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ESS Business Interlocks 2H08’ PCA ABC Cost Update Foxconn

ESS Business Interlocks 2H08’ PCA ABC Cost Update Foxconn. Thomas Chiang Oct5 th 2008. HP Restricted. Executive Summary. September Achievements : No cost reductions versus August ODM : Achieved saving $4.08M , 45% for $9.12M of total saving opportunity

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ESS Business Interlocks 2H08’ PCA ABC Cost Update Foxconn

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  1. ESS Business Interlocks2H08’ PCA ABC Cost UpdateFoxconn Thomas Chiang Oct5th 2008 HP Restricted

  2. Executive Summary • September Achievements : No cost reductions versus August • ODM : Achieved saving $4.08M , 45% for $9.12M of total saving opportunity • CM : Achieved savings $0.76M, 22% for $3.M of total saving opportunity • October Progress • Foxconn has finished supplier QBR meeting leading to cost reduction. • HP received ABC cost reduction updated (around $500k to $1M) • Real saving for QBR will be communicated during Nov interlock meeting • HP has finalized LOA worth $772k • Foxconn has updated cut-in date (ETA 10/24) • 1HFY09 ABC wave: plan to submit ODM quotes to CDP on 10/27 • Foxconn responsiveness not as fast as usual. Resource issue?  

  3. ABC Target to In Quote & Future Saving

  4. September ABC Achieved for ODM Sustaining • Achieved savings $4.07M (45%) – bellow goal • In quote: $4.07M (45%) • Future saving: $0.0M • WIP $3.3M (36%) [7/7/2008] – HP Restricted

  5. Foxconn ODM on Top 20 Saving Components LOA parts

  6. September 08’ABC Achieved for CM Sustaining • Achieved savings $0.76M (22%) – below goal • In quote: $0.76M (22%) • Future saving: $0.0M • WIP $2.0M (57%) [7/7/2008] – HP Restricted

  7. Foxconn CM on Top 20 saving components LOA parts

  8. Cost Cut-in schedule Today  • No future saving committed since last Interlock negotiations. No change versus last month. • Opportunity : • Foxconn has driven cost reduction during supplier QBR • ABC progress will be reflected in Novvember • Foxconn will confirm new price cut-in date for LOA approved parts [7/7/2008] – HP Restricted

  9. September 08’ABC Achieved for NPI program BL 495 G5 will be included sustaining program for ABC 1HFY09’ • Saving Opportunity: $1.8M from NPI programs (BL495 G5 Nitrogen) • Achieved savings (Cost Avoidance): $0.0 M from NPI • WIP $1.6M for NPI programs. • Open Opportunity $0.2M (5%) • Not obtainable $0.0 M (0%)

  10. Back up slides

  11. Achieved saving by product on sustaining programs [7/7/2008] – HP Restricted

  12. Analysis of Achieved Savings Cost Saving (sustaining products): $4.8M 94% Foxconn Negotiated 5% HP pass down price [7/7/2008] – HP Restricted

  13. Analysis of Saving for Not Obtainable Not Obtainable on sustaining product $0.8M Total $0.8M are not obtainable. 45% Foxconn cost closed 32% Data source inconsistencies 16% Freight cost 6% Assurance of Supply 0.2% No more demand

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