Compaq Computer Corporation and Subsidiaries - Page 16




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               In evaluating potential subcontractors, Compaq U.S. required           
          subcontractors to have significant manufacturing experience,                
          financial stability, competent management, and strong                       
          engineering.  Compaq U.S. developed the World Class Supplier                
          Process Survey (the WCSP) to evaluate new subcontractors and to             
          provide feedback to existing subcontractors.  This survey takes             
          into consideration quality system management, documentation,                
          procurement, manufacturing and material control, final                      
          acceptance, calibration, quality information, and statistical               
          process control.  The Compaq U.S. Commodity Management Team (CMT)           
          was responsible for administering the WCSP and evaluating PCA               
          subcontractors.  In selecting subcontractors, the CMT chose                 
          subcontractors to complete the WCSP, and, from this information,            
          the CMT picked which subcontractors to visit and evaluate.                  
               Compaq U.S. preferred that unrelated subcontractors use the            
          same Fuji manufacturing equipment, GenRad test equipment, and               
          programs in their manufacturing process that Compaq U.S. used in            
          manufacturing PCA's.  This allowed Compaq U.S. to provide                   
          customer support to its unrelated subcontractors and to                     
          troubleshoot a problem because it was familiar with the                     
          equipment.  In addition, the same equipment allows the unrelated            
          subcontractors to use the same programs.  Compaq U.S. also                  
          preferred its subcontractors to use the continuous flow rather              
          than the batch manufacturing process, although most                         





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Last modified: May 25, 2011