Cymer Supplier Handbook 63894l

8/8/2019 Cymer Supplier Handbook 63894l

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Supplier HandbookRev 1.0 (February 2008)

Vision

Cymers vision is to be number one in the Technology and Information Equipment market by being

the best at commercializing tomorrows technology into compelling products today.

We are committed to supplying world class products and services to our customers and we recognize

that our suppliers play a critical role in achieving this commitment. Cymer actively seeks supplierswhose objectives are compatible with ours. We especially value suppliers that offer us new ideas

through innovative technology or creative business techniques.

The purpose of Cymers Supplier Handbook is to educate our suppliers (existing and potential) ofCymers supplier management process and expectations.

Objectives

Cymers Supplier Management objectives are to:

1. Achieve predictable delivery and quality that meets or exceeds our Purchase Specification

requirements;

2. Maintain a competitive cost of ownership; and

3. Minimize supply line risk.

To achieve these objectives, our focus must be on continuous improvement in the quality of all

products and services. By making our suppliers an integral part of our overall quality process, we canbuild better products right from the start.

As dictated by the semi-conductor tool industry, suppliers must also be extremely agile and capable inorder to adapt to the rapid changes in design and manufacturing strategies. Reducing the time it takes

to develop and deliver products and services will help bring Cymers product to market sooner and

reduce inventory exposure for both Cymer and our suppliers.

To improve product cost and performance, Cymer and its suppliers must consider all factors that make

up the true value of the product or service being purchased. Joint efforts to identify value and

maximize results are the basis for intelligent buying decisions and will ensure higher quality at lowertotal cost.

There is no one-size-fits-all approach to achieving these objectives. Cymers supplier managementprocesses are flexible. Figure 1 illustrates the variety of categories of products and services supplied

to Cymer in terms of the complexity of the product or service along with the value of Cymers spends.

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Figure 1

Sourcing Categories

Much of the supplier management processes and infrastructure described throughout this Handbook

apply to all Cymer suppliers. However, we have a special designation for suppliers in the strategicsourcing category of Figure 1. Strategic sourcing is defined as the building of long-term supplier

relationships to meet our current and future needs for goods and services.

Integrated Supplier Management

A limited number of suppliers in the strategic sourcing category in Figure 1 are especially critical to

Cymers success because of their unique technical expertise and/or their ability to delivery a highvolume of quality product in a flawless manner. These suppliers are introduced to our IntegratedSupplier Management program. Suppliers achieving this level of distinction have demonstrated their

unique value to Cymer and receive a large percentage of our business in their respective commodity.

Integrated Suppliers have a preferred status within Cymer when new sourcing decisions areconsidered. These suppliers are also first to be notified of outsourcing opportunities and higher-level

integration of Cymer modules and components. Integrated Supplier Management is an opportunity

for both Cymer and Supplier to strive for total process optimization and realize shared gains. Thelevel of increased interaction between the two companies is illustrated in Figure 2.

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Figure 2

Integrated Supplier Management

Integrated Suppliers benefit from a structured, executive level alignment with Cymer, focused on

shared goals, metrics, and objectives. We work closely with Integrated Suppliers to seek out

opportunities for shared risk and cost reduction that benefit both companies.

Suppliers that dont qualify for the Integrated Supplier program are considered either Key or

Valued as shown in Figure 3. Depending on the suppliers criticality to Cymer business, there maybe a need for focused attention to specific issues. If not, suppliers are approved for use and in this

case, Cymers supplier management objective is effective demand planning and execution.

Figure 3Supplier Relationships

Integrated

Suppliers

Highly Aligned

Key Suppliers

Highly Capable

Valued Suppliers

Highly Qualified

Developed &

Managed

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Organizational Structure

From a supply chain management perspective, suppliers may have multiple interfaces with Cymer, but

each suppliers support plan will be determined by their Cymer classification. The three supplierclassifications are: Integrated, Key, and Valued. For Integrated Suppliers, a unique support plan willbe established for each relationship. The following descriptions highlight the roles and

responsibilities for some of the key supplier interface points at Cymer.

Supplier Development: Supply Chain Managers (SCMs) are the focal point for all strategic sourcing

activity. The SCM sets the strategic direction for a commodity (e.g., optics, fabricated parts, pulse

power, contract manufacturing, etc.) and serves as the Business Manager for any suppliers in thesecategories. There may be multiple SCMs assigned to a commodity and each SCM manages multiple

suppliers.

SCM key roles & responsibilities:

x Sets supplier classifications

x Negotiates commercial terms

x Manages a suppliers consolidated cost, quality, & delivery performance

x Serves as escalation point for Cymer commercial & technical issues when necessary

x Serves as the Business Manager for Integrated and Key suppliers

x Establishes key objectives for the commodity/category and gains management approval forkey sourcing actions

x Issues specifications with Request for Quotes and Proposals

x Receives and provides long run capacity requirements

x Provides long run outlook for Cymers demand; based on customer ordering, marketconditions, and sourcing

x Develops sourcing strategies and allocates business among multiple suppliers

Integrated & Key Suppliers within a commodity are expected to assign Business Managers to the

Cymer relationship. The Business Manager guides the supplier/customer relationship and serves as a

single point of contact on both technical and commercial issues, as illustrated in Figure 4.

Figure 4

Integrated & Key Supplier Team Structure

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Supply Chain Engineers (SCEs) are an important part of the Supplier Development team as well.They bring the expertise from our Manufacturing Engineering department to drive supplier quality

improvement and help set a commodity-wide strategy and sourcing allocations. SCEs are deeply

aware of Cymers technical requirements as well as the capabilities of the supply base for which theyare responsible. It is the SCEs primary responsibility to ensure these requirements and capabilities

are optimally matched.

SCE key roles & responsibilities:

x Executing Supplier Audits & reviewing supplier self audits,

x Developing qualification and re-qualification plans in conjunction with Cymer Engineering

x Evaluating change requests by suppliers

x Communicating corrective action requests (CARs) to suppliers

x Approving packaging proposals and/or requesting packaging improvements

x Reviewing First Article Inspection (FAI) reports

Procurement: Buyers & Planners are the focal point for all purchases, forecast, delivery and all otherpurchase order information.

Buyer/Planner key roles & responsibilities:

x Provides rolling production forecasts on a part number basis

x Places purchase orders

x Provides delivery requirements

x Receives input from supplier regarding specific shipping information

x Evaluate/Approve Engineering and Supplier initiated Change Orders (COs)

x Leads Return Material Authorization (RMA) process with supplier

x Provides feedback on delivery performance

x Determines Incoming Quality Control (IQC) requirements

x Dispositions Defective Material Requisitions (DMRs)

New Product Development (NPD) Procurement: Buyers & Planners within the NPD group focus onmeeting Engineerings supply chain needs prior to product release. NPD supports Cymers design

efforts for new product introduction and work closely with the SCM and released products buyers &

planners to define the transition from Development to Released Product.

NPD key roles & responsibilities:

x Provides delivery requirementsx Issues specifications and Request For Quotess

x Places expedited/quick turn purchase orders

x Receives input from supplier regarding specific shipping information

x Processes change orders

x Helps suppliers expedite deliveries

x Leads RMA process with supplier

x Provides feedback on delivery performance

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Supplier Quality & Reliability

Supplier quality & reliability is critical to both the success of Cymer and its customers. Therefore, aphilosophy of continuous improvement has been adopted. Suppliers are strongly encouraged to bring

forward quality and reliability improvements in the spirit of partnership. While Cymer doest not invokespecific quality management system requirements such as ISO9000, SSQA, AS9000, QS9000, or TL9000,we do expect suppliers to implement a quality management system that score a minimum 3.5 out of 4.0

on the Cymer Supplier Evaluation Audit. Any individual area that scores 3.0 or less must be addressed

and corrected with 90 days of completing the audit. Generally, once a supplier successfully completes the

initial assessment, there is no firm timeline for being re-audited, however Cymer reserves the right torequest a new audit at any time. For example, Cymer may request a revised audit prior to awarding a new

contract, renewing an existing contract, or if Cymer is experiencing deliver or quality issues.

Once a supplier passes the Supplier Evaluation Audit requirements, we may begin ordering product. The

following is a description of the tools Cymer uses to manage supplier quality & reliability on an ongoing

basis.

Change Notification

Suppliers are expected to notify Cymer if any changes made to the product affect the fit, form, orfunction in Cymers application. Additionally, if the change involves a material move of the

manufacturing location, for example, off shoring to China, Cymer must be notified in order to ensure

proper export licenses are in place and to properly document the manufacturing location of purchased

parts.

First Article Inspection (FAI)Suppliers are required to submit first articles to Cymer for review and approval on any new part. The

supplier is responsible for documenting verification results and providing the documentation along

with the part submission. First Article Inspection (FAI) Forms can be requested from a Supply ChainManager or Supply Chain Engineer. All parts received by Cymer are inspected in Incoming Quality

Control (IQC). If the part does not meet requirements, a Defective Material Requisition (DMR) will

be generated to document the discrepancy, and the supplier will need to provide a new first article thatconforms to established requirements.

Incoming Quality Control (IQC)The frequency and depth of incoming quality inspection depends on the type of part being received

and its criticality to Cymers end products. The inspection process may include dimensional,

cosmetic (physical appearance), functional, nondestructive, go-no-go (go-limit gauges) inspections

and optics visual inspections and optics testing of specifications.

Non-Conforming Material (DMR)

Nonconforming material is documented by Cymer in a Defective Material Requisition (DMR) andquarantined pending review. Suppliers must act quickly in resolving nonconforming material issues.

Containment and corrective action are imperative. The expectation is 48-hour turnaround time for

return material authorizations (RMAs) for items dispositioned by Cymer as return to vendor (RTV).

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Problem Solving

Cymer uses the 8D (Eight Discipline) problem solving methodology with its customers and we expect

our suppliers to do the same. This is a structured problem solving process that ensures a high quality

response to a serious customer issue or complaint. The process employs a comprehensive teamapproach and focuses on containing the customer symptoms as quickly as possible. Once the problem

is contained, the process requires objective data and problem solving techniques be used to determinethe root cause and ensure permanent corrective actions are put in place to limit the chance forreoccurrence.

Training on the 8D problem solving methodology is commercially available, and there are numerous

books and websites available on this subject.

Scorecard

The objective of Cymers supplier scorecard is to strengthen our supplier relationships by providing

objective and regular performance feedback. Through this evaluation tool, we are able to set clear

expectations and monitor supplier progress toward meeting these goals. The scorecard is divided into5 categories: Delivery, Quality, Total Cost, Technology/Engineering, and Customer Service. The

categories are weighted differently depending on which commodity the supplier is supporting (e.g.,

optics vs. contract manufacturing). Scorecard results are collected on a quarterly basis and reviewedinternally as shown in Figure 5.

Figure 5:

Supplier Scorecard Trend

0%

100%

1stQtr

2ndQtr

3rdQtr

4thQtr

Supplier 1

Supplier 2

Supplier 3

Goal

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Supplier Selection

Cymer follows the process in Figure 6 when making sourcing decisions.

Figure 6

Supplier Selection Process

The requirement for Cymer to source a new part can come from a variety of places (e.g., new

technology is required for next generation product offerings or there is a desire to 2nd

source or replace

an existing source). Once the need for a new part or module is identified, and we decide to outsource,suppliers are contacted to complete a Request for Quote (RFQ). Cymer may also decide to conduct an

Initial Supplier Assessment and/or a quality and business audit to determine the suppliers capabilities

and ability to ramp to meet Cymers high volume requirements.

Cymers quest for predictable quality, delivery, performance, and other strategic objectives,effectively limits the number of suppliers that meet our requirements. Successful sourcing at Cymer

is not achieved solely on the basis of securing competitive bids. We are not looking for the lowest

prices, but for the best value on a total cost basis. Companies under consideration as potential

suppliers are evaluated in a process using the following criteria:

x Predictability

x Quality

x Delivery

x Product Performance

x Process Control

x Cost Competitiveness

x Technology Innovation

x Financial Stability

x Service

Once a suppliers competencies in these areas are understood, we make our sourcing decision and will

work closely with the supplier to set up the long-term business relationship. This may include the useof Purchase Orders, Development Contracts, and/or Purchase Agreements.

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Contact Information

http://www.cymer.com/

Supporting Process Documents

Cymer will provide additional process documents to suppliers and potential suppliers upon request to theSupply Chain Manager (SCM) or Supply Chain Engineer (SCE). These documents include:

1) Cymers Audit Agenda, Self Assessment Form, and Audit Process Form

2) Cymers First Article Inspection (FAI) Report Form

3) Cymers 8D Problem Solving Report Form required for all corrective action requests (CARs)

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