Best logistics

Competitor Out of box ideas

information

Value improvement

Packaging Cost structure opportunities improvements

Lifetime cost Ease of assembly

Purchasing MH&PE

Engineering Manufacturing

Have you resolved roadblocks?

•

All Supplier

MP&L

Considered all possible actions / sources of ideas for implementation • Have you?

We will only meet our targets if ideas are implemented quickly and

effectively

•

We have not always implemented as efficiently as possible • Why focus on implementation?

73

Success is measured by improved value for Company

If actions are not occurring, have you developed solutions? escalated to your line

manager?

74

90 6. Key contacts for appropriate implementation support

86 5. Packaging changes

83 4. Logistics changes

80 3. Commercial changes – resourcing

79 2. Commercial changes – price only

75 1. Engineering changes

Page Type of change implemented

•The following are included in the guideline:

•This section of the reference guide is intended to guide the team through

implementation of selected ideas

- interactions with key functions and outlines of the steps involved are included

Implementation guideline

75

- Change verification checksheet 2

- Design verification plan 1

- New engineering group that reports to TVM Leadership

team/ PLANT manager

• Involve TVM engineer in complex

change

- Gathering ideas

- complete RCT

- communicate with supplier

- develop DVP1 and review checklist

CVC2 with plant engg

• Manage final stage of

implementation

- parts sample warrants

(PSW)

-logistics

- lead functional build

- manage in plant changes

- complete information in ERS

Concern (investigate details of

idea)

• Approve RCT for TVM

developed cost reduction

change

-raise Engg Release System (ERS) Concern

Responsibility: • Generate quality related

engineering changes and other

actions

• Manage cost reduction idea generation

implementation

- investigate plant feasibility with

PLANT manufacturing

- review CVC/ DVP (if required)

-manage RCT process

- manage Alerts as required to

support

- participate in functional builds

- resolve all quality issues that may

result from development or

implementation of cost reduction

– both engineering and sourcing

changes

- parts sample warrants (PSW)

• Generate engineering changes that

lead to increase of commodity

competitiveness (cost reduction)

Located at the plant

5 plant engg teams 10 dedicated engineers 70 TVM teams Who:

Plant engg teams TVM / PLANT Liaison Engineers TVM Team

How will TVM team implement engineering change?

76

Phone calls,

meetings

Change

management

meeting

On line,

ERS,

meetings

Through TVM/

liaison engineer

Joint

workshop

(TVM

engineer,

product

engineering)

Suggested

interaction

Invite engineer(s)

for idea

generation

discussion

Joint

workshop

(Plant engg /TVM

engineer,

product

engineering

Discuss any

roadblocks and

liase for quality

aspects with

Plant engg

Regular

implementation

meetings

Take ERS

release to ‘r’

Liaison

engineer

manage in

plant changes

Obtain CMM

sign off

Iterative

process of

review with

Plant engg

Discuss

manufacturing

and quality

aspects with

Plant engg

Consult with

product

engineering

testing

No need Communicate

with Plant engg for

feasibility and

previous

experience

How do TVM

team interact

with other

functions?

Prepare TARR

(Finance)

Engineer

monitors

functional build

Team need to

be authorised

to use ERS

Check ERS data –Final feasibility

TVM engineer

sends form for

approval

– cost and timing

Concern

flagged as TVM

concern

Buyer receives

WIPS and

completes

sourcing,

purchase and

tool order

Form sent for

approval to

various Company

functions

Complete RCT and

CVC form based

on supplier costs

and lead time and

on plant data

Develop solution

– complete

drawings

Investigate

all aspects of

proposed

change –

complete

DVP where

necessary

ERS concern

raised

Develop design

change to a

necessary level

(understand

cause of

problem, other

effected areas)

What does TVM

team do?

Steps: Get concern

approved

Complete

RCT/ CVC

Conduct sign

off testing

Raise

concern

Get change

imple

mented

Confirm

final cost &

feasibility

Develop initial

cost and

feasibility

What is the process to implement an engineering change?

77

6. Complete and

circulate RCT form

•TVM team • All ERS data must be checked •CVC completed

• TARR prepared

•RCT circulated

Investigate cost and

timing

•TVM team • Written supplier confirmation required. • Relevant sections of RCT completed by functions

involved

4. Develop

proposed solution

•TVM team • Drawing/ sketch of final proposal made

• RCT form completed with supplier costs/ lead

times

• Supplier written confirmation of cost and timing

obtained

3. Investigation

•TVM team • Iterative process needing revised costs

and timing

• Supplier issues raised

• Assess effects on Company functions involved

• Obtain current supplier cost variance/ timing

- fit and function prove out performed with

supplier

•DVP completed

2. Initial Plant engg

review and concern

allocation

• Concern is rejected/ accepted and prioritised

• Concern for emergency release action identified

•Plant engg teams • Root cause analysis completed

• Engineering details developed

1. ERS concern

raised

•TVM team • If pre job #1 concern assigned to

homebase engineers

• Concern raised at ‘w’ while idea developed

• Concern raised at ‘a’ to seek approval

• ECC assigns authorised concern to PLANT if post job

#1

Notes Process description Lead

Details on how plant engg runs engineering change will be run

Request for Cost and Timing (RCT) process (1)

78

13. Feedback

•PLANT admin • Process completed

• Check all savings have been made

• Enter actual change implementation into CRID

12. Balance out

and implement

•PLANT team • Change monitored through to implementation

11. Functional

build

•PLANT team • Completed up to 4 weeks ahead of

implementation

• Buy in of quality department

required

• Functional build completed and status entered into

GPP

10. Facilitate for

change

•PLANT team • Drawings distributed to Company

functions involved

• Relevant Company systems loaded

• Facilitation process completed including

- establish data link with supplier

- order functional build parts

- authorisation letters to suppliers

9. Change moved

to ERS release

•PLANT liaison • Changes released in ERS to trigger drawing

distribution

8. Final approval

for change

•TVM liaison • RCT includes scheduled timing and

implementation date

• Approval obtained at CMM

• RCT modified if rejected

•TVM liaison

engineer

• Approval obtained by TVM liaison engineer from

various functions

7. Begin review

and approval

process

Lead Notes Process description

Details on how an engineering change will be run

Request for Cost and Timing (RCT) process (2)

79

•Manager approves price

claim

•Prices reduced

permanently in WIPS

- add effective change

•Retrospective changes

automatically debited

from supplier account

•Check integrity of data -price

-volume

•Enter price claim into

WIPS -by vendor code

- as a % reduction across

commodity/

component

•WIPS calculates

reduction in

commodity/

component cost

- new price shown

- saving shown as %

reduction/total

•Annual negotiation

supported by data

based evidence -benchmark data

-historic data

-cost estimates

- competitive data

•Usually % reduction

across commodity

- occasional % reduction

across components

Details:

Price change approval

and final WIPS entry

Initial price change

entry to WIPS

Agree price change with

supplier

How does the buyer implement price changes with the

current supplier?

- agreeing to resource

80

4. Resourcing

agreed

• Agreement to resource

Yes

No

Is resourcing

better value

than working

with current

supplier?

•Resourcing

team

• Total costs to be considered

- Cost per part for remaining

volume required

- Incumbent supplier price

Obsolescence costs

- New tooling logistics cost

- Workload impact on team

- Implications of sourcing

council involvement

• Resourcing team to compare total cost of

resourcing versus the benefits of actioning the

resource

• If cannot reach benchmark you may need to work

with potential supplier to achieve this

2. Identify

resourcing team

•TVM buyer • Resourcing data form used to

identify key information to

communicate with team

• Identify resourcing team defined as

- production procurement

- AVT/VC systems engineer/ powertrain design

engineer

-Plant engg , STA and MP&L

-affected suppliers

- material control at using plant

3. Select new

supplier

• TVM buyer • Criteria based on cost, quality,

commodity strategy and location

• Buyer selects potential new supplier

No

•TVM buyer • Buyer to explore ways to bring current supplier to

benchmark

Yes Work with current

supplier to improve

processes

Can we bring

the current

supplier to

benchmark?

1. Verify part

numbers to be

resourced

•TVM buyer • Review must include any pre

production parts

Responsibility Notes Process description

• Utilise EPPS/ WIPS to identify total parts sourced

to the incumbent supplier

• Verify completeness with MP&L, SERVICE relevant

engineer(s) and incumbent supplier

How to resource (1)

Responsibility

10. Complete necessary

supplier paperwork

•Resourcing

team

• Include MP&L and quality

documentation as required (including

PPAP)

• Included are

- purchase orders with updated supplier code(s)

- update tool orders

9. Manage timeline

implementation

•Resourcing

team

• Secure names of those involved and

relevant dates for STA, PLANT , and MP&L

team members when plan is agreed

• Update and maintain resourcing data

communication (TVM buyer)

• Progress to key dates tracked and adjustments

made as required

• Hold resourcing team reviews

8. Establish resourcing

timeline

•Resourcing

team

• Major events to include

- Transfer of knowledge package

- New supplier/ part validation (PPAP)

- Update WIPS with transfer date

- Authorisation of tier 2 suppliers to

ship to new supplier inventory build

• Timeline submitted to the new supplier

• Resourcing team consensus required on contents

• Written acknowledgement from incumbent

supplier on key agreements of the plan and

acknowledgement of intention to desource

7. Establish knowledge

transfer package for new

supplier

•Resourcing

team

• Examples of what should be included

- process flow diagram

- current level drawing

- process capability data

• Resourcing team to agree on contents

• Team should use this opportunity to revaluate

documentation and make improvements to ensure

quality and incorporate feedback from PLANT

6. Establish inventory

requirements

•Resourcing

team

• Utilise old supplier releases and

required lead time for tool relocation

• Utilise the resourcing data

communication form for involvement

of affected activities

• Identify inventory requirements for resourcing

• Resourcing

team

• All resourcing team should participate

How to resource (2) - full implementation

Process description Notes

81

• Required if the tooling is to be moved 5. Conduct a tooling/ part

on site review if necessary

Obtain approval

82

Put in

comments on

why selection

is made

Select best

price

Returns to buyer

after final

approval

Get quotes

back

Put it into WIPS (supplier

profiling, change

details, etc.)

WIPS

compares

quotes

automatically

List goes

automatically to

the next level

Buyer signs

WIPS generates

approval list

How purchasing source a new supplier

Select best

quotation Steps: Prepare for RFQ RFQ

© Company Motor Company

What does

buyer do? Depending on

type of

quotation

conduct

preparation

Send request

for quotation to

suppliers

(electronically/

manually)

Enter quotes

into WIPS

sourcing

summary

83

Raise RDCF

(plants, parts,

effective data,

suppliers)

Nominate

supplier,

identify parts

based on

quotes

Fill in

Production

Part Analysis

Form

Fill in TLCC

form (assess

total logistics

costs)

What does

buyer do?

Train supplier in Company

logistics systems

Develop and

implement action

plan to bring supplier

logistics up to Company

requirements

Assess total

logistics

costs taking

account all

logistics

issues

Collect

packaging

specification

form

from supplier

Review supplier

logistics process on

site

Complete and

distribute

Resourcing Data

Communication

Form (RDCF)

Confirm

supplier

logistics

process

readiness

Establish EDI link

with supplier (if new)

Get description

of supplier and

parts

Work out most

efficient

logistics

solution

Communicate

with buyer to

discuss total

costs

What does MP&L

do?

Steps: Nominate

supplier

Calculate total

logistics costs

Raise and

cascade

RDCF

Establish

logistics

route

Confirm

supplier

MP&L

capability

Align

supplier

logistics

process

What is the process to implement logistics change?

84

10. Complete and distribute

RDCF

N/A Buyer

Person@COMPANY.COM

Complete and distribute resourcing data communication

form

9. Confirm MP&L capability

to LCS Team

Week Person@COMPANY.COM Get approval of supplier readiness

8. Training for supplier in

communication software

1 Day (at Company) Person@COMPANY.COM Install system – train how to use

Depends on supplier

processes

7. Action plan

implementation

SMRT Engineer Action, recovery plan development with supplier – to fix

logistics problems

1 Day SMRT Team Provides logistics support to supplier (similar to STA). 6. Supplier manufacturing

review team review on site

5. Establish EDI link 4 – 6 Weeks Person@COMPANY.COM Electronic data interchange established with supplier (to

exchange data with supplier)

3. Establish logistics route

1 Month Person@COMPANY.COM Buyer fills in production part freight analysis form, asses

cost and makes decision

Lead logistics partner involved

2. Approve packaging

specification

2 –4 Weeks Person@COMPANY.COM Supplier fills EU 11 21 (on line) and send to MH&PE

engineers

1. Nominate supplier/

Identify parts

N/A Buyer (Core/ local office) Buyer selects supplier based on market tests

4. Calculate total logistics

costs

2 weeks (codified regions)

Months (new regions)

PersonI@COMPANY.COM MP&L send TLCC form to buyer

Buyer completes and returns

Timing Company Contact Process description/ Notes

Example: How does MP&L run new supplier/ new location?

Detailed process description

85

Total enterprise cost

• Optimise

- normal/ premium freight cost

-packaging cost

• Reduce obsolescence

•Inventory reduction

Logistics strategy

• External logistics

- lead logistics provider

• Packaging strategies

• Synchronous material flow

• Prototype material control

•Concern and release

• Bill of material accuracy

• Global commodity audit

• Improved processes

- e-Business initiatives

-Everest

• Robust processes -forecasting

- order fulfilment

Engineering change

management

Standardised processes

• Volume planning/ forecast

• Order planning

• Product distribution

• Capable to promise

Stable sourcing plans

Supplier readiness

• Best practices

- supplier delivery performance

- early sourcing

- Bullseye sourcing

- supplier manufacturing readiness

- electronic communication capability

(EDI/DDL)

- supplier opening hours

Quality/ customer satisfaction

• Quality review process

• Supplier quality control

• Consumer driven 6 Sigma

MP&L 200X strategic priorities relevant to TVM

86

Discuss with

finance required

investment

Provide idea

description to

MH&PE

Coordinate trial

shipments

between supplier

and receiving

plant

Obtain plant

approvals

Incorporate

packaging costs

impact into total

costs calculation

Conduct basic

calculation of

potential cost

savings

Generate

packaging

ideas

What does TVM

Team do?

Assess required

investment in new

packaging design

or material

Collect calculation

of freight cost

change from MP&L

dept.

Assess impact of

new package

design/ material

on other

packaging costs

(e.g. labour,

waste disposal,

etc.)

Develop

detailed

description of

changes

required

Participates in

plant checks

with in-plant

processes

Fill in shipping and

packaging cost

analysis form

Engineer

alternative

solution

Calculate

potential

savings

Generate

packaging

ideas

What does

MH&PE do?

Generate idea Steps: Trial

shipments

Work out solution

(design/ material)

Receiving

plant issue

approval

Assess cost

benefit of

change

Scope idea

(calculate

cost savings)

What is the process to implement packaging change?

87

•Dedicated container fleet

•Improved housekeeping

•Ease of maintenance

•Commonality/ reusability of packaging

•Optimum freight through increasing density

•Ergonomically friendly

•Integral folding dunnage system

•Waste free process

Company strategic priorities in packaging

88

• Maintain database of supplier related

information

• Communicate quality and performance

requirements, initiatives and training to

suppliers

• Management of PPAP/PSW packages and

processes

• Assist in Lean Manufacturing and reliability/

robustness deployment to drive supplier

continuous improvement

• Provide new location technology evaluations to

support sourcing

• Provide technical assistance to aid improvements • Assess supplier QS-9000 capabilities

• Drive supplier corrective actions with a systematic

perspective

• Align supplier internal quality metrics with Company

supplier improvement metrics

Drive supplier improvements Monitor supplier quality

STA role in implementation

89

• Loss of control over sourcing

• No expertise development –

increasing reliance on supplier

• High investment costs

• Higher business risk

• It may be difficult to train people

in skill required

• Disadvantages

• Reduced investment costs

• Supplier takes the risk

• Supplier may source the service

more efficiently

• Overcomes any resources issues

• Allows expertise to develop

• Greater independence from

supplier

– more easy to resource if

desirable

• Advantages

• Cost per part increase if supplier

provides tool/ service

– note that the price will

include business risk to

supplier

• Cost of in house sourcing/

number of parts produced

• Economic value

(price per part)

Supplier sourced In house

• The factors in assessing the value of each option are outlined below

• Company can choose to complete in house or source at the supplier

- commodity engineering (in house Vs FSS engineering)

- tooling for supplier (in house Vs SOT)

The value of Company vs. supplier owned tooling/ engineers

90

Person Finance

Person Manufacturing

Person Material Handling and Packaging Engineering

Person Materials Planning and Logistics

TBD PLANT

Key contact for TVM Function

Whom to contact for support?

91

Streamline communication to deliver results

- provide a single point of contact to Company responsible for identifying, co-ordinating and

ensuring the appropriate supplier resources in support of TVM

- optimise internal processes/ communication to provide maximum support to TVM

- Internal rollout of process

•

Support all relevant TVM activities

- regular team meetings as required

- commodity workshops – brainstorming sessions

- CAB/ teardown evaluations

- co-ordinate supplier site based manufacturing process/ line reviews

•

Share commodity related data and knowledge

- share commodity related data (including cost breakdowns, value chain information, Company/

competitor parts)

- provide supplier’s own benchmarking/teardown information

- lead discussions on industry best practice, including challenges to Company SDS (share lessons

learned from prior cost reduction studies and industry best practices)

•

Be integral part of the TVM Team on an ongoing basis

- discuss value improvement actions

- assess cost and feasibility of the Team proposals

- project manage supplier/ lower tier implementation of value improvement actions

- commit timely support of activities

•

Supplier interaction with Company is as outlined below:

les & responsibilities Supplier’s ro

92

Cooperative interaction between the supplier and Company that improves

the overall strategic relationship long term

•

Supplier and Company possess the best knowledge of commodity through

joint and proactive use of market intelligence

•

- value improvement tools are shared between supplier and Company

- supplier and Company communicate in the most efficient way

- total costs of delivering commodity are lowest in the industry

Supplier and Company is a joint team to provide “best-in-class” commodity •

Open, action oriented co-operation within TVM team •

What does successful supplier interaction mean?

93

•Gap calculation

• Benchmarking data

collection from

other sources

• Data request

preparation

• Calculation of

financial impact

Teamwork • Benchmarking data

reviews

•Q&A

preparation

• Implementation

of refined action

• Implementation

plan creation

and buy-in

• Prioritisation of

actions

Supplier team

involved

• Account

manager,

engineering,

manufacturing

• Account

manager

•Senior manager, • Account

manager, account

manufacturing manager

•Senior manager,

account,

manager,

finance

• Account

manager,

engineering,

manufacturing

• Meeting with

leadership and

steering group

• Responsibilities

sign off

meeting

Meetings • Supplier visits

(deep dives, line

walks)

• Supplier

briefing

meeting

• Feedback

meeting

•Progress

review

meetings

• Negotiation

meetings

• Financial

assessment

meeting

• Implementation

workshop

• Implementation

workshop

• Particular tool

related workshops

(e.g. CAB)

Workshops • Roadblock

resolution

workshop (if

required)

•Workshop to

summarise

potential actions

•Brainstorming

workshop to

summarise

potential actions

• Benchmarking

workshop

8 weeks 6 weeks 4 weeks 2 weeks

10 weeks/

ongoing

Team

Kickoff

Supplier interaction guide (example)

94

•Log actions into

database

• Discuss identified

gap to benchmark

with supplier

• Prioritise and

agree actions

•Brainstorming

workshop

• Data input into

commodity

business plan

•Design and

participate in

activities at

supplier sites

(deep dives, line

walks)

• Communicate

progress on a

regular basis

•Inform on Company

process related

actions (if

appropriate)

• Identify process

to obtain

relevant data for

forward model

programs

•Agree

workplan and

deliverables

for

benchmarking

phase

• Involve supplier in

major

benchmarking

activities at Company

facilities (e.g.

CAB/Teardowns)

- cost breakdowns

• Discuss testing

process

participation

- quality data •Prompt

supplier to

suggest actions

• Review latest

competitive data • Request data

- process

description

•Discuss actions • Develop

that improve implementation

value through workplan with

improving suppliers input

supplier • Agree financial processes

assessment with - manufacturing

supplier -lean

•Obtain deployment

commitment to -packaging,

actions and logistics

timeline •Discuss actions

related to • Sign off

engineering ownership and

changes responsibilities

•Explain TVM - function data - suggestions for

improvement

-progress to-date

• Collect TVM

process feedback

• Run workshop

with selected

suppliers to

discuss design,

technology and

commercial

implications to

commodity

• 2-way dialogue

and “reality

check”

• Collect and

review existing

data for

benchmarking

• Invite to

supplier

briefing

meeting

Implement Set target Start up Best in the

business?

Forward

model targets

Gap closure

actions

Establish

benchmark

How will we work together with suppliers?

95

Plan to remove

any shortfall

RESULTS Future

commodity

competitiveness

ensured

Actions

implemented –

responsibilities

negotiated and

confirmed

Prioritised set

of actions

expected to

deliver results

Clear

understanding

of what must

be delivered,

by when

Current

commodity cost

and gap-to-

benchmark

analysed

Success is:

Prioritised

action plan

New business

actions

Expected

results

By when? Engineering

based actions

Value chain

analysis

Actions to

address

shortfalls

Who is doing

what?

Total cost

actions

Achieved

planned result

What are we

doing?

Commercial

actions

Define gap

target

Supplier and

competitor

benchmarks

Forward

model input

(design and

productivity)

Output

Timeframe Monthly review On-going ASAP 1-3 weeks 2-4 week 1-3 weeks

Implement Gap closure actions Set target Best in the

business?

Forward model

targets

Establish

benchmark

Supplier process guide

96

- suppliers

-design (…) • Actions are listed

in database

- cost (£__)

•Mr.X is

implementation

contact at Company

• All possible

actions to close

the gap are

(1,2,3… 20)

•Actions that

supplier will

work on in 200X

are …

• Supplier’s

concerns

addressed

• Differences

between our

commodity and

competition,

other Company brands

• Mr. X is

responsible at

Supplier

• Difference in

logistics drives

___% of gap

- preliminary

timeline

•Actions to

address

shortfalls are …

• Next 10 actions

are …

-list of

activities

•Actions in the

pipeline and

previously

suggested are …

•Expected results

are___________

• Difference in

manufacturing …

drives __% of

gap

-TVM

principles

Output • New contract

with all changes

signed

• First 5 actions

supplier will take

are … and will be

completed by

X/X/200X

•Estimate of gap

to benchmark

identified at £___

•Previous

commodity

studies identified

following issues …

• Supplier

committed to

Supplier

workshops

8 weeks 6 weeks 4 weeks 2 weeks

10 weeks/

ongoing

Team

kickoff

Supplier interaction guide (example)

97

Note: Suggested list is not exhaustive

•Company parts across product lines (if applicable)

•Competitor OEMs commodities produced by supplier/ their competitors

Hardware:

•All ideas for cost reduction (materials specification, packaging, logistics, etc)

• List of competitors suppliers

•Competitor specs

•Competitor costs analysis

•Price-volume curves

• Location of Tier 2,3 suppliers

•Value chain data

• Logistics

•Cost tables

•Cost breakdowns Specific data for Company:

•Supplier industry reports

•Market (customers/ competitors) studies conducted/ owned by supplier

by supplier •Commodity studies conducted Studies/ reports:

What do we want suppliers to bring?

98

Prepare data request •

Think of scope and areas of quick hits •

- prepare for Q&A session (confirm answers with supervisors/ managers)

- think of activities required, draft team workplan

- discuss required information, ask for suggested actions

- explain TVM and gap-to-benchmark principle

Prepare for supplier briefing meeting •

What to do next?

Note: Example is based on forms successful competitors are using with supplier

99

E -m a i l a ddr e s s T e le ph on e R es p o ns e b y

Di v / De p t

Ma n a g e r

Re le a s e i s s u e d a t e

Re le a s e N o . OK (A c c e p t e d )

N O ( R ejec t e d ) R e as o n

PE ( P e n din g ) l im i t

O K N O P E De c i s i o n

J u d g em ent b y p lant

Ju d ge m e n t b y b uy e r

F in a l de c i s io n da t e

E -m a i l a ddr e s s T e le ph on e

Ma n a g e r

R es p o ns e b y

Di v / De p t

Fin a l d e c i s i o n t im ing ST (s t u d y )

R E ( p r o p o s e ag ain) Reas o n

N o ( r ejec t ) R e as o n

S T R E N O De c i s i o n

R e sp o n se

Pr im a r y d e c i s io n d a t e

A c c e p t ed ex a m p le a t o t her au t o m a ker s En g ineer (i f nee d e d)

R e la t e d pa r t s c h a n g e r e qu i r e d Bu y e r c o d e

D e v e lo p m e n t t r ia ls r e q u i r e d Bu y e r

Qu a l i t y c h e c k R e sp o n si b le p u r c h a se m a n a g e r

Pa t e n t s e a r c h d a t e Re c e p t io n

Con c e r ns / t a s k s 000 eur o /y ear Ne t c o s t - s a v i ng s = (D ) - (E )

000 euro

00 0 eur o / y ear

= (D ) G ro s s c o s t s a v i n g s

(A ) * ( B) * ( C ) * 12/10 00

( E ) To o ling c o s t

R e a s on f o r propos a l e u r o / p i e c e ( C ) E x p e ct e d co st s a v in g s

Eu r o C u rre n c y

p iec e/V e h

V e h/m o nt h (A ) A p p l ic a b le n u m b e r o f v e h .

(B ) Nu m b er o f pa r t / ve h

A B C D

Su gge s t e d s o l u t io n C o n f id e n c e le v e l

A : 100% B: 75% C : 50% D :3 0 %

A p p l ic ab le uni t

Ad op t ion d at e ( te n t a t i ve )

Ap p l ic a b le m o d e l

Pa r t N o .

Blo c k N o .

C u rre n t s i t u a t io n Pa r t N a m e

E -m a i l a ddr e s s SU P P L IER C O D E

S U B JE C T

Te le p h o n e N o . SU P P L IER

PR O P O S A L N O .

Pr opos a l da t e

Pr o p o s a l d a t e

Example of Supplier Proposal Form*

100

• TVM Project Office

• TVM/ Plant Liaison Engineers

• TVM Champions

- Establish and identify your leadership team

• TVM Leadership

TVM organisational structure

101

• Responsibility to the line

management of the functional

activity TVM team members

report to

(e.g Body engineering, PTO, Purchasing,

Finance, etc.)

Provide feedback to functional management

• Lead responsibility within TVM

for interaction with designated

TVM support expertise group

(e.g Lean, TCM, MP&L)

• Champion for up to 8 TVM

teams

TVM team champion

Guide and support TVM teams Enable and coordinate support

expertise group

• Responsible to communicate to

TVM leadership for process,

lessons learned, feedback,

overall progress, breaking

roadblocks, etc.

Interact with TVM leadership

Team champion interactions

Event organisers / facilitators

Product Engineering

Packaging

MP&L

Program Teams TCM Tools

Product teardown TVM Team champions Lean Deployment Value management

Manufacturing

PPM

Industry benchmarking

PLANT Implementation

TVM Leadership

102

Team champions are initial linkage to TVM support expertise

TVM teams

TVM 1 … TVM 70

Support

Enable TVM team access

Part of TVM organisation

103

Contact telephone number (internal) Department Name

For information on and support regarding TVM please contact:

Team champions

104

Manufacturing

business office

Benchmarking

Product teardown

TCM systems

Facilitators

Lean

Finance

Support function

Best in the

business?

Forward model

target

Implement Gap closure

actions

Target setting Establish

benchmark

Guidelines on interaction - overview

105

Establish

benchmark

Person Gap closure

actions

•Provide

- parts and boards to support hardware review

- Cutaway products to support CAB activities

- access to existing CAB products

Product

teardown

Best in the

business?

Implement

Gap closure

actions

Person

•Provide

- Lean diagnostic/ additional data on the supplier

sites under study

• Identify supplier plant inefficiencies and

opportunities

• With cost estimating, identify the cost benefit of

waste elimination

• Compile status reports of Lean implementation

Lean

Best in the

business?

Implement

Gap closure

actions

Person

Establish

benchmark

•Provide

- competitive OEM benchmark financial data

- volumes and mix information

- base budget data (e.g. exchange rates)

• Identify initial objectives (e.g. turnover, gap)

• Calculate the business case for engineering

opportunities

• Track actual value improvement

• Assess financial feasibility of proposal

Finance

Key contact How they support TVM What stage they support

TVM

Function

Guideline on interaction

106

Best in the

business?

Implement

Gap closure

actions

Person

Establish

benchmark

•Provide

- ‘Hopper’ – opportunity database

• Facilitate supplier loading of value chain data into the

VCMS database

• Lead European launch of global TCM systems and

processes

TCM systems

All TVM

framework

Person

• Schedule workshop activities

• Facilitate events and workshops

• Ensure availability of supplier/ Company team members

• Organise appropriate facilities, services and equipment

• Advise on appropriate tools

• Assist supplier/ Company assignments prior to activities (if

needed)

• Monitor workshop feedback and recommend change

• Maintain scheduling database and status reports as

required

Event

organisers/

facilitators

Key contact How they support TVM What stage they support

TVM

Function

Guideline on interaction

107

Gap closure

actions

•Provide

- external/ industry benchmark information

- commodity benchmark information

- future needs assessment

-available parts list

Price

benchmarking

specialists

Forward model

target

Establish

benchmark

Person

•Provide

- specialist support from within the

manufacturing organisation

- feasibility and cost implications for cost

reduction opportunities

- expertise on supplier parks, make/ buy studies,

sourcing council

Manufacturing

business office

Key contact How they support TVM What stage they support

TVM

Function

Guideline on interaction

TVM Operational Reviews - Line Managers (Purchasing, Engineering, Cost Estimating)

Go to them for: To prepare: Expect:

• Progress assessment • Develop implementation plan • Bi-weekly commodity/ functional level reviews

• Review/ approval of Checkpoint • Develop checkpoint materials materials, implementation plan • Help resolving issues

• Create list of issues for for Steering Group

resolution • Raising/ resolving issues

TVM Steering Group Reviews - Steering Group chaired by VP purchasing (with VP Finance, VP Engineering)

Go to them for: To prepare: Expect:

• Revise checkpoint • Monthly Checkpoint • Review/approval of TVM Checkpoint materials and material per reviews on progress

implementation plan • Operational Review • “Show and Tell”

feedback • Roadblock clearance

• Red/Green assessment • Reward and recognition

on checkpoint criteria

108

TVM Team

• Development of checkpoint materials

•Collaborative

approach

Governance approach

• Remain on track with TVM tasks/ timeline

•Team working

sessions • Review of actions/ activities

• Up to twice weekly • Compile all existing commodity data

• Activity planning/ execution

Expect: To prepare: Go to them for:

TVM Team Sessions

• Identifying issues/ roadblocks

109

Checkpoint approval

Overall TVM plan/ commodity selection

concurrence

Scope approval

Checkpoint readiness

As required by guideline Key decisions

TVM team progress reviews – checkpoint

reviews

Pre launch TVM team reviews (as reqd.)

Process review, lessons learned summary

Plan concurrence

Roadblock clearance

Reward and recognition

Agree plan for TVM forward model

program input

Review, with all TVM teams and ‘informal’

teams within commodity group

Progress assessment

Review / approval of checkpoint materials

Issue raising and resolution planning

Lessons learned – process improvement

Confirm implementation plan

Key working level meeting – supports co

location principles – reinforces team

cohesion

Activity planning / execution

Review actions / activities completed

Issue / roadblock identification

Status assessment (standardised

documentation)

Development of checkpoint materials

(standardised documentation)

Purpose

Commodity purchasing managers, TVM

team members, PD commodity managers,

TVM team champions, TVM support

expertise group, commonality team

TVM team champions, TVM support

expertise group, manufacturing, MP&L

Designated TVM team champion, any other

specialist support, core engineering,

purchasing, finance, manufacturing, MP&L,

PLANT ,

Support as

required

Commodity purchasing, PTO, engineering,

finance, TVM manufacturing (MBO), MP&L

Purchasing, PD and cost estimating

supervisors

TVM team buyer and engineer

Core team: buyer, engineer, cost

estimator, suppliers (as required)

Mandatory

members

TVM project management Individual purchasing activity None Facilitator

Purchasing VP Co-chaired Purchasing and PD Commodity

manager

Nominated Chair

Monthly Bi weekly Up to twice weekly (minimum one “in

person” meeting per week)

Timing

TVM steering group review TVM operational review TVM team sessions

Governance roles and responsibilities

110

Suppliers

Feedback

Support expertise group TVM Operational Review TVM Team

Feedback Feedback Feedback

Review feedback from various sources. Provide

recommendations for improvement

TVM Leadership /TVM Team Champions

Communicate

feedback

TVM Steering Group

TVM feedback loop

111

Workshop with program team

Value chain analysis

Supplier workshop

Supplier benchmarking

Price - volume curves

Online quoting (OLQ)

Market test / RFQ

Manufacturing process review

Low cost country sourcing

List of competitors suppliers

Line walks

Lean deployment

Idea generation workshop

Global council comparison

Feature design cost comparison

Design specification

CRID

Cost variance

Cost table

Cost estimate

Competitor benchmarking

Commodity strategy workshop

CAB/ teardown workshops

Tool/ data source Forward model

target

Establish

benchmark

Gap closure

actions

Tools and data sources that support activities

112

Lean deployment Analysis of suppliers manufacturing process – identifies opportunities to eliminate

waste in the process/value stream logistics

Workshop to develop ideas for reducing commodity costs Idea generation workshop

Global council comparison Competitive indicator, provides information on pricing levels of global suppliers,

and of suppliers currently not in Company Europe’s CBG supplier base

Comparison of different commodities with design differences/ changes Feature design adjusted cost

comparison (cost walk)

Design specification Outlines the design of a commodity and the requirements in terms of minimum

quality standards

Previously logged cost reduction ideas CRID

A high level comparison of component price elements Cost table

Calculation of the cost impact of a proposed engineering change Cost variances

Cost estimate Analysis to estimate the cost of the best-in-class process to produce a component

or commodity

Comparison of Company to competitor cost/ quality/ function (e.g. Renault) Competitor benchmarking

Commodity strategy workshop to provide pan brand input Commodity strategy workshop

CAB/ teardown workshops Structured and progressive disassembly of competitor products to establish

benchmark design, function

Description Tool/ data source

Team information contact

(discuss with team

champion)

Tools and data sources that support activities - description

113

Workshop to understand future commodity design specifications and costs

relative to program needs

Workshop with program team

Value chain Analysis of cost structure of tier 1, 2 and 3 suppliers

Idea generation workshops involving suppliers Supplier workshop

Supplier benchmarking Comparison of the costs of several suppliers analysed and compared in detail.

Best practice can then be identified

Price - volume curves Tool to measure the effect of volume change on fixed cost for each supplier in

the value chain

Auctioning tool that allows suppliers to view the lowest bid and rebid On Line Quoting system (OLQ)

Request for quotes to allow high level of comparison of suppliers prices Market test/ RFQ

Review of manufacturing processes within Company Manufacturing process review

Low cost country sourcing Analysis of alternative sources in lower cost countries than our traditional supply

base

Full list of commodity suppliers to competitors List of competitors suppliers

Review of supplier manufacturing processes Line walks

Description Tool/ data source

Team information contact

(discuss with team

champion)

Tools and data sources that support activities - description

114

nline SPECS o

Tier 1, 2, 3 VA Quick SPECS online

Forward model

bench marking

com

sed

Lean

focu sed

Lean site

focu titive

is &

arking)

CAB (Compe

Analys

Benchm

Tier 1, 2, 3 SALM (supplier advanced

lean

manufacturing

VA (Value Analysis)

VE (Value Engineering)

SALM (Supplier Advanced

Lean

Manufacturing)

Lean site

focused

Current model Forward model Current model Forward model Current model Forward model

Design/specification Commercial/policy Manufacturing

Areas of opportunity Value

chain review

No Yes

Forward model

workshop

Is it

forward

model?

Yes No Do you

have a

value

chain?

Value chain tool selection flow chart

115

*All tools do not apply to every investigation

- - - - X X X XX Low cost country sourcing

- - - - - XX X X Impact of quality on total cost

- - - - - - X X X Any information from a design

competition

- - - - - X X X - Cross product line analysis

- - - - - - - X X Supplier cost break down

- - X X - - - X X Value chain

- - - - - - - - X Available cost table

- - - - X - X - - Understand last program target

- - - - X X X X - Matrix on absolute cost

Commodity

focused lean

CAB Tier 1, 2, 3 Site

focused

lean

SALM Quick

bench

marking

VE VA Value

chain

review

Gap-to-benchmark Investigation

This checklist provides assistance to relate key gap-to-benchmark investigations and TCM tool selection*

Gap-to-benchmark tools selection checklist

TCM Production Workshops

X X X X

Current assessment of suppliers’ lean status

Awareness of lean measurables and impact on total

cost

Fundamental knowledge of lean methods

Commitment to implement at suppliers’ sites

X

Needs cross functional team participation to

minimise waste

Senior management involvement from supplier

required (lean champion)

Site Focused Lean WS (Diagnostic, SALM, JIT,

KANBAN, etc.

Further enhance the supplier’s knowledge of lean

measurables. Provide a common structure to

collectively eliminate waste in the value chain using lean

manufacturing methods.

Conduct simulation training to link lean metrics to lean

performance

Assess suppliers’ current lean state with performance

data provided by the supplier

Utilises cross functional teams to minimise waste

Senior management involvement from supplier

required (lean champion)

X 3-5 days

Eliminate waste at a specific supplier site. Use lean

methods and metrics during shop floor implementation

projects. Define the current state

Develop the lean implementation plan

Develop transition plan for remaining supplier sites

Educate and enhance the lean manufacturing

capabilities of supplier. Shorten manufacturing cycle

times

Increase first run capabilities

Reduce inventory

Productivity improvements

Supports FPS and OTD implementation

TCM Lean Deployment Workshop Tools

X X X

Commodity Focused Lean X X 2 days X X X

Shorten manufacturing cycle times

Reduce inventory and generated waste elimination

ideas

Process mapping from tier 1 to tier 3 to identify waste

opportunities Tier 1,2,3 X X X 12 weeks

116

X X 2-3 days X X X X Forward Model Targeted for parts and systems that are pre-job

#1 and require cost / weight / design assistance

List of cost reduction opportunities to achieve ABS

objectives. All Company actionable ideas loaded into

CRID

A tool applied to parts or systems during the design

phase to maximise part value, either by reducing cost,

improving function or both (value = function/cost

(V=F/C))

X X X X X X X X X X Forward Model Value Chain Planning Validates current value chain, with breakdown of

cost drivers and waste identification

Series of pre-job #1 sessions used by product

teams to develop and analyse the value chain for

cost reduction opportunities

2-4 hours

per

session

A tool applied to parts or systems during the design

phase to maximise part value, and identify cost drivers

and waste identification - can lead to further TCM

workshops

TCM Forward Model Workshops

Must be requested by PD rep of CBG X X X X X X X X Competitive Analysis & Benchmarking (CAB)

Commodity strategy to feed GAP list of cost

reduction opportunities to achieve cost new program

targets. Company actionable ideas loaded into CRID

1-2 days

per

system

team

Uses competitive product analysis, physical property

reviews, and time-bound decision-making to generate

cost reduction opportunities for a single commodity

across product lines

X X X X X X 1.5 days X X X X X Value Chain Review Validates current value chain with breakdown of cost

drivers and waste identification

Use value chain management system (VCMS) to

create and analyse value chain cost models &

flow charts

Establishes value chain for specific parts which are

reviewed for cost drivers and waste identification – can

lead to further TCM workshops

For parts with high component content / value X X X X X X 2-3days X X Value Analysis List of cost reduction opportunities to achieve cost

targets. Company actionable ideas loaded into CRID

Used to identify design related cost reduction

opportunities for a specific part. A cross functional

Company/Tier 1 Supplier Team use benchmarking and cost-

to-function analysis to help generate ideas for current

production or carry-over parts

Special Considerations TCM Tool Expected Deliverable Scope TCM Tools Description TCM Tools General Supplier

Participants

General Company

Participants

Emph-

asis

Duration

of Key

Event

TCM tool quick reference guide

117

Attributes

Supplier

Commodity

Volume/units per day

Commodity features

Part number

Weight

Technology type

Specification

Material

Cost features

Price

Currency

Estimate

Landed cost

Packaging cost

Logistics

Tier 1 manufacturing location

Tier 2 manufacturing location

Shipped from

Shipped to

Shipping method

Packaging

Manufacturing operations

Head count

Parts/labour hour

RMat/WIP/FGoods

OEE

Manf technology (old/new/automated/manual)

Customer Satisfaction Issues

PPM

Warranty

SERVICE part availability

Daily delivery metrics

Competitor 2 Competitor 1 Global brand Company 2 Company 1

Benchmarking analysis worksheet