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4/20/2018 2
SPACEX SUPPLIER ORIENTATION
Quarter 2 2018
PROPRIETARY WARNING: This document and its contents are proprietary to Space Exploration Technologies Corp. and constitute Confidential and Proprietary information under SpaceX non-disclosure agreements. Unauthorized re-transfer is prohibited.
Supply Chain Reliability
4/20/2018 3
Directory – Hawthorne
Diondre Montgomery
Incoming Quality ManagerVibhor Jain
Quality Systems Manager
Rey Mastrapa
Receiving Inspection
Supervisor
Mason Falk
Precision Inspection
Supervisor
Christian Green
Quality Assurance Manager
Mary Sherman
Corrective Action Program
Annie Duong
Supplier Surveillance Team
Elizabeth Sondecker
Supplier Inspection Manager
Katie McDermott
Incoming Quality
Supervisor
Eric Romano
Supply Chain Reliability Director
Woojae Kim
Quality Assurance Manager
Michael Parzuchowski
Supplier Excellence Manager
4/20/2018 4
Directory – Seattle
David Deckert
Receiving Manager
Jared Roy
Supplier DevelopmentRob Dixon
Quality Inspection
Daniel Yeh
Procurement Manager
Anko Hofstee
Commodity Manager
Layne Sais
Receiving Inspection
Jared Tonge
Supplier Development
4/20/2018 5
Directory – Email Contacts
Hawthorne Annie Duong – [email protected]
Christian Green – [email protected] Diondre Montgomery – [email protected]
Elizabeth Sondecker – [email protected] Eric Romano – [email protected]
Katie McDermott – [email protected] Mason Falk – [email protected]
Mary Sherman – [email protected] Rey Mastrapa – [email protected]
Vibhor Jain – [email protected] Woojae Kim – [email protected]
Seattle
• Anko Hofstee - [email protected]• Daniel Yeh - [email protected]
• David Deckert - [email protected]• Jared Roy - [email protected]
• Jared Tonge - [email protected]• Layne Sais - [email protected]
• Rob Dixon - [email protected]
4/20/2018 6
Orientation Goal
• Establish a high-level
understanding of SpaceX
Supplier expectations and
processes
• Provide resources and
contact information to obtain
further details and support
Enable successful supplier relationships
4/20/2018 7
Agenda
• SpaceX Introduction
• Supplier Lifecycle
• Supplier Expectations
• Operational Overview
• Exception Management
• Supplier Performance
• Frequently Asked Questions
TIP!
This presentation is available to
you on www.SpaceX.com/Legal.
The password is #SallyRide
4/20/2018 8
Introduction
4/20/2018 10
Supplier Lifecycle
4/20/2018 11
Verification upfront Supplier
is technically capable and
production ready
Trial period where performance
is monitored with regular
monthly feedback intervals
Passing of quality evaluation
and deemed acceptable for
production without any
restrictions*
Supplier Lifecycle
Onboarding Prove Out Stabilization
*Countermeasures are taken to enforce supplier recovery where needed
4/20/2018 12
Supplier Leveling
Orientation, Expectations, Path to Success
Quality and Delivery performance is monitoredTrial Period with Oversight – Success of Trial Period required for
continued relationship
Performance results stabilized at B-Rating or BetterSource Inspection and E-Cert Participant
Performance results stabilized at A-RatingRegistered Third Party (or equivalent)
Part Approval Program ParticipantOngoing Customer/Supplier Teamwork and Support
Level 4 – Approved High Performing
Level 3 – Approved Satisfactory
Level 2 – Conditional/Under Evaluation
Level 1 – Under Consideration
YOU ARE
HERE
4/20/2018 13
Supplier Leveling Criteria
For questions regarding the process, please contact: Supplier Evaluation – [email protected]
LEVEL 3 LEVEL 4 Probation
Scorecard meeting minimum
expectations
Supplier inspection capability
requires some SpaceX
oversight
Source Inspection approved
Minimal containment activity
Acceptable E-Cert rejection
threshold
Registered Third Party
(AS9100 or equivalent)
Satisfactory scorecard
High confidence in supplier
inspection capability
No containment activity
Minimum volume threshold
Unsatisfactory scorecard
Low confidence in supplier
inspection capability
OR Quality Breach/
GIDEP/Quality Alert
Diagnostic Audit necessary for
improvement
**Consequences of noncompliance to SpaceX quality requirements will result in
Corrective Action and/or Probation**
4/20/2018 14
Supplier Expectations
4/20/2018 15
Supplier Documents
For questions regarding the expectations documented, please reach out to your SpaceX Quality contact.
Supplier Manual
Terms & Conditions
Additional Supplier Forms• Approved Supplier List• Acceptable Mill List• Quality Clauses• Scorecard Guide• SRIs• eCERTs
• And more…
**Supplier is responsible for complying to the latest SpaceX legal and quality
requirements found on www.spacex.com/legal (Password: #SallyRide)**
4/20/2018 16
Supplier Manual
For questions regarding the expectations documented, please reach out to your SpaceX Quality contact.
Purpose“To specify SpaceX requirements
for our suppliers”
Goal“To support the production of
quality product – a responsibility
that is shared between SpaceX
and our suppliers”
“All documents referenced in [the
Supplier Manual] can be found on
www.spacex.com/legal or are
otherwise publicly available”
**Supplier shall make sure they are working off of latest version of Supplier Manual**
4/20/2018 17
Product Traceability
Supplier shall have capability of tracing backward from fabricated hardware to the records or material from which the item, part, and material originated.
Identification and retrieval shall be required through all levels of higher assembly.
4/20/2018 18
Universal Compliance Practice
Supplier Manual (SPX-00007672)
Requirements in Supplier Manual are applicable to Flight and Non-Flight suppliers.
Compliance to the entirety of the document is required and acceptance of the order is a
record of the supplier’s understanding to perform.
Example:
Supplier Manual Section 4.2.2: Requires supplier to be able to trace backward from
fabricated hardware to the records or material from which the item, part, and material
originated.
‘Quality Clause 10a: raw material traceability’ requires suppliers to provide record of
above stated material traceability requirement being met, however, absence of this QC
from the PO does not exempt supplier from maintaining raw material traceability.
** Supplier is responsible for complying to requirements as stated in Supplier
Manual; absence of corresponding Quality Clauses does not exempt supplier from
any requirements stated in supplier manual **
4/20/2018 19
Inspection
SpaceX can reject an entire lot
if any part is found
nonconforming
Each part shall be visually
inspected
100% inspection of threaded
features
**100% inspection required on all Key and Major Characteristics**
4/20/2018 20
Nonconforming Material
**Supplier is responsible for ensuring product conformance to requirements**
Nonconforming material:
• Can be detected at any stage in production
• Detection will negatively impact supplier’s quality rating
Returned Material:
• Must be identified as “SpaceX Returned Material”
• Have necessary paperwork attached
• Can result in supplier suspension if not properly identified
4/20/2018 21
Acceptable Vendors List**For all SpaceX-designed parts, special processes are source controlled and
must be performed by a SpaceX approved vendor**
Special processes require SpaceX approval
Approval to one special process does not imply approval for any additional processes
Non-destructive testing (NDT)
• Suppliers who perform NDT requires SpaceX approval even if NADCAP certified
• Supplier is responsible for flowing down SpaceX requirements when subcontracting any NDT work
The ASL is a living document and is subject to change at any point. Suppliers are responsible for querying the most recent list
foundatSpaceX.com/legal upon scheduling special processes for any SpaceXcomponent. This, along with all other documents provided at SpaceX.com/legal should not be stored in a digital or physical state, but rather viewed from our webpage at time of need.
4/20/2018 22
Acceptable Mills List
Metallic material
• Use sources specified on Acceptable Mills & Preferred Distributors list
Non-metallic material
• Adhere to purchase order requirements
COTS are not bound by approved mill requirement
Melters, mills, and converters must use sources found on the Acceptable Mills List
**SpaceX requires control of material sources for metallic materials and other
cases**
4/20/2018 23
Counterfeit Prevention
• Do not contain the proper internal
construction consistent with the
ordered part
• Used, refurbished or reclaimed,
but represented as new product
• Different package style or surface
plating/finish than ordered
• Has not successfully completed
the OCM’s full production and test
flow, but represented as
completed product
• Sold with modified labeling or
markings intended to misrepresent
form, fit, function, or grade
4/20/2018 24
Prohibited Practices
Supplier Request for Information on spacex.com/legal
**Failing to obtain written approval for deviations may result in suspension**
Prohibited without prior written
approval from SpaceX:
• Repair of damaged or faulty
parts
• Change to any process,
material, or procedure
originally subject to approval
Do not accept verbal
modifications. Use SRI to
document deviation approvals.
4/20/2018 25
Prohibited Practices
Supplier Quality Alert
• We provide services to the U.S. Government & defense establishments
• Intellectual property shall be protected and not exposed
• Every supplier facility contracted is reviewed for compliance
Requirements
• SpaceX Standard T&C – Section 3: Any assignment of SELLER's Contract rights or delegation of SELLER's duties shall be void, unless prior written consent is given by SPACEX Authorized Representative.
• Supplier Manual – Section 4.8.4: Sellers are prohibited from relocating any production, manufacturing, and/or processing facilities during performance of a SpaceX Purchase Order without prior notification to SpaceX. This is necessary to afford SpaceX an opportunity to examine such facilities for compliance with quality assurance requirements, including any necessary approvals. In addition, if there is a change in senior management the Seller shall notify SpaceX.”
**Unauthorized delegation of seller’s duties during performance of a purchase
order is not acceptable**
4/20/2018 26
Prohibited Practices
Supplier Quality Alert
SpaceX has a zero tolerance policy for the falsification or misrepresentation of any quality
records. Falsification includes the alteration of any type of documentation.
Quality records are defined as documented evidence that processes are executed
according to the quality systems plan and requirements, such as inspection results,
audit results, calibration data, data sheets, and more.
Failure to report suspect activities observed at any level of the SpaceX supply chain will
also be considered a violation of ethical quality practices.
All suspect cases will undergo a full quality investigation. In the event that a case is
confirmed to be in violation, SpaceX will pursue all available remedies.
**Falsifying or misrepresenting quality records may result in civil liability and
criminal punishment**
4/20/2018 27
Operational Overview
4/20/2018 28
PO is released and
acknowledged by Supplier
Is QC-17 or -61 on
PO?
Product is Source Inspected at
Supplier location
Ship to SpaceX
Product is received and inspected at
SpaceX
Parts go to inventory or are kitted to Work
Order
NO
YES
Purchased Material Process
1. Purchase Orders
2. Source Inspection
3. Shipment Expectations
4. Receiving/Precision Inspection
41
2
3
4/20/2018 29
Purchase Orders
Quality Clause requirements
are communicated in PO
Header/Footer info – applies to
all lines
Line details – part specific
requirements
Supplier info – address and
contact information
Supplier ID
Line-specific descriptions, notes, and further requirements will be here.
Supersedes drawing notes.
For questions regarding the process, please reach out to your SpaceX Purchasing contact.
**Purchase Order Requirements supersede drawing level requirements**
(Supplier Manual 3.4) Comply to every requirement on every line for every order
4/20/2018 30
PO Quality Clauses
1. Line Level
– Found in Description below line
item
– Applies to individual line of the
Purchase order
2. Footer level
– Found in Order Specifications at
bottom of PO
– Applies to all lines of Purchase
order
More details on Quality Clauses are
found in Appendix A
TIP!
Log onto SpaceX.com/legal to
retrieve the latest Quality Clause
document (SPX-00000874)
4/20/2018 31
Supplier Portal – PO Acknowledgement
Supplier Portal: https://supplierexchange.spacex.com
If not yet active, E-mail primary contact for onboarding.
COMING IN 2018
• Vastly improved user interface
• Print PO contract, Revision History
• Request for Quote
• Supplier Request for Information
• Data exchange
• Advance Ship Notice
• And More!
**Acknowledge POs on the Supplier Portal** (Supplier Manual 3.5).
For questions regarding the expectations documented, please reach out to your SpaceX Purchasing contact.
4/20/2018 32
Source Inspection
4/20/2018 33
Source Inspection Program
What is source inspection?
• Source inspection is the inspection of products and process records at the supplier’s
premises to verify compliance with requirements before shipment to SpaceX
How are source inspection requirements communicated?
• Source inspection is imposed as a PO line requirement: QC-61 indicates in-process
source inspection and QC-17 indicates final product source inspection. One or both may
be applied to a PO line.
Who performs the source inspection?
• Source inspection is performed by 3rd party inspection providers (SQA and Verify) by
SpaceX-approved inspectors or by SpaceX personnel
How do I request source inspection?
• When QC-17 / QC-61 is called out on the PO line, request the source inspection event
through the SpaceX process or SQA application (StepQ). Requests should be made
with 48 hours advance notice.
For questions regarding the process, please contact: Elizabeth Sondecker – [email protected]
4/20/2018 34
Performing Source Inspection
What is performed during source inspection event?
• Purchase order / SpaceX requirement review
• Supplier documentation review: verification that required certification documentation has
been provided
• Physical product verification: dimensional inspection with hand tools and CMM,
verification of product marking, and visual examination
How do I prepare before source inspection event?
• Parts ready to be inspected prior to packaging for shipment
• Compile necessary product & process documentation
• Access to inspection tools & workspace for inspector
What needs to happen after parts pass source inspection?
• Submit documentation for eCerts (if applicable)
• Include relevant certification documentation and the source inspection report
• Clearly affix the source inspection label to each box in the shipment
For questions regarding the process, please contact: Elizabeth Sondecker – [email protected]
4/20/2018 35
Supplier eCerts
4/20/2018 36
eCerts Program
For questions regarding the process, please contact: Katie McDermott – [email protected]
4/20/2018 37
eCerts – Do’s and Don’ts
DO
• Submit using send.SpaceX.com for file sizes > 25 MB
• Verify ECVR submission success
• Ensure supplier email in SpaceX quality contacts
DON’T
• Send a CD, DVD, or flash drive
• Ship without eCVR submission or before eCVR approval
• Fail to re-submit rejected ECVRs (whether internal or external
issues)
• Submit Illegible documents or fail to correct scanning errors
• Duplicate Submissions
For questions regarding the process, please contact: Katie McDermott – [email protected]
4/20/2018 38
Shipping Requirements
Minimum Requirements
• Certificate of Conformance (Supplier Manual 4.4.3)
• Documentation required by SPXQCs on PO
• SRI Production Issue Reports; Work in Progress or Closed
Packaging
• Items must be adequately preserved, packaged, handled, and contained to
prevent deterioration or damage during shipment
– Damage during transit due to inadequate packing may be the responsibility of the
supplier
• Seller must segregate and identify lots within the shipment when:
– PO contains multiple Lines with the same part number
– PO contains 1 Line where units were not manufactured under the same
conditions & timeframe (Typically there should not be more than 1 lot)
**eCert Shipments: eCert acceptance confirmation shall be included in lieu of
physical documents** Further details on eCerts are found in Appendix B
For questions regarding the process, please contact: Rey Mastrapa –[email protected]
4/20/2018 39
Receiving Inspection – Best Practices
Packaging exterior
• Label with part number, PO and line number, and supplier name
• Note on exterior of packaging which parcel contains documents
Identify PO shipment of multiple parcels
• Mark with “box 1 of x” to indicate how many boxes to expect
FedEx and UPS shipment reference fields
• Include PO, line, and quantity in reference field – Example: PO123456 Line 1 and 2 shipping quantities 5 and 6
respectively.
(Format would be “123456 – Line1,2 – Qty5,6”)
For questions regarding the process, please contact: Rey Mastrapa –[email protected]
4/20/2018 40
Exception Management
4/20/2018 41
Exception Occurrence
Issue Tickets
• SpaceX method of documenting nonconformance
• “Issues” commonly referenced when discussing
nonconformance resolution with suppliers
Nonconformance detection and management
At Supplier
Supplier Request for Information (SRI)
At SpaceX
Production Issue Ticket
4/20/2018 42
Supplier Request for Information (SRI)
What is an SRI?
• Supplier requests additional information from SpaceX
• Supplier requests disposition for deviations from drawing or quality requirements
What is the SRI requirement before shipment?
• Any open existing SRI for a purchase order line must be closed prior to product
shipment, unless the SRI disposition is to review the parts at SpaceX
Key Takeaways
• Complete SRI submission correctly, and email to the specified email on the
completed PDF. If you receive an error, fix SRI submission and resubmit.
• Production Issue Ticket Report PDF must be included in shipping package to
SpaceX.
• Average response time from SpaceX is 5 business days from SRI submission date.
For questions regarding the process, please contact: Diondre Montgomery – [email protected]
**SRIs must be in WIP or Closed prior to shipment to SpaceX. Further details on
SRI process and common mistakes are found in Appendix C**
4/20/2018 43
Issue Resolution – Return to Vendor (RTV)
RTV Process
• Aims to return material to suppliers within 5 days of inspection, where the non-conformance(s) identified are deemed vendor caused.
Process Timeline
Day 1: SpaceX sends notice of RTV intent to Supplier
– Supplier should provide an RMA# (if necessary) within 72 hours
Day 3 (48 hours from initial notice): Final notice of RTV intent
– A final notification will be sent If no response or RMA is received by Day 3
– This indicates that 24 hours remains for receipt of an RMA#
Day 5: Suspect material returned to supplier
– SpaceX will internally generate RMA# and return material
– No further notice will be sent
For questions regarding the process, please contact: Diondre Montgomery – [email protected]
**SpaceX retains the right to return material to the supplier for analysis and review
(Supplier Manual 4.6.4)**
4/20/2018 44
Corrective and Preventive Action (CAPA)
At times, SpaceX will formally request a Corrective Action.
• The Supplier is expected to communicate progress and act in a timely manner upon request.
Examples of events requiring Corrective Action:
• Audit Finding
• Poor quality performance over a period of time
• High impact nonconformance or containment
• Failure to meet delivery expectations
• Recurring SRI
• Recurring Issue Ticket
Comply with the desired method of response for each Corrective Action Request
For questions regarding the process, please contact: Diondre Montgomery – [email protected]
**Suppliers are expected to document and perform root cause analysis and
corrective actions for every product/process nonconformance communicated by
SpaceX or detected by the Supplier on SpaceX product**
4/20/2018 45
CAPA Expectations
After a request for Corrective Action, the following is expected of a supplier
(Supplier Manual 4.7):
– Within 48 hours – Containment on affected WIP and inventory material
is completed at the supplier location
– Within 10 business days – Root Causes and Corrective Actions are
proposed by the supplier
– Expected completion dates for each Corrective Action are given and
met by the supplier
For questions regarding the process, please contact: Diondre Montgomery – [email protected]
**Failure to comply with CAPA activities may result in Supplier Probation or
Disqualification (Supplier Manual 4.7.3)**
4/20/2018 46
Supplier Performance
4/20/2018 47
SUPPLIER NAMESupplier
contact info Key Takeaways
• Our way of measuring your
performance
• Drives sourcing decisions
• Emailed weekly with your data
package
TIP!
Log onto SpaceX.com/legal to retrieve
the latest Supplier Scorecard Guide
For questions regarding the process, please contact
your SpaceX Quality or Purchasing Contact.
Supplier Scorecard**Supplier is responsible for reviewing scorecard for accuracy**
4/20/2018 48
Supplier Recovery - Diagnostic Audit
What is a Diagnostic Audit?
A countermeasure tool to use when a critical quality or performance observation is made
about a Supplier
Three Parts:
1. Supplier Performance review (1 week prior to audit)
2. Onsite Investigation of Quality Maturity and Commodity Competency (1-2 days)
3. Recovery Planning and Closure (30 days following audit)
What can a Diagnostic Audit do?
Capable of detecting deficiencies in a Supplier’s quality system and process, then
relating it to potential failure modes for a Supplier to correct
For questions regarding the process, please contact: Supplier Evaluation – [email protected]
**Continued unsatisfactory performance (Scorecard, delinquent CAPA,
containment, etc.) will result in a diagnostic audit**
4/20/2018 55
Questions and Feedback
4/20/2018 56
Next Steps
Confirm attendance
E-mail [email protected] and include:
• Company Name
• Attendees
• Feedback
