation BlocksSupplier Quality StandardQuality AgreementQuality Systems AuditQuality Process Audit Quality Management PlansNew Product Readiness ReviewClosed Loop Corrective ActionSupplier Engineering ChangeQBR Scorecard - Quality SectionCIPStandard doc for allGuidelines - unique by supplierStandard doc for allGuidelines - unique by commGuidelines - unique by commForm - can be modifiedStandard online systemForm - can be modifiedStandard system but quality section can be changedGuidelines - unique by supplierSUPPLIER QUALITY ENGINEERINGDell Confidential38Asia Pacific Supply Chain Management OfficeProcess/Tools LocationsIn addition to the hard copy quality tools stored in the Quality Management System binder, the following locations contain up-to-date soft copies:Dell internal web site :/mfg/wwp/mfg/wwp/sqe/index.htmSupplier web sites ValueChain(Note: this site is secure and all Dell/Supplier access must be requested of the ValueChain team. Please send an email to valuechain for a user name and password.)SUPPLIER QUALITY ENGINEERINGDell Confidential39Asia Pacific Supply Chain Management OfficeDocument LinksCOR.30.PR.SQ.200 Supplier Management ProcessCOR 40.PR.SQ.210 Quality Management Plan Template Tool GCOR 40.PR.SQ.230 New Product Readiness Review Tool HCOR 40.PR.SQ.250 Closed Loop Corrective Action Form Tool ICOR 40.PR.SQ.260 Supplier Engineering Change Notification Tool JContinuous Improvement Process Tool K