2000 STARS - Cessna Integrated Supplier Portal · number one supplier of aircraft and related services in the markets we serve, the Supplier Tracking And Rating System (STARS) continues

1 Company Confidential

2000 STARS


Cessna STARS 2000 Ratings Explanation

In accordance with the Cessna Aircraft Company vision to be the world’s

number one supplier of aircraft and related services in the markets we serve,

the Supplier Tracking And Rating System (STARS) continues to improve. This

improvement is seen in STARS 2000 and in our electronic monitoring and

communication methods.

STARS 2000 sets competitive standards for achieving excellence in the

categories of Quality, Schedule, Reliability, Cost, and Collaboration. Based on

these standards, scores included on your STARS 2000 report reflect Cessna’s

perception of your performance by category for the past 12 month period.

Your Overall company rating is equal to the average of numeric ratings for all

categories rated. Cessna appreciates your efforts to provide products and

services that meet or exceed acceptability standards.

Questions regarding your ratings should be directed to 1) the Cessna

Commodity Team representative designated for the applicable functional

category rating or 2) your Cessna Buyer.


Cessna STARS 2000 Overview

Cessna STARS consists of 5 Metric Ratings Quality

Factors in Performance (rejects), Impact (SCARs and Disclosure

Letters) and Complexity (Spend/Commodity)

Schedule

Based upon the number of items received designated as “On Time”

Reliability

Based upon the field performance of a supplier’s parts

Cost

Based upon the supplier’s ability to provide market competitive

pricing, desired terms, and procurement automation.

Collaboration

→Based upon participation in program initiatives.

The Overall STARS score is set equal to the

average of the 5 metric scores


STARS Rating Structure

Rating

Quality Schedule

Reliability Performance

PPM

40%

Impact Complexity

20%

(Based on Total Number of Pieces

Received) SCAR 10% LDR 30%

1 Outstanding

< 100 PPM 0 SCARS

0 Disclosure Letter/LDR Very Low

100% OTD 100%

2 Superior

<1,000 PPM

1 SCAR Low

> 99% OTD >= 98%

3 Acceptable

<5,000 PPM

2 SCARS 1 Disclosure Letter/LDR

Medium

> 98% OTD >= 95%

4 Marginal

<7,500 PPM

3 SCARS High

>95% OTD

>= 92%

5 Unacceptable

>=7,500 PPM

>3 SCARS >1

Disclosure Letter/LDR

Very High <= 95% OTD < 92%

5

STARS Rating Structure

Company Confidential

Rating

Cost Collaboration

Terms 20%

Automation

10%

Overall Value

70%

SOI/VMI/VAS

60%

ASN

10%

Program Contribution

25%

Compliance

5%

1 Outstanding

2%15N90 Yes Deflation

>2% Implemented Yes Yes 90-100%

2 Superior

Net 90

Deflation <2%

Signed

Contract/

Amendment

80-89%

%15N60

3 Acceptable

Net 60

Firm Fixed

Verbal

Commitment

70-79%

%15N45

4 Marginal

Net 45

Cost Sharing

On Opportunity

List 60-69%

%15N30

5 Unacceptable

Net 30 No Inflation No No No <60%


STARS – Quality Metric


2000 Quality Metric

Inclusions: Spares Orders

Exclusions: Rework Orders/Repair Orders

Timeframe: Past 12 Months

Reversals: If a part is returned to the supplier for evaluation due to an NC and the supplier finds the part to be a No Fault Found (NFF), then returns the part to Cessna, a Cessna Quality Engineer will evaluate the returned part performance through production. If the part successfully functions through flight, the Quality Engineer will honor the reversal request. If the part fails a second time, the Quality Notification stands as a charge to the supplier.


QUALITY METRIC CALCULATION

Performance (PPM) = 40% of overall score PPM is calculated as: (# of defectives / # of

receipts)*1,000,000

Impact = 40% of overall score 10% Quantity of SCARS issued

30% Quantity of Disclosure Letters received

Complexity (Spend/Receipts) = 20% of overall score Complexity is calculated by total spend divided by the

total number of parts received


QUALITY METRIC CALCULATION

STARS

Category Sub-Category

Sub-

Category

Weight

Score Criteria

1 0 SCAR

2 1 SCAR

3 2 SCARs

4 3 SCARs

5 > 3 SCARs

1 0 DL

2

3 1 DL

4

5 > 1 DL

1 < 100

2 < 1,000

3 < 5,000

4 < 7,500

5 > 7,500

1 < $5.00 2 $5.01 – $50.00

3 $50.01 – $500.00

4 $500.01 –$10,000

5 > $10,000

Qu

alit

y

SCAR

(qty of SCARs) 10

Disclosure Letter

(qty of parts ) 30

PPM

(# of defectives/# of

receipts)*1000000

40

Complexity

(Spend/qty recv'd) 20

10

Quality Rating Example


Supplier STARS Quality Score = 2

• Supplier’s PPM is 1250 = a score of “3” x 40% = 1.2

• Supplier has received 1 SCAR = a score of “2” x 10% = .2

• Supplier has 0 Disclosure Letters = a score of “1” x 30% = 0.3

• Supplier’s Complexity = a score of “3” x 20% = 0.6

Category Value Net Score

PPM 3 1.2

SCAR 2 0.2

Disclosures 1 0.3

Complexity 3 0.6

Combined Quality Score

2 2.3


1 Outstanding = 1-1.5

2 Superior =1.51-2.5

3 Acceptable = 2.51-3.5

4 Marginal = 3.51-4.5

5 Unacceptable

= 4.51-5.0


Quality Rating Example

• Supplier’s PPM is 750 = a score of “2” x 40% = 0.8

• Supplier has received 2 SCAR = a score of “3” x 10% = .3

• Supplier has 2 Disclosure Letters = a score of “5” x 30% = 1.5

• Supplier’s Complexity = a score of “5” x 20% = 1.0

Category Value Net Score

PPM 2 0.8

SCAR 3 0.3

Disclosures 5 1.5

Complexity 5 1.0


4 3.6


1 Outstanding = 1-1.5

2 Superior =1.51-2.5

3 Acceptable = 2.51-3.5

4 Marginal = 3.51-4.5

5 Unacceptable

= 4.51-5.0

Supplier STARS Quality Score = 4


STARS – Schedule Metric


2000 Schedule Metric

Inclusions: Spares Orders

Exclusions: Rework Orders, Experimental Orders,

Indirect Purchases, Partial Farm-Out Orders, Value Added Suppliers

Timeframe: Past 12 Months

Categories:

Traditional Purchase Orders

This includes standard purchase orders and auto purchase orders

Min – Max Parts

VMI Parts

Rota-Bin Suppliers

VMI Just-In-Time Suppliers

Blanket Purchase Orders


2000 Schedule Metric

Cessna uses the concept of a “perfect order” when measuring the

delivery performance of its supply base.

Accordingly, the Cessna STARS Schedule metric measures the

number of pieces against a purchase order line item that are

received on time.

This allows the Supplier to get credit for partial deliveries received on

time as opposed to the entire quantity.

A 7 day tolerance window is used for determining if an order is on

time.

This window is defined as any delivery received between 0 days late

and 7 business days early.


Schedule Rating Example

Delivery Example

Purchase

Order

Line

item

Scheduled

Delivery Date Qty

Receipt

Date

Receipt

Quantity

On Time

Receipt

45AAAAA 10 1/15/09 100 1/10/09 100 100

45AAAAA 20 2/1/09 200 1/15/09 200 0

45CCCCC 10 4/15/09 500 4/15/09 300 300

45CCCCC 10 4/15/09 500 4/18/09 200 0

45DDDDD 10 8/16/09 10 8/10/09 10 10

45DDDDD 10 9/16/09 200 9/12/09 200 200

45DDDDD 20 9/16/09 200 9/10/09 200 200

45EEEEE 10 11/18/09 10 11/19/09 10 0

45EEEEE 10 12/11/09 10 12/9/9 10 10

• Quantity of PO-Line Items Scheduled for Delivery in past 12 months = 1,730

• Quantity of On-Time Receipts in past 12 months = 810

• Supplier On Time Delivery Score = 810 / 1,730 = 46.8%

• Supplier STARS Schedule Score = 5


The STARS Schedule Metric calculation compares the scheduled due date and line item quantity on the purchase order with the actual receipt date and pieces received.

If the gate receipt date is later than the scheduled date that line item is considered late for total pieces not received on time.

If the gate receipt date is more than seven manufacturing days before the scheduled date, the line item pieces received are considered early.

2000 Schedule Metric – Traditional Orders


2000 Schedule Metric – Min-Max

This STARS Schedule Metric calculation for Min-max parts is based upon the current on hand inventory level and the min-max levels set for the part number & plant location.

The evaluation is done at the time of receipt as it relates to min-max range.

If the part quantity received plus on-hand inventory exceeds the Max then the order is considered early.

If on-hand inventory is less than Min at the time of receipt the shipment is considered late.


2000 Schedule Metric – VMI

VMI Rotabin:

The STARS Schedule Metric Calculation compares the scan date and quantity to the bin delivery date.

If the difference between the dates exceeds five manufacturing days, the order is considered late.

VMI Rotabin parts cannot be evaluated as early.

VMI Avionics:

On site Avionics suppliers are treated like Traditional Purchase Order suppliers.

The only difference is the on-time window has been modified to consider 7 days early and 30 days late to enable just-in-time delivery.


2000 Schedule Metric – Blanket Orders

Since a blanket purchase order only has the scheduled delivery date set at a point in the future, deliveries against these purchase orders will all be considered as early.

Therefore, the STARS Schedule Metric calculation for blanket purchase orders are handled separately.

All items on a blanket purchase order should have a STAT date set to 12/31/9999.

Any Receipt against a purchase order line item dated 12/31/9999 is considered as an On Time delivery.


SCHEDULE REVERSALS

Initiation of Reversal: Suppliers: Click on Schedule and the Schedule Summary Report appears. Click on

Schedule Detail and receiving numbers capable of reversal will be highlighted in blue. Click on the desired reversal and the reversal request form appears.

Complete the form and click on “Submit” at the bottom of the form making sure any attachments are included.

The electronic form is received by your Buyer. The Buyer dispositions the reversal request. The Buyer makes the

necessary schedule corrections on ZCSTARS in SAP.

Please Note: 1. The Receiving Report Number is not the PO number. Use the report

number found on the schedule detail found on supplier.cessna.com. 2. The receiving report item number is not the same as the PO line item

number. 3. The Received Date should be the date the shipment was due as

reflected in the schedule detail rather than the date Cessna received the shipment. All change/correction justification should be noted in the Justification for Reversal box only.

4. Corrections can be made up to 90 days after the discrepancy occurred. Afterward, it is up to the Buyer’s discretion to accept reversals requested.


STARS – Reliability Metric


Reliability Rating

Raw data is gathered by CAMP

Each part number/model installation is a line item in Trend

Each line item is assigned a code (1-12) based on it’s MTBUR value (or Mean Life/B10) and its growth value (+/-)

The total number of “good” coded parts over the total number of parts rated = % parts

Improving the reliability changes the part codes from the “bad” to the “good” and thus improves the rating percentage over time


Reliability Rating Notes

>= 95% is acceptable and is a 3 in STARS

Number of parts rated ≠ number analyzed

Difference is Code 9 & 12 parts

Also, not all supplier components are rated

MTBUR = 20% lower than MTTF (to account for NFF)

Cessna Reliability Department prioritizes the components to work based on customer satisfaction criteria

Codes 1, 2, 5, 6, 8, 10 are “good” codes

Codes 3, 4, 7, 11 are “bad” codes

Codes 9 & 12 have no impact in STARs


Good Codes

Code Explanation

1 Above Requirement - Positive Growth Trend

2 Above Requirement - Negative Growth Trend

5 Insufficient Removals Data

6 Below Requirement - Acceptable Growth Trend

8 MTBUR Delay Date and Reliability Growth Rate

10 Above Requirement - Mean Life or B-10 Life

Components are generally above requirement and/or have positive trend

Components that are new to trend (Insufficient Data until 5 installs and >=3 removals)

Components that are being monitored due to corrective action implementation


Code 8 Explained

Rating is delayed (monitored by Reliability) for 6 mo. due to Corrective Action Implementation

Criteria for RCCA Closure Root cause is understood

Corrective action will bring component above requirement

Engineering changes are complete

Production aircraft serial cut-ins are set (if app)

Business plan is mutually agreed upon by Cessna and supplier

Field plan is understood and scheduled (if needed)

Cessna SB/SL release date is imminent or established


Other Codes

Below Requirement & Require Corrective Action

Have no impact on Rating

Code Explanation

9 Data excluded from rating Calculation

12 Not rated due to low priority

Code Explanation

3 Below Requirement - Positive Growth Trend

4 Below Requirement - Negative Growth Trend

7 Below Requirement - Unacceptable Growth Trend

11 Below Requirement - Mean Life or B-10 Life


Code Logic Explained


( ) 63 26+21+13+2+0+0 *100=98.4%

Reliability Rating Example

*The part population

rated in STARS only

includes models that

have been out of

production less than

5 years.


To Improve Reliability Rating

Focus on working priority parts (as defined by Reliability dept) for customer satisfaction

Implement corrective action on top Pareto drivers contributing to removals to reach and/or exceed MTBUR requirement

Maintain low or decreased removal rate

Keep growth rate positive with goal of > .30 (industry standard)

Communicate with Cessna Reliability Contact on part obsolescence, part number rolls, and design changes affecting reliability

Be proactive and initiate corrective action as soon as possible to maximize number of parts in “good” codes


STARS – Cost Metric


2000 Cost Metric

Inclusions: Production and Spares Orders (On LTA)

Exclusions: Rework Orders, Experimental Orders,

Indirect Purchases, Farm-Out Orders, Value Added Suppliers

Cessna evaluates a supplier’s ability to provide Cessna with competitive part

pricing, terms, and participation in purchase order automation.

Terms are rated based upon your percent discount and/or Net terms offered.

This is a 12-month rolling score and is weighted as 20% of your Cost score.

The Automation scoring on the Cost Metric is based on your participation in

purchase order automation (Auto-PO and Min-Max). This is a 12-month

rolling score and is weighted as 10% of your Cost score.

The Overall Value portion of the Cost metric is the overall estimated price

change based on indices and is determined on a yearly basis and is

weighted as 70% of your Cost score.


2000 Cost Metric - Terms

Rating is determined as follows: 1 Outstanding 2%15N90

2 Superior Either Net 90 or X%15N60

3 Acceptable Either Net 60 or X%15N45

4 Marginal Either Net 45 or X%15N30

5 Unacceptable Net 30

Terms Represents 20% of the Cost Metric Score

Example:

Your terms are 1%15N45

Your score = 3

3 X scoring weight of .2 = .6

.6 + Automation Score + Overall Value Score = Cost Metric Score


2000 Cost Metric - Automation

Automation Represents 10% of the Cost Metric Score

Rating is determined as follows:

1 Outstanding Yes

5 Unacceptable No

Example:

You participate in Automation

You participate in Min-Max or Auto PO = 1

1 X scoring weight of .1 = .1

.6 + .1+ Overall Value Score = Cost Metric Score


2000 Cost Metric - Overall Value

Overall Value Represents 70% of the Cost Metric Score


1 Outstanding Deflation > 2%

2 Superior Deflation < 2%

3 Acceptable Firm Fixed

4 Marginal Cost Sharing

5 Unacceptable Inflation


2000 Cost Metric – Overall Value (Cont’d)

Example:

Your Overall Value is Firm Fixed

Your Overall Value Score = 3

3 X scoring weight of .7 = 2.1

.6 + .1+ 2.1 = 2.8

2.8 = a Cost Metric Score of 3

SCORING SCALE:

1 Outstanding 0.01-1.5

2 Superior 1.51-2.5

3 Acceptable 2.51-3.5

4 Marginal 3.51-4.5

5 Unacceptable 4.51-5.0


STARS - COLLABORATION METRIC


2000 Collaboration Metric

The Collaboration Metric was designed to capture supplier

involvement and commitment to Cessna initiatives that drive

down the total cost to produce aircraft.

This metric is scored based on four categories:

SOI/VMI/VAS is scored based on your commitment to participation in this

procurement strategy. This represents 60% of the total Collaboration

Metric score.

ASN is scored based on usage of ASN’s for shipments. This represents

10% of the total Collaboration Metric score.

Program Contribution is scored based on cost sharing incentives

provided for New Programs. This represents 25% of the total

Collaboration Metric score.

Compliance is scored based on your provision of Country of Origin,

ECCN, and HTSUS codes for all parts shipped to Cessna. This

represents 5% of the total Collaboration Metric score.

38

SCORING SCALE:

1 Outstanding 0.01-1.5

2 Superior 1.51-2.5

3 Acceptable 2.51-3.5

4 Marginal 3.51-4.5

5 Unacceptable 4.51-5.0


2000 Collaboration Metric

39

SOI/VMI/VAS Represents 60% of the Collaboration Metric Score


1 Outstanding SOI/VMI/VAS Implemented

2 Superior Signed Contract/Amendment

3 Acceptable Verbal Commitment

4 Marginal On Opportunity List

5 Unacceptable No

If your company cannot participate in SOI/VMI/VAS, the Collaboration score will be based on the sum of the other three categories.


2000 Collaboration Metric – SOI/VMI/VAS

40

ASN Usage Represents 10% of the Collaboration Metric Score.

Scoring is determined as follows:

1 Outstanding Yes

5 Unacceptable No

This metric is based on number of receipt transactions and not total dollars received.

You must have a minimum of 50% ASN usage to score a “1”.

Example: If you have 10 shipments with receipts and three have ASN’s, your participation level is 30%.


2000 Collaboration Metric – ASN

41

This Category Represents 25% of the Collaboration Metric Score.

Scoring is determined as follows:

1 Outstanding Yes

5 Unacceptable No

Scoring is based on your willingness to partner in New Program development. Partnering can be represented by but not limited to rebates, free hardware, test equipment, etc.

This metric is updated annually.

If you are not able to participate in New Programs, your score is based on the sum of the other three categories.


2000 Collaboration Metric – Program Contribution

42

This Category Represents 5% of the Collaboration Metric Score.

Scoring is based on the following:

1 Outstanding 90-100%

2 Superior 80-89%

3 Acceptable 70-79%

4 Marginal 60-69%

5 Unacceptable <60%

This metric is scored at the part number level and is updated monthly.


2000 Collaboration Metric – Compliance

Documents

2000 STARS - Cessna Integrated Supplier Portal · number one supplier of aircraft and related services in the markets we serve, the Supplier Tracking And Rating System (STARS) continues