sub tier clean)

8/6/2019 Sub Tier Clean)

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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



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



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



Issue Contribution - FY05

0%

20%

40%

60%

80%

100%

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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d / H D D

F a n

Commodities

C o s t

i n M i l l i o n s



WW VLRR TREND

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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



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



Sub-Tier Management Model

Supplier Quality Engineering




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




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




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




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




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



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 [email protected] (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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Q&A

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