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Supplier Evaluation System
2014/01 – TPML, Ralf Muelller Page 1 of 8
Depending on the point score. C-suppliers are asked to introduce urgent corrective measures. B or C-supplier (A = 100-80 points. B-suppliers are asked to correct any existing deficiencies.MTU Friedrichshafen Supplier Evaluation Handout Definition The Supplier Evaluation System (SES) of MTU Friedrichshafen GmbH is used for target suppliers. C = 59-0 points). MTU intends to cover most of its future procurement volume. Target The target of this supplier evaluation system is the objective and standardized evaluation of suppliers by applying the criteria referred to above. B = 79-60 points. on the other hand. Taking into account weighting factors. logistics and environment which are again detailed in sub-criteria. This system was developed to form a standard basis for the evaluation of existing and potential target suppliers. quality. The system of specified evaluation criteria facilitates achievement of this target. it also provides for the development and implementation of solutions and alternatives for existing weaknesses. Criteria and weighting Main criterion Weighting Objective Sub-criteria [points] PPM Weighting 60% 10% 10% 10% 10% 70% 10% 10% 10% 30% 30% 20% 10% 10% ____ Manual/ automatic determination automatic automatic automatic manual manual automatic automatic Quality 40% 100 Sample complaints rate Rate of residual quality costs Audit Support quality Meeting delivery deadlines Supplying agreed quantities Logistics 25% 100 Logistical supply quality Support logistics Price level Price development automatic manual manual manual manual manual manual manual Purchasing 25% 100 Proposals for cost reduction Financial stability Support purchasing Environment 10% 100 __________________ 2014/01 – TPML. Philosophy This supplier evaluation system is based on a philosophy which intends to find solutions. Suppliers are regarded as partners who can help counteract the ever-increasing competitive pressure. MTU aims at maintaining long-term supplier relations with A or B suppliers. a supplier is evaluated as A. This objectivity makes it possible to directly compare suppliers with each other and thus reveals the strengths and weaknesses of individual suppliers. uncover potential and develop existing strengths in cooperation with the suppliers and on the basis of the results and comparative figures determined. Repeated assessment as a C-supplier jeopardizes the target supplier status. this results in rates for the fulfillment of the main criteria on which the overall assessment is based. Evaluation is based on major criteria including purchasing. With these suppliers. Fulfillment of these criteria is measured on a scale between 0 and 100 points by applying specific definitions. Ralf Muelller Page 2 of 8 .
MTU Friedrichshafen Supplier Evaluation Handout Handling Criteria which can be determined automatically are updated each month. tidiness. contacts and their availability/contactability. Ralf Muelller Page 3 of 8 . 10% 0-100 Number / type of complaints Organization. cleanliness at supplier´s facility Cooperation during audit Intensity of follow-up of measures (not possible with initial audits) Activities for quality improvement Certification Support quality (The following are taken into account: response time and quality of 8D reports. reaction to enquiries.) 10% 100 80 60 40 20 0 Excellent cooperation and flexibility Good cooperation and flexibility Average cooperation and flexibility Below-average cooperation and flexibility Poor cooperation and flexibility Very poor cooperation and flexibility 2014/01 – TPML. quality problems.rate Sample complaints rate Rate of residual quality costs 60% 10% 10% Points 100 0-99 100 0-99 100 0-99 0 PPM Weighting: 40% Evaluation basis PPM rate >0 (for a description refer to page 4) Complaints rate 0 % Complaints rate >0 % (for a description refer to page 4) No residual quality costs Rate of residual quality costs proportional to incoming-goods value >0 % (for a description refer to page 4) This criterion is evaluated by the respective audit heads based on the following aspects: Audit / Preliminary evaluation Audit grade assigned only if entire process chain has been audited. Description of Criteria Main criterion: Quality Sub-criteria PPM . pro-active approach re. flexibility. information provision/handling. Manual criteria are evaluated once per year (January) for the previous year and continue to be applicable for the current year until the next evaluation.
000 ppm for unmachined castings 50. = 53 pts. Ralf Muelller Page 4 of 8 . = 25% = 65.75 pts.000 ppm for machined castings Sales share of machined cast. 2014/01 – TPML. Using degressive conversion tables which orientate themselves to the average PPM rate per goods group. a prorata point score is calculated proportionally to the pro-rata value of incoming goods before the points for raw materials and finished parts are added.MTU Friedrichshafen Supplier Evaluation Handout Determination of point score for PPM rate: The PPM rate is determined for each supplier on the basis of major goods groups. Determination of point score for sample complaints rate: The sample complaints rate is calculated by the number of quality notifications (of sample orders) in relation to the number of sample deliveries.25 = 70 pts. 70*0. a point score is determined for each goods group which is then calculated proportionally to the value of incoming goods of the respective goods group before being added. Example: 5 samples deliveries 1 quality notification (of sample orders) 20% sample complaints rate 25 points Determination of point score for residual quality costs: Residual quality costs are determined separately for raw materials and finished parts. Example: 50. Using degressive conversion tables.75 + 53*0.
The first time backlogs appear in the delivery schedule. pro-active approach to supply problems.10% claimed deliveries 100 points to 0 points > linear evaluation. process integration . reacquisition times. 12/40. packaging requirements.) 100 80 60 10% 40 20 Excellent cooperation and flexibility Good cooperation and flexibility Average cooperation and flexibility Below-average cooperation and flexibility Poor cooperation and flexibility 0 Very poor cooperation and flexibility 2014/01 – TPML. reaction to enquiries. 6/70.MTU Friedrichshafen Supplier Evaluation Handout Main criterion: Logistics Sub-criteria Points Weighting: 25% Evaluation basis Automatic determination via SAP based on the following criteria: Determination of average schedule compliance of all incoming goods per month. 40 points are allocated in each instance. For delivery schedules.g. contacts and their availability / contactability. The objective for approved delivery deadlines is fixed for all suppliers at 100 points! Automatic determination via SAP based on the following criteria: Determination of average quantity compliance of all incoming goods per month. 18/10. 60 points are allocated (compliance with deadline and volume). 18/10. The second time. Due to possible unforeseen problems (e. 14/30. >30 days/1 point(s) *The aim is delivery exactly on schedule. 10/50. a leeway of two days is granted. The second time.8/60. processing of reminders/warnings. flexibility re. 40 points are allocated in each instance. 10/50. 30/20. 15/60. 12/40. short-notice requests. 4/80. delivery call-offs. 6/60. 60 points are allocated (compliance with deadline and volume). 20/20. backlog status is also evaluated. 14/30. backlog status is also evaluated. 16/20. ≥20% 1 point(s) Short supply of more than 2% 90 points. The evaluation of purchase orders and delivery schedules is derived from the following point system: Delay of up to two days* 100 points. The evaluation of purchase orders and delivery schedules is derived from the following point system: Supplying agreed quantities 10% 1-100 Excess supply of more than 2% 90 points. 10/80. 4/80. ≥20% 1 point(s) For delivery schedules. direct call-offs. 16/20. 6/70. during transportation). of deliveries 0% .supplier adapts to meet MTU requirements and achieves high level of process consistency. proactive management of product start-up/changes. Ralf Muelller Page 5 of 8 . 4/80. The first time backlogs appear in the delivery schedule. >20days/1 point(s) Meeting delivery deadlines 70% 1-100 Premature delivery up to five days 100 points.8/60. 12/40. provision/handling of information. of quality reports „logistic“ in relation to no. Automatic determination via SAP based on the following criteria: Logistical supply quality 10% 0-100 No. ≥10% of claimed deliveries = 0 points Support Logistics (taken into account: batch size. 20/40.
No verified information available Deliveries to MTU only against cash in advance or bank guaranties. shows own initiative now and then Below-average cooperation and flexibility Below-average cooperation with SEmL. D Financial stability 10% 40 20 0 100 80 Support purchasing (SEmL assessment only if relevant) 10% 60 40 20 0 Note: Evaluation between fixed point scores is also possible. 2014/01 – TPML. frequently makes own proposals Good cooperation and flexibility Good cooperation with SEmL. occasionally makes own proposals Average cooperation and flexibility Cooperation with SEmL. Financial stability seems to be ensured subjectively. Supplier is involved in insolvency proceedings! Excellent cooperation and flexibility Very good cooperation with SEmL .MTU Friedrichshafen Supplier Evaluation Handout Main criterion: Purchasing Sub-criteria Points 100 60 0 100 60 0 100 60 0 100 90 80 60 Weighting: 25% Evaluation basis Supplier´s prices are within target range Supplier´s prices are outside target range Supplier´s prices are well outside target range Price development is within target range Price development is outside target range Price development is well outside target range Supplier with frequent proposals on cost reduction Supplier with occasional proposals on cost reduction Supplier without proposals on cost reduction Price level 30% Price development Proposals for cost reduction 30% 20% Rating Financial stability is proved or ensured via affiliation with Group. Or: Suppliers who have been rated as critical. hardly any own initiative Poor cooperation and flexibility Poor cooperation with SEmL. no own initiative Very poor cooperation and flexibility No cooperation with SEmL AAA AA A BBB BB B C. Ralf Muelller Page 6 of 8 .
0 2..unacceptable unacceptable Points 100 90 80 70 60 50 40 30 20 10 0 2014/01 – TPML. the business relationship will be terminated.0 excellent excellent – good good good – fair fair fair – needs improvement needs improvement needs impr. supplier development necessary. If no activities for improvement can be observed. environment OK.0 5. impr.0 3.0 1. impr needs significant improvement needs signif. Compliance with legislation.MTU Friedrichshafen Supplier Evaluation Handout Main criterion: Environment Points 100 80 60 0 Weighting: 10% Evaluation basis Environmental certification available (ISO14001. Ralf Muelller Page 7 of 8 . technological status or No information available.5 5. No identifiable environmental awareness. Conversion table / grade <> points Grade 1. Note: A 0-point score for the major criterion "Environment" will not be accepted permanently by MTU.5 6. EMAS …) Environmental certification aimed for within 18 months or MTU audit re.5 3.5 2.5 4. – needs signif.0 4.
MTU Friedrichshafen Supplier Evaluation Handout Example: 2014/01 – TPML. Ralf Muelller Page 8 of 8 .
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