Supplier Non-Conforming Part

Charge-Backs

Driven by Quality
 Agenda
PACCAR ePortal Navigation
Section 3.7 Continuous Improvement 10 PPM
Global Supplier Charge Back Policy
Supplier Quality Requirements Manual (SQRM)
Changes
Section 3.2 Non-Conforming Product (NCP) or Service
NCP Notification
Request for Corrective Action (RCA)
Section 3.3 Cost of Poor Quality Policy
Section 3.5 Non-Conforming Part Review
Supplier Charge Back Summary
 PACCAR ePortal Navigation

For PACCAR facilities in North America & Australia:

https://eportal.paccar.com/supplier/supplier/en/home/Pag
es/default.aspx
For PACCAR facilities in Europe & Brasil:
https://eportal.daf.com
PACCAR North America ePortal
 Global Supplier Charge Back Policy

Cost Recovery
NCP Tag ($300/200 Each)
Plant Rework ($400/300 Minimum)
Supplier Quality Manual Updated
January, 2015 Implementation
Future Penalties Q4 2015
Repeats and Late Corrective Actions
 SQRM Update Objectives

Improved Quality Metrics

Faster Response to Problems

Faster Part Returns

Reduce Production Disruptions

 Section 3. 7
Continuous Improvement 10 PPM

New Standard of Supplier Excellence

50 PPM => 10 PPM
Supplier 10 PPM Plan

10
PPM
 MSS Charge-Back Summary

$150 NCP Tag Charge for Kitting, Sequencing, or

Metering
$300 NCP Tag Charge for Assembly or Value Add
Task
Actual Rework Costs Fully Burdened Rate
Assembly or Value Add Task
Clear Supplier Responsibility
 Section 3.2
NCP Procedure - Reject Guidelines
Reasons To Reject
Any component, sub-assembly, assembly or product,
process-related service found to be non-compliant to the
drawing, CAD model, specification, applicable quality
standards, agreements or master samples approved by
Engineering and Quality will be rejected and considered
as a Quality non-conformity.
Production parts damaged as the result of non-standard
packaging (not per PACCAR specification) or production
parts damaged from inadequate packaging or
transportation for which the supplier is responsible.
 Section 3.2
NCP Procedure - Reject Guidelines
Reasons To Reject

Parts with incorrect shipping documentation (e.g.

packing slips), incorrect quantities or parts that were
shipped to the wrong facility and directly affect PACCAR
operations.
Damage or incorrect shipments directly attributable to PACCAR-
managed third-party carriers or handlers are assigned to the
third party.
Reoccurrence of the defect after the agreed implementation
date of the corrective action(s) will result in a new non-
conforming part report issuance.
 Section 3.2
NCP Procedure - Reject Guidelines
Reasons Not To Reject
Parts that meet all specifications and boundary
samples approved by Engineering and Quality.
Parts that have not been released and approved for
production and/or that have no released drawing.
Examples include launch parts, prototype parts, pre-
production parts, sample/trial parts, DOE parts, pre-
production parts, etc.
Any defects covered by a Deviation Authorization.
 Section 3.2
NCP Procedure - Reject Guidelines
Reasons Not To Reject

Potential problems the supplier identifies,

communicates and takes appropriate action to
contain and correct before being used in production
by PACCAR. Supplier must provide replacement
part(s) with certified material before required in
production.
Upon detection of a non-conforming part, the PACCAR
plant may start a request for corrective action.
Section 3.2 Supporting Documentation
Part Number
Quantity of Parts
Date of Lot Code (if accessible)
NCP#
Detailed Defect Description
Example 1, Example 2, Example 3
Clear Pictures of Area of Concern (overall picture of
part and close up of issue)
Specification on Print Not Met
Actual Part Measurement
Section 3.2 - Supplier NCP Notification
Section 3.2 - Supplier NCP Notification
Corrective Action Template

Single Global Template

Root Cause Analysis

Robust Corrective Actions

SQM Approval
 Section 3.3
Cost of Poor Quality
Receiving Process
Sorting, Rework, Misidentified Parts
In-Process Fallout
Downtime, Overtime, Rework
Customer Issues
Premium freight, added inspection, rework at customer
premises
 Section 3.5
Non-Conforming Part Review
Submit Completed NCP Review Request Form
Include Adequate Supporting Documentation
NCP Reviews Should be Completed Within 10
Business Days
See SQRM for NCP Review Extension Requirements
Contact Your Assigned SQM for Next-level Reviews
if Required
 Supplier Charge Back Policy
Summary
10 PPM
Phase 1 Administrative Charge per NCP Report = $300
Jan
2015 Minimum Rework Charge Per Part = $400
Use Accounting Debit Process

Penalty for Repeat NCPs

Phase 2 Penalty for Late Corrective Actions
Web-Based Corrective Action System
 Email Questions to:

Ken.Faith@PACCAR.Com