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Document Number: FMS-QMS-4-079-00

Revision: B

flexTitle: SRS Internal Training and General Information

Document Owner: Alejandra Vargas

CONFIDENTIAL

SRS General Information

Alejandra VargasSupplier Quality Engineer


Revision: B



Supplier Quality System SRS

Definitions and Acronyms 3

Introduction 4

SRS Measurements & Weights for Final Score 6

SRS Measurements 7

Actions Based On SRS Final Score 19

Quarterly Scorecard Distribution 20

SRS Scorecard Template 21

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Supplier Quality System SRS

DEFINITIONS and ACRONYMS

SRS Supplier Rating System

GCM Global Commodity Manager

SCAR Supplier Corrective Action Request

CRP Continuous Replenishment Program

JIT Just-In-Time

PO Purchase Order

MDSS

Materials Decision Support System. An application from the MicroStrategy

suite used for online analytical data processing and reporting; also known

as cubes.

SQE Supplier Quality Engineer

RFQ Request For Quote

OTD On-Time Delivery

QUALfx Global Quality System Tool

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SRS Introduction

PURPOSE:

This document provides detailed instructions in the proper use and understanding of the SRS

4.0 metrics defined in Supplier Rating System, FMS-QMS-2-005-00.

SCOPE:

This process is applicable to all Flex operations. This includes all Flex materials groups,

procurement personnel, GCMs, SQEs, and any other Flex employee involved in the

procurement process or that have a procurement relationship with supplier performance.

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https://flextronics365.flextronics.com/dms/gq/cq/SRS Supplier Rating System Process.pdf


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SRS Introduction

BACKGROUND

Flex’s SRS 4.0 is a Supplier Management Tool with the following benefits:

Provides objective supplier information to our customers and suppliers.

Ensures continuous supplier improvement through quarterly performance scorecards assessing

suppliers’ quality, delivery, price, and responsiveness in order to promote world-class suppliers and

create continuous improvement in supplier performance.

Facilitates constructive discussion in the context of quarterly business reviews (QBRs) that Flex

Procurement Teams hold with suppliers.

Flexible enough to be used by all sites and business groups.

Data used for SRS 4.0 is systemic and refreshed quarterly. Line item transactions are extracted and

calculated from MDSS, through a Cube.

Any supplier activity (purchase orders, pricing, terms, etc.) that is managed outside an ERP (Enterprise

Resource Planning) system is not considered in SRS 4.0. Any ERP system not linked to MDSS is also

not considered.

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SRS Measurements & Weights for Final Score

5

MEASUREMENTS

SRS rates criteria made up of eight

measurements.

The overall score is achieved by a

fixed weighted average according

to the Supplier Type. The final

score is a weighted average

aggregated score.

The highest overall score for these

measurements combined is 4.00.

If one measurement is “N/A”, then

the weight of the item is divided

and proportionally aggregated to

the remaining items.


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6

SRS Measurements

On-Time Delivery % (Supplier Promised Date)

Purpose: To improve On-Time Delivery, which will ultimately increase manufacturing efficiency based on the receipt transaction

tables in MDSS. If the receipt date is not earlier than 3 days from the confirmed or changed delivery date and not later than 2 days

from the confirmed or changed delivery date, it is considered “On-Time”.

Note: The calculation is based on WorkingDays.

Score Definition

0.00 Less than 70%

1.00 Greater than or equal to 70% and less than 80%



4.00 Greater than or equal to 95%

S DELIVERIES - 3 TO +2 DAYS

ALL DELIVERIES

% = X 100

N

1

N = NUMBER OF DELIVERIES BETWEEN -3 AND +2 DAYS

FROM CONFIRMED OR CHANGED DELIVERY DATE.

(CALCULATION IS BASED ON WORKING DAYS)

Logic:

If Purchase Order is SMI or JIT, then OTD = 1

Else

If Conf Delivery Date is NOT NULL,

If -3 <= (Received Date – Confirmed Delivery Date) <= 2

Then OTD = 1

Else

if -3 <= (Received Date – Planned Delivery Date) <= 2

Then OTD = 1

Else

OTD = 0


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7

SRS Measurements

On Time Delivery % (Flex Requested Date)

Purpose: To improve On-Time Delivery which will ultimately increase manufacturing efficiency based on the receipt

transaction tables in MDSS.

Score Definition

0.00 Less than 70%





SN

DELIVERIES <=2 DAYS

ALL DELIVERIES

% = X 100

N = NUMBER OF DELIVERIES <=2 DAYS

(CALCULATION BASED ON WORKING DAYS)

1

Logic:

If Purchase Order is SMI or JIT, then OTD = 1

Else

If Change Delivery Date is NOT NULL,

If (Received Date - Changed Delivery Date) <= 2

Then OTD = 1

Else

If (Received Date - Planned Delivery Date) <= 2

Then OTD = 1

Else

OTD = 0


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8

SRS Measurements

SMI – CRP Spend % (Supplier Managed Inventory – Continuous Replenishment Program)

Purpose: To increase SMI/JIT and CRP spend to 60% or greater, decreasing direct spend and costs associated with

logistics, as well as increasing time to line and reducing warehouse costs.

This measurement is based on the field named ‘PO Source’ and overall spend for a supplier. The percentage of SMI-CRP

spend compared to overall spend (for the specified time frame) dictates the score.

Score Definition

0.00 All less than 15%





S SPEND FOR PO TYPE = ((SMI + JIT)+(CRP*0.75))

TOTAL SUPPLIER SPEND% = X 100

N

1 N = No. of Suppliers w/ SMI, JIT & CRP

Logic:

Calculate spend for Purchase Order source type

((SMI+JIT) + (CRP*0.75) then divide by total spend

at supplier level.


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Score Definition

0.00 Payment terms are less than 60 days

2.00Payment terms are equal to or greater than 60

days, but less than 80 days


days, but less than 90 days


days

Terms of Payment

Purpose: To increase the number of suppliers that align to Flex’s preferred payment terms.

Calculation is based on the SITE terms in the Business Partners’ table in MDSS (not the Global Terms table).

The global score is the average of site scores, however the supplier should provide the same

payment terms to all sites. If a site has less days in payment terms than other sites, it should be

escalated to the GCM.

SRS Measurements

Logic:

Using a table in MDSS that converts

all terms to a numeric value (number

of days), scores are based directly on

number of days.


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10

SRS Measurements

Purchase Order (PO) Automation %

Purpose: To improve PO processing by removing manually performed steps.

This measurement is based on the receipt transaction tables in MDSS. If field named “PO_FILE_EXC_FLG “ (Purchase Order File

Exchange) is greater than zero it means that it is not manual or tactical PO.

S Purchase Order File Exchange > 0

Total Received P.O. Lines

% = X 100

N

1 N = No. of Purchase Order

File Exchange greater than 0

Logic: If Purchase Order File is greater than zero, then 1 else 0.

The total 1’s and 0’s are used to calculate the PO Automation

percentage based on total count of PO sequence (line) numbers.

Purchase Order File Exchange Value indicates how the purchase

order was communicated to the Supplier.

0 – Manual or Unknown

1 – FSP

2 – EDI

3 – EDI/FSP

SMI, JIT, CRP, and CRP-VH are treated as automatic orders.

Score Definition







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11

SRS Measurements

Quality Performance

Purpose: To provide Sites, Business Segments and the Global Team with a centralized data report related to Suppliers

Performance in terms of Quality. This measurement requires site intervention to provide the required data. The

measurements are

-- Actual DPPM (Defective Parts Per Million)

-- SCARs Initiated (within the quarter)

-- SCARs Open Time

Quality Performance data is entered or uploaded into FlexWARE Rating Quality Factor as defined in Instructions for Quality

Performance Data Uploading, FMS-QMS-4-091-00.

Logic:

Quality PI = [(PI for DPPM Level * 0.5) +

(# of SCARs Initiated * PI for SCAR * 0.5)

+ (PI for SCARs Open Time)] * 100

Score Quality PI Definition

0.00 Greater than 250

1.00 Greater than 150 AND less or equal to 250

2.00 Greater than 50 AND less or equal to 150

3.00 Greater than -50 AND less or equal to 50

4.00 Less or equal to -50

https://flextronics365.flextronics.com/dms/gq/cq/Instructions for Quality Performance Data Uploading.pptx


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12

DPPM (Defective Parts Per Million) Level

Actual DPPM / Target DPPM

PI of DPPM Level

Corresponding Failure Rate if DPPM Target = 2000

<=1 0 <=0.2%

<=3 1 <=0.6%

<=30 3 <=6%

>30 9 >6%

1 <= Target DPPM <= 2000

Actual DPPM = Number of Defective Parts

Number of Used Parts X 1,000,000

SRS Measurements


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13

SCARs Initiated

The number of SCARs initiated during the quarter due to occurrences of nonconforming product and

therefore unable to be used in production.

SCAR Open Time

Open Days

(Average SCAR Open Time)PI for SCARs Open Time

0 - 5 -0.5

6 - 21 0

≥ 22 0.5

• SCARs can be Open or Closed.

• # of SCAR: SCARs where the supplier has

confirmed the issue and committed to

corrective action.

SCAR Reason Code PI for SCAR

SCAR Incoming 1

SCAR Production 1

SCAR Customer 0KM 3

SCAR Customer Field 3

SCAR Line Stop 3

It is the number of days from when a SCAR is initiated to when a SCAR is closed.

• Only SCARS initiated during the quarter are reported. There is

no need to count the SCARs initiated in the previous quarter.

• SCAR close date: Supplier has replied to SCAR and corrective

actions are evaluated and accepted by Flex.

• If SCAR is Open, SCAR Open Time = Today – Date Sent to

Supplier.

SRS Measurements


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14

SRS Measurements

Cost Reduction Program

Purpose: To increase the number of suppliers that have Cost Reduction Programs when doing business with Flex.

Based on the receipts extended price by item, commodity. If a supplier provides more than one (1) commodity, each commodity

score is weighted by total spend to obtain an overall price competitiveness rating for each supplier. Negative values in cost delta

means cost savings.

Score Definition

0.00 Cost Delta is greater than 2.0%

1.00 Cost Delta is greater than 0.5% and equal or less than 2.0%

2.00 Cost Delta is greater than -0.5% and equal or less than 0.5%

3.00 Cost Delta is greater than -3.0% and equal or less than -0.5%

4.00 Cost Delta is less or equal than -3.0%

Logic:

Weighted Average Cost (WAC) SCORE =

SUM (PO Price * Qty) / SUM (Qty) for all receipts

from the quarter..

N = No. of commodities from supplier[S1

NWAC SCOREx

SUPPLIER COMMODITY SPEND

TOTAL SUPPLIER SPEND

SCORE = ]


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15

SRS Measurements

Communication Performance

Purpose: To improve the communication processes between Flex and its suppliers.

Supplier’s communicationperformance is rated with the average of the following measurements:

- Quotation Response Score

- Environmental Response Score

If any of these measures is “N/A”,

the communication score is

calculated with the average of

other available measurements.

Score Definition

0.00 Average (Quotation Score, Environmental Score, PCN score) = 0

1.00Average (Quotation Score, Environmental Score, PCN score) is greater

than or equal to 0.1 and less than 1.5


than or equal to 1.5 and less than 2.5


than or equal to 2.5 and less than 4

4.00 Average (Quotation Score, Environmental Score, PCN score) = 4


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16

SRS Measurements

Quotation Response Time %

Purpose: To decrease the Suppliers’ Response Time to our Quotation Team (Global or Regional). Quotation Team

uses QuoteWin to process RFQs. This adds value to the customer with a quote process that is fast, responsive,

consistent and professional, as well as minimizes the costs associated with Flex’s worldwide quote operations.

Logic:

Number of On-Time Responses

divided by the Total Number of

Quoted Parts from supplier.

Score Definition

0.00 Less than 50%






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17

SRS Measurements

Environmental Response Time %

Logic:

If the Response Date is less or equal to the Due Date

then 1, else 0.

The total 1’s and 0’s are used to calculate the

response percentage based on the total count of

MPNs or lines.

S RESPONSE DATE <= DUE DATE

ALL REQUESTED LINES

% = x 100

N

1 N = No. REQUESTED LINES

Score Definition






Purpose: To decrease the Suppliers’ Response Time to our Environmental Team . Environmental Team uses PTC Windchill

to process environmental declarations requests.

This measurement is to ensure that the materials Flex sources and approves can meet all applicable regulations and

requirements. For more information, visit the Environmental Compliance Systems Webpage. All declaration efforts are

managed by the GBS (Global Business Services) Team via ServiceNow requests.

https://flextronics365.sharepoint.com/sites/quality/supplier_quality_systems/SitePages/Environmental Compliance Systems.aspx


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18

Actions Based On SRS Final Score

Final Score Status Improvement Actions to be Taken

0-0.99Poor

Suggest No-Use

Supplier must provide Improvement Plan (SIP) within 2 weeks of receipt of scores. Non-

response and/or lack of improvement may initiate SCARs and/or disqualification process.

1.0-1.99Needs

Improvement

Supplier must provide Improvement Plan (SIP) within 4 weeks of receipt of scores.

Business maybe diverted from suppliers needing improvement until improvement is made.

Non-response and/or lack of improvement may initiate SCARs.

2.0-2.99 Acceptable Supplier is performing on an average level with room for improvement.

3.0-4.0 World ClassSupplier has potential to become a preferred supplier and to receive additional quote

opportunities and/or business.

While the SRS Team is responsible for providing the SRS process,

GCMs and Site Materials personnel are responsible for working with

suppliers to improve SRS score.

See SRS Supplier Rating System Process, FMS-QMS-2-005-00,

for additional information.

https://flextronics365.flextronics.com/dms/gq/cq/SRS Supplier Rating System Process.pdf


Revision: B



Thank you!

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