from the Far East Toru, 21st June 2010 Import - - PowerPoint PPT Presentation

• Purchase of electronic components

from the Far East

Toruń, 21st June 2010

Import from Chinese People’s Republic to EU countries

74 632 82 000 90 148 106 220 128 590 160 327 194 932 232 620 247 916 7,5% 8,4% 9,6% 11,4% 12,5% 13,6% 14,4% 16,2% 17,4% 15,8% 50 000 100 000 150 000 200 000 250 000 300 000

2 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 1 H 2 9

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Import value of EU countries from ChPR (m EUR) Share of import of EU countries from ChPR in total import (%)

Trade between Poland and Chinese People’s Republic in 2009 was in value of 11 bn EUR, where the import to Poland was in value about 10 bn EUR.

Increase of unit labour cost in the world

World market shares of high&tech products

Forecast of the share in the world PKB

Geographical structure of purchases

Total purchases of Grupa Apator in 2009 were 121 m PLN Total purchases of Apator in 2009 were 40 m PLN

Europe 24% Home 66% Far East 10%

Far East 15% Home 63% Europe 22%

Apator SA

Non-ferrous products 1% Electronicts 54% Electrical engineering 41% Plastic products 2% Other materials w ith products on iron alloy 2%

Share in purchases in the Far East

Grupa Apator

Non-ferrous products 23% Electronics 28% Electrical engineering 21% Plastic products 1% Other materials with products on iron alloy 27%

30% 40% 50% 60% 70% 80% 90% 100% 110%

kwiecień 2005 czerwiec 2005 sierpień 2005 październik 2005 grudzień 2005 styczeń 2006 marzec 2006 maj 2006 lipiec 2006 wrzesień 2006 listopad 2006 styczeń 2007 marzec 2007 maj 2007 lipiec 2007 wrzesień 2007 listopad 2007 styczeń 2008

GW 12EA5 - 1 fazowy GW 16EC3 - 3 fazowy

Changes in costs of materials of electronic elements for electronic electricity meters & GW type meters

GW type meter

till 07.2005 Memec’s display was used in 08.2005 chinese display was introduced in 10.2005 1-circuit board meter was introduced in 12.2005 meter with field sensor was introduced

40% 50% 60% 70% 80% 90% 100% 110%

m a r z e c 2 8 k w i e c i e ń 2 8 m a j 2 8 c z e r w i e c 2 8 l i p i e c 2 8 s i e r p i e ń 2 8 w r z e s i e ń 2 8 p a ź d z i e r n i k 2 8 l i s t

• p

a d 2 8 g r u d z i e ń 2 8 s t y c z e ń 2 9 l u t y 2 9 m a r z e c 2 9 k w i e c i e ń 2 9 m a j 2 9 c z e r w i e c 2 9 l i p i e c 2 9 s i e r p i e ń 2 9 w r z e s i e ń 2 9 p a ź d z i e r n i k 2 9 l i s t

• p

a d 2 9 g r u d z i e ń 2 9 s t y c z e ń 2 1 l u t y 2 1 m a r z e c 2 1 k w i e c i e ń 2 1

GR 12EA5 - 1 fazowy GR 16EC3 - 3 fazowy

GR type meter

In II and III quarters of 2008 1-circuit board was introduced Changes caused by exchange rate of EUR and USD at the turn

• f 2008

Changes in electronic material costs for electronic electricity meters – GR type meters

three phase meters

80,00 100,00 120,00 140,00 160,00 180,00 200,00 220,00 240,00 260,00 280,00 1Q2005 2Q2005 3Q2005 4Q2005 1Q2006 2Q2006 3Q2006 4Q2006 1Q2007 2Q2007 3Q2007 4Q2007 1Q2008 2Q2008 3Q2008 4Q2008 1Q2009 2Q2009 3Q2009 4Q2009 1Q2010

Prices of GW and GR type electronic electricity meters

• ne phase meters

40,00 50,00 60,00 70,00 80,00 90,00 100,00 110,00

1Q 20 05 2Q 20 05 3Q 20 05 4Q 20 05 1Q 20 06 2Q 20 06 3Q 20 06 4Q 20 06 1Q 20 07 2Q 20 07 3Q 20 07 4Q 20 07 1Q 20 08 2Q 20 08 3Q 20 08 4Q 20 08 1Q 20 09 2Q 20 09 3Q 20 09 4Q 20 09 1Q 20 10

max price of competition min price of competition price of Apator

0,0 0,2 0,4 0,6 0,8 1,0 1,2 1,4 1,6 1,8

1-2Q2008 1-3Q2008 1-4Q2008 1Q2009 1-2Q2009 1-3Q2009 1-4Q2009

12EA5 GR 16EC3 GR

Changes in profitability of technical manufacturing costs of GW and GR type meters

0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 1Q2005 1-2Q2005 1-3Q2005 1-4Q2005 1Q2006 1-2Q2006 1-3Q2006 1-4Q2006 1Q2007 1-2Q2007 1-3Q2007 1-4Q2007 1Q2008

12EA5 GW 16EC3 GW

Quality problems and economizing on purchasing in the Far East

Since 2007 occurred some quality problems of the displays being delivered from Chinese

• manufacturer. Those displays were installed in meters since the August 2005 and they were

delivered by the Polish distributor JM Elektronik in Gliwice. The seller in the reference list informed that the Chinese manufacturer also had manufactured the displays for Citroen, Bosch, Samsung and Mitsubishi. In 2008 Apator SA brought a case to a court in order to get the compensation of the costs of repairs from JM Elektronik (latent defect). The witnesses were examined and expert were selected by the court (from Warsaw University of Technology). In June 2010 experts took samples of the displays in

• rder to give expert opinion.

6 113 10 303

4 000 5 000 6 000 7 000 8 000 9 000 10 000 11 000

2005 - 2009

Cost of the replacement of the displays Economizing on components

Purchasing process of electronic components

Preventive actions:

• quality control by reliability testing of the products-procedure;
• auditing of manufacturers of electronic subassemblies – introduction of the

complete identification of the components from the suppliers by bar coding (for instance Hanza, Sims);

• delivery of critical elements only from famous manufacturers (for instance

Texas Instruments, STMicroelectronics, Microchips Technology Inc.) The rules of cooperation with the Far East:

• the representative in Chinese People’s Republic whose role is to make contacts

with manufacturers and quality control of their products;

• the departure twice a year to audit the manufacturers of subassemblies

Procedure of reliability testing of products and components

Reliability test procedure is used for:

• electronic components being used in

electronic metering equipment,

• printed circuit boards being used in

electronic metering equipment Procedure defines detailed rules and mode of proceeding in case of :

• acceptance of a new product for manufacturing,
• acceptance of substitute of electronic component for manufacturing,
• definition of requirements regarding reliability testing and additional special
• nes for selected electronic components,
• definition of the schedule for testing,
• statistic reliability testing for products

Procedure of reliability testing of products and components

• 1. Acceptance of a new product in respect of manufacturing:
• manufacturing the batch of samples in quantity defined by development department and

subject them to routine testing and reliability testing;

• manufacturing of pilot batch in quantity defined by salesmen and design engineers and

subject them to reliability testing

• 2. Implementation of substitute – critical element:
• acceptance by design engineers of technical parameters of components presented in

catalogues ;

• manufacturing the batch of samples: 10 units of the product and subject them to routine

testing and reliability testing;

• manufacturing of the pilot batch: 100 – 1 000 units of the product with components from the

batch made by the supplier later than the batch for sample series and subject them to routine testing and reliability testing;

• manufacturing of considerable manufacturing batch of 1 001 – 10 000 units with

components from the batch made by the supplier later than the batch for sample/pilot series and subject them to routine testing and reliability testing

Products and components are subject to:

• testing according to the standard PN-ISO 2859-1:2003,
• reliability testing according to PN-EN 62059-31-1 including testing of critical

elements

Procedure of reliability testing of products and components

• 3. Implementation of substitute – standard component:
• acceptance of technical parameters of components by design engineers presented in

catalogues ;

• design engineers make the decision whether it is necessary to carry out single electrical

testing and what is to be the scope. After the acceptance of components by design engineers the components are allowed to be used in serial manufacturing. However, the earliest possible time the components should be mounted in 3-5 pieces of the product and subject to reliability testing – negative result of reliability testing means the withdrawal the consent to use that component..

• 4. Testing of current manufacturing:
• subject to testing of random selected samples not rare than once per month suitable to

thesales volume and subject them to routine testing and reliability testing.

• 5. Elimination of critical elements of high mortality:
• process engineers provide with complete identifications of critical elements being used in

manufacturing of the products and therefore the data are archived: manufacturer of the component used,, number of batch, date of manufacture, date of receipt to the warehouse, number of manufacturing batch of the products;

• quality control personnel based on received quality claims and reliability testing carried out

regularly inform design engineers and procurement personnel about mortality of particular critical elements;

• design engineers make the analysis of the mortality of critical elements and the reasons of

their damages. Based on it they replace the critical elements being used to those of higher parameters or they apply to procurement personnel to change the supplier.

Control system & management

Integrated management system is based on the following standards:

• PN-EN ISO 9001:2009 – quality,
• PN-EN ISO 14001:2005 – environment,
• PN-N-18001:2004 – Safety and Health at Work

Control system & MID

Possibility of certification of own products according to Directive MID by the entities of Grupa that manufacture electricity meters:

• Pafal SA:
• since July 2008 - module B for 3-phase post paid meters,
• since October 2008 – module D for 3-phase post paid meters,
• since April 2009 – module B for single phase post paid meters,
• since February 2010 – module D for single phase post paid meters;
• Apator SA:
• since September 2009 – module B for single phase pre-paid meters,
• since December 2009 – module D for single phase pre-paid meters,
• planned date of the audit for modules B and D for 3-phase pre-paid meters is

September 2010

Granting of module D gives the following possibilities:

• Independent assessment on compliance of metrological and quality requirements of the meter being manufactured

without participation of Central Measurement Office (home sale) and to the countries of European Union). This fact means the prestige and financial benefit since there are lack of fees for legalization taken by Central Measurement Office that reduce considerably the cost of manufacturing of the product.

• Sale of certified product on all markets of the European Union without necessity to comply with additional

requirements of the local measurement offices. The effect is also minimization of the time necessary to comply all formal requirements in case of the export to European Union countries.

Ratio of faults – manufacturers of electricity meters in Grupa Apator

0,32% 0,15% 0,30% 0,16% 0,11% 0,26% 0,05% 0,11% 0,32% 0,19% 0,38% 0,38% 0,21% 0,25% 0,27%

0,00% 0,05% 0,10% 0,15% 0,20% 0,25% 0,30% 0,35% 0,40% 2005 2006 2007 2008 2009

Metering equipment of Apator SA Total Apator SA Total Pafal SA

Ratio is calculated as the relation of the costs of manufacturing faults to revenues on sales

Organization structure of the quality control in Apator SA

Quality of Products Team of Inspectors

1) checking the compliance with technical and design requirements:

• in input warehouse,
• in manufacturing area of the parts,
• in assembly area of electronic parts and

switchgear ,

• in warehouse for finished products

Measurements Team

1) checking the compliance of the product, subassembly or part with the assumptions of:

• obligatory regulations,
• technical specifications,
• design;

2) verification of new suppliers

Product Testing Team

1) quality verification of products and new suppliers by:

• reliability testing,
• testing of current products;

2) Testing of the software of the equipment; 3) Testing of finished product

Calibration and Legalization Section

1) checking of metrological compliance with the Regulation of Ministry of Economy

Service Team

1) remedy of damages 2) making motions regarding operation 3) taking quality (corrective) actions

Managing Director of Apator SA Quality and Service Management Department

• Thank you for your attention

Toruń, 21st June 2010