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Supplier Symposium 2008

Supplier Symposium 2008. Welcome to Alps Automotive McAllen Texas Nick Seeterlin, Purchasing Manager. How to Do Business with ALPS. http://supplier.alpsautomotive.biz/supplyWeb/account/login Automotive Supplier Manual FM.06.021, Rev. F Quality Requirements Green Procurement

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Supplier Symposium 2008

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  1. Supplier Symposium 2008 Welcome to Alps Automotive McAllen Texas Nick Seeterlin, Purchasing Manager

  2. How to Do Business with ALPS • http://supplier.alpsautomotive.biz/supplyWeb/account/login • Automotive Supplier Manual FM.06.021, Rev. F • Quality Requirements • Green Procurement • Material Requirements • Authorizations • Packaging • Paperwork • Delivery • Terms and Conditions • Breakdown Forms

  3. Supplier Symposium 2008 Purchasing Nick Seeterlin, Purchasing ManagerALAI Detlef Thonnissen, Materials Manager ALCOM

  4. Purchasing ALAI • BOM and Tooling P & L • Member of Program Launch Team • Concurrent Engineering Communication • New Tooling Design Reviews and Tracking • Prototype Builds - Order & Tracking • Production Quotes / Summarize • VA VE Design Related Ideas • ECN Signoff • Escalation Path pre SOP • Quality Issues • Logistics Issues • Commercial / Accounting Issues Program Purchasing Commodity Purchasing • Supplier Short List Maintenance • Scorecard and Development • Supplier Management Meetings • Sourcing Production Business • Resourcing • Escalation Path Production • Commercial Issues • Quality Issues • Logistics Issues • Cost Downs - Reporting • VA VE, Supply Chain Ideas • Negotiations

  5. Purchasing Program Management Pirrone - Team Asst Seeterlin – Senior Manager ToolingPrograms S. Joseph Supervisor Varga RKE / CAC Paye DSS / SWS / SWM / CSR Purchasing Cantu DSS Karnofsky CAC / SWM Pawlak RKE / SWS Pirrone CSR incl GECOM Supplier Quality Murphy DSS Adams RKE / SWS Lee CAC / SWM

  6. Purchasing Commodity Management Seeterlin – Senior Manager Pirrone - Team Asst Purchasing and ToolingCommodities S Joseph Tooling Tezuka Electronics, Asian Supply Katsube Mitsui, MDD, Auto F Pawlak Electromech / Electronics Hutton Plastics / Electromech / Supervisor Williams MRO / Packaging Rojas MRO / Paint / Resin / Outsourcing De La Garza Supplier Development/VAVE D Joseph Supply Web / JDE / Reporting SQA Lee Electronics, Asian Supply Adams Decorative Plastics Murphy Electromech, Shoot Ship Plastics, Stampings

  7. Purchasing Plant Level Management Thonnissen – Senior Manager A. Cruz – Purchasing Supervisor PurchasingCommodities S Kanasaki Plastics, Electronics, Electromechanical E Sanchez Electronics, Electromechanical L Delgado Auto F, Packaging E Cazares Plastics, Electronics M Garza Plastics, Electronics SQE B Garcia Manager Munoz Chemicals, Resins, Packaging Castillo Decorative Plastics Gonzalez Electromechanical, Electronics, Asian Suppliers

  8. Purchasing Escalation Process ALCOM Purchasing ALAI Purchasing Supplier Customer Service / Sales #1 Buyer #2 #3 #4 Sales Management Lead Buyer #5 #6 #7 cc Commodity Manager Sales Executive Material Manager #8 #7 #9 Purchasing Manager #10 PPL Director

  9. Spend by Commodity – 2007$126 Million

  10. Spend by Region – 2007$126 Million

  11. Purchasing Requirements • Total Cost Competitiveness, including Quality, Delivery • Breakdowns FM.06.004 and FM.06.005 • Annual Cost Downs • Financial Stability • Concurrent Engineering Support • Quick Turn, Detailed Quotations • Production Flexibility • Service Parts • VAVE Ideas and Implementation • Proactive Support to ALCOM component issues New Business Opportunities

  12. Supplier Symposium 2008 Supply Chain / Materials Detlef Thonnissen, Materials Manager

  13. Supply Chain TransformationOptimization (2008) Customer ALCOM Forecast accuracy measured weekly with feedback for improvement Tied directly to CSM industry forecasting data ALCOM freezes monthly plan MRP based on weekly buckets Forecast & Release Sales Forecast All communication of forecasts/releases via SupplyWeb and EDI Receipt into consigned inventory Shipped based on ETD date, assigned shipping day Short ships recognized at point of shipment (via ASN) Inventory reduction Increased milkrun/consolidation opportunities Receipts against pull signal number

  14. Supply Chain TransformationOptimization (2008)Key Change Points, Timing & Benefits • Transform “art” of forecasting into “science” (ongoing) • Based on industry forecasting data • Forecast accuracy constantly measured • Monthly production levelled and frozen • Standardize on SupplyWeb and/or EDI (July) • Confirm shipment at point of ship via ASN • Improve responsiveness • Eliminate all unauthorized freight (immediate) • Any deviation from standard freight requires PFA • Robust chargeback system for excess costs • Implement Alps Supplier Consigned Inventory System (September) • Reduces risks of supplier expedites, need of supplier to maintain stock at their facility • Allows further reductions of Alps inventory levels • Clearly defined Supplier Claim Process (on Supplier Portal now)

  15. Alps Supplier Consigned Inventory SystemKey 2008 Change Point • Goal: • Reduce expedites by supplier and Alps • Reduce total inventory levels at supplier and Alps • Reduce Alps logistics costs • No addition of risk or cost to supplier • Key Points: • Implemented in Alps owned facility by Alps personnel • Process protects supplier against aged inventory • No additional management activity by supplier (not VMI!) • Performed in McAllen for U.S. and overseas suppliers – no customs impact

  16. Alps Supplier Consigned Inventory SystemKey 2008 Change Point Weekly forecast/ order Shipment consolidated based on ABC class Incoterm is ExWorks at Supplier, however transfer of title does not take place until material is pulled Material received in MCA warehouse. Internally this will show as material available to our MRP, “in transit”, but uncosted Supplier classified on basis of location, material size, volumeA=Weekly ship (1-2 wk consignment)B=Bi-weekly ship (2-3 wk) C=Monthly ship (4-5 wk)

  17. Alps Supplier Consigned Inventory SystemKey 2008 Change Point Daily pull sheet Daily shipments to ATS-Reynosa Aging process runs and automatically completes pull of aged orders based on supplier ABC consignment code Weekly pull summary sent to supplier for invoicing

  18. Supply Chain TransformationOptimization (2008)Ongoing Issues & Costs • Alps planning systems based on weekly buckets • Complicates efforts to move to true JIT environment • Complicates use of internal (subassembly) pull systems • Receipts & payment made against specific PO & line (pull signal number) • Complicates receiving and measurement of supplier performance • Delays payment & adds overhead • Packaging • Inconsistent packaging types, suppliers • Limited returnable packaging

  19. Supply Chain TransformationWorld Class (2009) Customer ALCOM Transformation to Daily MRP Forecast & Release Sales Forecast Outsource some material controlresponsibility to vendors Shipped as directed VMI More formalized packaging standards, Returnable packaging CUM-based receiving and payment

  20. Material Releases • Suppliers will receive material forecasts and releases either by Supply Web or via EDI in the form of ANSI-X12 830 transaction • A quantity and date without a pull signal number is a forecast • A quantity and date with a pull signal number is a firm order • Releasable days defines firm orders vs. forecast • North American automotive standard is for firm orders to be a little more than transit time.

  21. Forecast, Release & Material AuthorizationKey 2007 Change Point • Forecast vs. Release (Firm) • Firm period reflects transit time plus order preparation only • Supplier is to build based on forecast beyond that point through true supplier lead time • Fab vs. Raw • Fab and Raw material authorizations protect supplier from Alps forecast reductions and drive claim process after end of regular production • Example: An item with 12 week discrete order lead time, as follows: • 3 weeks in transit to Alps • 3 weeks order preparation & fabrication • 6 weeks raw material order lead time 12 Week Discrete PO Lead Time Transit Fabrication Raw Lead Time 4 Week Firm + Forecast, Material authorizationEffective 4 week lead time with limited variation throughout forecast Firm Fabrication Raw

  22. Material Releases Supplier Responsibilities: • If Supplier does not get EDI or can not access Supply Web they are to contact their Alcom buyer immediately. • If Supplier can not meet forecast, they are to contact their ALCOM Buyer within 3 working days of receipt of forecast. • Supplier is to consolidate all weekly requirements into one shipment on their assigned ship day unless notified otherwise by Alps in writing • Supplier must provide ASN via EDI or Supply Web within 30 minutes of shipment. • If Supplier misses ship window, or cannot ship in full, they are to expedite materials to complete order at their expense. • Supplier is fully responsible for identifying if they believe Alps forecast violates terms as defined in supplier manual or written agreement, and providing evidence to ALCOM Buyer of this violation a minimum of 1 week in advance of ship date

  23. Material Releases ALPS Responsibilities: • Once a Supplier indicates a forecast they cannot meet (due to increase or over MCR or other concern), the ALCOM Buyer will review and determine responsibility or corrective action. • ALCOM Buyer will modify schedule or create a PFA if deemed ALPS responsibility for the deviation from standard shipping methods. • ALCOM Materials and/or ALAI Logistics will document any excess costs (downtime, overtime, freight, etc.) and prepare debits due to any supplier nonconformance.

  24. Claim Process • Material claim allowances are only relevant at End of Regular Production (EORP) or in event of Design Change (ECN) • No claim accepted until after EORP/ECN • Claim must be filed after but no later than 60 days of EORP/ECN, failure to do so relieves Alps from responsibility • Supplier must hold all material until Alps authorizes scrap • Alps must be able to audit claimed material • Supplier completes claim using data from Alps releases to identify fab/raw authorization

  25. Nonconformance Fines • All nonconformances will include an administration fee of $250 in addition to excessive costs incurred by Alps and our customers as a result of the nonconformance. Non-conformances include: • Shipping - Early, Incomplete or Late Shipments, Missing ASN’s • Packaging – Noncompliant, Incomplete, Inaccurate, Missing Labels and Paperwork. All packing slips must contain the following information: • Alps Part No. • Correct PO # • Correct Line # • Qty being shipped • Rejected Material Costs – Sorting, Reworking, Scraping, Returning • For a complete list of nonconformance items and chargebacks refer to the ALPS Automotive Supplier Manual FM.06.021, Rev. F, located at: http://supplier.alpsautomotive.biz/supplyWeb/account/login

  26. Company Profile Bob Anderson, Program Manager

  27. ALPS Group Electronic Parts & Devices Established in 1948 Mobile (Car) multimedia Established in 1967 Logistics Services Established in 1964

  28. ～ ～ Domestic Factories / Overseas Factories / Products Net Sales (JPY 100 mil.) 1000 2000 3000 4000 1948 1948 Established in Tokyo 1948 Switch 1949 Variable Capacitor 1954 TV Tuner 1958 Potentiometer 1960 Yokohama 1960 1960 FM Tuner 1963 UHF Tuner 1964 Furukawa 1966 Keyboard 1965 J/V KEL Company (India) 1966 Wakuya 1965 1967 Audio Head 1967 Niigata 1972 CATV Converter Kakuda 1973 Cassette Mechanism 1968 Soma 1974 RF Modulator 1970 1970 Central Lab. 1970 J/V Gold Star Alps (Korea) 1977 Micro Printer J/V Forward Electronics (Taiwan) 1978 Remote Controller 1973 J/V Alps Do Brazil (Brazil) Wire-dot Printer 1979 LCD 1975 1976 Morioka 1980 Floppy Disk Drive/Head 1977 Onahama VCR Head 1981 Tact Switch 1980 Control Panel for Car Use Optical Device 1983 Mouse / 1984 Plant Export to China Cylinder Unit LNB / 1984 Nagaoka UK Hard Disk Head 1985 1985 USA 1984 Thermal Printer 1987 Korea 1985 Hard Disk Drive 1988 Germany 1986 VCO 1990 Ireland 1988 Remote Keyless Entry 1989 Malaysia 1989 Clock Spring 1993 Dongguan (China) Transceiver Unit Ningbo (China) 1992 Micro Trackball 1995 Dalian (China) 1994 Glide Point Shanghai (China) 1996 Connector Mexico 2001 Wireless LAN Module 1995 Wuxi (China) 2000 2002 Haptic Commander Tianjin (China) 2004 Camera Module Czech 2005 Liqualloy™ Force Reactor™ 2005

  29. Alps Operating Organization and Products Automotive Products Division Magnetic Devices Division Peripheral Products Division Mechatronic　Devices Division Communication Devices Division • AM/FM tuner • TV/VCR tuner • Video modulator • DBS RF unit • RF units for communication • Optical Lens • Laser module • Network module • Floppy disk drive • Keyboard • LCD • Graphic input device • Office processor • Field data processor • Micro dry process printer • Remote control • Control panel • Power supply • Control panel • Switch • Electronics module • RF products • Clockspring • Steering Sensors • Switch • Tact switch • Trimmer capacitor • Potentiometer • Encoder • Sensor • Connector • Cassette mechanism • Audio head • Floppy disk head • Hard disk head • Cylinder unit • R-DAT mechanism

  30. World Wide Sales Locations Europe • Milton Keynes (England) • Solna (Sweden) • Goteborg(Sweden) • Helsinki(Finland) • Paris (France) • Dusseldorf (Germany) • Munchen (Germany) • Warsaw(Poland) Korea • Seoul • Sｕｗｏｎ • Gumi • Busan North America • Hatboro • Raleigh • Auburn Hills • Indianapolis • Ohio • Atlanta • Austin • Denver • San Jose • San Diego China • Beijing • Dalian • Suzhou • Hanzhou • Shanghai • Dongguan • Hong Kong Japan Taiwan • Taipei South America • Manaus • Sao Paulo Malaysia • Penang • Nilai Singapore Hong Kong Shanghai Dusseldorf (Germany) Auburn Hills (U.S.A.)

  31. World Wide Manufacturing Locations Europe • Ireland (Automotive Electronics Parts) • England • Germany (Tact Switch,LCD Module) • Czech Republic (Tuner,Modulator,Keyboard) North America • Reynosa (Automotive Electronics Parts) China • Dalian (Potentiometer,Car Steering Module) • Tianjin (Input Device,Keyboard,LCD Module) • Wuxi (Switch,Tact Switch,Connector) • Shanghai (Tuner,RF,FM) • Ningbo (Magnetic Head,Cylinder) • Dongguan (Remote Control,Printer,VTR Head,FDD) Korea • Kwangju (Automotive Electronics Parts) Malaysia • Jengka (Tuner,FDD) • Nilai (Switch,Remote Control) Reynosa(Mexico) Nilai(Malaysia) Wuxi(China) Czech Republic

  32. Global Automotive Operation Automotive Products Division Europe ALPS Electric Europa GmbH Japan/Asia Automotive Products Division America ALPS Automotive Inc. Sales Sales Sales Control Sales New Product & Process Development Product Design New Product Development Product Design Engineering Support Application Engineering Engineering Support Engineering Control Manufacturing (Korea/China/Japan) Manufacturing (Mexico) Production Control Manufacturing (Ireland)

  33. Automotive Products Division Products:　Car Switches/Control Units/RKE Systems Furukawa Plant Preliminary Door Switch Module Haptic Joystick TM Preliminary Preliminary TM Tire Pressure Monitoring System Haptic Commander Preliminary Smart Entry System Climate Control panel

  34. Mexico Plant Alcom Electronics Products: Switches/Electronic Modules/RKE

  35. Who is our Customer? Fiat Daewoo Suzuki Isuzu Subaru GM GM Brazil Vauxhall Saab Opel GM Holden Land Rover Ford Brazil Volvo Jaguar/ Aston Martin Ford Cologne UK Mazda Ford Ford Mexico Daihatsu Toyota France Toyota UK Toyota Toyota US Seat Skoda Audi VW VW Mexico VW Brazil Daimler Chrysler Daimler Chrysler Hyundai Renault Nissan UK Nissan US Renault Samsung Nissan PSA Honda UK Honda US Honda Honda Canada MG Rover BMW BMW US

  36. CUSTOMER AWARDS 1994 GM Supplier of the Year - Switches 1995 GM Supplier of the Year - Switches - CSR 1995 Nissan Quality Master Award 1995 Nissan Zero Defect Award 1995 Honda Productivity Improvement Award 1996 Honda Productivity Improvement Award 1996 Honda Productivity Improvement Award (Alps) 1996 ISO 9002 Certification 1997 J.D. Powers 1997 QS9000 Certification 1997 Chrysler Gold Pentastar Award 1997 GM Supplier of the year - CSR 1998 GM Supplier of the Year - Switches • GM Supplier of the Year – Switches • GM Supplier of the Year - Switches and Module • GM Supplier of the Year – Switches 2003 GM Supplier of the Year - Switches • GM Supplier of the Year – Switches 2004 TS16949 Certificate 2005 GM Supplier of the Year – Switches

  37. Customer Expectation of Alps • World class performance at best overall total program value. This includes piece price, development cost, on site resources and long term cost reductions. • Must give above and beyond contracted business.

  38. ALPS Expectation of Suppliers • Suppliers with the highest level of quality and support at the best overall value. • Annual cost reductions to match or exceed our customer requirements.

  39. SUPPLIER ALIGNMENT • WE CANNOT BE SUCCESSFUL WITHOUT THE ALIGNMENT OF ALPS SALES, PURCHASING AND THE COOPERATION OF OUR SUPPLY BASE.

  40. ALPS Expectations of a Quality SupplierBill Adams, Supplier Quality Engineer

  41. The Vision of Supplier Quality Management • To establish a world class supply base • To participate with Suppliers in establishing teams with a ‘Can Do’ attitude • To participate with Suppliers in establishing creative solutions to common problems • To participate with Suppliers in ensuring defect free product, on time, to our production lines.

  42. The Supplier Quality OrganizationORGANIZATIONAL CHART

  43. The Supplier Quality OrganizationORGANIZATIONAL RESPONSIBILITIES ALCOM • Supplier Performance – Product related • Monthly Scorecards - DMN Process • Control of containment actions - Internal • Control of CSL-1 actions • Supplier meetings at ALCOM • Cost recovery for line down and delivery concerns

  44. Goals of Supplier Quality for 2008 • Monthly improvement in PPM’s • Expectation is 50% improvement until the target of 50 PPM’s are reached, ultimate goal is Zero • Quick Response to DMN’s • 2 hour immediate Containment authorization • 24 hour Containment Response • 10 Day Corrective Action Response • Customer issues will meet their response demands • Promote a Zero Defect philosophy • Continuous Process Improvement activities

  45. The Supplier Quality OrganizationORGANIZATIONAL RESPONSIBILITIES ALAI • Supplier Management – Audits, C-TPAT Green Procurement • Supplier Performance - Quarterly • Supplier Improvement – CSL-2 • Monthly scorecards - DMN Process • Supplier PPAP’s • VA/VE initiatives – Cost and product related • Tool Transfers

  46. Goals of Supplier Quality for 2008 • ALPS / Supplier - Team improvement initiatives • System, process, management at the Suppliers facility • ALPS / Supplier - Team meetings at ALCOM • Review potential of process, handling, packaging, and communication improvements. • Register Suppliers on the Green Procurement web system by 10/1/2008 • Approve PPAP submissions - on time - 1st time • Conduct problem free Tool transfers

  47. The new initiative for Quality ImprovementCSL–2 Cost to the Supplier for Improvement not Containment • Joint Improvement opportunity for the Supplier and for ALPS • ALPS team to visit the Supplier’s facility • Supplier team to visit ALCOM • ALPS team to visit the Suppliers facility

  48. Supply Web the new frontierQuality and the Supply Web System: Supply Web will be a fundamental the link in establishing supplier status for decisions on new business. • Creating a process to track delivery and transportation concerns the DPR process (Delivery Performance Review) • Replaces the current nonconforming material process: MRR with the DMN (Defective Material Notification) process. • Box and internal package / reel labels will now be available in the Supply Web system • Supply Web establishes an internet access that will replace the current Supplier scorecards with an electronic process that tracks real time delivery, and quality concerns.

  49. C-TPAT Security Guidelines for Suppliers Customs & Trade Partnership Against Terrorism • C-TPAT recognizes the complexity of the international supply chains and endorses the application and implementation of security measures, based upon risk analysis, while allowing for flexibility and customization of security plans based on the Supplier’s business model • When a Supplier out sources elements such as transportation, warehousing, broker, consolidator or other elements the Supplier must assess their supply chain, based upon C-TPAT security guidelines, to ensure appropriate security measures, based on risk, are implemented and maintained throughout this supply chain.

  50. C-TPAT Security Guidelines for Suppliers The Elements of C-TPAT • CONVEYANCE SECURITY: Protect against the entry of unauthorized personnel or material. • BUSINESS PARTNER REQUIREMENTS: Ensure that service providers adhere to C-TPAT requirements • CONTAINER SECURITY: Protect against unauthorized personnel or material from entering the supply chain. • PHYSICAL ACCESS CONTROLS: Protect against the entry of unauthorized personnel into the facility or supply chain. • PERSONNEL SECURITY: Process to screen and check new and current employees. • PROCEDURAL SECURITY: Process to ensure the integrity and security of the cargo within the supply chain • SECURITY TRAINING AND THREAT AWARENESS: A program to educate employees, and the supply chain, of the potential threat of terrorist activities. • PHYSICAL SECURITY: Barriers', cameras, or other deterrents to guard against unauthorized access. • INFORMATION TECHNOLOGY SECURITY: To maintain the integrity of data from unauthorized entry or manipulation.

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