Quality & Industrial Performance

SUPPLY CHAIN
MANAGEMENT
“Going From Reactive to Proactive”
This presentation was developed by General Motors Corporation Global Purchasing & Supply Chain and PSA Supplier Development.
All rights reserved. No part of this material may be reproduced in any form, or by any method,
for any purpose, without written permission of General Motors Global Purchasing & Supply Chain or PSA Supplier Development.

Reference Doc-Info: 01601_13_00127

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Introduction
PURPOSE: SCOPE:
• To provide a standard process for • Applies to a supplier’s entire supply
managing all of the supplier tiers in chain, including all Tiers, sub-suppliers
the supply chain. of raw material, outside processes,
and purchased component suppliers.
• Ensure all tiers of the supply chain
have systems and processes to
evaluate, select, communicate
expectations and requirements,
measure performance, and develop
their suppliers.
RESPONSIBILITY:
• To provide final customer with high •Ownership
stability, high quality parts & service Senior Purchasing Leader
from initial Tier 1 thru entire supplier •Champion:
chain. Supplier Quality Leader

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Benefits

• Supports continuous improvement efforts and achievement of goals through

applying common principles, methods, and processes.

• Improves Quality metrics, reduces PPM and warranty costs.

• Creates the ability to identify where problems exist and actions required to
prevent additional problems entering the supply chain that negatively impact
customer enthusiasm.

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Tier 3 Tier 2 Tier 1 Customer

Supplier Supplier Supplier Enthusiasm
Dealer

Raw Outside Purchased

Material Processing Components
Supplier Service

What are Your expectations of Your suppliers?

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Supply chain quality expectations

• Development of a supply chain management system.

• Compliance to GM/PSA quality guidelines.
• Implementation of Quality Systems Basics Plus strategies.
• Use of GM/PSA problem solving methodology ( Drill Deep & Wide / 8D).
• APQP (GM) / Formalized Qualification Process (PSA) and PPAP/EI submission for
supplied material.
• Data metrics such as: FTQ, PPM, Internal/external quality.
• Continual improvements geared toward higher levels of quality and lower costs.

GM/PSA expects you, as a supplier to use a system that manages your

suppliers in a similar manner to that used by your customers to manage you.

A proactive approach!

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Supplier selection, what are we searching for?

Criteria of Requirement
1 – page 7-8
2 – page 9-11
3 – page 12
4 – page 9
Auditor hints – page 13

Next Requirement

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Supplier selection
Procedure is in place to support sourcing decisions, evaluation of potential supplier.
• All new suppliers shall be evaluated prior to placing business.
– Does the supplier have systems in place which meet all
customer requirements?
 Such as TS-16949, GM/PSA Specific Requirements
• Whenever new business is being placed with an upstream supplier for which you
have no performance history, you shall have:
– A method to evaluate that supplier’s capabilities. (e.g. NSA)
– The ability to weigh the risk of sourcing with that supplier.

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New Supplier Assessment (Example)

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Supplier selection
Criteria to become sourceable supplier is defined.
For a supplier location to be eligible to receive a new business award must either be:
• Sourceable status on ’Bid List’
OR
• Have a supporting signed document (e.g.: Quality Business Case (QBC)
QUAD report) with an approved audit.

Supplier Quality Department or organization is fully involved in the sourcing process.

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Bidlist (Example)

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Quality Business Case QUAD report (Example)

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Supplier selection (Example)

Contractual documents (such

as SOR, Statement of
Requirements) contains all
tier1 requirements,
expectations, and processes,
signed by tier supplier.

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Auditor hints
If supplier selection is done at manufacturing location check documentation of a tier
supplier selection process.
If selection is done centrally, check tier X status is known by manufacturing location.
Evidence of SQ responsibility (SQ organization chart or SQ training records).
Affect of manufacturing location to tier supplier's performance evaluation.

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Cascade customer specific requirements, what are we searching for?

Criteria of Requirement
1 – page 15
2 – page 16
3 – page 17-19
4 – page 20-21
5 – page 16
Auditor hints – page 22

Prev. Requirement Next Requirement

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Customer specific requirements
Customer specific requirements are implemented at tier suppliers:
• technical specification of product,
• product and process specific standards,
• procedures need to be applied
• PPAP/EI,
• Reference Manuals,
• Special Process Assessments,
• Capacity check (Run@Rate),
• Early Production Containment (GP12) etc.
• traceability, FIFO and labelling requirements.

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Tier part approval
Tiered suppliers comply to product and process validation requirements. Approval is
available for all the components needed for assembled part.
Tier suppliers capacity are confirmed for all the materials/components needed for
assembled part.

Tracking of approval status (Example)

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Characteristics control
Final product Key and Pass Through characteristics are identified on component (or
material) level as well as shared and controlled (if required with Statistical Process
Control) with tier supplier.
Customer-used part features (examples: fit, form, function, mating surfaces, etc.)
shall be incorporated in the PFMEA, process control plan, layered audits, and
error/mistake proofing. Additional items to be checked shall be defined during the
APQP process.

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Characteristics control (Continued)
Pass Through definition
1) From customer point of view (at Powertrain suppliers)
Any product from suppliers or in-house which is not checked or used in customer
powertrain plants.
• Pre-formed shapes or holes which machining at Vehicle Plants.
• Thread holes or other characteristics in supplier parts which are not used in
powertrain assembly but at dress-up line in Vehicle Plants.
2) From supplier point of view
Any product from suppliers or in-house which is not checked or used in Tier1
supplier plants, but could cause issue at customer.

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Characteristics control (Continued)
Pass Through (Example)

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Managing tier supplier changes
This system and its processes should be similar to those GM/PSA uses with their
suppliers (see Managing Changes key elements).
Change Management Process
• Internal changes to process or product
• Supplier changes to process or product
• Tool Move or Source Changes & Banking Strategies
Tier X supplier production transfer needs to be managed with specific procedures
similar like BTAB.

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Managing tier supplier changes
(Example)

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Auditor hints
An example of Request For Quotation. Does it contain customer specific requirements?
Technical specifications forwarded to Tier X including list of critical characteristic
(Process Control Plan).
Supplier quotation file including technical/process feasibility.
Check critical components product/process qualification files (PPAP/EI).
Check customer drawing whether it contains any Key or Pass Through characteristics
which are produced and controlled by tier X supplier. If yes, verify that tier X supplier
drawing, PPAP, Control Plan cover them as well as tier1 incoming control includes
them.
Example of management on a tier X process change.
Check capacity confirmation for critical components.

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Escalation of tier supplier’s issue, what are we searching for?

Criteria of Requirement
1 – page 24
2 – page 24
3 – page 25-26
4 – page 25 / 27
5 – page 25 / 28
6- page 29-31
Auditor hints – page 32

Prev. Requirement Next Requirement

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Problem solving
For any delivery of parts with deviation, tier 1 validates the formal deviation request of
the tier X complaint (refer to Control of Nonconforming Product CNC6).
All suppliers to GM / PSA shall demonstrate a systematic and disciplined approach to
problem solving. This applies to all tiers in the supply chain.
At a minimum, root cause analysis will include a 5-Why analysis to lead to the
technical root cause. Other tools such as Fish Bone (Ishakawa), Is-Is not are also
acceptable. The intent is to demonstrate discipline in applying the prescribed or
preferred analysis method(s).
The next level, Drill Deep and Wide or also known as the 3x5 why, shall be used through
the supply chain to determine why the system failed . (ref Fast Response)
1. Why did the current planning process fail to Predict the defect?
2. Why did the current process allow the defect to be made?
3. Why did the current control method not detect or prevent the defect from
being shipped?

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Performance tracking
Suppliers shall develop a system to measure performance for all of their suppliers.
• Approved supplier list to track tier suppliers performance (e.g.: Bidlist Six Panel
Chart etc.). Performance indicators are defined with threshold.
• In the event of non-respect of a target, an actions plan to reach it is systematically
defined and followed by the tier X supplier.
• When a tier supplier moved from Green ranking, escalation process take into
account the tier 1 support of the tier X supplier to improve. Exit criteria are
defined.

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Performance tracking
Bidlist (Example)

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Performance tracking
Step Down Chart (Example)

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Performance tracking
Escalation Process – Top Focus (Example)

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Tier supplier assessments
Suppliers shall develop a system to measure performance to requirements and best
practices for all of their suppliers.
Techniques used to measure the supply chain would include using audits such as QSB
Plus audit, Process Control Plan Audit, Labelling Audit, Special Process Audits (e.g. CQI-
9 Heat Treat Process).
GM/PSA Tier 1 suppliers are expected to have been QSB Plus audited, the expectation
is that this requirement shall be cascaded through the supply chain.

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Special Process Assessments
All suppliers, delivering to GM plants, in the supply chain shall assess vendors of
processes which apply to AIAG Special Process Assessments CQI-9 Heat Treat System,
CQI-11 Plating System, CQI-12 Coating System, CQI-15 Welding System, and CQI-17
Solder System.

These documents specify process requirements for an organization or it’s

suppliers performing applicable processes, who need to:

• Demonstrate the ability to consistently provide product that meets

customer and applicable regulatory requirements, and
• Enhance customer satisfaction through the effective application of the system
including processes for continual improvement of the system.

These assessments are applicable to sites where customer-specified parts for

production and/or service are processed throughout the automotive supply chain.

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Special Process Assessments

These
Special Process
Assessments are
available from
AIAG
(CQI-9 Heat Treat System
Assessment Example)

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Auditor hints
Prior to audit check whether there was any customer complaint caused by tier supplier.
Example of supplier complaints towards its tier 2, verify contents of the complaints
Is there a timely management with milestones?
Verify content of 5 whys prepared for customer complaint with problem resolution
report ( 8D; 5P; Red-X etc.)
Example of action plans given by tier X. How is it validated and verified?
Example of supplier audit, evidence of audits at key suppliers
Escalation criteria (e.g.: Controlled Shipping, Top Focus, New Business Hold etc.)
Critical suppliers identified and tracked via such as Top Focus process, exit criteria
defined.
Review Tier x Performance Matrix with Tier x corrective action plan approved by Tier 1.

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Incoming inspection, what are we searching for?

Criteria of Requirement
1 – page 34-40
2 – page 34
3 – page 39
4 – page 41
Auditor hints – page 42

Prev. Requirement Next Requirement

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Incoming inspection purpose
• To prevent use and shipment of nonconforming purchased parts to the
customer,
• To verify , that quality requirements of purchased parts are checked by
periodic incoming audits.
Only approved (PPAP/EI and incoming inspection released) components/
material are used for assembled part.
Main steps
1. Identification of purchased parts
2. Planning of the Incoming Audit
3. Execution of the Incoming Audit
4. Review of results of the Incoming Audit

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Identification of purchased parts
1. Identification of all purchased parts
• A local list of all purchased parts shall be generated and entered into a
database for Incoming Audit.
• Parts in the part list / catalogue should be classified by impact of failure into
groups:
- Category (ordinary / critical)
- Main Group (e.g. coated parts, treated parts, etc.)
- Delivery Up Status (module, raw part, semi-finished part, etc.)
- Build up Status (Pass Through, Inhouse tooling)

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Identification of purchased parts (Continued)
2. Define reason for checking
• Necessary inputs: past problems, ppm performance, warranty data, PPAP data,
Lessons Learned, drawing, specification, PFMEA, tier supplier Control Plan, etc.
• Out of the part list the check characteristics shall be defined (Key
Characteristics, Pass Through etc.).
• Based on past and current quality history for each part number characteristic
the basic check reasons will be determined and shall be reviewed frequently.
• For part characteristics without quality history a risk assessment shall be
carried out.

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Planning of the Incoming Audit
1. Development of the check plan for the part characteristics to be checked.
• The characteristics to be checked for each part shall be written down in the
Control Plan.
• Based on the data of ’define reason for checking’ task a suitable and effective
checking method and frequency shall be defined for each part to be checked
and shall be defined in the Control Plan.
• Checking frequency guideline
- Verification of PPAP (min. 3 times after PPAP-Approval in a time interval to
be defined)
- Verification of Problem solving (min. 3 times after Breakpoint in a time
interval to be defined)
- Strategy Checks (min. once a year)

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Planning of the Incoming Audit (Continued)
2. Development of the reaction plan
• A reaction plan shall be developed defining the next actions whenever
deviations to the specification are detected.
• The reaction plan will contain:
- Information flow
- Corrective actions
• The reaction plan should be linked to the Control Plan when applicable.

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Execution of the Incoming Audit
1. Training
• Auditors performing the Incoming Audit must be qualified and trained to
recognize deviations from specifications as identified on the check plan and to
act according to reaction plan.
2. Checking of the part
• Based on checking orders, each part number will be defined and
checked according to the Check Plan by the Incoming Audit Auditor.
• At the reception of supplied product the first controls take into account
the checking of the quantity, of the integrity of the packaging and the
identification of the product.
• Before starting the inspection/measurement the Auditors should check
the parts regarding damage, soiling, rust etc.
• Audit results shall be documented

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Execution of the Incoming Audit (Continued)
3. React according to reaction plan
• A deviation is any item of the check plan that is not in conformance to the
specification.
• The auditor act immediately according to the reaction plan if any deviation is
detected.
4. Evaluation
• Collect, evaluate, and report of results of the Incoming Audit including
corrective actions by the supplier

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Review of results and the Control Plan
• A status of the Incoming Audit results should be prepared.
• Priorities for improvement setting :
- worsen measurement results
- reoccurrence of nonconformities at the same single parts,
• The items for improvement shall be communicated to the responsible
implementation areas and tier suppliers respectively.
• The Control Plan should be reviewed with regard to the Incoming Audit results
and updated in case of new non-conformity.
• The results of the checks shall be reviewed on regular basis.

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Auditor hints
Check identification of material released for production after receiving.
Verify that incoming covers Key and Pass Through Characteristics, frequencies are
reasonable.
See a non-conformance found during incoming.
Verify link between incoming frequency and supplier performance (high ppm supplier).
Check incoming records for a component

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Efficiency, what are we searching for?

Criteria of Requirement
1 – page 44
2 – page 45
3 – page 46
4 – page 47
5 – page 48
Auditor hints – page 49

Prev. Requirement What goes wrong?

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Tier X performance result – 6 panel chart (Example)

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Average time to close tierX Problem Resolution (Example)

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PPAP curve (Example)

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Metrics on Bidlist (Example)

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Tracking of audit results (Example)

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Auditor hints
Check customer complaints, ratio of tier X supplier issues
Red suppliers on Bidlist, actions for improvement.
If any significant concern about Tier x Issues had been addressed in FR meeting.

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What goes wrong ?
• It is sub-supplier responsibility, not ours…” – see SQ SOR
• There is no standardized Assessment for new potential suppliers
• Tier supplier evaluation is only done during sourcing
• GM requirements are not cascaded to whole supply chain
• Poor sub-supplier APQP & PPAP or Qualification activities
• No audits are performed at sub-suppliers
• No systematic approach to concern notification / problem solving
• No on-site verification of corrective actions
• Missing capacity analysis
• Run at Rates not performed below tier 1

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