Godrej Material Handling Supplier Evaluation Model

Appendix 1

upplier
S

Evaluation
Model
Work sheet
Date Location

Supplier Project

Evaluation team

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COMPANY PROFILE
1.1 Ownership & Financial Evaluation

 Excellent stability, strong commitment. 3p

 Good. 2p
 Risk area. 1p
 Not acceptable. 0p

Assessment guidelines: stopping parameter

Evaluate what type of company it is, what is the complete ownership structure, who’s the owners/
licensees/joint ventures etc? If the ownership is stable, both in willingness to invest in the actual products
and in long-term view and this can be proven by the history, this will provide for a high grade. Some
information can be obtained from the financial report. Co-operation or alliances with other companies have
to be judged due to different standards depending on the situation. What does a partner bring in or take
away?
No conflicts in relations between supplier and Godrej will give a high grading. If the main shareholder is a
competitor, highest grading cannot be given, since it is considered as a risk.
0 points are given, when
there is no commitment for business in the future.
or a unique person is the unique shareholder, especially if he is not involved in the company, or if he is
close to retirement without successor or unknown shareholder or "secret" shareholder
or 100 % of shares are in a financial company without business commitment
If the company structure has been considered in the evaluation this must be noted.

Data: Company presentation booklet available.

Ownership structure – Information obtained by supplier.
Information given through financial evaluation.
Public. Private.
Recent changes in ownership: after 2013 will earn the low score
Major shareholders, %ge of share holding
Company Vision, investments, R&D, HR, Training, New Projects for last 2-3 yers &
future projects etc.
Connection to GMH & its competitors:
Number of employees per location:
Commitment can be analysed through the business plan
Involvement in automotive industry (normally that should provide a high grade)

Notes by evaluation team:

Evaluation of this topic

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COMPANY PROFILE
1.2 Global ability

 Global presence. 3p
 Continental supplier (ex. Europe). 2p
 National, regional supplier. 1p
 Local supplier (limited support to one company). 0p

Assessment guidelines:

The manufacturing plant delivering to GMH is to be evaluated and if it is part of a bigger group it has to be
taken into consideration.

Global: supplier means a supplier who has presence on several continents and could support GMH on all
continents where GMH is active and when so required by building up activities locally. Supplier is useful to
GMH and gives support in all markets.
Continental: supplier means a supplier who has activities in one continent (e.g. Europe, Asia, North
America) and in addition has extensive experience in global export and support.
Regional: supplier is present and makes majority of deliveries within one country or one region (e.g. India,
China) and has some experience in supporting within one continent.
Local: supplier is acting only on a one-to-one basis with customers.
Activities could mean technology, pre-production facilities, and production and supply facilities. In some
cases, the demand for local content and also offset business has to be considered. Links to co-operative
arrangements with other companies should be considered as well as industrial networks. Export knowledge
as well as market, industry and customer situation are also contributing factors.

Data:
Supplier's presence in various locations - information to be obtained from supplier.
Type of activities for each location (storage/shipping - manufacturing).
Co-operation arrangements with other companies, such as logistics, customer support.
Agents/Representatives/Branch offices.

Notes by evaluation team:

Evaluation of this topic

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Points

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COMPANY PROFILE
1.3 Dependency

 Supplier’s business to GMH is large enough to give attention,

but not that large that the supplier must rely on GMH for is survival 3p
 Supplier’s business to GMH is large enough to give attention,
but it also takes a larger portion of the supplier’s activities. 2p
 Supplier business to GMH is too small to give attention/ Few big customers. 1
p
 Not acceptable dependency / Monopoly. 0p

If the site plant of the supplier is part of a bigger group (the supplier has a group of companies), then this
question is applicable to the group.

Assessment guidelines:
Dependency deals with degree with which the supplier depends on GMH in his activities but also to which
degree GMH depends on a supplier as seen from a general risk management point, e.g. will the supplier
give necessary support to GMH in relation to other customers. A well-covered and represented business in
the automotive branch should be considered positive for the GMH. Normally the preferred range of
dependency upon GMH is 10 - 30%. What is the turnover relation between GMH and other Customers?
How big is the business with GMH and other customers, today and plans for future?
Does the supplier depend on any other customer to a high extent? Are there any connections to companies
competing with GMH (might be positive or negative)? Export share, customer structure and the ambitions of
the supplier should also be considered.
The GMH’s business should be considered first, and then the business with the biggest customer should be
checked.

Assessment guidelines for potential suppliers:

If information of potential purchasing volume is available, then it shall be considered.
Data:
To be obtained from supplier
Total sales turnover:
GMH business % of turnover, today/future
Sales to biggest customer % of turnover.
Supplier's patents licenses, product rights or other limitations.
Use of product rights owned by another customer to the supplier.

Notes by evaluation team:

Evaluation of this topic

Points
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MANAGEMENT
2.1 Management

 Excellent knowledge, commitment and overall view, High priority to GMH. 3p

 Well-run company, no major remarks moderate high priority to GMH. 2p
 Possibilities for improvements & moderate priority to GMH. 1p
 Not acceptable, “one man show”, no priority to GMH. 0p

Assessment guidelines:
If the company structure is considered in the evaluation this must be noted on the excel sheet.
Check that the well proven methods used by the Global Company are applied.
Evaluate whether there are modern work procedures (e.g. lean manufacturing and 6 sigma) in the
company? Are there cross-functional teams and does it give appropriate attention to GMH as customer?
What is the attitude, knowledge of the management team? and long-term perspective? Does the company
have a well-defined business plan (including investments plan), covering 3 - 5 year including action plans?
Is the supplier willing to share the highlights in the business plan? What is the level of investments
compared to the turnover? Who are their customers? It is also very important that GMH has good
communication with the key persons in the company. If the supplier is working via representative channels,
e.g. an agent, it mustn’t give GMH any problem. Supplier must be willing to work in a confidential manner,
and willing to enter in a long-term relationship. The supplier shall give GMH a high priority in all aspects to
get high score.

Data:
Organisation chart.
List of current customers. Copy of TQM-award.
Presentation of business plan.
Is the company working per TQM philosophy? Any awards given should affect the score
in a positive way.
Describe the organisation and responsibilities.
How is attention given to GMH business?
Describe the role and handling of the business plan.
How does the supplier work to strengthen confidence with GMH?
Describe your attitude to long-term relationship with GMH.
How are the labour relations arranged?

Notes by evaluation team:

Evaluation of this topic

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MANAGEMENT
2.2 Customer satisfaction

 A routine is fully in use since many years, with effective

Improvements as a result. 3p
 A routine is in use with many of their customers. 2p
 Recently started, but small improvement can be shown. 1p
 No routine in use, very passive. 0p

Assessment guidelines:
The monitoring system for customer satisfaction, ref to ISO 9001:2015 clause 8.2 should be evaluated. The
procedure could include questionnaires that are sent out to customers regularly as well as improvement
plans.
Also, the internal supplier/customer relations are of important, as well as consideration of the end use.
If the company is belonging to a bigger group, the routine may be handled by the group. Nevertheless, the
following items should be checked:
Is the global routine taking into consideration the audited site?
Is the audited site taking in account remarks from the customer survey by implementing action
plans and measuring results?

Data:
Customer satisfaction statistics:
Customer survey document, results and action plan including the improvements
achieved.

Notes by evaluation team:

Evaluation of this topic

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MANAGEMENT
2.3 Ethical standards

GMH is committed to a Code of Conduct which describes GMH employee intension on how to behave when
GMH does business and how GMH employees interact with their stakeholders.
 No stopping parameter and Has contractual requirements on its suppliers,
ethics policy, Involved in CSR. 3p
 No stopping parameter and Has contractual requirements on its suppliers,
ethics policy. 2p
 No stopping parameter and Has contractual requirements on its suppliers. 1p
 A stopping parameter, no contractual requirements on its suppliers,
no ethics policy, not involved in CSR 0p

Assessment guidelines stopping parameter

A supplier ignoring “ethics” (stopping parameters) is a supplier which

Does not place contractual requirements on its suppliers to be compliant with issues outlined in this self-
assessment.
Does not have a monitoring system implemented to identify specific risks for health and safety of the
employees and prevent recurrence of work accidents.
Does not respect the minimum age required by country law or other regulations,
Does not allow the employees to leave the premises after work at any time in compliance with statutory
regulations,
Does not have procedures to detect and prevent corruption.

Data:
Suppliers own ethics policy
Documents Corporate Social responsibility/ Any Social Activities within company
Ask for evidence supporting management directives.
Observe conditions and ask questions in production
Any code of conduct for tier 2 suppliers/ Contractual requirements for tier 2 suppliers

Notes by evaluation team:

Evaluation of this topic

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MANAGEMENT
2.4 Risk management

 Well defined, trained & implemented risk management plan, good

prevention. 3p
 Good system internally but doesn’t include suppliers or
not fully developed internal system but suppliers are included. 2p
 Limited systematic approach, actions mostly after the fact/incidence. 1p
 No plans, no risk management at all, no respect of a legal rule 0p

Assessment guidelines: stopping parameter

Regarding Risk Management, investigate if there is an appointed Risk Manager or set strategy, well-known
routines for Risk Management. Does the supplier perform a regular risk analysis of the business? Areas
may include production process, such as fire protection (sprinklers, etc.), flooding, earthquake etc. but also
environmental hazards and computer system breakdown etc. Does the Risk Management also include sub-
suppliers? Are essential data, product- and process specifications securely stored? If the supplier does not
respect the local rules about security and or other risks, we must give 0 pt. Fulfilling local requirements is
not enough to get 1 p.

Data:
Appointed risk manager or organisation with risk management tasks, information to be
given by supplier.
Fire protection; A written security policy in place.
Structural protection - fire walls,
Supply of raw material and parts.
Active fire protection - sprinklers, water fire
extinguishers etc, Legislation, legal affairs.
Special fire protection areas – (testing
Environmental protection.
areas, presses, plastic presses and
mouldings, ovens…)
Protection for natural hazards; Business contingency plan (including
water related hazards, flooding, landslides, emergency, business continuity
earth quakes, hail, ice storms, typhoons… management and crisis communication)
Computer and soft-ware protection/ Power supply (e.g. generators), water
Computer data backup process/ storage supply and air pressure for tools
Insurance for part and tooling Political risks.
replacement.
Union relations. Risk of terrorism.
Any needs of extra safety stocks Machine/tool breakdown.
required for critical suppliers?
Up to date tooling list for unique GMH Any past example of managing the risk
tools. effectively
Are there any possibilities for alternative production in case of a problem?
On site, within the company group either on the continent or elsewhere in the world, or in
cooperation with other company. In case with another company which?
Which is the lead time to start up alternative production?

Notes by evaluation team:

Evaluation of this topic

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ENVIRONMENT
3.1 ISO 14001

Environmental concern is one of the core values for GMH.

 ISO 14001 certified 3p

 ISO 14001 certification in-process 2p
 Documental Evidence indicating concern towards enviornmental effects
of business/production activities and action taken. 1p
 No concern towards enviornmental effects of business/production activities. 0p

Assessment guidelines:
The environmental management system is similar to quality assurance systems. There are different
standards to follow when building up the system, such as ISO 14001.
Certified system means that a nationally accredited 3 rd party organisation, such as LRQA or DNV etc. has
audited the supplier and issued a certificate. The supplier must also show that non-compliance found at
audits is corrected. If the supplier fulfils the local legal requirements, but shows no evidence of documented
routines and procedures for environmental management and with no clear plans & objectives should be
scored with 0 p.

Data:
Environmental system certificate or audit result, to be obtained from Supplier
Plans for further development in the environmental system, in auditing and certification.
Results from last three periodical audits, including improvement plan.
Documental Evidence indicating concern towards enviornmental effects
of business/production activities and action taken.
Identification & Closure/Prevention of Environmental hazards
Hazardous waste generated & Its Disposal
Energy & Water Management
Purchase of energy efficient & environment friendly products
Any activities for making environment Green

Notes by evaluation team:

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Safety
ENVIRONMENT
4.1
3.2 OHSAS 18001&Certification
Identification Closure/Prevention
of hazardous activities

OHSAS is one of the core values for GMH.

 OHSAS 18001 certified 3p

 OHSAS 18001 certification in-process 2p
 Documental Evidence indicating concern towards Occupational Health and Safety
on account of business/production activities and action taken. 1p
 No concern towards Occupational Health and Safety
on account of business/production activities and no action taken. 0p

Assessment guidelines:
The OHSAS management system is similar to quality assurance systems. There are different standards to
follow when building up the system, such as OSHAS 18001.
Certified system means that a nationally accredited 3 rd party organisation, such as LRQA or DNV etc. has
audited the supplier and issued a certificate. The supplier must also show that non-compliance found at
audits is corrected. If the supplier fulfils the local legal requirements, but shows no evidence of documented
routines and procedures for OHSAS management and with no clear plans & objectives should be scored
with 0 p.

Data:
OSHAS 18001 certificate or audit result, to be obtained from Supplier
Plans for further development in the OSHAS system, in auditing and certification.
Results from last three periodical audits, including improvement plan.
Documental Evidence indicating concern towards OHSAS effects
of business/production activities and action taken.
Identification & Closure/Prevention of hazardous activities
Identification & availability of PPE’s
Availability Fire extinguishers
Fire fighter training & Effectiveness
Availability of First aid box; First aid training & its Effectiveness
Past incidence

Notes by evaluation team:

Evaluation of this topic

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QUALITY
5.1 Quality Management System

 TS 16949 Certification (Automotive Quality) 3p

 ISO 9001 QMS Certification 2p
 ISO 9001 QMS Certification in Progress 1p
 No ISO 9001 QMS Certification. 0p

Assessment guidelines: stopping parameter

Quality management systems should be developed and implemented in accordance with a known standard
norm. Evidence of the level to which the system has been audited and/or certified gives proof of
conformance. Example of Automotive branch recognised standards is TS1694 or ISO 9001 is recognised.
An accredited institute, such as LRQA, DNV, BVQI, UL, TÜV and many more gives certification.

Data:
Quality system certificate or audit result, to be obtained from Supplier
An ISO TS 16949/ISO 9001 certified supplier must have a routine to evaluate their
suppliers.
Verify that the supplier quality system is applied in the Tier 2 suppliers that is of
interest for GMH.
Results from last three periodical audits, including improvement plan.
Evidences for continuous improvement, Customer Satisfaction
Actions implemented on NCRs received in last 3 periodic ISO/TS audit

Notes by evaluation team:

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QUALITY
5.2 Quality Planning, Part Quality Assurance

 Develoment activities are followed with a detailed planning executed on time.

Lessons learned from previous projects are effectively and systermatically used.
Quality and timing targets are always reached 3p
 Develoment activities are followed with a detailed planning
executed on time. Lessons learned from previous
projects are effectively and systermatically used. 2p
 Limited control of development activities 1p
 Poor control of development activities, limited to actions directly required
by customers. 0p

Sub-Item Documents to be checked 3 points 2 points 1 point 0 point

Request for -RFQ/RTS handling -Process includes Review of -Review done by -Review done only by -No process
Quotation (RFQ) process/guideline drawing being done by supplier experts in their fields but marketing team/Owner to review
handling/RTS prior to quoting, answer to quality process not well with no specific specification
target formalized industrial or project before
-Review being done by CFT skills quoting.
including all necessary
departments.
-Procedure gives a lead time
target to answer RFQ/RTS
Setting quality targets -Quality target analysis -Targets set for all criteria like -Targets set only for only -Target setting without - No target
for new products document quality, productivity, cost, delivery, few criteria. considering actual setting
reliability and so on. -Target setting based on performance. before start
-Targets set based on market actual performance of of new
survey and claim analysis also set past projects without projects.
targets based on competitor input of competitor
benchmark. benchmarking.
White books (lessons -White books (lessons -System of making White books -White book and / or -A documented -No white
learned) / History of learned) or equivalent. (lessons learned) to track things lessons learned are process exists book
past problems -Things gone wrong gone right and things gone wrong being made but no referencing the making (lessons
in the project. evidence of usage in all of white books, learned)
-Activity of review of previous projects. lessons learned and / /things gone
lessons learned (white books) -Effectiveness of actions or things gone wrong, wrong
included in the initial stage of put are not verified. but is not implemented. concept
project. being used.
-System exists to verify
Effectiveness of actions.
PFMEA -PFMEA -Clear rules to assess Severity, -Severity rating rightly -Severity rating not -NO PFMEA
Occurrence, Detection and level identified but no regular linked to part fit and or being
from which an action is required review of PFMEA function. done only on
-Clear targets exists for any document -No targets exist or not customer
countermeasures to be taken. . challenging or no request and
Targets are challenging. countermeasures no self-
-Evidence of regular review of initiative.
PFMEA.
-Update of PFMEA during quality
complaints or instances of high
internal rejections.
Control Plan -Control Plan -Control plan includes all -Control plan have some -No clear guidelines for -Very basic
operations from Receiving, operations missing or fixing control methods or no control
intermediate and delivery steps. have wrong sequence. and parameters. plan exists.
-All control items including part -Process controls are
and process characteristics are not mentioned on the
listed. control plan. Poka Yoke
-Clear links between P-FMEA and concept partially
control plan (control methods and implemented for critical
parameters are fixed according parameters
severity, process capability)
-Poka Yoke implemented for
critical dimensions wherever

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possible.
Work instruction and -Operator instruction -Clear instruction document exists -Not practiced at all -Operator instructions -No operator
operator training sheet. with controls linked to control plan. stations. are not located at the instructions
-procedure to make -Clear visual guide to operator on -No clear visual guides stations or very basic
operator instruction checks need to be done. or general instructions or format in
-General working instructions inspection methods use
specific to the machine. -No procedure to made
-Clear inspection method operator instruction
displayed.
-There is a procedure to make
operator instruction (from control
plan, FMEA)
Controls at pre- -Control checklist -There is a list of control items like -No actions taken when -Some important items No control
production stage -Production Trial Run process capability, quality targets, the targets are not are missing in the items
(PPAP approval) -Process audit operator training level, equipment achieved or there is no control check list (like identified.
-PPAP and PSW set, which must be met within a follow-up of actual process capability)
certain time frame before serial performance.
production.
-Targets have been set for each of
the control item.
-There needs to be an action plan
if target is not met within that time
frame.

Ramp up activity -Ramp up monitoring tool -Supplier uses a ramp up -Supplier uses a ramp -Ramp-up plan -No ramp up
-PPAP action plan monitoring tool to capture influence up monitoring tool to contains only volume plan
-PTR results vs target of increasing volumes. Ability to capture influence of information. No monitoring
-cpk improvement detect defects (by operator and increasing volumes. specific measure tool exists.
-internal defect rate poka yoke is measured. Release Ability to detect defects during ramp-up period.
-process audit result is done when targets are all met. (by operator and poka -No requirement of
improvement -Safety stock target exists based yoke) is measured. safety stock exists.
on manufacturing and transit lead -Target exists for safety
time and it is monitored. stock but not monitored
Process audit is performed after or no actions taken when
SOP (at least each year) below requirement.

Notes by evaluation team:

Evaluation of this topi

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QUALITY
5.3 Quality performance of delivaries

 Supplier meets or exceeds customer targets. Positive trend can be demonstrated 3p

 Supplier does not exceed twice the customer target. Positive overall trend can be
demonstrated 2p
 Supplier does not exceed 10 times the target value. Problem attributed to singular
events, no negative trend 1p
 Target exceeded >10 times. Negative overall trend, failure to address problems
and improve performance 0p

Assessment guidelines: stopping parameter

Documents to check: Supplier data collection & measurements for new or potential suppliers.
SQE should judge against benchmark level of current suppliers in the same commodity.
For castings, blanks and raw material the following table should be used as a guide

PPM value for Points

blanks (or raw
material)
50 3
500 2
<5000 1
>5000 0
Overall plant PPM should be evaluated and should not be part or family specific.
Time period : 6 to 12 months of data should be used to determine a current result and 3 years for trend.
The trend should show a positive result.
Where a brand new facility is being evaluated, the previous plant performance should be taken into
consideration along with any data available from the new production facility. The auditor must use their
knowledge and skill to determine a realistic initial score to be followed up within a 12 month period when
actual data should be available.
A delivery precision trend monitoring should be available and should be as per customer requirement
Customer return PPM monitoring trend (compare 3 years’ data), should be downward trend, actions against
customer complaints should be available
GMH’s target for customer return PPM is 500.

Notes by evaluation team:

Evaluation of this topic

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QUALITY
5.4 Reliability

 Supplier Fault Frequency and warranty costs are very low (compared to the
benchmark of the commodity), showing a positive trend during latest 3 years.
Supplier is proactive in solving problems 3p
 Supplier Fault Frequency and warranty costs are low (compared to the benchmark
of the commodity). Supplier is active in solving problems each time requested by the
customer 2p
 Supplier Fault Frequency and warranty costs are low but not in positive trend
Or supplier is quite reluctant to co-operate in the reliability/warranty process 1p
 Supplier is ignoring reliability and reluctant to co-operate on warranty issues 0p

Sub-item Documents to 3 points 2 points 1 points 0 point

check
Warranty Cost -Warranty Costs, Warranty Costs Results are WC results are at WC Results are No
and Fault Fault Frequency better than the target and the target or better lower than the target measurements or
frequency value and trend the trend is positive. Fault than the target and but the trend is results lower
Frequency level is the trend is neutral positive. than target and
controlled or positive. trend is negative.
Serviceability -Process to collect The supplier is pro-active The supplier is The supplier is in a The supplier is
Quality information when it comes to quality in participating actively reactive mode reluctant to deal
from the field and the field: "pushing" the to meetings related regarding topics with Quality in
to implement customer in order to get to Quality in the linked with Quality in the field because
actions info, leading working field. Meetings are the field. No he doesn't feel
-Evidences of use groups with the customers lead by the anticipation of the responsable. .
and efficiency on that subject, proposing customer. needs. No existing
-Evidences of design solutions to process at the
support in case of decrease FF, proposing a supplier to
campaign/warrant very good support address this
y issues (technical...) subject

Assessment guidelines:

In case of simple part with 0 or few warranty issues, at least serviceability has to be judged

FF target can be the target agreed between the supplier and their current customers.
Warranty Cost can be a amount of money or a ratio compared to the yearly turnover.
The trend of the indicators has to be estimated based on figures covering 3 years.

Suppliers with design responsibility shall be judged from design and manufacturing point of view while
suppliers of components designed by GMH shall be judged from manufacturing point of view.

If the company is belonging to a bigger group, this subject can be handled at the group level. Nevertheless,
the company has to know the status.

Notes by evaluation team:

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QUALITY
5.5 Problem Solving / Management of
Non-Conforming (NC) parts
Purchasing Quality
 The supplier has a formalised problem solving process in place for both
quality issues in customer serial production and aftermarket claims.
The supplier can show very good attitude, efficiency, speed and no
recurrence of previous problems. 3p
 A formalised problem solving method is used to solve problems related
to customer/ GMH issues. 2p
 Supplier and customer/GMH inform each other when problems occur. 1 p
 Firefighting crisis management, same problems occurs continuously. 0p

Documents to
Sub Item check 3 points 2 points 1 points 0 point
Method of -8D or equivalent Use tool to make their analysis Use tool to make One root There is
cause analysis -additionnal (Ishikawa,5why, 5M…). For analysis for the main cause is not no
documentation 100% of the problems They problems or analysis analysed procedure
(Ishikawa, 5 why) analyze root cause of sometimes not deep (occurrence or or tools
occurrence and non detection. enough non detection) are not
used
Check -8D or equivalent Use a tracking chart for past Use a verification Use a No
efficiency of -Tracking chart or and new defects. Efficiency is system tracking for verification confirmati
actions verification system confirmed with measurable past and new system on of
of defects indicator. No reoccurrence defects. Efficiency is tracking for efficiency
confirmed with past and new of actions
measurable problem. No
indicator. efficiency
proved.
Prevention of -8D or equivalent Update all necessary Update all necessary Some Do not
recurrence -FMEA documents after each problem documents after documents update
-Control plan solving. Modifications are each problem are not document
-Process applied and deployed in the solving. updated or not s
instruction plant and in all other company Modifications are applied
-Training records plants. applied and deployed
in the plant
Control of -8D progress There is an indicator to There is a target There is a No target
problem solving control list measure the duration of time for customer target time but time for
progress different problem solving steps. protection: less than too long or customer
Customer protection is made 48 hours (exept for sometimes protection
less than 48 hours (exept warranty issues). It is not respected. or almost
warranty problems). It is always always respected. never
respected. Supplier atitude is respected
very good.
Non conforming NC treatment Defect parts are identified Defect parts are Identified but Not
part treatment procedure clearly and isolated (at least identified clearly and not isolated or identified
(SHOPFLOOR) Records once a shift) in a dedicated isolated (once a day) isolated but and not
area. in a dedicated area. not identified isolated

Rework Rework There are specific rework There are generic Rework flow is No control
operations instructions instructions. OK reworked parts rework instructions. not secured. after
(SHOPFLOOR) Records are marked, controlled then put OK reworked parts rework.
into the process before are marked,
inspection station. Repair controlled then put
operations are recorded. into the process
before inspection
station.

Assessment guidelines:
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This chapter is applicable for both line problems and warranty.

Notes by evaluation team:

Evaluation of this topic

Points

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QUALITY
5.6 Management of critical and
significant characteristics

 Excellent handling of critical and significant characteristics from engineering to

Production (product and process significant characteristics). Supplier has
developed the necessary actions to keep control of those characteristics. 3p
 Routines for handling critical and significant characteristics exist but could
be improved 2p
 Procedures for handling critical and significant characteristics exist
but supplier shows evident lack of application. 1p
 Supplier does not have any specific consideration for critical and significant
Characteristics 0p

Sub Item Documents to check 3 points 2 points 1 points 0 point

Determination -Supplier Drawings Supplier determines critical Supplier determines Supplier determines Supplier
of Critical -FMEA characteristics from critical characteristics critical characteristics does not
Characteristics -Control Plan customer input and adds from customer input only from customer input consider
own critical parameters and puts in its internal only but it is not fully criticality of
based on proper analysis documentation deployed on their charareristic
using expertise. internal system.
Identification in -FMEA Criticality is clearly present Critical characteristics Critical characteristics No specific
supplier -Control Plan on supplier documentation, have proper traceability identified only on consideratio
documentation -Operator instructions, quality records but are not identified Control Plan. n for
and part Instruction and training, including properly on FMEA, Traceability is ensured criticality.
traceability -Visual traceability and visual Control Plan, only on some critical
Management management on the plant Operational Instructions, characteristics.
(Machine, and there are clear quality records and
Equipement) instructions on their handling. training.
-Traceability
-Quality Records
Tier 2 -Subsupplier Well documented Deploy customer Poorly documented No
deployement requirement requirements to suppliers requirement requirement
considered.
Process -Measurement Critical Characteristics with Some characteristics No capability study, No specific
Capability for System Analysis capable processes. are not capable but only inspection consideratio
Critical -Cpk Calculations controls are efficient n for
Characteristics -SPC charts criticality.

Notes by evaluation team:

Evaluation of this topic

Points

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LOGISTICS
6.1 Capacity management

 The supplier is performing regularly capacity evaluations at their production sites

for long, medium and short term. Fully defined tools are in use to determine
bottlenecks, root causes and implement actions. Tier 2 supplier’s capacity is secured
and clear actions for adjustments of bad performance in place 3p
 The suppliers is performing regular evaluations at their sites but some actions
are missing to secure completely the capacity at short/medium and long term 2p
 The capacity is not known on a detailed level for each machine and process 1p
 The capacity is not measured and the planning is from day to day 0p

Sub-Item Documents 3 points 2 points 1 point 0 point

to be
checked
Capacity Capacity Capacity is checked for a Capacity is checked for Capacity is checked No
forecast forecast long term for a minimum of 2 a medium term up to 1 for a narrow time capacity
sheet years on a regular base. year on a regular base. frame (up to 6 months) forecast
or very
short
vision.
Planning Capacity Planning is providing Planning performed for Manual planning or Day to
and check improved workload profile for a 3 to 6-month period Narrow visibility up to day
Flexibility sheet and 1 year. Robust ERP tools in 3 month or plant planning -
production place. already working full
planning time to meet demand
Tier 2 Capacity Tier 2 capacity monitored for Tier 2 capacity EDI dispatched to No
supplier document a period of min 1yr. Good confirmed by supplier vs supplier for a narrow capacity
capacity of tier 2 knowledge of supplier base delivery schedule for a time frame and no evaluation
capacity (including short time period up to 6 formal capacity of tier 2
bottlenecks identification, month. No standard check/feedback supplier.
OEE) and regular follow up /formal process nor requested
production rational
knowledge.
Capacity Capacity Calculation model framed The calculation model Capacity calculation No
calculation model based on accurate process based mostly on current based completely on capacity
model measures (bottleneck model, statistics and partly assumptions. calculatio
cycle time and OEE) with theoretical. n model
current downtimes or past exists.
production data.
Bottleneck OEE Bottleneck machine identified Bottleneck machine Bottleneck machine No
Analysis calculation considering both cycle time identified considering identified based only bottleneck
model and and OEE. Action plan exists both cycle time and on cycle time or analysis
Capacity to manage the-bottleneck OEE. No management management feeling – being
model. according to the customer of bottleneck OEE not considered done.
forecast. nor monitored.
Continuou Production Robust continuous KPI (output, efficiency, Basic production KPI No
s system or improvement system – scrap rate...) as well as exist with no further continuou
Improvem continuous Efficiency monitored and down time records exist record or analyse – s
ent improveme improvement action planned but directly linked to Messy process flow improvem
nt are managed successfully – improvement actions. and work in process ent
organizatio 5S or TPM workshops Uneven working team process.
n involving workers, lean involvement in
manufacturing mindset improvement workshop.
developed…

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Notes by evaluation team:

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LOGISTICS
6.2 Delivery precision /Service level

=> 98 % - Delivery precision. 3p

=> 90 % - Delivery precision. 2p
=> 85 % - Delivery precision. 1p
< 85 % - Delivery precision. . 0p

Assessment guidelines: stopping parameter

The result for existing suppliers can be obtained from the Material departments at GMH (also named
service level).
The delivery precision is measured as a running 6-month figure, (deliveries in the right time and with the
right quantity).
If you do not have internal info about delivery precision do the calculation on the supplier’s statistics of their
performance. For a potential supplier, the supplier shall be able to show statistics for dispatches to his
major customers according to their original demand.
Customer adaptations and prototypes are not to be considered in the delivery precision measurement.

Data:
Delivery performance measured by Materials departments.
For potential supplier, ask for data concerning major other customers.
Number of assembly line stops or incomplete vehicles during the last year.
GMH plant: Service level Comments:
%:

What measurements does the supplier use to monitor delivery precision?

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LOGISTICS
6.3 Electronic communication

 Full EDI implementation with GMH/other customers including majority of their

suppliers (min 80% of the volume value). Fulfils all our requirements like the
exchange of Delivery schedules/instructions, Synchronized Deliveries, Dispatch
advices, Invoices and Product Data according to GMH`s guidelines. 3p
 Partly EDI. Not all requirements fulfilled. Following is in use:
A time plan exists for any other required EDI messages before production start. 2p
 There is a management commitment for EDI within an agreed time period or as
alternative WEB-EDI or B2B solution utilisation. 1p
 No EDI, web-EDI or B2B and no time plan agreed. 0p

Data:
Check with our own EDI/Logistic expertise.
Note the systems that are used by supplier.
(EDI in this question is for logistic area)

Notes by evaluation team:

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AFTER MARKET
7.1 Strategy, co-operation and support

-Supplier has policy/process/life cycle strategy in place to exceed

GMH’s basic requirements on aftermarket supplies. 3p
-Supplier has policy/process/life cycle strategy in place to meet
GMH basic requirements according to GMH’s General Purchasing
Conditions. Or has signed a frame work agreement with a GMH unit. 2p
-Supplier has an aftermarket strategy/policy but it is only partly meeting
the GMH basic requirements 1p
-Supplier has no documented aftermarket strategy/policy. 0p

Assessment guidelines:
Mandatory for suppliers with design responsibility.
To get a high score the supplier has to provide evidence of ability to provide spare parts over a long time
and have a life cycle approach including improvements and active cost saving programmes.
If the supplier is a competitor, direct or indirect, to GMH on the aftermarket, highest grading cannot be
given. Also, consider if the supplier is part of a bigger group competing with GMH on the aftermarket.
Does the supplier have process and ability to provide the necessary services in connection with cases of
emergency orders?
Are there any weaknesses in commitment or sense of service or need for prompt response when needed?
And if, are these being improved?
Pricing principles for spare parts is very important to the aftermarket; same base price for parts common
with production and cost based price for parts going out of production.

Data:
Does the supplier have a formulated aftermarket-parts policy? Do they live up to it?
How does the supplier give after market and spare parts support over an extended
period of time, i.e. for 15 years after the serial production ends?
Suppliers should have the capability for supplying low volumes for spare parts and/or
process for adapting production method to decreasing volumes.
Same price for same specification for aftermarket and production.
Type of price adjustment when parts go out from production.

Notes by the evaluation team:

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AFTER MARKET
7.2 Documentation, service literature

-It is the supplier’s specific policy to fully furnish customers with required
documentation as hard-copy or electronic media, for drawing breakdown
and service manual(s) in such a format that it does not have to be revised
by GMH. 3p
-Supplier has no specific policy to furnish customers with drawings or
service manual(s), or only furnishes documentation in formats that need
to be converted by GMH. 2p
-Supplier only partly furnishes customers with drawings and/or
service manual(s), and in a format, that needs to be converted by GMH 1p
-Supplier will not, nor has ability/possibility, to furnish either manuals
nor drawings on customers’ requests. 0p

Assessment guidelines:
Mandatory for suppliers with design responsibility.
GMH require detailed drawings and samples of special tools for planning and comprehensive service
information for supplier-designed components.
GMH expects this information to be entirely furnished by its suppliers. Requested information should be
received by GMH at least one month before SP start.
Format, media and detail level for drawings to be agreed with concerned GMH spare parts organisation.

Data:
Verify the supplier’s process and routines for providing customers with required
documentation and specific tools.
Is the supplier supporting the common electronic interfaces used by GMH?
Schematics of electronics, diagnostic support (for suppliers of electronics)?
Is the supplier supporting the drawing formats used within GMH?

Notes by evaluation team:

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AFTER MARKET
7.3 Remanufacturing

-The supplier has an ongoing fully proficient operation and process in place
for quality assured remanufacturing, with warranty, of own products
according to customers’ specification when applicable. 3p
-The supplier has an ongoing fully proficient operation and process in place
for remanufacturing, with warranty, of own products but only according to
own fixed specification(s). 2p
-The supplier has an ongoing operation and process in place for
remanufacturing of own products but not according to one technical
regulation for one uniform specification (e.g. more as functional repair) 1p
-The supplier has no remanufacturing process. 0p

Assessment guidelines:
Only applicable to remanufacturing suppliers, and suppliers with design responsibility and who will become,
or already are, providers to any GMH brand for any of the products listed in the table at the bottom of this
section (6.3)
This competence is related to the supplier's overall competence and experience from an industrial point of
view.
The supplier has competence and capability to supply remanufactured parts to GMH.
The “fully proficient” for 3 or 2 points means that manufacturing and quality processes are on the same level
as for the original product.
A process for an assured even level of quality according to Technical Regulation is important.

Data:
Receiving inspection of products from the market to be used as ingoing material, wholly
or partly to determine serviceable parts.
System for keeping track of serviceable stock.
Traceability of remanufactured parts.
Are dismantling and cleansing activities performed in a professional way?
Look for Technical Regulations connected to suppliers’ own or customers’ products.
Are assembly and testing activities performed in a professional way?
Quality inspections and follow up? Documentation?

List of parts normally subject to request for remanufacturing.

The products below are normally remanufactured in full:

Engine Hydraulic Pump Hydraulic Cylinder
Air Compressor Transmission Starter motor
Alternator Steering Unit Motors

Notes by evaluation team:

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COMPETENCE
8.1 Product and industrial competence

-The supplier has an excellent competence and extensive experience

and has a comprehensive training programme for all personnel. 3p
-The supplier has well proven competence and has good experience
and has a good training programme for majority of the personnel. 2p
-The supplier has proven competence and has some experience
and a basic training programme. 1p
-The degree of competence is not known or proven. The training
programme is inadequate or not existing. 0p

Assessment guidelines:
This competence is related to the supplier's overall competence and experience from an industrial point of
view, research (own or in relationship with other actors e.g. universities/Technical Societies), product,
processes, company-wide industrial development etc.
The supplier has competence and capability to supply services, manufacturing and design to GMH. The
degree and maintenance of good working relations and the supplier's sense of service. Education of
personnel according to established programs (competence programs and training/skill matrix). Time spent
on education should be above 2 % annually for a high rating.

Data:
Data concerning time spent on education and training, to be obtained from supplier.
For past 3 years.
Expenditure and/or time spent per employee and year.
Training/skill matrix
Qualification procedure for special processes (e.g. welding, painting, heat treatment
etc.)
How does the supplier compare itself with competition benchmark wise? Does the
supplier perform global benchmarking to position themselves compared to the biggest
competitors?

Notes by evaluation team:

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COMPETENCE
8.2 Industrial engineering

-The shop floor is very well managed, manufacturing process is properly

controlled. Continuous improvement system is in place and results are visible 3p
-The shop floor is well managed and the manufacturing process is
properly controlled 2p
-There are some weaknesses in the way manufacturing process is controlled 1p
-Quality risk are high due to the poor control of the manufacturing process 0p

Sub Item Issues or documents 3 points 2 points 1 points 0 point

to check

Incoming area and Storage area Storage area is well defined,
inspection Incoming inspection and packaging identified.
area Incoming inspection are done
according control plan and
recorded. FIFO is completely
secured (based on computer
system,…)
Process flow -Control of WIP Wip levels in process are
control (Work In between stations controlled using kanban or
Progress) and similar controls.
work instruction
Housekeeping -Workplace The workplaces are well
cleanliness and organized with no evidence of
organization clutter or items out of place
-Workplace lighting Lighting for all workstations
allow for excellent visual part
inspection.
Product is prevented from
damages all along the
process.
The entrances and exits for
the building are easily
accessible; and the company
maintains a security group
Continuous -Daily meetings There are daily meeting for
improvement (daily -Improvement plan analysing internal defects
management) for internal defetcs Action plan is documented
(shopfloor) and followed.
Internal defect rate is
improving.
Storage area is well defined,
and packaging identified.
Incoming inspection are done
according control plan and
recorded. FIFO is
implemented.
Wip levels in process are
acceptable but no evidence of
visual management..
The workplaces are
organized; some stations are
not following the disciplines.
Some parts of the plant have
poor lighting
The entrances and exits for
the building are easily
accessible; and the company
maintains a security group
Analysis of internal defect
done but not daily.
Few actions are late. Internal
defect rate is improving
Storage area not well FIFO not
identified implemented
Or some incoming Packaging not
controls are missing. identifed
Or FIFO is not well
implemented.
Wip levels in process are Wip levels in
inconsistent and not well process are very
balanced throughout the high and not
process. controlled (no
Kanban or similar
controls)
The workplaces are The workplaces are
organized; but have trash not organized; have
and clutter within the trash and clutter
stations within the stations
Some stations have poor Poor lighting at the
lighting at the workstation workstations -
Or there are risk of difficult to visually
damaging product inspect parts
The entrances and exits The entrances and
for the building are easily exits for the building
accessible; but not free of are not easily
debris. accessible; and free
of debris
Analysis is not deep Poor analysis or no
enough or internal defect analysis
rate is increasing.

Calibration -Calibration records All control instrument are All control instruments are Some calibrations are No calibration
Poke Yoke use calibrated. calibrated missing
Many poke yoke being used. Little poke yoke being used No poke yoke being used

Final inspection, -Control instructions Final control are done
packaging and -Control Plan according to control plan. OK
delivery Inspected parts are clearly
identified. Packaging style
preserves from damage. FIFO
is completely secured (based
on computer system,…) and
delivery area is safe.
Final control are done
according to control plan.
FIFO is implemented
Packaging style preserves
from damage
Delivery area is safe (no risk)
Some final controls are Controls not done
not handled in a good way Or FIFO not
(missing or no boundary implemented
sample for visual Or delivery area not
inspection,…) safe (part damages)
Or some packaging are
damaged
Or Fifo is not well
implemented

Notes by evaluation team:

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COMPETENCE
8.3 Customer support and communication

-The supplier is outstanding in commitment and handling of relations

with customers. 3p
-Very seldom any weaknesses in commitment or sense of service.
Prompt response whenever needed. 2p
-Some lack of commitment, and or sense of service in general, but being
constantly improved. 1p
-Lack of commitment, and or sense of service in general for some time. 0p

Assessment guidelines:
Evaluate the supplier’s presence and speed of action, especially in the case of field related problems. Also,
regard knowledge about GMH and willingness to show interest and energy at all times.
What GMH needs for an easy quick and safe communication on all levels?

Data: Information given by: interview internal GMH contacts

Current and potential suppliers:
Use of English language is of very high importance, written and spoken
Response to questions from GMH.
Suggestions and ideas from supplier.
Willingness to show plans to GMH.
Appointed and empowered GMH account manager
Ask for list of contact person within Commercial, Quality, PD, Manufacturing, Logistic,
After market.
Current suppliers:
Corrective actions promptly.
Ability to keep promises and schedules.

Notes by evaluation team:

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COMPETENCE
8.4 Maintenance

-A Total Preventive Maintenance (TPM) system is in place and evidence

of update through feedback from daily or periodic equipment checks.
Supported with a spare part management system based on risk and availability. 3p
-The Total Preventive Maintenance (TPM) system is in place but not fully
efficient in all area (realization of plan or spare parts or daily checks) 2p
-System in place but not fully applied or some checks are missing 1p
-No evidence of planned preventative maintenance or service program. 0p

Sub Item Documents to 3 points 2 points 1 points 0 point

check
Preventive -Maintenance A Total Preventive A manual Total A manual Total No or very
maintenance plan Maintenance is in place and Preventive Preventive poor
plan and -Records evidence of update through Maintenance system Maintenance preventive
records -Breakdown feedback from daily or is in place. Almost system is in maintenanc
records periodic equipment checks. 100% of preventive place. Many e
100% of preventive maintenance actions actions are late
maintenance actions are are performed on time
performed on time.
Preventive -Procedures/ Instructions are standardized There are No instruction or no
maintenance instructions with fow chart/ picture, easily maintenance some validity instruction,
standards / understandable for operators. Instructions.Validity dates are no validity
Instructions Validity period is indicated on period is indicated on missing date
each machine. each machine.
External -Maintenance Contracts, certificates and Contracts, certificates There are No record
maintenance contracts records are documented. and records are maintenance for external
contracts -Maintenance 100% of actions are done documented. Very few records. Some maintenanc
(can be Not certificates according to the maintenance actions are late actions are late. e
applicable) -Maintenance plan. compared to the plan. operations
records
Spare part -Spare parts “Key” spare parts are “Key” spare parts are Many key spare No
avaibility list identified in the maintenance identified in the parts are not identificatio
program. They are they maintenance program. available with n of key
stored or available with short Few are not available short leadtime spare parts
leadtime with short lead time.
Daily start-up -Start-up check Start up check sheets are Start up check sheets Start up check No start up
checks sheets fullfilled and recorder every are fullfilled and sheets are check sheet
shift and restart. Check: recorder every shift fullfilled and
working of Poka-yoke, and restart. Some recorder every
equipement and tool checks are missing day.
condition, machine set-up,
red boxes,…. First part
controls are recorded

Assessment guidelines:
In case of TPM certified company, the questionnaire shall be used to check anyway

Notes by evaluation team:

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Points

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PRODUCT DEVELOPMENT
9.1 Product development process/ Project support

Note: 9.1 to 9.5 are Applicable only to the suppliers with design responsibility

-Full and independent product development structure with all necessary

resources in research, design, verification and validation. Supplier is leading
in his system/component branch and is working with the most demanding
customers. Meets all deadlines. 3p
-Independent product development process with design and verification.
Supplier is able to design complex sub-assemblies and are working with
several customers in the industry. Meets major deadlines with no negative impact on us. 2p
-Product development with limited experience and single-customer relation within
different industries of the system/component. Limited resources for testing and validation.
Seldom meet deadlines, sometimes with negative impact on us. 1p
-Limited component development process and testing. Always late. Low
experience in product development. 0p

Assessment guidelines:

The supplier shall have a documented development process that describes the different steps in the
process. It shall also be cost driven (continuous improvement).
Supplier shall also be able to build up a project organisation to support GMH product development process.
Team Project Managers must be accountable, accessible and be empowered to perform efficiently.
For a high grade, the supplier shall be closely and early involved in our development process. He shall also
exceed cost targets in all areas, such as prototypes, tools and development
The supplier should show evidence that he has developed systems or components for other customers in
the chosen industry, or has a long experience and co-operation with GMH. In this way we can benefit from
earlier development both in function and cost. The supplier has leading competence and has awareness of
the global market.

Data:
Detailed description of testing facilities, to be obtained by supplier.
Describe the product development process, what are the key steps or phases?
How are projects organised?
How are test facilities made available? Teamwork?
Check different tools, risk analysis, design-FMEA
Describe examples of systems which have been engineered:
Within automotive area.
Outside automotive.
Major customers.

Notes by evaluation team:

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Appendix 1
PRODUCT DEVELOPMENT
9.2 Product engineering technology

-The supplier has extended knowledge and utilisation of CAE

technologies (design, calculations and testing)
They can edit our info and send it back. 3p
-The supplier uses CAE technologies to good advantage We can send
info without complex conversion programmes; they can receive, but
cannot edit the info before sending back. 2p
-The supplier uses CAD systems to some degree and can receive CAD
information and has the possibility to convert. 1p
-The supplier has a limited use of CAD systems
They have not much knowledge. 0p

Assessment guidelines:
To be able to draw full benefit of design development in a modern IT-environment the availability of CAE
technology and computer communication links are of prime importance. In this element, the supplier’s
knowledge, equipment, systems and prepared communication must be evaluated.
If the company belongs to a bigger group which is handling this subject at a global level, it must be taken
into consideration. Nevertheless, the way to transfer the information from the group to the company must be
assessed.

Data:
Supplier level of CAE communications to be obtained from EDI department.
Describe the computer aided engineering systems used?
Computer links to GMH or other customer.
Ability to receive information in CAD-models.
Quality assurance of CAD-communication: document control, security, conversation
accuracy.

Notes by evaluation team:

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PRODUCT DEVELOPMENT
9.3 Prototypes

-Prototypes produced in-house in production process 3p

with production quality to correct delivery time
-Prototypes produced in-house in production process, variations 2p
in quality or delivery.
-Prototypes made from ordinary production process. 1p
-Cannot support with prototypes. 0p

Assessment guidelines:
It is a strong demand that the supplier shall be able to supply prototypes. The assessment deals with ability
to make prototypes regardless of any prototype orders from GMH. Preferably the prototypes shall be made
in-house. The reason for this is that the prototypes must have production-like quality for durability test etc.,
and if they are produced in production process, the supplier can detect problem areas in the process before
mass-production. Another demand is that the prototypes are delivered in time so it does not offset our test
programmes. The supplier’s system for monitoring delivery schedules and quality output must be evaluated.
In-house = in the company’s facilities and under the company’s management.

Data:
Describe how prototypes are manufactured.
Rapid prototyping.
In production process.
Test samples.
1st off / production samples.
Delivery on time.

Notes by evaluation team:

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PRODUCT DEVELOPMENT
9.4 Research and development

-Average R&D/turnover ratio > 5 %. Best industry practice. 3p

-Average R&D/turnover ratio > 3 %. Impressive and sufficient. 2p
Supplier’s own future plans.
-Average R&D/turnover ratio > 1 %. Some resources allocated 1p
R&D, but not consistent and more customer driven.
-Average R&D/turnover ratio < 1 %. Not acceptable. 0p

Assessment guidelines:
The supplier must invest in R&D in order to improve the products and stay competitive. The basis for
evaluation of this element is the average of investment rate for R&D over 3 year-
period, specifically within the scope we are evaluating the supplier. Consideration must be taken to the
availability of corporate resources as well as links to universities, Research Institutions etc.

Data:
Ratio R & D / turnover %, to be obtained from supplier.
Year: Year: Year:

Describe the research and development resources available.

In-house.
Corporate.
By agreements (such as universities, test centres, etc).
Number of patents obtained:

Notes by evaluation team:

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PRODUCT DEVELOPMENT
9.5 Design and Process changes
(Product Process Change Notification)

-Procedure is existing and there are evidences that the PPCN process (or equivalent)
is used. Traceability is done on all changes, process or design. Same process is
deployed to tier 2 suppliers 3p
-Procedure is existing and there are evidences that the PPCN or similar form is used
internally. Some weaknesses regarding traceability or tier 2 changes. 2p
-No formal routine in place. PPCN is used upon customer demand. 1p
-No consideration of informing customer in case of product or process change 0p

Sub Item Documents to 3 points 2 points 1 points 0 point

check
Product -Procedure and Procedure is existing and Procedure is existing and No formal routine No Procedure
Process PPCN (or there are evidences that there are evidences that the in place. or no use of
Change similar) the PPCN(or similar) is PPCN( or similar) form is PPCN(or similar) PPCN( or
Notification PPAP used and that the used internally. is used upon similar).
(PPCN or customer has approved Communication with the customer
similar) the demand. New PPAP customer seems poor.New demand.
is performed PPAP is performed.
Product -Procedure of Traceability is done on all Traceability is done on main Traceability is No
Process traceability changes, process or changes but there's no done upon traceability,
Change process design. Documents are specific rule to determine customer no record.
Notification recorded and stored in severity of the change. request. It takes
(PPCN or an accessible place. Documents are recorded and time to find the
similar) stored in an accessible related
place. documentation.
PPCN planning -Timeplan Timeplan is existing. It's Timeplan is existing but not Main dates given No timeplan.
shared with the customer. shared with the customer. to the customer No info. Or
The customer is informed Main dates are given to the upon request. informed after
in advance (several customer who has time to Late information change is
weeks) prepare. to the customer. implemented.
Team approach -Composition of Information and analyse Some key departments are Good Analyse done
the team of the consequences are missing in the analyse or in communication by one people
done within a cross the information flow (PD, flow within the only. No
functional team. Formal manufacturing, commercial, company but information
acceptance of the Quality) analyse is done internally
different parties. by one dpt only.
Tier 2 changes -Process and A Procedure exists for tier A Procedure exists for tier 2 No formal routine No procedure
design change 2 process and design process and design change in place. or no use
notification/reque change request. Tier 1 request. Communication with
st approves always the tier1 seems poor. New PPAP
request. New PPAP are are perfomed
perfomed.

Assessment guidelines
This chapter is applicable for changes requested by either supplier or GMH.

Notes by evaluation team:

Evaluation of this topic

Points

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PRODUCTIVITY
10.1 Process of internal cost reduction

-The supplier has a working system for productivity improvements

and rationalizations, sets goals and can show improvements over several
years and shares with its customers. 3p
-The supplier has a working system and set targets. 2p
-The supplier has a process but no goals for cost reduction. 1p
-The supplier has no special system or improvement goals. 0p

Assessment guidelines:
The supplier should have a high competence and capability to reduce costs in both manufacturing and
design (when applicable). If they have design responsibility, cost reduction activities should be part of their
product development process (see 7.1 / 7.2 and 8.1 for full picture). The supplier should use methods like
cost split-up VA (value analysis), IPPS (Improved Production Process with Supplier: cost reduction tool),
PVA (Product Value Added), Kaizen or similar, etc. to improve productivity and realize rationalizations.

Data:
Describe the internal cost reduction programme?
What methods are used (such as Value analysis, Cost split-up, OEE, and IPPS)?
Procedure to propose cost reduction to customer.
Verify targets and results for internal cost programs for the latest three years.
How does the supplier work with follow up for poor quality (waste, internal scrap and
waiting time etc.)
Check if agreement for cost reduction with GMH exists? Yes
Is the supplier ready to perform and share a bottom-up costing?

Notes by the evaluation team:

Evaluation of this topic

Points

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SOURCING
11.1 Sourcing process

-Supplier has a fully documented sourcing process with targets, evaluations

with clear strategies. 3p
-Supplier has a documented sourcing process with some targets but not fully developed. 2p
-Supplier has a limited range of activities regarding targets,evaluations , not systematic. 1p
-Supplier has no documented sourcing process. 0p

Sub Item Documents to check 3 points 2 points 1 points 0 point

Supplier -Evaluation -Fully documented system -Documented system exists -The system existis The system
Evaluation documentation exists and it includes and it includes procedures, but it is not fully does not
Phase -Process audit procedures, responsibilities responsibilities and follow up. documented or not exist or it is
-Supplier project (SQA function), follow up and Improvement targets and/or fully implemented. not
management has improvement targets and actions not included. -No specific Index followed.
actions; -Some type of supplier There are areas for
-Organization chart -Quality and environment evaluation audit similar to the improvement.
certification for all suppliers GMH SEM exists
-Specific process audit in use
with area like (Safety, Casting,
Forging)
Supplier -How supplier is -Supplier selection with Full -Supplier selection with -There are Targets, -None.
Selection selected (Check QDC target Target,but not for Full QDC but only on Cost.
phase Sourcing example) -Full Agreements ( purchasing, -Supplier agreement but not -There are
-Streering PPM agreement, RM, warranty) all agreement, but only
Committee -Formal review fully in function -Cross-functional check list purchasing.
are used. -No cross-functional
check-list
Supplier -Supplier switch -Full system in place for -Switch process in place, but -Switch process in -None
switch process monitoring the switch process not fully in use place, not well used
process -Risk management -Clear analysis on Risk -Risk analysis, but W/O -No risk
management and PDCA for PDCD follow up management
reducing the Risk during switch -Implementation team exists -No delegate
-Delegate implementation team but not fully cross founction implementation
and team leader for each team,only buyer
change(purchasing, PD, Quality, drive
Manufacturing, logistic) implementation.

Notes by evaluation team:

Evaluation of this topic

Points

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SOURCING
11.2 Subcontractor performance

-An excellent system is in place to follow-up the sub-suppliers in both quality

and deliveries as well as co-operation about improvements to reach agreed
competitive targets 3p
-There is a system to monitor sub-suppliers but some sub-suppliers do not meet
target levels or targets are sometimes not competivive enough. 2p
-A recently implemented or poor monitoring system or poor sub-supplier performance. 1p
-No system for follow-up. 0p

Sub Item Documents to check 3 points 2 points 1 points 0 point

System to -Quality records (PPM, -Fully documented system -Documented system -The system -The
monitor sub- linedisturbance, exists and it includes exists and it includes existis but it is system
supplier warranty) procedures, responsibilities, procedures, not fully does not
performance -Quality management follow up and has improvement responsibilities and follow documented or exist or it is
system targets and actions; up. Improvement targets not fully not
-It is part of supplier's business and/or actions not implemented. followed.
plan included There are areas
for improvement.
Audit system -Supplier audit planning -There is an audit planning for -There is an audit -There is an No audit
Audit records all tier 2 suppliers. It is followed planning for critical audit planning
and tier 2 supplier quality level suppliers (processes with but not followed
is improving “technology”). Action enough (audit or
plans are well followed. action plan).

Improvements -8D reports -For each quality incident ,ask -For each quality -Does not -None
and Problems Meeting minutes for an Action Plan (using 8D incident ,ask for an Action systematically
Solving report). Time plan to come Plan (using 8D report). ask for an
back to the target is well Time plan to come back Action Plan. Or
controlled. There is somebody to the target is sometime responsible
responsible for follow up. not controlled. There is people to follow
somebody responsible for up not well
follow up. identified.
Process to -Escalation process -There is an escalation system -There is an escalation -No well defined -No
manage low -Business review for managing Low sytem for managing Low process or not process
performing meeting minutes Performancing Suppliers Performancing Suppliers. well applied.
suppliers (LPS). For the worst cases it Special activities are
leads to supplier phase out. required for worst sub-
Special activities are required suppliers, including audits
for worst sub-suppliers, and reviews with top
including audits and reviews management.
with top management

Assessment guidelines:

Notes by evaluation team:

Evaluation of this topic

Points

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Appendix 1

Glossary:
A
B
BVQI: Bureau Veritas Quality International, national accredited organisation.
BLANKS: Blanks are defined as materials where further processing, such as machining, will take place,
e.g. castings and forgings.
Bottleneck: The point in a process that limits total output.
C
CAE: Computer Aided Engineering.
CAD: Computer Aided Design.
CSR: Corporate Social Responsibility
D
DNV: Det Norske Veritas, national accredited organisation.
E
EDI: Electronic Data Interchange.
F
FMEA: Failure Mode and Effect Analysis. There are three different areas to run a FMEA on, Design, Process
and Environmental impact evaluation.
G
H
I
IPPS: Improved Production Process with Supplier. Cost reduction tool/procedure focusing on the suppliers’
production process.
ISO 14001: International environmental standard.
J
K
Kaizen: KAIZEN means improvement. Moreover, KAIZEN means continuing improvement in personal life,
home life, social life, and working life. When applied to the workplace KAIZEN means continuing improvement
involving everyone - managers and workers alike.
KPI: Key Performance Indicator.
L
LRQA: Lloyd’s Register Quality Assurance, national accredited organisation.
M
N
O
OEE: Overall Equipment Efficiency, the evaluation of the production set up, capacity and capability by
means of a study of at least one production shift. The maximum OEE value is 100 % and is a calculation of
machine availability, performance efficiency and the rate of quality.

P
PD: Product Development
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PDCA: Plan Do Check Act.
PPCN: Product Process Change Notification
PPM: Parts Per Million.
Q
R
R&R: Stands for Repeatability & Reproducibility. Statistical method for measuring the capability of
measurement devices. This method comes from the MSA (Measurement System Analysis) which is one of the
reference manuals of TS 16949.
S
SQA: Supplier Quality Assurance
SQE: Supplier Quality Engineer
T
TQM: Total Quality Management.
TS16949: ISO/TS 16949 is an ISO Technical Specification, which aligns existing automotive quality system
requirements within the global automotive industry. In conjunction with ISO 9001/9002:1994, ISO/TS 16949
specifies the quality system requirements for the design/development, production, and where relevant,
installation and servicing of automotive-related products.
U
V
VA: Value Analysis. Cost reduction tool/procedure focusing on the parts total cost.
W
X
Y
Z
1 – 10
6 Sigma: Sigma (σ) is character of the Greek alphabet which is used in mathematical statistics to define
standard deviation. The standard deviation indicates how tightly all the various examples are clustered around
the mean in a set of data. Six Sigma is a business method for improving quality by removing defects and their
causes in business process activities.
8D: Problem Solving Process for the automotive Industry.

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