proprietary as 51 version 2 -training module - supplier rating issued by: jolene kawa, jeffrey...

PROPRIETARY

AS 51 version 2 -Training Module -

Supplier Rating

Issued by: Jolene Kawa, Jeffrey McMurdieApproved by: Svante Mogefors, Halvar Jonzon

30-June-2005

30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 2 PROPRIETARY

Contents

AS 51 Training Purpose and Objectives

Abbreviations and Introduction

Measurable Parameters (PPM, DMT, OTP)

Service Level Parameters (S-APQP, PPAP, RESP)

Overall Rating - Total % achieved

Overall Rating - Rating Category

Overall Rating - Depending on No. of Relations

Overall Rating - Example with >1 Supplier Relation

Overall Rating - Rating Period

Overall Rating - Disputes from Suppliers

AS 51 Training Summary

References and Links


AS 51 Training Purpose

PurposeExplain AS 51

Present changes from AS 51 version 1.0 to the new AS 51 version 2.0 (high lighted in red)

Demonstrate how supplier rating has been simplified.

Intended AudienceSuppliers to Autoliv plants.

Autoliv SQ, Purchasing and Production Control or Logistics


AS 51 Training Objectives

After completing this training, you will be able to understand ...

How Autoliv plants rate their suppliers

How each rating parameter is calculated

How Overall Rating is calculated for one Supplier Relation, and for more than one Supplier Relation

How Autoliv discriminates between good and bad supplier performances

How supplier performance affects supplier selection for new business


AS 51 Autoliv Supplier RatingAbbreviations - General

Abbreviation Explanation

PPM Parts Per Million (number of non-conformingparts per million produced)

DMT Demerits

OTP On Time Parts

M Measurable parameters (PPM, DMT, OTP)

S-APQP Supplier - Advanced Product Quality Planning

PPAP Production Part Approval Process

RESP Responsiveness

SL Service Level parameters (S-APQP, PPAP, RESP)

NCM Non Conforming Material


AS 51 Autoliv Supplier RatingAbbreviations - Targets, Thresholds, Weights

Abbreviation Explanation Value

TPPM Target for PPMs 0 PPM *

UPPM Unacceptable Level for PPMs 200 PPM *

THOTP THreshold for On Time Parts 90% on time *

WPPM Weight for PPM 25

WDMT Weight for Demerits 25

WOTP Weight for On Time Parts 26

WAPQP Weight for S-APQP 8

WPPAP Weight for PPAP 8

WRESP Weight for RESPonsiveness 8

* These values are defined by Autoliv Head Office when needed.


AS 51 Autoliv Supplier RatingIntroduction

The Autoliv Supplier Rating is a strategic tool to support decision-making when dealing with our suppliers. Suppliers with “UNSATISFACTORY” rating will be at risk

for obtaining new business.

Each supplier is rated by six different parameters: 3 Measurable Parameters: PPM, DMT, OTP.

3 Service Level Parameters: S-APQP, PPAP, RESP.

All suppliers of materials for serial production will be rated.

All Autoliv plants use this system.


AS 51 Autoliv Supplier RatingMeasurable Parameters - Overview

This rating is unchanged.


PPM is calculated on production parts* as follows:

PPM calculation does not include: Warranties or field returns.

Pre-production parts or engineering samples .

If parts are returned to supplier: Only actual defective parts are counted. If the supplier does not

provide information within 10 days about actual defective parts found, the complete returned shipment is counted.

*PPAP approved parts

AS 51 Autoliv Supplier RatingMeasurable Parameters - PPM (I)

PPM =Defective parts scrapped/returned + reworked

Total quantity received x 106


How to count parts that are difficult to quantify:

All calculations shall be based on the unit used within the Autoliv MRP system, e.g.: Individual labels or roll of labels.

Length of threads or number of cones.

For the following cases, PPM rating can be modified upon joint decision, between Autoliv and Supplier: Where counting of defect parts is impossible or

too time consuming in comparison to the cost of the part.

Example:A box of 10 000 O-rings was found to be defective. A representative sample from the box was inspected with a result of 5% defect: 5% will be applied: 10.000 x 5% = 500 non-conforming parts.

AS 51 Autoliv Supplier RatingMeasurable Parameters - PPM (II)


TPPM (Target PPM) has changed from 10 to 0.

PPM score is calculated as follows:

If PPM = TPPM score = WPPM

If PPM UPPM score = 0

If TPPM PPM UPPM score =

AS 51 Autoliv Supplier RatingMeasurable Parameters - PPM (III)

UPPM PPM

UPPM TPPM

x WPPM

UPPMTPPM

0 PPM

Score

WPPM


PPM score calculation example

Use these values: UPPM = 200

WPPM = 25

TPPM = 0

PPM = 78 (supplier PPM)

In this case, TPPM PPM UPPM applies, and the score is calculated as follows:

score = = = 15.25

Round off the calculated score PPM score = 15

AS 51 Autoliv Supplier RatingMeasurable Parameters - PPM (IV)

UPPM PPM

UPPM TPPM

x WPPM

200 78

200 0x 25


AS 51 Autoliv Supplier RatingMeasurable Parameters - DMT (I)

This rating was changed.

Rating rules in AS 51:1.0

Rating rules in AS 51:2.0Severity of defect Criteria Demerit

Minor Non-Conforming Material (NCMs) which do not impactCC/SC or Autoliv production or the customer

1

Critical CC/SC violated or Autoliv production stopped or Minoroccurrences repeated

10

Customer Customer impacted or Critical occurrences repeated 25


Supplier demerits are based on the severity of the defective material or

the delivery concern.

A customer impact is a supplier defect or delivery concern that reached or affected an Autoliv customer.

A repeat occurrence is an incident occurring after the supplier has implemented containment actions.

For the reporting period, the total generated demerits are added up.

AS 51 Autoliv Supplier RatingMeasurable Parameters - DMT (II)


DMT score calculation is unchanged.

DMT is calculated as follows:

If total demerits WDMT score = 0

If total demerits WDMT score = WDMT Total

AS 51 Autoliv Supplier RatingMeasurable Parameters - DMT (III)


DMT score calculation example

Use these values: WDMT = 25

2 minor demerits = 2x1 = 2

1 critical demerit = 1x10 = 10

total demerits = 2x1 + 1x10 = 12

In this case, total demerits WDMT applies, and the score is calculated as follows:

score = WDMT Total = 25 (2x1 + 1x10) = 25 12 = 13

DMT score = 13

AS 51 Autoliv Supplier RatingMeasurable Parameters - DMT (IV)


OTP is calculated as follows:

Definition of delivery and delivery concern:

A delivery is defined by part number and engineering level, quantity and specified shipment time according to the supplier’s individual purchasing agreement (e.g. INCOTERMS, “Pull Lists”).

A delivery concern is an incident monitored by a NCM reportto the supplier and managed by Logistics. Typical examples:

Deliveries not on time Wrong quantity / product Packaging not according to specification AS 242 non-compliance (e.g. missing or wrong EDI/documents) AS 244 non-compliance (e.g. mislabeling) Crisis Management (e.g. capacity recovery, alternative delivery plan)

AS 51 Autoliv Supplier RatingMeasurable Parameters - OTP (I)

OTP = (1 Number of delivery concerns

Number of deliveries per month ) x100


OTP score calculation is unchanged.

OTP is calculated as follows:

If OTP THOTP score = 0

If THOTP OTP 100 score =

AS 51 Autoliv Supplier RatingMeasurable Parameters - OTP (II)

OTP THOTP

100 THOTP

x WOTP

100THOTP

0 OTP

WOTP

Score


AS 51 Autoliv Supplier RatingMeasurable Parameters - OTP (III)

OTP score calculation example

Use these values: WOTP = 26

THOTP = 90

30 deliveries in 1 month with 1 delivery concern

OTP = = 96.66

In this case, THOTP OTP 100 applies, and the score is calculated as follows:

score = = = 17.3

Round off the calculated score OTP score = 17

(1 1

30 ) x100

96.66 90

100 90x 26

(1 No. of delivery concerns

No. of deliveries per month ) x100

OTP THOTP

100 THOTP

x WOTP


AS 51 Autoliv Supplier RatingService Level Parameters - Overview (I)

This rating was changed.




AS 51 Autoliv Supplier RatingService Level Parameters - Overview (II)

Important Note:

Quality of Quotation (QUOT) was removed.

Engineering Support (ENG) was replaced by S-APQP.

Service Level Parameters only apply to external (non-Autoliv) suppliers.


AS 51 Autoliv Supplier RatingService Level Parameters - S-APQP

This rating was changed.Rating rules in AS 51:1.0, Engineering Support (ENG)

Rating rules in AS 51:2.0, S-APQP

LEVEL CRITERIA SCORE

1No maintenance of open issues/concerns lists (Action Items, APQP). Prototypes**provided sometimes. Design Reviews less than 100%. Not holding APQP meetings.

0

2Little maintenance of open issues/concerns lists (Action Items, APQP). Prototypes**provided inconsistent. Design Reviews less than 100%. Not holding APQP meetings.

1.5

3Poor maintenance of open issues/concerns lists (Action Items, APQP). Prototypes**provided inconsistent. Design Reviews less than 100%. APQP meetings heldoccasionally.

3

4Manage all open issues/concerns lists (Action Items, APQP). Prototypes provided**consistent. Design Reviews less than 100%. Setting and holding regular APQPmeetings.

4.5

5Manage all open issues/concerns lists (Action Items, APQP). Prototypes** providedin a timely manner. Design Reviews 100%. Setting and holding regular APQPmeetings.

6


0 Not applicable (S-APQP not required, or supplier is internal) N/A

1 S-APQP required but not delivered 0

2 S-APQP delivered but not fully meeting Autoliv Supplier Manual (ASM)requirements

4

3 S-APQP delivered according to ASM, complete, correct and on time 8


AS 51 Autoliv Supplier RatingService Level Parameters - PPAP (I)

This rating was changed.It is applicable only for 1st time submittals per engineering level. The worst PPAP score will be taken.




1 PPAP requirements are not understood or acknowledged by supplier. 0

2PPAP is not delivered on time and/or documentation not complete and/or samples arenot complete.

1.5

3With Autoliv support, all documentation together with samples is complete anddelivered on time and approved on the first review.

3

4With minimal Autoliv assistance, all documentation together with samples is completeand delivered on time and approved on the first review.

4.5

5Without Autoliv assistance, all documentation together with samples is complete anddelivered on time and approved on the first review.

6


0 Not applicable (PPAP not required, or supplier is internal) N/A

1 PPAP requirements are not understood or acknowledged by supplier 0

2 PPAP not complete or not correct or not on time 4

3 PPAP delivered according to ASM, complete, correct and on time 8


AS 51 Autoliv Supplier RatingService Level Parameters - PPAP (II)

What is counted as an Engineering level?In AS 51: PPAP rating is applicable only for 1st time submittals per engineering level. For 2nd or 3rd or 4th time submittals, no new rating will be given.

There is a new engineering level if A major change is made to the part according to AS 101

There is not a new engineering level if A minor change is made to the part according to AS 101


This rating was changed.Rating rules in AS 51:1.0


AS 51 Autoliv Supplier RatingService Level Parameters - RESP


1 Problem not understood and/or acknowledged by the supplier 0

2 Supplier issue effects Autoliv’ability to build and ship during the 8-D process 1.5

3Autoliv support is required for the supplier to initiate immediate containment,determine root cause, implement corrective action and verify effectiveness withminimal disruption to Autoliv’s material flow.

3

4With minimal Autoliv assistance, supplier initiates immediate containment, determinesroot cause, implements corrective action and verifies effectiveness without disruptionto Autoliv’s production process.

4.5

5Without Autoliv assistance, supplier initiates immediate containment, determines rootcause, implements corrective action and verifies effectiveness without disruption toAutoliv’s production process.

6


0 Not applicable N/A

1 Problem not understood and/or acknowledged by the supplier 0

2 Autoliv support is required for supplier to solve their problem (e.g. 8D report) 4

3 Without Autoliv assistance, supplier is able to solve the problem according toASM, or no problem occured

8


For all Service Level Parameters, a level 0 was introduced.

Level 0 gives the score N/A (Not applicable). This means that the parameter is not included in: Total score Total possible score (total possible score is reduced with the weight

of the not applicable parameter(s)

Level 0 can be applied in the following cases:

The supplier is internal S-APQP or PPAP is not required at all for the supplier (off the shelf

parts, small quantities or the supplier does not provide these services at all)

S-APQP or PPAP is not required for the rating period for the supplier

AS 51 Autoliv Supplier RatingService Level Parameters - Level 0


SL Parameter score calculation example

Use these values: S-APQP level 2 score = 4

PPAP level 1 score = 0

RESP level 3 score = 8

In a final step, we will derive the Overall Rating / Total % achieved for all Measurable and Service Level Parameters used in examples so far.

AS 51 Autoliv Supplier RatingService Level Parameters - Example


AS 51 Autoliv Supplier RatingOverall Rating - Total % achieved

Summary of score calculation example

The scores from the examples are shown below:

The Total Score is 57 out of 100. This means, Total % achieved is 57%.

Measurable Parameters Score Supplier PPM 15 Supplier Demerits 13 On Time Parts Index 17

Service Level Parameters Score S-APQP 4 PPAP 0 Responsiveness / Relationship 8

Total Score 57


AS 51 Autoliv Supplier RatingOverall Rating - Rating Category

Each supplier is given a status (Rating Category).

The Total % achieved based upon previous examples was 57%, which means this supplier’s performance falls into Rating Category “UNSATISFACTORY”.

*Supplier Rating Database is only used within Autoliv


AS 51 Autoliv Supplier RatingOverall Rating - Depending on No. of Relations

Overall Rating – One supplier relation Example of previous slides

Overall Rating – More than one supplier relation Example of future slides

Supplier A

Autoliv Plant 4

Autoliv Plant 3

Autoliv Plant 2

Autoliv Plant 1

Supplier A Autoliv Plant 1


Example with >1 Supplier Relation Supplier Overview

Supplier A delivered parts to 4 ALV plants during the last 6 months (Sep-03 to Feb-04): AOA, ASG, BKI, BMF.

On the next pages, the numbers below are explained.

Note! The picture in this and the next slide is taken from the internal Autoliv Supplier Rating database

A

Monthly values6 months

Period minus 1 (=January -04)

Period minus 5 (=September -03)

43 %


AAR did not purchase any parts in the last 6 months.

AOA did not rate Supplier A in 2004, but during the last 4 months of 2003, the 6 months score was 84%

Supplier A ASG: 6M rolling = 92% , and Feb-04 = 91%

Supplier A BKI: 6M rolling = 66% , and Feb-04 = 66%

Supplier A BMF: 6M rolling = 60% , and Feb-04 = 85%

Supplier A Total: 6M rolling = 39% , and Feb-04 = 65%

Example with >1 Supplier Relation Single Ratings

A43 %


Total % achieved is calculated as follows:

Note: M means Measurable Parameters

SL means Service Level Parameters

Parameters will be rated only if they are applicable.

Example: For Autoliv internal suppliers, Service Level Parameters are not rated.

Total possible score = 100 - Total weight Service Level Parameters

Total possible score = 100 - 24 = 76

Example with >1 Supplier Relation Overall Rating - Total % achieved

Total % achieved = x100Total achieved score for applicable parameters (M+SL)

Total possible score


Total PPM during the 6 months rolling period:

AOA PPM = 0 rejects divided by 147 200 delivered parts = 0 PPM

ASG PPM = 1 rejects divided by 709 459 delivered parts = 1 PPM

BKI PPM = 0 rejects divided by 278 400 delivered parts = 0 PPM

BMF PPM = 998 rejects divided by 277 507 delivered parts = 3596 PPM

Total PPM = 999 rejects divided by 1 412 566 delivered parts = 707 PPM

Note: Total PPM is calculated as total rejects from all supplier relations divided by total deliveries from all supplier relations, times 1000 000

Total PPM score = 0 because 707 PPM > 200 PPM = UPPM .

Example with >1 Supplier Relation Overall Rating - Total PPM

Total PPM = x106 Total rejects from all supplier relations (past 6 months)

Total deliveries from all supplier relations (past 6 months)


Total DMT during the 6 months rolling period:

Note: A supplier relation exists for every month where a specific supplier delivers parts to a specific ALV plant. In this example, there are 22 months

of reporting due to 22 supplier relations. AOA: 0 demerits during 4 months of reporting

ASG: 4 demerits during 6 months of reporting

BKI: 0 demerits during 6 months of reporting

BMF: 39 demerits during 6 months of reporting

All plants: 43 demerits during 22 months of reporting

Total DMT: 43 demerits divided by 22 months = 1.95 2

Total DMT score = 25 - 2 = 23 because 2 demerits < 25 = WDMT .

Example with >1 Supplier Relation Overall Rating - Total DMT

Total DMT = x100Total demerits from all supplier relations (past 6 months)

Number of supplier relations (past 6 months)


Total OTP is calculated as a quantity-weighted-OTP for all supplier relations.

Total OTP during the 6 months rolling period =

The next slide shows the Delivery and OTP data of all 4 plants for this example. When you put them in the equation above, the result will be Total OTP = 91.6

Example with >1 Supplier Relation Overall Rating - Total OTP (I)

AOA (Delivery month1 x OTPmonth1 + Delivery month2 x OTPmonth2 +…..Delivery month6 x OTPmonth6 ) + ASG (Delivery month1 x OTPmonth1 + Delivery month2 x OTPmonth2 +…..Delivery month6 x OTPmonth6 ) +

BKI (Delivery month1 x OTPmonth1 + Delivery month2 x OTPmonth2 +…..Delivery month6 x OTPmonth6 ) +BMF (Delivery month1 x OTPmonth1 + Delivery month2 x OTPmonth2 +…..Delivery month6 x OTPmonth6 )

AOA (Delivery month1 + Delivery month2 +…..Delivery month6) +ASG (Delivery month1 + Delivery month2 +…..Delivery month6) + BKI (Delivery month1 + Delivery month2 +…..Delivery month6) +BMF (Delivery month1 + Delivery month2 +…..Delivery month6)


Delivery and OTP data for the 4 plants:

Total OTP = 91.6 for all 4 supplier relations.

THOTP = 90 OTP 100 applies, and

Total OTP score = = 4.16 4

Example with >1 Supplier Relation Overall Rating - Total OTP (II)

Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04Delivery 43200 31600 32800 39600 0 0

OTP 100 100 100 100

Delivery 107576 129126 137109 89628 130410 115610OTP 100 100 100 100 100 100

Delivery 43536 49296 57840 27504 35136 65088OTP 50 60 75 33 67 50

Delivery 19800 47440 67267 31440 49760 61800OTP 100 100 100 100 100 100

BKI

BMF

ASG

PeriodPlant Data

AOA

91.6 90

100 90x 26


Total SLP during the 6 months rolling period:

S-APQP, PPAP and RESP data for the 4 plants during the 6 months rolling period:

Example with >1 Supplier Relation Overall Rating - Service Level Parameters (I)

Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04S-APQP 1 1 2 2 3 1PPAP 2 2 3 1 2 2RESP 3 3 3 2 2 2

S-APQP 2 1 3 2 3 3PPAP 3 3 3 3 0 0RESP 1 2 3 2 3 3

S-APQP 2 1 0 0 3 3PPAP 3 3 3 3 3 3RESP 1 1 2 2 3 3

S-APQP 1 1 2 2 3 1PPAP 2 2 0 3 3 2RESP 3 3 3 2 2 2

ASG

BKI

BMF

PeriodPlant Data

AOA

Total SLP = x100Total SL ratings from all supplier relations (past 6 months)

Number of supplier relations (past 6 months)


SLP level for S-APQP

= = = 1.95 2

SLP level for PPAP

= = = 2.57 3

SLP level for RESP

= = = 2.33 2

SLP score: level 2 score = 4, level 3 score = 8

Total SLP score = (4 + 8 + 4) = 16

Example with >1 Supplier Relation Overall Rating - Service Level Parameters (II)

(1+1+2+2+3+1+2+1+3+2+3+3+2+1+3+3+1+1+2+2+3+1)

(24-2)4322

(2+2+3+1+2+2+3+3+3+3+3+3+3+3+3+3+2+2+3+3+2)

(24-3)54

21

56

24

(3+3+3+2+2+2+1+2+3+2+3+3+1+1+2+2+3+3+3+3+3+2+2+2)

(24-0)


Overall Rating Total PPM score = 0

Total DMT score = 23

Total OTP score = 4

Total SLP score = 16

Total % achieved = (0 + 23 + 4 + 16) / (25+25+26+24) = 43 / 100 = 43%

This means that this supplier’s performance falls into Rating Category “UNSATISFACTORY”.

Example with >1 Supplier Relation Overall Rating - Summary


AS 51 Autoliv Supplier RatingOverall Rating - Rating Period

All Suppliers are rated monthly:

Measurable Parameters are calculated monthly.

Service Level (SL) Parameters are evaluated monthly.

If there is no change, the last rating will remain visible in the database until the next rating will take place. If there is no rating activity during 6 months, rating will become “Not Applicable (N/A)”.

For external suppliers, SL Parameters will be rated only if applicable. For internal suppliers, SL Parameters are not rated at all.

If a supplier has not delivered any parts to Autoliv in a specific month/period, this supplier shall not be rated for that month/period.


AS 51 Autoliv Supplier RatingOverall Rating - Rating Period

Ratings are submitted to Autoliv Supplier Rating Database by the 10th of the next month.

Supplier Performance is published on APP (Autoliv Partner Portal) by the 15th of the next month.

The Autoliv Supplier Rating Database will only be open for input files between the 1st and the 10th each month. This means that input files sent to the database after the 10th will not be processed until the 1st of the next month


AS 51 Autoliv Supplier RatingOverall Rating - Disputes from Suppliers

The supplier is responsible for checking accuracy of their AS 51 rating.

Suppliers that are not agreeing with their rating(s) should issue an AS 51 Dispute form found in the Library section on the APP.

Suppliers must respond within two weeks after the supplier rating has been published.

The AS 51 Dispute form shall be faxed / e-mailed to the appropriate person listed in the dispute form contact list.


AS 51 Autoliv Supplier RatingOverall Rating - AS 51 Dispute Form on APP


AS 51 Training Summary (I)Main Changes

PPM

Target PPM was changed from 10 to “Zero”.

The PPM rating can be modified upon joint decision, between Autoliv and Supplier, where counting of defect parts is impossible or too time consuming compared to the cost of the part.

DMT

Supplier Demerits are now based on 3 criteria: Minor (1), Critical (10), Customer (25).

Major was removed.


AS 51 Training Summary (II)Main Changes

OTP

A delivery is defined by part number and engineering level, quantity and specified shipment time according to the supplier’s individual purchasing agreement (e.g. INCOTERMS, “Pull Lists”).

A delivery concern is an incident monitored by a NCM report to the supplier and managed by Logistics. Typical examples of reported incidents are: Deliveries not on time,

wrong quantity / product, packaging not according to specification, AS 242 non-compliance (e.g. missing or wrong EDI/documents), AS 244 non-compliance (e.g. mislabeling), Crisis Management (e.g. capacity recovery, alternative delivery plan).


AS 51 Training Summary (III)Main Changes

Service Level Parameters (SLP)

The number of SLP changed from 4 to 3, QUOT was removed. The Service Level Weights changed from 6 to 8.

Engineering Support (ENG) was replaced by S-APQP.

The number of SLP criteria was reduced from 5 to 3, a Level 0 was added giving a score: N/A.

PPAP rating is applicable only for 1st time submittals per engineering level. Suppliers with multiple PPAP submittals in one month will get the

lowest score of these submittals.


AS 51 Training Summary (IV)Main Changes

Miscellaneous

Ratings are compiled and submitted to APP by the 10th of the next month.

The Service Level Parameters are now evaluated and updated monthly instead of half-yearly.

The AS 51 Supplier Overview Report now shows a table at the bottom with the detailed data leading into the summary scores which are shown in the graphs.

A Supplier Dispute Procedure was introduced.


References and Links

AS 51 Autoliv Inc. Standard Supplier RatingAS 101 Autoliv Inc. Standard Part numberAS 242 Autoliv Inc. Standard EDI MessagesAS 244 Autoliv Inc. Standard Package & Transport

Label

ASM Autoliv Supplier Manual (see http://www.autoliv.biz)

APP Autoliv Partner Portal (see http://www.autoliv.biz)

proprietary as 51 version 2 -training module - supplier rating issued by: jolene kawa, jeffrey...

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