Training_Supplier Evaluation
29.10.20071EADS Supplier Evaluation Training
Matthias Gramolla -EADS Corporate Sourcing
CHaINA SUMMIT Shanghai November 200729.10.20072European Aeronautic Defence and Space Company
A Global Leader
2006 Revenues 39.4 bn. €
EADS at a glance 29.10.20073Content Why evaluate suppliers? What to evaluate and how to measure? How to improve and develop? Trends Success factors
29.10.20074EADS Sourcing Volume
Divisions developed to high level integrators with strong sourcing content
All Sourcing Data: …EADS Sourcing Report 2006“by EADS SG/SP 342006
[bln. €]
Revenues
Sourcing 39.4
Sourcing Volume approx. 80% of Sales 29.10.20075EADS Sourcing Volume
Divisions developed to high level integrators with strong sourcing content
All Sourcing Data: …EADS Sourcing Report 2006“by EADS SG/SP 23%
14%12%12%
39%Systems &
Equipment
Airframe
Product Related Services
Indirect
Material 3/4 of Sourcing is product related, >1/2 complex Systems, Equipment, Structures 29.10.20076Number of Suppliers Sourcing Volume [%]Major suppliers require dedicated Supplier Management attention Supply Base Profile
020
40
60
80
100
010.00020.00030.00040.000
29.10.20077identify
s e l e c t
o p
e
r a t
e Supplier Relationship
Management Supplier Evaluation: Manage the performance and risks of your major suppliers Supplier Relationship Management
-a key element of any Sourcing Strategy
Procurement
Marketing
Negotiating,
Contracting
29.10.20078
Why evaluate Suppliers –Summary
Market EADS Supplier
29.10.200710Expectations Expectation from supplier Measure /
Evaluate
Criteria
and Thresholds Workshop
What do you expect from your suppliers? What do your
customers expect from you?
What are the relevant criteria?
How can you measure them?
29.10.200711Common Criteria to evaluate the Supplier‘s Performance
Commercial
Technical Quality
Logistics Customer Support
All Business Units apply the same criteria to all suppliers
Supplier Management Maturity Corporate Social Responsibility 29.10.200712Simple Traffic Light Evaluation D C A/B Unacceptable Requirements not met
Mandatory Improvements
Requirements not fully met
Good -Requirements met
Excellent –Outstanding performance
Detailed evaluations, based on formulas and several weighted
sub criteria, result in four grades
Subcriteria on Commercial (Examples)
Price Evolution over time
Price Comparison vs. market or benchmark price
Willingness toparticipate to design to cost initiatives
Speed of Response
Commercial Attitude
Innovation Attitude
Responsiveness to Risk Sharing
Economic Stability
Offset Participation, Sales Support
29.10.200713
Evaluation matrix for Commercial
The evaluation matrices contain BU specific sub criteria and thresholds
29.10.200714
Subcriteria on Quality(Examples)
Percentage of Rejections
Level of Satisfaction Concerning the Reaction to Quality Complaints
Quality System
Process Control, Risk Management
Responsiveness to Quality Issues
Low Tier Control
29.10.200715
29.10.200716Quality Thresholds (Example)
Percentage of rejections attributable to supplier over a 12 months rolling period
D
C B A D
C B A Example Airbus: Systems and Equipment
Example Airbus: Material and Aerostructures
0,10,5011,523
Individual evolving thresholds
express business requirements towards suppliers
29.10.200717Subcriteria on Logistics (Examples)
On-Time-Delivery Performance (delivery window)
Logistics Support
Reactivity and Flexibility
Capacity
Ordering Lead Time
Supply Chain Optimization
Promise Credibility
Reporting and Delay Recovery 29.10.200718Logistics Thresholds (Example)On time delivery performance over a 12 months rolling period Example Airbus: Systems and Equipment Example Airbus: Material and Aerostructures
D
C B A D
C B A 9895100908580
Individual evolving thresholds
express business requirements towards suppliers
29.10.200719Subcriteria on Technical (Examples)
Ability to meet development requirements: milestones, ability to drive the development process
audits on the Supplier technical and / or innovation capability
29.10.200720Subcriteria on Customer Support (Examples)
Level of satisfaction concerning the Support given to EADS's Customers by a Supplier: Product Support, Service, Costs 29.10.200721Requirements for Supplier Evaluation Criteria Workshop What are the requirements for a good supplier evaluation criteria?
29.10.200722Who evaluates ?
?Purchasing
?Procurement, supply management ?Operations ?Engineering ?Quality
?Finance
?Etc.
Purchasing takes the lead People from different functions participate to the evaluation. They contribute with their data to the overall assessment 29.10.200723Content
Why evaluate suppliers?
What to evaluate and how to measure?
How to improve and develop?
Trends
Success factors 29.10.200724Target Setting to Drive Improvement Evalua-tion Improve-ment Plan BU‘s Review Progress Reporting Target Agree-ment Target Setting Evaluation done
by
EADS BU Targets set by
EADS
BU, agreed by suppliers
Improvement
plan
defined and committed by supplier
Commercial Customer Support Logistics 0,01,0
2,03,04,0
Technical Quality Evaluation and Improvement to follow a clear process
29.10.200725SED is a major pillar of EADS Supplier Relationship Mgmt.
P
e r
f
o
r m a
n c
e low
high Willingness to contribute to EADS business interest
low high
Open Competition Competitive Partner
?
Unpreferred Improve
Manage suppliers to contribute to EADS business interest 29.10.200726Internally common understanding of the process compliance results available to all involved monitor history
work flow
support link to internal tools With the supplier clear understanding of process, requirements, criteria, thresholds consistent communication supplier can check his evaluation no surprises
Discussion with supplier can focus on Improvement
Clear and open communication of evaluation process and results Corporate Sourcing –June 2004
SED handbook & thresholds 29.10.200727
Content
Why evaluate suppliers?
What to evaluate and how to measure?
How to improve and develop?
Trends
Success factors
29.10.200728Trends in Supplier Evaluation widen focus from operational results to also comprise enablers and risks
new elements around CSR
new elements around supplier processes
tool support for workflow, documentation, supplier communication supplier development 29.10.200729Expanded Scope, to better address enablers
?Supplier Intelligence
?Supplier Management
Maturity
?Corporate Social
Responsibility
Traditional Scope, focused
on results Supplier Evaluation & Development
Enhancement to better asses enablers and risks for future performances
Financial Health Business Processes Skills & Tools
Behaviors &
Cultures
B u y D e l i v e r EADS SUPPLIER TIER 1SUPPLIER TIER n D e l i v e r B u y 29.10.200730Supplier Management Maturity -Supplier Management Maturity assessed along sourcing topics:–Sourcing Strategy –Supplier Selection –Order Processing –Supplier Development –People and Organization -assessment in 4 Maturity levels -KPI and e-tool deployment level measured for each of them
Supplier Maturity Evaluation S upplier Maturity E valuation S tructure of Templa te
Topic
s
Maturity Level S e e n e x t p a g e
f o r
d e t a il
s
to better understand the risk in our supplier base to drive improvement at the supplier
29.10.200731Supplier Management Maturity assessment:T opic/sub process 1-Undefined 2-Defined 3-Defined & Applied
4- Optimizing
1.1 S ourcing S tra tegy
1.2 Globa l S ourcing
1.3 R isk Ma nagement
1.4 Make/Buy
1.5 P erforma nce indica tors
1.6 E -Tool deployme nt
2.1 S upplie r Ma rketing
2.2 S upplie r S election 2.3 S upplie r P roduct Qua lifica tion
2.4 Contra cting 2.5 P erforma nce indica tors
2.6 E -Tool deployme nt
3.1 Order proce ssing
3.2 P erforma nce indica tors
3.3 e-Tool deployment
4.1 S upplie r E va lua tion
4.2 S upplie r Development
4.3 P erforma nce indica tors
4.4 E -Tool deployme nt
5.1 P eople
5.2 Knowledge Ma na gement
3. Orde r proces sing
4. S u pplie r E va lua tion
a n d De ve lopm e nt P rocess Ma turity leve
1.S ourcin g S tra te g y
2. S upplie r S ele ction 5.3 Orga niza tion
5. P
e ople & Orga nisa tion Category expectation Supplier Maturity 29.10.200732
Corporate Social Responsibility
CSR Sourcing Tool Box
?Supplier CSR code
?CSR contractual clause
?CSR evaluation
questionnaire for CSR
compliance assessment
CSR:
How companies integrate social and
environmental concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis How do our suppliers treat their employees, their suppliers and their environment?CSR is a risk management issue
Procurement Relevance 29.10.200733
Corporate Social Responsibility Company Values 2121
0Does your he company acknowledge the EADS Supplier CSR code ?yes 55
1Does your company support and integrate international standards eg: OECD Guidelines, the Universal
Declaration of Human Rights, ILO declaration etc…)yes 1010
2Has your company signed the United Nations Global Compact or participate/support similar initiative?yes 113Have you clearly defined your company's vision, values and rules of conduct?yes 11
If so, is there an annual reporting/documentation?yes 11
Do you communicate and flow down your company's values and policies to internal and external
stakeholders (employees, business partners, suppliers, sub-tiers, etc.)?yes 11If so, do you ensure compliance?yes 11
5Does your company consider Corporate Responsibility/Sustainability criteria on the selection of business
partners, products and suppliers?yes 11
Human Resources 2312
6Do you ensure that adequate steps are taken against child labor and against of all forms of forced and
compulsory labour yes 1010
7Is there a policy to ensure adequate steps are taken against all forms of discrimination, both in the
workplace and at the time of recruitment (e.g. against women, ethnic groups, disabled people, membership to a trade union, etc.)?
no 100
8Can you show evidence of a of constructive dialogue with employee representatives ?yes 11
9Does your company have suitable arrangements for health, safety and welfare that provide sufficient
protection for your employees?yes 11
10Do you communicate and flow-down your company's social policies to subtiers and monitor suppliers
compliance no 10
Business Ethics 3010
11Does your company has a policy to prevent corruption and economic crime ?no 100
12If so, is this policy circulated and accessible to all employees?no 100
13Have you put in place a special dedicated organisation to ensure compliance with export control laws and
regulations ?yes 1010
Sustainable Growth 21
14Does your company ensure timely payment of suppliers' invoices?yes 11
15Does your company register and resolve complaints from customers, suppliers and business partners?no 10
Environmental Policies 2419
Did your company establish an environmental management system ? no 10
If yes, according to what standards (ISO 14000, EMAS co-audit...)?no 10
17Have you established another management system within your company (e.g. quality assurance, safety
standards), which includes environmental protection? yes 88
18Does your company pattern its environmental care on written guidelines ? (e.g. environmental policy,
company guidelines, ...)yes 11
19Did you define objectives to improve environmental impacts within your company?
If so, are measures & results for environmental care documented within your company?no 10
20Are measures for environmental care within your company audited regularly?no 10
21Are aspects of environmental care inherent parts of your product planning (e.g. design, conception &
development)?yes 1010
22Does your company supply clear and accurate environmental information on its products, services and
activities to customers, suppliers, local community, etc?no 10
164SUPPLIER CSR EVALUATION QUESTIONNAIRE
Company name : EXAMPLE Answer If yes If no Target Rating
CSR evaluation questionnaire for CSR
compliance assessment
29.10.200734Content
Why evaluate suppliers?
What to evaluate?
How to measure?
How to improve and develop?
Trends
Success factors 29.10.200735Success Factors well defined expectations clear realistic consistent
well defined criteria: quantifyable objective related to company targets communication with suppliers open consistent regular 29.10.200736
EADS Global Sourcing Strategy
Matthias Gramolla -EADS Corporate Sourcing
matthias.gramolla@https://www.sodocs.net/doc/0414639276.html,
CHaINA SUMMIT Shanghai November 2007