Materials Administration Operations Rule/Logistics Assessment.

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Materials Administration Operations Rule/Logistics Assessment January 2008 MMOG/LE Motivation Why MMOG/LE? What is MMOG/LE? Finishing the Self-Appraisal Who is Requiring MMOG/LE? MMOG/LE Key Criteria AIAG/Odette MMOG/LE Advantages Review Client Examples of overcoming adversity
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Materials Management Operations Guideline/Logistics Evaluation January 2008 MMOG/LE

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Agenda Why MMOG/LE? What is MMOG/LE? Finishing the Self-Assessment Who is Requiring MMOG/LE? MMOG/LE Key Criteria AIAG/Odette MMOG/LE Benefits Survey Customer Success Stories Supporting Training and Documents Available

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Improving Supply Chain Delivery Performance Gain control of procedures Reduce stock conveying expenses, premium cargo, revamp, line stoppages, lead times Gain control of store network Increase stock perceivability Reduce inventory network danger Support persistent change Increase consumer loyalty Increase intensity Actionline Magazine, Fall 2006

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Who is Implementing MMOG/LE? Suppliers to conform to OEM necessities Suppliers in developing markets Companies hoping to Reduce store network dangers Improve inventory network consistence and Increase conveyance and long separation execution Regional industry affiliations Brazil, Romania, China, and so forth

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MMOG/LE Outside the Automotive Industry Universities High Schools Other non-car commercial enterprises Hospitals Construction Aerospace Chemistry Electronics Industrial Retail

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What is MMOG/LE?

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Principles of Global MMOG/LE Recommended standard for materials and logistics Self-evaluation apparatus for recognizing holes in procedures Based on concurred business forms By OEMs and suppliers Ford, Chrysler, PSA, Renault, Volvo Car, Volvo Truck, and so on. In light of broad, best practices 6 parts 206 criteria Determine current level of plant execution

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Scoring Summary (ABC Classification)

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MMOG/LE Self Evaluation Categories Strategy and Improvement Work Organization Production and Capacity Planning Customer Interface Production and Product Control Supplier Interface

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MMOG/LE Translations Available in 10 dialects including: English French German Spanish Portuguese Chinese Romanian Czech Russian Turkish

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What Does this Mean to Me? Go to AIAG/Odette MMOG/LE standard preparing Understanding and building a group to finish evaluation Complete self-appraisal Attend self-appraisal instruction and survey Develop hole examination and activity arrangement client, interior, and sub suppliers Implement Action Plan Internal procedures and frameworks Sub suppliers (e.g, Tier 2) Customer confirms self-appraisal score

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Completing the Self-Assessment

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Download the Self Assessment or ENGLISH FRENCH CHINESE

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Complete the Form Each Question is Yes (“ X ”) or No ( Blank ) Populates the hole investigation tab

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Each Question is Weighted

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Submit Scoring Summary

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Submit Gap Analysis L ist of All Unanswered Questions ( Blank )

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Who is obliging MMOG/LE?

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OEM Focus During MMOG/LE Audits Strategy and Improvement Management responsibility Capacity and Production Planning Supplier Interface (Tier 2) Performance estimation Sub-level supplier correspondence Sub-level suppliers in developing markets Improvement Plan Self-Assessment Quality

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Key MMOG/LE Criteria

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MMOG/LE Processes

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Key Criteria Materials Management Objectives Analyzed, measured (activity arranges if fundamental) Defined, recorded, imparted and comprehended Identify constant change opportunities Corrective activity for bottleneck procedures Job depictions, work guidelines and preparing arrangements

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Key Criteria Key Performance Metrics Delivery Performance Supplier Performance Internal execution (plan versus real)

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KPI’s for MMOG/LE* KPI4GMML 5 Production Disruption Schedule Modifications Incomplete units Line Stops KPI4GMML 6 Supplier Communication & Cooperation Criteria : Self-adequacy, Reliability, Responsiveness Supplier issue notice, Availability, Flexibility KPI4GMML 4 Material Handling & Identification or Delivery Requirements ASN Message Customer Plant DOCK Warehouse Supplier Plant Assembly Line or KPI4GMML 2 Delivery Accuracy KPI4GMML 3 “VMI” KPI4GMML 1 ASN Performance *Key Performance Indicators for Global Materials Management and Logistics

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Key Criteria Resource Planning Flexibility and accessibility are upgraded Contingency arrangements and crisis methods exist Employees are prepared Capacity Planning Long, medium, transient arrangements looked into frequently Process set up to tell of deficiencies Support all necessities for all clients Minimize stock Obsolescence Raw material WIP Finished merchandise

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Key Criteria Communication Scheduling consequently incorporated into framework without manual mediation 830/DELFOR/Planning Releases 862/DELJIT/Shipping Releases System thinks about assets versus prerequisites Process set up to inform of asset confinements Material Identification Segregate great/terrible material Packaging and scanner tag naming

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Key Criteria Production and Product Control Process to screen stock levels Safety stock, least stock, and so forth. Check Accuracy Product structure exactness Control and treatment of WIP, scrap, rejects, returns Traceability

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Key Criteria Engineering Change Control Participate and formal close down New parts/past models/inert parts Shipping Timing, substance and precision of transportation marks Labels match client necessities Data substance of ASN is 100% exact Controls set up to avert shipping inconsistencies Customs clearing procedure (if relevant)

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Key Criteria Supplier Communication Process to guarantee sub-level suppliers can bolster generation on-time with the right amounts Electronic correspondence (EDI or Internet) Releases, calendars and ASNs Planning skyline is suitable In-travel perceivability from ASNs Customs clearing procedure (if appropriate) Process for suppliers to inform of deficiencies

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Key Criteria Supplier Packaging Bar code names Process to characterize bundling and pack size Ensure adequate bundling material is accessible

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Key Criteria Supplier Assessment Methodology to choose and assess suppliers Continuous change process for sub-suppliers Supplier execution measurements

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AIAG/Odette Benefits Survey

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AIAG and Odette MMOG/LE Survey regulated in March/April 2007 Over 160+ overview respondents North America Europe China Respondent demographics Tier 1, Tier 2, Tier 3 and Aftermarket Large, Midsize and Small Companies Implementation time was from 1 to 3+ years Management duty was not measured

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Top Five Performance Improvements: Tier 1 and Tier 2-3 Ability to meet ISO TS-16949 Ability to continue existing business Data exactness Ability to bolster incline (Tier 1) Overall supplier rating (Tier 2-3) Inventory Control Regardless of Tier:

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Top Five Performance Improvements: Large, Midsize and Small Companies Data exactness Ability to meet ISO TS-16949 Ability to continue existing business Large suppliers additionally demonstrated Delivery precision and stock control Midsize suppliers likewise showed Supports incline execution and new business Small suppliers likewise showed Overall supplier rating and new business Regardless of Size:

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Top Five Performance Improvements: by Time Implemented Data precision Ability to meet ISO TS-16949 Ability to continue existing business Also showed: < 1year: Ability to bolster incline and stock control 1-2 years: Inventory control 2-3 years: Delivery exactness and line deficiencies 3+ years: Reduced manual passage and stock control Regardless of Time Implemented:

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Data Accuracy Positive Performance Improvement Mean Score Over Time 70 68 66 64 62 60 58 <1 Year 1-2 Years 2-3 Years 3+ Years Notes: On a 100 point scale Over 60 is viewed as an in number positive reaction

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General Findings Meeting client prerequisites and information precision are reliable advantages paying little respect to time, size or level MMOG/LE use keeps on enhancing quite a long time MMOG/LE is an interest in first year of usage Continuous change is an excursion, not a destination Minimal contrasts between N.A. what\'s more, Europe Performance enhancements were predictable

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MMOG/LE Results Identified by OEMS

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Renault and MMOG/LE Global Benefits Renault obliges the utilization of Global MMOG/LE in undertaking stage (vehicles or motors) In July 2007 for the “Twingo” program: For 28 suppliers utilizing Global MMOG/LE Service Rate = 91 % For the others : Service Rate = 80 %

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Ford and MMOG/LE Delivery Rating Improvements 1641 suppliers in North America finished MMOG/LE As of December 31 st , 2007: 90% of suppliers reporting MMOG/LE Level “A” 90% of suppliers have a conveyance rating > 80 15% conveyance change in the previous 10 years

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Ford and MMOG/LE Benefits Improved Ford Delivery Ratings ASN information exact and auspicious Up-to-timetable shipments Correct bundling and naming Premium occasions diminished Improved correspondence with the Ford client areas Fewer Ford plant close downs because of materials administration issues All of which prompt expanded consumer loyalty !

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Ford and MMOG/LE Benefits Feedback and perceptions from supplier on location reviews Cost diminishments; particularly stock conveying expense of crude material, WIP, and completed products Optimization of stock security stock levels Improvement in floor space use Adherence to FIFO rehearses Accurate marking of material Efficiencies in transportation and getting ranges with set up window times Accurate part following Correct shipment being stacked on the truck Better comprehension of material administration framework Visual association – Plan For Every Part .:tsl

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