Cairo 02 Supplier Control

INTERNAL CERTIFICATION

EXTERNAL SUPPLIER EVALUATION & SELECTION

Quality and Reliability

Willingness to Work Together - Responsiveness

Technical Competence

Commitment to Continuous Improvement

Geography

Price

- Total Acquisition Costs

- Processing Economics

IMPORTANCE OF SUPPLIER QA

Amount of Purchased Product Increasing

Poor Supplier Quality Increases Cost

Buyers and Suppliers Are More Interdependent

Other Factors

Cost Reduction

Inventory Control

Schedule Demands

SUPPLY CHAIN MANAGEMENT

External Customers

Sales and Operations Planning

Smoothing Customer Demand

Developing JIT Customers

External Supplier Relationships

Evaluation, Selection & Consolidation

Certification

Supplier Development

Vendor Managed Inventories

SUPPLIER ACTIVITIES Outsourcing Out-partnering Product/Capacity Buys Process/Capability Buys Reduced Direct Cost Flexibility Name Recognition Excess Capacity Access to Technical Expertise Market Information Rationalization Latest Technology and Processes

EXTERNAL SUPPLIER CONSOLIDATION

Sole Source vs.. Single Source

Benefits

Simpler Traceability

Increased Communication

Ability to Focus on Process

Concerns:

Traditional Focus on First-Cost

TQM OBJECTIVE

Foster a long-term relationship with a small number of suppliers

Because suppliers are chosen for the long term it is important to have:

Supplier Policy

Supplier Evaluation and Selection Methodology

Planning

Certification

Continuous Improvement

CHANGING RELATIONSHIPS Traditional Relationship - Adversarial New Relationship - Long Term - Mutual Benefit - Fewer Suppliers - Better Suppliers

Primary Tasks

Evaluate Solicitations

Evaluate Supplier Capability

Conduct Post Contract Award Activities

Monitor Status of Delivered Product

Program Organization

Engineers & Quality Assurance

Data Base Management

ORGANIZING A SUPPLIER PROGRAM

SUPPLIER EVALUATION SUPPLIER CERTIFICATION PROGRAM SUPPLIER CONTROL ACTIVITIES SUPPLIER SELECTION SUPPLIER QUALITY ASSURANCE

Supplier Control Planning

ADDRESS THE SIX MAGIC QUESTIONS WHO? WHAT? WHY? WHERE? WHEN? HOW? Answer These Questions And You Will Have A Good Plan!! The Keys to an Excellent Supplier Control Plan

WHY? WHY DO WE NEED TO ENSURE SUPPLIER QUALITY? WHY IS THIS IMPORTANT? POLICY STATEMENT BY TOP MANAGEMENT WOULD BE APPROPRIATE HERE!

WHO? Who Is In Charge Who Is Responsible For Specific Duties How Do These Offices Interrelate

WHAT ? What Is To Be Done To Ensure Effective Supplier Control? Maintain Certification Program Monitor Solicitations Participation In Pre & Post Contract Award Activities Evaluate & Approve Contract Data Requirements List items (CDRLS) Participation In FAAT Etc.

WHAT ARE YOUR RESOURCES? Financial Budget Availability Of Personnel Computer Support Data Base Management

WHERE? Where Will The Activities Identified In This Plan Occur? At Your Facilities? At The Suppliers Facilities?

WHEN? WHEN SHOULD IDENTIFIED ACTIVITIES OCCUR? SEQUENCE OF EVENTS

HOW? How Will The Identified Activities Be Accomplished Reference More Detailed Procedures

ISO 9000 Requirements

Paragraph 7.4.1: The Purchasing Process Paragraph 7.4.2: Purchasing Information Paragraph 7.4.3: Verification of Purchased Product Paragraph 8.4: Analysis of Data ISO 9000 - 2000 REQUIREMENTS

Supplier Certification

Quality Management System

New Product/Technology/Service Control

Sub-Supplier Management

Process Operation & Control

Quality Data Program

Human Resources Involvement

Customer/Performance Assessment

Elements of a Certification Program: SUPPLIER CERTIFICATION

Good (Pass)

Bad (Fail)

Poor

Weak

Fair

Marginally Qualified

Qualified

Outstanding

Attribute Assessment Variable Assessment ATTIBUTE OR VARIABLE ASSESSMENT

SUPPLIER DEFINITIONS Approved Supplier: Minimum Qualification Approved To Supply Required Item Preferred Supplier: Approved, Participating In Certification Process Quality History Is Excellent May Pull Samples For Customer Testing Provides Lot-specific Certificates Of Analysis Certified Supplier : Extensive Investigation Not Necessary To Perform Routine Testing Partner

APPROVED CERTIFIED PARTNER DIRECT MATERIAL SUPPLIERS EXTERNAL SUPPLIER CERTIFICATION PREFERRED

SUPPLIER MATRIX Technology Development Strategic Business Alignment Approved Certified Partner

BUYER-SUPPLIER RELATIONSHIPS Arm’s-Length Relationships Acceptance of Mutual Goals Buyer-Supplier Spectrum of Relationships Confrontation Traditional Relationship Confrontation Suspicion Outsourcing Full Partnership New Relationship Cooperation Trust Out-partnering

KEY RATING CRITERIA QUALITY DELIVERY TECHNICAL SUPPORT MANAGEMENT ATTITUDE COST

GENERAL CERTIFICATION CRITERIA No Product Rejections For Significant Period No Non-Product Rejections For Stated Period Of Time No Production- Related Negative Incidents For A Stated Period Of Time. Passed A Recent On-site Quality System Evaluation A Totally Agreed On Specification Timely Copies Of Certificates Of Analysis, Inspection Data, And Test Results. Stable and In Control Processes

BULK PROCESS INDUSTRIES Compare Supplier’s Test Results With Your Tests Compare Results Statistically

PIECE PART INDUSTRIES Process Capability Analysis Defects Per Million Monitor SPC Data Rolled Throughput Yield

DATA COLLECTION FOR CERIFICATION Process Analysis Input Specifications Activity Performed Output Specifications Performance Data Performance Capability Studies Expected Defect Level

SYSTEM ADMINISTRATION An Established Procedures Established Quality System Evaluation Criteria Trained Personnel

QUALITY REQUIREMENTS ISO 9000 - 1994 ISO 9000 - 2000 SIX SIGMA

QUALITY ASSESSMENT

Evaluate Entire Quality System

An Agreed Upon Criteria

ISO 9000

ISO 9000 Plus

Professional Audit

Audit Plan

Trained / Competent Assessors

Identify Deficiencies

Corrective Action Audit (If Necessary)

Audit Report

Manufacturing Facilities Quality Program Technical Support & Human Resources Material Control Process Control Communication TYPICAL SUPPLIER EVALUATION CRITERIA

QS-9000 CRITERIA Same 20 Elements Identified By ISO 9000: 1994 Each Element Has Been Expanded Additional Elements Production Part Approval Process Continuous Improvement Manufacturing Capabilities Chrysler, Ford, General Motors Requirements

(CP) 2 CRITERIA Same 20 Elements As ISO 9000:1994 Additional Criteria Identified For Each Element Assessment Criteria And Metrics For Each Element Additional Elements: Customer Satisfaction Quality Costs Warranty Performance Ethics Business Planning Safety Environmental Continuous Improvement

Supplier Quality System Review Process

Provide Supplier Clearly Worded Documentation & Evaluation Criteria Supplier Conducts Self Audit Implement Corrective Action & Improvements Evaluation Team Conducts Audit Audit Report Supplier Response : Continuous Improvement Plan Soon After Receiving Audit Report Follow-up Audit To Monitor Progress And Reevaluate THE OVERALL PROCESS

QUALIFICATIONS FOR QS AUDIT TEAM LEADER Membership In A Quality, Supply Management Manufacturing Or Engineering Council/team Or Experience As A R&QA Engineer, Supplier Quality Engineer, Or Commodity Manager Member On At Least Two Previous Supplier Qs Audit Teams QA Training - Being A Certified Qs Lead Auditor Is A Good Idea

Supplier Control

Pre-award Solicitation Review Post-award M&TE Review & Approval Review & Approve Quality Plans (Identified In The Contract) First Article Test (FAAT) Production Audit(s)

Monitor Key Metrics

Rolled Throughput Yield

SPC Charts

Process Capability Studies

Monitor ECPs RFWs/RFDs Monitor Items Received Delivery Schedule SUPPLIER RATING SUPPLIER CONTROL Assistance Training Support Consultation Quality Standards ISO Certified/Compliant Six Sigma Constant Feedback

Solicitation Review

Identify Responsible Individual Develop Solicitation Review Procedure Maintain Solicitation File Ensure Requirements Are Properly Identified MONITOR ADEQUACY OF SOLICITATIONS

IDENTIFY RESPONSIBLE INDIVIDUAL

REVIEW THE SOLICITATIONS

COMMUNICATE WITH SOLICITATION POC

MAINTAINS FILES

MONITORS AMENDMENTS

DEVELOP & MAINTAIN PROCEDURE WHY? WHO? WHAT? WHERE? WHEN? HOW? Why Is This Important & Needed Responsibilities Tasks to Done Location of Review & Files Frequency of Review Process Methodology for Performing the Review

ENSURE REQUIREMENTS ARE PROPERLY LISTED

Quality System Requirements

SPC

Criteria For Quality Plans Clearly Stated

Quality Manual Approval

Approval of SPC General & Detailed Quality Plans

Acceptance of Inspection Equipment (AIE) Methodology

First Article Acceptance Test (FAAT) Methodology

FAAT Report Distribution

“ Sample” Ammunition Data Card Distribution

Proper Warranty Clauses

Proper Rework and Repair Clauses

Proper Distribution of Lot Acceptance Test Reports

COMMUNICATE WITH SOLICITATION POC

IDENTIFY DISCREPANCIES

MAINTAIN RECORDS

FOLLOW-UP

Pre-Award Evaluation

Item Importance Quality History Total Cost Delivery History Facilities Experience EVALUATION OF SUPPLIERS Is This a Certified Supplier?

EVALUATING SUPPLIER CAPABILITIES

Qualify Design

Qualify Manufacturing Process

Prior Performance

Process Capability

Quality Survey

Approved Supplier Lists

SUPPLIER RATINGS

Consider Quality, Price and Schedule

Supplier Rating Plan must be

Clearly defined and communicated

Contains only necessary information

Economical to implement

Practical in coverage of materials, parts, or services

Maintainable

Auditable

ITEM IMPORTANCE Pencils & Paper Can Be Purchased From Anybody Important Items Require More Control

SUPPLIER QUALITY HISTORY ISO Compliant / Certified? Six Sigma? Previously Supplied Product? History Of Waivers & Deviations? Quality Deficiency Reports (QDRs)? Corrective Action Responsiveness?

COST $$$ Always Important Total Life Cycle Costs?

DELIVERY HISTORY Percent Of Deliveries Made On Time Percent Of Deliveries With Correct Amount Shipping Invoices Properly Completed Correct Billing

FACILITIES Building Floorspace Special Tooling Requirements Safety Considerations Test Facilities Accessibility Availability Of Personnel

EXPERIENCE Has The Supplier Built A Similar Item Before? Management Experience Technical Experience

Post-Award Assistance

POST-AWARD ASSISTANCE

A Formal Meeting To Ensure Supplier Properly Understands:

All Specification Requirements

All Drawing Requirements

Implementation of SPC

SPC Plan Requirements

SPC Flow-down Requirements

Special Processes

Contractual Requirements

FAAT Requirements

LAT Requirements

Production Audit

Gage Review and Approval

GAGE REVIEW AND APPROVAL Supplier Needs to Identify All Gages Used to Inspect Major, Special and Critical Characteristics These Gages Need to Be Evaluated & Approved Appropriate / Capable Approval Before FAAT

SPC Plan Review and Approval

SPC PLAN REQUIREMENTS General And Detailed Plans Clearly Stated In Solicitation

WHAT WILL THESE PLANS DO Each Plan Answers The Five Magic Questions General SPC Plan Describes Overall SPC Program The Detailed Plan Describes SPC Operations For Specific Production Line

EVALUATING SPC PLANS Make Sure Plans Comply With All Requirements May Set The Stage For Further Contractual Compliance Issues Approve General Plan Before FAAT Approve Detailed Plan Before Production BE TOUGH!!

First Article Acceptance Test (FAAT)

FIRST ARTICLE ACCEPTANCE TEST (FAAT) Can the Supplier Produce the Item?

Requirements Usually Spelled Out in the Spec

Approved Gages & Equipment

SPC Plans (General & Detailed ) Approved

Measurement & Performance Requirements

Be Tough

Now Is the Time to Cut Your Losses

DIMENSIONAL REQUIREMENTS All Dimensions Identified On Drawings Must Be Inspected The Number Of Samples To Be Inspected Normally Established By Specification All Dimensions Must Be In Compliance Gages Used Need To Be Properly Approved Calibrated, Capable And Appropriate

BALLISTIC TESTING Requirements Probably Established By Specification May Require Specific Test Equipment Environmental Conditioning Ballistic And Dimensional Failures Are Equal

Production Audit

THE PRODUCTION AUDIT Not a Surprise - Established Criteria, Detailed Audit Plan All Specification & Drawing Requirements Accomplished?

Purchase Order Development

Incoming Inspection

Gages - Approved, Appropriate, Capable & Calibrated

In-process Inspection

SPC Operations

Process Control

Final Inspection

Check All Critical Characteristics

Check Significant Number of Major Characteristics

Destructive & Non-destructive Tests

Write a Useful Audit Report Focus On The Product Not The Quality System!

THE AUDIT PLAN Tell The Supplier Exactly What Will Happen Who What When Where How No Surprises

PURCHASE ORDER DEVLEOPMENT Must Reflect All Specification And Drawing Requirements Flow Down Of SPC Requirements Plus All ISO 9000 Requirements

INCOMING INSPECTION Incoming Material Invoices Reviewed To Ensure Correct Item Has Arrived Do The Invoices Match The Purchase Orders? Is Incoming Material Handled & Stored Properly Receiving Inspection Are Proper Characteristics Inspected Are The Right Gages Being Used Are Gages Calibrated

GAGES Have They Been Properly Approved Calibrated Capable Appropriate Check Calibration Lab Review Gage Linearity Data Training Records Compliance With Standards Review Procedures

INPROCESS INSPECTION In Accordance With Spec. & Drawing Requirements Documentation & Product Identification In Accordance With IS0 Requirements Inspection Data Sheets Done Correctly Sampling Done Correctly

SPC OPERATIONS Compliance With General And Detailed Plan Requirements Charts Being Done Correctly Out-of-control Situations Properly Identified Control & Centerlines Being Evaluated On Regular Basis Process Capability Studies Being Done & Reviewed Vendor SPC Data Evaluated Properly

PROCESS CONTROL Procedures Suitable Work Environment Effective Training Preventive Maintenance Non-conforming Material Necessary Items Not Beyond Shelf Life

NON-DESTRUCTIVE TESTS Training Records Compliance With Standards Procedures Proper Equipment

FINAL INSPECTION Compliance With Specification & Drawing Requirements Appropriate Equipment Being Used Data Sheets Are Properly Completed

CHECKING CHARACTERISTICS All Criticals Most Majors Ensure Compliance With All Specification And Drawing Requirements Watch Operations During Several Cycles If Possible

Changes, Waivers, and Deviations

Configuration Control Board

Established Procedure

Input From Customers

Review Based on Engineering & Quality

Assessment

Arguments Must Have Proper Statistical

Support

Data Base Management

CHANGES, WAIVERS, & DEVIATIONS

REQUIRE PROPER STATISTICAL JUSTIFICATIONS Paired Comparisons Confidence Intervals Null Hypothesis Required Sample Sizes FACT BASED DECISIONS!!

Monitor Key Metrics

Rolled Throughput Yield

SPC Data

Other Metrics

KEY METRICS

Throughput Yield

NOMENCLATURE Number Of Operation Steps = m Defects = D Unit = U Opportunities For A Defect = O Yield = Y

BASIC RELATIONSHIPS Total Opportunities (TOP) = U X O Defects Per Unit (DPU) = D/U Defects Per Unit Opportunity (DPO) = DPU/O = D/(U X O) Defects Per Million Opportunities (DPMO) = DPO X 10 6

DISTRIBUTION OF DEFECTS IN MANUFACTURED PRODUCT Non-Randomly Occurring Defect Randomly Occurring Defect Example Result Conclusion Wrong part in manual insertion parts bin Every board contains same wrong part in same location. Defects are easier to detect/diagnose & are less likely to be sent to next operation Mixed parts in manual insertion parts bin. Probability of a board containing wrong part is equal to proportion of wrong parts in bin Defects are harder to detect/diagnose and are more likely to be sent to next operation

GENERAL CHARACTERISTICS OF DPU

Directly Proportional To :

Parts Count

Lines of code

Die Area

Product Built In Plant Having Best Process Controls Will Have The Lowest Defects Per Unit Level

DEFECTS PER UNIT Defect Prevents Product From Fulfilling Physical And Functional Requirements Of The Customer

A Unit

A Measure Of Volume Of Output

Observable & Countable

Is An Individual Measurement - Not An Average

Defects Per Unit = A Count of All Defects - Not a Measure of the Consequences of The Defect Number of Defects Found at Any Review Point Number of Units Processed Through That Review Point

PREDICTING THE QUALITY OF PRODUCTS FTY = e -DPU DPU = -ln FTY Estimation of units containing “q’ defects (where “q” is not limited to zero) If we use the Poisson distribution Becomes (DPU) q e -DPU q!  x e -  x! P{x} =

YIELD RELATIONSHIPS Throughput Yield : Y TP = e -DPU Defects Per Unit: DPU = -ln(Y) Rolled Throughput Yield: Y RT =  m Y TP i Total Defects Per Unit: TDPU = -ln(Y RT ) Normalized Yield: Y norm =  Defects per Normalized Unit: DPU norm = -ln(Y norm ) i =1 m Y RT

PROBABILITY OF DEFECTS IN MANUFACTURED PRODUCT GIVEN: (1) Average DPU For This Product Is One (DPU=1) (2) Defects are randomly distributed What Is The Probability of Zero Defects In This Unit?

YIELD Probability with zero defects Specification Limit Probability of Defect = 1 - e -DPU Yield = e -DPU Y = P(x = 0) = e-   x x! e-  = = e -D/U = e -DPU

THE HIDDEN FACTORY Customer Quality Operation Not OK Scrap Verify Rework Operation Not OK Scrap Verify Rework Y tp Throughput Yield Y tp Throughput Yield Non-Value Added (The Hidden Factory) Value Added (The Visible Factory) Producers Quality Supplier Quality Y rt =  Y tpi m i=10

IMPLICATIONS OF THE HIDDEN FACTORY 1.63 Equivalent Units Must Be Produced To Get Out 1 Good Unit Every Occurrence Of A Defect Within The Manufacturing Process Requires Time To Verify, Analyze, Repair And Re-verify Average Cycle Time Per Unit Is Directly Proportional To The Total Number Of Defects Per Unit Y e e TP DPU       3679 1 0 . = 1.6321 . Cycle Time = Work In Process Throughput

#1 #6 #2 #7 #5 #9 #4 #8 #3 #10 Final Insp.. Process Yield is 93.17% - Right?????? A FACTORY WITH 10 PROCESSES NOT QUITE!!! 1200 Good & 88 Bad Items [93.2% Found OK]

COMPARISON OF YIELDS Y = S U = = .931677 S = Number of Units That Pass U = Number of Units Tested Throughput Yield Analysis Tells Us Y TPI = .47774 .4774  .932 Why Not??? 1200 1288

ROLLED THROUGHPUT YIELD Operation Defects Units DPU (D/U) Throughput Yield (Y TPI = e -D/U = e -DPU ) 1 2 3 4 5 6 7 8 9 10 5 75 18 72 6 28 82 70 35 88 523 851 334 1202 252 243 943 894 234 1200 0.00956 0.08813 0.05389 0.05990 0.02381 0.11523 0.08696 0.07830 0.14957 0.07333 0.99049 0.91564 0.94753 0.94186 0.97647 0.89116 0.91672 0.92469 0.86108 0.92929 Sum of Operation Steps = 479 6676 0.73868 0.47774 (Y RT ) 47.9 667.6 0.07387 0.73868 =TDPU TDPU = -ln(Y RT ) Avg.. of Operation Steps =

HOW MANY UNITS PRODUCED? UNITS PRODUCED = 1 + (1 - e -DPU ) = 1 + (1 - e -73868 ) = 1 + (1 - .477744) = 1 + .5222558 = 1.52 To Achieve 100 Conforming Units, 152 ( 1.52 X 100) Would Need To Be Produced

SPC Data

SUMMARY OF PROCESS CAPABILITY STUDIES

Primary SPC Metric

Maintain Data Base

Insure Supplier Is Taking Action

Unacceptable Cpks

Marginal Cpks

Too Long As Unacceptable Or Marginal

Disturbing Trends

Clearly Established Triggers - Can Effect Certification

OTHER SPC DATA

Maintain Current Copies Of SPC Plans

Not Necessary To Have Copies Of All SPC Charts

Have Representative Sample

Audits

Corrective Action Situations

Special Requests

COMPARE SPC DATA Receiving Inspections, Field Reports, Etc. Should Compare With CPK Data If Not, Why Not?

Other Metrics

Provide Assistance

JOINT PLANNING

Economic Planning

# Value Not Conformance

# Optimize Quality Cost

Technological Planning

Managerial Planning

Statistical Inference

SPC

Design of Experiments (DOE)

Sampling

All Quality Management Concepts

Six Sigma Black Belt

Other Certifications

X-Ray

Soldering

Etc.

TRAINING

PROBLEM SOLVING Technical Expertise Operations Research Master Black Belt Assistance

KEEP THE SUPPLIER INFORMED Changes From Your Customer Changes in Operations Changes in Production Requirements Remember This Is a Partnership - If Your Supplier Does a Good Job, Then You Look Good!!

ASSIST WITH SIX SIGMA PLAYER CERTIFICATIONS Champions Master Black Belts Black Belts Green Belts

CHAMPIONS Senior Managers Who Define The Projects Do Whatever Troubleshooting Is Required At Start Of GE Program Some Business Leaders Were Champions Now A GE Business Has 7 - 10 Champions Not Required To Work Full Time In The Quality Program Suppose To Devote As Much Time As Necessary To Make Sure Program Succeeds Training Length: 1 Week By Spring 1999 Every Officer And Every Senior Executive Was A Champion

MASTER BLACK BELTS Full-time Teachers With A Good Deal Of Quantitative Skills Teaching And Leadership Ability Review And Mentor Black Belts Length Of Training: At Least 2 Weeks In Spring Of 1999 GE Had 700 Master Black Belts Certification After Overseeing At Least 10 Black Belts Who Get Certified & Approved By The Business Champion Team

BLACK BELTS Full Time Quality Executives Lead Teams That Focus On Key Processes Report Results Back To The Champion Responsible For Measuring, Analyzing, Improving, And Controlling Key Processes By Spring 1999 There Were 4,500 Black Belts At GE To Be Certified Must Be Approved By Business Champion Team

SIX SIGMA BLACK BELTS Mentor Teach Coach Transfer Identify Influence

GREEN BELTS Personnel Who Take Part In Black Belt Projects On Part-time Basis Must Continue To Use Six Sigma Tools In Regular Jobs

TYPICAL SIX SIGMA TRAINING CURRICULUM Week 1 Six Sigma Overview & Process Improvement Process Mapping Quality Function Deployment (QFD) Failure Mode and Effects Analysis (FMEA) Organizational Effectiveness Concepts Basic Statistics Using Minitab Process Capability Measurement System Analysis Week 2 Review of Key Week 1 Topics Statistical Thinking Hypothesis Testing (F, t, etc.) Correlation Passive Multi-Vari Analysis & Regression (simple) Team assessment Week 3 Design of Experiments Regression Analysis Facilitation Tools Week 4 Control Plans Statistical Process Control (SPC) Advanced Process Control Mistake-Proofing Team Development Wrap-Up of Tools

Evaluating Delivered Product

Supplier History

Criticality of Part

Warranty History

Supplier Process Capability

Manufacturing Process

Availability of Skills/Equipment

EVALUATING DELIVERED PRODUCT

LOGISTICS MANAGEMENT SYSTEM Internal Logistics Inbound Logistics Outbound Logistics (Physical distribution) Plants Organization Supplier Customer The span of the logistics management system

CONTINUOUS IMPROVEMENT

Motivation

Analyze Losses

Provide Technical

Assistance

Training

Long-Term

SUMMARY Be Involved At The Start Participate in Selection of Suppliers Participate in Post Contract Award Activities Post Award Meetings M&TE Approval Quality Plan Review & Approval FAAT Production Audits Review & Approval of ECPs, RFDs, & RFWs Monitor Key Metrics Provide Assistance Ensure Expertise Through Product Teams Maintain Data Base

SUPPLIER CERTIFICATION

Consider levels of supplier capability:

Probationary

Approved

Certified

INTERNAL QUALITY AUDITS

THE AUDIT PROGRAM DEFINED

“ Do Unto Yourself What Others Will Do Unto You” Find Your Problems Before The Customer Does IMPORTANT INTERNAL AUDIT CONCEPTS

AUDITOR’S MISSION STATEMENT : To Provide Evaluations That Are:

Independent

Uniform

Consistent

To an Agreed Upon Standard &

CLEARLY ESTABLISHED CRITERIA

Everyone Should Know The Standard Against

Which The Audit Will Be Conducted

ISO 9000 - 1994

ISO 9000 - 2000

QS 9000

ISO 9000 Plus

Product Specification

Product Drawings

Military Standards, Handbooks, Publications, etc.

NO SURPRISES!!

A PUBLISHED SCHEDULE Quality System Requirements - Annual Schedule Will Work Production Audit - 1st Week Of Production (Before Customer Arrives) Follow-Up Audits - An established time period plus notification well prior to audit. NO SURPRISES !!!

THE AUDITING GROUP Independent Of Groups Being Audited - If Possible Well Trained And Knowledgeable Can Be A Full Time Job Must Have Full Support Of Management Somebody Must Audit The Audit Group

PROGRAM OBJECTIVE To Obtain Sufficient Evidence To Evaluate Compliance With a Standard

PURPOSE OF AN AUDIT

A Management Tool

To Make Improvements

An Audit Can Determine:

Future Purchases

Certify the Organization

Register the Organization

DEFINITION

An Audit Is:

A Planned Systemic Process Performed by Independent, Trained Personnel

In Accordance With Previously

Prepared “Game Plan”

Results Are Documented

Corrective Actions Are Taken

Top Management

Auditor

Auditee

ELEMENTS OF AN AUDIT

PROCESS

PRODUCT

QUALITY SYSTEMS

CLASSES OF AUDITS

CLASSES OF AUDITS (CONTINUED)

PROCESS

PRODUCT

QUALITY SYSTEMS

CLASSES OF AUDITS (CONTINUED)

Process

Product

QUALITY SYSTEMS

ORGANIZATION

LEAD AUDITOR

SUBJECT MATTER EXPERTS

Team Members

ORGANIZATION OF AN AUDIT TEAM

ORGANIZATION OF AN AUDIT TEAM (continued)

Organization

Lead Auditor

Subject Matter Experts

TEAM MEMBERS

DUTIES

Team Members

Objectivity

Analysis

Alertness

Ethics

Lead Auditor

Responsibility

Management

Decision Making

AUDITOR CONDUCT AND SKILLS

Technical Knowledge

Audit Training

Good Communication Skills

Attitude of Helpfulness

AUDITOR CONDUCT AND SKILLS

Technical Knowledge

Audit Training

Good Communication Skills

Attitude of Helpfulness

AUDIT IMPLEMENTATION

Audit Initiation

Preliminary Meeting

Audit Planning

Pre-Audit Review

Performing the Audit

Report ing Results

Audit Conclusion, Including

Follow-Up

Corrective Action

AUDIT INITIATION

Purpose & Location

Reference Standards

Schedule

Guidelines

Report Distribution

REGULATORY

STANDARDS

Internal Documents

REFERENCE STANDARDS

REFERENCE STANDARDS

(CONTINUED)

Regulatory

Standards

INTERNAL DOCUMENTS

IDENTIFICATION OF TEAM MEMBERS

DATES AND LOCATIONS OF THE AUDIT

Schedule and Assignments

Meetings

Report Distribution

Escorts

Necessary Documents

SPECIFIC AREAS TO ADDRESS

(CONTINUED)

Identification of Team Members

Dates and Locations of the Audit

SCHEDULE AND ASSIGNMENTS

MEETINGS

Report Distribution

Escorts

Necessary Documents

(CONTINUED)

Meetings

REPORT DISTRIBUTION

Escorts

Necessary Documents

(CONTINUED)

Meetings

Report Distribution

ESCORTS

NECESSARY DOCUMENTS

COMMITMENT TO:

Facilities

Documents

Personnel

Top Management

Corrective Actions Taken

Preventive Actions Taken

AUDIT PLANNING

Brief the Audit Team

Audit Scope

Identification of Auditors and Auditee

Schedule

Standards and Procedures

Initiate Working Papers

Brief the Audit Team

Initiate Working Papers

AUDIT PLANNING (CONTINUED)

PRE-AUDIT REVIEW

Review Documents

Continue Preparation of Working Papers

Management in-Brief

Plant Tour

Operational Meeting

Audit Operations

Daily Written Records

PERFORMING THE AUDIT

(CONTINUED)

Management in-Brief

Plant Tour

Operational Meeting

Audit Operations

Management in-Brief

Plant Tour

Operational Meeting

Audit Operations

PUT PERSON AT EASE

EXPLAIN WHY HE IS BEING QUESTIONED

Learn What He Does

Analyze What He Does

Determine a Tentative Conclusion

Explain the Next Step

INTERVIEWS

INTERVIEWS

(CONTINUED)

Put Person at Ease

Explain Why He Is Being Questioned

LEARN WHAT HE DOES

ANALYZE WHAT HE DOES

Determine a Tentative Conclusion

Explain the Next Step

Put Person at Ease

Explain Why He Is Being Questioned

Learn What He Does

Analyze What He Does

DETERMINE A TENTATIVE CONCLUSION

EXPLAIN THE NEXT STEP

INTERVIEWS (CONTINUED)

TYPES OF FINDINGS

Findings or Observations

Systemic or Isolated Problems

DETERMINING ACCEPTABILITY

Unconditional Approval

Conditional Approval

Conditional Nonapproval

Unconditional Nonapproval

FINAL OUTBRIEF

Last Opportunity to Dispute Findings

Senior Management Present

No Surprises

Purpose and Scope

Applicable Game Plan Details

Referenced Documents

Audit Findings and Observations

Recommendations (Internal Audit Only)

Corrective Actions

FINAL WRITTEN REPORT

CORRECTIVE ACTION REQUESTS

Follow-up (Corrective Action) Audits

Close-Out

Records

FOLLOW-UP ACTIONS

Corrective Action Requests

FOLLOW-UP (CORRECTIVE ACTION) AUDITS

CLOSE-OUT

RECORDS

FOLLOW-UP ACTIONS

CORRECTIVE ACTION EVALUATION

Correct the Problem

Determine Its Affect on Past Performance

Take Immediate Temporary Corrective Actions

Take Permanent Action to Prevent Recurrence

AUDITOR REQUIREMENTS AND QUALIFICATIONS * Communicate * Plan * Control * Gain Cooperation * Lead *Administer * Work Independently * Good Attitude * Reach Decisions * Adaptable * Good Impression * Intelligent * Emotionally Stable * Good Character * Technical Training in Area of Expertise

AUDITOR TECHNICAL TRAINING

Nondestructive Inspection & Test Training

* Eddy Current Testing * Heat Treatment Processes * Liquid Penetrant Testing * Welding Inspection * Magnetic Particle Test Methods * Soldering Inspection * Radiographic Test Methods * Ultrasonic Test Methods * Drawing & Blueprint Reading

Quality Assurance

* Software Quality Assurance (32 hours)

* Geometric Dimensioning and Tolerancing (40 hr.)

* Weibull Risk and Uncertainty Analysis (24 hrs)

* Principles of Metrology (40 hrs)

* Statistical Process Control, (24 hrs)

AUDITOR TECHNICAL TRAINING (Continuing)

Configuration Management

Configuration Management (40 hrs)

Material Review Board Procedures (4 hrs)

Procurement

Defense Contracting for Technical Personnel (40 hrs)

Procurement Integrity (8 hrs)

Government Contract Law (24 hrs)

AUDITOR TECHNICAL TRAINING (Continuing)

Design Control

* Design Review (24 hrs)

* Reliability by Design (40 hrs)

General

* Report Writing (24 hrs)

* Basics of Explosive Safety (24 hrs)

* Effective Written Communication (15 hrs)

* Safe Assembly of Component Explosives (32 hrs)

* Hazardous Waste Training (8 hrs)

MEETINGS

Nightly Team Meetings

Inform Auditors

Share Information and Findings

Change Audit Schedule

Morning Reviews With Auditee

Keep the Auditee Informed

PRELIMINARY MEETING

Initiated by Correspondence

Between Lead Auditor and Auditee

Define Responsibilities

Identify Requirements

PRELIMINARY MEETING (CONTINUED)

Initiated by Correspondence

Between Lead Auditor and Auditee

Define Responsibilities

Identify Requirements

AUDIT TYPES

Internal - First Party

External - Second Party

- Third Party

Cairo 02 Supplier Control

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Notes on slide 1

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