Pacific Gas & Electric Advancements in Supplier Quality Assurance Programs Jim Adamson Director of Supplier Quality Assurance Electric / Gas T&D, Hydro, Solar & Fossil Fuel Power Generation 1
Pacific Gas & Electric
Advancements in Supplier Quality
Assurance Programs
Jim AdamsonDirector of Supplier Quality AssuranceElectric / Gas T&D, Hydro, Solar &Fossil Fuel Power Generation
1
SQA Function / Supplier Life Cycle
PG&E Engineering confirms part design
meets fit, form, function & System
Compatibility based on specs & standards
SQA confirms capability to meet
spec. / stds. in daily production via
supplier ISO site audit, PPQP &
supplier accountable to quality terms &
conditions
Supplier Continuous Improvement driven
by Inspections, Audits, Surveillance, Monthly Meetings &
KPIs: DPPM, SCARs, MPR,
Scorecard
Chronic Suppliers: Executive
awareness, Biweekly meetings with a
deadline for recovery or QSL removal with award to high quality
suppliers
1
23
4
What assures supplier
leadership awareness of
issues & consequences
enabling resource
prioritization?
What assures issue
alignment? It’s a data
driven process with
key measurables
followed by routine
meetings & onsite
visual verification
What process confirms the
material specification &
standards are met beyond
the initial Engineering
samples?
What enables safety,
reliability & affordability?
Every part meets design
intent enabling system
function to design intent,
employee / public safety,
& reliable energy delivery
at the lowest cost to our
customers
2
Director
Electric/PGEN*
SQA Manager
Cert. ASQ CQEs
Material
Qualification
Continuous
Improvement
MPRs
Change Control
Procedures
Gas SQA
Manager
Cert. ASQ CQEs
Material
Qualification
MPRs
Continuous
Improvement
Change Control
Procedures
Material
Records
QMS Audits & Compliance
Manager
Cert. ASQ CQAs
New Site ISO Qualification
Qualification Maintenance
Probation Sites
Material Inspection Manager
Cert. ASQ CQIs
Source Inspection
Receiving Inspection
Contracted Inspection
Admin
Key
35 2015 SQA Staff
7 Contracted Services
* Non-Nuclear
Supplier Quality Assurance - Materials
3
New Quality Programs
Material Quality
• 90% Reduction in Defects
• Supplier Mentoring - worst to best
• Driven Distributors to manage material suppliers to PG&E requirements
Value to Lines of
Business
• Rapid qualification for new equipment technologies & suppliers
• Customers Satisfaction at 95.1%
• $20M cost eliminated annually (ROI: 3)
Suppliers
• Accountability / Behavior Change
• Investing in automated equipment & new advanced manufacturing facilities
• Growth in size / capability QA staff
Sourcing
• Improved Security of Supply
• Improved Scorecard model driving all supplier measureables: safety, quality, delivery, cost, diversity, and green
Results
1. Supplier Qualification Manual
2. Quality Management Manual
3. ISO9001 Auditing Program
4. SAP Qualified Supplier List
5. Quality Terms & Conditions
6. Annual Supplier Requirements
Letter for Quality
New Programs with Great Results
4
Best in Class Performance & Improving
4th – 20,800
3rd – 10,100
1st – 4,200
Performance Benchmark
Quartiles
2nd – 6,000
2,500
19,507
5,593
2,459
393
4,196
1,887 951
1,814
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2012 2013 2014 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 YTD
All DPPM
DPPM Target
99.82% Defect Free
5
Quality Management Manual
Objective
Quality Mgmt, System
ISO9001 Compliance
Standardize Process
Accountability
6
Requirements
PG&E Audit for compliance
to ISO 9001 or equivalent
Record Retention
Qualification Process
Sub-Supplier Control
Change Management
Notification
Post Qualification reporting
http://www.pge.com/en/b2b/purc
hasing/suppliers/index.page
Supplier Qualification Manual
7
Performance Requirements
Scorecard DPPM Performance
Criteria
Qualification Process
Sub-Supplier Control
Change Management
Notification
Vision to achieve zero
customer defects
Notification of significant
issues upon awareness
Annual Supplier Requirements Letter
8
Supplier Resource Requirements
Product / Site Qualifications
Provide a Sr. Project Manager
as point person to coordinate
all activities & documents
Maintain a project timeline &
a qualification plan according
to PG&E requirements
Identify sub-suppliers and tier
one’s process to qualify
Lead routine team meeting,
issue minutes, timelines,
qualification plan, & corrective
actions for any failures
9
To assure safety, reliability,
and affordability of procured
material, PG&E has
established policies for
material quality that require
supplier compliance.
Non-compliance of PG&E
policies and/or problematic
quality may lead to supplier
probation with additional
supplier cost related to
oversight performed by
PG&E Supplier Quality
and/or contracted 3rd parties,
and/or business diverted to
an alternate supplier.
Contract Terms & Conditions - Quality
10
SAP Qualified Supplier List (QSL)
• Access to approved sites & products
• Audit schedule for site re-qualification
• Tracking of QMS non-conformances
• 1,100+ Suppliers & Sub-Suppliers
11
Material
Problem
Reports
Supplier
Management
Corrective
Actions
Qualification
Business
Allocation
& Strategy
Material
Inspection
1
2
3
4
5
6
SQA Quality Programs
Metrics & Allocation
Supplier & Product Qualification
MPR
Material Inspection
SCAR & Failure Analysis / Purge
SCM-2105S; Supplier Management Standard
SCM-2105P-02; QMS Audit Procedure QSL
SCM-2105P-03; Supplier Qualification Procedure PPQP
SCM-2105P-01; FA Procedure 1st Article / sub-set of PPQP
SCM-2101S; Mat’l Inspection Standard
SCM-2101P-01, RI Procedure SAP
SCM-2101P-02 to 08, 10; SI Report
SCM-2101P-09, LDCPE RI SAP
SCM-2106S; MPR Standard
SCM-2106P-01, MPR Procedure MPR
SCM-2106S; MPR Standard
SCM-2106P-02; SCAR & FA Procedure SCAR & FA Notification
SCM-2106P-04; Quarantine & Purge Procedure Purge
SCM-2105S; Supplier Management Standard
SCM-2105P-04; Managing SQ Procedure SQ Metrics
12
Policies / Procedures
To eliminate confusion and
assure roles & responsibilities
are known, these documents
must be clear & standardized
Web Based
• 54 procedures
– Manuals
– Policies
– Inspection Procedures
– Job Aids
– Check lists
13
Material Problem Reports (MPRs)
System to identify material defects related to:
• Supplier Material Quality, Installation Quality, Maintenance Quality,
and Design Opportunities
14
Communicating with PG&E Leadership
Executive Meeting Cadence
• Every Month - VPs / Directors / Managers / Engineers
– MPR Report
– MPR review
• Every two Months - SVPs / VPs / Directors
– CFST - KPIs / Accomplishments / Challenges / Opportunities
– MQ&S - KPIs / Accomplishments / Challenges / Opportunities
• Every Six Months - EVPs / SVPs / VPs
– CPP - Customer Procurement Plan
• SQA Update – KPIs / Accomplishments / Challenges /
Opportunities
15
Best in Class Performance & Improving
4th – 20,800
3rd – 10,100
1st – 4,200
Performance Benchmark
Quartiles
2nd – 6,000
2,500
19,507
5,593
2,459
393
4,196
1,887 951
1,814
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2012 2013 2014 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 YTD
All DPPM
DPPM Target
99.82% Defect Free
16
Communicating Value to Executives
Progress on KPIs
New Quality Programs &
Progress
Enabling New Technology
for increased reliability &
Security of Supply
Risks & Challenges
Opportunities for
Continuous Improvement
17
Material Problem Reports (MPR)
Understanding material
issues beyond initial
quality via MPRs
Issue Prioritization
Top Open / Resolved
Sharing cross functionally
for awareness & for
further action in the field
18
The Pursuit To be World Class
For the purpose of continuous improvement PG&E had an
independent study of our Quality Management System that was
carried out by Dr. Godfrey (Chairman of the Juran Institute for 12
years) and Dr. Hoerl. Below are their comments for Supplier Quality
Assurance.
• “We were impressed with the close linkage with engineering risk
assessment to establish priorities, the use of manufacturing site
inspections when that gives better insight into product quality and
the processes to create the product, feedback loops with
suppliers, and the new Supplier Quality Manual.”
• “Some of the major oil companies and pharmaceutical companies
also have outstanding programs. PG&E may in the not so distant
future be comparable to some of the best programs in these
industries not just the leader in the gas operations industry”.
19
Vision for the Future - Alliance
It is just as important for this industry to receive zero material
defects as any other. How can utilities efficiently improve?
• Benchmark. As iron sharpens iron, we will improve together
• Create a utility industry forum with those participating agree
on standardized supplier quality programs:
– ISO9001 supplier audit program. Contribute audit
resources and share the Qualified Suppliers List (QSL)
like Nuclear Procurement Issues Committee (NUPIC).
– Use a common supplier qualification manual that is
adaptable to each utilities’ unique specifications &
standards.
– Standardize Key Performance Indicators for quality
20
Question & Answers
Safety
Reliability
Affordability
Team Work is the Enabler21
Key
Terms
• RI Receiving Inspection
• SI Source Inspection
• KPIs Key Performance Indicators
• DPPM Defective Parts Per Million
• SCAR Supplier Corrective Action Request
• MPR Material Problem Report
• SoS Security of Supply
• PPQP PG&E Parts Qualification Plan
• QSL Qualified Supplier List
• SQA Supplier Quality Assurance
• QMS Quality Management System
• NUPIC Nuclear Procurement Issues Committee22