Supply Quality Assurance

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1 Supply Quality Assurance Electric / Gas T&D, Hydro, Solar and Fossil Fuel Power Generation 2014 Supplier Conference Jim Adamson Director, Supplier Quality Assurance

2 Engaging With Suppliers How Supplier Quality partners with you to achieve the requirements: Safe, Reliable, and Affordable Material To assure material functions safely, Quality requirements are based on Design specs. Reliability of Transmission/Distribution systems is dependent on quality materials Quality enables affordability through reduced scrap, rework, & production expediting Qualify New Suppliers, Manufacturing Sites, and Material QMS Audit Program surveys potential suppliers for ability to meet our requirements QMS Program routinely audits current supplier sites for compliance to maintain our QSL SQA Program conducts material qualifications for new designs and process changes Supplier Process Change Management Request SQA Program reviews supplier change requests that affect fit, form, or function of procured material This includes change in manufacturing site location, change in sub-suppliers, a two year break in production, and changes to key manufacturing equipment. SQA Program perform a desktop audit and/or site qualification, and approves change control

3 Engaging With Suppliers How Supplier Quality partners with you to achieve the requirements: Supplier Corrective Action Request (SCAR) Warning and containment if there is a material problem Corrective action (SCAR) that identifies and corrects discrete and systemic problems Timely Return Material Authorization (RMA) number when PG&E needs to return discrepant material Receiving Inspection & Issue Resolution Standardized plan and contacts for timely onsite material sorting by supplier Documented results for material sorting and proper re-identification of material inspected Material Quality & KPI Metrics Supplier trends safety incidences (Near Hit, Event) and proactively addresses required improvements Supplier s trends internal quality rejects for Receiving, In-Process, Final Inspection, & PG&E identified Supplier s Corrective Action Program documents the improvement plan for all nonconformances

4 Rating our Suppliers How We Rate Suppliers: DPPM: At or below requirement each month Audits / SCARs: Adequate, timely response with no repeated issues Qualifications & Change Management: Adequate, timely & transparent Communication: Proactive notification of significant quality events Scorecard Impact on Sourcing: Future allocations are dependent on the supplier s score. If requirements are not maintained it may lead to supplier probation and the product line being diverted to alternate suppliers that are meeting the requirements.

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6 20,000 18,000 18,448 4th Quartile to 1st Decile Performance DPPM for All Lines of Business Combined Performance Benchmark Quartiles 4 th 20,800 16,000 14,000 12,000 10,000 3 rd 10,100 8,000 6,000 4,000 2,000-5,593 1,145 2,418 2,525 3,599 5,003 3,147 1,611 1, #N/A #N/A #N/A 2, Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 YTD DPPM 12 Mo Average Target 2 nd 6,000 5,000 1 st 4,200

7 Electric DPPM DPPM 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2, Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 YTD

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10 New SAP Qualified Supplier List (QSL) Functions Easy identification of approved supplier sites & products Audit schedule for initial site qualification & requalification Tracking of QMS nonconformances & performance Related site & subsupplier information & contacts

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14 1. DPPM SQA Vison for 2015 and Beyond 18,000 18,700 Forecast for Annual DPPM Requirement 15,000 12,000 9,000 6,000 3, ,000 7,500 5,625 3,800 4,219 2,850 2, Gas Electric 2. Material Quality Oversight for EPC Contracts 3. Gas & Electric Transmission DPPM Tracking 4. Department ISO9001:2015 Certified

15 Question & Answers Safety Reliability Affordability Team Work is the Enabler

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