Transcript
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Welcome
Sub Tier Supplier Conference
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Agenda
• Welcome• Sub Tier Impact• Sub Tier Supplier Mgt
SQEProcurementEngineeringReliability
• Break• Testimonials• Your Actions• Q/A
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Quality
Support first to volumeleadership that drivesmutual advantage
Achieve lowest lifecyclestructural cost
Invest in high growthbusinesses – Imaging,Displays, Handhelds
Flawless execution andtransition management
Achieve FIR/VLRRtargets/goals
Continue warranty costreduction
Establish & implementsupport avoidance costinitiatives
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FY06 Partner PrioritiesGrowth &
Globalization
Customer
Experience
Product
LeadershipDrive volume &efficiencies throughvalue propositions
Continue growthWW by aligningregional fulfillment &support capabilities
Maintain continuityof supply to supportgrowth opportunities
Align regionally withdesign centers
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Field Incident Rate Performance
• Average 16% YoY improvement over the last three years
• Customer reliability expectations increasing faster than current performance• Latent failures on sub-tier components have resulted in costly proactive
actions and customer dissatisfaction Must contain going forward
• FY06 FIR CE goal set to 25% improvement
Ownership of the Customer Experience is Equally Shared BetweenDell and Its Partners
3-Year FIR Performance - Relationship
Optiplex Latitude Enterprise
FY02FY03
FY04
FY05FY06 Target
1-Year FIR Performance - Transactional
Inspiron Dimension
FY02FY03
FY04
FY05FY06 Target
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Issue Contribution - FY05
0%
20%
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Holds IFIR FIR PFR
2nd Tier
1st Tier
Dell
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Sub-Tier Supplier Management key to Hitting Goals
• Tier 2 suppliers represent
19% of holds but 50% of latent excursions requiring proactive action
• Impact: FY05 warranty expense for PFR’s and significant customer disruption
• Majority of 2 nd tier excursionsare process related
• Focus on 2 nd tier quality management and processcontrols is a must for success
90Million
$90M
PFR –Proactive Field ReplacementHolds –Factory holds or stop shipsIFIR –Failures in Field from 0-30 daysFIR –Failures in Field after 30 days
$1.1 billion FY05 Warranty cost$700 million parts related
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90Million US$ in PFR’s due to Sub Tier
Root Cause•CapacitorsManuf process
•Inductor Thermal Issue
•PSFET failures
•ChassisRivet process
•HDDHead contamination
•FanThermal Issues
PFR cost due to 2nd Tier
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Design vs Process
Sub Tier FIR
•Supplier Process main focus
ProcessControl
1st Tier Procees s or Desi
Design Issues Process iss ue
Sub Ti er Process or Desig
Design Issues Process Issues
•We are succeeding at 1st Tier •Apply what we know works
85% at 5 σ
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Sub-Tier Supplier Management Model
ComponentEngineering
ProcurementSQE
Sub Tier Model•4 major elements
•SQE
•Engineering•Procurement•Reliability
•Need all 4 to effectivelymanage sub tier
Reliability
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Sub-Tier Management Model
Supplier Quality Engineering
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Sub-Tier Management Model
Dell Factory
Supplier Factory
FY06 ChallengeDrive and Track Product Quality, VLRR, in Sub-Tier
Success using the Dell SQE Model
• Measure Incoming/In-Process Quality (VLRR)
• Establish Control points (SPC)
• Drive first pass yield
• Stretch to 5 sigma goals
• Award business based on Quality• Focused Supplier Reviews – 10 worst
Dell SQE Model
1st Tier
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Sub-Tier Management Model
Dell Factory
Supplier Factory
FY06 ChallengeDrive and Track Product Quality, VLRR, in Sub-Tier
• Use Dell SQE Model todrive sub–tier supplier to
5σ
• Show progress onManaging Sub-Tier Suppliers in Q2 QBRs
• 40% of QBR Qualitypoints will be awardedon Sub-Tier results
Dell SQE Model
Sub-Tier
Sub-Tier
Sub-Tier
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Sub-Tier Management Model
Component Engineering
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Sub Tier Management Model Component Engineering
Migrate Dell AVL to ODM’s when beneficial in Cost and QualityDedicated Dell CE resources to work with Tier 1 suppliers
Component Qualification Processes
Component Specifications
Increase the rigor of sub tier component qualification processesFirst Article Inspection data for all key parameters
Capability studies (cp/cpk) for critical parameters
Ensure compliance to entire specification
Certificate of compliance for lead free components
Perform joint ODM BOM scrubs to identify high risk components/suppliers
Standardize on Common AVL
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Sub-Tier Management Model
Reliability Engineering
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Sub Tier Management ModelReliability Engineering (RE)•Objective:
Ensure that reliability of the product is maintained fromdevelopment throughout the manufacturing life.
•RE Tools available for ongoing testing•HALT or HASS•De-rating of Components•High voltage screens•Critical design and process parameters
•Need to identify early indicators of VFIR though RE testing prior to RTS
•Deploy appropriate ongoing reliability tasks for each commodity
• Improve engagement: Reliability plan reviews, Training, BOB
•Eng and Manuf Variation•Pre/Post ORT•Mechanical Stress Testing
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Sub-Tier Management Model
Procurement
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Sub Tier Management ModelProcurement
•Agreements with Sub Tier that match Dell agreements with 1st
Tier •Sub Tier Hub located near 1 st Tier
•Drive 1 st Tier suppliers to align with Dell’s preferred Sub Tier
•Continuity of Supply
Provide 12+ week demand outlookSub-tier suppliers to provide 12+ week demand/supply plan
•Supplier rating system
Hold quarterly QBRs with Sub-tier
COS, Cost, Quality, Service, Engineering
Supplier selection criteria, sourcing model, and development model
•TAM Split - Award POs based on both cost & quality
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InvestmentQDI and Mitac made a choice to improve their Quality
Enhanced their sub tier management year over year Passed down the leanings
Chose the right people and invested in them
Partnered with sub tier
ProcessTraining
Constantly raised the bar on what they expected
Achieved results
Are being rewarded for their efforts
More business from Dell
Improved Customer Satisfaction
Less Defects –Lower cost –Better COS
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Dell’s Investment Changes in SQE organization
SQE Org for Sub Tier Austin -20 Asia -13
Component EngineeringAustin -27
Formed a Dell Governance Process for critical Sub Tier Core teams => Commodity teams => Business Strategy TeamsTies Eng, Procurement, Quality, Operations into one Strategy
Critical Sub Tier brought to 1 st tier Status as a first priority
Fans, PS, Cables, HeatsinksDell is ready to invest in you! Are you ready, willing, and committed?
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Next StepsJoint update and training on supplier mgt tools in May/June
ScopeSQE
Procurement
EngineeringReliability
Sub tier application of Tools –Start in June
Roll out sub Tier mgt tools to all Sub Tier Hands on focus on PS, Fans, Heatsinks, Cables
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Your Actions
1. ODM and OEM Exec Mgt accepts total responsibility for sub tier regardless of who selects and buys the parts.
2. Commitment to assign resourcesSQE, Procurement, Engineering
1. Commitment to Share BOB practices for Tool development2. Attend training of 1 st tier Teams in May/June
3. Coach and Mentor sub tier and help them improve
4. Assign a team for each commodity Engineering, Procurement, SQE
5. Deliver results –Drive 50% S-VLRR reduction. Improve Reliability
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Issue Contribution - FY05
0%
20%
40%
60%
80%
100%
Holds IFIR FIR PFR
2nd Tier
1st Tier
Dell
$1.1 billion FY05 Warranty cost$700 million parts related
Sub Tier Process or Design
Design Issues Process Issues
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Sub-Tier Supplier Management key to Hitting Goals
5 0 % r e d
u c t i o n
i n S - V L
R R
S T S
M = 4 0
% Q B R
S c o r e
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TrainingDell encourages joint trainings with your Sub-Tier suppliers.
Trainings Available from Dell: Contact is Kirk_Chi@Dell.comBPI (Six Sigma) Green Belt
SPC and Process Capability
Other classes available
BPI Six Sigma Black Belt Classes(1) Advanced Methods (2) Statistics (3) Design of Experiments
BPI Six Sigma Executive BeltDesign for Six SigmaQFD (Quality Function Deployment)FMEA (Failure Mode Effective Analysis)Mentor DevelopmentFacilitation SkillsManaging BPI (Six Sigma)BPI Six Sigma Project Management
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Partner with Dell Drive Sub Tier Supplier MGT
Build Reliable ProductsNo More Defects
Achieve 5 σ
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