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OEM SCR Expectations in a Zero Defects Environment

OEM SCR Expectations in a Zero Defects Environment. Perspectives from you Supply Base. Leading Edge Ceramic and Tantalum Capacitors. May 22-24, 2007. Automotive Electronics Council Component Technical Committee. Agenda Outline. Zero Defects Defined Impact of PPAP 4 th Edition

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OEM SCR Expectations in a Zero Defects Environment

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  1. OEM SCR Expectations in a Zero Defects Environment Perspectives from you Supply Base Leading Edge Ceramic and Tantalum Capacitors May 22-24, 2007 Automotive Electronics CouncilComponent Technical Committee

  2. Agenda Outline • Zero Defects Defined • Impact of PPAP 4th Edition • Current State Process Maps • Global Process Map • Considerations • Recommendations Automotive Electronics CouncilComponent Technical Committee

  3. Zero Defects Defined • Scope of AEC-Q004 31Aug06 Draft • “…tools and processes for suppliers and users to use to approach or achieve the goal of zero defects.” • By definition = change. • AEC-Q004 31Aug06 Draft Section 7.2, Process / Product Improvements • 7.2.3 “…Change in material or process, either to address a root cause issue or as an evolution of a process or design, to improve device function, yield and / or reliability.” • Reference to JESD-46, Customer Notification of Product / Process Changes by Semiconductor Suppliers. • Requires change notification for major changes • JESD-46, Section 3.2.1, Classify change(s) • "...Customers must be notified of major changes, whereas notification of minor changes may or may not occur depending on customer requirements.“ • IC major change definitions included and also repeated in Q004 draft Automotive Electronics CouncilComponent Technical Committee

  4. Impact of PPAP 4th Edition • PPAP 4th Edition • Extends well beyond these requirements • IQC Webinar Presentation • Customer notification is required for ALL proposed changes. • Any change from the original PPAP requires re-PPAP. • At least notification to the appropriate customer PPAP representative. Automotive Electronics CouncilComponent Technical Committee

  5. Impact of PPAP 4th Edition • “Customer Notification” is misleading • Implies one-way communication. • In reality, two-way communication is required. “Must not implement prior to customer written approval” • Significant implementation delays occur. • SCR approval cycle duration problematic • Agreement on this fact by multiple EIA / ECA participating suppliers: • KEMET, AVX, Vishay, TDK, KOA Speer, others. • KEMET LEAN project • Process impact sufficient to have been assigned a project reviewed by Executive Leadership and Board of Directors. • LEAN process maps pinpoint significant issues. Automotive Electronics CouncilComponent Technical Committee

  6. Current State Process Map - Customer • Automotive Approval Process Issues • Customers describe their process as • Not well-defined, Non-existent, Dysfunctional • 100% of customers asked for their approval procedure provided the supplier submission procedure • Automotive SCR Volume • 300 – 500 change “requests” received per month • 1000 – 2500 in the system at any given time • Processing them is at least 6 months behind • Capacitors typically apply to every program, adding to the confusion • Some customers’ customers deny any mid-year changes • Eliminates immediate realization of improvement effects. Automotive Electronics CouncilComponent Technical Committee

  7. Current State Process Map - Supplier • Supply Base Change Approval Process Issues • Nearly 40% extend beyond 1 year • Done in succession, equivalent to 8.5 years • All 2006 notifications would equal 68 years • At least 50% of the process not visible to Suppliers • Purchasing, Quality, Component Engineering, Material Planning, and all Program Managers always involved • Actual process differs for each customer • 1 Change grows exponentially between notification and approval • 13 automotive accounts • grows to 90 total Locations and • Involves 29 total account Managers. • Multiple hand offs on both customer and supplier side. • Results in negative impact to suppliers’ revenue stream • Decreases sales time • Prolongs realizing manufacturing cost reductions or quality improvements • Reduces focus on new product development or process improvement Automotive Electronics CouncilComponent Technical Committee

  8. Global Process Map – Customer + Supplier • Process Current State • 2300 Steps • assumes 1 affected program per location • 170 steps could have up to 5 iterations per customer • step count based on average of 3 iterations per customer • 5 months estimated Value Added Time • 11 months estimated Waste • You are already familiar with a very similar process Automotive Electronics CouncilComponent Technical Committee

  9. Global Process Map – Customer + Supplier Customer + Supplier Current State Maps = The Titanic Factor • Increasing customer expectations for level of communication outpace • our ability to comply • their ability to manage • Complicated approval process, extending supplier implementation • lost revenue from cost improvements • takes technical resources away from product development or process improvements • missed opportunities for sales • No infrastructure exists to support multiple approval cycles in tandem Automotive Electronics CouncilComponent Technical Committee

  10. Optimum Approval Actual Approval Considerations • Each Zero Defects Tool includes Estimated Cost vs. Benefit • Are improved quality effects or costs savings diluted by the overall process? **Actives in double-digit better position on business margin than passives Automotive Electronics CouncilComponent Technical Committee

  11. Considerations • If nothing changes, the tidal wave is coming. • Where are all of us relative to supporting this change? • Customers need additional support and streamlined systems. • Suppliers need to understand their customers’ processes and alignment to facilitate faster approvals. • Is Q-200 effective? • 1000 hour testing extends qualification time. • Questionable relationship between tests and actual field performance. • Does not support zero defects in the long run. • 12 Month advance notice of changes is not practical • Delays process improvements and / or cost savings by up to 2 years. Automotive Electronics CouncilComponent Technical Committee

  12. Recommendations • Take a pragmatic, no-nonsense approach to define requirements. • Improve business processes to support shorter approval cycles. • Educate suppliers on customer processes so they can better align their change strategies. • Use cost – benefit analysis vs. risk to determine what changes really require this level of scrutiny. • Partner with suppliers to find more effective testing than current Q-200 test protocol. • We all need strategies to improve the bottom line while maintaining or improving customer satisfaction relative to performance and reliability. Automotive Electronics CouncilComponent Technical Committee

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