Supplier Performance Metrics External Balanced Score Card (EBSC) Update
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1 Supplier Performance Metrics External Balanced Score Card (EBSC) Update June, 2011 Morris Brown Janet Harthen Dale Zajac Supplier Relations Supplier Quality Supplier Quality- Warranty
2 2 How EBSC is used in sourcing Market Share Fiat Purchasing Technology Financial Risk TS MMOG/LE Commodity and Supplier Strategy Bid List Sourcing Decision Quotes Logistics EBSC
3 EBSC- 5 Equal Value Drivers (Production) Suppliers Delivery Quality Delivery Quality 20% 20% 20% 20% 20% 20% 20% 20% Cost 20% Partnership Cost 20% Warranty Product Dev. Process Partnership Bold Value Drivers Have Been Changed for
4 2011 EBSC Supplier / Commodity Scorecard Report Parameters Year: 2011 BU: Production Source Hold: Yes - Commercial Supplier: F - WP Chrysler, Inc. Source Restriction: No Address: 1207 Chrysler Road, Kokomo IN Financial Risk Rating: High Risk Commodity: 23BA - Non-Decorative Injection Moldings Service Parts (MOPAR): Yellow Scorecard Updated Jan 18, 2011 Target/We ight Jan Feb Mar Apr May Quality (20%) 59% 59% 76% 33% 0% 0% AQP / NCT Composite Non-Conforming Material - Prod (NC Tickets) Advance Quality Planning Forever Requirements Violation (occurrence) Containments (Yardholds) (occurrence) 3CPR Level 1 3CPR Level 2 TS Certification Q Hold Jun - Dec YTD 100% 64% 69% 57% 53% 96% 96% % 58% 76% 70% 94% 94% % 100% 98% 98% Deduction of points 1 to overall Y Y Y Y Y Y N N N N Y Y Delivery (20%) 100% 93% 91% 94% 98% 98% Delivery Conformance Response Conformance CLS/CLD (occurrence) MMOG/LE (deduction) % 100% 100% 100% 100% 100% 100% % 100% 92% 90% 94% 96% 96% Y Y N N N N Warranty (20%) 70% 68% 82% 82% 85% 85% Supplier Associated Warranty (C's/1000) % 70% 68% 82% 82% 85% 85% Cost (20%) 46% 32% 68% 100% 100% 100% Annual Combined (000's) Commercial Contribution (000's) Technical Contribution (000's) Idea(s) Submitted $1,250 $57 $79 $256 $646 $656 $ % 46% 32% 68% 100% 100% 100% $57 $79 $390 $400 $400 N N Y $256 $256 $256 $256 Partnership (20%) 52% 54% 56% 49% 51% 51% Purchasing Support Diversity (000's) Corporate Sustainability Delivery Grade each month, due to not submitting the MMOG/LE self-assessment scores by the assigned deadline. Deduction for no submission: 15 points for Direct Ship suppliers, 30 points for a SPD / Module or PAB supplier % 80% 80% 80% 50% 50% 50% $580 $50 $100 $150 $200 $250 $250 25% 8.6% 17.2% 25.9% 34.4% 43.1% 43.1% % 40% 40% 40% 60% 60% 60% Overall 64% 60% 73% 69% 62% 62% Benefits: Eliminates reconciliation of quarterly EBSC and monthly detail report numbers by suppliers and Chrysler employees Corporate sustainability assessment is a differentiator for Chrysler Mouse-over functionality to reveal descriptions and formulas for measures Better visibility of MOPAR performance on production scorecard 4
5 Quality Enhancements Quality (20%) AQP / NCT Composite Non-Conforming Material - Prod (NC Tickets) Advance Quality Planning Forever Requirements Violation (occurrence) Containments (Yardholds) (occurrence) 3CPR Level 1 3CPR Level 2 TS Certification Q Hold Aligned with supplier quality bid list Target/ Weight Jan Feb Mar YTD 59% 59% 76% 0% % 64% 69% 57% 96% % 58% 76% 94% % 100% 98% Y Y Y Y N N N Y AQP is now under Quality Potential deductions have been added for 3CPR Levels 1 & 2 TS 16949; Quality New Business Hold included 5
6 6 How to Improve Your Quality Score Take training in the source systems: NCT, CQMS, etc. Request access to the source systems in the Chrysler Supplier Portal (Covisint) Source systems contain the most current information, usually updated daily, rather than waiting for a monthly update on the scorecard Look at web sites, especially home pages of applications for updates Learn how to run reports in source systems Learn how to run deliverable due reports 30 days in advance Make sure any parts sourced to your location are your parts Look at your scorecard frequently. Files are uploaded as received from source systems (usually over the weekend) The Quality Value Driver is usually fully loaded by the 3 rd week of the month
7 Quality Value Driver
8 AQP/NCT Composite Score 8
9 9 AQP/NCT Composite Score This measurement is a composite of the AQP (Advance Quality Planning) and NCT (Non Conformance Tracking) measurements Calculated as ¼ of the AQP value plus ¾ of the NCT value Formula: (AQP FFR * 25%) + (NCT FFR *75%) Example: (60 * 25%) + (80 * 75%)
10 Advance Quality Planning AQP 10
11 11 Advance Quality Planning (AQP) The AQP measure is a percentage of required responses submitted to CQMS before the appropriate due date Calculation: # Deliverables Submitted # Deliverables Due Target is 100% of responses submitted on time Cumulative rolling 6 month score
12 AQP Measurement Business Rules If there are no tasks due within the current month, the score will be null (blank) for the month (not 0%) No credit is given for responses entered after the due date If a part is incorrectly sourced it will still be included in the BSC for IRE, AQP and PPAP tasks. Please work with the Chrysler buyer to correct any sourcing issue prior to the month end Effective 3/11/2011 Mandatory tasks that are not approved will be scored in between Quality Gates Task promise dates must be kept current at all times in order to avoid a negative score
13 13 Exemptions from AQP Scoring AQP and PPAP tasks created in the current and previous calendar months are exempt from scoring If a Quality Gate date is moved into the current or previous months, it is exempt from scoring for AQP and PPAP tasks Cancelled parts with an effective out date occurring in the scoring month are exempt from scoring (out date = last date the part will be placed on a vehicle)
14 AQP IBSC/EBSC Weights and Scoring - Effective January
15 15 AQP Supplier Reports - Web Suppliers need to request access to the AQP Supplier Reports link from their Security Administrator. The link is located under the Applications tab in the Chrysler portal. It will help you understand your AQP score.
16 16 AQP Supplier Reports - Web 5 Reports
17 17 AQP Supplier Reports - Web
18 18 AQP Supplier Reports - Web
19 19 AQP Supplier Reports - Web
20 Non-Conformance Tracking NCT 20
21 21 Non Conformance Tracking Nonconformance Tracking System is source system Cumulative rolling 6 month score Non-conforming tickets that change to a status that is not scored are adjusted in the current month calculation
22 NCT Adjustments Adjustments - Resolved disputed tickets (possible NC quantity or defect code) - Voided or cancelled tickets Defect Codes that do not count against suppliers - NPNP Notice of Shipment of Potential Non- Conforming Parts (pro-active notification) - NPCO No Parts Cost Only - DCC Directed Consigned Component - DCNC Directed Component Non-Conformance
23 23 NCT Ticket FFR Calculation C= Current = 8 T = Target = 4 Formula: (1-6*(C-T)/(T+100) ) *100 [1-6 * (8-4)/( 4+100)] *100 [1-6 * 4/104] *100 [1-6* ]*100 [ ] *100 = *100 = 76.9 = 77 % FFR
24 Best-in-Class Definition NCT uses a Best-In-Class (BIC) methodology to determine the target for each 4 digit commodity code. Suppliers that ship the same local commodity code are grouped together and the best performance is used to determine the 2011 target for all suppliers that ship that commodity 24
25 NCT Ticket Targets - Example Suppliers in Local code 12AA Receipts Those under the 20% floor are eliminated from participating in BIC Suppliers able to participate in BIC Supplier A Supplier B Supplier C Supplier D Supplier E Supplier F Supplier G Average % BIC Floor = (average of receipts for local commodity code)*
26 Target Setting For NC Tickets Best in Class target for all suppliers in the LCC 4 digit commodity code 12AA with 10% improvement factor = 3.9 = 4.0 NC Tickets Target = 4 x.90 = 3.6 Tickets Supplier A Supplier B Supplier F Supplier C Supplier D Supplier E Supplier G 26
27 NCT Rolling 6 Months 27
28 NCT Rolling 6 Months 28
29 NCT 6 Month Summary 29
30 30 NCT Rolling 6 Month Detail
31 Rolling 6 Month Detail by Part 31
32 32 Ticket Details by Part
33 NCT Worksheet Inquiry 33
34 Quality Metric Deductions Forever Requirement Violation Containments (Yardholds) 3CPR Level 1 3CPR Level 2 TS Certification Quality New Business Hold 34
35 35 Deductions from the Composite Score Forever Requirements Violation 10 point deduction per occurrence More than 2 occurrences in the scoring period - Quality Score = Zero Containments (Yardholds) 20 point deduction per occurrence More than 2 occurrences in the scoring period - Quality Score = Zero 3CPR (Third Party Containment and Problem Resolution) - Level 1 5 point deduction per month in which project is open More than 2 occurrences in the scoring period - Quality Score = Zero 3CPR Level 2 10 point deduction per occurrence in which project is open More than 1 occurrence in the same month Quality Score = Zero TS16949 Certification No Certification - Quality Score = Zero Metric is yet to become activated to affect scorecard Quality New Business Hold NBH - Quality Score = Zero
36 Forever Requirement Violations FRV 36
37 37 The Forever Requirements Proactively communicate with Chrysler and know when to raise the Red Flag Request approval from Chrysler prior to implementing any anticipated material or process changes Request approval from Chrysler prior to implementing any internal or sub-supplier manufacturing location changes Watch for sub-supplier issues and inform Chrysler of them Notify Chrysler of possible supply/capacity issues
38 38 Forever Requirements Violations Categories Processing change Change in construction or material Implemented prior to Forever Requirements approval Parts produced at different / additional locations Sub-supplier location change Sub-supplier material change Tooling capacity change Unauthorized tooling transfer Unauthorized refurbishment/replacement Missed PDR (Production Demonstration Run) & PPAP dates Other
39 39 Forever Requirements Cumulative rolling 6 month score 10 point deduction per occurrence from the overall quality score More than 2 occurrences in the scoring period - Quality Score = Zero
40 PRI SQ Responsible Yardholds 40
41 41 Yardholds Measure of the occurrences of a supplier responsible containment (yardholds) as reported by the Chrysler manufacturing plant via a PRI (Product Related Issue) Cumulative rolling 6 month score 20 point deduction per occurrence from the overall quality score More than 2 occurrences in the scoring period - Quality Score = Zero
42 Third Party Containment & Problem Resolution 3CPR Level 1 3CPR Level 2 3CPR@Chrysler.com 42
43 Third Party Containment & Problem Resolution Level 1 3CPR Provider (3CPR-P) sorts Chrysler inventory (pipeline), supplier sorts at supplier plant. 3CPR-P sorts all parts past supplier s dock and 100% of supplier s clean certified shipment (CS) Supplier sorts all parts to all plants before shipping until 3CPR-P verifies supplier s clean CS - 5 point deduction per month in which project is open - More than 2 occurrences in the same month - Quality Score = Zero Level 2 3CPR-P sorts at Supplier s plant (L2 includes L1 unless L1 waived). 3CPR-P sorts all parts past supplier s dock and all parts to all plants prior to shipment for 15 to 999 days (project initiator determined length of time) from supplier s permanent corrective action (PCA) implementation date. Exit clock resets if nonconforming part found after PCA point deduction per occurrence in which project is open - More than 1 occurrence in the same month Quality Score = Zero 43
44 Third Party Containment & Problem Resolution Are there any sorts that are not counted toward the scorecard? If the supplier notifies the 3CPR provider or the plant and requests a pro-active 3CPR sort, the scorecard is not affected A Pro-active sort is identified as such on the project itself Is there a dispute process of any kind that would affect a 3CPR point deduction? No Any discussion would be handled at the time of the sort Additional information? Information including a Training and Help section can be found the on 3CPR site available through Covisint Questions? Contact 3CPR@Chrysler.com 44
45 ISO/TS16949 Mail box: Web site: TS16949.extra.chrysler.com 45
46 ISO/TS16949 Chrysler now requires suppliers to provide proof of certification to ISO/TS16949 and were notified by Chrysler Management Certification - Quality Score = Zero Metric is yet to become activated to affect scorecard
47 TS Certification Suppliers were notified in writing by Chrysler management in June and September, 2010 regarding the TS certification requirement Supplier certifications are captured and status is monitored Certification scoring is not yet effective Scoring Plan When this metric is activated in late July, we will display the certification status, but NOT have it affect the scorecard for TWO months to allow suppliers time to see their status and respond After two months, a NO will result in 0 on the scorecard for Quality, 47
48 Submit TS Certification Information Required: PDF (only) copy of current certification Supplier Manufacturing Location Code (SMLC) Contact information o Name o Phone o address to: TS16949@Chrysler.com 48
49 Quality New Business Hold NBH 49
50 50 Quality New Business Hold A formal Supplier Quality led process to restrict supplier manufacturing locations from quoting on new business opportunities Suppliers are notified if they are placed on NBH Suppliers need to meet the established exit criteria to be taken off NBH NBH Yes - Quality Score = Zero
51 Partnership Enhancements Partnership (20%) Purchasing Support Diversity (000's) Corporate Sustainability Target/ Weight Jan Feb Mar YTD 52% 54% 56% 51% % 80% 80% 80% 50% $580 $50 $100 $150 $250 25% 8.6% 17.2% 25.9% 43.1% % 40% 40% 40% 60% Overall 64% 60% 73% 62% Engineering survey has been replaced with corporate sustainability assessment More robust diversity calculation (eliminates directed parts, foreign operations) Partnership score (20% of total EBSC) Purchasing Support Survey (10%) Corporate Sustainability Assessment (5%) Diversity (5%) 51
52 52 Purchasing Support Survey Measure for Partnership mindset of supplier management Survey provides 10% of score Performed 2x per year Assessment by Lead Director
53 Purchasing Support Survey X Low ranking results in F2F meeting: 10 Benefits both! 53
54 Purchasing Support Survey 10 54
55 55 Diversity Purpose: Measure Supplier Performance to Target Warranty 20 points Delivery 20 points Diversity: 5% Purchasing support: 10% Partnership 20 points Quality 20 points Sustainability: 5% Cost 20 points Note: Red rating in diversity negates entire partnership score (20 points)
56 Corporate Responsibility Supplier Self-assessment Online survey to determine level of Corporate Responsibility activity within supply base Will measure all suppliers regardless of commodity or APV Data collected will be used to help structure Supply Chain Sustainability Assessment measures: Overall Program Working Conditions Environmental Management Ethics & Anti-corruption Training & Governance 56
57 Corporate Responsibility Tracking and issue-identification tool 57
58 58 Warranty Enhancements Warranty (20%) Target/ Weight Jan Feb Mar YTD 70% 68% 82% 85% Supplier Associated Warranty (C's/1000) % 70% 68% 82% 85% Warranty has been moved out from Quality into its own section Warranty weight has been increased to 20% Aligned with the new Supplier Associated Warranty Reduction Program (SAWRP)
59 59 Supplier Monthly Measure Formula to calculate the Fulfillment Rate (FFR) Formula to set an FFR >= 80% if supplier does not deteriorate Formula to set FFR =100% if supplier meet/exceeds the corporate initiative (12% for 2011MY) Formula: FFR = (Percent Improvement* 1.667) + (80%) Percent Improvement ( Best of two prior years Current) / Best of two of the prior years = Improvement factor constant (20%/12%)
60 FFR Deterioration 60 Graphical Representation 100% Improvement 90% 80% No warranty improvement 70% 60% 50% 40% 2MIS 3MIS 4MIS 5MIS 6MIS 30% 20% 10% 0%
61 61 New Measures - Cost Cost (20%) 46% 32% 68% 100% 100% 100% Annual Combined (000's) Commercial Contribution (000's) $1,250 $57 $79 $256 $646 $656 $ % 46% 32% 68% 100% 100% 100% $57 $79 $390 $400 $400 Technical Contribution (000's) Idea(s) Submitted N N Y $256 $256 $256 $256
62 62 New Measures - Cost Target / Weight Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD Cost (20%) 15% 16% 41% 94% 87% 87% Annual Combined (000's) Commercial Contribution (000's) Technical Contribution (000's) $1,250 $1,000 $250 $57 $57 $0 $79 $79 $0 $256 $79 $177 $646 $390 $256 $656 $400 $256 $656 $400 $256 15% 15% 0% 16% 16% 0% 41% 13% 28% 94% 57% 37% 87% 53% 34% 87% 53% 34% Idea(s) Submitted? N N N Y N RAW SUPPLIER DATA Glide Path YTD Target in CY Savings EBSC Score Supplier XYZ Target ($000) Factor * May ($000) Credit ($000) as of May APV - $41,666,667 Total (3.0% APV) 1,250 60% % Commercial (2.4% APV) 1,000 60% % Technical (0.6% APV) % % Idea(s) Submitted? Indicates if supplier enters ideas in the database each month --- no impact to score * The following glide path will be used to calculate the cost metric within the EBSC: Jan - 30%, Feb - 40%, Mar - 50%, Apr - 55%, May - 60%, June - 70%, July - 80%, Aug - 85%, Sept - 90%, Oct - 95%, Nov - 100%, Dec - 100% Example shown for the month of May Commercial Contribution = 400 / (1,250 x 0.60) = 53% Technical Contribution = 256 / (1,250 x 0.60) = 34% Ideas Submitted? N (No ideas submitted in May) EBSC Cost Score as of May = 87%
63 63 New Measures - Delivery Delivery (20%) 100% 93% 91% 94% 98% 98% Delivery Conformance Response Conformance CLS/CLD (occurrence) % 100% 100% 100% 100% 100% 100% % 100% 92% 90% 94% 96% 96% MMOG/LE (deduction) Y Y N N N N Direct feed from DRIVe at commodity level Potential deductions for CLS/CLD occurrence and MMOG/LE not being submitted
64 Navigating to EBSC GPSIS MAIN MENU - Supplier Tools EBSC Monthly Detail Report Other Tools -MCM
65 Navigating to EBSC Supplier / Commodity Scorecard Report Parameters Year: 2011 BU: Production Source Hold: Yes - Commercial Supplier: F - WP Chrysler, Inc. Source Restriction: No Address: 1207 Chrysler Road, Kokomo IN Financial Risk Rating: High Risk Commodity: 23BA - Non-Decorative Injection Moldings Service Parts (MOPAR): Yellow Scorecard Updated Jan 18, 2011 Target/We ight Jan Feb Mar Apr May Jun - Dec YTD Quality (20%) 59% 59% 76% 33% 0% 0% AQP / NCT Composite % 64% 69% 57% 53% 96% 96% Non-Conforming Material - Prod (NC Tickets) % 58% 76% 70% 94% 94% Advance Quality Planning % 100% 98% 98% Forever Requirements Violation (occurrence) 1 1 Containments (Yardholds) (occurrence) CPR Level 1 1 3CPR Level 2 TS Certification Q Hold 1 Y Y Y Y Y Y N N N N Y Y Delivery (20%) 100% 93% 91% 94% 98% 98% Delivery Conformance % 100% 100% 100% 100% 100% 100% Response Conformance % 100% 92% 90% 94% 96% 96% CLS/CLD (occurrence) MMOG/LE (deduction) Y Y N N N N Warranty (20%) 70% 68% 82% 82% 85% 85% Supplier Associated Warranty (C's/1000) % 70% 68% 82% 82% 85% 85% Cost (20%) 46% 32% 68% 100% 100% 100% Annual Combined (000's) $1,250 $57 $79 $256 $646 $656 $ % 46% 32% 68% 100% 100% 100% Commercial Contribution (000's) $57 $79 $390 $400 $400 Technical Contribution (000's) Idea(s) Submitted N N Y $256 $256 $256 $256 Partnership (20%) 52% 54% 56% 49% 51% 51% Purchasing Support % 80% 80% 80% 50% 50% 50% Diversity (000's) $580 $50 $100 $150 $200 $250 $250 25% 8.6% 17.2% 25.9% 34.4% 43.1% 43.1% Corporate Sustainability % 40% 40% 40% 60% 60% 60% Overall 64% 60% 73% 69% 62% 62%
66 66 Suggestions & Feedback For help: General EBSC Questions: Quality Questions: Warranty Questions: Delivery / Supply Questions: scmsdd@chrysler.com. DSD Questions: crp7@chrysler.com Cost Measure Questions: bj558@chrysler.com Corporate sustainability: csr@chrysler.com
67 2011 EBSC Supplier / Commodity Scorecard Report Parameters Year: 2011 BU: Production Source Hold: Yes - Commercial Supplier: F - WP Chrysler, Inc. Source Restriction: No Address: 1207 Chrysler Road, Kokomo IN Financial Risk Rating: High Risk Commodity: 23BA - Non-Decorative Injection Moldings Service Parts (MOPAR): Yellow Scorecard Updated Jan 18, 2011 Target/We ight Jan Feb Mar Apr May Quality (20%) 59% 59% 76% 33% 0% 0% AQP / NCT Composite Non-Conforming Material - Prod (NC Tickets) Advance Quality Planning Forever Requirements Violation (occurrence) Containments (Yardholds) (occurrence) 3CPR Level 1 3CPR Level 2 TS Certification Q Hold Jun - Dec YTD 100% 64% 69% 57% 53% 96% 96% % 58% 76% 70% 94% 94% % 100% 98% 98% Y Y Y Y Y Y N N N N Y Y Delivery (20%) 100% 93% 91% 94% 98% 98% Delivery Conformance Response Conformance CLS/CLD (occurrence) MMOG/LE (deduction) % 100% 100% 100% 100% 100% 100% % 100% 92% 90% 94% 96% 96% Y Y N N N N Warranty (20%) 70% 68% 82% 82% 85% 85% Supplier Associated Warranty (C's/1000) % 70% 68% 82% 82% 85% 85% Cost (20%) 46% 32% 68% 100% 100% 100% Annual Combined (000's) Commercial Contribution (000's) Technical Contribution (000's) Idea(s) Submitted $1,250 $57 $79 $256 $646 $656 $ % 46% 32% 68% 100% 100% 100% $57 $79 $390 $400 $400 N N Y $256 $256 $256 $256 Partnership (20%) 52% 54% 56% 49% 51% 51% Purchasing Support Diversity (000's) Corporate Sustainability % 80% 80% 80% 50% 50% 50% $580 $50 $100 $150 $200 $250 $250 25% 8.6% 17.2% 25.9% 34.4% 43.1% 43.1% % 40% 40% 40% 60% 60% 60% Overall 64% 60% 73% 69% 62% 62% Next Steps Supplier Training Week 2 Full EBSC training sessions occurred EBSC Webinars are scheduled for June 23 and July 20 Phase 1 (Quality & Delivery) launches in May-Suppliers able to view in June Phase 2 launches in June- Suppliers able to view in July Contact ebsc@chrysler.com or morris.brown@chrysler.com
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