1. Customer-Supplier Division Supplier Selection & Qualification A Podcast presentation for members of the Customer-Supplier Division and ASQ Presented by Betty Rose ASQ-CQE Sr. Supplier Engineer Global Supply Chain Tektronix, Inc. ( a Danaher company) betty.rose@tektronix.com

2. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)2 How to Find a Supplier that matches your technology requirements Previous experience/knowledge of the supplier –You have worked with the supplier in a previous life (you do take your business cards with you, don’t you?!!) Your network, including ASQ meetings –ASK : ”do you know of a company that….” Searches –Internet –Search firms

3. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)3 First Contact Introductory letter & inquiry to determine if there is interest in working with your company Include survey form to be filled out –Technology mix (does it mesh with your business) –Who are current customers RFQ –For NPI or sensitive parts, use a similar part for quoting –Otherwise, send actual drawing (2-D or model) –Ask for a cost model

4. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)4 The primary purpose of the audit is to determine if the potential supplier’s capabilities match your requirements Pre-audit work The most important question you can ask : How do you know ? Form teams to cover the technical/quality audit and the various business audits (financials, business & purchasing systems, etc.) to allow for stronger focus Plant tour –General appearance –Process documentation –Operator demeanor/attitude (ask questions regarding handling of defective material) –WIP –Postings (charts, graphs, reminders) that are on display –Safety The Audit

5. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)5 Quality Department –Staff & org chart –Relationship to the Manufacturing Department –SOPs and processes specific to QA –Their suppliers : qualification, incoming material, discrepant material –Metrology : MSV, gage R&R, calibration certificates, etc Pareto of yield losses and quality targets –MRB The Audit continued

6. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)6 Customer returns –Pareto of common causes –What processes exist to handle and which departments are involved –CLCA : is there a written process –Are there targets For current customers, what data currently precedes or accompanies shipments –You want to know if your data requirements are unusual Do they use –Cost models –Cost reduction goals The Audit continued

7. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)7 It will take longer to qualify a potential supplier The data becomes your eyes –Examples of data they request of their suppliers –Data collected on the factory floor –QA release data –Data sent with a shipment to a customer –Other data relevant to your parts/material Remember to ask the most important question “how do you know”. The next most important question is “can you demonstrate it” How do you perform an Audit when travel is not an option ??? The Audit continued

8. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)8 Making a Decision Unique technology vs. common or commodity Decide how the various criteria are to be weighted based on your company’s objectives Example of a scoring used : 6 categories –General category (maintenance, housekeeping, ethics, environmental policies, openess) 6% –Quality 37% –Cost 16% –Availability (delivery & flexibility, risk management) 19% –Technology (fit has already been ascertained; this category looks at technology management & the design process) 12% –Customer satisfaction (account support & communication) 10%

9. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)9 Evaluation based on a 500 point scoring system. 1-5 points available for each of the 100 questions Minimum acceptable score of ≥ 60% is required in each category for “Approved” status Suppliers who do not meet the minimum acceptable evaluation score will either be rejected or put on a corrective action plan to improve performance before business is placed with them  Approved status clears a supplier for business  Conditional status requires follow-up, corrective action and improvement  Not Approved indicates supplier is too risky/costly to fix. Business with this supplier is not recommended. Making a Decision continued

10. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)10 Execution Production trials : how do you define “production trial”, how many, size, data to be reported What goes into inventory & what gets scrapped Perform measurement correlation, MSV, gage R&R, etc Checklist with sign offs may be necessary to ascertain all steps were taken Now that the supplier has been selected, it’s time for the supplier to PERFORM

11. Jan. 9, 2009Betty Rose (betty.rose@tektronix.com)11 Monitoring & Improvement Change control for permanent & temporary changes How are out of spec parts/material to be handled Are you getting the VOE you required and are you looking at it Are you getting CLCA when needed and are you responding Set up periodical business and technical reviews Supplier performance evaluations based on meeting targets such as price, quality delivery, etc. Important : For continuous improvement by your supplier, do what you said you would do during the audit & approval process !!