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Dave Watkins, Executive VP and Director of International Operations
Omnex Inc.
Q1 Second Edition
R1 08.04 © OMNEX 3
2001 - 2004, Omnex, Inc.
3025 Boardwalk Suite 120
Ann Arbor, MI 48108
734-761-4940First EditionAugust 2004
This publication is protected by Federal Copyright Law, with all rights reserved. No part of this publication may be reproduced, stored in a retrieval system, translated, transcribed, or transmitted, in any form, or by any means manual, electronic, electro-
magnetic, mechanical, chemical, optical, or otherwise, without prior explicit written permission from Omnex, Inc.
R1 08.04 © OMNEX 4
Table of Contents
• Introduction • Overview of Ford Q1• Eligibility, Process and Requirements• Revocation • Manufacturing Site Assessment
Introduction
R1 08.04 © OMNEX 6
Focus of Q1A Process—Not An Award
• Capable Systems• Ongoing Performance (SIM)• Manufacturing Site Assessment• Customer Endorsement• Site Action Plan• Evolving standards and expectations• Continuous Improvement• Elimination of Q1 Probation
R1 08.04 © OMNEX 7
Strategy –Q1 2nd Edition
• Objectives: – Communicate Ford expectations to drive continuous
improvement and customer satisfaction– Provide recognition for quality achievement
• Who: Tier 1 suppliers of production or service product to Ford
• What: Set of fundamental systems, quality and manufacturing disciplines, metrics and tools that are predictive and drive continuous improvement
R1 08.04 © OMNEX 8
Strategy –Q1 2nd Edition
• How: – Ensuring capable systems– Manufacturing Site Assessment– Supplier Improvement Metrics (SIM)– Defined Objectives– Consistent application of continuous improvement
systems, tools and methodologies
• Benefit: Becomes a valid predictor and monitor of ongoing capability, quality performance and continuous improvement
R1 08.04 © OMNEX 9
Q1 Then Q1 2nd Edition
Diploma
SIM
SIM
Discrete Approach
Holistic Approach
Supplier Self-assessment
Roadmap Execution Deployment Including Program Deliverables
Supplier Corrective
Actions
QualityResults
Supplier Manufacturing
Assessment
Predictive In-process
Metrics
Verify Results
Q1 – Ford Perspective
R1 08.04 © OMNEX 10
Significant Changes in 2nd Edition
• Revised ppm requirements• Revised Stop Shipment Waiver Criteria• Elimination of partial site assessment• Site assessment based on Segmentation• Violation of Trust provision• Add ppm and delivery to Europe Service
suppliers• Site Warranty specifics• Include Launch Performance in Site
Assessment
Overview of Ford Q1
R1 08.04 © OMNEX 12
Q1 Expectations
• Q1 status means that a supplier’s facility achieves excellence in these key areas:– CAPABLE SYSTEMS: 3rd Party Certified to
QS-9000 or TS 16949, ISO 14001; MS 9000/MMOG compliant (self assessment)
– ONGOING PERFORMANCE: Ford tracks and communicates to suppliers by linking a supplier’s Q1 status directly to Supplier Improvement Metrics (SIM).
R1 08.04 © OMNEX 13
Q1 Expectations
– SUPERIOR MANUFACTURING PROCESS: The Manufacturing Site Assessment evaluates supplier capability and performance to customer expectations.
– SATISFIED CUSTOMERS ... CONTINUAL IMPROVEMENT: Demonstrated customer satisfaction by Customer Endorsement.
– CONTINUOUS IMPROVEMENT: Rising thresholds for performance acceptance criteria.
R1 08.04 © OMNEX 14
• Third Party Certification – QS 9000 (or TS 16949); ISO 14001 and compliance to MS 9000/MMOG/Odette*
• Q1 overall score > 800 points• Acceptable Manufacturing Site Assessment• No Field Actions (with supplier responsibility)• <2 Stop Shipments (with supplier responsibility)
Acceptance Criteria for Q1
*Volvo Suppliers
R1 08.04 © OMNEX 15
Acceptance Criteria for Q1
• PPM less than 100% of Commodity Average or <110• Minimum Delivery Rating of 81 points• Shipping History – 6 months• No Violations of Trust• Acceptable Warranty Performance (TBD)• Endorsement – STA and Customers
R1 08.04 © OMNEX 16
Ongoing Evaluation for Q1
• CONTINUOUS IMPROVEMENT– Thresholds may be raised annually:
• SIM Metrics• Warranty Performance• Manufacturing Site Assessment
– Site Action Plan - corrective action plans assessed based on timeliness, thoroughness and effectiveness
Q1 Eligibility, Process and Requirements
R1 08.04 © OMNEX 18
Q1 Eligibility
• Who Is Eligible for Q1 2002?– An External Supplier whose manufacturing
facility currently supplies production or service product to Ford, and has an active Ford purchase order
• Minimum six consecutive months of production or service shipping history
– Current Q1 suppliers must meet the new criteria
R1 08.04 © OMNEX 19
Q1 Process Steps
1. Obtain 3rd Party Certification:– ISO/TS 16949 (QS-9000 may be acceptable until
2006)– ISO 14001
2. Achieve compliance to MS9000/MMOG or Odette (Self Assessment)
3. Contact Ford STA Site Engineer
R1 08.04 © OMNEX 20
Q1 Process Steps
4. Establish eligibility– Identify Ford Customer sites– Determine Supplier Site Classification– Agree on process: Ford STA or Self-Assessment
to Q1 Criteria – Obtain Customer Endorsements
5. Submit Formal Application to Ford STA
6. Q1 On-site Evaluation (at STA option)
7. Obtain Final Recommendation from STA
R1 08.04 © OMNEX 21
Q1 Requirements
• Established Eligibility– Suppliers must have a purchasing contract with
Ford, and at least six consecutive months of production, or service, shipping history.
• QMS/EMS Systems Certification• MS9000/MMOG or Odette Compliance
R1 08.04 © OMNEX 22
Q1 Requirements
• Ongoing Manufacturing Site Assessment– Acceptable Site Assessment:
• Planning and Demonstration of Manufacturing Process Capability
• Variability Improvements (e.g., Consumer Driven 6 sigma)
• Manufacturing Efficiencies (FTT & OEE)• Customer Satisfaction documented in robust
Quality Operating System (QOS)
R1 08.04 © OMNEX 23
Q1 Requirements
• Performance MetricsFive areas of performance measurement:
1. Field Service Actions
2. Stop Shipments
3. PPM Performance
4. Delivery Performance
5. Violations of Trust
R1 08.04 © OMNEX 24
Q1 Requirements
• Customer Endorsement– Each Ford plant that receives the supplier’s
products
For Service Parts– Ford Customer Service Division (FCSD)– Material Planning & Logistics (MP & L)– Supplier Technical Assistance (STA)
R1 08.04 © OMNEX 25
Q1 Requirements
• Customer Endorsement CriteriaConsiders immediate prior six months– No Stop Shipments with any supplier
responsibility– Commodity PPM <150% for relevant industry– Weighted average Delivery Rating >80– Improving or flat trend in QR for 6 months– Site action plans effective at addressing
concerns
R1 08.04 © OMNEX 26
Q1 Requirements
• Continual Improvement: Ongoing Excellence– Acceptance criteria for
performance metrics and site assessment may be raised periodically to encourage continuous improvement.
• Continual Improvement is built into the heart of the Q1 designation.– According to Ford, to
maintain Q1 status suppliers must “keep a step ahead of the game, becoming better and better each year.”
R1 08.04 © OMNEX 27
Q1 Score
• Each site begins with 1000 points• Each site must maintain a score of 800
or better• Sites gain or lose points based on
performance metrics and must meet all Q1 manufacturing site expectations.
R1 08.04 © OMNEX 28
Q1 Scoring Thresholds
• Field Action (-250 points)– Directly impacts Customer Satisfaction and Brand
Image
• Stop Shipment (-100 to -250 points)– Directly impacts Customer Satisfaction
• PPM (+100 to -250 points)– Provides incentive to continually improve, increasing
Customer Satisfaction
R1 08.04 © OMNEX 29
Q1 Scoring Thresholds Continued
• Delivery Rating (+100 to -250 points)– Drives excellence in communication and shipping
performance
• Manufacturing Site Assessment (-150 to –250 points– Late– Ineffective
R1 08.04 © OMNEX 30
Q1 Scoring Thresholds Continued
• Violation of Trust (-250 points)– Trust issue which severely impacts Ford-Supplier
business relationship
• Warranty (TBE)– Scoring threshold planned to be available 3rd Qtr.
2003*
*Check https//:web.bli.ford.com
Q1 Revocation Process
R1 08.04 © OMNEX 32
Revocation of Q1
• Q1 status:– A supplier’s overall Q1 score will be updated
monthly to reflect the most recent six months of mature data.
– Suppliers must maintain a minimum of 800 points of the initial 1,000 Q1 points
– The effect of triggering criteria cannot be offset by positive Q1 performance in other areas.
– Result is recommendation to revoke Q1 status.
R1 08.04 © OMNEX 33
Q1 Status - Revocation
• Situations which may result in Revocation: – Any loss of certification – Field Service Action with any supplier responsibility– Stop Shipments -- two or more (may be waived)– Commodity PPM level exceeds commodity average
by 100% and site PPM >110– Delivery Rating <81 Points– Delinquent Mfg. Site Assessment– MSA Corrective Action Plan delinquent or ineffective– Violation of Trust– Overall Score falls below 800
R1 08.04 © OMNEX 34
Q1 may be regained by satisfying all requirements for 6 consecutive months, including STA and Customer Endorsements, as appropriate.
Q1 Status- Revocation
• Triggering situations cannot be offset by positive performance in other areas
• If not satisfactorily addressed, Q1 status will be affected
Manufacturing Assessment
R1 08.04 © OMNEX 36
Q1 Site AssessmentEvaluation Matrix
• Electronic checklist to provide objective evidence
• Completed Checklist is provided to STA• Maintain completed copies on-site
– Corrective Action Plans– Retain for prior 24 months
• Process Manufacturers use Manufacturing Process Checklist
• Employs R/Y/G and Expectation Ranking
R1 08.04 © OMNEX 37
General Areas of Assessment
• Planning for Manufacturing Process Capability
• Demonstration of Manufacturing Process Capability
• Continuous Improvement– Launch Performance– Lean Manufacturing– Variability Reduction– Customer Satisfaction
R1 08.04 © OMNEX 38
2 Stage Process Affecting Q1 Status
• At Discretion of STA. Triggered if:– Site assessment is late to the required
frequency– Corrective action plan is not submitted within
30 days of assessment– Corrective action plan is ineffective in
execution
• First Action = -150 points
• Second Action = -250; loss of Q1 status
R1 08.04 © OMNEX 39
*Focus areas: require semi-annual self-assessment
Manufacturing Site Assessment
• Quality procedures, QS- 9000/ TS 16949, QOS
• FMEAs and Control Plans*
• Employee Readiness, Training Review
• APQP, Launch, Run-at-Rate Review *
• Manage the Change
R1 08.04 © OMNEX 40
Manufacturing Site Assessment, Cont’d
• Sub-supplier Quality Management*• Control on Incoming Quality• Control Plans, Operator Instructions *• Process Variability Monitoring, reduction*• Gage Calibration and Use *
*Focus areas: require semi-annual self-assessment
R1 08.04 © OMNEX 41
Manufacturing Site Assessment, Cont’d
• Part Identification, Nonconforming Parts, Packaging, Shipping
• Testing, Engineering Specifications• Preventive Maintenance/Housekeeping *• Manufacturing Flow, Six Sigma & Lean
Manufacturing Metrics *• Problem Solving and Corrective Action *
*Focus areas: require semi-annual self-assessment
R1 08.04 © OMNEX 42
Integrated Systems
The 2nd Edition Q1 Approach
3rd PartyCertification
(QS-9000, ISO14001)
CustomerEndorsements
AcceptableSupply
Performance(SIM Results)
Acceptable SiteAssessment
ScoreContinuous
Impro
vemen
t++
++
++ Q1Q1