Results of pilot benchmark study Anfried Sauerborn/René Colin EAQG Metrics WGtApril 2008

2 Content 1.KPI’s overview 2.Proposed indicators 1.Customer service indicators 2.Production factors indicators 3.Pilot Study results Based on the work done by Anfried Sauerborn

3 KPIs overview Among its duties, Space will provide for benchmarking services, with two objectives : Allow sub-tier suppliers to self-assess their level of performance through a benchmark study Provide a yearly global assessment of the industrial performance of the Supply Chain.  The purpose of this presentation is to define the indicators that will be used to support this service. Purpose of the KPI’s

4 KPIs overview Improve the efficiency of the European civil aeronautical supply chain The indicators must reflect these objectives - with a number of 10 maximum Objectives of SPACE

5 KPIs overview What is the efficiency of a supply chain? Efficiency = output input More output with less input! Customer view Resources

6 KPIs overview What to measure in terms of output for a supply chain? Customer service OUTPUTINDICATOR Product QualityCustomer returns Deliveries qualityCustomer delivery achievements

7 KPIs overview What to measure in terms of input for a supply chain? Production efficiency INPUTINDICATOR ManpowerAdded value per employee Turnover per employee MaterialsCost of waste (scraps, reworks) Suppliers under evaluation Inventory investmentInventory turns Floor spaceFloor space utilization

8 Pilot study results The pilot study was conducted in Febr/March companies invited: –Randomly selected –Electric/mechanics activities –Across Europe 11 answers (25%, achieved with a lot of interventions/reminders) (In automotive, the return is 45-60%, there were a lot of interventions needed to achieve this result)

9 Pilot study results: Customer returns: Customer Returns: Unit: p.p.m. (Parts Per Million) Definition: total quantity of unacceptable products rejected by the customers during the last three months and acknowledged as such by the Supplier, divided by the total quantity of components delivered to all customers during the same period, multiplied by 1 million. Automotive:

10 Pilot study results: Customer delivery achievements: Customer Delivery Achievement: Unit : % - percentage Definition : total quantities delivered on- time* during the last three months, in acceptable quality, divided by total number of “lines of order” supplied during the same period, multiplied by 100. On-time = +2 days to -7 days of the due date. Automotive:

11 Pilot study results: Added Value per employee: Added Value per Employee: Unit : K€/person Definition : sales value of all products manufactured excluding trading, less cost of raw materials, purchase of components and overheads for the year, divided by the total number of employees including interim and temporary hired people. Automotive:

12 Pilot study results: Turnover per employee: Turnover per Employee: Unit : K€/person Definition: sales value of all products manufactured excluding trading, divided by the total number of employees, including interim and temporary hired people. Automotive:

13 Pilot study results: Cost of waste: Cost of Waste, Scraps & Reworks: Unit : % - percentage of Turnover Definition: total annual costs of internal waste, scrap & internal rework divided by the total annual cost of goods sold, excluding trading, and multiplied by 100. Automotive:

14 Pilot study results: Supplier under evaluation: Suppliers under evaluation : Unit : % - percentage Definition : Number of suppliers under evaluation* divided by total number of suppliers. * OTD and/or quality achievement of their own suppliers Automotive: no information

15 Pilot study results: Inventory turns: Inventory Turns: Unit: number Definition : Annual cost of goods sold divided by the appropriate value of total inventory (raw materials, work in- progress and finished goods). This indicator should be calculated on a calendar year basis i.e. from 1st January to 31st December. All products owned or controlled should be taken into account even if they are not physically located on-site e.g. consignment stocks held at customers. Automotive:

16 Pilot study results: Space Utilisation: Space Utilization: Unit : K€/m² Definition: Annual cost of goods sold divided by the total production floor space including all storages and production offices areas, but excluding specialist R&D facilities. period, Automotive: