THE GLOBAL SUPPLIER QUALITY ASSURANCE SYSTEM

ELECTROLUX MAJOR APPLIANCES THE GLOBAL SUPPLIER QUALITY ASSURANCE SYSTEM SUPPLIER/COMMODITY PURCHASING STATUS IMPLICATIONS Incl. ON HOLD Process EL 2...
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ELECTROLUX MAJOR APPLIANCES

THE GLOBAL SUPPLIER QUALITY ASSURANCE SYSTEM SUPPLIER/COMMODITY PURCHASING STATUS IMPLICATIONS Incl. ON HOLD Process EL 29005A Edition 2007 Revision A

GSQA EL29005A - 2007

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PREFACE The purpose of this document is to communicate to current and potential suppliers the Implications that result from the various Supplier/Commodity Purchasing Statuses applied to a specific supplier/commodity combination. This document also includes the Supplier/Commodity On Hold process and the New Potential supplier Qualification process.

PURPOSE The purpose of this procedure is to ensure that actions are taken both internally and externally to solve problems caused by supplies. The objective of the procedure is to emphasize serious problems and to solve them. Signed

Francois Van Caeyzeele Senior Vice President Purchasing AB Electrolux

Dated

Sture Ögren Senior Vice President Quality AB Electrolux

Hans Stråberg President and CEO AB Electrolux

STATEMENT OF CONFIDENTIALITY AB Electrolux gives its assurance that any information provided by suppliers will be treated as totally confidential. AB Electrolux and its advisors, who are bound by a confidentiality agreement, will have sole access to this information.

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CONTENTS 1.0

Reference Documents

2.0

On Hold Process Flow Chart

3.0

On Hold Process Description

Appendix A

Standard “ On Hold” memo to supplier.

Appendix B

New Potential Supplier Qualification.

Reference Documents

1.0

ISO9001:2000, ISO/TS 16949, QS-9000 or equivalent - Quality Systems ISO9000:2005 - Quality Management Systems --- Fundamentals and Vocabulary The Global SQA is defined through the following documents: EL29000 EL29001 EL29002A EL29002P EL29003 EL29005 EL29005A EL29006 EL3000

GSQA Policy and Definitions Supplier Profile Questionnaire Supplier Process Audit Questionnaire Preliminary Supplier Process Audit Questionnaire Supplier Pre-Production Quality Assurance Supplier/Commodity Quality Statusing Process Supplier/Commodity Purchasing Status Incl. On Hold Process - Supplier Self Certification Requirements - Supplier Requirements relating to Ongoing Supply and Evaluation

These documents are supported by: The Integrated Product Development Process The Purchasing Process Procedures and Tools

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2.0

On Hold Process Flow Chart

ON HOLD Process - Quality Supplier Status file RED

SIGNAL

Commodity or local?

Local

Commodity

Preliminary investigation initiated by Plant Q-mgr and supported by Local purchasing

Preliminary investigation initiated by Category Q-mgr and supported by Commodity purchasing

Decision by Plant mgr

Decision by SPB

Supplier ON HOLD Communication responsible Local purchasing. Send letter to supplier signed by Q & P.

ON HOLD- IDCO Communication responsible Commodity mgr. Send letter to supplier signed by Q & P.

No New Business Grip supplier list Red flag system

No New Development Supplier list check CP1

100% inspection Improvement project supervised by Commodity QIM / Local QIM

ACTIVE or PREFERRED Supplier

GSQA EL29005A - 2007

YES

Improvement?

NO

New supplier within (6 months)

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3.0

On Hold Process Description 3.1

The Signal

The Signal to start the “On Hold procedure” with a supplier can come from anywhere in the company. There are some support systems to help indicate problems. These are: GSQA Supplier Status – Procedure EL 29005 A Red colour automatically gives a signal to an organisation to start evaluating the possibility and necessity to start the On Hold process. QES --- Warranty return statistics --- Any deviations in the warranty statistics will lead to an evaluation. The Purchasing Process Classification statusing system --- takes all commercial aspects including the GSQA Supplier Status into consideration see below.

Supplier classification Preferred Preferred supplier supplier

Active Active supplier supplier

Restricted Restricted supplier supplier (hold) (hold)

Disqualified Disqualified supplier supplier Potential Potential supplier supplier

Description Fulfils Fulfils Electrolux Electrolux requirements requirements inin regards regards to, to, for for example, example, meeting cost targets, being quality approved and meeting cost targets, being quality approved and having having strategies strategies that that supports supports Electrolux’s Electrolux’s Is Is used used ifif the the preferred preferred suppliers suppliers can cannot not be be used used for for specific specific reasons and fulfils Electrolux’s minimum requirements, reasons and fulfils Electrolux’s minimum requirements, e.g. e.g. are are at at least least quality quality usable usable AA supplier supplier where where the thedirection direction to to go go isis to to reduce reduce the the supply supply volume, where the commitment is limited in time, where volume, where the commitment is limited in time, whereno no new new inquiries inquiries are are made madeand and where where the the supplier supplier isis not not involved involved in in new new projects. projects. Does Does not not fulfil fulfilElectrolux’s Electrolux’s minimum minimum requirements, requirements, e.g. e.g. isis quality restricted, and shall not receive any new business quality restricted, and shall not receive any new business and and the the existing existingbusiness business shall shall be be phased phased out out Is Is currently currently not not an an Electrolux Electrolux supplier, supplier, but but isis regarded regarded as as having the potential to be become and preferred or active having the potential to be become and preferred or active supplier supplier and and shall shall therefore therefore be be supported supported inin its its development development

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The implications of each of the Purchasing supplier classifications are as shown in the table below

Supplier Purchasing Classification

Parts can be used in New Development

Parts can be used for Current Product

Can be used to Replace Other supplier

Preferred

Yes

Yes

Yes

Active

No

Yes but with restrictions

Yes but with restrictions

Restricted/On Hold

No

No

No

Disqualified

No

No

No

Potential

No

No

No

Top Priority will be given to dealing with supplier/commodity combinations which are Purchasing Restricted. Supplier/Commodity combinations which become Purchasing Restricted are either placed On Hold or are Disqualified and replaced by an alternative supplier. Hence the continuous need for New Potential suppliers, Any supplier who has a status Q Restricted and is also declared Purchasing Restricted will be subjected to the On Hold process. NOTE A Supplier in this document refers to the combination of a Supplier and an associated commodity. Some suppliers supply several different commodities to our Plants, even within a specific Major Commodity grouping. The decision as to what level of commodity will be relevant to a supplier to be placed On Hold, is at the discretion of the individual Purchaser/Commodity manager to which the supplier commodity combination applies. A supplier may be put On Hold for a specific commodity and yet still be a Preferred supplier for a different Commodity. 3.2

Commodity / Local

The responsibilities in the procedure differ dependant on whether the supplier is handled by the Commodity organisation or the factory organisation, see the various sections below.

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3.3

Preliminary investigation

A Preliminary Investigation is made as to the reason for the Signal. This is initiated by either Quality and supported by Commodity Purchasing.or by Plant Quality and supported by Plant Purchasing. Action If the problem is confirmed and there are no other commercial limitations, it is recommended that the On Hold process be started.

3.4 Decision A decision is taken to put the supplier in the Restricted /On Hold category. By Commodity Purchasing/Quality or Plant Purchasing/Quality at joint meetings. See Purchasing Process Procedure – Change Supplier Classification

3.5 Supplier put “On Hold” An Electrolux co-ordinator is appointed. The Supplier is informed in writing (see Standard On Hold memo - Appendix A). The Electrolux organisation is informed and the classification in the GRIP supplier list is changed. Commodity Purchasing/Quality will provide Plant managers, Project leaders, Plant Purchasing managers, Project buyers, Industrial Design, Service, in fact all who have a need to know, a listing of the On Hold suppliers every month and receive a receipt for this. A Supplier Improvement plan must be set up with the support from Electrolux. The Supplier must demonstrate (prove) that he has improved. No New business will be offered to the supplier. The New business listings will be reviewed in PMS each month by Commodity Supplier Improvement to ensure that no On Hold suppliers are used. The Supplier will not be considered for any New development work. Supplier selection for New development is decided by the Project manager. See GRIP - Selecting Key suppliers.

3.6 Inspection Problem Parts bought from the Supplier must undergo 100 % inspection. This ruling affects the ordering of Spare parts( if these are problem parts) also. This is initiated by Quality/Plant Quality with support from Commodity Purchasing/Plant Purchasing. Commodity Purchasing/Quality to provide Spares a listing of On Hold suppliers every month and receive a receipt for this.

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3.7

Alternative supplier

If there is no Alternative Current supplier that can immediately take over the business, a New supplier has to be identified and qualified. This is initiated by Commodity Purchasing / Plant Purchasing. (see GRIP - Introduce new suppliers) and New Potential Supplier Qualification process – Appendix B

3.8 Stop the procedure If the supplier improves to our satisfaction, before the time limit expires then he is put back into categories Preferred or Active supplier and the restrictions are lifted. If the supplier fails then he will be put into category Disqualified, meaning that no business can be done with him and the restrictions remain. By Commodity Purchasing/Quality at joint meetings. (see GRIP – Change Supplier Classification)

NOTES Quality refers to EHP Quality/SQA Commodity Purchasingrefers to EHP Major Commodity/Supplier Improvement Plant Quality refers toEHP Plant Quality/SQA Plant Purchasing refers to EHP Plant Purchasing/Logistics Quality and Commodity Purchasing deal with Commodity suppliers. Plant Quality and Plant Purchasing deal with Local suppliers

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Appendix A Standard Supplier On Hold Letter

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Appendix B New Potential Supplier Qualification If it becomes necessary to replace a Current supplier with a New supplier or if a New supplier is required for whatever reason then the New supplier qualification process requires to be operated.

The Actions 1

Review Marketplace or Potential suppliers we already have details on.

2

Shortlist Potentials.

3

Get “Supplier Profile” background information.

4

Checkout “Basic Qualification” status Supplier Management system accreditation.

5

If information so far promising then Shortlist potentials to one or two

6

Deliver Specifications and RFQs, requesting also manufacturing process details.

7

Decide on which supplier to go forward with.

7

Initiate Preproduction QA plan Review FMEAs Review System and Process- SPC Process Audit Review suppliers Approved Parts list Review suppliers Approved Subcontractor list Approve Parts and Process capability

as relevant as relevant

8 Start Production

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