1. MMOG/LE: Tips for Satisfying the OEM Requirement Terry Onica, Director, Automotive, QAD Dave Doyle, Solutions Consultant, QAD QAD Explore 2012

2. 2 The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD. Safe Harbor Statement MMOG/LE: Tips for Satisfying the OEM Requirement

3. 3 MMOG/LEoverview Answering the assessment Assessment pitfalls QAD support Summary Presentation Agenda MMOG/LE: Tips for Satisfying the OEM Requirement

4. 4 QAD’s manufacturing solution supports the Effective Enterprise by: -Meeting industry best practice processes -Satisfying customer requirements -Delivering products/services to address MMOG/LE compliance Session Overview MMOG/LE: Tips for Satisfying the OEM Requirement

5. 5 MMOG/LE Overview MMOG/LE: Tips for Satisfying the OEM Requirement

6. M aterials M anagement O perations G uideline L ogistic E valuation What is MMOG/LE? MMOG/LE: Tips for Satisfying the OEM Requirement 6

7. 7 Assessment tool to evaluate/select suppliers according to: −Supply chain capabilities −Industry best practices Provides plant score (e.g., A, B or C) What is MMOG/LE? MMOG/LE: Tips for Satisfying the OEM Requirement MMOG/LE = Delivery ISO = Quality

8. 8 Excel spreadsheet with: −Six chapters − 206 criteria −Answer responses: Yes, No, N/A What is MMOG/LE? MMOG/LE: Tips for Satisfying the OEM Requirement  3.1 Product RealizationX 3.1.1  The MP&L function shall formally participate in, and sign off, the Product Realization process. Why?  The material organization is involved in each stage (e.g., quoting, engineering) of the Product Realization process to ensure supply chain issues are addressed and parts are available for all phases of production (e.g. prototypes, preproduction, production). Criterion:  1)F3 The MP&L function shall participate in the Product Realization process to ensure all material planning and logistics requirements are addressed and all changes which affect the supply process are planned, executed and communicated in a synchronized manner (e.g. bill of material (BOM), routings, effectivity dates, supplier notification, scheduling, shipping). Back-up plans shall be in place to ensure continuity of supply. The engineering change process is outline in WMM- 3111. Engineering Change meetings are held weekly. The materials manager is involved in the meeting. See WMM-3111 for an example of the meeting minutes and invited participants as well as what is included in the organization's engineering change checklist.

9. 9 A B C Classification Definition MMOG/LE: Tips for Satisfying the OEM Requirement Classification F3F2F1 Score A Best practice Compliance to ALL Non- compliance to < 6 No limit> 90% B Unstable or inconsistent processes Compliance to ALL Non- compliance to 6-12 No limit75-89% C Deficient in key critical areas Not compliant to ANY Non- compliance to > 13 No limit< 75%

10. 10 Developed by: -AIAG -Odette -Automotive OEMs & Tier 1 Suppliers Contributions from QAD: -Member & author -Leader of work group efforts -Lead speaker at worldwide events -Trainer -Provider of software that meets requirements MMOG/LE Authors MMOG/LE: Tips for Satisfying the OEM Requirement

11. 123456 11 Areas Covered in MMOG/LE MMOG/LE: Tips for Satisfying the OEM Requirement

12. OEMs UsingTier 1 UsingTier 1 Using (cont) ChryslerAutolivSNOP CNH – Latin AmericaBentelerValeo FordBeruWoco GMBosch ZF IvecoBrose Jaguar/Land RoverContinental PSAGates RenaultJohnson Controls Under Review Tofas Fiat (Turkey)LearBMW Volvo CarMGI CoutierDaimler Volvo TruckPierburgHonda NA VW (US PilotSelzer AutomotiveVW 12 MMOG/LE Customer Usage With Suppliers MMOG/LE: Tips for Satisfying the OEM Requirement

13. 13 Answer the Assessment MMOG/LE: Tips for Satisfying the OEM Requirement

14. 14 Let’s Take a Look at a Set of Criteria MMOG/LE: Tips for Satisfying the OEM Requirement 1)F3 Comparison of resources versus customer requirements shall be reviewed upon receipt of forecast requirements (e.g. 830/DELFOR/planning release), comparing every week of the forecast sent by customers. Capacity planning volumes negotiated with the customer shall also be incorporated in the capacity planning process. 2)F3 Resources versus customer requirements shall be reviewed upon receipt of shipping requirements (e.g. 862/DELJIT/ shipping schedules, 866/DELJIT/sequenced shipping schedules), comparing daily ship requirement sent by customers. 3)F3 There shall be a process in place to notify customers of any significant resource limitations in meeting the requirements. Criteria for 3.2.1 Capacity and Resources

15. 15 What Role or Title would you interview? What questions would you ask to determine compliance? What objective evidence would you expect to see? How Would You Respond to the Criteria? MMOG/LE: Tips for Satisfying the OEM Requirement

16. 16 What role or title would you interview? How Would You Respond to the Criteria? MMOG/LE: Tips for Satisfying the OEM Requirement

17. 17 What role or title would you interview? ─Top management ─Supply chain ─Purchasing ─Production ─Engineering ─Human resources ─Quality ─It ─Sales ─Others, as required How Would You Respond to the Criteria? MMOG/LE: Tips for Satisfying the OEM Requirement

18. 18 What questions would you ask to determine compliance? How Would You Respond to the Criteria? MMOG/LE: Tips for Satisfying the OEM Requirement

19. 19 What questions would you ask to determine compliance? -How is capacity negotiated with the customer? -How are resources versus customer EDI analyzed? -Does analysis include all areas of the business? -Does analysis include production, prototype, preproduction and after sales? -How often is capacity reviewed and when? -Are contingency plans in place for capacity constraints? -Are resources for administrative and containers included? How Would You Respond to the Criteria? MMOG/LE: Tips for Satisfying the OEM Requirement

20. 20 What objective evidence would you expect to see? How Would You Respond to the Criteria? MMOG/LE: Tips for Satisfying the OEM Requirement

21. 21 What objective evidence would you expect to see? -Work instructions including how capacity is negotiated, how customer EDI is integrated -Reports from QAD that shows anything out-of-tolerance -How the customer is alerted of significant resource limitations -Comparative report Current release, shipping, 2-5 year trend -Meeting minutes including action items -Training -Job descriptions How Would You Respond to the Criteria? MMOG/LE: Tips for Satisfying the OEM Requirement

22. 22 Would the OEM consider your ‘yes’ to be a yes? -Rate your answer on a 1 – 10 scale Would a 6 still be a yes? Would a 4? Better way to see gaps Justify projects with ‘points’ that can be improved Improve Your “Yes” MMOG/LE: Tips for Satisfying the OEM Requirement

23. 23.Net UI -Process maps and work instructions -Browses -Operational Metrics -Alerts Rough cut capacity planning CRP reports MRP Exceptions MSW/PSW BI Leverage QAD to Improve Your Answer MMOG/LE: Tips for Satisfying the OEM Requirement

24. 24 QAD Has Responses for All 206 Criteria MMOG/LE: Tips for Satisfying the OEM Requirement QAD answer Probing/ evidence questions Location on Process Map MMOG/LE criteria

25. 25 Assessment Pitfalls MMOG/LE: Tips for Satisfying the OEM Requirement

26. 26 Who is leading the assessment? Is the right person answering the question? Are you thoroughly documenting your responses? Have you documented customer specifics? Are your work instructions detailed enough? Assessment Pitfalls MMOG/LE: Tips for Satisfying the OEM Requirement

27. 27 ISO/TS 16949, is a technical specification for quality management MMOG/LE is similar, but focuses on supply chain processes. MMOG/LE has adopted the same process approach as ISO/TS 16949 Example: Scrap process Who is Leading the Assessment? MMOG/LE: Tips for Satisfying the OEM Requirement Quality

28. 28 Process owners, including management All facilities and shifts Areas with vital involvement in the assessment process include: ─Top management ─Supply chain ─Corporate delivery champion ─Purchasing ─Production ─Engineering ─Program manager ─Human resources ─Quality ─IT ─Logistics ─Sales Is the Right Person Answering the Question? MMOG/LE: Tips for Satisfying the OEM Requirement

29. 29 Where will you find customer specifics? Customer training Global terms and conditions Materials planning and logistics agreements Supplier manuals Customer web sites and applications −EDI portals −Delivery rating − Capacity −Packaging and labeling −Container management Have You Documented Customer Specifics? MMOG/LE: Tips for Satisfying the OEM Requirement

30. 30 Are Your Work Instructions Detailed Enough? MMOG/LE: Tips for Satisfying the OEM Requirement Used for training and back-ups Instructions should Include: −Step by step instructions −Person(s) responsible −Customer specifics −Customer references −Metrics −Error handling −Contingencies −Document version control −Last date tested −Explanation of any acronyms −Obtaining user logins

31. 31 Are You Thoroughly Documenting Responses ? MMOG/LE: Tips for Satisfying the OEM Requirement Comments box best practices Evidence −Comments −Work instructions −Non applicable −Annual review −Customer specifics

32. 32 Review critical questions & top criteria Review processes, procedures & work instructions Present findings to management MMOG/LE Q-Scan MMOG/LE: Tips for Satisfying the OEM Requirement

33. 33 Summary MMOG/LE: Tips for Satisfying the OEM Requirement

34. 34 Process Maps and Work Instructions QAD MMOG/LE Answer Sheet White Paper Solutions Brochure MMOG/LE Q-Scan www.qad.com/mmogle AIAG/Odette MMOG/LE Level 1 Training -Register at www.aiag.org or www.odette.orgwww.aiag.org QAD Support MMOG/LE: Tips for Satisfying the OEM Requirement

35. 35 What is MMOG/LE OEM expectations for MMOG/LE submissions Answering the assessment -Are you really compliant? -Ability “to do” versus “discipline doing” Common pitfalls How QAD can help Summary MMOG/LE: Tips for Satisfying the OEM Requirement

36. 36 Terry Onica Director, Automotive, QAD tjo@qad.com Dave Doyle Solutions Consultant, QAD dfd@qad.com Questions & Answers MMOG/LE: Tips for Satisfying the OEM Requirement

37. www.qad.com © QAD Inc 2012 37