Q1 2nd Edition

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Transcript of Q1 2nd Edition

  • Ford Confidential UNCONTROLLED COPY

    April 24, 2003


    2nd E NG



  • Q1 2nd Edition Ford

    Insert Photo of Tony Brown

    Q1 was built upon previous guidelines and has incorporated the lessons learned fromquality experience. Now, one-year later, we have enhanced Q1 based upon supplier feedback to drive continuous improvement and customer satisfaction. Q1 has been raddress the needs of supplier partners and customers in our pursuit of quality excelle The relationship we hold with our suppliers is of key importance as we work togetheproduce quality vehicles and drive customer satisfaction. Q1 lets our suppliers undeexactly where they stand and helps lead the way to achieve continuous improvementreward for improving quality and maintaining Q1 status is the recognition that the sufacility is the best in the business. The symbol of this excellence is the Q1 flag that iproudly over the best supplier facilities in the world. Our Q1 suppliers are valued partners, an integral part of our business fabric. Only byin partnership will we be able to provide the high quality products our customers exp The Q1 journey, like the quest for excellence itself, never ends. We appreciate that ycontinued the journey with us. Tony Brown Ford Motor Company, Vice President, Global Purchasing May 2003

    April 24, 2003 Confidential

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  • Q1 2nd Edition F ential

    C O N T E N T S


    2nd Edition Summary of Changes

    Q1 Requirements

    Q1 Score


    Benefits of Q1

    Applying for Q1

    Appendix A Capable Systems

    Appendix B Ongoing Performance

    Appendix C Manufacturing Site Assessment

    ord Confid 2









    16 Page 1 of 18 April 24, 2003 Uncontrolled Copy

  • Q1 2nd Edition Ford ial

    INTRODUCTION Q1 was launched in February 2002 and is delivering results. By recognizing qualitat the manufacturing site level, and by applying consistent, understandable metricsquality, Q1 has become the quality trustmark worldwide for each brand name. But in today's dynamic marketplace, companies that don't improve get left behind. expectations and requirements in Q1 have been refined to more accurately reflect sperformance in relation to the total Ford enterprise. What Is Q1?: It is a set of fundamental quality and manufacturing disciplines wfollowed, ensure a supplier's success and drive a supplier's continuous improvemenare expected to attain a certain mark, put the tools in place to maintain excellence, with each passing year. Suppliers aren't expected to achieve Q1 independently it is a relationship. Ford sto offer suppliers its expertise and assistance throughout the Q1 quality journey. Q1 puts the discipline in place to achieve consistent excellence and guides coopbetween Ford and its suppliers for superior quality execution. Approach: Q1 applies a few vital metrics to determine which suppliers qualify same measurements will be used to establish who will keep Q1 status. The 2nd Edirefined the manufacturing site assessment as a key tool in driving continuous improThe revised site assessment places greater emphasis on the site QOS, including waperformance, launch performance, quality reject trends and process variability to pframework to achieve continuous improvement. Summary of Changes: The 2nd Edition Q1 requirements are effective June 1A summary of the content changes is provided in the next section. Confidenty achievement to drive high

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    , 2003. April 24, 2003 Uncontrolled Copy Page 2 of 18


    What's Changed 1. Commodity PPM Performance (production and service) The threshold for commodity PPM performance has been revised: A) The industry commodity PPM has been revised to a 12-month

    fixed PPM from today's floating monthly industry commodity PPM. The industry commodity PPM will be fixed at the beginning of each calendar year.

    B) The process for deducting points from suppliers for poor performance to the industry commodity PPM has changed.

    Sites whose commodity PPM exceeds twice the industry PPM will lose 150 points vs. 250 points today. If the site commodity PPM exceeds the industry commodity PPM in any month for any commodity during the next five months, the site will lose 250 points and Q1 status (the PPM maximum threshold rule does not apply, refer to 1C below).

    C) The overall site PPM maximum threshold has been reduced to 110 PPM (from 120). Suppliers will receive negative points based on the scoring table when the commodity PPM exceeds 110. Sites with commodity PPM lower than 110 will not receive negative points but may receive positive points for commodity PPM.

    2. Six-month Site PPM (production only) Sites will no longer receive negative points when 6-month PPM exceeds 100.

    3. Low-volume site PPM (production only) If a site ships fewer than 40,000 total pieces in the mature six-

    month reporting Responds to supplier concerns period, it is considered under the low-volume rule. The site will not receive that the PPM calculation was negative points for PPM performance if it ships fewer than six rejected pieces in the six-month period. Low volume sites are eligible to receive positive points for good PPM performance.

    4. Stop Shipment Waiver (production only)

    The stop shipment waiver criteria have been revised to clarify. Suppliers who assist Ford by alerting the Ford Plant to a potential issue before part utilization and replace suspect parts with certified stock will be considered for the waiver.

    5. Site Assessment (production and service)

    The partial site assessment addressing focus elements has been eliminated for all suppliers. Site self-assessment frequency is based on Quality segmentation. Full site assessments are required as follows:

    Segment 1 and 2 sites every 6 months Segment 3 and 4 sites every 12 months

    The site assessment scoring impact on Q1 has also been revised and now supported by a two-step process at the discretion of the Ford site engineer.

    Rationale Provide suppliers with a stable target for PPM performance. Allow suppliers to react to a significant PPM event without losing Q1 for a single event. Designed to respond to the demands of the marketplace by requiring year-over-year improvement in key performance metrics. Addresses supplier's concerns. Responds to supplier's concerns that the PPM calculation was overly sensitive for low-volume sites.

    Recognize sites who proactively communicate potential concerns to the Ford plant and STA prior to plant disruption. Provide Ford and suppliers more flexibility in responding to issues.

    Q1 2nd Edition Ford Confidential

    Page 3 of 18 April 24, 2003

    Uncontrolled Copy

  • Q1 2nd Edition Ford Confidential

    Summary of Change (continued)

    What's Changed

    5. Site Assessment (continued) The process will be triggered by:

    Site assessment is late to the required 6 or 12 month frequency

    Corrective action plan is not submitted to the Ford STA site engineer within 30 days of the site assessment

    Site action plan is ineffective in its execution The first STA action will result in 150 points, the second STA action will result in 250 points and loss of Q1 status.

    6. Violation of Trust (production and service) Due to the importance of trust in Ford and supplier relationship, any violation of that trust could result in revocation of Q1 status. Violation of trust is discussed in more detail in Appendix B.

    7. Plant Endorsement (production only) If a Ford plant rescinds its customer endorsement from a supplier site for Q1 criteria violations or 6-month QR trend performance, the supplier is required to submit a corrective action plan to its STA site engineer.

    8. Service Ford of Europe Add service PPM and delivery for product to FCSD Ford of Europe receiving locations.

    9. Warranty Performance (production only 3rd quarter 2003) Specifics for site warranty are being finalized around annual improvement in the percent of warranty claims per parts shipped. Suppliers are expected to demonstrate knowledge of the warranty impact of their parts on Ford vehicles.

    10. Launch Performance (production only) Launch performance is included in the site assessment. Sites are required to meet program launch requirements, including responsiveness and closure of any launch rea