Global Supplier Analysis and Qualification for our Customer ABB

Since the start of 2012, Formel D has been lending its support to the global group, ABB, to develop its suppliers. Engineers and quality managers employed by the service provider ensure on-time delivery in line with agreed quality standards.

Whether the products are electronic control systems from Malaysia, largescale capacitors from England, aluminium cabinets from Switzerland, oil tanks for transformers from China or case parts from Poland – ABB is always seeking to work with the most reliable suppliers. The number of suppliers is extremely high. The reason for this high number is that the group, which employs 150,000 people around the globe, offers a wide variety of services and products in the fields of energy technology products and systems, industrial automation and drives, low-voltage products and process automation. Approved suppliers have to be certified not only to ISO 9001:2000 standard, or its equivalent, but they must also show reliable and high-quality delivery. These suppliers commit to complete and on-time deliveries as well as to continuous improvement in their performance. To ensure this, ABB verifies the reliability of its suppliers to provide transparency and traceability on an ongoing scale.

Helping Turn Flops to Tops

If materials, components, systems or services are not delivered on time and/or are defective, ABB has a defined approach for re-establishing fault-free services so that the requirements of customers can be met. As part of its quality assurance strategy, all sectors of ABB are asked to name their top ten worst performing suppliers (Flop10) and to improve their performance.

Solving Technical and Organisational Problems

On behalf of ABB, quality engineers and technology specialists from Formel D help those suppliers that have been identified as “Flop10” companies: for example, a British supplier for the production of large-scale capacitors that were not delivered on time. “For this project, our quality engineers were quickly able to implement effective measures to aid process stability,” reports Marcel Klehr, in his role as Technical Director at Formel D in Munich, responsible for all “Flop10” projects. By using optimised allocation plans for the systems, production increased permanently from two to eight units per week.

On the control units for welding robots, which are manufactured in Malaysia, the display often failed because a cable connection kept coming loose. Cables often broke, too. The cause, the technology experts at Formel D discovered, was excessive vibration, which could be reduced by making a few technical improvements. A kink protector also ensures that the cables can no longer break. In addition to joint project management with John Müller (Group Function Quality & Supply Chain OPEX), his contact at ABB in Zürich, Formel D’s Technical Director is generally on site for a few days to set up the teams with his experts and the supplier’s staff and to launch the project – in this case in England and Malaysia. “Depending on whether the issue is of a technical or an organisational nature, the right specialists for each project have to be found. And we have these,” Marcel Klehr says. Depending on the exact task at hand, they are employed at ABB – and often not just as troubleshooters. “Thanks to our international set-up, we have a global presence and can serve our customers quickly wherever they are,” the Technical Director explains. With some projects, the causes are easy to identify and resolve. With others, they have to be analysed in depth. Measures need to be defined together with the supplier, which then has to implement these independently and consistently.

Measuring, Analysing, Improving and Ensuring Sustainability

Marcel Klehr’s team is generally on site with ABB suppliers for three to four weeks. The main requirement for their success is that they ensure adequate methods and tools for analysing and solving problems. Thanks to its extensive experience in the automotive and supplier industry, not to mention its global presence, Formel D is able to successfully apply its expertise to other new industries. 4Q is an approach that ABB and Formel D have been using for several years and one in which they have extensive experience. 4Q refers to each of the four quadrants that have to be processed: measuring, analysing, improving and ensuring sustainability. Instead of focusing exclusively on symptoms and the conclusions drawn from these, the particular success of 4Q lies in analysing and solving not only the root causes of a problem, but also in improving the related processes on a permanent basis. “It is always our aim to enable the supplier to avoid quality defects and delays in future and – should these arise – to deal with these independently,” Marcel Klehr says in answer to the question about where the expectations of ABB and his team’s approach lie.

The 4Q report (based on 8D) at ABB, is a fault analysis process consisting of eight levels. This is used as a standard part of quality management in the automotive industry in the event of a complaint between the supplier and customer and Formel D has extensive experience with this. It allows a systematic approach and the continuous documentation of a project. Progress reports and results from “Flop10” projects are communicated regularly via the 4Q newsletter to around 800 ABB contacts. What’s more, they are also presented at supplier and internal meetings, integrated into the companies’ best practice procedures and ultimately used to improve the suppliers’ quality on a global scale.

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Continuous Improvement

Bill Black, Senior Group Vice President of Quality and Operational Excellence at ABB, is responsible for the “Flop10” programme for approving suppliers. In the interview, he answers questions on collaborating with Formel D for the programme.

What are the aims of the project?

Our goal for the future is to work with fewer suppliers in the future and to only work with the best suppliers in terms of scheduling and quality. For this reason, we have formulated our requirements and are pursuing a long-term programme for selecting and approving them. Therefore “Flop10” is a permanent, integral part of our quality management. It addresses those suppliers that either do not render their services on time or provide low quality. However, most work very well and are reliable. We want to learn from them. We would like to develop those that we are not 100% happy with, so that in the long-term they provide a fixed level of quality within a fixed timeframe. In doing so, our aims are cooperative partnerships and exchanging best practice experiences.

Which criteria were of particular relevance for ABB when calling for tenders?

For the “Flop10” programme, we needed to find partners with the knowledge and expertise to be able to analyse our suppliers’ difficulties on-site and with a proven track record in providing long-term solutions. This is why we searched for service providers that had both technical competence and practical experience in supplier quality management. Additionally, the service providers had to demonstrate experience in implementing sustainable improvements on a worldwide scale.

Formel D was chosen from 150 applicants. What did Formel D have that others didn’t?

Over the years, the Formel D Group has encouraged an extensive amount of successful supplier improvement. It was ready to adapt its standard improvement approach to be consistent with our ABB 4Q methodology. This has the advantage of speaking the same improvement language. The group also has a large number of exceptionally skilled supplier quality engineers.

Which changes has the programme already brought about?

We already see positive examples of improvements in terms of delivery and quality with suppliers with whom we’ve had long-term problems. Formel D’s work has made a significant contribution in delivering these improvements.

What are the next steps for the “Flop10” programme at ABB?

We’ll continue to pursue the supply base management programme to improve our suppliers over the medium term. “Flop10” will carry on as part of that and we look forward to further cooperation with our partner Formel D to intensify and expand on this successful start.

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