PRI & Nadcap Overview Chicago, IL December 5 2012
1 Joseph G Pinto Executive Vice President & Chief Operating Officer © 2013 Performance Review Institute
• Performance Review Institute (PRI) Overview • Industry Managed Supply Chain Oversight and
Control Program – Aerospace Case Study (Nadcap)
• How could PRI’s Industry Managed Approach benefit the Medical Device Industry?
Agenda 2
© 2013 Performance Review Institute
PRI is a global provider of customer focused solutions designed to improve process and product quality by adding value, reducing total cost and promoting collaboration among stakeholders in industries where safety and quality are shared goals.
PRI is a not-for-profit affiliate of SAE International and is led by a Board of Directors with responsibility for strategic direction and financial stability.
About PRI 3
© 2013 Performance Review Institute
Established PRI Programs 4
Special Process, System and Product Qualification
Qualified Products List is
similar to Nadcap. Focuses on Products
rather than processes.
Provides personnel
qualification, developed and managed by
industry.
Improves the quality of personnel, products and processes through public
and onsite training classes and
memberships.
ANAB approved Registrar committed to
improving the quality of: Personnel, Products &
Processes AS9100, ISO9000,
ISO14001
Industry Managed
Complementary
Professional Development
Management Systems
Product Qualification
Accreditation (Qualification)
© 2013 Performance Review Institute
PRI Historical Highlights 5
1985 Government/Industry Equal Partner Conference identifies the need to minimize redundant process audits
1990 SAE launches PRI as a separately incorporated 501(c)6. Nadcap launched. 5 NDT audits conducted
1992 GEAE and Allied Signal mandate Nadcap to NDT supply chain. 70 NDT Audits conducted
1994 Heat Treat, Welding, Chemical Processing, Coatings, Material Test Labs added
1995 PRI Registrar created to provide QMS/ EMS in support of existing qualification programs
2000 Nadcap Europe established with U.K. office
2002 Nadcap business support software launched - eAuditNet
2003 Nadcap Asia launched
2008 PRI launches Professional Development programs
2011 Board approved exploration of new industry models: Transportation & Power Generation, Nuclear and Medical Devices.
2012 Approximately 5000 audits for all special processes across all industry-managed programs Transportation and Power Generation (TPG) Program initiated
© 2013 Performance Review Institute
Agenda 6
• Performance Review Institute (PRI) Overview • Industry Managed Supply Chain Oversight and
Control Program – Aerospace Case Study (Nadcap)
• How could PRI’s Industry Managed Approach benefit the Medical Device Industry?
© 2013 Performance Review Institute
Nadcap Definition
The leading, worldwide industry-managed
cooperative program of major companies designed
to manage a cost effective consensus approach to
special processes/products and provide continual
improvement within the aerospace industry.
Compliance – Control – Cost Savings – Risk Reduction
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© 2013 Performance Review Institute
Nadcap - Regulatory Requirements & Acceptance
European Aviation Safety Agency
AMC No.2 to EASA Part 21A.139(b)(1)(ii) - Vendor and sub-contractor assessment, audit and control - Production Organization Approval (POA) holder using other party supplier certification
“Other party supplier certification is a method whereby a supplier contracts with an appropriately recognised or accredited Other Party (OP) for the purpose of obtaining a certification from that OP. The assessment and surveillance of suppliers by an OP should be deemed to satisfy the requirements of 21A.139(b)(1)(ii) when the conditions of this AMC are satisfied.”
Federal Aviation Administration
Order 8120.12A - Production Approval Holder Use of Other-Parties to Supplement Their Supplier Control Program
“Other-party registration is a method whereby a supplier contracts with an appropriately recognized or accredited other-party for the purpose of obtaining a registration. The recognized or accredited other-party organization is normally a professional society, such as the Society of Automotive Engineers, the National Aerospace and Defense Contractors Accreditation Program, the American Society of Mechanical Engineers, or an ISO 9000 registrar accredited by a group such as the ANSI-ASQ National Accreditation Board (ANAB). Registration indicates that the supplier has satisfactorily demonstrated an inspection and quality control system or manufacturing process that meets the requirements of the other-party on a continuing basis.”
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Tactical
Board of Directors
Nadcap Management Council (NMC)
Technical Task Groups
Special Processes Nondestructive Testing, Materials Testing, Heat Treating, Coatings, Chemical Processing, Welding, NMSE, Non Metallic Materials Testing & Conventional Machining Measurement & Inspection Systems & Products Electronics, Sealants, Elastomer Seals, AQS (AC7004), Fluid Distribution Systems & Composites
Technical Experts • Determine requirements • Develop documents • Accept corrective action • Final decision on accreditation
Supplier Support Committee (SSC)
Policy Executive Leaders • Legal entity • Fiduciary responsibility • Set policy • Provide the vision
Senior quality leaders & managers • Oversee operation of Nadcap • Establish/implement policy & procedure • Task group coordination & development • Identify/develop/deploy improvement
9 PRI & Nadcap Organizational Structure
© 2013 Performance Review Institute
Nadcap OEMs
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Nadcap Accreditation Today 11
Special Processes Systems & Products
Non-Destructive Testing
Welding
Chemical Processing
Heat Treating
Materials Testing Laboratories
Coatings
Non-Conventional Machining
Conventional Machining as a Special Process
Surface Enhancement
Non Metallic Materials Testing
Electronics
Fluid Distribution Systems
Sealants
Aerospace Quality Systems
Composites
Elastomer Seals
Castings & Forgings Raw Materials
Future Processes
Measurement & Inspection
Non Metallic Materials
Manufacturing
© 2013 Performance Review Institute
• OEMs reach consensus on core audit criteria
• OEMs mandate Nadcap to supply chain as part of the supplier approval process
• Suppliers schedule and pay for the audit
• PRI contracts OEM approved Auditors who conduct on-site process audits to industry managed checklist
• Audit data is entered into eAuditNet (PRI’s in-house web based audit management system)
• PRI Staff Engineers review the audit report packages and work with Suppliers to close non-conformances
• Task Groups review audit packages, identify issues and vote to grant accreditation or request additional actions
• OEMs work with PRI to measure program effectiveness and continually assess and improve Nadcap for all participants
Nadcap Process Flow 12
© 2013 Performance Review Institute
Nadcap Audits: Percent by Region 13
92.3% 94.3% 85.1%
74.2% 69.2% 59.4% 58.9% 60.2% 58.9% 57.6% 56.4% 55.1% 55.8%
7.5% 5.2% 14.6%
23.6% 24.6%
26.1% 30.9% 29.3% 30.0% 30.7% 30.6% 31.1% 29.8%
0.2% 0.5% 0.2% 2.3% 6.2% 9.5% 10.3% 10.5% 11.1% 11.8% 13.0% 13.8% 14.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Plan
2012YTD
Americas Europe Asia
Correct as of October 2012 © 2013 Performance Review Institute
Shared Program Management
AUDIT CHECKLIST
PROCESS EVALUATION/
IMPROVEMENT
CORRECTIVE ACTIONS AS REQUIRED
AUDIT RESULTS
AUDIT CONDUCTED
AUDITOR QUALIFICATION &
SELECTION INDUSTRY EXPERTS
MANAGE ALL KEY STEPS
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© 2013 Performance Review Institute
PRI and Industry Working Together
OEMs Suppliers PRI Staff
Establish
Audit Checklist
Criteria
Audit Checklist Criteria:
Document containing audit questions to determine compliance to established industry standards and OEM requirements.
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© 2013 Performance Review Institute
Shared Program Management
AUDIT CHECKLIST
PROCESS EVALUATION/
IMPROVEMENT
CORRECTIVE ACTIONS AS REQUIRED
AUDIT RESULTS
AUDIT CONDUCTED
AUDITOR QUALIFICATION &
SELECTION INDUSTRY EXPERTS
MANAGE ALL KEY STEPS
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© 2013 Performance Review Institute
• Required auditor skills, knowledge and abilities are defined by Nadcap Task Groups
• Potential candidates complete an on-line pre-screening questionnaire and, if qualified, are interviewed by PRI Staff
• Task Group interview with powers of approval or rejection
• Testing/Certification may be required for acceptance as an Auditor
• Approved Auditor candidate completes extensive training and evaluation
• Candidates are approved after successfully performing an audit under observation
• Continual performance monitoring through on-site observation by Task Group and Supplier feedback
• Continued training at annual Auditor Conference and technical advisories
Industry Qualifies & Selects Auditors 17
Auditors average 30 years of industry experience
© 2013 Performance Review Institute
Shared Program Management
AUDIT CHECKLIST
PROCESS EVALUATION/
IMPROVEMENT
CORRECTIVE ACTIONS AS REQUIRED
AUDIT RESULTS
AUDIT CONDUCTED
AUDITOR QUALIFICATION &
SELECTION INDUSTRY EXPERTS
MANAGE ALL KEY STEPS
AUDIT RESULTS
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© 2013 Performance Review Institute
General Focus vs. Commodity Specific Audit ISO 9001 Nadcap
Written evidence of a quality management system is required
Management system is present and effectively used in special processes (AS9100, AS9110, AC7004)
Checklists are developed by individual Registrars and are general in nature (Caveat: Aerospace Standards have checklists)
All interested parties are given the opportunity to participate in technical checklist development through open meetings Checklists are based on industry standards and customer specifications
Focus is on general employee competence Focus is on operator performance to acceptable levels
General process oriented audit with a focus on compliance to the quality system as written
Job audit includes all interrelated processes for effectiveness Involves audit of P.O. or process specific jobs
Audit duration based upon company population and additional industry-specific factors
Audits take 3 – 5 days, depending on the detailed audit scope
Findings are resolved and closed by the Auditor who found them
Audits are reviewed by experienced special process specific Staff Engineers and the industry Task Group
Annual or semi-annual surveillances conducted by the same lead Auditor
Different Auditor is usually assigned for each periodic process audit
No traceability / less transparent to industry (Caveat: AS has limited transparency through OASIS)
Complete traceability through eAuditNet including objective evidence of implementation of corrective actions
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General focus audit – is not process specific
Does the Supplier define the processes employed for calibrating, inspection, measuring, and testing?
Electronics (PCBs) Chemical Processing
Nadcap audit- is process specific
General Focus vs. Commodity Specific Audit 20
Is there a procedure for the analysis of electrical
test failures, which include failure analysis, non-
conformance assessment and mandates for
documented corrective actions?
Are the fluorescent penetrant inspection (FPI)
dryer ovens calibrated every three months at multiple points across the usable
range?
Is measuring and test equipment used to control or monitor the control of a
process (within parameters) maintained in a calibration system compliant with ISO
10012-1? (I.e. temperature gages, conductivity meters,
voltmeters, rectifiers)
Electronics (PCBs) NDT Chemical Processing
NDT
© 2013 Performance Review Institute
Shared Program Management
AUDIT CHECKLIST
PROCESS EVALUATION/
IMPROVEMENT
CORRECTIVE ACTIONS AS REQUIRED
AUDIT RESULTS
AUDIT CONDUCTED
AUDITOR QUALIFICATION &
SELECTION INDUSTRY EXPERTS
MANAGE ALL KEY STEPS
AUDIT RESULTS
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© 2013 Performance Review Institute
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• All audits are electronically recorded in an in-house web based system called eAuditNet
• The Auditor will submit into eAuditNet:
– Completed checklist
– Required attachments
– Write-up and grading of non-conformances
• Supplier will submit into eAuditNet:
– Responses to non-conformances
– Supplier feedback form (evaluation of the Auditor)
• Upon Audit report submission:
– All automatic notifications are sent to designated OEM, Suppliers, PRI Staff and Auditors
– Time control metrics are automatically initiated and sent to OEMs
Audit Management System - eAuditNet
© 2013 Performance Review Institute
Shared Program Management 23
AUDIT CHECKLIST
PROCESS EVALUATION/
IMPROVEMENT
CORRECTIVE ACTIONS AS REQUIRED
AUDIT RESULTS
AUDIT CONDUCTED
AUDITOR QUALIFICATION & SELECTION
INDUSTRY EXPERTS
MANAGE ALL KEY STEPS
© 2013 Performance Review Institute
Non-Conformance Corrective Action Process
Supplier • Supplier submits root cause analysis and objective evidence of
corrective actions for each non-conformance
PRI • Staff Engineer reviews the audit report, works with the Supplier to close and
approve corrective actions
Task Group
• Reviews each non-conformance, approves or rejects the Supplier’s response • All issues must be resolved prior to closure of the audit by Task Group • Votes to accredit the Supplier if all corrective actions are acceptable • If the audit fails, Supplier must start the Nadcap process again (initial audit)
PRI
• Issues certificate of accreditation (period of validity dependent on merit status)
• Schedules next audit (reaccreditation audit)
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© 2013 Performance Review Institute
Shared Program Management 25
AUDIT CHECKLIST
PROCESS EVALUATION/
IMPROVEMENT
CORRECTIVE ACTIONS AS REQUIRED
AUDIT RESULTS
AUDIT CONDUCTED
AUDITOR QUALIFICATION & SELECTION
INDUSTRY EXPERTS
MANAGE ALL KEY STEPS
© 2013 Performance Review Institute
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Nadcap Management
Council
Ethics and Appeals
Committee
Oversight Committee
Metrics Committee
Standardization Committee
Globalization and Strategy Committee
Date Location
18-22 February 2013 Dallas, Texas, USA
3-7 June 2013 Paris, France
21-25 October 2013 Pittsburgh, Pennsylvania, USA
Industry Managed Program Continuous improvement achieved through industry-managed committee structure meeting via teleconference and face to face three times per year.
Upcoming Nadcap meetings:
© 2013 Performance Review Institute
Agenda 27
• Performance Review Institute (PRI) Overview • Industry Managed Supply Chain Oversight and
Control Program – Aerospace Case Study (Nadcap)
• How could PRI’s Industry Managed Approach benefit the Medical Device Industry?
© 2013 Performance Review Institute
28
A Recent Quality Related Product Recall 2010: FDA issues a Class II recall on an Automated External Defibrillator ¹.
Root cause: Printed Circuit Board Assembly (PCBA)
(1) Trautman, K. (2010). Purchasing Controls – Background & Examples. Retrieved November 02, 2012, from FDANews.com
• Supplier has incorrectly applied solder flux • Ineffective cleaning
Specific root-causes
•20,525 devices were recalled • Contamination could have lead to inoperability
Product failure/recall
•Although individual supplier could resolve issue, the industry remains exposed
•Customers remain exposed to potential consequences •Highly likely industry will face similar issues from other
suppliers
Threat to life & profits
© 2013 Performance Review Institute
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Root cause: Printed Circuit Board Assembly (PCBA)
Supplier has incorrectly applied solder flux Ineffective cleaning
Nadcap process compliance is used as a preventative measure: AC7120 Revision B – audit criteria for circuit card assembly 17.1 Reflow Soldering 17.1.14.C Are soldering defects including solder joint touchup identified, recorded and addressed in a continuous improvement plan? 17.1.15.C Is the cleaning method being used as per the procedure and is the maximum time permitted between reflow and cleaning being observed? Audit Note: Maximum allowed time of 8 hours unless otherwise specified by customer or manufacturer’s recommendation. 20 Coatings and Encapsulation 20.1.C Is there objective evidence of cleanliness verification?
How would Nadcap address this issue?
© 2013 Performance Review Institute
30 Establishing Medical Device Industry Requirements (Electronics Example)
Industry • Industry defines scope of Electronics Task Group • Nomination of technical experts
PRI • PRI facilitates establishment of Task Group and guiding procedures
Industry • Development of audit criteria • Interview and selection of Auditors
PRI • Conduct pilot audit program
Industry • Issue mandate to supply-base • Continual development of program
© 2013 Performance Review Institute
Benefits to OEMs • Conduct more in-depth, technically superior special process audits
• Increases number of consistent audits of the supply chain
• Establish stringent industry consensus standards that satisfy the requirements of all participants
• Identify and reduce risk of exposure to lower-quality suppliers
• Provides industry-wide early warning advisories for potential product impact and escapes (defective products)
• Provides complete visibility of supplier behaviors and transparency of audit results in a secure and retrievable format
• Program reduces costs of supply chain oversight and control
• Utilizes technically superior auditors to assure process familiarity
• Effectiveness of OEM’s Quality team increased – able to look beyond baseline requirements and focus on problem areas and suppliers
• Improves flow down of industry and customer requirements to sub-tier suppliers
• eAuditNet supports procurement to identify accredited suppliers (Qualified Manufacturers List)
• Global Supply Chain managed through single real-time system (eAuditNet)
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© 2013 Performance Review Institute
• Provides routine special process audits accepted by industry
• *85% report supplier quality improvements after accreditation, including more than one-third reducing scrap rates, reworks and escapes (defective products)
• Promotes lean and continuous improvement practices, leading to higher quality and lower overall cost
• Industry accepted and consistent technical requirements leading to uniform process controls and greater operational efficiency
• Develops a structured approach to special process and product manufacturing
• Can use accreditation to increase client-base
• Opportunity to participate in development of audit criteria and program operations
Benefits to Suppliers 32
*Aerospace data © 2013 Performance Review Institute
Questions 33
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