2009 supplier conference phoenix airport marriott february ... · commitment to quality. 14 • iso...
TRANSCRIPT
2009 Supplier ConferencePhoenix Airport Marriott
February 25, 2009
Agenda
• Welcome Wally Johnson• EPIC Strategy & Direction Bhawnesh Mathur• Business Development Todd Baggett/David Brakenwagen• Break• EPIC Lean Journey Wally Johnson/Jochen Lipp• Commodity Management Lou Nemeth• Lunch• State of the Industry Lloyd Kaplan, iSupply• Quality Renee Quiroz• Logistics Hilario Apodaca• Supplier Development Steve McEuen• Closing Remarks Bhawnesh Mathur
Bhawnesh MathurCEO, EPIC Technologies LLC
Business Development Update
Todd BaggettDavid Brakenwagen
EPIC at a Glance………
• Mid-Tier EMS provider with 2400 Employees in North America
• Focus on higher mix / medium volume market segments• Full service offering with a strong focus on New Product
Introduction• Robust Quality Systems• A track record of revenue growth and stable financial
performanceIndustry Leader in Lean Manufacturing, delivering
extremely flexibility and responsiveness to our Customers
A Network of North American Facilities
6
Juarez, Mexico Plant 1• Facility opened 2002• 72,000 square feet• 8 SMT lines• 671 employees
South Lebanon, Ohio• EPIC acquired Jan. 2005• 59,400 square feet• Ultra high mix/low volume• 2 SMT lines• 108 employees
Norwalk, Ohio• 55,000 square feet• 3 SMT lines• 190 employees
Juarez, Mexico Plant 2 • EPIC customer plant take-out Dec. 2004• 125,000 square feet• 4 SMT lines• 701 employees
El Paso, Texas• 25,000 Sq. Ft.• NPI/post-mfg. repair• Distribution center• 25 employees
a
Full Turn-Key Manufacturing Services
7
Customer – Centric Business Model (CFT’s)
EPIC Timeline of Key Events
1988 200820021999 2005
EPIC Technologies
founded in Norwalk, OH
EPIC Acquires Plant 2 in
Juarez, MX
EPIC Acquired by current operational leadership
team / Begin Lean
Implementation
EPIC Opens Plant 1 in
Juarez, MX
EPIC Acquires
Siemens EMS Operations in
TN and OH
2004
Bhawnesh Mathur
joins EPIC as CEO
EPIC Growth – 30% CAGR
Financial Highlights
•Strong balance sheet / low debt
•Sustained Operating Profit
•Strong Banking and Private Equity relationships
•Available capital for continued growth and expansion
EPIC Sales By Market Segment for 2008
48%
33%
4%5%
10%
Medical Industrial ControlsAutomotive ConsumerOther
EPIC Ranked in the Top 10 Globally for Medical Electronics Device manufacturing!
Strong Systems Expertise
• Medical patient monitoring products• Automotive tire pressure monitoring
systems• Solid state electric meters with RF• Programmable logic controls• Elevator starter modules• Building security systems• Fuel pump and antenna control
modules• IT data room equipment• PDA interface dock for medical CPAP
machine
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Design & Engineering Services
•Printed Circuit Board Design
•Robust DFM / DFT Toolsets
•Component Engineering
•Full Service Failure Analysis Laboratory
•Industry-leading Test Engineering Services
•X-Ray, AOI, Flying Probe
•ICT support for all major platforms, in-house fixture development
•Full Functional Test Development capabilities (software / hardware)
•Extensive RF capability
•Repair Depot Services
Commitment to Quality
14
• ISO 9001:2000 registered• ISO 13485:2003 registered• ISO/TS-16949:2002 registered• Manufacturing Standards to IPC Class II & III• FDA Quality System Regulations (QSR) 21 CFR Part
820 compliant (Class II and III)• Manufacturing capability and test certifications: UL,
CSA, FM, CE Mark• Winner of SMT Vision Award, several Circuits
Assembly Service Excellence awards and E&Y Regional Entrepreneur of the Year award
• Numerous Supplier Excellence awards
Target Customer Profile
• Electronics spend of between $10M and $50M annually– Desires to work with mid-Tier EMS partner– Roadmap to $10M+ in loading for EPIC– Medium Mix (< 100 assemblies)
• Understand value of Lean and Kanban models– Understands Total Landed Cost and the value of flexibility, OTD
and lower inventory levels• Existing products with stable growth and > 3 years in the
product life cycle remaining• Financially healthy with a strong balance sheet• Desires Mexico as a low cost option for North American end
user consumption • Focused approach in high growth markets: Medical, Industrial
Controls, Automotive, LED
EPIC Business Outlook
• Leverage the current economic environment, capitalize on contraction and consolidation
• $500M revenue run rate over next 3 years• Continue to grow market share with existing
customers• 6 to 8 new customers
• Expand the Service Offering, providing greater value for our customers
• ~ 25 strategic customers with average revenue per customer of $ 20M.
• Selective evaluation of M&A opportunities (OEM divestiture, etc.)
In Summary….
• In spite of the current economic climate, EPIC remains in growth mode
• Our Lean Manufacturing systems continue to provide a strategic advantage for EPIC with OEM customers, enabling our growth• Supply Chain excellence is a critical element of our
model• Our Suppliers are an excellent source for new
opportunities (Sales and M&A)• We appreciate your support!
EPIC’s Lean Journey
Jochen LippWally Johnson
At EPIC Technologies, Synchronous Flow Manufacturing means never building product until
our customers say they need it, as well as…•No “Frozen Windows” on Orders
•1 to 2 Day Order Turn Around Time
•99% On-Time Delivery to Customer Request
•Incredible Inventory Turns for our Customers
Lean – Why Is it Important?
• Foundation of the EPIC Value Proposition• We need all of you to embrace it• Fundamental to a successful business
• Lean History Lesson– Eiji Toyoda – Visit to Ford Rouge Plant– Taiichi Ohno – Father of the Toyota Production System– W. Edwards Deming – Quality Teachings
VALUE =
QUALITY SERVICE
CYCLETIME
COST
X
X
Key Lean Components
• Team based approach to eliminate waste– Anything other than the minimum amount of equipment, materials, parts, and time absolutely
essential to production is Waste• Voice of the Customer
– Specific Product, Capability and What are they willing to pay for it?• Value Stream Mapping
– Development through Delivery to the End Customer– Separate the Value Added from Waste
• Quality - Capable Processes– You can go no further in the journey without this!
• Flow– Commitment to Radical Change– Quick Changeovers and Small Lot Production– Balanced to the Customers Rate of Usage (Takt)
• Pull– Production is initiated only upon the signal from the customer– Movement through the process occurs only upon upstream signals
• Continuous Improvement– Top Down and Bottom Up Commitment to Driving Key Performance Metrics
• People– De-emphasis of Specialization– Motivated to commit to the long term success of the company
LEAN
SMED
One Piece Flow
Employee Empowerment
VOCPULLFLOW
Cpk
Cross Training
Six Sigma
Kaizen
Kaikaku Constraint Management
Takt
Poka-Yoke
APQP
8D
Value Stream Mapping
Value Added vs. Waste (Muda)
• Value Added – Directly impacts the value recognized by the customer
• Two Types of Muda1. Unavoidable until a transformation occurs2. No Value Added
• Types of Waste• Overproduction• Motion• Inventory• Waiting• Transportation• Defects• Resource Under-Utilization (especially Constraints!)
• Non-Value Added Activities• Scheduling• Expediting• Ordering• Inspecting• Moving• Kitting• Storing
NVA
ValueAdded Non Value-Added
Total Cycle Time
V.A. NVA
ValueAdded Non Value-Added
Total Cycle Time
V.A.
W.I.
P C
OM
PLET
ED B
OAR
DS
FINAL ASSEMBLY
FINAL ASSEMBLY
INCOMING RECEIVING& INSPECTION
WAV
E SO
LDER
TOU
CH
-UP
W.I.
P AU
TO-IN
SER
TED
BO
ARD
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HAND INSERTION
HAND INSERTION
HAND INSERTION
SEQ
UEN
CER
AUTO
-IN
SER
TIO
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STOCKROOMINVENTORY
PAC
KA
GIN
G &
SH
IPPI
NG
TO C
UST
OM
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ACC
EPTA
NC
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STIN
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5-10 Days 5 Days 5-10
Days 3-5 Days 3-5 DaysThrough-Put Time
Work Order Trigger
Materials Transaction
MRP BasedPurchase Orders
SUPPLIERL.T. = Up to 24 Weeks
Traditional Electronic Manufacturing Flow
FIN
AL A
SSEM
BLY
FIN
AL A
SSEM
BLY
KAN
BA
N Q
UAN
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CO
MPL
ETED
BO
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LINE INVENTORY
PAC
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SH
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ACC
EPTA
NC
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STIN
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SUR
FAC
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OU
NT
TEC
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OLO
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LIN
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SEQUENCINGMACHINE
AUTO
-INSE
RTI
ON
LIN
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WAV
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TOU
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-UP
HAN
D IN
SER
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KAN
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BO
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S PA
ST A
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MAT
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Lead Time = 1-3 Days
Through-Put Time2-4 Hours 2-4 Hours 2-4 Hours2-4 Hours
MRP Schedule Share
Planning Information
Release Trigger (withdirect Dock-to-P.O.U.)
Work Order Trigger
Pull Signal
Materials Transaction
BA
CK
FLU
SH T
RA
NSA
CTI
ON
Lean Transformation
(Should-Be)Cost Effective and Necessary Process
(As-Is)Process Assessment
Value-Added Activity
Non Value-Added Activity
(“White-Space”)
V.A.
V.A.
V.A.
V.A.
V.A.
Lean as a path to Growth
V.A.V.A.V.A.V.A. V.A.V.A.V.A.V.A.
Inventory Hides Problems
PoorScheduling Methods
Quality Problems
ObsoleteProcesses
LongSet-Up Times
LongLead Times
InadequateMaterial Control
InsufficientCommunications
UnreliableInformation
SupplyDelays
Sea of Inventory
Supply Chain Starts with Internal Alignment
Developing and Adopting a High Performance Supply Chain Strategy that exceeds customer expectations in the Fulfillment of Goods and Services While Maximizing
Economic Value.
CustomerSupply Base
Product/MarketDevelopment
Supply ChainStrategy
Extended Lean Enterprise
The Enterprise
Suppliers Customers
ProductCreation
SalesGeneration
OrderFulfillment
Distribution After-SalesService
The Company
Supply Chain Management Strategies and Tactics
Manufacturing TechnologyFacilities
Supply Base ManagementPeopleManagement Systems
Quality SystemsMaterial Flow
Working Capital Information Technology Product Development
Lean – Case Studies
Lantech 1991 1995Metric Batch & Queue Lean FlowDevelopment time for a new Product Family 3-4 yrs 1 yearEmployee Hours Per Machine 160 80Manufacturing Space per Machine (sq ft) 100 55Delivered Defects per Machine 8 0.8WIP and finished goods inventory ($000} 2,600$ 1,900$ Production Throughput Time 16 weeks 14 hrs-5 daysProduct Delivery Lead Time 4-20 wks 1-4 wks
Wiremold 1990 1995Metric Batch & Queue Lean FlowSales per Employee ($000) 90 190Average Throughput Time 4-6 wks 1-2 daysProduct Development Time 3 yrs 3-6 monthsSuppliers 320 73Inventory Turns 3.4 15Space Reduction 50%Sales 2.5XOperating Profit 6.2X
Source – Lean Thinking, Womack & Jones
Getting Started
• Change Agent• Core of Lean Knowledge• Crisis• Value Stream Map• Process Capability• Commitment
– Radical Change– Ongoing Continuous Improvement
Why Do Companies Fail?
• Infatuation with Current Product, Process or Technology
• Incapable Processes • Nationalistic Agenda• Lack of Commitment and Alignment
– Shareholders– Dismantling of Fiefdoms– Engagement to the Working Level– Loss of Focus
Alignment of Priorities
Engineering Logistics
PurchasingManufacturing
Where is Total Cost of Ownership Recognized?
ObsolescenceFreight Inventory
Unit Price
Sales
Top Line Sales
www.lean.org
For Further Investigation…..http://www.isixsigma.com/
http://www.northriverpress.com
Taiichi Ohno
Shigeo Shingo
Many Names But The Same Concept
• Toyota production system (TPS)• Pull manufacturing• World Class Manufacturing• Just in Time• One piece flow• Cellular manufacturing• Continuous Flow Manufacturing• Lean Manufacturing
At EPIC Technologies, Synchronous Flow Manufacturing means never building product until
our customers say they need it, as well as…•No “Frozen Windows” on Orders
•1 to 2 Day Order Turn Around Time
•99% On-Time Delivery to Customer Request
•Incredible Inventory Turns for our Customers
EPIC Technologies Profile
• Premier manufacturer of specialty electronic assemblies in the higher mix, medium volume market segment
• Provides turnkey services– Product engineering, test development, prototype to
volume PCB assy, box build, direct fulfillment to end customer.
• Utilizes lean manufacturing principles and cutting edge production technologies to offer customers faster turnaround time, lower inventory & obsolescence, and increased flexibility.
• Effective footprint with operations in Ohio and Juarez, Mexico• EPIC’s “lean” approach has resulted in very rapid growth in
an industry that has otherwise been in decline throughout North America.
EPIC/Respironics Case Study
– Maximize utilization of plant floor space– Standardize Equipment and processes, maximize
equipment utilization to reduce the need for additional capital investment, 7/24 schedule
– Material storage on the point of use– With small lot runs, improve production quality
(first pass yields) in order to ensure optimum labor efficiencies
– Produce only for actual customer demand versus speculative forecasts in order to reduce waste
– Improve responsiveness & flexibility for customers
Point Of Use Reel Stocking
Kanban Models
• KB2 – 2 bins, Pull Card when Bin Empty• K11 – 1 bin/reel, Pull when Template
Reached • K12 – 1 reel, Pull when reel is pulled
INVENTORY CYCLE
Customer places order
with EPICEPIC ships material from
designated finish goods zone
All empty bin cards go
to the 1st process master bin
for replenishment
Operator pulls parts from bin
for production
All empty raw material
cards are placed in master bin Cards are collected & scanned
Parts are received
from suppliers
Parts are taken
to Kan Ban bins
With cards
EPIC Operations Initiatives
– Implemented Synchronous Flow Manufacturing• Designed cellular-based layout to improve capacity utilization
& increase equipment / process flexibility• Reduce set-up/change-over times (15 min avg vs. > typical
2hrs) enabling multiple product changeovers per shift• Increased first-pass yield at ICT and Functional Test (>99+%)
through transfer of very small batch quantities• Reduced average production cycle times from 4-5 days to < 1
shift in a high-mix environment (e.g. producing 25-50 assemblies simultaneously in each work cell)
• Receiving daily pull signals from customers and shipping products from “finished goods leveling system”, triggering replenishment during the following shift.
Operations Line Scheduling
• System requires no Production Scheduler:– Operators empowered to prioritize production sequence for each line
based upon color coded pull signals– System drives significant reduction in WIP (based completely on
demand flow)– Fast Reaction time for Customer needs / high flexibility as required
(lines can be changed immediately to respond to demand)
Demand Flow: Finished Goods Leveling System
• 3-zone system to drive production flow:Green Zone (Replenishment Zone) / Yellow Zone (Staging) / Red Zone (Action Zone)
• FGDS are shipped out of red zone first, then rotated to ensure FIFO integrity • Provides production schedule flexibility to contain demand swings up to 50%
within 2 days of signal & reduces window for “firm orders” from 4-6 wks to 1-2 daysThe overall result of EPIC’s Kanban system is to provide flexibility,
minimize inventory exposure and improve turns
Automated Finished Goods Leveling
Benefits Achieved
• Converted from fixed orders to kanban releases with pull signals and reduced WIP from approximately 2 weeks to 2 days
• Improved inventory turns over the past two years from <10 to >45.• Improved incoming quality over two fiscal years by an order of
magnitude and eliminated receiving inspection• Implemented returnable containers with line side usage• Significantly increased capacity utilization (floor space & equip.)• Increased OTD resulting in increased customer satisfaction and
additional market share• Redeployed working capital freed up through increased inventory
turns (raw and WIP reductions) to finance continued growth, including the launch of an additional facility in Mexico.
EPIC Lean Workshop
Final Insp
SupplierCustomer
WC 100
WC 200
WC 300
WC 400
Stores
Receiving
Program Mgr
Purchasing
Planner
Expeditor 1
Expeditor 2
Expeditor 3
EPIC Lean Workshop Results
#1 #2 #3 #4 #5Ordered 111 92 135 151 127Delivered 20 90 146 151 127Rejected 5 40 40 2 0Accepted 15 50 106 127 151Late Deliveries 15 64 93 24 0Backlog 96 64 29 0 0
Revenue 6,875$ 22,917$ 48,583$ 58,208$ 69,208$ Througput 2,750$ 9,167$ 19,433$ 23,283$ 27,683$
People 5,250$ 5,250$ 4,900$ 5,250$ 5,250$ Tables 2,000$ 750$ 750$ 1,000$ 1,000$ Inventory Costs 9,160$ 3,390$ 4,328$ 3,577$ 527$ Rejects 1,000$ 8,000$ 8,000$ 400$ -$ Late Shipments 1,500$ 6,400$ 9,300$ 2,400$ -$ Backorder Costs 14,400$ 9,600$ 4,350$ -$ -$ Ordering Costs 1,350$ 3,375$ 6,750$ 135$ 135$ Total Costs 34,660$ 36,765$ 38,378$ 12,762$ 6,912$ Cost per Unit Deliv 2,311$ 735$ 362$ 100$ 46$
OTD 5% 28% 39% 84% 100%
ROUND
Lou NemethDirector,
Commodity Management,Electronic Components
InitiativesProcessStructureObjectives & StrategiesSourcing CriteriaSupplier Expectations
Purchasing
Sales Presents Opportunity Quote for Bid (site specific) J Customer Awards PO J EPIC System Load Quote for Buy Buyers award PO’s based on 11 Sourcing Metrics Buyers to ensure pipeline is secure into production. Once in production, Kanban is set up and Buyers have an Intelligence training with the Material
Analyst who takes over to manage the project. Commodity Buyers will come back in play when:
Material issues arise.Resourcing is required due to vendor performance
or for pricing issues Pricing Refresh
Sourcing Process Overview
2008 Epic Procurement Initiatives
One Blended Purchasing Community.Expanded Product Coding. Launched Corp. Lead Buyer Program:
Customer Champion launches and oversees new purchasing efforts by customer.
Enhanced Supplier Champion RoleEnhanced Bond Review program headed by
Corporate Buyer.Material Analyst Intelligence Training.
Commodity Team
Customer Champion Team
Amy Taylor: COD, OOP,SHU, TYC Brenda Pachasa: DAN, DRS, WEL Carlos Melendez: PEN, SEG Carolina Salcido: HIR, KUH, VON Ignacio Osuna: RES Lori McHenry: MED, GES, VOC Mary Torres: APC, GEL, GEF Nohemi Galvan: SEN Patty Muniz: Flo, THO Rafael Carrillo: CAN Rocio Blanco: SIM, MKS Sabino Nevarez: SES, SIE, SSP, SBL Susie Loudy: COP, DRA, MDT
Material Analyst Intelligence Training
Delivery schedule for items which are not set to go with our preferred supplier from the get-go. IE: which spot buys covers us until the preferred supplier’s pipeline kicks in.
Risk analysis Long Lead Time devices Allocation Issues Leaded vs. Rohs alert Sole Sourced items
Firm release suppliers and rules of engagement Who the key contacts are for New vendors Commodity Buyers will share the Strategy of vendor selection
process. (why vendor A won over vendor B). Candidates for consignment (due to low initial production
runs, PO’s may be set up as a regular Blanket but EAU’s are high enough that a device should move into consignment at a later date).
Procurement Initiatives
Part Number Reduction ProgramBOM Enhancement = Customer Value AddDepartmental Expansion:Purchasing Engineer
• Navigate towards less problematic MFR’s• Move towards common flavors• Navigate upstream in technology
Strategic Semi BuyerStrategic Passive Buyer
• Mentor Commodity Buyers• Negotiate Strategic packages
Site Transition Process
GOAL: Maintain the established pipeline Mirror AVL & Blankets onto the receiving sites system. Suppliers to be advised of ship-to address change (Epic part
numbers, new Blanket numbers and pricing) For MX transfers, COO’s & weights will be requested. Sales forecasts move.
(Epic as a company will continue to send one signal). Product transfers may commence. Releases may be sent to fill bins. Sending location to have a Hand-Off Meeting with the MA and
CB’s Sending location to close Blankets In the mean time, fill consignment, on upcoming transitions, to 3
weeks. Epic will deplete the cage at the time of transfer.
Note: No new NCNR need be signed.
Price Change Process
EPIC will maintain a Master Price Sheet by Vendor. Vendor may submit changes once per month on the Master
Price Sheet. It is understood that requests for Price Increases means the
supplier is prepared to pass on business unless the new price is agreed to. As such, Epic understands that all measures have been taken to mitigate increases: Alternative MFR’s Sweet Spot better than parts
The following month is considered the Notice Period. The Buyer will work alternative solutions to mitigate costs. Resourcing Prevention: Increase one device but reduce others. Note if we have an Invoice discrepancy and Invoice price is not
in effect at the time of the Invoice, the invoice will be paid short. Exception: when a project has been dormant for over a year, fair
play will be in order.
Vendor Change Process
Contact Current (old) Vendor and advise of change.
Identify liabilities. Contact New Vendor and ask when they can
support a solid pipeline. Note: this goes beyond the initial shipment.
Establish Vendor Transition date. System Change: Close old Blanket on a Saturday
& open a new Blanket on a Sunday. If the change effects consignment, advise the floor If moving from Bond to Consignment or Proximity Whse,
change bin sizes
CFT Meetings
Significant Forecast Changes Push to clean up out dated work orders Material shortage updates Aged material > Move product into Customer
consignment Life time buys > Customer to approve for consignment Alt approvals (for better costs or to lower risk) PPV approvals Request for Bulk vs. T & R where warranted to save
inventory investments Push to load demand and extend forecasts beyond the
lead time of the longest lead time part
Roles & Responsibilities
Material AnalystProgram Production Material AdministrationResponds to Card ScansMRP Ordering for “MRP Suppliers” Bond Report “Reds” Hot List/Shortages ‘Spot’ Quality IssuesEnd-Of-Life AdministrationECNs Risk Awareness (Herbies)… CB taughtExpeditesShortage “Spot Buys”
Roles & Responsibilities
Commodity BuyersStrategic “Quote for Bid”New Program Sourcing through Launch “Quote for Buy”Cost Enhancement / Cost Avoidance NCNRMOQ navigationChronic Quality IssuesCommodity StrategyMarket Trends (Lead Times, Market Positioning,
Sweet Spots)Supplier DevelopmentLead Time watch Intelligence training (hand-off process)
1. Epic’s differentiator is to offer extreme Flexibility. As such Epic’s Procurement Objective is to Meet all Customer’s, Highly Flexible, Delivery Expectations. (expect the unexpected)
2. If you want to grow with your customer, make them as competitive as possible. As such Epic’s second Procurement Objective is to challenge cost models and drive as much redundant cost out of the equation as possible. To assist our suppliers in this capacity, Epic commits to being the simplest and most open company you interact with.
EPIC Procurement Objectives
Strategies: Align with Suppliers who work within the Epic Model and
who continue to push the Lean Envelope. Consistent Strategy throughout all EPIC Facilities. Quote in Packages. Focus on Total Cost of Acquisition. Enhance Supplier Relationships. Value Add: Enhance Customer BOM’s Design Preferred Vendor Programs by Commodity. In Depth Market Intelligence:
Current Lead Times & Trends Current Pricing & Trends Sweet Spots MFR Print Position
EPIC Procurement Strategies
Bronze: Epic will engage in Spot BuysSilver: Supplier has entered into a Pull
Agreement where the Supplier reviews Epic’s forecasts and buffers according. Epic entrusts the Supplier with BlanketsGold: Upon review of Epic’s 11
Sourcing Metrics, Epic declares a supplier as the Primary Supplier for a given Commodity.
Epic’s Preferred Vendor Program
Overall Favorable PricingPricing ConsistencyMarket PositioningOn Time Delivery Record Inventory Breadth Inventory DepthAbility to Lower Liability
• Quote Standard Product• NCNR’s to be lead time based• Availability of Smaller Mults.
Ability to Entertain AlternativesAbility to Shield EPIC from Price Increases Terms and ServicesResponsiveness / Support
Supplier Sourcing Criteria
Full support for a lean “pull” system evidenced by signature of EPIC ‘Pull’ agreement. Build to forecast, ship to release/pull signal. Drive down minimum lot sizes and cycle times, and work together to eliminate waste in the value stream
Weekly "Bonded Inventory Report" and/or ATP (Available To Promise) Report from the supplier with buffers and graded per the EPIC process. (A supplier tool)
The purchase order release in its entirety is an important part of our contract. Meet the date Meet quantity or if the quantity changes you must get confirmation
bins have been changed at EPIC Meet price or stop and get it fixed Don’t change parts on AVL without notifying EPIC
Supplier Requirements
Supplier Requirements (cont)
OTD Goal – One day early, zero late OTD We expect Supplier management to escalate to EPIC
management if a soft forecast line delivery cannot be met within a 2 week timeframe.
Bonded Inventory at EPIC for higher volume parts (consignment) or at Proximity Whse.
Shield EPIC’s customers from Price Increases. 60 day notice Alternatives to be offered Increase one but reduce another.
Operate in a Liable or Non-Liable World NCNR and Custom Part obligations to extend no further than
forecasted quantity over lead-time plus buffer stock as required per EPIC model.
Epic does not participate in the supplier of the month club. Quote Best Up Front - No time to Requote Shield EPIC’s Customers from price increases Quarterly Cost Enhancements Uniform Pricing across all EPIC locations BOM enhancement scrubbing Market Intelligence:
Sweet Spots Alternative parts management Notice of Parts Change & Obsoleteness
Given the above, how does a supplier reposition themselves? Once a year Suppliers are invited to reposition themselves through
EPIC’s annual quote At any time, alternative MFR’s (not on the AVL) can be presented
Expectations
Improvement Opportunities
The opportunity manifests itself in the form of upsides. Proper preparation is how we differentiate ourselves and accelerate our combined growth. Anyone can perform to a lead-time
When Epic (and our customer) finally win an order, we are looking for expediting leverage. Epic shouldn’t have to pick up the phone to expedite with the MFR. Heaven forbid the customer actually picks up the phone and yields what we couldn’t… nothing creates a worse impression.
Flexible Supply Chain which includes not just popcorn as an inventory base but also Uniques.
The customer trusts Epic to procure products. Together we need to navigate according to Market data, life cycle analysis, current sweet spots and lead our customer to where the puck is going.
Improvement Opportunities (Cont)
Our goal must be to provide solutions to the customer, not problems for our customers to solve.
We must keep our solutions and our processes simple.
We have to be more proactive, less reactive, and provide timely and effective responses.
Touch it Once. We are revisiting too many things that should have been done right the first time.
We have to improve the quality and frequency of feedback to you and work together to reduce waste and improve the effectiveness of our activities.
Lower min/mults and offer more liberal returns policies.
Work cost enhancement. If the market goes North, Cost Avoidance or at least a solid story to tell which makes us all look good.
Lloyd KaplaniSupply
Quality
Renee QuirozQuality Manager
EPIC Quality Management System
• Essential to our Lean / Synchronous Flow model, is a QMS that drives continuous improvements throughout the system while satisfying the most stringent customer demands and standard requirements, the diversity of segments we serve is tough.
• Our Market requires Third Party registrar certifications and compliance to customer and regulatory requirements
• EPIC Model requires the flexibility to have the product run when and where the customer need it with the highest quality level, this is where you all play an important role, component Quality and OTD is crucial.
• This is not easy in the common world we know that, but in EPIC our QMS approach is to make it simple, and profitable by understanding customer requirements and supporting a culture of continuous improvements based on the philosophy of the 8- Principles of ISO–TS 16949: 2002 and ISO 13485:2003, one of them relates to our partnership.
Basic QMS Model with Process Approach
Customer
Requirements
Continual improvement of the Quality Management System
Satisfaction
ManagementResponsibility
ResourceManagement
ProductRealization
Measurement+Analysis+
Improvement
InputProduct
Output
Customer
8 Principles ISO/TS16949:2002Customer FocusInvolvement of peopleSystem Approach to ManagementFactual Approach
LeadershipProcess ApproachContinual ImprovementMutually Beneficial Supplier Relationship
Current Certification models and requirements
• ISO/TS 16949:2002 as our strongest culture base for automotive market and continuous improvement, all of our customers are internally standardized based on this model.
• PPAP (Production Part Approval Process) Level III Submission using standard AIAG core tool on all Make to print parts and Customer specific Shelve items.
• IMDS (International Material Data System) Component approval # for ALL BOM parts, this is in conjunction with the PPAP package.
• 100% OTD performance.• Systematic approach for Corrective action, NOT symptomatic when Quality
issues arise.• Supplier certification to ISO-9001:2008 as a minimum aiming for ISO/TS
16949:2002.• ISO-13485:2003 as our Medical industry standard approach.• PPAP Level III submission or IQ/OQ/PQ validation process to our customers• Certificate of Compliance on customer identified parts.• ISO-9001:2008 as the basis for the above • Industry Standard requirements like C of C’s for UL / CSA / VDE approved
components
Mutually Beneficial Supplier relationship
• Our Quality Concept and approach to this principal:• Strong Supplier compliance to requirements, work with us to
understand your role, and the impact behind your activities. Our model is based on proactive steps, get involved with us, our process approach and people involvement philosophy is our main driver.
• Continuous Drive for Quality / Service improvement, we want you to be successful, we’ll help you to be successful, we are only as strong as you are.
• Partnering hand to hand when Issues arise nothing works better than two hands committed to the same goal, this makes the difference on our supplier preferences and we want you to be part of the team.
• We will soon announce our new Supplier Development Model we are strongly pursuing working with you to drive our Dock To Stock along with our Lean and Synchronous flow model that you are learning today.
• Our focus in Lean and Synchronous flow, throughout the different phases of product and process development is such that flexibility and aggressiveness in our supply chain is what makes the difference, our Quality Levels to our customers are less than 20 PPM’s for Automotive and less than 300 for our Medical Segment, Our competition is far away from us.
• Our processes are not defined based on inspecting Quality, we focus into engineering design of a process where Quality is built into the product, this means, our lean approach is such that the operator is expected to produce a Quality product the first time, without having to measure and assure component quality, this is your role in our model, we need you to guarantee, defect free components so that our operators are successful and our customers happy.
Mutually Beneficial Supplier relationship
Logistics
Hilario ApodacaDirector of Quality
Acting Director of Logistics
At EPIC Technologies, Synchronous Flow Manufacturing means never building product until
our customers say they need it, as well as…•No “Frozen Windows” on Orders
•1 to 2 Day Order Turn Around Time
•99% On-Time Delivery to Customer Request
•Incredible Inventory Turns for our Customers
EPIC Supply Model
• EPIC Technologies LLC’s core value proposition is to be able to deliver product ‘when and where’ the customer needs it in spite of forecasts being misaligned with actual requirements
• Flexibility and Responsiveness are fundamental principles of not only or operational execution but also our organizational philosophy
• The EPIC Supply Chain requires partners who are committed to this goal to help us work together on strategies and tactics to better enable us to satisfy our mutual end customers– “Best in Class” Quality– Elimination of non-value add (Muda, or ‘waste’)– Short Cycle Times– Strategic buffers– Throughput Mentality
EPIC Partner Supplier Expectations
• EPIC value proposition is simply put as Flexibility & Responsiveness. We expect customers to place unrealistic demands on us. We setup our business to respond quickly to capitalize on this need and grow our business profitably over the long term through service level differentiation instead of relying on ‘expediting fees’ to pad short term profits. Our vision is to establish a supply chain set of like-minded suppliers across all our purchase categories.
• We measure ourselves against customer requested or need date as opposed to the normal measure against ‘promised date’ (no matter how far inside of lead-time this is). This is how we measure our suppliers as well.
• Our goal is to respond as effectively and efficiently to our partners needs for assistance and information as we do to our customers. Regular, concise and timely exchange of information is fundamental to our success.
• In responding to challenges in handling normal business or upside opportunities, we expect our partners to manage themselves with a minimum of handholding and to attack issues proactively. When a potential disruption in unlikely, our mutual management teams need to be talking to one another.
• The implicit contract between EPIC and our customers is that we will manage our suppliers we pick as well as the ones they assign to us. We treat these suppliers as potential partners at the start. The first test of a potential partner is how well they respond to tactical challenges from our mutual customer without their direct involvement. If our customer needs to get involved, we both look bad.
EPIC Partner Supplier Expectations
• We need to understand and factor your lead-times into our planning, but expect our mutual customers to continually push us to respond sooner. How well we collectively respond to increases inside of lead-time will be the most important determinant of our success. Breaking down lead-times beyond normal cycle times is how we show the customer how important they are to us.
• Bond and ATP reports are vital tools for suppliers to use to manage the component pipeline buffers. We will train you how to create and use them.
• Our Lean Manufacturing kanban system is extremely efficient, but it also requires more discipline than a ‘kit-and-push’ system in regards to buffer integrity, shipping full bins in exact quantities and precisely on time.
• Muda (Waste) is our enemy and it must be our mutual goal to identify, minimize and strive to eliminate it. ‘Touch it once’ must be our mantra at all points in the chain.
• The required buffer size is understood and willingly maintained throughout the program, and properly diminished when parts and programs are phased out or cancelled.
• Our customers have high standards in regards to quality and cost and expect us to continuously improve in both areas.
Kanban for ‘Dummies’
• Two Bin System– Active Bin – Currently in Use– Reserve Bin – Will support requirements until
empty bin can be replenished• Both Bins Empty – Is ALWAYS a Bad
Thing
INVENTORY CYCLE
Customer places order
with EPICEPIC ships material from
designated finish goods zone
All empty bin cards go
to the 1st process master bin
for replenishment
Operator pulls parts from bin
for production
All empty raw material
cards are placed in master bin Cards are collected & scanned
Parts are received
from suppliers
Parts are taken
to Kan Ban bins
With cards
KanBan Card Scanning System
PLANT FLOOR
Bin 1 is Consumed by Production
Only Exceptions go to Analyst
PURCHASING
Most parts go directlyTo EDI Queue
SUPPLIER
Sends next “Pull” QtyPer release
EDI 850
EDI 855
Card is Scanned Near Point of Use
Supplier AcknowledgesOrder via 855
Not EDINo BlanketSetup ErrorNot Autorel2BE
MANUAL INTERVENTION-BAD 855-NO REPLY AFTER 2 DAYS
Bond/ATP Grading• Determine Part Type and Lead Time• Calculate Average Weekly Usage (AWU)
– From the Forecast Over the Part Lead-time• Targeted Bond Level =
– If the Material Code is ‘”CB” (Common Bond)• Targeted Bond = 4 weeks of AWU
– If the Material Code is “UNQ” or “NCNR”• Targeted Bond = 4 Weeks + 1 Week for every additional Four Weeks of Lead Time (at the AWU)• ROUND UP!
• Pipeline (GYR) Risk Rating for Each Part……– “R” – Estimated Available to Promise (ATP) Inventory <= 0 at some point within the
lead-time window– “Y” – Est. ATP Inventory is less than Targeted Bond Qty at some point within the lead-
time window (but always > 0)– “G” – Est. ATP Inventory is always greater than the Targeted Bond quantity
Lead Time 4 5 6 7 8 9 10 11 12
Total AWU Weeks Required 4 5 5 5 5 6 6 6 6
Graphical Part Examples
(5)
-
5
10
15
20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Targeted Bond QuantityEstimated Available to Promise
(5)
-
5
10
15
20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Targeted Bond QuantityEstimated Available to PromiseG Y
(5)
-
5
10
15
20
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Targeted Bond QuantityEstimated Available to Promise R
Example of Bond Report
EPIC Part Number Part Type
Lead Time
Avg Wkly Usage
Targed Bond
Weeks
Targeted Bond
Quantity 10/23/06 10/30/06 11/6/06 2/5/07 2/12/07Part
Rating Mfr Mfg PN5100 0049 CB 6 210 5 1,050 2,000 2,000 1,440 (800) (1,360) R TYCO 3-435640-95101 0006 CB 1 263 4 1,050 5,000 4,400 4,400 800 800 Y GRAYHILL94HEB08WRT5500 0026 CB 2 125 4 500 3,000 3,000 3,000 1,000 1,000 G ALLEGRO A3515EUA5500 0027 CB 1 125 4 500 2,500 1,500 1,500 500 500 G HONEYWESCC15D551048S CB 1 16,125 4 64,500 120,000 102,000 90,000 84,000 66,000 G TYCO 6404452581112S CB 6 375 5 1,875 7,500 7,500 7,500 4,500 2,000 G PHILIPS PMBD914TR581134S CB 10 313 6 1,875 6,000 6,000 3,500 1,000 1,000 Y TEXAS INSLM2902DR581591S CB 12 938 6 5,625 4,000 4,000 4,000 (11,000) (11,000) R LINEAR TELT1114S14#20238VPE611019S SC 5 313 4 1,250 20,000 20,000 20,000 15,000 15,000 G KOA RK73H2ATTD2493F611038S CB 8 1,000 5 5,000 15,000 15,000 15,000 10,000 10,000 G MURATA GRM216R71H472KA01621008S NCNR 20 2,969 8 23,750 50,000 47,500 45,000 5,000 2,500 Y ON SEMI LM324DR2G621245S CB 12 156 6 938 5,000 5,000 5,000 2,500 2,500 G NAT SEMI LM4861MX681026S CB 6 875 5 4,375 20,000 20,000 18,000 6,000 6,000 G MURATA LQH31CN220K03L681049S CB 8 3,750 5 18,750 50,000 50,000 50,000 28,000 28,000 G MURATA GRM40X7R103M050AL681052S CB 10 5,000 6 30,000 40,000 40,000 40,000 (32,000) (40,000) R MURATA GRM21AR72E222JW0
Available to Promise
GYR based on Available to Promise (ATP)
Part Number XXXX YYYY Bin Size 2,000 Lead Time 6 weeksWeekly Bucket 04-Nov 11-Nov 18-Nov 25-Nov 02-Dec 09-Dec 16-DecBeginning Inventory 2,000 2,000 4,000 4,000 4,000 4,000 2,000 Expected Shipments to EPIC 2,000 - 2,000 2,000 - 2,000 - Production Completions to FG 2,000 2,000 2,000 2,000 - - 2,000 Ending Inventory * 2,000 4,000 4,000 4,000 4,000 2,000 4,000 Part Rating G
Part Number XXXX YYYY Bin Size 2,000 Lead Time 6 weeksWeekly Bucket 04-Nov 11-Nov 18-Nov 25-Nov 02-Dec 09-Dec 16-DecBeginning Inventory 2,000 2,000 1,000 1,000 1,000 2,000 1,000 Expected Shipments to EPIC 2,000 2,000 2,000 2,000 - 2,000 - Production Completions to FG 2,000 1,000 2,000 2,000 1,000 1,000 2,000 Ending Inventory * 2,000 1,000 1,000 1,000 2,000 1,000 3,000 Part Rating Y
Part Number XXXX YYYY Bin Size 2,000 Lead Time 6 weeksWeekly Bucket 04-Nov 11-Nov 18-Nov 25-Nov 02-Dec 09-Dec 16-DecBeginning Inventory 2,000 2,000 1,000 1,000 1,000 - (1,000) Expected Shipments to EPIC 2,000 2,000 2,000 2,000 2,000 2,000 - Production Completions to FG 2,000 1,000 2,000 2,000 1,000 1,000 2,000 Ending Inventory * 2,000 1,000 1,000 1,000 - (1,000) 1,000 Part Rating R
Ending Inventory = Available To Promise (ATP)
Rating CriteriaG ATP never falls below one bin over part lead timeY ATP falls below one binR ATP falls to zero or less
Logistics (Accomplishments / opportunities)
– Converted 5160 Sq. Ft. of Warehouse space to Manufacturing areas, Sensus RMA’s and Precision Camera in plant two.
– Currently adding 8.5K ft of space for NPI center in ELP– Freight Contract Negotiations
• Individual Confirmations• No strays
– Warehouse Improvements• Layout• Receiving / transfer Effectiveness
– Improved years of experience in Juarez material Planning Team – Working with our Customer Focus Teams to improve accuracy on
forecasts– Continuous Improvement and reinforcement of our Kanban
process– Increase MRP knowledge, around the plants as our MRP
component base increases.
Juarez Local Warehouse Program
• Two of our partners have established warehouses in JZ under our “Proximity Warehouse” program to serve our plants there.
• Daily pulls are organized in a closed loop system which includes EDI signals, ASN’s, receipts into plant floor locations and auto vouchering is included for real time payment.
• This eliminated the weekly consumption report calibration issues which involved many hours of work.
• Bin size adjustment for the plants based on their run rates and customer pulls, faster feedback for any quality issue directly to our supplier. And faster response to an unexpected bump in demand from our customer.
• This program also enables our two partners to be able to manage their inventories and understanding real plant demand in almost a daily basis, thanks to our partners for the successful implementation of phase one, looking forward to phase two completion in the next two months.
• VMI program with one of our packaging partner through a third party logistic server, where daily replenishment of material occurs based on pre calculated bin sizes, similar program as proximity warehouse.
Supplier Red Card Log Issues “YTD”(TOP TEN Detailed By Supplier)
Juarez
0
200
400
600
800
1000
1200
Early Past Due Packing Slip Partial Over No Open Line
Orion IndCESAR SCOTTSTATE IND.SAMTECSager ElectronicsDIGI-KEYFUTUREAVNETARROWTTI
Supplier Red Card Log Issues “YTD”(TOP TEN Detailed By Supplier)
Norwalk
0
20
40
60
80
100
120
140
160
EARLY Partial Over K11/K12 LineDown
Line Down 2BE LATE SOFT NC BADPACKING
LIST
FUTUREELGMOLNUHORISAGEREITLCIRLAIRDTDIGIKEAVNETE
Concluding Comments
• As we move forward in our relationship with existing and new partners to satisfy our continuously challenging customer and market, we need to make certain that our Lean and Synchronous flow approach is observed throughout the system, we are only as good as our supplier base enable us to be successful, the growth we are experiencing and the new segments we are serving requires the dynamism and assertiveness in our way of working, Mutually beneficial relationship is the key of our success, please join us in the next generation of EPIC as a major EMS supplier.
Supplier Development
Steve McEuenDirector, Supplier Development
EPIC Supply ModelEPIC’s Core Value Proposition
Deliver product ‘when and where’ the customer needs it We expect customers to set unrealistic goals and do
everything in our power to meet them We measure OTD on Customer Requested Date
The goal of EPIC’s Supplier Development strategy is to align the supply base with our goals with the end customer foremost in mind. The EPIC Supply Chain requires partners who are committed to :
“Best in Class” Quality Elimination of non-value add Short Cycle Times Strategic buffers Throughput Mentality
Pull Agreements
CommodityStrategies
Supplier Qualifications
Business Reviews
PerformanceMonitoring
EPIC Supplier Development
Bond/ATPReviews
EPIC Supplier Development Strategy is to identify, develop, and unify our strategic suppliers into a seamless enterprise capable of responding swiftly to customer request and marketplace opportunities
ContinuallyImproving
Supply Chain Management
Benefits Develop EPIC’s Strategic Suppliers Provide for continued improvement Improved supplier relationships Improved flexibility and responsiveness Proactive actions Implement value chain optimization
Supplier Corrective
ActionResponses
Value Engineering
Commodity Manager
Supplier Champion
Strategic Supplier Expectations
Strategic Suppliers provide goods and/or services that have a significant effect on EPIC’s ability to meet business objectives. These partners demonstrate ownership of the supply chain, evidenced by accountability for assuring goods and/or services are available when needed1. Strategic Suppliers are described by the following:
Committed to EPIC Supply Model Execute an EPIC Supply Partner Agreement Support consignment or VMI Minimum ISO 9001:2008 Certified Commit to continuous cost reductions and process improvements
2. Strategic Suppliers have EPIC’s commitment to: Provide strategic Insight and direction Consolidate purchases Proactively encourage Customers to engage with them as a provider
EPIC recognizes our suppliers are a valued and integral component of our company's 2009 and long-term success
1. Expand the commodity strategy process to include additional commodities
2. Adding additional resources3. Increase the number of suppliers who have executed a Pull
Agreements 4. Focus on reducing cost, lot sizes, and lead times5. Develop understanding of the cost drivers and structure6. Continue to enhance product quality7. Improve On-Time delivery performance8. Implement Proximity Warehousing with Key Suppliers9. Deploy Value Analysis for reducing cost and waste10.Rationalize supply base
EPIC Supplier Development Actions
Commodity Strategies provide: Identifying EPIC’s Strategic Suppliers
who are aligned with the EPIC lean model
Assess Supplier alignment to EPIC’s Business, Quality, and Delivery Objectives
Match Supplier technology with customer needs
Provide commodity market intelligence Identify supplier development plans Determine strategies for reducing
supply chain costs
EPIC Commodity Strategies
EPIC’s Commodity Strategies ensure Supplier alignment providing the greatestoverall value to the enterprise in support of EPIC’s strategic goals
EPIC Commodity Manager Responsibilities• Determine and execute commodity strategy• Provide strategic direction to EPIC Commodity Buyers and Analysts• Evaluate market conditions and supplier financial stability to determine the
impact on the strategic direction • Develop the Commodity Market Conditions Report• Establish cost targets based on EPIC’s financial plan, execute plan, and
monitor supplier progress• Facilitate supplier business reviews• Manage supplier performance evaluations• Identify primary sources of supply (new and existing) that support the EPIC
synchronous flow model• If required, develop and source alternate suppliers or components to reduce
EPIC’s total acquisition cost and supply risk
EPIC Commodity Manager
EPIC Supplier Champion Responsibilities1. Set up new Suppliers or work to enhance existing Suppliers 2. Communicate the EPIC Model, Policies, Goals and present the EPIC
opportunity 3. Negotiate T’s & C’s (3/30/60, FOB EPIC) 4. Negotiate Pull and Consignment Agreements 5. Single contact point for Supplier proposals or concerns6. Support supplier business reviews (once or twice a year) 7. Review Bond Reports (consigned and regular) or ATP.8. Work to resolve supplier related issues
EDI Issues Consumption report issues Unresolved RMA issues Unresolved Aged MRB issues Chronic Red Card issues
EPIC Supplier Champion
Requirements1. EPIC requires all “EPIC Selected Suppliers” to be
ISO-9001:2008 certified as a minimum the target TS 16949:2002
2. EPIC requires all suppliers to accept EPIC’s Terms and Conditions
3. Prior to being a EPIC selected supplier, EPIC will require the supplier to conduct a self-assessment of their operation and quality system using EPIC’s Supplier Quality System Assessment Survey
4. Additional official qualification assessments may be scheduled and conducted at the supplier's manufacturing facilities by Purchasing and Quality
5. As a strategic supplier, EPIC will require supplier commitment to EPIC’s Supply Model and the supplier to execute a Supply Partner Agreement
EPIC Supplier Qualification
Supplier Pull Agreements
Kanban Pull Agreement
Vendor Managed Inventory
In-house Consignment
Proximity Warehouse
EPIC encourages suppliers sign EPIC’s pull agreement and when appropriate maintain a portion of their material buffers in consignment at EPIC. This has minimized expense for premium freight should a ‘spike’ in demand occur.
MRP supplier
The strongest factors in supply risk are the market and lead time. To address supply risk, EPIC developed a simplified tool for the supplier to self-assess their ability to meet EPIC forecast needs
Supplier analyze ability to meet forecast and bins the analysis in GYR Supplier then communicates their status to EPIC’s Supplier Champion The ATP/Bond report, in conjunction with Supplier Champion review,
provide a proactive process for managing supply risk
EPIC Bond/ATP Reviews
High RiskLower Risk
Supplier buffer stock of four weeks Supplier buffer stock of four weeksplus 1 week per every 4 weeks in lead time
SCAR (Supplier Corrective Action Reports) 1. SCARs focus on increasing supplier quality awareness for the purpose of
supplying only 100% acceptable materials 2. Once a SCAR is issued the supplier is required to contact the EPIC Quality
Engineer to acknowledge receipt of the SCAR and to negotiate a mutually agreed upon response date
3. It is the supplier’s responsibility to implement appropriate root cause corrective action and supply the corrective action documentation to EPIC within the specified time
EPIC Supplier Corrective Action Reports
Supplier Performance Monitoring (Scorecard) utilizes common dimensions formeasuring supplier performance:
On-Time Delivery - 1 day early and zero days late Quality Returns – More than 1 return for any reason Red Card Log –Anything that could cause the Kanban system to
jeopardize production Customer Response – Responsiveness on inquires
1. EPIC’s Supplier Scorecard process captures quantitative and qualitative information
2. The Supplier Scorecard works in concert with the other EPIC Supplier Management Tools to enable continuous improvement and focus on the “right” issues
EPIC Supplier Performance Monitoring
SupplierChampion
Business Reviews
Red Card Log
SCARs
Supplier ScorecardSupplier Period
CategoryPotential
Points Metric CriteriaPoint
AllocationCriteria
PerformancePoint
Award CommentDelivery *** 30 % On-Time 100-98% 30 From Supplier Delivery Query
>95%, <98% 15<95% 0
Quality 30 Quality Return or Scrap Incidents 0 10 From Plant Quality1 0
8D's Open after 30 days 0 10 From Plant Quality1 5
>1 0ISO9000 Yes 10 From Approved Supplier ListQS9000 Yes/No 0
Responsiveness 20 Responds quickly with solutions, Never Requires Follow Up 20 Purchasing Manager/Planner/Comm Strat Team
Usually responds the same day with answers. Follow up sometimes required.
15
Rarely delivers answers without followup. 010 Quote Response - % Complete and On-Time 100% 10 Cheryl Input
>95%, <100% 8 >90%, <95% 3 >80%, <90% 2
<80% 1Logistics 40 Bond or ATP Report sent regularly & good supply chain
planningLimits material liability to industry lead times and custom parts
Yes 10 Purchasing Manager
EDI or Flat File Partner Yes 5EDI, % of successful 855 transactions >95% 5 Release to Dock Nominal Lead-Time 3 days or better Yes 5 Avg EDI lag + Freight Transit TimeSupplier Paid Freight Yes 5VMI, Consignment or In-Plant program Yes 10
TOTAL 130*** Three consecutive months below 90% requires action plan development with weekly reviews.
Red Card Log Summary for Past Quarter From Red Card Log AnalysisCount Number Pct
Early ShipmentsLate/Past DuePartial ShipmentsOver-ShipmentsRejectsTotal Receipts
Supplementary Comments:Enter overall comments about supplier performance with special emphasis on detailing expectations for improvement as well as giving credit where due.
EPIC Supplier Business Review
Agenda
• Organizational updates• Quality performance, MRB
and SCAR updates• Scorecard review• Delivery Performance• Customer Support• Commercial review• Market trends• Technology updates• Launch review
EPIC Supplier Business Reviews are conducted with Strategic Supplier Partners and focus on improving the business relationship
• Stronger alignment to EPIC’s business requirements
• Increased quality performance• Enhanced relationships• Increased understanding of
expectations
EPIC Value Engineering
Information
Gather info, identify products, requirements, specifications, & cost.Determine Value Mismatches where performance and cost are not aligned
Review
Brainstorm ideas that have impact on mismatches
Evaluation
Screen ideas for Feasibility,. cost and customer acceptance
Development
Select best solution, finalize cost and implementation plan
Implementation
Gain acceptance to final proposal and incorporate solution into production
EPIC will implement Value Engineering projects in 2009 focused on reducing product cost
Our mission is to exceed our customers expectations as the “Best- In-Class” provider of full service electronics manufacturing and systems integration.