Working Together

PC REFERRED S UPPLIER E R T I F I C A T I O N

SUPPLIER MANAGEMENT VISION Suppliers, in long-term p

Suppliers in long-term relationships with Boeing satisfying our

are satisfying our customers with top-quality, technically excellent, affordable products, delivered on time.

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veryone knows the importance of having co-workers or associates

with whom you can work closely, tackle challenges, and share a commitment to a vision. At Boeing, our suppliers are a valued part of our extended enterprise. Suppliers account for more than half the cost of our products. They touch every function and every program at Boeing. How well our suppliers do their jobs directly affects how

William L. Stowers

well we do our job. That’s why we are committed to developing long-lasting, mutually beneficial relationships throughout our extended family of suppliers. One way we build such relationships is through our enhanced Preferred Supplier Certification (PSC) process — a tool to identify and recognize high-performing suppliers strategically important to Boeing. Considered a best-in-industry practice, PSC has been widely copied and benchmarked. Now we are taking PSC to a new level. Look through these pages, and you will see how Boeing is using PSC to support the development of lean processes that are crucial to our vision of providing high-quality, affordable products to our customers. Together with our extended family of suppliers, we are one team working for global aerospace leadership. We are working together for success!

TOGETHER William L. Stowers Supplier Management Process Council

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PC REFERRED S UPPLIER E R T I F I C A T I O N Preferred Supplier Certification (PSC) involves a series of processes

Boeing Preferred Supplier Certification Process

that touch a supplier’s entire business operation. Boeing invites selected suppliers to participate in the PSC process. PSC identifies and honors suppliers that provide Boeing with the highest-quality products and services, delivered on time and at best value. PSC focuses on improved relationships with affordable, high-performing,

Establish Expectations

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strategically important suppliers. It also promotes process and

Boeing Customers

performance improvements throughout the supply chain. Meet Boeing Performance Criteria

Implement Advanced Quality System

Meet On-Site Business Assessment Expectations

Continue Improvement

Suppliers Establish Criteria for Preferred Supplier Certification (PSC)

Award Preferred Supplier Certification

Measure Supplier Performance and Processes

Upgrade When Higher Criteria Are Met

Boeing

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WHAT IS IT? Preferred Supplier Certification Process Supplier certification includes evaluation of suppliers in three areas: • Advanced Quality System

• Continuous Improvement System Development

d d e e c nc an a v y v • Performance Measures d Ad ua lliitty A a • Products and Processes m Qu te Q em t s s • Improvement Actions/Projects Sy Sy • Management Review • Variation Control Methods

• Process Capability/Optimization • Design Variation Management

r li e ce p Sup rma n rfo e P

• Quality Acceptance • On-Time Delivery • Affordability • Customer Satisfaction

• Business Processes • Demonstrated Performance The certification process identifies suppliers who are committed to continuous improvement in both processes and products. Supplier certification is based

er i l pp es s u S sin e s s Bu ce s Pro

on the achievement of specific standards of excellence.

• Leadership • Quality • Technology • Cost • Product Delivery • Support

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LEAN SUPPLIERS

TOGETHER

AQS EVALUATION MATRIX Evaluation Section

4

Raw score

Section Weights Without Design

With Design

Continous Improvement System Development

5

4

Performance Measures

6

5

Analysis of Products and Processes

6

5

Implementation of Improvement Actions/Projects

7

7

Management Review

6

5

“Plsnning, selection, and maintenance”, and SPC)

5

4

Process Capability and Optimization

5

4

Weighted Score

BUSINESS PROCESS ASSESSMEN Leadership

Quality

Product Delivery

Cost

Techno

Organization

Quality Management

Planning, Scheduling, Control & Supplier Integration

Cost Estimating, Proposal Preparation and Reporting

Prod Develop

Company Integration

Quality Assurance Quality Control

Production Organization & Operations

Valuation of Inventory and Control of Cost

Prod Desi Defini

Desig Produc Transi

Material & Inventory Control Systems

Variation Control Method (Both

Variation Management in Design

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TOTAL

Gold

185 Points Minimum

Advanced Quality System Evaluation Implementing an Advanced Quality System Silver (AQS) is a key to quality because it helps a 120 Points Minimum supplier to reduce variability and to promote Bronze productivity. The certification process Basic Acceptance evaluates the supplier’s AQS techniques for effectiveness in limiting variability and in improving the quality and productivity of manufacturing and administrative processes. To become certified in AQS, a supplier must attain basic acceptance in the categories listed above.

Business Process Assessment Boeing assesses a supplier’s business processes through an on-site vis supplier personnel. A supplier is evaluated on how well it functions in six quality, product delivery, cost, technology, and support. During the on-site visit, Boeing and the supplier work as a team to cla document strengths, and to identify areas for process improvements, esp assistance is needed to enhance lean techniques and applications. When the assessment is completed, the supplier submits a continuous ensure its ongoing growth as a best-value supplier.

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NT ogy

ent

n

Support

SUPPLIER PERFORMANCE

Support Management & Planning

Performance

In-Service Support

Delivery

o on n

On-Time (%)

and interviews with areas: leadership, y expectations, to cially places where mprovement plan to

(1)

Period (Months)

Quality

(2)

Acceptance Period (Months) (%)

Gold

100

12

Silver

97

12

99.5

Bronze

93

12

99

100

Affordability Cost Trends, Cost-Reduction Efforts, Lean Practices

Customer Satisfaction Management, Schedule, Quality, Technical, Finance

12

4.0 or greater

4.4 or greater

12

3.4 to 3.9

3.8 to 4.3

2.8 to 3.3

2.8 to 3.7

12

Certification Standards Boeing continuously measures supplier performance in four areas: • Delivery • Quality • Affordability • Customer Satisfaction Boeing plans to deliver online performance reports quarterly, after compiling data from across Boeing. Besides facilitating performance improvement, evaluation reports are a tool for ongoing communication and feedback between suppliers and Boeing.

TOGETHER Certified Suppliers must achieve and maintain the specific performance standards described in the accompanying chart. On-time delivery window to fulfill contractual commitment is 10 days early/zero days late or as otherwise specified in the PO. (2) Complexity factors may apply to specific items. (1)

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POTENTIAL BENEFITS FOR CERTIFIED SUPPLIERS Suppliers that attain Certified Supplier status may gain more than a Gold, Silver or Bronze designation. Plans call for a Certified Supplier to receive a variety of potential benefits, including increased opportunities for business with Boeing and with other suppliers as a result of a supplier’s certification achievement. Preferred Supplier Certification can: • Improve supplier competitiveness • Increase bidder/source selection preference • Enhance relationship with Boeing and reputation within industry

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• Reduce potential for Boeing inspections • Support supplier lean initiatives • Provide access to Boeing resources and training Supplier Base Training To help build strong relationships with our suppliers, Boeing offers assistance to suppliers who are committed to Preferred

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Supplier Certification. Boeing provides training for Certified Suppliers through such courses as: • Lean Enterprise Overview

Achieving Certified Supplier status means recognition from Boeing and the aerospace industry. The Certified Supplier designation identifies a company as a best-value high performer that is part of the Boeing extended enterprise team of global aerospace leadership.

• Statistical Process Control (SPC)

SUMMARY OF STANDARDS FOR CERTIFICATION

• Preferred Supplier Certification • Accelerated Improvement Workshops • Value Stream Mapping

Process Certification Level

• Stepup Reduction/Controls

Total Business Assessment Certification Level

Advanced Quality System

Performance Expectations Affordability (3)

• Lean Workshops 4.5 - 5.0 Min. 4.0

Gold

Courses are usually offered at Boeing facilities. Classes also

100

12

100

12

Silver

3.5 - 4.4 Min. 3.0

Assessment Score > 120

97

12

99.5

12

Silver Bronze

supplier will be asked to pay the

2.5 - 3.4 Min. 2.0

4.0 or greater

4.4 or greater

7

3.2 to 3.99

Gold

can be conducted at a supplier’s facility. In such cases, the

Assessment Score > 185

(1)

Customer Satisfaction Improvement, Quality (2) Cost Trends, CostAffordability Lean Applications Cost Trends, Cost-Reduction Efforts, Management, Schedule, Quality, Period Delivery Acceptance Period Quality Lean Practices Technical, Finance (Months) (Months) (%) 4.0 or Greater

Delivery On-Time (%)

Effective 1/1/2004

3.4 to 3.9

3.8 to 4.3

2.8 to 3.19 Basic Acceptance

93

12

99

12

2.8 to 3.3

2.8 to 3.7

instructor’s per diem allowance

(1)

On-time delivery window to fulfill contractual commitment is 10 days early/zero days late or as otherwise specified in the PO.

and travel expenses.

(2)

Complexity factors may apply to specific items.

For more information about course locations and schedules, call (314) 234-0143.

TOGETHER

LOOKING TO THE FUTURE As the world’s leading aerospace company, Boeing requires a world-class supply base. Suppliers are a valuable and integral part of the Boeing extended enterprise. Together, we are meeting the challenges of global aerospace leadership. Meeting those challenges demands a lean enterprise — throughout Boeing and throughout our extended supplier family. A key to achieving that lean extended enterprise is to build strong supplier relationships based on open, honest communication, mutual respect, and shared goals that will allow us to move Boeing and our extended supplier family to the next level of performance. Additional efforts to help us achieve those strong supplier relationships include:

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• Holding supplier focus groups to promote communication and feedback. • Involving suppliers early in new business acquisitions. • Assisting suppliers in assessing their processes to achieve leanness. • Using Boeing Strategic Sourcing Teams to improve individual supplier relationships.

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Boeing sees working together with our suppliers as a relationship that is good for our suppliers, good for Boeing, and good for our customers.

ONE TEAM, ONE GLOBAL AEROSPACE LEADER • ONE TEAM, ONE G

ONE TEAM, ONE GLOBAL AEROSPACE LEADER • ONE TEAM ONE TEAM, ONE GLOBAL AEROSPACE LEADER • ONE

ONE TEAM, ONE GLOBAL AEROSPACE LEADER • ONE TEAM, ONE G

ONE TEAM, ONE GLOBAL AEROSPACE LEADER • ONE TEAM, ON

TOGETHER

ONE TEAM, ONE GLOBAL AEROSPACE LEADER • ONE TEAM

For more information on the Boeling Preferred Supplier Certification process,contact Terrence Majerski, Supplier Management and Procuremant, 714-896-4281 or at [email protected]

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