SQA Activities 2008-2010

Mario MERLO Director of Supplier Quality

May 2009

.:. MAGNETI MARELLI Purchasing and SQA Magneti Marelli HOLDING SQA 2008-2010

2007-2010
Purchasing strategy
Supplier Quality Assurance

Vision
s eti do mm C i o

Create a world-class supply base as mesuared by cost, quality, delivery through common and controlled system which reflect a continuous improvement supplier management. Objectives

Regions

Business Lines

Implementation of Magneti Marelli SQA organization and roles. Integration of supplier capability systems through divisions. Harmonize through divisions of a common set of SQA process.

Key elements

May 2009

Supplier metrics development. Supplier performance evaluation criteria and reporting. Involvement of supplier in core and application development program.
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SQA Organization
SDE: Supplier Development Engineering Works in direct contact with R&D and Supplier during the product development. Has the responsibility of a portion of the supplier panel to ensure: SQB program and results Lead on the Customer issue concerns Coordinate the APQP activities where defined till 6 months after SOP PPAP support and first time acceptance Supports purchasing organization to choose and develop new suppliers SQE: Supplier Quality Engineering Works in the Plant organization. Has the task to manage reactivity problems: containment actions, cost of non quality review 8D consistence, review Supplier performance and activate the first SQB step. Issue CSL1 status and propose to Purchasing organization CSL2 status.

May 2009

SDE Activities
SDE Rule Development of New Suppliers, Components, Technologies to satisfy Magneti Marelli requests in terms of quality and cost. Qualitative problematics management (initial capacity,delivery) product/process modifications during component development phase. SQB program Involvement about high quality issue on going monitoring the performances and Improvement Plan (There are Suppliers in the SQB) To take part to decisional process about New Suppliers . SDE Responsability To Subject complete PPAP to Plant Quality approval after product validation for components ranked as A High Risk. To monitor quality suppliers performances during the rump-up until to finish launch (6 month after SOP). To collaborate with product/process cost reduction activity or improvement initiatives requested from other Function (Plant) during product life. To monitor suppliers performance and choose Suppliers (in cooperation with Purchasing and Plant) who have to improve (because qualitative targets not reached). Do Supplier Risk Assessment activities and later draw up APQP components Plan, with Auditing, Run & Rate e Fit@Funtion activities, for each products assigned
May 2009 4

SQE Activities
SQE Plant Rule SQE works between Magneti Marelli and the Supplier in qualitative improvement activity (1th phase) defining when a Supplier must be introduced into Escalation process. To monitor suppliers performance (PPM, open/closed problems) to assure a prevention process during la mass production. To orientate/manage the activities (day-to-day) due to supply problem. SQE Plant Responsability To approve PPAP for all supply components (new or where requested ). To Monitor and to report suppliers performance monthly (PPM, # Concerns, Cost Recovery) to assure that the Target assigned will be reached. To Prevent recurrence of quality problems and assure implementation Suppliers action. Authorize (Supplier Control Plansee PPAP) and link it to Incoming Control Plan. To assure the right notification/management of the concerns, monitoring through 8D approach. To Cooperate with product/process cost reduction activity or improvement initiatives requested from other Function (Plant) during product life.
May 2009 5

SDE Commodity / SQE Plant Handover process

SQE Plant

Run @ Rate Run @ Rate Part & Part & Process Audit Process Audit Launch Launch Rediness Rediness Review Review PPAP PPAP Approval Approval at site level at site level Safe Launch Safe Launch Plan Plan completion completion

SDE Product Line Commodity

Handover Process is aimed to:

Transfer Supplier Process Knowledge Magneti Marelli using plant approval of PPAP Transfer of Supplier Ownership from SQA PL/Com. to SQA Monitor Supplier Performance during Safe Launch period (90 days trouble-free).
May 2009 6

SQA 2009 TARGET

Reduction -30% PPMs Vs previous year PPAP full approval (85%) before SOP, or max waiver 3 month Improvement Plan TOP OFFENDERS (50% Tot. respect to the considerated metrics) Monitoring / Collection Recovery Cost Reduction customer Issue due to Supplier (n. of Incidents, 0Km, Warranty -50% year) Reduction number of Concerns (-30% year) Apply ASQA methodology for Projects selected Quality agreement on the supplier list identified

May 2009

SDE 2009 assignment & Responsibility

Each SDE will have the responsibility about a supplier panel of 20-30 suppliers and for specific Commodity. n strategics New Product and APQP (where necessary) on critical suppliers individuated in the Risk Assessment. n Suppliers to support and manage as TOP Offenders SQB Program Verify Reference Plant the correct applications of the procedures and metrics results above mentioned. Will lead the Customer issue due to Supplier concern for Suppliers panel assigned.

May 2009

.:. SQA: Magneti Marelli Powertrain Organization

PURCHASING

O. PHILIPPOT

# of Suppliers

SQA WW

M. MERLO

75 207 37

Electronic Components Rogante G. Mechanical Components Istruiti L. Elettromechanical Elettrome Components Bonfiglioli P.

Miranda, Opizzi, Cantalupi

Longhini, Raco, Campa, Di Lorenzo

Commodity Supplier Group

Colucci,

Bologna

New Product/Components APQP Advance Customer Issue Supplier Quality Breakthrough Supplier Recovery Cost
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May 2009
May 2009

.:. SQA: Magneti Marelli Powertrain Organization

SQA WW

M. MERLO

Data Mng D. Di Lorenzo

Bari V. Sicolo Electronic Components Rogante G. Mechanical Components Istruiti L.

Bologna D. Soverini

Argentan A. Voineau

Corbetta P. Guarino

Hortolandia G. Tshua

Shanghai A. Dong

Sandford K. King

Elettromechanical Elettrome Components Bonfiglioli P. Quality methodologies Longhini V..

May 2009

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TOP 5 Initiatives 2009

1. SQA Quality Monthly report 2. Global Quality Agreement 3. Advanced Quality Plan / Safe Launch Plan implementation 4. Supplier Quality Breakthrough program at plant level 5. SQP: Supplier Quality Performance

Supplier Quality Monthly Report / Target 11 monitoring May 2009

1. Supplier Quality Monthly Report

Magneti Marelli Supplier Quality Monthly report has been defined to report PPM (Suppliers parts rejected) trough Divisions Worst Suppliers n. of Concern (general concern) n. of Customer Concerns due to supplier issues C1 concern SQB program status SQA-SDE initiatives Supplier cost recovery

Next steps PPAP situation for new components Supplier visit and results

May 2009

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2. Global Quality Agreement

GQA must define the general rules that Supplier must respect. Have a common & unique tool to manage the same Supplier Light core document (derived from FIEV QA), with the key concept. Develop the MM detailed customization by the attachment (focused on the TOP topics)

1.Non Conformance Cost & Liabilities 2.Conformity to Directive and Regulation 3.Audit Process Audit guideline & form 4.Advanced Product Quality Planning & PPAP 5.Failure rate 6.Product change notification 7.Traceability

May 2009

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. Advanced Quality Plan / Safe Launch Plan

Supplier Selection

Components Qualification

Special period Monitoring

Pre-selection Request for quotation Requirement files Selection Certifications Pre-Process Audit (new suppliers)

Launching Planning Requirement File Review and Signature. Drawing and Specifications Review APQP Quality Assurance File Review and Signature Process Audit and Run@Rate Serial tools Serial process Initial Samples Validation Initial Samples Validation reports Measurements, Cpk

Product performances measurements (ramp-up) Incoming Controls PPM Evaluation

Follow-up performances Reports

May 2009

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May 2009

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. Advanced Quality Plan / Safe Launch Plan

Supplier Components and Processes must be validated before Run@Rate:

Magneti Marelli Powertrain

MM PWT SOP

May 2009

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3. Supplier Quality Management Responsibility sharing

New purchased components APQP Risk assessment Resp. SDE New purchased component PPAP Approval Resp. Plant Incoming Quality

Resolution of each NonConformance through the 8D report Resp. * SDE for C1 concerns * SQE / Incoming manager * SQB program Effectiveness of the implemented corrective actions through visit or SQB program Resp. SQE PPAP RP3

RP1

RPA

RPB

RP2

PROJECT DEVELOPMENT

PROCESS DEVELOPMENT PRODUCTION

Process Qualification through: -process audit (PCPA) or ANFIA -capacity assessment (R@R) Resp. SDE with support of Plant Incoming Quality - Component Quality Plan (APQP) -Critical vendor part List Resp. SDE Suppliers performance monitoring Resp. SDE & SQE Negative performances management SQB program

May 2009

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3. NEW PRODUCTS Purchased components development

KICK OFF meeting Risk Assessment
Product development Process development

00063127 00058180

-New supplier -New technology -New design -Quality performances -Customer impact -Complex assemblies

LOW

MEDIUM

A P Q P

HIGH

Master Plan

Product & Process Validation

950 900

S O P APPROVAL

Units

P P A P

Run@Rate

LCR MCR Contracted Capacity Schedule

850 800 750 700 Time

P C P A KICK OFF SOP

May 2009

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3. NEW PRODUCTS Purchased components development

RISK ASSESSMENT Risk assessment is a tool to assess the potential problems early in the Purchased Component Development.
During the Kick off meeting, the cross functional team evaluate any related component information throughout specifics
1. New Process, Technology and/or Capacity 2. Supplying Location 3. MM PWT SQ Support 4. Facilities 5. New Design Responsibility 6. Design Timing/ Stability 7. Quality History 8. Timing concerns 9. High Customer Impact

00064503

0 - 15 0 - 10 0 - 10 0 - 15 0 - 5 0 - 10 0 - 5 0 - 5 0 - 5 0 - 15 0 - 5 0 - 15 0 - 3

assessment category guidelines and calculate a rating

LOW

0 10 11 20 21 or greater

LOW MEDIUM HIGH

MEDIUM

10. Complex Management structure 11. Program Management

HIGH

12. Complex Assemblies 13. Other (Classified characteristics)

May 2009

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3. NEW PRODUCTS Purchased components development

CRITICAL VENDOR PART LIST
The CVP list resume all the new component for a MM PWT new product For each component are listed the chosen activities (APQP; PPAP; PCPA and R@R) to guarantee a successful SOP Components assessed with high/medium risk shall be monitored with APQP tool CVP list is updated periodically; status of each activity is reported

cvplist_meca

May 2009

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3. NEW PRODUCTS Purchased components development

COMPONENT QUALITY PLAN (CQP)
CQP is a structured document which defines the key quality planning requirements necessary to assure that a product satisfies the customer requirements. It is the APQP tool for MM PWT The goal of CQP is to facilitate the communication between the Supplier and MM PWT to assure that all steps are effectively completed on time. CQP lists a series of activities for which must be defined a completion date coherent with the milestones of MM PWT product development plan. The CQP must be signed by Supplier for acceptance and constitutes the instrument for the monitoring of the undertaken engagements.

00064504

May 2009

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3. NEW PRODUCTS Purchased components development P P A P

May 2009

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3. NEW PRODUCTS Purchased components development Global RUN @ RATE

The purpose of the Run @ Rate activity is to verify that a suppliers actual manufacturing process, while operating under normal operating conditions, is capable of: Producing Quality Components as stated in PPAP (Process Control Plan Audit - PCPA); Meeting or exceeding the Contracted Capacity within One Production Day on a sustained basis. (Capacity analysis)

The Run @ Rate should be performed: After the supplier has attained an interim or fully approved PPAP submission;

No later than eight weeks prior the start of regular production (SOP).

May 2009

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Supplier Quality Breakthrough program

Focused on high impact suppliers Top management direct involvement required is strictly

Pragmatism wants real action planning with commitment. A structured program based on facts, detailed root cause analysis, removing of all the potential and systematic causes which will be jointly reviewed with specific audits. Regular quarterly meetings with structured and transparent preparation The program is regularly presented to the Magneti Marelli Executive Committee reporting the progress of the quarterly meetings with Top Supplier Management

May 2009

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4. SQB program: Matrix / KPI Example

May 2009

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SQB status ( updated to 2Quarter 2009)

% IMPROVEMENT is: the baseline key performance index before kick-off SQB meeting and present situation KPI: N of concerns (C1/C2/C3) PPM Time to answer PPAP first time approval Cost of No Quality Q.I.P. % of implementation Others
NEW ENTRY

May 2009

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. SQP: Supplier Quality Performance

Vendor Information Network

SQP is a supplier portal that is designed to facilitate seamless communication between Magneti Marelli and its suppliers. SQP is centralized is a Purchasing Information System that aids in enchanced decision making and managing the workflow across the various process in Supplier Chain.

May 2009

27 ROBUST AND COMMON DATA MANAGEMENT