supplier quality development program

8/4/2019 Supplier Quality Development Program

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Implemented September 9, 2011 Rev 1 version 1

www.cleanfuelusa.com

Supplier Quality Development Program(SQD)

Lisa McCall, Quality ManagerBrenda Gill, Supplier Quality Engineer


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What is the supplier quality development (SQD) Program?A. Primary Components of the SQD program

Supplier Quality Development (SQD) is a strategically focused program that is aimed at:

Driving Quality

Continuous improvement

Lowering total cost for the company as well as the supplier

The SQD team is aligned with the Sourcing Strategy Teams and is composed of members of Quality Assurance for all Clean

Fuel USA facilities.

B. SQD Key Strategies Development: partner with new and existing suppliers to drive continuous improvement activities in

the supplier manufacturing processes, quality systems, and customer service to achieve measurable

improvement in quality.

Performance: Systematically identify opportunities to improve supplier performance and proactivelydevelop/drive supplier Performance improvement plans to achieve measurable improvement in

supplier product quality, on-time delivery, and total lowest cost.

Prevention:proactively access supplier manufacturing and quality capabilities, minimize potentialrisks, and ensure the effective implementation of Clean Fuel Quality expectations to achieve on-time,

on-target launches and exceptional supplier quality.


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C.SQD Representative Responsibilities Primary source of communication between suppliers and Clean Fuel USA

Partner with Suppliers to improve quality

Participate in Strategic Sourcing teams (SST)

Support the sourcing of new materials and suppliers

Advanced Quality Planning on new product initiatives

Conduct supplier quality audits

Manage material certification program

Manage raw material and product non-conformance

Complaint data analysis and reporting

Vision/Mission/GoalVision: To build a foundation for world class quality through supply-based continuous improvement activities.Mission: To proactively drive supplier quality development to deliver quality materials and products on time and ontarget.Goal: the ultimate goal is to drive improved quality starting at the supplier, which drives continuous improvementand a lover total cost of ownership for all involved.

SQD Supplier ExpectationsWe want our suppliers to continually focus on quality improvement.

To continually drive supplier quality development and maintain or exceed the 99% quality expectation, our team is

willing to work with you to proactively achieve this goal 9please refer to the Quality Service Rating section on howthis is measured).

However, for us to be able to assist you in the process, we also expect that our suppliers are engaged in the process

and meet certain expectations. These expectations are:


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Have effective and timely processes in place to implement corrective action and quality

improvements.

Focus on continued quality improvement

Have identified and available quality resources

Share best practices

Share data to reduce inspections

Attention to audits and follow up actions

Good communications

Quarterly Review ReportsAlthough they are other ways for vendors to monitor their performance, the quarterly review report is an

opportunity for SQD representatives to work with the vendor and discuss their overall quality rating, discuss good

performance as well as take a detailed look at areas that are in need of improvement and work with the vendor to

devise an improvement plan.

Quality Service Rating

The quality service rating is the suppliers overall quality rating. There are four different scores that are used to

tabulate the quality rating:

1. Qualitative Service Rating

2. Quality Rating

3. Audit Score

4. CAPA Rating


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Below is a visual presentation of how the quality rating is derived and how the rating is

communicated.

QUALITATIVE

SERVICE

RATING

QUALITY

RATING

AUDIT

SCORE

CAPA

SCORE

QualityService

Rating

Quarterly

ReportImprovement

Plan


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Qualitative Service RatingThe qualitative Service Rating measures supplier performance in four (4) different area on a scale of 1-5 (5 being the

highest score). A copy of the evaluation form is available from the quality manager of CFUSA.

Accurate Information

Measures overall vendor interaction Information provided to CFUSA is detailed,

accurate and complete

QA is knowledgeable about CFUSA quality

requirements

QA consults with experts when they do not know

an answer.

Area of Evaluation Criteria used for Evaluation

SQD/Strategic Activities QA representative designated

QA contact information is provided and kept

current

QA is available when needed

QA responds to CFUSA requests in a timely fashion

QA meets key dates on or ahead of schedule

QA is proactive in providing info to CFUSA when

issues occur.

DMDO/ADR Supplier has an efficient DMDO process

Response time is reasonably quick

Response is appropriate, applicable and complete

RMAs are promptly sent when requested

Willingness to help CFUSA investigate the best

options

Responds quickly when resolution is agreed upon

Offers timely on-site rework assistance, as

applicable

Supplier utilizes results to improve performance

Continuous Improvement Supplier generates ideas for quality improvement

Supplier is open to SFUSA audits/visits

Supplier actively sets goals to improve quality

Supplier has formal performance measurement

systems

Supplier supports continuous improvement

activities

Supplier shares ledge on best practices/ideas


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Quality Rating/Supplier ScorecardThe quality rating is a rating that is calculated based on quantative metrics that measure supplier performance in areas that

have a significant impact on supply chain operations. These metrics are outlined on the supplier scorecard and accessible to

the supplier via the quality manager of SFUSA

Supplier ScorecardThe Supplierscorecard measures supplier performance using key supply chain metrics.

Why is it important?The score received on the supplier scorecard is important because it determines whether the company will seek long

term or short term relationships with the supplier.

How do I access the information?Scorecards are available from the CFUSA quality manager and from your SQD representative during the quarterly

review or from your procurement representative.

Supplier Scorecard ManualFor more detailed information on elements of the supplier scorecard, please take a look at the Supplier scorecard

handbook you can obtain from the quality manager or your SQD representative. If you have any questions, please contact

your procurement representative.


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Audit ScoreAudit scores are taken from the audit checklist and can vary depending on the kind of audit that is performed.

Corrective Action follow-Up (CAPA Rating)This metric measures how effectively and timely a supplier responds to CAPAsfrom the time of receipt to successful control

of the issue.

There are four areas that are measures on a scale of 1 to 5 (5 being the highest):

1. Timely response2. Effective Response3. Timely Implementation4. Demonstrated Control

What are the considered poor ratings and what happens if I have poor ratings?Clean Fuel USA expects that its suppliers have an overall quality rating of 99% or higher. We know that this is an

ambiguous target, so we are willing to partner with our suppliers to achieve this goal together.

For suppliers with quality ratings of less than 99%, a quality improvement plan will be created to help the supplier work

towards the goal.

However, consistently poor ratings can also lead to a chance in the suppliers segmentation, which affects the business

relationship between the supplier and CFUSA. For more information on segmentation, please refer to the quality manager.


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Supplier Quality Improvement PlanSupplier Quality Improvement Plans are supplier goals that are created as a result of quarterly reviews of less than 99%, or

as needed. These goals are intended to help the supplier work towards and sustain the 99% or higher quality rating.

1. Why would I receive one?

Your SQD representative will discuss a quality improvement plan with you when a consistent problem is

identified of if your quality rating falls below 99%.

2. What does it look like?

*Please ask the quality manager for a copy sample.EVALUATION OF SUPPLIERSCapability RatingClean Fuel USAevaluates a supplier's capability rating on whether the following factors are judged adequate to

manufacture product conforming to specifications and the potential exists for continual quality improvement.

Management commitment to provide quality product with continuing emphasis on improvements in product quality.

Quality systems and the extent to which they conform to Clean Fuel USAQuality System Requirements, or alternately

ISO/TS 16949:2002.

Capability, capacity, and condition of the suppliersphysical manufacturing facilities and equipment.

Deficiencies noted during a capability evaluation shall be discussed with the supplier at the time of the survey and could

have an effect on future purchase negotiations and order placement.

Potential SuppliersClean Fuel USAmay survey potential suppliers prior to placement of orders for product or related tooling. Order placement

shall be based on the supplier first obtaining a satisfactory capability rating.


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Current SuppliersSurveys to establish capability ratings may be initiated prior to placement of new business as a result of quality performance

records or if the product differs significantly from the product previously purchased.

Supplier SurveillanceSuppliers are expected to participate in periodic appraisals of their quality control systems, record audits, and inspection of

finished products. If required, the suppliers measuring and test facilities are expected to be made available to Clean Fuel

USAandClean Fuel USAs customers. Suppliers must notifyClean Fuel USAof any major change in the organization such

as leadership, ownership, location, and or supplier modifications.

Supplier Quality Capability Rating SystemThe suppliers that are currently in the Clean Fuel USAManufacturing Approved Rating shall be ranked equally on Quality,

Cost, and Delivery.

Quality of Products DeliveredAll parts and materials are expected to arrive with zero (0) defects. The quality of products delivered rating is measured in

PPM and is based on the receiving inspection results, discrepant materials reports, and warranty system results.

On-Time DeliveryThis rating is based on delivering parts on the day they are due with an on-time window of up to five (5) working days early,

zero (0) days late to an agreed upon schedule. Anything less than 100% on time shall deduct from the rating. Quotes are

expected in 7 days. Engineering estimates for budgetary purposes are required within 48 hours. Part of the delivery rating

shall be based on the responsiveness of quotes and other necessary business functions.

Cost:


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Cost reduction targets are provided yearly by each buyer to your company. The percentage of accomplishment to target shall

be valued in this category.Supplier Quality System Survey


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