TYW-OP-382 Supplier Quality Mgt

Quality Manual Supplier Quality Management 1.​ Objective To ensure quality materials supplied from qualified suppliers. In the attempt of achieving this, this chapter details the procedures for the activities related material quality problem prevention, material quality problem handling and supplier rating. 2.​ Scope Component Quality Assurance and Supplier Quality Assurance form essential activities of the BCU Monitors Supplier Management Process, outlined in the flowchart shown in the TYW-OP-320 and explained in the document UAT-0466. For early involve to supplier design and/or production initial stage CTQ representing BCU externally as purchasing quality officer to ensure supplier quality and component quality fulfill our requirement. The main function can also be comprised to support concerning the product quality in all relevant stages of the product life. Apply CE Standard UAT-0469 Failure Registration and Reporting System for Component PPM Management. 3.​ Responsibility ​ Managing the BCU monitors supplier quality assurance and component release / qualification (EE, E/M components, CRT and LCD’s). ​ Defining, deploying and organizing the PCE component qualification policy. ​ Managing and deploying the purchasing related FOR and FCR process as operated by the sites, consolidating / providing feedback to suppliers and planning corrective action. ​ Contributing in supplier selection, assessment and quality system / process audits. ​ Contributing in the supplier quality assurance network as CLAN member. ​ Contributing to the contents and negotiations of the Supplier Quality Agreement Standards. ​ Supporting the SBMT teams on technical and quality issues. ​ Benchmark supplier quality. ​ Representing PCE externally as purchasing quality officer. PCBA component and Display component group have same task for different articles and suppliers. 4. Material Quality Problem Prevention To minimize material quality problem through preventive activities taken via supplier qualification, material inspection and yearly supplier auditing. 4.1.0 Supplier Qualification To qualify a supplier through supplier survey, quality agreement and component approval. After supplier is listed in the supply base, depending on supplier’s performance and project/product requirements, use supplier audit as a tool to maintain supplier’s qualification. 4.1.1 New Supplier Selection Scope New suppliers not included in BCU monitors Forward Procurement List (FPL). Reference (Survey checklist) -​ UAN D1813 (w/ ISO9000 certification or equivalent certification e.g. QS9000) -​ UAN D1814 (w/o ISO9000 certification or equivalent certification e.g.QS9000) Responsibilities Purchasing - Surveys purchasing/logistic aspects and scoring CTQ - Surveys quality assurance/Technical aspects and scoring CTQ is responsible for E, E/M, Display component and PCBA for Mech. and plastics parts are taken care by relative PAC and keep IP informed the audit result for further follow up. Procedures: ​ Purchasing evaluates potential sources before submitting new supplier survey request. ​ Purchasing collects general information of supplier to be surveyed and communicated with survey team members for reference/preparation in advance. ​ Purchasing coordinates the matters related to survey such as report format, transportation arrangement... etc., Purchasing also serves as a contact window of BCU to supplier. ​ Purchasing informs supplier items to be surveyed in advance for well preparation. ​ Survey teams acknowledge supplier the comments in survey when this activity is completed. ​ Survey teams conclude survey results and makes an official report within 4 weeks. 4.1.2 Quality Agreement Per requirements of products, quality agreement to be reached between Philips and supplier before a new supplier is qualified. In case some of the conditions in the default CE standard quality agreemnts are to be revised, use an agreemment addendum to adopt the changes. Scope According to supplier satisfaction, agreement with supplier is to be accomlished by different authorities: CE global supplier – To be done by SBMT’s Monitors global supplier – To be done by BCU Purchasing Site specific supplier – To be done by PAC Purchasing Responsibilities in BCU Purchasing CTQ -Refer to CE updated ppm standard and PACs’ inputs, sets up PPM target and/or Acceptance Quality Level for articles concerned and conclude the final setting with suppliers. Purchasing - Settles with supplier the most appropriate quality level in BCU interests. Procedures: -​ CTQ defines/issues the Acceptance Quality Level in material inspection and PPM targets in PEI-CE production for articles concerned per product quality requirements. -​ Based on the targets given, Purchasing works with suppliers to obtain an agreed quality level and enters the figures into quality agreement. -​ Factory qualities concerned concur the quality level in Quality Agreement. -​ Have 3 copies of original quality agreement available. One copy for supplier, other copy for CTQ and another copy kept in Purchasing. -​ Quality agreement addendum will be review yearly if necessary. Validity of Quality Agreement : -​ Conditions of validity shown in Quality Agreement. -​ Quality Agreement signed by the authorities of supplier, CTQ and Purchasing 4.1.3 Audit Purpose -​ To support the supplier selection process; All selected suppliers have to be ISO 9000 certified or with equivalent certification (e.g. QS 9000), ISO 14000 is preferred (no banned substance declaration). -​ To safe guard the supply of components: quality wise/volume wise/financial health Policy -​ Will perform process Audit/Commercial Audit, not perform ISO Audit. -​ Audit are performed on request of the purchasing members -​ General PCE Suppliers are audited together with CE SBMT -​ Other suppliers for BCU monitors are audited by BCU-representatives -​ Commercial suppliers can be audited by BCU-representatives in consultation with SBMT core team -​ The CE SBMT will provide a document reference number -​ Audits are performed by an audit team, team members are a lead auditor (the process owner) and one or 2 co-auditors -​ The auditors will use the mandatory checklist(s) -​ The audit team gives a first feedback to the supplier at the end of the audit (strong/weak points, area for improvement) -​ The audit team makes an official report within 4 weeks -​ The supplier should provide first corrective action within 2 weeks after audit •​ Quality System Audit is performed in case of : - New supplier - Existing supplier with structural quality issue - Supplier failed in QPA - yearly performed on CRT, LOT, LCD, Inverter, PCBA and Cabinet suppliers. •​ Process audit is performed in case of: -​ A new supplier or existing supplier with new site/technology -​ Structural quality issues with follow-up on corrective actions or preventive actions that have been implemented -​ Repeat audit of existing supplier base -​ Other reasons •​ Commercial Audit is performed to: -​ Asses the capabilities of the supplier to satisfy our need of products, support and continuous improvements in our Supplier Chain -​ Evaluate the suppliers productivity -​ Evaluate the suppliers cost levels Tools QSA checklist : TYT88-1001 is derived from “Best Iin Class” benchmark. QPA checklist : TYT88-1002 for CRT TYT88-1003 for LCD TYT88-1004 for PCBA UAN-D1815 for the rest component. Audit criteria The audit overall composite average: Total score / Number of subjects Assessed. The assessment indicators are defined as following (UAN-D1815): = > 80 % : Good; Approved = > 60 – < 80 % : Conditionally approved, provided improvement plan is agreed upon with committed follow-up < 60 % : Correction compulsory prior to any business opportunity For using TYT88-100x checklist will base on” best in class” as scoring criteria. Audit Frequency: In principle, audit to selected suppliers is conducted on yearly basis. CTQ use the following guidelines to plan the need for routine audits: QPA > 80% (QSA > 90%) : Conduct routine audit once per year QPA < 80% (QSA < 90%) : CTQ base upon the severity of the audit finding to determine the needs of increasing the audit frequency 4.2.0 Material Inspection Purpose Material inspection is one of the measures to prevent material quality problem from occurrence /recurrence in production lines and fields. Scope F.A.I.- First Article Inspection - Applied to the First delivery of new Article. Safety Items - Applied to Safety items in which compulsory inspection is required by Safety authorities. Dynamic Inspection - Applied to items, which are requested by PE per production complaints. Sourcing Inspection - Same as dynamic inspection except applied to bulky items, or items of which the inspection is impracticably carried out in this plant but at supplier’s site. 5.0.0. Material Quality Problem Handling In case there is material quality issue found in receiving, production or field, proper handling procedures should be applied accordingly to solve problem and prevent it from recurrence. 5.1.0. Quality Complaints in Receiving Purpose To avoid using faulty/defective materials in production. Scope For direct materials which are subject to inspection. Reference/Procedure See Factory operation manual regarding to Incoming Material Quality Control. 5.2.0 MQFS (Material quality feedback sheet) Handling Purpose MQFS is the document issued by production line to highlight material quality problem in case the fall-off rate of specific component reaches the minimum level of complaint. This sheet will record what/when/where happened, defect rate, and addresses the concerned for cause analysis, corrective action taken, faulty/defective material disposition and results follow-up. Scope Direct materials with production quality level fail to meet production line acceptable level. Reference ​ MQFS system diagram ​ Factory operation manual Procedure See Factory operation manual regarding to MQFS operation procedure. 5.3.0 Field Complaint Handling Purpose To have supplier involved in root cause analysis and corrective action taken to prevent from Recurrence in the field and make further improvements. Scope Problem materials which failed in end user application. Usually, such information are collected and feedback to Purchasing and supplier through due courses. Reference/Procedure BU Quality standard operation procedure regarding to this operation. 5.4.0 Improvement Project Purpose Improvement project is to use team approach working for the weak area to be strengthened or material quality improvement on some specific articles which significantly adverse to product quality and/or quality cost. Scope Task/Component articles to be worked on was decided in the CI/IP formulation process in the previous year end based on the Purchasing performance or material quality performance review in that year end, or whenever such activities are determined by management. Team members were selected then. Reference QC story of improvement project Responsibilities Per assignments Procedures Per CWQI requirements 6.0​ Defect Component Analysis Purpose To define the process for effectively handling the supplier material quality improvement activities Scope The defective components to be analyzed include the 1st50 & field return, Designer stage test failure, Reliability test failure and production line failure. System Diagam As shown. Working Instruction: 1.​ When CTQ received failure samples from any site, the defect components should be registered into tracking list. 2.​ The initial analysis of failure samples will be performed by CTQ concerned component engineer, then send the defect samples to supplier for further analysis. 3.​ Supplier should be requested to provide defect analysis report within 2 weeks (after received defect sample), the status of the supplier's analysis result will be reviewed in CTQ weekly meeting. 4.​ CTQ concerned engineer is responsible to verify that supplier's analysis results, and corrective action. All the confirmed failure causation will be issued in a F/A report with recommended corrective action. 5.​ For all the confirmed failure causation, CTQ will keep in touch with concerned department and / or supplier for the corrective action follow up. 7.0 Supplier Rating System Introduction: In order for Philips to meet our customers’ high quality expectations, we require from our suppliers only world class quality materials, 100 % on-time deliveries, shortest possible lead times, as well as their full commitment to continuously improve their products and services, both in the Order Fulfillment and in the Product Creation Process. In order to achieve this high goal, the performance of the suppliers is evaluated in regular intervals in a consistent and standardised way by our Supplier Rating System and the results are reported back to the suppliers as a basis for further improvement programs. The main objectives fulfilled by the SRS are ​ effective measurement of the supplier’s actual performance and its continuous improvement efforts, at site level and at SBMT level ​ constant feedback to rated suppliers as a means of motivation, followed up by mutual agreed improvement actions, leading to a competitive advantage for both Philips and our suppliers in our global markets. Only the Key local suppliers and the Forward Procurement List suppliers are measured by the SRS, according to the yearly Supplier Monitoring Schedule, and provide a 90% turnover coverage. The suppliers are rated on a monthly basis by every site. This reporting is the basis of mutual agreed improvement actions monitored locally by every site. Every quarter, the performance of the suppliers from the Forward Procurement List is consolidated at global level, to enable the SBMTs and their CLANs to review and agree on the overall rating and action to support for every supplier. This global reporting provides a key input for supplier business review meetings as well as article strategy review and related sourcing plan: ​ Performance above 80%: green ​ Performance between 60 & 79%: yellow – mandatory improvement plan ​ Performance below 59%: red – mandatory improvement plan leading to yellow/green status within 6 months or phase-out plan from the CLAN. The following elements of the supplier performance are rated: Quality , Delivery, Cost performance, Responsiveness/Support, Innovation Supplier Quality Performance Basis for the rating are the Quality agreements per product. The relevant rating elements are PPM% (Parts PER Million Percentage) during the agreed period of 1 month. PPM% (Parts Per Million Percentage) is the ratio between: o​ Actual PPM based on line rejects (Fall-off) and products used during a certain period of time, and o​ Yearly agreed PPM via General Purchase Agreement Quality annexe update. PPM % = Actual PPM * 100 Agreed PPM Rating scheme: PPM Score < 100 % 30 > 100 % to < 120 % 25 > 120 % to < 150 % 20 > 150 % to < 200 % 15 > 200 % to < 250 % 10 > 250 % 0 The quality performance data is periodically calculated by Quality using the Failure Registration & Reporting system and transferred monthly to the SRS, at 12NC level. In case of a critical Material Quality Complaint based exclusively on following criteria, a penalty will be applied as follows, on supplier level: 15 points o​ a safety hazard for the PCE end product (=anything affecting the PCE end product safety) o​ a Quality issue causing blocking of deliveries (=anything blocking the delivery of a PCE end product batch for more than one day) o​ a Quality issue causing a belt stop for more than one hour. MQC (Material Quality Complaint): Rating scheme: No. of new complaints during the Agreed time period Penalty Critical MQC 15 The number of critical MQCs for the month should be manually reported into ISRS in absolute number. Supplier Delivery Performance Basis for the rating is the latest delivery/call-off schedule which has been agreed upon with the supplier. This schedule shows the suppliers’ commitment, both to quantity and time for all and any products to be delivered. The performance indicator for the delivery reliability is CLIPS (Committed Line Item Performance Supplier). CLIPS should reflect if the supplier is able to deliver exactly the committed (=ordered) quantities in time. CLIPS % = No. of deliveries with right qty. and in time / Total No. of order lines * 100 CLIPS % self filling = No. of days with OK inventory level No. of days in the defined period *100 Rating scheme: PPM Score > 95 % 25 < 95 % to > 90 % 20 < 90 % to > 80 % 15 < 80 % to > 70 % 10 < 70 % to > 60 % 5 < 60 % 0 Quantities delivered are according to the delivery schedule, no quantity tolerance is allowed. For the delivery time, tolerance is in day unit. Positive number x means that we allow x number of days early and a negative number for x number of days late. For example, 2/-1 means, that we allow delivery which is two days early or one day late. In order to reach lowest stock level at PCE premises, the tolerance cannot exceed –2/+2 for low value commodity parts and 0/0 for high value parts. Each site maintains the tolerance value set to ensure minimum stock level and maximum flexibility for the production. For Vendor managed consigned Inventory (VMCI), the reference point to measure delivery performance is the inventory level at the end of every day, whether it is or not within the agreed min/max range. For Just In Time (JIT), the reference point is the on-time delivery with less than one hour tolerance (Remark: today not measurable via ERP system, Daily CLIPS needs to be corrected manually based on actual hourly performance ). For Vendor Managed Inventory (VMI), the reference point for measurement is the availability of the components out of the supplier stock to realise the daily planned production (Remark: today not measurable via ERP system, CLIPS needs to reported manually based on `missing quantity of components at the end of the day per supplier, per 12NC to realise the daily planned production`). The delivery performance of all suppliers is continuously monitored by Logistics. CLIPS are periodically calculated and transferred to the SRS. Supplier Cost Performance Whereas the rating elements for Quality and Delivery performance are objective, the Key Performance Indicators (KPI’s) for the supplier`s Cost Performance are primarily subjective. The following 3 KPI’s will be used to limit the subjectivity in measurement: o​ Actual price position related to comparable supply market o​ Supplier takes initiative to reduce integral costs (e.g. cost workshop or quick scan active up, non Quality cost compensation) o​ Supplier gives insight into internal cost structure (open books /cost model) and takes initiatives to reduce integral costs In the rating of the suppliers’ Cost performance each KPI gets a score as following: Sub Criteria For Cost Performance Total score Excellent Good Moderate Very poor N/A Points Actual price position related to comparable supply market 5 4 2 0 5 Supplier takes initiative to reduce integral costs (e.g. cost workshop or quick scan active up, non Quality cost compensation) 5 3 1 0 5 Supplier gives insight into internal cost structure (open books/cost model) 5 3 2 0 5 Total points 15 10 5 0 15 Performance Score Excellent 15 Good 10 Moderate 5 Very poor 0 The Cost performance is defined and monitored per supplier by every CLAN (FPL suppliers) or sites (local Top supplier) on a quarterly basis. Supplier Responsiveness/Support Performance Like the rating element for the Cost performance, the Key Performance Indicators for Responsiveness are also primarily subjective. The rating is done according to the following KPI`s to limit the subjectivity in measurement: o​ Supplier has a plan / in place high supply flexibility and short lead time of 2 weeks, and this is formalised in the GPA o​ Supplier’s replies to Philips requests are always prompt: 24 hours for containment and 48-72 hours for correcti