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Definition of the KPI Return rate

Definition of the KPI Return rate. Purpose. This document defines the KPI return rate for suppliers of direct material. The purpose is to measure our supplier performance of delivering conforming material into our factories .

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Definition of the KPI Return rate

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  1. Definition of the KPI Return rate

  2. Purpose Thisdocumentdefinesthe KPI return rate for suppliersofdirectmaterial. The purpose is to measureour supplier performance of deliveringconformingmaterial intoourfactories. The KPI measures the amount of nonconformancedirect material that wedetect in ourfactories in relationship to the amount of volumeofreceiveddirect material. Nonconformingdirect material does not conformto the drawing, specifications and/or agreeduponstandards. Quantitieswill be reported in the unitsofmeasure in whichtheyarepurchased. Thisappliestoproduction parts / saleableunits.

  3. Terminology 1 Supplier Return Released On Transit ReworkedReleased Received Stock/Line QuantityOK Factory Blocked material In comming inspection Suspected R E L E A S E D Checked / SortedOK Reworked In house, vendor or 3rd party Scrapped Sorted NOK Return

  4. Terminology 2 Received: Direct material that has beenregisterd in a Husqvarna factory system as received. Blocked: Direct material that are under evaluation and thereforerestricted material. Has a status ”Not available” in the system. Checked / Sorted OK: Suspected material that has beensorted and/or confirmed to be ok. Has a status ”Available” in the system. Sorted NOK: Suspected material that has beensorted and confirmed to be nonconforming material Scrapped: Sorted NOK material that the supplier has decidedtoscrap Rework: Sorted NOK material that the supplier and Husqvarna has agreedtorework. Returned: Sorted NOK material thatHusqvarna has agreedtoreturn. Released: Blockeddirect material that has beenanalyzed and placed in anyof the catagories, Sorted OK, Scrapped, Reworked or Returned. The physical parts are no longer in the restricted area.

  5. Calculation SORTED NOK 1 000 000 * Return rate = Received

  6. Method • When a Husqvarna factory identifies suspected material they should immediately remove the batch of physical parts, and the parts in the system, into a restricted material area. • In normal case all sorting of suspected material should be handled by the supplier. The suppliers should be asked if they want to have the batch delivered back to them or if they want to have it delivered to a 3rd party sorting company. If there is a critical need to sort the suspected material, it could be done by Husqvarna. • If Husqvarna or the suppliers sorts the complete batch at a Husqvarna site – then only the actual nonconformingparts will have the status ”Sorted NOK”. • If the supplier takes back the complete batch – then the complete batch will get the status ”Sorted NOK”. • If the supplier sort at Husqvarna site or sends the batch to a 3rd part sorting company – then only the actual nonconformingparts will have the status ”Sorted NOK” if the ”Sorted NOK” parts are identified and available within 10 working days.

  7. Nonconformance vs Conformance

  8. Howtohandle different cases in the systems?

  9. Direct material vs Indirect material – packaging material

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