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PROPRIETARY AS 51 version 2 -Training Module - Supplier Rating Issued by: Jolene Kawa, Jeffrey McMurdie Approved by: Svante Mogefors, Halvar Jonzon 30-June-2005.

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Presentation on theme: "PROPRIETARY AS 51 version 2 -Training Module - Supplier Rating Issued by: Jolene Kawa, Jeffrey McMurdie Approved by: Svante Mogefors, Halvar Jonzon 30-June-2005."— Presentation transcript:

1 PROPRIETARY AS 51 version 2 -Training Module - Supplier Rating Issued by: Jolene Kawa, Jeffrey McMurdie Approved by: Svante Mogefors, Halvar Jonzon 30-June-2005

2 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

3 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 3 PROPRIETARY AS 51 Training Purpose Purpose Explain 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 Audience Suppliers to Autoliv plants. Autoliv SQ, Purchasing and Production Control or Logistics

4 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 4 PROPRIETARY 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

5 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 5 PROPRIETARY AS 51 Autoliv Supplier Rating Abbreviations - General AbbreviationExplanation PPMParts Per Million (number of non-conforming parts per million produced) DMT Demerits OTP On Time Parts MMeasurable parameters (PPM, DMT, OTP) S-APQP Supplier - Advanced Product Quality Planning PPAPProduction Part Approval Process RESPResponsiveness SLService Level parameters (S-APQP, PPAP, RESP) NCMNon Conforming Material

6 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 6 PROPRIETARY AS 51 Autoliv Supplier Rating Abbreviations - Targets, Thresholds, Weights AbbreviationExplanationValue T PPM Target for PPMs 0 PPM * U PPM Unacceptable Level for PPMs 200 PPM * TH OTP THreshold for On Time Parts90% on time * W PPM Weight for PPM 25 W DMT Weight for Demerits 25 W OTP Weight for On Time Parts26 W APQP Weight for S-APQP 8 W PPAP Weight for PPAP 8 W RESP Weight for RESPonsiveness 8 * These values are defined by Autoliv Head Office when needed.

7 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 7 PROPRIETARY AS 51 Autoliv Supplier Rating Introduction 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.

8 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 8 PROPRIETARY AS 51 Autoliv Supplier Rating Measurable Parameters - Overview This rating is unchanged.

9 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 9 PROPRIETARY 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 Rating Measurable Parameters - PPM (I) PPM = Defective parts scrapped/returned + reworked Total quantity received x 10 6

10 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 10 PROPRIETARY 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 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: x 5% = 500 non-conforming parts. AS 51 Autoliv Supplier Rating Measurable Parameters - PPM (II)

11 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 11 PROPRIETARY T PPM (Target PPM) has changed from 10 to 0. PPM score is calculated as follows: If PPM = T PPM score = W PPM If PPM U PPM score = 0 If T PPM PPM U PPM score = AS 51 Autoliv Supplier Rating Measurable Parameters - PPM (III) U PPM PPM U PPM T PPM x W PPM

12 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 12 PROPRIETARY PPM score calculation example Use these values: U PPM = 200 W PPM = 25 T PPM = 0 PPM = 78 (supplier PPM) In this case, T PPM PPM U PPM applies, and the score is calculated as follows: score = = = Round off the calculated score PPM score = 15 AS 51 Autoliv Supplier Rating Measurable Parameters - PPM (IV) U PPM PPM U PPM T PPM x W PPM x 25

13 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 13 PROPRIETARY AS 51 Autoliv Supplier Rating Measurable Parameters - DMT (I) This rating was changed. Rating rules in AS 51:1.0 Rating rules in AS 51:2.0

14 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 14 PROPRIETARY 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 Rating Measurable Parameters - DMT (II)

15 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 15 PROPRIETARY DMT score calculation is unchanged. DMT is calculated as follows: If total demerits W DMT score = 0 If total demerits W DMT score = W DMT Total AS 51 Autoliv Supplier Rating Measurable Parameters - DMT (III)

16 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 16 PROPRIETARY DMT score calculation example Use these values: W DMT = 25 2 minor demerits = 2x1 = 2 1 critical demerit= 1x10 = 10 total demerits= 2x1 + 1x10 = 12 In this case, total demerits W DMT applies, and the score is calculated as follows: score = W DMT Total = 25 (2x1 + 1x10) = = 13 DMT score = 13 AS 51 Autoliv Supplier Rating Measurable Parameters - DMT (IV)

17 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 17 PROPRIETARY 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 suppliers 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: 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 Rating Measurable Parameters - OTP (I) OTP = (1 Number of delivery concerns Number of deliveries per month ) x100

18 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 18 PROPRIETARY OTP score calculation is unchanged. OTP is calculated as follows: If OTP TH OTP score = 0 If TH OTP OTP 100 score = AS 51 Autoliv Supplier Rating Measurable Parameters - OTP (II) OTP TH OTP 100 TH OTP x W OTP

19 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 19 PROPRIETARY AS 51 Autoliv Supplier Rating Measurable Parameters - OTP (III) OTP score calculation example Use these values: W OTP = 26 TH OTP = deliveries in 1 month with 1 delivery concern OTP = = In this case, TH OTP OTP 100 applies, and the score is calculated as follows: score = = = 17.3 Round off the calculated score OTP score = 17 ( ) x x 26 (1 No. of delivery concerns No. of deliveries per month ) x100 OTP TH OTP 100 TH OTP x W OTP

20 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 20 PROPRIETARY AS 51 Autoliv Supplier Rating Service Level Parameters - Overview (I) This rating was changed. Rating rules in AS 51:1.0 Rating rules in AS 51:2.0

21 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 21 PROPRIETARY AS 51 Autoliv Supplier Rating Service 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.

22 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 22 PROPRIETARY AS 51 Autoliv Supplier Rating Service 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

23 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 23 PROPRIETARY AS 51 Autoliv Supplier Rating Service Level Parameters - PPAP (I) This rating was changed. It is applicable only for 1 st time submittals per engineering level. The worst PPAP score will be taken. Rating rules in AS 51:1.0 Rating rules in AS 51:2.0

24 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 24 PROPRIETARY AS 51 Autoliv Supplier Rating Service 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

25 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 25 PROPRIETARY This rating was changed. Rating rules in AS 51:1.0 Rating rules in AS 51:2.0 AS 51 Autoliv Supplier Rating Service Level Parameters - RESP

26 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 26 PROPRIETARY 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 Rating Service Level Parameters - Level 0

27 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 27 PROPRIETARY 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 Rating Service Level Parameters - Example

28 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 28 PROPRIETARY AS 51 Autoliv Supplier Rating Overall 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%.

29 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 29 PROPRIETARY AS 51 Autoliv Supplier Rating Overall Rating - Rating Category Each supplier is given a status (Rating Category). The Total % achieved based upon previous examples was 57%, which means this suppliers performance falls into Rating Category UNSATISFACTORY. *Supplier Rating Database is only used within Autoliv

30 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 30 PROPRIETARY AS 51 Autoliv Supplier Rating Overall 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

31 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 31 PROPRIETARY 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 Monthly values6 months Period minus 1 (=January -04) Period minus 5 (=September -03) 43 %

32 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 32 PROPRIETARY 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 43 %

33 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 33 PROPRIETARY Total % achieved is calculated as follows: Note: M means Measurable Parameters SLmeans 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 = Total weight Service Level Parameters Total possible score = = 76 Example with >1 Supplier Relation Overall Rating - Total % achieved Total % achieved = x100 Total achieved score for applicable parameters (M+SL) Total possible score

34 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 34 PROPRIETARY Total PPM during the 6 months rolling period: AOA PPM = 0 rejects divided by delivered parts= 0 PPM ASG PPM = 1 rejects divided by delivered parts= 1 PPM BKI PPM= 0 rejects divided by delivered parts= 0 PPM BMF PPM = 998 rejects divided by delivered parts= 3596 PPM Total PPM= 999 rejects divided by 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 Total PPM score = 0 because 707 PPM > 200 PPM = U PPM. Example with >1 Supplier Relation Overall Rating - Total PPM Total PPM = x10 6 Total rejects from all supplier relations (past 6 months) Total deliveries from all supplier relations (past 6 months)

35 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 35 PROPRIETARY 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 = Total DMT score = = 23 because 2 demerits < 25 = W DMT. Example with >1 Supplier Relation Overall Rating - Total DMT Total DMT = x100 Total demerits from all supplier relations (past 6 months) Number of supplier relations (past 6 months)

36 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 36 PROPRIETARY 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 OTP month1 + Delivery month2 x OTP month2 +…..Delivery month6 x OTP month6 ) + ASG (Delivery month1 x OTP month1 + Delivery month2 x OTP month2 +…..Delivery month6 x OTP month6 ) + BKI (Delivery month1 x OTP month1 + Delivery month2 x OTP month2 +…..Delivery month6 x OTP month6 ) + BMF (Delivery month1 x OTP month1 + Delivery month2 x OTP month2 +…..Delivery month6 x OTP month6 ) 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 )

37 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 37 PROPRIETARY Delivery and OTP data for the 4 plants: Total OTP = 91.6 for all 4 supplier relations. TH OTP = 90 OTP 100 applies, and Total OTP score = = Example with >1 Supplier Relation Overall Rating - Total OTP (II) x 26

38 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 38 PROPRIETARY 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) Total SLP = x100 Total SL ratings from all supplier relations (past 6 months) Number of supplier relations (past 6 months)

39 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 39 PROPRIETARY SLP level for S-APQP = = = SLP level for PPAP = = = SLP level for RESP = = = SLP score: level 2 score = 4, level 3 score = 8 Total SLP score = ( ) = 16 Example with >1 Supplier Relation Overall Rating - Service Level Parameters (II) ( ) (24-2) ( ) (24-3) ( ) (24-0)

40 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 40 PROPRIETARY Overall Rating Total PPM score= 0 Total DMT score= 23 Total OTP score= 4 Total SLP score= 16 Total % achieved= ( ) / ( ) = 43 / 100 = 43% This means that this suppliers performance falls into Rating Category UNSATISFACTORY. Example with >1 Supplier Relation Overall Rating - Summary

41 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 41 PROPRIETARY AS 51 Autoliv Supplier Rating Overall 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.

42 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 42 PROPRIETARY AS 51 Autoliv Supplier Rating Overall Rating - Rating Period Ratings are submitted to Autoliv Supplier Rating Database by the 10 th of the next month. Supplier Performance is published on APP (Autoliv Partner Portal) by the 15 th of the next month. The Autoliv Supplier Rating Database will only be open for input files between the 1 st and the 10 th each month. This means that i nput files sent to the database after the 10th will not be processed until the 1st of the next month

43 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 43 PROPRIETARY AS 51 Autoliv Supplier Rating Overall 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 / ed to the appropriate person listed in the dispute form contact list.

44 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 44 PROPRIETARY AS 51 Autoliv Supplier Rating Overall Rating - AS 51 Dispute Form on APP

45 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 45 PROPRIETARY 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.

46 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 46 PROPRIETARY 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 suppliers 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).

47 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 47 PROPRIETARY 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 1 st time submittals per engineering level. Suppliers with multiple PPAP submittals in one month will get the lowest score of these submittals.

48 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 48 PROPRIETARY AS 51 Training Summary (IV) Main Changes Miscellaneous Ratings are compiled and submitted to APP by the 10 th 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.

49 30-June-2005 – AHO-Q/SM and AHO-PU/HJ - 49 PROPRIETARY References and Links AS 51Autoliv Inc. StandardSupplier Rating AS 101Autoliv Inc. StandardPart number AS 242Autoliv Inc. StandardEDI Messages AS 244Autoliv Inc. StandardPackage & Transport Label ASMAutoliv Supplier Manual (see APPAutoliv Partner Portal (see


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