The Supplier Perspective

1
The Supplier Perspective
Ed Englehard Owego Heat Treat April 16, 2003
Agenda Item 2.2
2
Apprehension Prior to Participating in NADCAP

• If a mandate letter - start research business
  decision justification right away!
• If no mandate letter - poll customer base in
  order to justify business decision.
• Fear of the unknown, justifying the business
  decision by the supplier's executive management
• A change in the way most suppliers obtain
  approvals from "divide conquer" (one prime at a
  time) to third party
• Change in cost from Prime to Supplier
• Changes in internal processes and quality system,
  in terms of dollars man-hours.
• If yes, then supplier must plan appropriate
  resources above and beyond current quality system
  requirements.
• If no, then supplier must plan to loose certain
  amount of business (current and future).

3
First Time Preparation Actions

• In order to mitigate the apprehension of
  participation
• If the classes or range of approvals under a
  particular discipline is a choice in the matter,
  keep the scope of approval limited to those areas
  of the supplier facility that will benefit from
  it, i.e., if you are prime approved for only
  aluminum processing and don't have exposure to
  aerospace steel processing (even though you do
  some steel processing) then just have the
  aluminum processing portion of the plant
  accredited.
• Start early meet with quality staff often for
  status updates. Make a timeline and stick to it.
• Call the Task Group Engineer for Supplier
  Mentoring recommendations and assistance
• Go to the PRI/NADCAP website and plan to invest
  in attending a couple of quarterly meetings in
  order to learn how the system works and who the
  players are early in the effort to accreditation.

4
First Time Preparation Actions (continued)

• Be sure that supplier executives attend at least
  one quarterly meeting so that they understand
  better the resource allocation requirements of
  the effort.
• Be sure that supplier quality personnel
  responsible for implementation attend at least
  one quarterly meeting so that they understand the
  process, checklists and people with whom they
  will be dealing with intimately during the effort
  to achieve the initial audit.
• Have quality personnel attend a thorough Root
  Cause and Corrective Action (RCCA) course or
  seminar if they haven't yet. PRI offers a good
  program on a regular basis around the country.

5
First Time Preparation Actions (continued)

• Preparation Efforts
• Start early meet often. Make a timeline and
  stick to it.
• Order copies of the checklist(s) long before the
  audit is scheduled and start work immediately.
  You will typically need much more than the 60-90
  days of time lapse between the getting on the
  NADCAP schedule and the audit date. Don't wait
  for the checklist to arrive along with your audit
  date - you likely will not be able to do an
  effective job of implementation before the
  initial audit.
• Call the TG Staff Engineer for supplier mentoring
  assistance
• If you are ISO/AS registered then be sure that
  your system is sound, especially in the areas of
  calibration, inspection test equipment, process
  control, contract review and training.

6
First Time Preparation Actions (continued)

• Preparation Efforts (continued)
• If you are not ISO/AS registered and are not
  planning to do so, then be sure to get a copy of
  AC7004 and get busy on fixing your system in
  order to comply with it.
• If you are not ISO/AS registered and you do plan
  to do so, then make every effort to get it done
  before the NADCAP audit.
• Start early meet often in order to benchmark
  progress.
• Review all of the checklist questions objectively
  and take them seriously.

7
First Time Preparation Actions (continued)

• Every "yes" response requires objective evidence.
  Mark down where the objective evidence exists in
  your system next to each question.
• Every "no" response requires a fix to your system
  in order to turn it into a "yes". Be sure the
  fix has a trail all the way from the top tier
  documents through to the work instruction level,
  as applicable.
• Run many rigorous job audits and then fix them
  with rigorous RCCA.
• REMEMBER - This audit is going to "drill down" to
  the shop floor level, it is not an audit or
  survey of the just the QC Department. Quality
  system work must include appropriate training at
  levels down to the shop floor.

8
First Time Preparation Actions (continued)

• Where there is a checklist need for a procedure,
  have one in detail.
• Where there is a checklist need for an
  instruction, have one in detail. Good quality
  shop orders/travelers/operation sheets with
  appropriate process details can't be emphasized
  enough.
• The importance of good strong internal audit
  procedures can't be underestimated
• Remember - NADCAP auditors are process experts
  and highly professional
• Call early for your initial audit schedule so you
  don't miss any mandate deadlines

9
First Time Preparation Actions (continued)

• When you receive your audit package, start to
  work on the pre-audit immediately so you have
  plenty of time to fix problems before the auditor
  arrives.
• Be sure to conduct the opening and closing
  meetings with all affected personnel
• Think about any proprietary issues before the
  audit and bring them up at the opening meeting
• Be sure you understand each finding before the
  auditor leaves. It's much easier to obtain an
  explanation and clarify terms when the auditor is
  there rather than to try to second-guess the
  meaning of the findings after the auditor has
  left

10
Thoughts after the initial audit?

• First thought - Wow, what just happened??!! (Am
  I glad this week is done.)
• Take a little breather, there's usually a lot of
  work to do afterwards
• Watch the calendar - Note that the responses are
  due 14 days after the end of audit and that
  objective evidence is due 21 days after the end
  of the audit
• Fill out the auditor questionnaire and send it in
  while still fresh in your mind
• Review the findings carefully and be prepared to
  apply RCCA lessons rigorously

11
Process used for addressing audit findings?

• Use good RCCA practices
• Review supplier handbook
• Read findings carefully
• Answer findings thoroughly
• Address product impact issues promptly and in
  detail
• React to proximate causes promptly while working
  on root causes
• Drill down to quality system causes and respond
  to them completely

12
Company position on NADCAP (feelings,
benchmarking, pride etc) during
audit/accreditation process

• Ours was a strategic business to participate
  driven not by a mandate letter per se but by
  polling of our aerospace/defense contractor base
  of customers. Positive responses to our
  participation represented about 1/3 of our
  business at the time.
• We had a lot of anxiety about the possibility of
  failure outright because our quality system was
  quite crude at that time (1994-1995).
• We had a lot of hope for success because we knew
  it would distinguish us among our competitors

13
Company position on NADCAP (feelings,
benchmarking, pride etc) during
audit/accreditation process (continued)

• The effort to participate was huge and affected
  nearly all parties in the plant, especially at
  the shop floor level
• Achievement of the certificate represented a
  change in the company culture
• It institutionalized professionalism all the way
  down to the shop floor
• It raised the bar for high quality performance
  and continuous improvement across the plant.
• It raised the confidence level of all parties in
  the plant - both in the company and in regards to
  thier individual abilities
• It raised quality awareness across the plant

14
Where Owego Heat Treating is now (in regards to
feelings about NADCAP)

• It is a "must have" accreditation now in our
  business practices
• It has been informally adopted throughout
  industry among the first-tier suppliers to the
  primes (and the sub-first tier level) as a
  serious quality "security blanket" for current
  and new suppliers. In some cases it is being
  established as a requirement for doing business
  at this level even if the prime does not have a
  formal flow down requirement
• This has greatly reduced the amount of quality
  survey time that we received from this level of
  manufacturing
• Prime visits have been dramatically reduced to a
  focus on specific engineering needs or
  prime-specific requirements total quality survey
  and audit team has been reduced by at least 3/4
  (but not entirely eliminated)
• Our process capability and quality of output has
  dramatically improved and our customer's
  confidence in us has increased as a result.

15
Closure (data available to show
improvements-reduced escapes, additional
business, less re-work scrap, etc.)

• Our rework and scrap rates have been reduced
  significantly. In the pre-NADCAP days having to
  rework 5 or 6 orders in 100 and scrap 1 order in
  1000 was not uncommon. Now those numbers are
  more like a rework rate of 2 or 3 in 1000 orders
  and a scrap rate of 1 order in 3000 orders, or
  less.
• Our pre-NADCAP escape rate was maybe 1 order in
  3000 to 5000 orders. It is significantly less
  now, around 1 in 6000 to 10,000 orders. Our
  discovery and response times to escapes is much
  improved.

16
Closure (data available to show
improvements-reduced escapes, additional
business, less re-work scrap, etc.) (continued)

• We definitely have much higher compliance to
  specification requirements
• We have a much higher level of understanding of
  prime, customer and industry requirements
• We have a much higher comfort level with tackling
  new work due to a better understanding of the
  quality issues involved.
• All of our other customers have benefited from
  the practices instilled throughout the plant as
  noted above.

17
Closure (data available to show
improvements-reduced escapes, additional
business, less re-work scrap, etc.) (continued)

• At the time we embarked on this endeavor we
  retained about 1/3 of our business. In a market
  where manufacturing volume is declining that was
  a significant accomplishment.
• We have gained market share in our region as a
  result of maintaining our NADCAP accreditation.