SRS Supplier Information - Flex Supplier... · · 2017-05-16Download Date: 3/9/2017 2:59:10 PM...

Download Date: 3/9/2017 2:59:10 PM

Document Number : FMS-QMS-4-093-00

Revision No: A

flexTitle : SRS Supplier Information

Document Owner : Isaac Garcia

CONFIDENTIAL

SRS Supplier Information

Isaac Garcia

FMS-QMS-04-093-00



Revision No: A



SRS Supplier Quality System – Contents

I. Definitions 2

II. SRS Background & Purpose 3

III. SRS Scope 4

IV. SRS Measurements 5

V. Supplier Improvement Plan 17

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Definitions

SRS Supplier Rating System

SME Subject Matter Expert

GCM Global Commodity Manager

QBR Quarterly Business Review

CAR Corrective Action Request

ERP Enterprise Resource Planning

SCAR Supplier Corrective Action Request

GBA General Business Agreement

DPPM Defective Parts Per Million

GP Global Procurement

SIP Supplier Improvement Plan

SMI Supplier Managed Inventory (a supplier classification type)

CRP Continuous Replenishment Program (a supplier classification type)

JIT Just-In-Time (a supplier classification type)

ROI Return On Investment

PO Purchase Order

MDSSMaterials Decision Support System. An application from the MicroStrategy suite used for online analytical data

processing and reporting; also known as cubes.

Measure Data, usually numeric and additive, that can be examined and analyzed.

SQE Supplier Quality Engineer

QAE Quality Assurance Engineer

WAC Weighted Average Cost

RFQ Request For Quote

CMT Commercial Management Tracker

NCMR Non-Conforming Material Report

OTD On-Time Delivery

QUALfx Global Quality System Tool

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SRS Background & Purpose

BACKGROUND

Flex’s SRS 4.0 is a Supplier Management Tool with the following benefits:

• Well-structured system to provide objective information to our customers.

• Flexible enough to be used by all Sites and Business Groups.

• Ensures continuous supplier improvement through quarterly performance scorecards assessing

suppliers’ quality, delivery, price, and responsiveness.

Data used for SRS 4.0 is systemic, line item transactions are extracted and calculated from MDSS,

through a Cube. By utilizing systemic data, which is refreshed quarterly, suppliers are scored fairly and

consistently.

PURPOSE

The purpose of this process is to provide instructions and forms in order to ensure the proper use and

understanding of SRS 4.0. SRS metrics are intended to promote world-class suppliers and to provide

continuous improvement in suppliers’ performance. The SRS process has been enhanced and

automated to establish an unbiased rating process for supplier management.

SRS 4.0 is a tool to facilitate constructive discussion in the context of regular business reviews (QBR’s)

that the Flex Procurement Team holds with its suppliers.

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SRS Scope

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SCOPE

SRS 4.0 rates all specifically designated suppliers and its rating criteria is made up of 8

measurements:

1. On Time Delivery (OTD) (Supplier Promise Date)

2. On Time Delivery (OTD) (Flex Requested Date)

3. Purchase Order Automation

4. SMI / CRP Spend (Supplier Managed Inventory / Continual Replenishment

Program)

5. Terms of Payment

6. Quality Performance

7. Cost Reduction Program

8. Communication Performance:

• Environmental Response Time

• Quotation Response Time



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SRS Measurements

On-Time Delivery % (Supplier Promised Date)

Purpose: To improve On-Time Delivery, which will ultimately increase manufacturing efficiency based on the receipt

transaction tables in MDSS. If the receipt date is not earlier than 3 days from the confirmed or changed delivery date and not

later than 2 days from the confirmed or changed delivery date, it’s considered as “On-Time”.

Note: The calculation is based on Working Days.

Score Definition

0.00 Less than 70%

1.00 Greater than or equal to 70% and less than 80%



4.00 Greater than or equal to 95%

S DELIVERIES - 3 TO +2 DAYS

ALL DELIVERIES

% = X 100

N

1

N = NUMBER OF DELIVERIES BETWEEN -3 AND +2 DAYS

FROM CONFIRMED OR CHANGED DELIVERY DATE.

(CALCULATION IS BASED ON WORKING DAYS)

Logic:

If PO is SMI or JIT, then OTD = 1

Else

If Change Delivery Date is NOT NULL,

If -3 <= (Received Date - Changed Delivery Date) <= 2

Then OTD = 1

Else

if -3 <= (Received Date - Confirmed Delivery Date) <= 2

Then OTD = 1

Else

OTD = 0



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SRS Measurements

On Time Delivery % (Flex Requested Date)

Purpose: To improve On-Time Delivery which will ultimately increase manufacturing efficiency based on the

receipt transaction tables in MDSS.

Score Definition

0.00 Less than 70%





SN

DELIVERIES <=2 DAYS

ALL DELIVERIES

% = X 100

N = NUMBER OF DELIVERIES <=2 DAYS

(CALCULATION BASED ON WORKING DAYS)

1

Logic:

If PO is SMI or JIT, then OTD = 1

Else

If Change Delivery Date is NOT NULL,

If (Received Date - Changed Delivery Date) <= 2

Then OTD = 1

Else

If (Received Date - Planned Delivery Date) <= 2

Then OTD = 1

Else

OTD = 0



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SRS Measurements

SMI – CRP Spend % (Supplier Managed Inventory – Continuous Replenishment Program)

Purpose: To increase SMI/JIT and CRP spend to 60% or greater, decreasing direct spend and costs associated with logistics, as

well as increasing time to line and reducing warehouse costs.

This measurement is based on the field named PO Source and overall spend for a supplier. The percentage of SMI-CRP spend

compared to overall spend (for the specified time frame) dictates the score.

Score Definition

0.00 All less than 15%





Logic: Calculate spend for PO source type ((SMI+JIT) +

(CRP*0.75) then divide by total spend at supplier level.

S SPEND FOR PO TYPE = ((SMI + JIT)+(CRP*0.75))

TOTAL SUPPLIER SPEND% = X 100

N

1 N = No. of Suppliers w/ SMI, JIT & CRP



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Scor

eDefinition

0.00 Payment terms are less than 60 days

2.00Payment terms are equal to or greater than 60

days, but less than 80 days


days, but less than 90 days


days

Terms of Payment:

Purpose: To increase the number of suppliers that align to Flex’s preferred payment terms.

Calculation is based on the SITE terms in the Business Partners’ table in MDSS (not the Global Terms table).

Logic: Using a table in MDSS that converts all terms to a numeric value (number of days),

scores are based directly on number of days.

NOTE: The Global Score is the average of Sites Scores, however the Supplier should provide the same Payment Terms to all sites,

if a site has less days in Payment Terms than other sites then it should be escalated to GCM.

SRS Measurements



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SRS Measurements

Purchase Order Automation %:

Purpose: To improve Purchase Orders (PO’s) processing by removing any manually performed steps.

This measurement is based on the receipt transaction tables in MDSS. If field named “PO_FILE_EXC_FLG “ (Purchase Order File

Exchange) is greater than zero it means that it is not Manual or Tactical PO.

S Purchase Order File Exchange > 0

Total Received P.O. Lines

% = X 100

N

1 N = No. of Purchase Order

File Exchange greater than 0

Logic: If Purchase Order File is greater than zero, then 1 else 0.

The total 1’s and 0’s are used to calculate the PO Automation percentage based on

total count of PO sequence (line) numbers.

Note: Purchase Order File Exchange Value indicates how the purchase order was

communicated to the Supplier:

0 – Manual or Unknown

1 – FSP

2 – EDI

3 – EDI/FSP

Score Definition






SMI, JIT, CRP, CRP-VH are treated as Automatic Orders



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SRS Measurements

Quality Performance:

The measurements included are:

1) Actual DPPM

2) SCARs Initiated (within the Quarter)

3) SCARs Open Time

Purpose: To provide the Sites, Business Segments and Global Team with a centralized data report related to Suppliers Performance

in Quality terms.

Quality PI = [(PI for DPPM Level * 0.5) + (# of SCARs Initiated * PI for SCAR * 0.5) + (PI for SCARs Open Time)] * 100

Score Quality PI Definition

0.00 Greater than 250

1.00 Greater than 150 AND less or equal to 250

2.00 Greater than 50 AND less or equal to 150

3.00 Greater than -50 AND less or equal to 50

4.00 Less or equal to -50

NOTE: This measurement is requires Sites’ intervention to provide actual DPPM, SCARs Initiated

and SCARs Open Time data.

In the future, QUALfx will be connected to MicroStrategy and all SCAR data can be pulled from

QUALfx automatically (to be added in SRS v4.1).



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DPPM Level

DPPM = Defective Parts Per Million

Actual DPPM /

Target DPPM

PI of DPPM

Level

Corresponding Failure

Rate if DPPM Target = 2000

<=1 0 <=0.2%

<=3 1 <=0.6%

<=30 3 <=6%

>30 9 >6%

1 <= Target DPPM <= 2000

Actual DPPM = Number of Defective Parts

Number of Used Parts X 1,000,000

SRS Measurements



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SCARs Initiated

It is the number of SCAR’s initiated during the Quarter due to occurrences of nonconforming product, that was unable to be

used in production.

SCAR Open Time

Open Days* PI for SCARs Open Time

0 - 5 -0.5

6 - 21 0

≥ 22 0.5

Open Days: Average SCAR’s Open Time

Note: The SCARs can be Open or Closed.

# of SCAR: Supplier confirmed the issue and committed to

take Corrective Actions.

SCAR Reason Code PI for SCAR

SCAR Incoming 1

SCAR Production 1

SCAR Customer 0KM 3

SCAR Customer Field 3

SCAR Line Stop 3

It is the number of days from when a SCAR is initiated to when a SCAR is closed.

Note:

1. Only report the SCARs initiated during the quarter, no need to count

the SCARs initiated in the previous quarter.

2. SCAR close date = when SCAR is replied by supplier and

Corrective Actions are evaluated and accepted by Flex.

3. If SCAR is still open, SCAR Open Time = Today – Date Sent to

Supplier.

SRS Measurements



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SRS Measurements

Cost Reduction Program:

Purpose: To increase the number of suppliers that have Cost Reduction Programs when doing business with Flex.

Based on the receipts extended price by item, commodity. If a supplier provides more than one (1) commodity, each commodity score isweighted by total spend to obtain an overall price competitiveness rating for each supplier.

Score Definition

0.00 Cost Delta is greater than 2.0%

1.00 Cost Delta is greater than 0.5% and equal or less than 2.0%

2.00 Cost Delta is greater than -0.5% and equal or less than 0.5%

3.00 Cost Delta is greater than -3.0% and equal or less than -0.5%

4.00 Cost Delta is less or equal than -3.0%

NOTE: Negative values in Cost Delta means Cost Savings

WAC SCORE = SUM (PO Price * Qty) / SUM (Qty) for all receipts from last quarter

N = No. of commodities from supplier[S1

NWAC SCOREx

SUPPLIER COMMODITY SPEND

TOTAL SUPPLIER SPEND

SCORE = ]



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SRS Measurements

Communication Performance

Purpose: To improve the communication processes between Flex and its suppliers.

Supplier’s communication performance is rated with the average of the following measurements:

- Quotation Response Score

- Environmental Response Score

If any of above measures is “N/A”, the communication score is calculated with the average of other available measurements.

Score Definition

0.00 Average (Quotation Score, Environmental Score, PCN score) = 0

1.00Average (Quotation Score, Environmental Score, PCN score) is

greater than or equal to 0.1 and less than 1.5


greater than or equal to 1.5 and less than 2.5


greater than or equal to 2.5 and less than 4

4.00 Average (Quotation Score, Environmental Score, PCN score) = 4



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SRS Measurements

Quotation Response Time %:

Purpose: To decrease the Suppliers’ Response Time to our Quotation Team (Global or Regional).

Quotation Team uses QuoteWin to process RFQs.

Logic: Number of On-Time Responses divided by the Total Number of Quoted Parts from Supplier.

Score Definition

0.00 Less than 50%







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SRS Measurements

Environmental Response Time %:

Logic: If the Response Date is less or equal to the Due Date then 1, else 0.

The total 1’s and 0’s are used to calculate the response percentage based on the total count of MPN’s or lines.

S RESPONSE DATE <= DUE DATE

ALL REQUESTED LINES% = x 100

N

1 N = No. REQUESTED LINES

Score Definition






Purpose: To decrease the Suppliers’ Response Time to our Environmental Team.

Environmental Team uses PTC Windchill to process environmental declarations requests.



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Supplier Improvement Plan

Final Score Status Improvement Actions to be Taken

0-0.99Poor

Suggest Non-Use

Supplier must provide Improvement Plan (SIP) within 2 weeks of receipt of

scores. Non-response and/or lack of improvement may initiate SCARs and/or

disqualification process.

1.0-1.99Needs

Improvement

Supplier must provide Improvement Plan (SIP) within 4 weeks of receipt of

scores. Business maybe diverted from suppliers needing improvement until

improvement is made. Non-response and/or lack of improvement may initiate

SCARs.

2.0-2.99 Acceptable Supplier is performing on an average level with room for improvement.

3.0-4.0 World ClassSupplier has potential to become a preferred supplier and to receive additional

quote opportunities and/or business.

Final Score

• A score with “N/A” simply means there was no data available to calculate that particular measure. No action is needed from

Supplier or Flex.

• Should any scores fall in “Poor” or “Needs Improvement” flags, Supplier is encouraged to submit (to the appropriate Flex

contact) the Supplier Improvement Plan within the timeframe specified in the action table accompanying the scorecard form that

Supplier receives. Suppliers should work with their Flex representative to discuss improvement and subsequent actions.

• A Flex representative may initiate a SCAR at any time if supplier is non-responsive and/or improvement plan has not been

submitted by Supplier within the time frame stated below.



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Thank You

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SRS Supplier Information - Flex Supplier... · · 2017-05-16Download Date: 3/9/2017 2:59:10 PM...

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Transcript of SRS Supplier Information - Flex Supplier... · · 2017-05-16Download Date: 3/9/2017 2:59:10 PM...