1. Berlin, November 2009 Deutsche Bahn AG Dipl. Ing. Sascha Pantel Technology, Integrated Systems and Services - Procurement Further development of supplier management Deutsche Bahn AG Buildings and Structures Product Area – Supplier Management

2. 2Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 Supplier management as a continuous process 1. Cross-functional and ongoing:  Updating and  Continuing the supplier data  Risk management Supplier development 3. Supplier evaluation 2. Phasing out suppliers Integrated Systems Rail Supplier management at DB is understood as an overall control process and consists of 3 part phases OVERVIEW OF THE SUPPLIER MANAGEMENT PROCESS New companies Supplier qualification

3. 3Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 Supplier qualification 1. Supplier development 3. Supplier evaluation 2. Integrated Systems Rail All suppliers are qualified, but with different degrees of intensity  For this purpose, the suppliers' products/ services are classified into risk categories  Depending on the risk category of the products/services, qualification is made at different depths with different requirements  Criteria for determining suitability are specialist know-how, productive capacity and reliability Key aspects of supplier qualification

4. 4Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 The risk assessment of the groups of goods determines the qualification intensity of the potential contracting party environment customers image costs supply quality safety set freely selectable Example dimensions for determining the risk other criteria none Risk classification high very high low usual Basic data Commer. criteria Perform. criteria Process criteria Modules for qualification

5. 5Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 Modules Contractual capacity Trustworthiness Reliability Sustainability QUALIFICATION: GRADATION LOGIC FOR THE QUALIFICATION OF COMPANIES Example sub-criteria Basic data Commer. criteria Perform. criteria a and b Process criteria  DUNS no., Sector Code  company, address, telephone no., contact  banking connection  VAT ID  QMS in place  ability to enter into risks (trade assoc. member)  solvency of the company  integrity of business management  references at DB AG  work at the required state of the art (DIN)/minimum technical requirements for performance  necessary equipment/expertise (means of production, welding approval, …)  Manufacturer-related product qualification (HPQ)  Q classification Supplier (future contract- ing partner) Product/ manu- facturer Top criteria Levels Defined criteria (partly goods group-specific) are allocated to every qualification module

6. 6Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 PQ system is designed throughout as a two-stage procedure. The Buildings and Structures pre-qualification procedure forms the basis of high-quality supplier qualification Pre-qualification procedure stipulation of objective rules and criteria stipulation of an evaluation system Stage 1 legal, administrative and economic criteria Stage 2 specialist suitability, productive capacity and reliability Directory of the pre-qualified companies approval Companies can undergo the pre-qualification procedure at any time by applying to participate Planning services Track superstructure Earthworks (general/special) Structural engineering Protection services Construction supervision Supplier qualification Application of the PQ procedure for the following sub-systems:

7. 7Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 The DB supplier pool comprises 3 different supplier categories QUALIFICATION: CLASSIFICATION INTO SUPPLIER CATEGORIES AND INFLUENCING VARIABLES Major suppliers with high purchasing volume Strategic suppliers owing to low substitutability Significant markets and materials High relevance for DB business Einteilung Lieferanten in Lieferantenklassen Key Preferred Accepted Einteilung Lieferanten in Lieferantenklassen Key Preferred Accepted Classification of suppliers into supplier categories according to group of goods or eClass Strategic Preferred Accepted

8. 8Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 Supplier qualification 1. Supplier development 3. Supplier evaluation 2. Integrated Systems Rail  Evaluation is the target/actual comparison on the basis of specifications in the dimensions of quality, costs and dates along the entire supply chain  Evaluations take place within a narrow timeframe according to defined events  The result is a ranking of the suppliers  Every evaluation is communicated  Every evaluation has a consequence KEY ASPECTS OF SUPPLIER EVALUATION

9. 9Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 EVALUATION GRID: FIRST AND SECOND AGGREGATION LEVEL DB TOTAL Product evaluation phase Delivery and performance phase Quotation phase Phases in the procurement process Quality in use product evaluation quality of elimination of defects Quality of deliveries and performance quality of delivery & performance quality of cooperation effectiveness of the QMS Quality of the quotation formal quality of the quotation quality regarding contents of quotation Operating costs maintenance costs disposal costs costs for energy, auxiliary materials, operating supplies Cost development adherence to costs in contract period claim behaviour Price level and price transparency transparency/plausibility of pricing reasonableness of price level Observance of deadline in case of defects reaction time after notice of defect duration of eliminating defect Observance of dates compliance with dates of delivery and performance behaviour with change of date Observance of deadlines and dates formal observance of deadlines assurance of set/expected delivery and performance dates Dimensions Quality (>20%) Costs (>20%) Dates (>20%) Detailed question catalogue for each field Supplier evaluation is an elementary part of supplier management and comprises the dimensions of quality, costs and dates

10. 10Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 Uniformly throughout DB, …  … at least 80% of the purchasing volume is covered in supplier evaluations  … every evaluation is based on the dimensions of quality, costs and dates with a minimum weighting  … all results are communicated CONSIDERATION OF UNIFORM BASIC PRINCIPLES AND GOODS GROUP-SPECIFIC FEATURES Goods group-specific features require diversification of the evaluation questions and conditions As a result, …  … suppliers are evaluated transparently according to objective suitability requirements (productive capacity, reliability, specialist know- how)  … companies which do not fulfil this demand can be identified  … legally and revision-secure decisions are taken in the award process according to the principle of equal treatment and transparency Goods group-specific, … … different evaluation sheets are generated (examples):  construction services  planning services  subsoil evaluations and foundation consultancy  construction supervision  planning services (FA*)  protection services  protection services (FA)  provision of track material  disposal of track material  logistics services *FA=framework agreement

11. 11Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 The ranking results from event-related data, individual cases and an annual evaluation round LOGIC OF OVERALL RANKING FOR EACH SUPPLIER Event-related data along the supply chain (for quotation, delivery and performance, warranty each) Annual evaluation round with every Business Area concerning supplier portfolio  on the basis of the event- related data  in addition: 2-3 qualitative criteria (e.g. technology, innovation capability, soft skills) 91-100 outstanding good restricted poor 81-90 61-80 ≤60 Supplier ranking  Quality  Costs  Dates Individual-case-related data with particular significance as threshold or limit values or "killer criteria" (0-1), e.g.  compliance cases,  insolvencies or dunning stages SCHEMATIC REPRESENTATION e.g. points

12. 12Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 Supplier qualification 1. Supplier development 3. Supplier evaluation 2. Integrated Systems Rail  Every supplier evaluation leads to a structured reaction; every evaluation has a consequence  Depending on the significance of the supplier and his classification in the ranking, further development is performed with differing intensity KEY ASPECTS OF SUPPLIER DEVELOPMENT

13. 13Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 OVERVIEW OF THE COMMUNICATIONS CONCEPT Development measures are agreed on along with the communication to the supplier 1 Joint supplier development teams 2 Proposal for supplier's award and further qualified automatically 3 Phasing out possible, e.g. no extension of framework contracts 4 Contractual obligation of the supplier for improvement (catalogue of measures, target agreement) or phasing out poor < 60 acceptedpreferredstrategic Outstand- ing 100-91 Good 81-90 Restricted 61-80 Supplier classification 2 Ranking for each supplier 1 Poor <60 3 4 SCHEMATIC REPRESENTATION The result of a supplier evaluation is always communicated to the supplier

14. 14Deutsche Bahn AG, Technik, Systemverbund und Dienstleistungen, November 2009 Supplier management Integration. Weltweit. Mit zuverlässigen Lieferanten den Kunden gewinnen ! Integration. Worldwide. Gain the customer with reliable suppliers ! Integrierte Lösungen für weltweiten Erfolg – Integrated solutions for worldwide success