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Supplier Management Supplier Evaluation / Classification

Preamble: BOS uses global sourcing to find the most suitable suppliers for making deliveries to all BOS plants around the world. In particular it is the companys intent to qualify local suppliers (located in pro imity to our production plants! to reach a level enabling them to supply to all plants across the BOS "roup.

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Introduction * %reface ,valuation -riteria Standard ,valuation -riteria .on/-onforming 0elivery 0ates 0elivery 0ate 1etric .on/-onforming 3uantities 0elivered 0elivered 3uantity 1etric %%1 #nalyses on 3/reports 1etric %%1 #dditional ,valuation -riteria .umber of -ustomer -omplaints %remium 7reights Supplier 8aunch 3uality ,valuation :eighting of ,valuation -riteria Supplier ;ating for Overall ,valuation Standard ,valuation -riteria #dditional ,valuation -riteria -onsequences # < 8evel ;ating B < 8evel ;ating - < 8evel ;ating

%age + + + + 2 4 4 5 5 6 6 6 9 )( )( )( )( )) )) )) ))

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Introduction 1 Preface BOS intends to establish a standard evaluation scheme for the entire BOS "roup. =he supplier qualification provides the basis for collaboration between all BOS locations regarding the selection> determination and evaluation of suppliers which are planned to be < or have already been < integrated in the value chain of our products. 2 Evaluation Criteria =he supplier evaluation will be performed according to the following criteria$ Standard evaluation criteria #dditional evaluation criteria

2.1 Standard Evaluation Criteria =he evaluation consists of three standard evaluation criteria$ 0elivery date (weighted at '(?! 3uantity delivered (weighted at '(?! %%1 on 3/reports (weighted at '4?!

=he evaluation period for the three standard evaluation criteria listed above will be established for a continuous )'/month time frame. =he standard evaluation criteria will only be weighted at 54 ? in the overall evaluation. 2.1.1 on!Conforming "eliver# "ates

0elivery dates are assessed based on the difference between the delivery date agreed on the purchase order and the actual receipt of the shipment in the receiving docks of the respective plant. If the delivery date is stated as a calendar week 7riday is deemed to be the agreed delivery date. ,ach inbound shipment will be rated according to the score below$ 0ays =o @ )2 )2 =o A =o + =o @/+ ;esponsible$ -entral 8ogistics 0ays )( 2 /+ %oints ( +( 5( )(( 5(

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2.1.1.1 "eliver# "ate Metric =he points for all deliveries made per type of delivery are added and then divided by the number of shipments received. , ample$ Supplier # Ordered AA)9((+922(( AA)9(('(4(() AA)9(('(4(() AA)9(('4')(( AA)9(()')+(( %otal$

+( Buly (5 )9 #ug (5 (9 Sep (5 (9 Sep (5 (9 0ec (5

0elivered '5 #ug (5 (2 Sep (5 )) Sep (5 )5 Sep (5 (' 0ec (5

:orkdays )A )) + 5 /2

%oints ( +( )(( 5( 5( 2&'

Point score for all deliveries made "" ( umber of s)ipments received 2&' "" ( & =he 00 metric will be reported by -entral 8ogistics to -entral %urchasing by plant and supplier at the end of the established interval. &'

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2.1.2

on!Conforming *uantities "elivered

3uantities delivered are assessed based on the difference between the quantity agreed on the purchase order and the quantity actually received. ,ach inbound shipment will be evaluated using the point score below$ 7rom quantity in ? 2( )( ( 2.1.2.1 "elivered *uantit# Metric =he points for all shipments received per supplier are added and then divided by the number of shipments received. , ample$ Supplier # Ordered AA)9((+922(( AA)9(('(4(() AA)9(('(4(() AA)9(('4')(( AA)9(()')+(( =otal Point score of all deliveries made "* ( umber of 1+' ,M ( & 3=o quantity in ? @2( @)( @) %oints ( +( 5( )((

3uantity )(((( pcs )(((( pcs 5((( pcs )((( pcs 9((( pcs

0elivered 4((( pcs A4(( pcs 5((( pcs 54( pcs )+((( pcs

&ariance 4( ? 4 ? ( ? +4 ? 5'.4 ?

%oints ( 5( )(( +( ( 1+'

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2.1.3 PPM /nal#ses on *!0eports 1-" 0eports2 %%1 rates are analyCed by comparing the reported non/conforming quantity with the quantity delivered. =he reported non/conforming quantity includes all quantities which the supplier has accepted as non/conforming quantities (90 ;eports accepted by supplier!. It is immaterial whether such quantities were physically shipped or only posted as returned quantities. .on/conforming parts which were installed despite the non/conformance are %%1/relevant if a 3/report (complaint from S#%! was created. In comparisons with the supplier> in other words if partial quantities from a total delivery have been acceptedD only the reEected quantity will be posted as a reported non/ conforming quantity. =he point score below considers the O/defects philosophy to which the BOS "roup is committed. 2.1.3.1 Metric PPM 1*!0eport 3 - " 0eport2 =he ratio between the reported non/conforming quantity * delivered quantity F )>(((>((( results in the ppm rate. 7or the purposes of performing the supplier evaluation> the overall delivery situation of the supplier will be considered. Gence the total quantity delivered across all of the suppliers part will be reviewed. , ample$ Supplier # Ordered AA)9((+922(( AA)9(('(4(() AA)9(('(4(() AA)9(('4')(( AA)9(()')+(( =otal

3uantity )((((pcs )((((pcs 5((( pcs )((( pcs 9((( pcs +4((( pcs

;ep. non/conf. 4 9 ( ' ) )5 pcs pcs pcs pcs pcs pcs

ppm 4(( 9(( ( '((( )'4 $&4 ppm (ratio to )mill.!

=he H%%1H metric is determined from the ppm/rate using the point score below$ ppm ;ate @ A((( 9AAA 4AAA 'AAA )6AA I 4(( ;esponsible$ 31I ppm ;ate 5((( +((( )9(( 4(( %oints ( '( +( 5( 9( )((

Gence the H%%1H metric for supplier # in this e ample is 1'' points.
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2.2 /dditional Evaluation Criteria 2.2.1 umber of complaints 15ritten2 / total number of production parts 1 umber of item numbers and/or I"! o.: per #ear

=he definition of complaints (reported non/conformances! is based on the 90/;eport and*or 3/;eports (S#%!. 7rom the total number of complaints for a supplier in relation to the number of currently approved item numbers per year> a metric is determined which will be assessed as follows$ %oints )(( 5( +( ( -riterion 1etric J ( < (>) 1etric @ (>) < (>+ 1etric @ (>+ < (>4 1etric @ (>4

In the overall evaluation> the complaints are weighted at )4?. 2.2.2 Premium 6reig)ts If deliveries to BOS plants require premium freights> these will be assessed in relation to regular freights. =he total of premium freights comprises the premium freights caused by the supplier and initiated by BOS. %remium freights initiated and paid for by the supplier must be reportedD for this purpose> the evaluation letter inquiring about premium freights is sent. %oints )(( 5( +( ( -riterion .o premium freights I 4? @ 4? und I )(? @ )(?

In the overall evaluation> premium freights are weighted at )(?. .

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..2.3 Supplier ,aunc) *ualit# Evaluation 7or new proEects> the HSupplier 8aunch 3ualityK evaluation is a preliminary evaluation of the supplier prior to SO%. =his evaluation is used for suppliers bringing new components to the proEect. =he HSupplier 8aunch 3ualityK evaluation is performed < by proEect < at the time of the %,% 2 process (pre/production!. =he following evaluation criteria will be considered$ ). '. +. 2. 4. #3% 8OB list$ complete> on/time> up/to/date documentation> etc. ,valuation of sampling process Gow does the supplier manage its sub/suppliersL ,valuation of quality issues prior to SO% ,valuation of suppliers communication and involvement*support

=his HSupplier 8aunch 3ualityK evaluation will be performed by 3uality #ssurance International (3#I! and the ,ng. Mnits. =he evaluation refers to the plant as well as the proEect*product. ,ach criterion will be rated at )(> 4> or ) point(s!> with )( points representing the worst rating. #ll criteria are weighted equally. =he five evaluation criteria are multiplied. =he result is the S83 proEect evaluation for the finished proEect. By means of this score the supplier is classified as #83>B83 or -83 and receives the corresponding point for the total evaluation (compare table below!. If> during the evaluation period> several HSupplier 8aunch 3uality ,valuationsH are performed> the average value of the individual proEect evaluations will be determined. =he evaluation result will be shown as follows$ S83 proEect evaluation ( < 2A 4( < AA )(( and more -lassification supplier #83 B83 -83 %oints )(( 5( (

In the suppliers overall evaluation the HSupplier 8aunch 3ualityK rating will be weighted at )(?.

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, ample of a supplier involved in two proEects$ %roEect ) < -rit. ) J 4> -rit.' J )> -rit.+ J 4> -rit.2 J )> -rit.4 J ) 1ultiplied J '4 N=hus being rated as #83 /)(( pointsO %roEect ' < -rit. ) J )(> -rit.' J )(> -rit.+ J 4> -rit.2 J )> -rit.4 J 4 1ultiplied J '4(( N=hus being rated as -83 / ( pointsO #verage score of proEect evaluation J ()(( P (!*' J 4( -onclusion$ 7inal result$ Supplier rated as B83 / 5( points # supplier not being rated in the HSupplier 8aunch 3ualityK category will receive the full points score for this additional criterion in the overall evaluation. 31I will perform this evaluation and communicate the result to -entral %urchasing after the respective assessment intervals.

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3 7eig)ting of Evaluation Criteria =he weighting is as follows$ a! Standard evaluation criteria$ %%1 .on/conf. delivery date .on/conf. quantity del. %otal: '4? '(? '(? .&8 )(? )4? )(? 3&8

b! #dditional evaluation criteria$ .umber of premium freights .umber of complaints 3uality 8aunch evaluation %otal: 3.1 Supplier 0ating for 9verall Evaluation

#fter determining the scores for all metrics the scores are added and divided by the number of evaluation criteria. =his will result in a rating of the supplier for the standard evaluation criteria according to scheme below$ )(( / 96 95 / 5( 4A / ( 3.2 Standard Evaluation Criteria 0elivery date 3uantity delivered ;eturn shipments 3.3 /dditional Evaluation Criteria .umber of complaints (written!*total number of item numbers delivered per year. .umber of premium freights vs. regular freights ;ating from Supplier 8aunch 3uality ,valuation %otal: ;rand total$ points points points #/8evel Supplier B/8evel Supplier -/8evel Supplier E:ample: 4(% +9% )((% '(? J )( % '(? J 6.5% '4? J '4 % $2.. P

5(% +(% 5(%

)4? J A % )(? J + % )(? J 5 % 1- P .'<. points 1=!,evel Supplier2

ote: # consolidated worldwide evaluation is performed by adding the total score from all plants and then dividing this value by the number of plants> for e ample$ GM
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9+ P 9( P 6( J '++* + plants J 69 %

=hese 69 points would then be multiplied with the score achieved for the respective evaluation metric and factored into the overall evaluation. (See above e ampleQ! $ Conse>uences 2.) 2.' #/8evel ;ating - .o action plan required. B/8evel ;ating - Supplier has to contact the respective functional areas> such as 8ogistics> %lant 3#> 31I (8aunch 3uality!> -entral %urchasing> and define proposed improvements (action plan with timeline!. -/8evel ;ating - Supplier has to contact the respective functional areas> such as 8ogistics> %lant 3#> 31I (8aunch 3uality!> -entral %urchasing> and define proposed improvements (action plan with timeline!. - #ward of new contracts questionable. - Supplier may be included in =op 7ocus process (31I! / Supplier has to update the supplier data sheet

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#pproved by$

;. Gillemacher

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-. Gerrington

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