SUPPLIER MANUAL

JUNE 2019 EDITION

 Copyright© 2019 by WABCO
This book or any part thereof may not be reproduced in
any manner without written permission of WABCO.

CONTENTS

7.1.4. COMPONENT QUALITY PLANNING (CQP) PROCESS ............34

INTRODUCTION .............................................................................................. 3 7.1.5. PRODUCTION PART APPROVAL PROCESS (PPAP) ................37
7.1.6. INITIAL SAMPLES (IS) PREREQUISITES AND APPROVAL .....38
1. HOW TO USE THIS MANUAL .................................................................... 4 7.1.7. PPAP PREREQUISITES AND APPROVAL .................................39
7.1.8. SUPPLIER COMPONENT REQUALIFICATION (LAYOUT
2. SUPPLIER ENDORSEMENT POLICY ........................................................ 5
INSPECTION AND FUNCTIONAL TESTING) ......................................43
7.2. REACTIVE SUPPLIER QUALITY MANAGEMENT .............................43
3. COMMITMENT TO COMPLIANCE AND CORPORATE SOCIAL
7.2.1. INCIDENTS MANAGEMENT (QR6σ) AND ESCALATION ..........43
RESPONSIBILITY............................................................................................ 6
7.2.2. COST OF POOR QUALITY AND LOGISTIC (COPQ&L)
REIMBURSEMENT PROCESS ..............................................................44
3.1. OUR CODE OF CONDUCT ................................................................. 6
7.2.3. SUPPLIER QUALITY IMPROVEMENT AND ESCALATION ......45
3.2. ANTI-BRIBERY AND CORRUPTION .................................................. 7
7.2.4. CRITICAL COMPONENTS AND SPECIAL PROCESSES
3.3. CONFLICT MINERALS POLICY .......................................................... 7
MANAGEMENT......................................................................................46
3.4. HUMAN RIGHTS .................................................................................. 8
7.2.5. CHANGE MANAGEMENT ...........................................................47
3.5. THE ENVIRONMENT ........................................................................... 8
7.2.6. CONTROLLED SHIPPING LEVEL 1 (CSL1)...............................49
3.6. HEALTH AND SAFETY ........................................................................ 9
7.2.7. CONTROLLED SHIPPING LEVEL 2 (CSL2) ..............................50
3.7. PROPOSITION 65 ................................................................................ 10
7.3. WABCO ACADEMY .............................................................................51

4. GET TO KNOW SOURCING & PURCHASING AT WABCO ..................... 11

8. HOW WE MANAGE TOOLING ...................................................................53

4.1. SOURCING & PURCHASING MISSION ............................................. 11

8.1. THIRD-PARTY TOOL SOURCING ......................................................55
4.2. SOURCING & PURCHASING DIFFERENTIATION STRATEGY ......... 11
4.3. SOURCING & PURCHASING AND SUPPLIER QUALITY
9. SUPPLIER DEVELOPMENT AND LEAN DEPLOYMENT .........................56
ORGANIZATION ......................................................................................... 12
4.4. WHAT WE BUY ..................................................................................... 14 10. HOW WE MANAGE DELIVERY WITH SUPPLIERS ................................59
4.5. COLLABORATION ............................................................................... 15
4.5.1. SUPPLIER PROFILE QUESTIONNAIRE .................................... 15 10.1. GENERAL DEFINITIONS OF DELIVERY .........................................59
4.5.2. WABCO SUPPLIER PORTAL ..................................................... 16 10.2. FORECAST AND PROCUREMENT PROCESS ...............................60
10.3. CAPACITY & FLEXIBILITY .................................................................61
5. HOW TO BECOME A WABCO TARGET PANEL SUPPLIER .................. 17
10.4. DATA INTERCHARGE REQUIREMENTS ..........................................62
10.5. TRANSPORTATION AND DOCUMENTS .........................................63
5.1. SOURCING STRATEGY & SUPPLIER PANELS ................................. 17
10.6. PACKING & LABELING ......................................................................65
5.2. SUPPLIER RISK MANAGEMENT ....................................................... 18
10.7. DELIVERY PERFORMANCE REQUIREMENTS & MONITORING ..67
5.3. STANDARD SUPPLIER AGREEMENTS ............................................. 20
10.8. LOGISTICS COMMUNICATION ........................................................68
5.4. SUPPLIER TARGETS ........................................................................... 21
10.9. LOGISTICS AUDIT .............................................................................68
5.5. SUPPLIER SCORECARD .................................................................... 22
10.10. CAPACITY ASSESSMENT ...............................................................69

6. HOW WE SELECT AND NOMINATE SUPPLIERS .................................... 24

11. ADVANCED PURCHASING & SUPPLIER INTEGRATION .....................71

6.1. PRE-SOURCING COMMITTEE ........................................................... 24

11.1. SUPPLIER DESIGN CAPABILITY ASSESSMENT ...........................72
6.2. REQUEST FOR QUOTATION (RFQ) ................................................... 25
11.2. WABCO INTEGRATED SUPPLY PARTNER .....................................73
6.3. FEASIBILITY DECLARATIONS ........................................................... 26
6.4. SUPPLIER OFFER REVIEW MEETING (SORM) ............................... 26 12. LONG TERM VENDOR DECLARATION (LTVD) .....................................74
6.5. SAFE LAUNCH CONCEPT .................................................................. 27
6.6. SOURCING COMMITTEE AND BUSINESS AWARD ......................... 29 13. HOW WE CONTROL EXPORT .................................................................75

7. HOW WE MANAGE QUALITY AMONG SUPPLIERS ............................... 30 14. ISSUING INVOICES TO WABCO SITES IN EUROPE.............................77

7.1. PREVENTIVE SUPPLIER QUALITY MANAGEMENT ........................ 30 14.1. SENDING THE INVOICE IN PDF FORMAT......................................78
7.1.1. SUPPLIER PROCESS AUDIT (SPA) .......................................... 30
7.1.2. PRODUCT SAFETY MANAGEMENT (CUSTOMER 15. GLOSSARY OF TERMS ............................................................................79
PROTECTION) ...................................................................................... 32
7.1.2.1. SAFETY MANAGEMENT AUDIT .................................... 33
7.1.3. BUSINESS MANAGEMENT SYSTEM CERTIFICATION ........... 34

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INTRODUCTION

Dear Supplier,

Today, the global economy is challenging. The market, industry conditions, and regulations both global and local – are all
increasingly complex. In this incredibly fast-paced, exciting industry, WABCO continues to pioneer innovations to address
key technology milestones towards the autonomous, connected and electric future of the commercial vehicle industry.

As WABCO’s Sourcing & Purchasing (S&P) team we support WABCO’s innovation by providing customers with exceptional
quality and delivery at the competitive cost, while also ensuring sustainability across our supply chain based on high ethical
and environmental standards.

Vital to success is a shared purpose with key supplier business partners. Having a shared purpose and collaborating
closely will help both parties to achieve the highest quality, sustainability and consistently high performance. This will also
accelerate value creation by applying automotive standards (IATF 16949) and frugal mindset, underpinned by solid Lean
and Design to Cost foundations.

To help WABCO suppliers perform to a high standard and in order to provide transparency with regard to our expectations,
we created the first edition of the WABCO Supplier Manual in 2014, which has now been upgraded based on the latest
standards and changes. This single source of reference, which comprises all relevant information and guidelines that
explain how we manage our supply base, was designed to make our processes easy to understand and follow.

In order to reflect the changing requirements of our customers and WABCO’s growing capabilities in the ACE domains, we
have updated our policies and processes, and are delighted to provide you with the third edition of the WABCO Supplier
Manual.

Adhering to the policies and processes contained within the WABCO Supplier Manual will underpin close collaboration and
foster strong relationships. Working better together will deliver business growth for our respective companies. To conclude,
implementing the policies and processes gathered in WABCO Supplier Manual will enable your company to be ranked as a
preferential supplier for future business. It also offers suppliers the potential to be nominated as a WABCO Integrated
Supply Partner.

We hope that you find the WABCO Supplier Manual helpful, and would like to take this opportunity to thank you for your
collaboration.

Nicolas Flour Francesco Martini

Vice President Global Sourcing & Purchasing Global Supplier Quality Leader

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1. HOW TO USE THIS MANUAL

This is the third edition of WABCO’s Supplier Manual. Like the previous ones,
it has been created to help you understand what WABCO expects from its
suppliers to ensure that suppliers’ processes, systems, products and services
are aligned to our business priorities and customer commitments. The rules,
processes, and requirements described here apply to WABCO suppliers,
contractors, and vendors in every region of the world.

SOME GUIDING PRINCIPLES

This manual is written in English, which is WABCO’s official business language.

Each chapter of the manual is broken into sections that describe important WABCO
supplier processes.

Each section is organized to help you understand:

• Purpose: What each process is designed to achieve

• Scope: To what each process applies
• Description: What the process is
• Responsibilities: What you need to do to adhere to the process, and
how WABCO will support you
• Supplier benefits: What your organization stands to gain

Where applicable, the manual provides links to associated documentation you

may need, or find useful.

As robust change management and clear communication are important to WABCO,

we commit to:

• Review and update the Supplier Manual on regular basis

• Notify you when changes are made to the Supplier Manual
• Ensure that the latest version of the Supplier Manual is available on
the WABCO Supplier Portal. Please note that it is your responsibility to
download the latest version from the portal.

This Supplier Manual is intended to supplement the contract documentation in

place with each supplier, and to provide clarity regarding the processes referenced
therein. Nothing contained in this Supplier Manual is intended to contradict,
modify, or amend any contractual agreement in place between WABCO and a
supplier. Such contractual commitments are binding between both parties,
irrespective of any language contained within this Supplier Manual.

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2. SUPPLIER ENDORSEMENT POLICY

WABCO will not endorse any suppliers in press releases, articles, advertising,
websites, or other marketing materials. This is because suppliers’ products and
services are often linked to sensitive information that WABCO does not want to
disclose to competitors.

Depending on WABCO’s satisfaction with a supplier’s service, WABCO may agree

to provide a customer reference. However, any requests for such references will be
assessed on a case-by-case basis, and are subject to review and approval by the
relevant WABCO business leaders.

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3. COMMITMENT TO COMPLIANCE AND CORPORATE
SOCIAL RESPONSIBILITY

PURPOSE WABCO is a global company with a powerful reputation for the excellence of its
products and services. Our reputation is also built on a strong foundation of
integrity and fair dealing in every aspect of our business. In this increasingly
complex, competitive, and dynamic world, protecting our reputation is a key pillar
to maintain the confidence and trust of WABCO’s diverse stakeholders. To
conduct business openly and honestly, WABCO will avoid conflicts of interest, and
comply with all applicable anti-corruption laws, including the US Foreign Corrupt
Practices Act. We will obey the law of the countries in which we operate, and
respect the dignity of every individual.

WABCO builds mutually beneficial relationships with suppliers and service

providers. We comply with all regulations and contractual commitments regarding
the use of intellectual property and with the law in all jurisdictions in which we do
business, including especially any competition law requirement.

WABCO is committed to protecting the environment, respecting human rights, and

maintaining a safe and friendly workplace, throughout its supply chain.

The information contained within this manual applies throughout WABCO’s

SCOPE Global Sourcing & Purchasing organization to our employees, customers,
suppliers, consultants, or any other party with which we would enter into a
contractual relationship.

3.1. OUR CODE OF CONDUCT

WABCO created its Code of Conduct to help all of us live up to the highest ethical
DESCRIPTION
standards, to meet our obligations to the law, our commitments to our customers,
and our responsibilities to each other and our shareholders. It protects our
reputation, and creates a culture in which we can all thrive. We build long term
relationships with suppliers and service providers, and award business to them
on the basis of the value they provide to our business or our customers. In return,
we expect them to share our ethical standards, uphold our Code of Conduct or a
code with equivalent provisions, and report on compliance in key areas, including
anti-bribery legislation, the use of conflict minerals, the environment, and human
rights protection, such as measures against child exploitation, compulsory,
forced, or slave labor. More generally, we require from them that they provide
assurance of their compliance with all applicable laws.

Our Code of Conduct details what is expected of you if you deal with us as a
supplier or as a service provider. Below we give you a brief overview of its most
important principles.

When dealing with suppliers and service providers, we:

• require that you confirm your compliance with applicable laws, regulations,
and industry standards
• require that you review and respect our Code of Conduct, or a code with
equivalent provisions in your organization, to be reviewed and accepted
by us

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 • share our zero tolerance policy with regard to bribery and corruption, including the
prohibition of money laundering, and of political contributions

• refrain from accepting gifts, favors, or entertainment, of greater than nominal value

• provide fair and open information to you when you are competing for our business

• protect your proprietary information

• do not make unlicensed copies of software which you would license to us,
or incorporate it into your own software.

WABCO complies with national and international anti-trust laws in all countries in
which it does business, and we maintain an active, global program for educating
our employees in compliance with these laws.

WABCO does not participate in conversations or understandings – either formal

or informal – with its competitors that involve prices, territories, market share, or
customers to be served.

WABCO is committed to providing challenging, meaningful, and rewarding

opportunities to all employees, regardless of race, religion, color, nationality, age,
gender, sexual orientation, or disability.

And last but not least, WABCO is truthful and forthright about communicating its
performance, and we expect our employees to avoid situations that would
compromise their objectivity at work.

3.2. ANTI-BRIBERY AND CORRUPTION

DESCRIPTION WABCO has a zero tolerance for any form of bribery, and does not allow direct or
indirect payments, or other items of value, to be offered, made to, or accepted,
from any party (including individuals, companies, and government officials) to
facilitate business, influence decisions, or accelerate actions.

RESPONSIBILITIES Therefore we expect our suppliers never to:

• make or offer unlawful payments, or provide other items of value, for the
purpose of obtaining, retaining or facilitating business
• offer, authorize, or accept bribes, including ‘facilitation payments’ (small,
unofficial payments to speed up what should be a routine process), or any other
form of improper payment, with the intention of gaining a commercial advantage
for WABCO
• offer customers, or prospective customers, suppliers, or anyone else, gifts,
favors, or entertainment of greater than nominal value. Nor accept them
when offered

3.3. CONFLICT MINERALS POLICY

DESCRIPTION The Conflict Minerals Policy has been designed to support the humanitarian
objective of ending ongoing violence funded by the trade of conflict minerals from
the eastern portion of the Democratic Republic of the Congo and surrounding
countries (“Conflict Region”).

WABCO fully supports U.S. legislation on the supply of conflict minerals, including
the rules adopted by Securities Exchange Commission. Conflict minerals include
gold, tin, tantalum, and tungsten. The U.S. Secretary of State may designate
other minerals in the future.

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 WABCO endorses the objectives of the U.S. legislation to address the trade of
conflict minerals.

WABCO will not knowingly procure minerals from the Conflict Region unless
they are certified as conflict-free by an independent third party.

WABCO is committed to complying with the due diligence requirements to

determine the source of conflict minerals used within its products, and expects
its suppliers to assist with this task.

RESPONSIBILITIES We expect our suppliers to ensure compliance with U.S. legislation on the supply of
conflict minerals, including the rules adopted by Securities Exchange Commission.
We therefore require our suppliers to make an annual submission on their sourcing
practices.

Should you like to learn more, please visit our webpage where you will find WABCO
Conflict Minerals Policy.

3.4. HUMAN RIGHTS

WABCO respects applicable labor laws and regulations, and wants to create
DESCRIPTION
an environment in which people can freely contribute, excel, and be recognized
for their achievements. It expects its suppliers to adopt similar rules within their
organizations.

RESPONSIBILITIES WABCO expects its suppliers to:

• comply with local labor laws and regulations

• recognize and respect rights to be members of a union, Works Council, or other
employee representative body
• provide payment and reward that is competitive in local markets, consistent
with industry standards, and in line with or above applicable minimum wage
requirements
• not tolerate child, compulsory, forced, or slave labor in any of the markets in
which it operates
• respect the dignity of every individual and colleague
• never harass, discriminate against, or make unwelcome sexual advances to any
colleague, contractor, customer, or supplier
• avoid any behavior that could create an offensive or intimidating work
environment

3.5. THE ENVIRONMENT

Protection of the environment is an integral part of WABCO’s vision. All of WABCO’s

DESCRIPTION manufacturing plants are certified according to ISO 14001, based on the firm belief
that ‘excellence in execution’ will only be achieved by continually improving our
environmental performance, including the use of permitted materials, energy
conservation, and waste reduction.

WABCO implements ISO 50001 Energy Management at larger locations, to ensure

a higher focus on energy conservation, and with that, CO2 reduction.

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RESPONSIBILITIES We expect our suppliers to ensure compliance with all relevant environmental
legislation and regulations in force in the country where their products are
delivered. In terms of environmental management, suppliers must conform to the
latest version of ISO 14001. In addition, suppliers must comply with WABCO’s
environmental policy and the WABCO JED Standards to avoid hazardous
substances (JED-762).

Any complaints from WABCO suppliers should be addressed in line with REACH
Regulation (EC) No. 1907/2006 (Registration, Evaluation, Authorization and
Restriction of Chemicals).

Parts are only to be provided along with the material data MDS record (Material
Datasheet), which must include the IMDS ID number in the initial sample cover
sheet (PPAP PSW). MDS is recorded in the IMDS (International Material Data
System).

We expect our suppliers to protect the environment by being responsible and by

ensuring excellence in the design, manufacture, distribution, recycling, and
disposal of the products they create.

3.6. HEALTH AND SAFETY

DESCRIPTION At WABCO we value people and take their health and safety very seriously. As
such, WABCO has implemented, and is certificated for, the Occupational Health
and Safety standard OHSAS18001 (ISO 45001). We lead by example, and nurture
a culture of responsibility for health and safety among our colleagues, customers,
and business partners.

WABCO has a specific policy for health and safety which we expect our suppliers to
RESPONSIBILITIES
adhere to. This includes:

• Safety principles govern our daily work – working safely is a condition of

employment at WABCO
• Our processes are designed to perform better than, rather than just comply
with, laws, rules, and regulations determined by local, state, province, or
federal jurisdictions
• WABCO has a comprehensive ergonomic program in place to protect our
people today, but also for the future
• We have a moral obligation to report all health and safety risks. This includes
reporting any incidences of child labor and other exploitative activities
• We treat all incidents regarding safety, health, asset(s) and property damage
as a process deficiency that can be avoided based on Six Sigma Lean
principles. We truly believe that preventing accidents is an important part of
our social responsibility
• All accidents must be investigated by a formal procedure. In case of an
accident involving WABCO employees at our supplier site, our supplier must
take full responsibility for the care and needs of the affected employee(s)
• We communicate to all our employees in an honest, clear, and fair
manner about the relationship between our processes, safety, health,
and the environment

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 In addition:

• We expect all WABCO suppliers to conduct business in the same honest,

clear, and fair manner, and that goods and services should be delivered to
our locations in a safe, ergonomic, and healthy fashion
• We encourage all suppliers to follow the principles and implementation
requirements of OHSAS 18001 (ISO 45001) in their activities, including
making a commitment to the prevention of injury and ill health. We expect
them to pursue continuous improvement
• Suppliers must understand and respect WABCO’s commitment to safety,
health, environment, and security
• When suppliers visit our facilities, they must obey all warning signs and plant
visitor rules. When WABCO employees visit supplier sites, the supplier must
provide them with the necessary information and instruction to ensure their
safety. As appropriate, this will include the provision of adequate personal
protection equipment

WABCO suppliers are responsible for making sure that their suppliers also meet
these environmental, health and safety requirements in order to protect WABCO’s
supply chain.

3.7. PROPOSITION 65

DESCRIPTION California Proposition 65, officially known as the Safe Drinking Water and Toxic
Enforcement Act of 1986, became law in November 1986. Proposition 65 requires
businesses to provide warnings to consumers (and others doing business in the
State of California) about significant exposures to chemicals that are known to
cause cancer, birth defects, or other reproductive harm. On August 31, 2016, the
State of California Office of Environmental Health Hazard Assessment (OEHHA)
adopted certain amendments to Article 6. Clear and Reasonable Warnings for
California Proposition 65, which became effective on August 30, 2018. For more
information on warnings, go to www.P65Warnings.ca.gov

WABCO suppliers shall always monitor the potential regulatory, safety, health, and
RESPONSIBILITIES
environmental impact of using their products. Whenever applicable, suppliers shall
place the appropriate warning labels, in line with the relevant regulation, on all
products supplied to WABCO. In addition, we also require our suppliers to make
an annual submission on their sourcing practices.

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4. GET TO KNOW SOURCING & PURCHASING AT WABCO

4.1. SOURCING & PURCHASING MISSION

PURPOSE The Sourcing & Purchasing (S&P) mission spells out our goal, guides our actions,
and provides a guide to decision making.

SCOPE The mission is applied throughout WABCO’s worldwide S&P organization.

WABCO Sourcing and Purchasing’s mission is to provide customers with

DESCRIPTION exceptional quality and delivery at a competitive cost to support WABCO’s
innovation, while also ensuring sustainability across our supply chain based on
high ethical and environmental standards.

4.2. SOURCING & PURCHASING DIFFERENTIATION STRATEGY

PURPOSE The S&P Differentiation Strategy ensures global satisfaction through operational
excellence in terms of cost, quality, and delivery.

SCOPE The Differentiation Strategy is applied throughout WABCO’s worldwide

S&P organization.

DESCRIPTION WABCO’s S&P vision calls us to:

• Aim for the most mature & global organization

• Strive for the best supplier management
• Develop ‘next best places to buy’
• Drive Cost innovation

The diagram below details the key components of WABCO’S S&P Differentiation Strategy.

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 We deliver a strategic roadmap to pursue this vision, with a progressive plan
of activities to improve our performance in each of these areas.

4.3. SOURCING & PURCHASING AND SUPPLIER QUALITY ORGANIZATION

PURPOSE To describe the structure of WABCO’s S&P organization.

SCOPE This is applied throughout WABCO’s worldwide organization.

DESCRIPTION

S&P and Manufacturing & Logistics (M&L) are both part of WABCO’s Integrated
Supply Chain (ISC), while Supplier Quality (SQ) belongs to the independent Global
Quality Assurance organization at WABCO.

Regional Sourcing & Purchasing Leaders are responsible for WABCO’s S&P
organization within key WABCO regions (APAC, EMEA, India, Americas). They
leverage regional supply bases and ensure proximity to the business and suppliers.

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Global Commodity Leaders are responsible for Global Strategy for WABCO
across the regions. They drive all necessary actions to achieve the best Quality,
Cost, Delivery (QCD) supplier performance by defining and implementing the right
strategy according to WABCO’s needs, and by managing globally the supplier
relationship.

Regional Commodity Leaders lead teams of Commodity Buyers, supporting the

global Commodity Strategy with region-specific inputs. They are responsible for
QCD performance of the commodity in the regions, and managing regional
supplier relationships.

Commodity Buyers drive benchmark activities within their commodity, award

business to suppliers, lead negotiations, and manage the assigned suppliers.

WPCP Leaders lead and develop the project buyer team to achieve WPCP
projects and QCD targets. They anticipate market trends and bring proposals to
HUB leadership. They provide ideas for new customer projects.

The Global Advanced Purchasing Leader identifies, assesses, and selects

advanced technologies and partners in line with appropriate domains, and is
accountable for supplier integration set-up.

Global Indirect Sourcing Leader is in charge of QCD performance of S&P

processes related to indirect materials.

Global Purchasing Productivity Leader leverages the regional commodity and

supplier inputs, explores cost opportunities through lean, and alternate sourcing
based on cost analysis of existing parts. The Global Purchasing Productivity
Leader also drives cost competitiveness through alternate processes and
materials at part level, and proposes ideas for cost reduction.

Global Supplier Quality Leader belongs to the Global Quality Assurance

organization that is led by WABCO’s Quality Chief Officer. The Global Supplier
Quality Leader leads and steers supplier quality management activities across all
regions.

Regional Supplier Quality Leaders report to the Supplier Quality organization,

and are responsible for driving all aspects of supplier quality within the
commodity.

Commodity Supplier Quality Engineers belong to the Quality organization, and

drive all necessary actions to achieve the best supplier quality by evaluating and
developing assigned suppliers, and ensuring quality in projects to achieve zero
defects.

Site Supplier Quality Engineers belong to the Quality organization, and drive all
necessary actions in partnership with the supplier(s) in order to achieve and
maintain the best quality during serial life, with the ultimate goal to achieve zero
defects.

Global Supplier Development Experts develop suppliers and facilitate supplier

process improvements in order to support WABCO’s growth. They identify and
resolve specific issues that are impacting quality, cost and delivery, and cooperate
closely with regional supplier Quality organizations.

The Global S&P Change Management Leader provides S&P functional

excellence to the central change management team by ensuring that S&P provides
comprehensive and timely inputs to change management filtering decisions. The
Global S&P Change Management Leader defines and improves standards and
processes in the S&P organization to facilitate efficient change management
requests.
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 4.4. WHAT WE BUY

PURPOSE To explain the purpose of the S&P organization structure and to give an overview of
what are we interested in buying.

SCOPE This is applied throughout WABCO’s worldwide organization.

DESCRIPTION WABCO S&P is the global group function that buys parts for six of the commodity
groups that support Direct Manufacturing. Those commodities are the following:

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 4.5. COLLABORATION

4.5.1. SUPPLIER PROFILE QUESTIONNAIRE

PURPOSE Supplier’s detailed input into the supplier profile questionnaire (SPQ) will help us to
identify potential partners for our “right” supply base. Suppliers are invited to
complete the SPQ and submit it together with any relevant supporting information.

SCOPE SPQ is applicable for both potential new suppliers and those who are already part
of WABCO’s supplier panel. Potential new suppliers should use SPQ to introduce
themselves to confirm their desire to support us in our mission to deliver the
highest quality products at a competitive cost. The SPQ can be found in the
‘Become a Supplier’ section of our website by following this link:
https://www.wabco-auto.com/suppliers/suppliers-information/
Registered suppliers and partners should update us frequently about their
company and organization by using the SPQ in the WABCO Supplier Portal
(WASP).

The SPQ consists of the following 10 sections:

DESCRIPTION
Pre-registration
This section is applicable for potential new partners only. We require a supplier’s
unique DUNS number, physical address, and an email-address to verify the
registration.
General Data
In this section, we would like to understand the supplier’s global set-up and
delivery portfolio.
Certificate and Document Section

In this important section, suppliers should provide evidence that they fulfill the
standards required by WABCO. This includes automotive standards, as well as
legal demands.
Furthermore, the supplier may wish to share their company’s brochure and/or
further details.
Company Information

In the Company Information section, suppliers are asked to share legal form and
organizational structures as well as details on their ethical and environmental
policies.
KPI Section
This section is designed to provide WABCO with an overview of how a supplier is
performing internally, and across its entire business sphere.
Manufacturing Capacity

It is important for us to understand the supplier’s operating model in order to

determine the partnership opportunities. Suppliers are also kindly requested to
provide an overview of their machine park.
Product Development and Testing

We are continuously on the look-out for potential partners that offer development
services. This section is the place to advertise all relevant skills and capabilities.

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 Quality
Highest quality is a core element of our S&P mission. We need to understand from
our partners if they are able to follow the standard automotive tool set.

Project Management

We collaborate closely with our partners and suppliers on all projects (e.g. those
dedicated to WABCO’s automotive business). This section is designed to help us
understand to what extent potential partners/suppliers are able to serve the
complex requirements within our business environment.
Logistics
The automotive business also places high demands on its partners in the logistics
sector. We want to understand whether our partners and suppliers can meet the
standards with regard to processes, communication, packaging, and transport.

4.5.2. WABCO SUPPLIER PORTAL

PURPOSE To exchange data, communications, and documents in a protected and

secure environment, accessible from anywhere, at any time.
SCOPE Applies to all WABCO suppliers for direct and indirect materials. Data is
exchanged between the supplier and WABCO.
DESCRIPTION The WABCO Supplier Portal (WASP) is used for various standard business
processes such as claims-handling, RFQs, document-approval-exchange,
BIG-data-transfer, project collaboration, and management of supplier initiated
change requests.

The initial access to WASP is granted when registering as a potential WABCO-

supplier via the WABCO homepage:
(http://www.wabco-auto.com/suppliers/suppliers-information/) at or when
invited by WABCO through a dedicated e-mail invitation.

Once the supplier’s profile has been revised and approved by the appropriate
WABCO Global Commodity Leader, the requesting supplier contact person will
receive individual logon-data by e-mail. Those logon credentials remain valid
throughout any collaboration on WASP.
Access to WASP is free of charge, and compliant with recent regulations on data
security and data protection (e.g. GDPR).

The initial supplier contact person will be assigned as the supplier's WASP
administrator, and held responsible for adding additional supplier contacts, and all
disclosed data updated in the WASP at all times.

In WASP, which can be accessed by clicking on the link below, detailed, up-to-
date user instructions can be accessed via the main navigation in the portal at any
time:

http://www.wabco-
auto.com/WABCO_Supplier_portal_getting_started/WABCO_
Supplier_Portal_User_Guide_output/story.html

Last but not least, 24/5 support is available at adminsourcing@wabco-auto.com

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5. HOW TO BECOME A WABCO TARGET PANEL SUPPLIER

5.1. SOURCING STRATEGY & SUPPLIER PANELS

PURPOSE Sourcing strategy and supplier panels allow WABCO to select and work with the
best suppliers in order to meet the demands of the market.

SCOPE This process is applied throughout WABCO’s worldwide S&P organization.

DESCRIPTION The aim of WABCO’s sourcing strategy is to establish a supplier panel for each
technology segment. Each supplier takes into account WABCO’s current and future
strategic needs in order to maintain innovation/technology leadership, global
capability, and excellence in execution.

WABCO takes a structured approach by creating a strategic roadmap for each

commodity.

Our ultimate goal is to work with a limited number of integrated, key partners that will
be part of WABCO’s ‘Target Panel’. This will allow us to differentiate ourselves in
the eyes of our customers, and to ensure a transparent process that gives equal
opportunities to capable companies.

AN EXAMPLE OF WABCO STRATEGY SET-UP:

A prerequisite of being part of a WABCO Target Panel is the fulfillment of both

automotive and WABCO standard requirements.

Any interested potential suppliers will be asked to complete WABCO’s Supplier

Profile Questionnaire where, in addition to standard company information, suppliers
are asked to prove IATF 16949 certification and their automotive experience.

Should a new potential supplier meet WABCO’s strategic requirements, it will be

assessed by VDA 6.3 based Supplier Process Audit.

To be confirmed as a supplier to WABCO, the WABCO standard contract package

must be signed by the authorized representatives.

Our S&P mission: “WABCO Sourcing and Purchasing’s mission is to provide

customers with exceptional quality and delivery at a competitive cost to support
WABCO’s innovation, while also ensuring sustainability across our supply chain
based on high ethical and environmental standards.” which must be supported by
our new and existing partners, all of which are expected to demonstrate this attitude
by their overall performance. Once a member of a Target Panel, a supplier will need to
perform in line with various strategic statistics based on spend maturity and QCDI
performance. In case of any deviation from WABCO’s expectations and targets, the
supplier can be put on, at any time, a ‘New Business on Hold’ (NBoH) status, which
will immediately block any incremental/new business with WABCO.

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 In case of non-recovery, the supplier will be eliminated entirely from WABCO’s
supplier portfolio (This process is known as ‘Phase out’).

WABCO provides each supplier with a monthly update on performance, which

can be accessed via our web portal (Supplier Scorecard).

In accordance with our standard contract framework, our supply base is asked to also
monitor their own suppliers’ performance using WABCO’s Supplier Scorecard.

As a reminder WABCO’s SPQ is available at:

http://www.wabco-auto.com/suppliers/suppliers-information/become-a-supplier/

5.2. SUPPLIER RISK MANAGEMENT

PURPOSE The purpose of Supplier Risk Management is to secure WABCO’s and its
customers’ supply chain by anticipating, recognizing and, subsequently minimizing
- or mitigating - the supplier’s financial risk.

SCOPE WABCO’s supplier risk assessment program applies to all current and potential
suppliers.

Only supplier with low or

no risk assessed can
DESCRIPTION be part of WABCO’s
supplier Target Panel

Low /
No Risk
Potential & Risk Result /
Panel Rating
Medium /
High
Risk

Supplier with medium or

high risk assessed cannot
be part of
WABCO’s supplier
Target Panel

WABCO’s success depends on a healthy supply chain in which every supplier, and
sub-contractor, is financially stable. We therefore seek to manage any risk by
applying a risk rating to each supplier. The actual rating is based on external and
internally sourced data, and takes into consideration standard KPIs, as well as
empirical information, and geophysical set-up. The rating guides our decision-making
process when awarding contracts to suppliers, and is regularly reviewed.

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Only when a supplier has been assessed no or low risk can it be awarded new
business from WABCO. For existing partners of our supply chain, we reserve the right to
put them on ‘New Business on Hold’ (NBoH) if there is a decline in performance vs.
our risk assessment criteria. If a supplier’s performance does not subsequently
improve, it is likely that it will be phased out from WABCO’s supply base.

CRITICAL SUPPLIERS

For critical suppliers, whose failure would result in a significant distress to WABCO
operations and who show signs of financial difficulties, WABCO reserves the right to
impose a risk mitigation and improvement plan, which includes frequent reviews.

Such response plans are derived based on the risk category, response cluster and the
nature of responses.

Response plans are specified for the risk levels “yellow” and “red”.
For each risk type identified in the risk assessment model, both mitigation and
contingency responses are specified, covering the following clusters:
- Contractual aspects
- Supply chain aspects
- Financial aspects
- Communication

Mitigation responses are implemented to reduce the impact/probability of occurrence of

certain risk, while contingency responses are to be executed only if certain events
occur (e.g. supplier insolvency).

SUPPLIER BANKRUPTCY

When a supplier files for bankruptcy it will have a significant, negative impact on
WABCO’s business. Therefore, suppliers are advised to warn WABCO as early as
possible, so that a mitigation plan can be put in place.

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 5.3. STANDARD SUPPLIER AGREEMENTS

PURPOSE To ensure compliance with the requirements of WABCO and its customers as
well as transparency in our dealings with suppliers.

SCOPE WABCO’s Standard Supplier Agreements apply to all potential and current WABCO
direct materials suppliers worldwide.

DESCRIPTION

NON-DISCLOSURE AGREEMENT (S&P NDA)

The S&P NDA must be signed with any new potential WABCO supplier before the
supplier receives its first Request for Quotation (RFQ). Any RFQ shall be signed on
a product family/technology level (e.g. non-ferrous metal die castings). WABCO’s
S&P NDA protects the intellectual property of both WABCO and its suppliers.

PROJECT AGREEMENT (PA)

The PA is a document that records the supplier agreement. It covers a particular

project with a supplier both before and a few years after the Start of Production (SOP).

PRODUCT AND PRICING AGREEMENT (PPA)

The PPA is more of a frame contract that covers the whole or part of the current
business with a supplier after SOP. It is used mainly to formalize supplier
negotiations, and it includes new prices.
Before awarding any business, the supplier must send signed and scanned
agreements to the relevant buyer within WABCO. Two original copies must then
follow by post or courier. WABCO will sign both copies and return one document
to the supplier.

WABCO expects each supplier to cascade the contractual requirements of

WABCO to its sub-suppliers or sub-contractors whenever applicable.

QUALITY ASSURANCE AGREEMENT (QAA)

The QAA is a key contract that covers the supplier’s quality requirements and
quality management system.

TOOLING AGREEMENT (TA)

The TA is a contract that defines the rules according to which and WABCO-owned
tool is left at the disposal of a supplier to produce dedicated parts for WABCO.

LOGISTIC PROTOCOL (LP)

The LP contains a set of standards specifying the requirements and rules for
logistical exchanges between WABCO and suppliers to ensure awareness,
expectations, and clear responsibilities, in terms of data and information
exchange, flexibility, packaging and delivery performance.

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 The LP provides the supplier with clear guidance with regard to any outstanding
quality issues

SUPPLIER BENEFITS WABCO’s Supplier Agreements give clarity and business security to our suppliers
and define expectations clearly, helping to ensure a smooth relationship.

5.4. SUPPLIER TARGETS

PURPOSE Supplier Targets are designed to set clear QCD targets for WABCO suppliers, and to
assess supplier performance by managing key performance indicators (KPIs).

SCOPE Supplier Targets are applied to all WABCO direct material suppliers worldwide.

DESCRIPTION WABCO’s S&P organization drives business improvements by defining quality,

cost, and delivery targets for each and every supplier. These targets are reviewed
and confirmed in writing to each supplier on an annual basis.

QUALITY

As we believe that rapid and proactive problem solving is key to eradicate non-
quality, we measure supplier response time in QR6σ.

WABCO continuously aims to reduce PPM and CPB defects across its business
and execute a zero defect strategy. As a result, WABCO will implement prevention-
oriented supplier management activities in the introduction process of goods and
services. ‘On-time’ provision of qualification parts and documents and ‘release
without deviations’ will also be closely tracked by KPIs to ensure supplier quality.

COST

Cost targets measure, on a full year’s basis, a supplier’s ability to continuously

reduce the cost of the function supplied to WABCO. Our Commodity organization
provides WABCO with a granular market survey capability and a better
understanding of the cost drivers.

This Commodity organization is the team that drives WABCO’s Sourcing Strategy,
defines the supplier Target Panel, and builds its differentiation strategy. It is
therefore very important that suppliers submit all identified cost reduction ideas for
WABCO’s components and functions, so that the planning of the suppliers’ 36
months’ productivity can be performed. Those teams led by our Global Commodity
Leaders are the supplier’s preliminary contacts in order to engage in business
discussions on value creation, long term business agreements, and partnership
matters.

DELIVERY

Delivery targets are defined to ensure that the ‘right part at the right time in the right
quantity’ is delivered to WABCO. Targets will be measured on a monthly basis.

RESPONSIBILITIES To ensure excellence in delivery performance, we expect suppliers to focus on

preventive actions and delivering the right capacity, as well as being reactive -
delivering ‘quick response’ actions on time, and in an efficient manner.

WABCO expects full support and cooperation from its suppliers. Every supplier
employee working on WABCO’s behalf should be aware of, and committed to,
achieving WABCO’s quality, cost, and delivery targets.

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SUPPLIER BENEFITS WABCO’s Supplier Targets help suppliers monitor their performance and
ensure that they are meeting WABCO’s expectations. As a consequence, they
increase their chances of growing their business with WABCO.

5.5. SUPPLIER SCORECARD

PURPOSE The Supplier Scorecard ensures that both WABCO and each supplier have a
common understanding of actual performance versus targets. The Supplier
Scorecard’s performance rating charts the KPIs that are used to qualify existing
partners for new, additional, and continuation of business.

SCOPE The Supplier Scorecard applies to all WABCO’s direct material suppliers worldwide.
WABCO’s S&P organization drives business improvements by defining quality, cost,
and delivery targets, accompanied by compliance measures linked to automotive
standards ( e.g. IATF 16949), and compliance with, and contractual alignment to,
WABCO’s T&Cs. Each supplier can monitor its performance in WASP.

WABCO’s Supplier Scorecard consists of the following performance areas:

QUALITY – MEASURED AS:

• Parts per Million Defective (PPM)
• Claims per Billion (CPB)
• Incidents: number of total supplier ‘incidents’

COST – MEASURED AS:

• Productivity: material price inflation as a percentage summary of
commercial agreements

DELIVERY – MEASURED AS:

• On-time delivery: showing percentage of number of order lines (NoL)
delivered on the requested by WABCO date or 1 (local)/9
(intercontinental) day(s) before
• Availability: showing percentage of number of order lines (NoL) delivered on
the ‘requested by WABCO date’, or any time before that day

ADDITIONAL INFORMATION – MEASURED AS:

• Contractual coverage
• Certificate status
• Results of the last VDA 6.3 audit
• Number of Logistic Escalations
• Number of Premium Freights

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The Supplier Scorecard is updated on a daily basis and should be reviewed by
suppliers regularly, or at least once a month. The scorecard can be accessed via
WASP.

The supplier is expected to be familiar with the latest results in the Supplier
Scorecard, and its performance versus KPIs, at any time. Supplier Scorecard
performance is part of the standard agenda for management meetings and QCD
reviews.

The WABCO Supplier Scorecard communicates general or, if set and

communicated via a target letter, individual QCD targets for the supplier. This
enables both parties to have a mutual understanding of customer satisfaction, as
well as which general and/or specific areas need improvement, or are displaying
early warnings.

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6. HOW WE SELECT AND NOMINATE SUPPLIERS

PURPOSE To fulfill WABCO and automotive standard requirements and to nominate the best
supplier for new business, in order to ensure smooth project implementation and
excellent QCD performance in serial production.

SCOPE The selection and nomination process applies to each business award decision. We
handle both new projects and the reallocation of existing business.

DESCRIPTION The following diagram details WABCO’s core purchasing process:

CORE PURCHASING PROCESS

WABCO’s Supplier Selection and Nomination Process is part of our Core

Purchasing Process, as shown in the diagram above. This process takes both
external and internal customer expectations into account, and is linked to our
supplier panel.
The process evaluates, but is not limited to, the following areas:
- Financial stability
- The supplier’s quality management system (IATF 16949)
- Relevant quality and delivery performance
- An assessment of software development capabilities if applicable

The nomination procedure consists of three core steps and is underpinned

by WABCO’s CQP process (Component Quality Planning/APQP):
• Pre-Sourcing Committee
• Request for Quotation (RFQ)
• Sourcing Committee

6.1. PRE-SOURCING COMMITTEE

PURPOSE To ensure that only suppliers that meet all stated requirements receive a RFQ from
WABCO.

The Pre-Sourcing Committee is applicable for any item required to follow the
SCOPE
nomination process.

The Pre-Sourcing Committee ensures that, in addition to our internal strategy

DESCRIPTION
considerations, all suppliers selected to receive a RFQ:

- 24 -
  Are able to fully meet customer requirements
 Meet QCD performance requirements
 Are validated by the panel versus current projects and other potential
RFQ candidates
CORE PURCHASING PROCESS

Supplier
Definition
Pre-Sourcing Sourcing Management in
of Supply RFQ Serial Production
Committee Committee
Customer Base QCDI)
Expectations
Milestone: CQP
Business Award
SOP

The Pre-Sourcing Committee formulates the initial recommendations regarding

business nominations for the various WABCO functions.

Organized by the lead buyer for the project, and with the participation of Global
Commodity and Product Line representatives, the Pre-Sourcing Committee ensures
that a number of potential suppliers and partners are selected for our business.

The Pre-Sourcing Committee is supported by regional purchasing teams from all

required countries, and experts from Quality Management and Product &
Manufacturing Engineering.

Based on the decisions taken by the Pre-Sourcing Committee, buyers are allowed to
send RFQs for particular business requirements to all identified suppliers (Target
Panel in the first instance).

6.2. REQUEST FOR QUOTATION (RFQ)

PURPOSE The purpose of the RFQ is to collect suppliers’ quotations in line with WABCO’s
requirements for specified projects.

SCOPE eRFQ is open for current and potential suppliers, and provides guidance on any
change or creation of a supply chain (Quality, Cost, Delivery).

DESCRIPTION WABCO uses the WABCO Supplier Portal to publish RFQs.

Any quotation delivered via the platform is binding.

Details on access and navigation in the eRFQ can be found within WABCO Supplier
Portal and are described in point 4.5.2 of this Supplier Manual.

The WABCO eRFQ contains component drawings and/or specifications, as well all
relevant attachments that are mandatory to participation in the WABCO-RFQ, such
as Standard Agreements and Cost Breakdowns, Initial and Final Feasibility
Declarations, plus any project related obligatory documents. If marked ‘mandatory’,
these documents are to be considered and confirmed as feasible in order to submit a
valid quote.

RESPONSIBILITIES When submitting quotations, suppliers must use the Supplier Portal. Quotations sent
by email or in a different format than expected will not be considered.

SUPPLIER BENEFITS Providing a quotation in the predefined format will help WABCO to analyze and
feedback as quickly as possible, and in a structured and fair way. This will allow
suppliers and potential suppliers to understand the reasons behind WABCO’s
decision.

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 6.3. FEASIBILITY DECLARATIONS
PURPOSE The purpose of the Feasibility Declaration is to confirm that a supplier can comply
with WABCO’s specifications and requirements for each part number.

SCOPE The Feasibility Declaration must be completed by all direct material suppliers.

CORE PURCHASING PROCESS

DESCRIPTION

Within the RFQ package, suppliers receive a Feasibility Declaration. It must be

completed, signed and submitted by the supplier as part of the RFQ response.
Changes in the project: whenever there is a change regarding the component
during project phase (after design freeze) that affects directly safety characteristics -
<1>, significant characteristics <2>, or Customer Interface characteristics <CI> – the
Component Quality Planning (CQP) process must be repeated starting from TR.
Any new Feasibility Declaration needs to be signed by the supplier.

6.4. SUPPLIER OFFER REVIEW MEETING (SORM)

PURPOSE Purpose of SORM is to ensure that all requirements and specifications are
considered and reflected in the offer.

SCOPE A SORM meeting will be held to review all RFQs which have been positively
received.
CORE PURCHASING PROCESS

DESCRIPTION

When the deadline for the eRFQ has passed, the WABCO buyer reviews and
compares all of the supplier quotations that have been submitted. They then
organize a SORM, which is the first step in WABCO’s CQP process. The SORM is
attended by both the supplier and WABCO. During the SORM, the WABCO buyer,
Commodity Quality Engineer, and Engineering Expert will present the project and
discuss with the supplier the contents of their RFQ response including:
• Cost breakdown
• Tooling cost breakdown
• Process steps (including Safe Launch)
• Supplier technical recommendations included the Initial Feasibility Declaration
• Price
• Contractual situation

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SUPPLIER BENEFITS The SORM gives both WABCO and the supplier the opportunity to clarify and align
all the RFQ requirements.

6.5. SAFE LAUNCH CONCEPT

PURPOSE Safe Launch Concept (SLC) is a method to ensure that launch risks are mitigated
and that launch problems are corrected as quickly as possible during ramp-up.
The SLC will:
• Validate the supplier’s production control plan
• Protect WABCO plants from quality non-conformances during product launches
• Ensure that any quality issues that may arise are quickly identified, contained,
and corrected at the supplier’s location
• Increase involvement and visibility of supplier’s top management

SCOPE SLC applies from the start of project until the completion of launch, and for all
aspects of the containment area.

DESCRIPTION Safe Launch is a containment initiative designed to ensure a supply of defect free
parts to WABCO for SOP and the acceleration phase. The supplier is required to
identify all additional inspection, testing, and dimensional checks required in the
containment area based on Key Product Characteristics, Customer Interface, high
RPN, and/or issues identified during product and process development.
Containment must remain in place for a period of time or quantity of parts as
specified by WABCO Commodity Quality.

The exit criterion is shipment of 0 defects for the duration of this containment.

If a problem is identified in CSL1 or by WABCO, this activity shall remain in effect for
a minimum of 2 weeks after the supplier has implemented the permanent
corrective actions. If time or quantity is not specified, SLC will remain in effect
throughout acceleration or for a minimum of 3 months, whichever is longer.

The diagram below shows the key elements of SLC.

Sub-supplier
involvement

Further detail can be found in the CSL1 chapter on page 49.

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 RESPONSIBILITIES Suppliers shall present evidence as follows:
• Documented WI for additional inspections, functional testing, and dimensional
checks required at the CSL1 containment station and in process check
• Documented WI for the CSL1 containment station to ensure standardized work
• Documented evidence of execution and validation of the control plan utilizing
the I-chart or other format agreed upon by WABCO. The data must be readily
available for review by Commodity Quality
• Documented problem solving for both internal and WABCO quality concerns
utilizing an accepted customer format – to include problem description, root
cause, irreversible corrective action with break points and updated FMEAS and
Control Plans as appropriate

Tier 1 suppliers must ensure that sub-suppliers follow SLC rules for Critical
Components (please refer to chapter 6.5.). Appropriate evidence of Safe Launch
Concept deployment at the sub-suppliers must be provided to WABCO upon
request.

For any other components, the deployment of SLC at sub-suppliers should be

agreed between Commodity Quality and supplier on a case by case basis.

As a general rule, the duration of SLC is a minimum of 3 months from SOP and/
or related to piece numbers, in which case it is up to Commodity Quality to
decide and RSQL/CQL to validate the decision.

In order to exit SLC, the supplier will be eligible to exit after validation of the
effectiveness of the Process Control Plan and when they meet certain criteria. If the
supplier is unable to meet the exit criteria, or if the supplier’s SLC plan continues to
identify non-conformances, the supplier shall continue the necessary containment
measures to protect the customer until the quality concerns have been resolved to
the satisfaction of both the supplier and WABCO.

If a problem is identified in CSL1 or by WABCO, CSL1 must remain in effect for

a minimum of 2 weeks after implementation of corrective action or through the
original CSL1 period, whichever is longer. If the CSL1 continues to identify non-
conformances, the CSL1 activity must be kept in place until process controls and
capabilities have proven effective.

SUPPLIER BENEFITS SLC is a significant enhancement to the production control plan. Additional controls,
inspections, audits, and testing all ensure conformance and capability of the
manufacturing process, leading to higher quality throughout the process which
benefits both parties.

The SLC plan delivers the following benefits:

1. Increased frequency/sample size (cf. Production Control Plan)

2. Greater control for Key Product Characteristics, customer interface, high
Risk Priority Number (RPN), and/or issues identified during product and
process development
3. Better verification of the effectiveness of error proofing methods deployed
4. Immediate implementation of containment and irreversible corrective action
when non-conformances are discovered

It should be noted that the SLC plan is not a substitute for the Production Control
Plan, but rather, it is a complementary process that is used to validate the
Production Control Plan.

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 6.6. SOURCING COMMITTEE AND BUSINESS AWARD

PURPOSE The Sourcing Committee and Business Award processes govern the selection of a
supplier to whom the business will be awarded.

SCOPE The Sourcing Committee is mandatory for all direct material business awards.

DESCRIPTION The diagram below shows the key stages followed leading to the Business Award.

CORE PURCHASING PROCESS

Definition
Pre-Sourcing
RFQ

Expectations
Milestone: CQP
Business Award
SOP

After the successful completion of SORM, the Sourcing Committee is the next
meeting organized by the WABCO buyer. This purpose of this meeting is to review
supplier responses to the eRFQ and decide to which supplier WABCO should
award the business. This formal business decision meeting is supported by an
online approval workflow that allows full internal transparency and coverage of
automotive requirements in terms of documentation.

The Sourcing Committee procedure ensures that all relevant internal parties
approve acceptance of the quotation and the business award. This includes
S&P, as well as the interfaces with Manufacturing, Logistics and Engineering.

RESPONSIBILITIES Following the meeting, the nominated supplier receives a nomination letter and a set
of documents to be signed.

By accepting our nomination, the supplier must sign the contracts via e-sign, or
return scanned copies to WABCO by email, with hard copies following by surface
mail or courier service. Nomination is binding only once Project/Product related
contracts are signed by both parties.

SUPPLIER BENEFITS The supplier receives a new business award and the terms of engagement, and
the process and expectations for co-operation are clearly defined.

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7. HOW WE MANAGE QUALITY AMONG SUPPLIERS

PURPOSE To manage supplier quality to ensure that WABCO products continue to meet the
acceptable PPM (defective parts counted per million), and in accordance with
thresholds set by our customers, and so, when incidents occur, corrective action is
in line with their expectations.

SCOPE We actively manage quality among all WABCO direct material suppliers.

DESCRIPTION

Development Job 01 Serial Production

At WABCO, Supplier Quality Management is based on a ‘do it right first time on time’
philosophy. Following this principle, the Supplier Quality process map (see diagram
above) demonstrates the preventive and reactive processes we apply in order to
achieve our vision of perfect quality and zero defects. In summary, we:
• Manage quality by taking preventive action to avoid defects
• Drive continuous improvement at speed
• Aim to be recognized by our customers as the supplier of choice

7.1. PREVENTIVE SUPPLIER QUALITY MANAGEMENT

7.1.1. SUPPLIER PROCESS AUDIT (SPA)

The Supplier Process Audit (SPA) is carried out to assess the ability of potential
PURPOSE suppliers to meet WABCO’s requirements, and to re-validate the capabilities of
existing suppliers..

SCOPE All direct material suppliers will be subject to the SPA process.

DESCRIPTION The SPA is a systematic, independent process that allows WABCO to evaluate
supplier performance. The SPA is carried out using a standard questionnaire, which
also acts as the SPA report.

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 Suppliers are expected to reveal all relevant documentation, and grant access to
all processes which are used to create goods and services delivered to WABCO.
If deemed necessary, this also includes sub-suppliers and sub-contractors, in order to
understand important steps in the supply chain.

Suppliers are given two weeks’ notice of a SPA audit, and the results are circulated
five days after the SPA takes place.

Potential suppliers that have been recommended for a business award must pass
the SPA before the Sourcing Committee meeting that will determine the award.

In general, existing suppliers are audited at least every three years. However, they
may be audited more frequently should a specific need arise at WABCO.

The table below shows an overview of the possible SPA results and their
implications for existing and potential suppliers.

SUPPLIER
RESPONSIBILITIES
Before the SPA date, the supplier must review the SPA questionnaire and prepare
the required documentation. The supplier is encouraged to perform self-assessment
according to SPA questionnaire.

If WABCO recommends corrective action to be taken to address problems identified

in the audit, the supplier must draw up and implement a plan to complete the action
within 15 days, unless otherwise agreed with the auditor. The supplier must not only
confirm that corrective action has been taken, but also provide evidence that it has
been successful.

WABCO

Immediate feedback, including findings and a SPA score, are given to the supplier
during the closing meeting at the end of the SPA audit. The complete and signed
SPA questionnaire will be delivered to the supplier within 5 working days. The
score, once communicated, cannot be changed.

NOTE

The SPA is in line with the VDA 6.3 standard adapted to WABCO needs.

SUPPLIER BENEFITS The SPA:

• Clearly identifies the weaknesses, risks and strengths within the audited processes
• Helps avoid the cost of warranties by identifying potential risks

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• Increases process efficiency by identifying incidences of waste and loss
• Is mandatory for any business award

7.1.2. PRODUCT SAFETY MANAGEMENT (CUSTOMER PROTECTION)

Safety Management is applicable when a product, function, and/or feature, is/are

non-conform, or pose a risk or safety hazard. WABCO’s understanding of safety is
not only related to the end user, but also to understanding the impact of our product
on the community and the environment.
The supplier must implement all technically and organizationally feasible measures
to ensure the safety of its own and its sub-suppliers’ products, to minimize product
liability risks.

All WABCO suppliers shall nominate a Product Safety Representative (Eng: PSR;
Ger: PSB), with responsibility for product safety:
 For each stage of the manufacturing process
 In every site across the supply chain

This requirement is for materials processing, and assembly processes, and

includes all trading suppliers of goods.

The supplier shall ensure that:

 The required Product Safety is guaranteed in the development stage
 Special attention is paid to product safety in the product planning process
 Appropriate quality measures are implemented to minimize the safety risk of
faulty products
 Faulty products are identified as early as possible in the production process
 Quality data and all legally required tests are documented in sufficient detail to
prove that products are manufactured in accordance with applicable laws and
safety standards
 All relevant personnel receive enough detailed information and training on
product safety and product liability issues
 An on-site Product Safety Representative (PSR) is appointed (as above), and
that all PSR contact details are entered into WABCO’s Supplier Portal and kept
up to date
 All Safety Characteristics, e.g. SC<1> (or an alternative if approved by
WABCO) are clearly identified, and associated with the respective
product/process documentation (e.g. Design & Process FMEA, Control Plan &
Work Instructions)
 The safety management system is implemented, and fully embedded in the
quality management system

NOTICE
WABCO must be notified immediately in the event a non-conformance, or if a
potential customer safety risk is identified. There is no approval (or any deviation)
from WABCO in the event of non-conformities which might impact safety critical
features in road traffic or any other business in which we operate.
Product Safety should not be limited to products and/or components identified as
having Safety Characteristics (marked as SC <1>), but should also apply to
products/features for which non-conformity could create a risk of safety hazard at the
point of final application of the device on a vehicle.
WABCO recommends using Safety Management Audit (SMA), a specific
assessment audit, as a preventive process to assess supplier capability to meet
WABCO’s requirements for ‘safety critical’ components.

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 7.1.2.1. SAFETY MANAGEMENT AUDIT

PURPOSE Safety Management Audit (SMA) is specific assessment audit designed as a

preventive process to assess supplier capability to meet WABCO requirements
regarding safety critical components.

SCOPE The SMA shall be applied for supplier components with identified safety
characteristics <1>.

The SMA focuses on following areas and corresponding detail:

DESCRIPTION
1. Company Management
1. Specific product safety objectives deployed and monitored for all areas for
which safety management is required
2. Customer Relations, including Crisis Management handling of field recalls,
internal communication and communication with the customer/regulatory
agencies, as well as product safety policy
3. Competencies, including training program on product safety, customer effects
and consequences, and product liability
4. Lessons learned, including problem solving methodologies to highlight the
‘safety critical’ aspects, using lessons learned on new product development
(process or product)

2. Development (product and process)

Safety Risk Management from customer input to production release, including

review of customer inputs relating to safety; identifying/considering safety
characteristics for new designs

3. Manufacturing

Workstation identification, including special identification on the manufacturing

floor; training people working on ‘safety critical’ equipment; maintenance of
‘safety critical’ equipment/stations and all evidence regarding process and
machine capability

4. Supply chain management

Safety Risk Management, including list of outsourced safety parts

operations; safety management program to sub-suppliers with goals and
targets
RESPONSIBILITIES

SUPPLIER

Before the SMA date, the supplier must review the SMA questionnaire and prepare
the required documentation. If WABCO recommends corrective action to be taken to
address problems identified in the audit, the supplier must draw up and implement a
plan to complete the action within 15 days, unless otherwise agreed with the auditor.
The supplier must not only confirm that corrective action has been taken, but also
provide evidence that it has been successful.

WABCO

Immediate feedback, including findings and a SMA score, are given to the supplier
during a meeting at the end of the SMA audit. The score, once communicated,
cannot be changed.

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 7.1.3. BUSINESS MANAGEMENT SYSTEM CERTIFICATION

PURPOSE The purpose of Business Management System Certification is to ensure

that suppliers understand the dynamics of the automotive industry in
addition to their customers’ specific requirements.

SCOPE All WABCO direct and PGRS materials suppliers worldwide.

DESCRIPTION WABCO suppliers must be compliant with IATF 16949 or have a plan in place to
achieve that compliance. Unless otherwise specified, conformity has to be
demonstrated by the third party certification to IATF 16949 or ISO 9001 (as a
minimum).

RESPONSIBILITIES As an IATF 16949 certified company, WABCO is obliged to cooperate with certified
suppliers and track their certification status. Therefore, suppliers who are not
certified as compliant will be asked to submit, and agree with WABCO, an action
plan to achieve certification by an agreed date. The supplier must keep the
information of its certification status updated in WABCO Supplier Portal. This
update includes the request to revise and attach a copy of the latest certificate as
described above.

Should a supplier’s certification be suspended, WABCO expects to be informed

immediately.

SUPPLIER BENEFITS Appropriate certification of a supplier’s management systems gives them a decisive
advantage, demonstrating that their organization has achieved internationally
recognized automotive standards.

7.1.4. COMPONENT QUALITY PLANNING (CQP) PROCESS

PURPOSE To plan, design, and develop a process that will enable the supplier to meet all
WABCO requirements in order to launch production on time and at ‘zero
defect’ level of quality.

SCOPE CQP is applied to all new component development and cost reduction projects,
including supplier relocation, material, design change, etc.

DESCRIPTION CORE PURCHASING PROCESS

The primary goal of WABCO’s CQP process is to ensure a flawless introduction of

any new goods and services to achieve a ‘zero defect’ performance right from SOP.

KPIs equate to a 100% score in WABCO’s Product Part Approval Process (PPAP),
which translates into ‘Right First Time on Time’ (PPAP RFTOT).

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The full CQP process consists of seven standard reviews. These are shown below,
together with their predefined timing:

NOTE

The CQP process is embedded in WABCO’s Product Creation Process (WPCP).

The diagram below shows the CQP steps within WPCP.

The reasons for launching a CQP vary and may include:

• Initial production (new parts)
• Variant
• Design change
• Supplier manufacturing process change
• Sub-supplier change
• Tool replacement

In some of the scenarios listed below, a full CQP process will not be required. A risk
analysis will be undertaken, governed by WABCO’s CQP Applicability Matrix, to
determine which CQP steps might be skipped.

Each CQP review is conducted according to a standard agenda and finished with a
standard report available in the eCQP section on WABCO Supplier Portal.

The table below provides an overview of all CQP steps with their purpose, timing,
inputs and outputs, and required participants.

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Review Purpose When? Input Output

Supplier Review supplier offer in order Before Sourcing - Clear project timing - All project requirements
Offer to confirm supplier Committee, before - Quotation with cost break down reviewed with supplier
Review commitment and ability to supplier nomination from supplier - Updated supplier quotation
Meeting meet the project - Tooling cost breakdown (if applicable)
(SORM) requirements on time, - Drawing with special characteristics - Tooling concept form – SORM
perform a pre-technical - Component Criticality Assessment part
review - Safe launch requirements - SORM report
- Sub-components and sub-processes
list
- Additional WABCO and customer
requirements not stated on the drawing
(e.g. X-Ray, CT-Scan, quality targets,
special analysis)
- List of required tests from
Product Engineering

Technical - Detail design and
Review components requirements
(TR) review with supplier
- D-FMEA input to supplier
- Review supplier proposal for
optimization (cost, quality)
After supplier - Component drawing and/or
nomination, before specification
design freeze - Technical Component Risk
Assessment (TCRA) indicating
importance to function for every
dimension in the drawing (WABCO
input)
- SORM meeting validated
- Tooling concept form SORM part
revised
- CQP action plan followed
- Design optimization
proposals from supplier
- TCRA (part 1) reviewed with
supplier
- Sub-supplier status list
- Tooling concept form –
TR part
- TR report

CQP 0 - Final technical review to
confirm serial
specification
- Confirmation details of
supplier process planning
Before design freeze,
before tool order issue
- Updated drawing with changes
agreed during TR
- TCRA (manufacturing and no
detection risk evaluated by supplier)
- TR meeting validated
- CQP action plan followed
- Tooling concept form (SORM and TR
part) revised
- TCRA (part 1 and 2) finished
- Measurement methods
agreed (for ISIR, PPAP, and
serial parts)
- “Green light” to serial
drawing release and tool order
- CQP0 report

CQP 1 - Check if process and tool After serial drawing - Serial drawing released - Reviewed supplier
preparation is according release - Tool order available at supplier preparation
to plan - CQP0 meeting validated - CQP1 report
- Review status and progress - CQP action plan followed
of quality planning (P-FMEA,
control method, capability
studies)
- Check Contingency Plans
of supplier and sub-
suppliers

CQP 2 - Perform Initial Samples
production trial at supplier in
order to confirm that they are
fully off tool and meet
WABCO’s quality
requirements
- Confirm serial tool
During production of Initial - Attachment to Initial Samples PSO - Initial Samples
Samples - Serial tooling at supplier - Production order for Run Rate
- Sub-supplier PPAP (PPAP level 3 for - CQP2 report
components produced out of Special
Processes)
- CQP1 meeting validated
- CQP action plan followed

CQP 3 - Confirmation of serial
process at supplier, Supplier
Process Audit
- PPAP samples production
- Run@rate
During production of - Attachment to PPAP PSO - SPA questionnaire with audit
PPAP samples - Initial Samples PSW approved result
(positive result of functional test) - Capacity Verification Report
- Serial tooling and process - PPAP samples
available at final supplier localization - CQP3 report

CQP 4 - Confirmation of supplier
performance
- Release of project team
6 months after SOP,
before project team
dismantling
- Component performance after SOP - CQP action plan closed
- CQP action plan (no open issues)
- Pending issues - PPAP fully released
- PPAP status - CQP4 report
- SCR (Series Change Request) status
- Long term capabilities

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 7.1.5. PRODUCTION PART APPROVAL PROCESS (PPAP)

PURPOSE The PPAP process ensures that the supplier completely understands WABCO’s
engineering design records and specifications, and has the capability to produce
parts that consistently meet those specifications.

SCOPE The PPAP process is applied to all suppliers of production components parts, raw
materials and source products to WABCO for:

• All WABCO businesses

• All types of supplied parts regardless of complexity, criticality or cost
• All new part purchases
• All supplier changes initiated by eSICR (Supplier Initiated Change Request) by
WASP

DESCRIPTION

WABCO applies the latest (fourth) edition of the Production Part Approval
Process (PPAP) manual from the Automotive Industry Action Group (AIAG).

The specific WABCO Initial Samples (IS) and PPAP requirements are determined
during the CQP process and will be stated by the Commodity Quality Engineer
(Commodity Quality) on every Part Submission Order (PSO) attachment.

Initial Samples are off-serial tool samples used for supplier tool validation and for
WABCO tests. IS documents need to be submitted by the supplier and confirmed
by WABCO. At this project stage WABCO requires release evidence, PPAP, for sub-
processes and sub-components.

PPAP samples are off-serial tool and off-serial manufacturing process samples.
PPAP documents need to be submitted by the supplier and confirmed by WABCO.
RESPONSIBILITIES WABCO

The PPAP submission requirements are formally communicated to the supplier by

WABCO via the PPAP Part Submission Order (PSO). PPAP PSO includes
Technical PPAP requirements for plastic, rubber, and welded parts, as well as
samples labeling requirements for new and modified parts.

SUPPLIER

Suppliers are expected to obtain the PPAP AIAG manual and understand its
contents. Suppliers must obtain a Part Submission Warrant (PSW) signed by the
WABCO’s Commodity Quality, as evidence of PPAP approval.
SUPPLIER BENEFITS
The PPAP process:
• Gives the supplier confidence of formal part conformance and approval
• Ensures quality planning is aligned with WABCO’s requirements
• Helps to maintain design integrity
• Reduces warranty charges and prevents costs that result from poor quality

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 • Prevents production of unapproved and non-conforming parts
• Improves the overall quality of the product
• Drives customer satisfaction

7.1.6. INITIAL SAMPLES (IS) PREREQUISITES AND APPROVAL

PURPOSE Initial Samples are tested to validate that the part has been properly designed and
functions well.

SCOPE IS and supporting documentation must be submitted for all production parts, raw
materials, and source products provided to WABCO for:
• All WABCO businesses
• All types of supplied parts regardless of complexity, criticality, or cost
• All new part purchases
• All supplier changes (initiated by Supplier Initiated Change Request)

DESCRIPTION

RESPONSIBILITIES
At WABCO’s request, suppliers must submit physical samples produced during
CQP2 and supporting documentation for review. At this point, all open issues from
the CQP review must be completed, in line with the agreed action plan.

The request for IS is issued by WABCO in the form of an IS Part Submission Order
(PSO), which outlines exactly what is required in terms of the part and supporting
documentation, and to whom they must be submitted. The following are required in
every case:
• An IS in line with drawing specifications
• An IS Part Submission Warrant (PSW)
• A full dimensional report

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 The IS and supporting documentation is then reviewed by WABCO and is either
approved, approved under condition, or rejected, as described below:

APPROVED APPROVED WITH REJECTED

Initial Samples meet drawing
requirements regarding
geometry and material
CONDITION
The part does not fully meet
WABCO’s requirements
All deviations must be
corrected before further IS
submission can be made or
before the final PPAP sub-
mission (if no additional IS is
requested by WABCO before
completion of the PPAP)
IS cannot be used by
WABCO for any validation
test
The supplier must set up an
immediate correction loop
and submit correct samples
to WABCO

The supplier must prepare a

robust action plan to correct
any deviations

The decision will be recorded on the PSW by WABCO’s Commodity Quality

and returned to the supplier.

SUPPLIER BENEFITS The IS approval process supports the supplier by:

• Providing a validation loop before the official PPAP

• Ensuring that quality planning is aligned with WABCO’s requirements
• Helping to maintain design integrity
• Reducing warranty charges and preventing the cost of poor quality
• Preventing the production of unapproved and non-conforming parts
• Improving overall product quality and ensuring customer satisfaction

7.1.7. PPAP PREREQUISITES AND APPROVAL

PURPOSE The PPAP approval process helps suppliers to achieve or improve design quality
when introducing new or revised components to WABCO.

SCOPE The process applies to all suppliers of production parts, raw materials, and
source products to WABCO for:

• All WABCO businesses

• All types of supplied parts regardless of complexity, criticality, or cost
• All new part purchases
• All supplier changes (initiated by Supplier Initiated Change Request)

DESCRIPTION

RESPONSIBILITIES At WABCO’s request suppliers must submit physical samples and supporting
documentation for review.

- 39 -
The process is initiated when WABCO issues a PPAP Parts Submission Order
(PSO). This will not be done until:

• All open issues from previous CQP stages have been resolved
• The suppliers production process has been audited by WABCO
• Initial Samples (see 7.1.6) have been validated and released

The PSO clearly outlines what samples and documentation are required, and to
whom they should be submitted.

The PPAP submission is then reviewed by WABCO, and the part is either approved,
approved under condition, or rejected, as described below.

APPROVED APPROVED UNDER REJECTED

Part meets drawing
requirements regarding
geometry, material and part
performance (e.g. corrosion
resistance test)
CONDITION
Part or process does not fully Part does not meet WABCO’s
meet WABCO’s requirements
requirements within one or
more of the following three Part cannot be used by
categories: WABCO

All required PPAP steps
have been completed, and
required documentation
submitted to WABCO
Condition A: deviation to The supplier must implement
PPAP documentation (e.g. a selection loop and submit
documents are missing but new samples to WABCO
the process in place at the
supplier is in line with
WABCO’s requirements

Condition B: deviation to
production process (e.g. part
of the process is not in serial
condition, but this does not
impact part quality)

Condition C: deviation to part

geometry, pending supplier
material test or part durability
test

The decision will be recorded on the PPAP PSW by WABCO’s Commodity

Quality and returned to the supplier. If approval is given under condition, all
corrective actions must be completed within a given time period, usually a
maximum of six months.

NOTE

The CQP process, as well as the PPAP release process, is supported by the
eCQP in WABCO Supplier Portal. This to ensure all involved parties are aware of,
and follow the correct sequence and process steps to achieve project goals as
expected. Details on the handling are listed in point 4.5.2.

The PPAP submission documents must be prepared by the supplier in line with the
guidelines contained in the following table.

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Item Guideline

PSW with IMDS - PSW to be signed by Supplier Quality representative

number - Drawing revision and date to be indicated on PSW, and to correspond to the last drawing version
- IMDS number to be written on PSW and accepted in IMDS system
- Weight to be indicated on PSW, and to correspond to the drawing

Design records - Drawing revision to correspond to last drawing revision

- Drawing to be marked with numbers corresponding to measurement
report
Engineering Change - Any Engineering Change documents that are not reflected in the drawing, but already released by WABCO, to be
Documents included as official documents

Customer Engineering - Evidence of WABCO Engineering approval for changes that are not reflected in the drawing
Approval

Dimensional results - Dimensional report with judgment OK/NOK from supplier to be made available
- All results to be in accordance with drawing (including e.g. hardness, roughness)
- Each sample measurement to be identified with number corresponding to Product Sample (PPAP samples submitted to WABCO)
- Drawing number with revision to be written on dimensional report
- Remarks including: “measuring ongoing” and “test still running” are not acceptable
- Corrections made by WABCO on supplier report are not allowed
- Any supplier corrections to the report must be confirmed with supplier signature
- Drawing marked with numbers corresponding to dimensions in measurement report
- Report to be signed by supplier and WABCO

Material, Performance - Composition and share of weight [g] to be recorded in IMDS database
test result, chemical - IMDS accepted by WABCO
composition, IMDS - Requested (on the drawing, in PSO) material, performance or functional tests results to be made available (e.g. SST)
- Material certificate to be made available
- Drawing number, drawing revision, test date, quantity of samples tested, methods/specification/standards, material name to
be written on report
- Result of measurement/performance OK to be included

Design FMEA - Applied for design supplier representative

- D-FMEA or D-FMEA summary (extract from FMEA) with highest scores available to be included
- Action plan to be initiated for agreed RPN

Process Flow Diagram - Process flow diagram to be made available

- Process Flow Diagram to reflect all process steps at supplier

Process FMEA - P-FMEA or P-FMEA summary (extract from P-FMEA) with highest scores to be made available
- Action plan to be initiated for agreed RPN

Control Plan with - Control Plan to be made available

Requalification Plan - Special characteristics to be indicated on the drawing marked in Control Plan and checked with SPC card or 100% if
capability does not meet required level
- Measurement methods to be indicated
- Requalification to be included in Control Plan with Requalification frequency content described

Initial Process Studies - Short term or long term process studies to be made available for all special characteristics and for other characteristics agreed
with supplier during TR and/or CQP0
- For safety characteristics <1> short term capability study ≥ 2 performed for more than 50 samples, long term process capability
≥1.67
- For significant characteristics <2> short term capability study ≥ 1.67 performed for more than 50 samples, long term process
capability ≥1.33
- If capability study does not meet requirements 100%, control shall be introduced to eliminate variation

Measurement System - Attach list of all gauges and measurement/test equipment with certification date used for component
Analysis (MSA) - MSA to be made available for all characteristics where gauges and measurement/test equipment used (e.g. gauge R&R, bias, linearity)

Sample Product (PPAP - Samples to be made available according to WABCO’s request (per cavity, mold, tool or pattern)
samples submitted to - Samples to be marked with the number corresponding to dimensional report, identified with cavity, tool or
WABCO) pattern (traceability on part according to drawing or clearly identified by marking)
- Samples to be identified as PPAP samples

Master Sample (PPAP - Master Samples to be available per cavity, mold, tool or pattern (traceability on part according to drawing or clearly identified
samples retained at by marking)
supplier) - Samples to be identified as Master Samples and marked with date of WABCO approval
- Supplier to retain Master Sample as described in latest PPAP manual edition. In addition to the master sample retention
period described in latest PPAP manual edition, the supplier shall retain master samples of latest PPAP revision level 15 years
after last day of production date or 1 year after last delivery out of stock (in case last production > 15 years ago)

- 41 -
Item
Checking Aids
Records of compliance
with customer specific
requirements
Qualified Laboratory
Documentation
Appearance Approval Report
Technical Cleanliness Report
Packaging Specification
Guideline
- Checking aids to be made available (e.g. fixtures, gauges, models)
- Preventive maintenance for checking aids to be made available
- Supplier to indicate for which drawing revision checking aids are valid
- Pictures and/or description of some special checking aids to be attached (if requested from supplier)
- Results of special tests, checks, etc. required by WABCO to be made available
- Results to be recorded according to specification
- Inspection/test result performed by qualified laboratory (internal or external) to be made available
- Name of laboratory to be indicated on report
- All checked material to be indicated on report
- Identification of related part (e.g. WABCO drawing number of supplier drawing number) to be written on report
- Specified method/standards used for tests to be written on report
- Result to be recorded according to specification
- Report to include requested appearance features (e.g. colour, grain, surface appearance)
- Appearance according to requirements
- Technical Cleanliness report to be made available
- Result to be recorded according to requirements on the drawing (Technical Cleanliness must be clearly defined on
drawing - level required and area applicable as stated in JED-593)
- Packaging Specification to be printed and attached to PPAP
- 42 -
 7.1.8. SUPPLIER COMPONENT REQUALIFICATION (LAYOUT INSPECTION
AND FUNCTIONAL TESTING)

To verify performance and compliance to all WABCO requirements, the supplier

shall, for all components, conduct a yearly requalification (layout inspection and
functional testing) with content according to guideline of IATF 8.6.2., i.e. a full
dimensional report and functional verification to applicable customer engineering
material and performance standards.

Should the supplier need to perform a product group (family) requalification,

the supplier shall present WABCO with a requalification plan, together with risk
assessment, for a product group requalification.

Any proposal for a product group based requalification must be approved by the
WABCO representative responsible for the particular supplier (Commodity
Quality/RSQL). The requalification plan must be integrated in the validated
control plan as part of the PPAP validation. Test results must be documented and
presented to WABCO on demand. The supplier shall inform WABCO
immediately should any deviations be detected. In this case, corrective actions
have to be defined and presented to WABCO.

7.2. REACTIVE SUPPLIER QUALITY MANAGEMENT

7.2.1. INCIDENTS MANAGEMENT (QR6σ) AND ESCALATION

PURPOSE QR6σ defines the problem solving culture WABCO insists upon. At the heart of
QR6σ is a Quick Response element, built around Six Sigma disciplines and the San
Gen Shugi approach. It is a mindset as well as a tool, and the key characteristics
are: speed of response, disciplined analysis of data, and rigorous pursuit of root
causes.

When a defect is found, the supplier must act to contain the damage, to replace
the poor quality parts, and to ensure that the defect does not recur. In doing so,
suppliers should follow this three-step process:
• 24 hours - quick reaction with containment actions to protect WABCO’s
production
• 10 working days – analysis of root cause and corrective action plan, proof that
the action plan has been implemented
• 30 working days – lessons learned card submitted to WABCO

When a defective part is found in a supplier delivery, WABCO works with the
supplier using the QR6σ methodology to find the root cause and take effective
corrective action. Our aim is to prevent reoccurrence and improve our supplier’s
production process. By doing so, we protect WABCO’s business and increase
our customers’ satisfaction.

This process is applied to all suppliers of production parts, raw materials, and source
SCOPE
products when a defect is found.

- 43 -
 PROBLEM IT EXCHANGE
DESCRIPTION PORTAL

WABCO SUPPLIER PORTAL SUPPLIER

When a defect is found, WABCO informs the supplier and provides a 5W2H
Analysis. WABCO’s way of describing problems is as follows:
• What is the problem? (An adequate and precise description)
• Why is the problem? (What is known about the contributing factors)
• When detected? (At what moment and with what frequency?)
• Who detected? (The individuals that identified the problem)
• Where detected? (The location(s) of the problem)
• How detected? (Method, situation and procedure)
• How much/many? (The extent of the problem/defect in statistics)

WABCO and the supplier must work together to resolve the problem in a structured
way, following appropriate QR6σ steps as follows:
• Factor Tree Analysis
• ‘5 Why’ analysis for occurrence and for non-detection
• Defect reproduction
• Verification of effectiveness of implemented corrective actions
• Sharing of ‘Lessons Learned’

This is our key approach to problem solving and is based on San Gen Shugi
(GENBA, GENBUTSU, GENJITSU), which means REAL PLACE, REAL PARTS,
REAL DATA.

RESPONSIBILITIES WABCO

WABCO will inform a supplier about any defect found using a 5W2H problem
description and, if requested, provide an example of the defective part. We will then
review the situation with the supplier after 24 hours, and then ten days, working
constructively to resolve the problem. The problem is only considered closed when
a Lessons Learned Card (LLC) has been validated. The LLC captures the solutions
for future applications, to prevent the same problem re-occurring, and to inform
other potential risk processes.

SUPPLIER

The supplier must analyze the problem using the QR6s methodology, eliminate
its root causes, and implement effective action to prevent a reoccurrence. All
of this must be completed in a timely manner. The supplier will be called upon
to attend an escalation meeting (see 7.2.4.) with WABCO if the problem is not
resolved adequately or on time.

SUPPLIER BENEFITS The structured QR6σ methodology enables the supplier to achieve effective and
sustainable results in problem solving. As a consequence, defect recurrences are
reduced and the costs of poor quality minimized.

7.2.2. COST OF POOR QUALITY AND LOGISTIC (COPQ&L)

REIMBURSEMENT PROCESS
PURPOSE
In cases where WABCO has incurred losses (e.g. line stopped, sorting costs,
premium transport, customer claims, quantity discrepancies, missed deliveries, etc.)
and there is a justifiable claim against any supplier for causing the issue, WABCO
- 44 -
 will undertake the COPQ&L process. Under the COPQ&L reimbursement process,
WABCO will record the costs it incurs as a result of a claim against a supplier for
poor quality or defective goods, and ensure that those costs are reimbursed by the
supplier.

Suppliers’ COPQ&L performance might be considered in decisions for future business

awards.

The COPQ&L process is applied to any supplier of production parts, raw materials,
SCOPE and source products to WABCO when there has been a quality incident.

DESCRIPTION

RESPONSIBILITIES WABCO

WABCO will provide the supplier with a detailed breakdown of the COPQ&L costs
and how they have been incurred. This is provided first as an estimate, which will
be confirmed after the claim is closed, and then invoiced to the supplier.

SUPPLIER

The supplier is expected to fully reimburse WABCO for its COPQ&L losses.
SUPPLIER BENEFITS
This transparent process enables suppliers to see clearly how poor quality is
affecting its business and its relationship with WABCO.

7.2.3. SUPPLIER QUALITY IMPROVEMENT AND ESCALATION

PURPOSE Supplier Quality Improvement and Escalation describes the supplier quality path,
levels L1 to L3, which aims to effectively improve ‘not satisfactory’ quality results
of WABCO suppliers.

SCOPE Applies to direct and merchandise goods suppliers

DESCRIPTION Supplier Quality Improvement and Escalation process consists of three levels as
described in the pyramid below:

L3 – Group Escalation (NBoH)

L2 – Regional Escalation

L1 – Site Escalation

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 L1 – Site Escalation – managed by Supplier Quality organization, applicable if
supplier KPI’s (ppm result, number of incidents, reactivity time on claims) are out
of target for more than 3 months. Improvement plan and level 1 exit criteria are to
be set. The supplier will be informed by an official letter about the enrolment to L1
escalation. L1 can last maximum 6 months.

L2 – Regional Escalation – managed by Regional Supplier Quality organization,

applicable if supplier failed to achieve L1 exit criteria. Improvement plan and level
2 exit criteria are to be set. The supplier will be informed by an official letter about
the enrolment to L2 escalation. L2 can last maximum 3 months.

L3 – Group Escalation (NBoH) – managed by Global Supplier Quality

organization and VP S&P, applicable if supplier failed to achieve L2 exit criteria. In
addition, L3 escalation will be directly used if:
- Supplier is not registered to ISO 9001 or is not compliant to IATF 16949
and is not willing to certify
- Supplier is having serious delivery or capacity problems
- Supplier’s performance in the projects is not satisfactory

Improvement plan and level 3 exit criteria are to be set. Supplier will be informed
by an official letter about the enrolment to L3 escalation. L3 can last minimum 3
months. As per decision of WABCO organization, level 3 escalation can lead to
NBoH for supplier. If L3 exit criteria are not met, Phase Out activity can be initiated
for the supplier.

The supplier is responsible for assigning resources, and for the effective planning
and execution of actions agreed with WABCO in the improvement plan for each
escalation level.

7.2.4. CRITICAL COMPONENTS AND SPECIAL PROCESSES MANAGEMENT

PURPOSE
Critical Components and Special Processes Management (SPM) is used to
minimize quality and delivery risk for new WABCO products through enhanced
quality management of critical components & sub-components.

SCOPE SPM applies to all suppliers that produce components or sub-components

identified by WABCO as critical.

DESCRIPTION

In addition, WABCO expects that suppliers will audit their Special Processes
according to AIAG requirements (CQI). This requirement shall be cascaded down
to n-tier suppliers if special processes are outsourced.

RESPONSIBILITIES
WABCO

WABCO will inform a supplier, during CQP process, when a component they are to
supply is classified as critical, and will outline the special requirements needed. In case
of a sub-supplier, these requirements, including PPAP Level 3, will be supervised by
WABCO.

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 SUPPLIER

Suppliers must have the capability to manage their supplier base, including
their new product and process development activities. Suppliers must release
all sub-components’ PPAP before production of Initial Samples (if applicable)
or PPAP samples for WABCO.

SUPPLIER BENEFITS WABCO’s Quality team supports the supplier’s management of its critical sub-
suppliers and, by doing so, helps to lower warranty risk.

7.2.5. CHANGE MANAGEMENT

WABCO expects strict compliance to its defined Change Management

Process (CMP) as a major cornerstone of its business relationship with the
supplier.

Any change represents an increase in risk, which is why it is crucial for

WABCO to have the security of knowing that its supply base is not making
any changes that might adversely affect WABCO and its customers. As such,
there is to be NO CHANGE without a documented risk assessment.
Furthermore if the change will impact fit, form, function, or reliability of the
delivered good and services, there will be NO CHANGE without upfront
information to, and necessary approval from, WABCO.

Examples of changes (not exhaustive) include change of location, process,

materials, equipment, design, tooling, etc. in supply chain (in particular for
outsourced Special Processes). As such, WABCO insists on being provided
with adequate and timely detail of any proposed changes that need to be
validated by WABCO before they can be put into effect.

PURPOSE To ensure an appropriate Change Control process and to protect WABCO and its
customers from risks cause by supplier changes.

DESCRIPTION Change control is applied to all direct material suppliers.

Sourcing
Suppliers
& Purchasing

Commodity Commodity
Quality Buyer
Engineer

Propose change to
WABCO via
eSICR

eCQP

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As previously mentioned, changes that impact fit, form, function, and reliability,
including but not limited to: changing cutting fluids, tool lubricants, adhesives,
material compound and chemistry, shall be all considered process changes requiring
WABCO approval. Off-Line rework (not included in the original Control Plan), is
considered a process change and suppliers shall obtain WABCO approval. Rework
shall be supported by operating and inspection instructions. This is not an exhaustive
list of process changes. Contact your WABCO Commodity Quality if any clarification
is needed.

If a supplier intends to plan a change, it must submit a completed Supplier

Initiated Change Request (SICR), via WABCO Supplier Portal to its designated
WABCO Commodity Quality no later than 12 months before the proposed
implementation date. When a SICR is received, WABCO will carry out a review
and inform the supplier in writing whether or not its change request has been
approved.

Typically, PPAP resubmission is required. Submission details and requirements

should be agreed with the designated WABCO Commodity Quality.

Before the first delivery of new or changed materials and/or components, PPAP in
defined submission level must be delivered by the supplier and released by WABCO.

If, however, the change is to an electronic component, suppliers must follow the
requirements outlined by ZVEI outlined at www.zvei.org/ecs. An appropriate
Change Notification document can be found at www.zvei.org/PCN. When
completed it must be sent to PCN.electronic-components@WABCO-auto.com

The consequences of unauthorized process changes at a supplier’s manufacturing

facility, or any sub-supplier facility, could result in any or all of the following actions:

1. The supplier’s commercial status could change to New Business on Hold

(NBoH) for a period of 12 months (depending on the change) and result in the
immediate third party containment of the affected component/product

2. Written notification from WABCO requesting that the supplier contacts

its certification body within 5 business days to communicate the non-
conformance

3. An independent, third party audit (VDA 6.3), to include ALL affected sub-
suppliers involved, to be organized by supplier. The results shall be shared
with WABCO

4. The supplier being required to attend mandatory Change Management

Training at WABCO University (all associated costs shall be paid by supplier)

Reinstatement of the supplier to ‘Good Standing’ will depend on the supplier’s

ability to meet the exit criteria as stipulated by WABCO. WABCO reserves the
right to hold the supplier responsible for any unauthorized process changes and to
recover the related costs.

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 Following WABCO’s Change Management process helps suppliers to avoid quality
SUPPLIER BENEFITS
and delivery issues that may have an adverse effect on WABCO’s customers.
The process makes sure that the supplier’s resources are used effectively to plan,
agree, and validate changes efficiently.

7.2.6. CONTROLLED SHIPPING LEVEL 1 (CSL1)

The purpose of CSL1 is to:

PURPOSE
• Provide immediate protection for WABCO against receiving non-conforming
components from a supplier
• Give the supplier time to investigate root cause and implement effective
corrective actions

CSL1 applies to all suppliers of production parts, raw materials, and

SCOPE source products.

DESCRIPTION
separate

inspection

RESPONSIBILITIES WABCO

WABCO will inform the supplier about entry to CSL1 by sending a CSL1 Launch
Letter with the reason why this action has been taken. Unless otherwise defined, in
order to exit from CSL1, the supplier must meet the following criteria:
• No rejects for 20 successive days of production after permanent corrective
actions implementation (unless decided differently by Site Supplier
Quality
• QR6s closed (Lessons Learned Card validated) with focus on error proofing solutions
• Supplier’s production Control Plan updated
• Supplier’s P-FMEA updated
• Updated PPAP (if applicable) submitted by supplier and approved by WABCO
• Supplier Process Audit passed

If necessary, additional criteria might be agreed with the supplier. If exit criteria are met,
WABCO will accept the CSL1 Exit Application Letter from the supplier.

SUPPLIER

Return the signed CSL1 Launch Letter with approval of CSL1 to WABCO.

Set up a separate CSL1 containment area, totally isolated from the standard
production and:

• Clearly identify CSL1 area

• Ensure reference and boundary samples on CSL1 area (boundary samples
approved by Site Supplier Quality)

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 • Notify all WABCO plants that use the affected component about the CSL1
details, and how the components after inspection have been identified
• Prepare CSL1 Control Plan using WABCO template, and obtain Site Supplier Quality
approval
• Submit CSL1 Daily Report (according to WABCO template) to Site Supplier Quality
• Display results from CSL1 in a public and visible location
• Ensure operator training, and display CSL1 Operators Skills Matrix on CSL1 area
• Conduct Daily Management Review on CSL1
• Solve the problem in production

When the CSL1 exit criteria have been met, prepare and send a CSL1 Exit
Application Letter to Site Supplier Quality.
SUPPLIER BENEFITS
• More time to solve problems
• No defects flow to WABCO
• No COPQ&L

7.2.7. CONTROLLED SHIPPING LEVEL 2 (CSL2)

PURPOSE The purpose of CSL2 is to:

• Provide WABCO with immediate (by an external company) against receiving

further non-conforming components from a supplier, while CSL1 is not fulfilling
its purpose
• Give the supplier time to find the root cause and implement effective, corrective actions
• Provide the supplier with the opportunity to learn/improve control methods
(why CSL1 was not effective)

SCOPE CSL2 applies to all suppliers of production parts, raw materials and source
products.
DESCRIPTION

separate
supplier
inspection

WABCO
RESPONSIBILITIES

WABCO will inform supplier about:

• Entry to CSL2 by sending a CSL2 Launch Letter which indicates the
reason why CSL2 containment must be taken
• The list of 3rd Party Containment Services Providers accepted by WABCO

The CSL2 exit criteria are as follows (unless otherwise defined):

• No rejects for 20 successive days of production after permanent
corrective actions have been implemented (unless decided differently by
Site Supplier Quality)
• No rejects at WABCO
• QR6s closed (Lessons Learnt Card validated) with focus on error proofing solutions
• Supplier’s production Control Plan updated

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 • Supplier’s P-FMEA updated
• Updated PPAP (if applicable) submitted by supplier and approved by WABCO
• Supplier Process Audit passed
• If necessary, the additional criteria might be agreed with supplier
• If exit criteria met, accept CSL2 Exit Application Letter

SUPPLIER

• Return to WABCO signed CSL2 Launch Letter with approval of CSL2

• Keep CSL1 containment
• Set up separate area for CSL2, and use 3rd Party Containment Services
• Organize WABCO approved provider to perform CSL2
• Clearly identify CSL2 area
• Notify all WABCO plants that use the affected component about CSL2 details
and how the components after inspection are identified
• Solve the problem in production and control areas
• When CSL2 exit criteria are met, prepare and send the CSL2 Exit
Application Letter to the Site Supplier Quality.

SUPPLIER BENEFITS • More time to solve problems

• No defects flow to WABCO
• No COPQ&L
• Pinpoint and learn what was not corrected during CSL1

7.3. WABCO ACADEMY

PURPOSE WABCO provides professional training solutions to the commercial vehicle sector,
including WABCO suppliers and customers.

SCOPE WABCO trainings are available to all WABCO suppliers worldwide.

DESCRIPTION

• consulting • concept & offer • execution • evaluation & feedback

WABCO offers services and consulting to its suppliers in the areas of business
process improvement and personnel development. Training modules on offer
include:
• Six Sigma Green Belt Certification
• QR6s (Quick Response Six Sigma) Workshop
• MMOG (Materials Management Operations Guideline) Workshop
• e-quality Workshop
• Lean Management consulting
• WABCO products & systems

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 WABCO works with suppliers to define exactly what their learning needs are and
then to define a program to meet them. During all modules, trainees work on real
projects, and will gain a full understanding of the approaches and tools needed to
improve processes and quality.

SUPPLIER BENEFITS WABCO supports suppliers as they drive towards process optimization and helps
ensure achievements and results.

By investing in people and increasing their levels of qualification through the

WABCO Academy, our suppliers can improve their performance and
differentiate themselves as valuable players in their field of activity. Gaining
the knowledge, tools, and capability to deliver a high standard of performance
reinforces competitiveness and supports business growth.

For further information visit www.wabco-academy.com

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8. HOW WE MANAGE TOOLING

PURPOSE Our tooling strategy is a key element of WABCO’s vision for differentiation. Good
products come from good tools, so we constantly strive to develop the best and the
most efficient tools possible. We expect our partners in the supply chain to do the
same. We use approaches such as: ‘Design to Cost’, ‘BCC tool manufacturing’, and
progressive extension of the tool lifetime, and deploy innovative technologies,
materials, and design processes.

SCOPE All non-standard tooling, used only for manufacturing WABCO parts with WABCO
or WABCO customer full or partial ownership, and covering every stage of the
tooling lifetime, from design to disposal.

DESCRIPTION

TOOLING CONTRACT

All tooling ordered by WABCO is covered by a Tooling Agreement. The agreement

defines all details related to tooling ownership, usage, labeling, maintenance,
transfer, and management. Signing of Tooling Agreement is mandatory. The
Tooling Annex is an integral part of the Tooling Agreement and contains the list of
all existing tools. WABCO may update the Tooling annex at any time in order to
ensure data accuracy.

SUPPLIER SELECTION

If asked to quote for tooling, suppliers must use WABCO’s Tooling Cost Breakdown
form, which is sent to them together with the RFQ. The RFQ may include the 2D
Model - and can include 3D model - for both raw and machined parts, to support the
quotation process. The main criteria considered for Tooling offer selection are:

• Cost of the tool – shot price (cost of the tool divided by tool guarantee)
• Guarantee of life-time (number of only good parts to be delivered)
• Design concept and process simulation analysis result
• Lead time for ‘first off ‘ tool parts
• Improvement in cost and guarantee compared to previous tool (only for follow
up tools)
• Impact of tool design on piece price

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The tool process is managed by the WABCO Tooling Experts and Commodity
Quality during the SORM meeting, when the Tooling Cost Breakdown and design
concept are reviewed.

BUSINESS AWARD

When WABCO awards business for tooling, the lead buyer sends the supplier a
dedicated Purchase Order with defined tooling specification, cost, and delivery
date (the date when the tool is to be finished. Good PPAP samples are to be
produced using the tool).

The Tooling Annex shall be updated with the new or transferred tools
accordingly. Each tool is ordered with a dedicated WABCO asset number.

Tool ownership, asset number, and part number, all have to be engraved either on
the tool directly, or on a label provided by WABCO. In the event that the tool is owned
by WABCO’s customer, a plate indicating the ownership by the customer has to be put
on the tool. In this instance WABCO’s tool plate shall also remain.

PRODUCTION & VALIDATION

Tool manufacturing has to meet the delivery date mentioned on Purchase Order
which has been agreed with WABCO. Project milestones have to be provided to
WABCO on request of the buyer. If the supplier cannot achieve the delivery date for
good PPAP samples, the following must be respected:

• In case of replacement tool (if initiated by the supplier): deliver required

components from current tool until new one is released. All repairs,
maintenance, and process costs to be covered by the supplier
• In case of new tools in a new project: supplier to cover all costs related to
any project delay and/or the delivery parts from the previous supplier
• In case of business transfer: the new supplier shall cover the cost of any
project delay (if caused by supplier), and the delivery parts from the previous
supplier

Validation of the tool is based on requirements defined in the PPAP attachment.

WABCO’s policy is to pay for the tool after PPAP is released by SQE.

After payment, all tools come fully under WABCO’s ownership and must be properly
marked. The transfer of ownership must be confirmed with a Tooling Hand Over
Certificate. On WABCO’s request, the supplier is obliged to provide WABCO with all
Tooling drawings and documentation.

SERIAL LIFE

A supplier can only start serial deliveries of a new tool after it has been released by
WABCO via a formal PPAP approval. Information about first usage date has to be
sent to WABCO to allow lifetime counting.

During the lifetime of the tool, the supplier is obliged to properly store, maintain, and
repair the tool in order to achieve the longest possible output (measured as number
of good parts). The supplier must ensure, at its own cost, that the tool achieves at
least the guaranteed number of good parts.

The supplier is obliged to inform WABCO in good time if it is necessary to order a

replacement tool.

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 The supplier is not allowed to use a WABCO tool to produce parts for a third party.

In order to assure proper tool management, WABCO performs Tooling Audits at the
supplier’s premises to verify tool status (technical validation), maintenance, proper
labeling, and storing conditions. WABCO will ask the supplier in advance to make all
tools available for inspection. In addition, WABCO asks for tool confirmation on a
yearly basis to support the inventory review.

The supplier must inform WABCO before a tool has reached the end of its
guarantee so a tooling validation audit can be completed to decide whether the
guarantee should be extended, or whether the tool should be renewed, repaired,
or scrapped. The supplier can only scrap the tool with WABCO’s written
permission. All tools must be destroyed before they are scrapped and the destroy
report, documented by photographs, must be sent to WABCO’s Commodity buyer.

8.1. THIRD-PARTY TOOL SOURCING

DESCRIPTION WABCO is developing and evaluating target tooling suppliers for selected projects.
Based on the offer review, a WABCO component supplier may be asked to source
tooling at a tool shop specified by WABCO. The supplier must take full responsibility
for tooling concept selection and management of the tooling sub-supplier.

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9. SUPPLIER DEVELOPMENT AND LEAN DEPLOYMENT

PURPOSE Supplier Development Program is an integral part of WABCO’s strategy to focus

on developing long term strategic partners, improve overall quality, streamline
operations, and reduce ‘non value’ activities.

WABCO’s Operating System reinforces the fact that a shared mindset for Six
Sigma Lean and Continuous Improvement can continuously power and enhance
our operating performance.

To remain successful in increasingly challenging environments, we must

continuously challenge ourselves to identify ways to move from ‘surviving’ to
‘thriving’.

Lean, one of WABCO’s key differentiators, has successfully improved the

performance of our own plants for many years. We want our suppliers to
embrace this powerful tool to create differentiation and grow alongside WABCO.

For WABCO and its suppliers, Lean is about:

• Eliminating all kinds of waste by using lean tools
• Reducing cost from processes and parts
• Driving reduced prices and enabling strong, competitive suppliers
• Creating value flow across the value chain

The primary function is to proactively develop supplier capabilities with a focus

DESCRIPTION
on waste reduction and quality improvements.

The supplier shall ensure that its Operating System (manufacturing and
business) is capable and stable by using the best Lean Manufacturing
Methodology and Quality Standards, with focus on the following:

• Identify current state map and prioritize to reduce losses

• Identify the current state of performance using the performance data
from the shop floor
• Identify and recognize the various losses, prioritize them, engage
people, assign to teams, and drive them
• Deploy the standard operating systems to reduce variability
• Have the value stream mapping done and prepare the ‘future state
map’, with a clear road map and defined accountability.
• Have robust routine management to review, support and, enhance
performance

Suppliers are expected to use Lean tools systematically to reduce waste on an on-
going basis and to stay focused on:

• Creating Capacity on time in a Lean way

• Quick Changeover Techniques: reduce set-up time and facilitate flexibility
• Total Productive Maintenance: reduce downtime of key operating assets

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• Increase productivity and save space
• Flow Line Design: configure equipment for efficient, one-piece flow
• Lean Material Management: prepare, sequence, and deliver
parts efficiently to eliminate waste
• Standard Work: create optimal combinations of people, material,
and equipment in line with demand
• Gemba Kaizen: accelerated improvement workshops to deliver immediate
impact

• Decrease lead time and reduce stock

• Value Stream Mapping: discover sources of waste throughout the supply
chain
• Kanban Implementation: apply Kanban systems to improve material
flow and reduce inventory
• Rate-Based Planning: smooth and synchronize demand to reduce stocks

• Reduce defects and increase quality

• Mistake Proofing: prevent defects by built-in-quality (part design, tools,
fixtures, feeders, etc.)
• Mistake Proofing Audits
• Visual Management: prevent defects by creating systems to visually
detect abnormalities
• Six Sigma Process Quality Management System: proactively improve
quality system
• Deploy standard Operating System guidelines for continuous
improvement of QCD performance
• Daily Routine Management: create systems for hourly, daily, and
weekly performance management
• 5S Housekeeping: reduce defects by implementing systems to ensure a
culture of housekeeping

• FMEA and proactive risk reduction

• Support continuous improvement as required by automotive
standards
• Provides a basis for effective error proofing
• Focuses on part function and manufacturing process to ensure risks
are understood while initiating actions with the goal of reducing the
risk

• Shutdown/Startup
• Ensures suppliers monitor the risk associated with these activities
• Shutting down the operations for longer than 24 hours requires
proper planning to ensure critical points are being reviewed by the
management team

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 RESPONSIBILITIES WABCO

WABCO can offer systematic Lean training modules based on improvement plans
customized by the supplier. WABCO can also offer support to the supplier in
deploying the Lean roadmap.

Baseline Screen suppliers Define key

Assessment in based on shop suppliers level in
WABCO site floor view and alignment with
strategy S&P

Lean Introduction day Initial meeting

Overview short training for and project
Training suppliers – what Six definition
Sigma Lean is about

Lean Assessment Start activities Project reviews on

at supplier
Definition of VS- regular basis
improvement joint improvements
projects

SUPPLIER

Suppliers are encouraged to create a Lean culture in their organization, and to

demonstrate constant progress in waste elimination using Lean tools. We invite our
suppliers to improve alongside WABCO, support the 2-way flow of information, and
fully leverage the sharing of lessons learned.

Suppliers will develop capability to identify and eliminate waste systematically. They
SUPPLIER BENEFITS
will also be able to reduce costs in order to improve cash flow, significantly improve
quality, drastically reduce lead time, and improve employee morale and the
customer relationship, all of which contribute to boosting profitability.

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10. HOW WE MANAGE DELIVERY WITH SUPPLIERS

10.1. GENERAL DEFINITIONS OF DELIVERY

PURPOSE To support our vision for Delivery: Bring the right part at the right time in the
right quantity and quality to each WABCO site and Distribution Center, and
to make sure suppliers understand all Delivery definitions used by WABCO.

SCOPE These definitions are relevant to all WABCO’s direct material suppliers.

DESCRIPTION PART NUMBER

A WABCO numeric reference used to identify a product. The Part Number has to
be used in all communications between the supplier and WABCO to identify the
particular product.

ORDER

A confirmed WABCO demand, requesting product(s) to be delivered/shipped on a

particular date and in particular quantities (the quantities and dates are agreed in
line with the Planning Time Fence or Vendor Kanban call-off).

FORECAST

A projected, non-binding WABCO demand for the next rolling 12/24 months,
communicated by WABCO to the supplier as a Delivery Schedule at least once a month.

DELIVERY SCHEDULE

An update of the subsequent 12/24 months of WABCO demand, communicated to

the supplier at an agreed frequency (at least once a month). For Kanban Parts, it
shows cumulative weekly/monthly quantities, where firm orders will be expressed
by vendor Kanban call-offs. For non-Kanban Parts, the delivery schedule will show
the short-term view due dates and volumes on the long term view forecast. A
’frozen’ period can be defined by using the Planning Time Fence within WABCO’s
ERP system.

LOT SIZE

Demand split/accumulation in the delivery schedule.

VENDOR KANBAN

WABCO will place the order with reference to Kanban Parts. Kanban Parts are
the parts which are ordered based on a pull system, that takes into account actual
consumption of material, not predictions. The frequency for sending Vendor
Kanban call-offs to the supplier is not fixed and depends on the recent
consumption of material by WABCO.

ROUNDING VALUE

The defined order quantity which is equal to packaging size or multiplication of

packaging size.

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 MINIMUM LOT SIZE

The fixed minimum order quantity, and multiplication of Rounding Value. If no

Minimum Lot Size is defined, then the Rounding Value is deemed to be the
Minimum Lot Size.

PLANNING TIME FENCE

This is used only with reference to non-Kanban Parts, and refers to the time
period (defined purely on the basis of working days of ordering WABCO Site)
within which WABCO orders are fixed, and in respect of which WABCO commits
not to modify the quantities and dates, except in exceptional circumstances. The
planning Time Fence does not represent Production Lead Time of supplier, but
rather the time for placing goods at disposal plus transport time, as agreed with
WABCO.

REPLENISHMENT LEAD TIME

Is used only with reference to Kanban Parts, and means the fixed time (defined
purely on the basis of working days of the ordering WABCO site) which is needed
to replenish the Kanban from the moment the supplier receives the order until the
parts reach the WABCO site. It includes the supplier’s reaction time, shipment
preparation, transportation lead time, and time for goods receipt at WABCO, but does
not include full production lead time at the supplier. Replenishment Lead Time does
not take into account the sending date of the Kanban call-off. Calculation of
Replenishment Lead Time starts the day after.

OVERALL EQUIPMENT EFFECTIVENESS

A measure of machinery efficiency expressed as a percentage of maximum

equipment effectiveness. It is made up of three components:
1. Availability (A): the percentage uptime of each asset (scheduled time – down
time)/scheduled time
2. Performance (P): percentage throughput against theoretical throughput of
actual operating time (bottleneck cycle time x quantity produced/operating
time)
3. Quality (Q): percentage of good parts (total quantity produced – quantity with
defects/total quantity produced) where Overall Equipment Effectiveness = A
xPxQ

10.2. FORECAST AND PROCUREMENT PROCESS

PURPOSE WABCO’s forecasts predict the future demand of WABCO customers. We share this
information with suppliers, so that they can ensure sufficient capacity to meet this
demand in a timely manner.

SCOPE The process applies to all direct material suppliers to all WABCO locations.

DESCRIPTION

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 The logistic parameters are maintained at WABCO for each part number, and can
be expressed by the suppliers as:
• Delivery Schedules with required delivery dates and quantities within the
Planning Time Fence
• Vendor Kanbans with required delivery dates and quantities within the
Replenishment Lead Time

The dates indicated on the orders are delivery dates when products are expected to
arrive at the relevant WABCO site.

WABCO sends the supplier an update of Delivery Schedules for the complete time
horizon according to an individually aligned sequence, but not less than once a week
in case of forecast changes.

If there are no changes in demand within a month, the Delivery Schedule will be sent
automatically once a month.

Delivery Schedules will show WABCO’s demand split as follows:

• Depending on the demand pattern, demand is allocated to daily or
weekly shipments on pre-defined delivery days
• For Kanban parts, usually the total monthly quantity will be shown for
the month and will be called off by release of the respective Kanban

RESPONSIBILITIES If the supplier cannot accept the order for any reason, they must inform the lead
Value Stream or DC Logistics contact person at WABCO within 24 hours (1
working day) after receiving the order, and provide that person with a short-term
contingency plan.

SUPPLIER BENEFITS Through clearly defined forecasting and procurement processes, suppliers know
what WABCO expects and can plan production/deliveries accordingly to ensure that
the right products are available at the right place at the right time.

10.3. CAPACITY & FLEXIBILITY

PURPOSE WABCO communicates its need for flexibility so that suppliers can ensure they have
sufficient capacity to cover short and mid-term demand changes from WABCO’s
customers, and to follow the requirements of automotive industry standards.

SCOPE The need for flexibility applies to all direct material suppliers to all WABCO locations.

DESCRIPTION

WABCO’s product quantity requirements may vary depending on customer

demand. Suppliers must ensure they have sufficient flexibility to respond in a
timely manner to changes in demand. WABCO will inform suppliers of any expected
mid or long-term demand changes. Suppliers must implement a Failure Mode and
Effects Analysis (FMEA) and contingency plans in order to secure deliveries of
products to WABCO. They must be prepared to present these to WABCO if
requested.

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 As soon as a supplier identifies any problem that might in any way delay or
jeopardize deliveries to WABCO, they must inform the lead Value Stream or
Distribution Center Logistics contact person at WABCO, and share all relevant
information to ensure a quick solution, which shall be agreed by both parties. Under
no circumstances will a supplier’s lack of capacity excuse it from meeting its delivery
obligations.

The supplier must set up and implement an action plan for all critical products. A
Part Number is considered critical when general demand is above the capacity
calculated on a production done over 5 days per week, 15 shifts per week, and
85% OEE.

In the absence of any notification from the supplier, WABCO’s forecast demand for
product(s) shall be deemed to have been accepted by the supplier upon receipt of
the Delivery Schedules.

RESPONSIBILITIES WABCO

WABCO provides the supplier with a continuous summary of requirements between

12 and 24 months in advance.

SUPPLIER

With respect to this rolling summary of WABCO requirements, suppliers must:

• Perform regular capacity checks and calculations against received forecasts
• Perform capacity checks at least once every second month and for all
reasonable WABCO requests
• Provide details of the latest updated WABCO requirements to other parties in
the supply chain within the shortest possible time period
• Support WABCO capacity assessments on demand

Through a structured and proactive approach, the right capacity and flexibility to
deliver on time to WABCO can be ensured by suppliers. They will increase customer
satisfaction and avoid the extra costs associated with special freights and customer
line stoppages.

10.4. DATA INTERCHARGE REQUIREMENTS

PURPOSE In order to ensure adequate and efficient information exchange between WABCO
and the supplier, data communication is principally carried out electronically.

SCOPE Data interchange is required from all direct material suppliers to all WABCO
locations.

DESCRIPTION
NOTE

The following Business Processes are managed via EDI:

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 Information Sent By

Delivery schedule WABCO

Kanban WABCO

Advanced shipping notification (ASN) SUPPLIER

Invoices / Debit notes SUPPLIER /WABCO

WABCO offers two forms of communication to its suppliers:

• EDI (possible formats: VDA, ODETTE V1, ODETTE V2, ODETTE 96A, EDIFACT)
or
• E-Mail
The preferred communication method is EDI. This includes sending ASN (Advanced
Shipping Notification) to WABCO for each delivery position shipped. ASN should
always be sent in real time, once the pick-up has been done by the carrier.
More information on the EDI standard can be found in the supplier section of the
WABCO Homepage: https://www.wabco-auto.com/suppliers/suppliers-
information/delivery/

RESPONSIBILITIES In the event that a supplier notices issues with the agreed communication system,
they must notify immediately the Value Stream Logistics contact person at WABCO.
Furthermore, an effective backup communications strategy must be presented by
the supplier.

SUPPLIER BENEFITS A well-established and reliable means of data exchange helps suppliers understand
and respond to customer demand in a timely manner.

10.5. TRANSPORTATION AND DOCUMENTS

PURPOSE To define rules and responsibilities for transportation between WABCO and
suppliers, and to outline the documentation required by WABCO to accompany or
follow each delivery of products from a supplier to WABCO.

SCOPE Applicable to all direct material suppliers to all WABCO locations.

WABCO refers to the current version of Incoterms® as the basis for delivery terms.
Preferred Incoterms® are:
• FCA “Point of Departure”

DESCRIPTION

Without exception, it is the supplier’s responsibility to organize deliveries to WABCO.

This must be done in line with First In First Out (FIFO) principle.

RESPONSIBILITIES Responsibility for transportation varies, depending on agreed Incoterms®, as

follows:

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 WABCO
If, according to the agreed Incoterms®, WABCO is responsible for transportation,
then the contact details of the forwarders to be used and the procedures that are to
apply will be specified in one of the appendices to the Logistic Protocol provided to
the supplier by WABCO.
The supplier is obliged to book the shipment with the named forwarder
according to that forwarder’s booking procedure. The supplier must then
ensure that the goods are ready for collection at the time agreed with the
forwarder.

SUPPLIER

It is the responsibility of the supplier to make sure that products are delivered to
WABCO on time. The supplier is responsible for following up the delivery, and
must inform the responsible Value Stream or DC Logistics contact person at WABCO
in the event of any incident that might affect delivery within one hour of becoming
aware of it.

In case dates specified on WABCO’s orders are the delivery dates when products
should arrive at the relevant WABCO site, suppliers must take into account the
delivery lead time from the supplier to the respective WABCO site.

WABCO & SUPPLIER

Where the responsibility for transportation is shared between the supplier and
WABCO, the agreed Incoterms® will define the place where responsibility for
transportation passes from the supplier to WABCO.

It is the responsibility of the supplier to make sure that products are delivered to the
place named in the agreed Incoterms® in time to allow on-time delivery to WABCO.
The supplier is responsible for following up the delivery up to the point indicated in
Incoterms®, at which point responsibility passes to WABCO. The supplier must
inform the Value Stream or Distribution Center Logistics contact person at WABCO
in the event of any incident that may impact delivery within one hour of becoming
aware of it.

The supplier is obliged to book the shipment with the forwarder named by
WABCO to take over delivery of the products at the point when WABCO becomes
responsible for them. They must use the approved booking process of that
forwarder. The supplier must ensure that products are available at the right time and
place when WABCO takes over responsibility for them.

SPECIAL FREIGHTS

Within the framework of a special/exceptional request from WABCO for supplementary

supplies in order to prevent a line stoppage, WABCO will define with the supplier the
adequate operating mode to prevent line stoppage (depending on the urgency).
WABCO will take responsibility for all the exceptional expenses involved in this
purpose (apart from the cases listed in the paragraph ‘Non Compliance Procedures’ set
out in the Logistic Protocol). If the need for a special delivery has been caused by the
supplier, that supplier will take responsibility for all additional expenses.

DOCUMENTS All deliveries to WABCO should be accompanied by the delivery documents

specified below:

1. Delivery note
2. Packing list (optional in case of intra-EU shipments)
3. CMR waybill prepared by the forwarder*
4. Customs documents (only if applicable)

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 * If the supplier is responsible for transportation then they must ensure that the forwarder
prepares the CMR waybill. If WABCO is responsible for transportation, then the supplier
needs to provide WABCO’s nominated forwarder with the necessary information to create
the CMR waybill (from above mentioned excluding truck license plate number).

Each delivery should be followed by a corresponding invoice:

1. Invoice for products

2. Invoice for WABCO returnable packaging if applicable

For deliveries going to WABCO plants in Europe, the invoice should not
accompany the goods delivered to WABCO. Instead, it should be issued to
WABCO, but sent directly to WABCO accounting at the following address:

WABCO Europe BVBA

c/o WABCO Polska
ul. Kwiatkowskiego 2
52-407 Wroclaw
Poland

NOTE

It is the supplier’s responsibility to ensure that all the information on each document
(origin, part number, purchase order number, etc.) is consistent, so that each load
can be identified easily. Any discrepancies can cause delays, detention at customs,
damages, and deterioration in quality.

SUPPLIER BENEFITS Appropriate documentation and transport organization helps suppliers to meet their
delivery performance targets.

10.6. PACKING & LABELING

PURPOSE Proper product packaging and labeling preserves quality and ensures that products
can be identified easily when moving through the supply chain.

SCOPE WABCO’s packing and labeling requirements apply to all direct material suppliers
to all WABCO locations.

DESCRIPTION

In collaboration with the supplier, WABCO offers packing opportunities as follows:

• WABCO returnable packaging, or

• Pool packaging (Gitterbox, etc.), or
• One Way Packaging/Supplier’s own packaging

Packaging specification is part of the PPAP validation process. WABCO’s packing

instructions for returnable and non-returnable packaging are specified on the
WABCO website:
https://www.wabco-auto.com/suppliers/suppliers-information/delivery/

If a packing plan is not available on the WABCO website, the packing plan
provided by WABCO directly to the supplier will apply.

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RESPONSIBILITIES PACKAGING IN GENERAL
It is the supplier’s responsibility to ensure the availability of packaging materials
for on-time deliveries to WABCO. Where on-time delivery to WABCO is
jeopardized due to non-availability of the necessary packaging and this is
caused by the supplier or any of their personnel, then the supplier must bear
the cost of all emergency freights, replacement packaging (returnable or non-
returnable) and all other costs to ensure on-time delivery to WABCO (use of any
replacement packaging needs to be validated by WABCO and the supplier).
WABCO will cover the cost of emergency freights, packaging, and all other
costs only if previously agreed in writing.

In case of non-availability of agreed packaging, suppliers must inform WABCO

immediately, and both parties must agree on temporary packaging in order to
avoid quality and delivery issues.

Any changes that a supplier wants to make to the agreed packing plan must be
submitted and approved in writing by the lead Value Stream or Distribution Center
Logistics contact person at WABCO, before delivery of the products.

The supplier shall, in all cases, respect the agreed number of products they should
be packing into the relevant containers. In all circumstances, different products must
not be mixed within the same single packaging unit.

Suppliers must keep packaging clean and undamaged. WABCO is entitled to

claim for any delivery which arrives in packaging which is in poor condition due to
mishandling or poor packing by the supplier. Also, with respect to deliveries in one
way packaging, suppliers are responsible for ensuring that all packaging materials
at least fulfill the WABCO One Way Packaging instruction, so that neither
packaging nor products will be damaged during transportation.

WABCO RETURNABLE PACKAGING

At WABCO’s request, suppliers will use WABCO returnable packaging for deliveries
of products to WABCO. Suppliers are allowed to keep a stock of WABCO returnable
packaging for a maximum of two weeks and corresponding to the required quantities
as per their delivery schedule. Suppliers must order the returnable packaging they
need from WABCO’s named service provider.

POOL PACKAGING

At WABCO’s request, suppliers will use pool packaging for deliveries of products to
WABCO. When using such packaging, suppliers need to follow pool packaging
service provider rules and comply with WABCO requirements regarding condition in
deliveries.

WABCO One Way Packaging

Suppliers cannot use non-returnable packaging for deliveries to WABCO unless,

prior to being used for the first time, the relevant packaging is approved in writing by
the WABCO Supply Chain Management Packaging Team. Cost of non-returnable
packaging has to be included into the product price.

Suppliers need to ensure compliance with International Standards for Phytosanitary

Measures No. 15 (ISPM 15).

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 LABELING

In terms of packaging identification, suppliers must meet the requirements agreed

with WABCO. WABCO’s labeling instructions for returnable and non-returnable
packaging are specified on WABCO’s website:
https://www.wabco-auto.com/suppliers/suppliers-information/delivery/

Correct packaging and labeling prevents logistics incidents and quality issues. This
SUPPLIER BENEFITS
means that unnecessary costs are avoided and that customer satisfaction is
protected.

10.7. DELIVERY PERFORMANCE REQUIREMENTS & MONITORING

PURPOSE
To communicate to the supplier key delivery performance metrics measured
by WABCO and ensure that corrective actions are taken when WABCO’s
delivery targets are not met.
SCOPE
WABCO’s delivery performance requirements apply to all direct material suppliers
to all WABCO locations.
DESCRIPTION
WABCO measures the Fill Rate in Number of Lines (NoL). Only when a complete
position with a complete quantity behind is delivered within the requested time the
resulting Fill Rate will be 100%.

The Measurement of the supplier delivery performance is based on the

percentage of the NoL delivered on time vs. all open NoL due.

The example below shows an acceptable delivery window when the due date for
goods expected at WABCO is April 5th:

• Material received and booked on April 4th or 5th is measured as on time (blue)
• Before April 4th it is too early but measured as availability (yellow)
• After April 5th, it is too late and a Fill Rate (FR) defect (red)
• Not later than on April 5th is measured as available (green)

In terms of logistics management, the supplier’s objective is to reach a delivery

accuracy level of 97% on-time and 100% availability of products on site, if not
differently specified by other agreements, whereby the following definitions are
valid:

• All products which arrive with WABCO on the due date specified on the order
or due date minus 1 working day are on-time
• All products which arrive with WABCO after the due date specified on the order are
considered late
• All products which arrive with WABCO before the due date specified on the
order minus 1 working day are considered to be too early

• All products which arrive at Consignment Stock managed by WABCO, on-time

delivery means all products arrived on due date or earlier, but within min/max
stock level agreed with WABCO
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 RESPONSIBILITIES Suppliers must monitor their delivery performance at all times. Both parties
should use WABCO Supplier Portal to track performance. In the event that the
supplier does not meet one of the agreed delivery accuracy levels, they will be
required to present a corrective action plan, which includes the allocation of
responsibilities between the parties and the time schedule for the steps to be
undertaken.

10.8. LOGISTICS COMMUNICATION

PURPOSE To improve cooperation between WABCO and its suppliers.

SCOPE WABCO’s communication requirements apply to all direct material suppliers to all
WABCO locations.

DESCRIPTION WABCO requires each supplier to define a daily contact person with the necessary
knowledge of logistical issues. The contact shall have good English language skills
and if possible language skills in the national language of the WABCO plant being
delivered to. Each daily contact person must have a trained substitute for absences,
holidays and unavailability.

The respective WABCO contact person for each part number/delivery destination
level can be found in the WABCO Supplier Portal.

RESPONSIBILITIES If suppliers schedule plant holidays, they must:

• Inform the WABCO daily contact person, the Value Stream or Distribution
Center Logistics and Commodity Buyer, in advance
• Ensure that a logistics contact person is available to be contacted by WABCO if
necessary
• Ensure product availability during this period for on-time deliveries to WABCO

SUPPLIER BENEFITS Disciplined communications between WABCO and its suppliers ensure that any
requirements and issues are addressed early enough to avoid disturbances in
supply chain and the extra cost those disturbances lead to.

10.9. LOGISTICS AUDIT

The Logistics Audit ensures that supplier planning and logistics capabilities are
PURPOSE well established. It also identifies opportunities to eliminate waste and risk through
established action plans. As a result, disturbances in the supply chain are
minimized.

SCOPE The Logistic Audit can apply to all direct material suppliers to all WABCO
locations, according to internal selection process and criteria.

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 DESCRIPTION Information to selected suppliers

Training for suppliers at WABCO University - optional

Supplier self - assessment

Communication to supplier of key assessment criteria

Desk audit on selected criteria

MMOG/LE assessment by WABCO at Supplier

Gap analysis and follow-up on actions defined to improve

WABCO is entitled to perform a Logistics Audit, according to the Global Materials

Management Guide/Logistic Evaluation (MMOG/LE) standard, on a supplier’s
premises by giving at least 24 hours’ prior notice, in order to determine whether the
supplier’s logistics system and measures are suitable to meet WABCO’s
requirements as laid down in the Logistic Protocol.

Suppliers are expected to assess their own performance and provide results to
RESPONSIBILITIES WABCO within an agreed timeframe. They must also provide objective evidence
to support their answers to all questions asked by WABCO and must accompany
WABCO representatives during the on-site assessment. In addition, suppliers must
define an action plan to close the performance gaps identified by the audit and
ensure that it is completed in a timely fashion.

Logistics Audits that follow the MMOG/LE standard allow suppliers to identify
SUPPLIER BENEFITS risk, mitigate any delivery disturbances, and ultimately increase the end
customers’ satisfaction in the most efficient way.

10.10. CAPACITY ASSESSMENT

Capacity Assessments help WABCO to understand its suppliers’ processes and

PURPOSE secure capacity. It identifies bottleneck processes at supplier operations that
could impact WABCO’s supply and allows them to be addressed so that customer
demands can be met.

SCOPE The Capacity Assessment can apply to all direct material suppliers to all WABCO
locations.

DESCRIPTION

At WABCO’s request the supplier must present relevant capacity parameters and
WABCO is entitled to audit the described capacity on a supplier’s premise. The
common procedure is the WABCO Glide Path. This is a standard format to
visualize month over month demand.

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 RESPONSIBILITIES The supplier must:
• Perform a capacity self-assessment when requested to do so by WABCO and
compare by this delivery requests and their available capacities
• Provide WABCO with reliable data to enable a capacity check and to support
WABCO Glide Path process
• Define and complete an action plan to close any performance gaps identified
by the corrective action
SUPPLIER BENEFITS
Capacity Assessments allow suppliers to improve their understanding of WABCO’s
demands and their own capabilities to meet them. If performance gaps are identified
and closed, on-time delivery and customer satisfaction are protected.

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11. ADVANCED PURCHASING & SUPPLIER INTEGRATION

PURPOSE One of the central challenges of supply chain is the effective integration of
suppliers. In order to improve the development of new products, WABCO’s Project
Management strives to integrate suppliers early or to offer for a proof concept.

Supplier integration includes:

SCOPE • Flexible resources for development tasks/footprint/manufacturing
• Technology knowledge in terms of automation, connectivity and
electrification (Advanced Purchasing)
• Cost optimization by experienced specialists (Design to Cost)

WABCO’s Supplier Integration Process ensures proper guidance and intense

DESCRIPTION cooperation through the entire lifetime of related projects.

WABCO Sourcing and WABCO Engineering joined forces to establish a robust,

internal interface for supplier integration.

As a result, the Supplier Integration Process clearly addresses WABCO’s

requirements and expectations, as well as automotive standards such as ASPICE,
to ensure the success of supplier activities.

Advanced Purchasing is a dedicated team within our S&P organization that

identifies, assesses, and selects advanced technologies and partners in line with
Business Hubs’ requirements and it is also the interface to our in-house
development organization which focuses on the domains of automation,
connectivity and electrification.

The Advances Purchasing process is systematically deployed for WABCO’s

Integrated Supply Partners, who are long-term WABCO partners for specific
commodities.

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 11.1. SUPPLIER DESIGN CAPABILITY ASSESSMENT

PURPOSE Evaluate supplier capability to run non-software design activities according to

WABCO’s requirements.

SCOPE Supplier Design Capability Assessment (SDCA) applies as a non-software related

equivalent to ASPICE to all WABCO direct material suppliers worldwide.

SDCA is an assessment performed at the supplier’s site by a Commodity Quality

DESCRIPTION Engineer and a Product Engineer.

This one and a half day audit is performed using a standard evaluation tool. The
output of the SDCA is a rating as per the diagram below:

SUPPLIER CATEGORIES

Copy Manufacturer Designer Development Function

SUPPLIER Supplier Supplier Supplier Supplier Supplier

CATEGORY S0 S1 S2 S3 S4

Only suppliers rated from S2 to S4 can be integrated in a project. In addition,

suppliers achieving these ratings are eligible for the WABCO Integrated
Supply Partner program.

The rating will help the Product Engineer and the Project Buyer to decide
which supplier should be invited for supplier integration, depending on the type
of development to be done.

The SDCA result is valid for three years, at which point a re-audit is required.

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 11.2. WABCO INTEGRATED SUPPLY PARTNER

PURPOSE To create a long-term partnerships with strategic suppliers who support

WABCO’s differentiation strategy.

The WABCO Integrated Supply Partner Program (WISP) applies to all WABCO
direct material suppliers worldwide. Eligibility is according to specific criteria.
SCOPE

DESCRIPTION

The purpose of the WISP program is to identify, within WABCO’s panel, strategic
suppliers that will become preferred partners through the supplier integration
process. All integrated supply partners support WABCO’s differentiation strategy.

The award for WISP is subject to full compliance with all WABCO and automotive
requirements and targets. Furthermore, suppliers must have the potential to
deliver value in terms of flexible resources for development tasks and/or
technology knowledge.

After the initial selection process, the supplier will be invited to work through
several steps in order to prepare, with support from the WABCO cross-functional
team, the WISP Charter and Dashboard. The WISP Charter and Dashboard
summarizes the shared business objectives, and underpins the collaboration
throughout its lifetime.

RESPONSIBILITIES
The top management from a supplier wishing to join the WISP program commits to
engaging their company in a transparent, trusting, constructive, and loyal
relationship with WABCO.
SUPPLIER BENEFITS
WISP suppliers are systematically considered for supplier integration in new
projects when required.

WABCO and supplier strategies are shared and aligned.

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12. LONG TERM VENDOR DECLARATION (LTVD)

PURPOSE The Vendor Declaration is proof that a product qualifies for preferential agreements
between the EU and third countries.

SCOPE Long Term Vendor Declarations are obtained from all manufacturers and vendors of
trade materials across all WABCO’s sites.

DESCRIPTION Legislative regulation (EU) 2015/2447 requires WABCO to provide proof of

preferential origin.

In order to facilitate the process for vendors, WABCO will provide a Long Term
Vendor Declaration (LTVD) by mail or as a letter for all relevant products.

The vendor has to use the provided LTVD and to complete the document
accordingly.
The document has to be signed and stamped by an authorized person, and sent
back to WABCO by mail or as a letter.

The vendor has to ensure that only persons with the relevant knowledge (no
trainees) have filled the LTVD and signed the declaration.

The correctness of the information is very important as it affects the preferential

origin of the products.

It is absolutely mandatory that the Country of Origin of the product is shown in the
LTVD.

In the case of materials for which the vendor is unable to supply a LTVD, the vendor
must declare a non-preferential status and provide the Country of Origin.

Should the vendor not respond, WABCO will send reminders.

Due to the far-reaching effect of the information provided, the supplier is fully liable for
false/incorrect data stated in the LTVD and the resulting damage and costs.

Important instructions:

https://www.stade.ihk24.de/blob/stdihk24/international/downloads/3762970/7bb
2f10d60c4abeebcfe53e50cade88e/Englische-Uebersetzung-der-Fussnote-
data.pdf

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13. HOW WE CONTROL EXPORT

PURPOSE To ensure compliance with national, foreign and international trade and export
control laws and regulations.

SCOPE Export Control information is obtained from all suppliers for all WABCO sites.

The supplier is obligated to inform WABCO’s Export Control Department (GL-EC)

DESCRIPTION immediately if its products, software, or services are subject to national or
international export control regulations, and has to provide the corresponding
export control classification number (e.g. 3A991 ECCN).

OBLIGATION TO OBTAIN LICENSES

For all products to be delivered and services to be provided according to the

agreement, the supplier shall comply with all applicable export control, customs,
and foreign trade regulations (“Foreign Trade Regulations”) and shall obtain all
necessary export licenses, unless the buyer, or any party other than the supplier,
is required to apply for the export licenses pursuant to the applicable Foreign
Trade Regulations.

The supplier shall advise in writing WABCO’s Export Control Department (GL-EC)
as early as possible but not later than 2 weeks prior to the Delivery Date of any
information and data required by the buyer, to comply with all Foreign Trade
Regulations for the Products and Services applicable in the countries of export
and import as well as re-export in case of resale. In any case, for each product
and service, the supplier will provide the buyer with the “Export Control
Classification Number” according to the U.S. Commerce Control List (ECCN) if the
Product is subject to the U.S. Export administration Regulations; and all applicable
export list numbers (e.g. EU Dual-Use-List); and the statistical commodity code
according to the current commodity classification for foreign trade statistics and
the HS (Harmonized System) coding. The supplier has also to clearly indicate on
all delivery notes or invoices the corresponding export control classification
number (e.g. 3A991 ECCN) and HS-Coding.

In case of any alterations to origin and/or characteristics of the products and

services and/or to the applicable Foreign Trade Regulations, the supplier shall
update the Export Control and Foreign Trade Data as early as possible but not
later than 2 weeks prior to the Delivery Date. The supplier shall be liable for any
expenses and/or damage incurred by the buyer due to the lack of, or inaccuracy
of, said Export Control and Foreign Trade Data.

TECHNICAL ASSISTANCE AGREEMENTS

If one or more Technical Assistance Agreements (TAA) is required for the fulfillment
of a contract or an order, the TAA(s) and any amendments thereto shall be agreed
with the purchaser before being submitted to the export authorities. A copy of the
TAA signed by all parties and of the issued approval, including a copy of all provisos
that relate to the execution of the contract or the compliance obligations of the
purchaser shall be provided to the purchaser. If required, the supplier may redact
passages in the copies.

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Notwithstanding anything to the contrary in the contract, the following provisions are
of essence for this contract:

1. Purchaser’s ability to deliver and support items/commodities fitted with the

delivery or service that are not listed on an export control list worldwide –
provided that the purchaser follows all national and international (especially
but not limited to EU and US) export control regulations
2. Customer’s or end-user’s ability to use, operate, and maintain the products
that are listed on an export control list as provided by the end-use/end-user
statement. In the event of supplier’s non-compliance with its obligations
under these provisions to supply the deliverables or services compliant with
Export Regulations, the supplier shall, at its own costs, and within a
timeframe compatible with the purchaser’s business needs, take the
appropriate actions to comply with, by:

1. Performing all necessary steps in order to obtain from the relevant

administration any authorization, with respect to the deliverable and
service, necessary for the purchaser to sell and support the deliverable and
service and/or the provided end-use/end-user statement for the relevant
customer or end-user to continue using, operating and maintaining the
deliverable and service, and in case the supplier fails to obtain it
2. Replacing or modifying the restricted technology so that the deliverable
and service ceases to infringe the Export Regulations, while fulfilling all
requirements defined by the contract or the order; without prejudice to the
purchaser’s rights to claim for compensation for all costs, damages and
losses suffered as a consequence of the said breach and/or to terminate
the contract or order for supplier’s default

LIABILITY

Notwithstanding any other provision of the contract or the order, the supplier shall
be liable for all damages, losses, and liabilities incurred by the Purchaser as the
result of the supplier’s negligent non-compliance with its obligations under these
provisions.

WABCO’s Export Control Department

Department GL-EC
e-mail: exportcontrol@wabco-auto.com
phone: +49 511 922 1985 or 3941

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14. ISSUING INVOICES TO WABCO SITES IN EUROPE

To increase the efficiency of invoice processing and to minimize the number of

PURPOSE
incorrect invoices returned to the supplier.

Applies to all WABCO suppliers of direct and indirect materials issuing invoices to
SCOPE
WABCO sites located in Europe, including United Arab Emirates.

We ask suppliers to meet the following WABCO requirements regarding issuing

DESCRIPTION
invoices to WABCO sites located in Europe:
• Use the correct legal entity (as shown on WABCO’s Purchase Order)
• Always include WABCO’s Purchase Order number on the invoice as lack of
this information may delay payment. Including the name of the contact
person at WABCO would be helpful

EXAMPLE

• Always include WABCO’s VAT-ID number (as shown on WABCO’s purchase order)
• Paper invoice: the invoice recipient address shall be stated on the order.
Important remark: WABCO’s centralized accounting address differs from
WABCO’s legal entity address
• Electronic invoice: send all invoices directly to our Accounts Payable team
using the correct e-mail address
• Send only one original of an invoice and do not create additional copies (this
refers to electronic and paper invoices as well)

In the event that a supplier uses an envelope with a “transparent window”, the
document shall be folded in a way that allows the invoice recipient’s address to be
visible in the window. In all cases, the billing address must be printed on the invoice
as mandatory.

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 EXAMPLE

Invoices that do not meet the above requirements will be returned to the
sender with a request to re-issue them properly. WABCO does explicitly
reserve the right no claim cash discounts on re-issued invoices.

14.1. SENDING THE INVOICE IN PDF FORMAT

PURPOSE To allow suppliers to convert paper invoices into a PDF format and expedite the
invoicing process.

SCOPE Applies to all WABCO suppliers of direct and indirect materials issuing invoices to
WABCO entities in Europe and the United Arab Emirates.

DESCRIPTION WABCO uses “PDF invoice format receipt” for WABCO entities in Europe and the
United Arab Emirates. This change allows suppliers to transfer paper invoices into a
PDF format.

In order to send invoices in a PDF format instead of a paper invoice, the supplier
has to contact his/her respective Commodity Buyer in order to sign an Electronic
Invoicing Agreement between WABCO and the supplier’s company
representatives.

BENEFITS • Better and faster processing of invoices

• Increased payment process efficiency
• Improvement of service quality
• Eliminates the costs of paper, printing, envelopes, and postage
• Environmentally friendly
• PDF is a familiar and user-friendly format

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15. GLOSSARY OF TERMS

PURPOSE To explain the abbreviations used by WABCO

SCOPE The Glossary of Terms applies to all direct material suppliers to all WABCO locations.

5W2H What is the problem? Why is the problem? When detected? Where detected?
Who detected? How detected? How much/many?
APQP Advanced Product Quality Planning
BCC Best Cost Country
BMS Business Management System
C0 Field Incident Incident on the basis of an operational fault that has been noticed in the vehicle after
vehicle was released to end customer for operation; caused by a faulty component from a
WABCO supplier
C1 Incident Customer complaint about a WABCO product that is on a vehicle which has not been released
to end-customer for operation (zero kilometers); caused by a faulty component supplied by a
WABCO supplier
C1M Incident Customer complaint on a Merchandise Goods product, on vehicle which has not been released
to end-customer for operation (zero kilometers); caused by a faulty component supplied
by WABCO supplier
C2 Incident Complaint detected in the WABCO manufacturing line; caused by a faulty component supplied
by a WABCO supplier
C4 Incident Logistic non-conformity identified by WABCO; caused by a faulty delivery or faulty delivery
documents by a WABCO supplier
COPQ&L Cost of Poor Quality & Logistic
CPB Claims per Billion
CQL Commodity Quality Leader
CQP Component Quality Planning
CRP Cost Reduction Project
CSL1 Controlled Shipping Level 1
CSL2 Controlled Shipping Level 2
FD Feasibility Declaration
FFD Final Feasibility Declaration
FR Fill Rate
FSMC Ferrous Metal Casting
GCL Global Commodity Leader
IFD Initial Feasibility Declaration
IMDS International Material Data System
IS Initial Sample
KPI Key Performance Indicator
LP Logistic Protocol
MMOG/LE Materials Management Operations Guideline/Logistic Evaluation
NDA Non-disclosure Agreement
NFMC Non-Ferrous Metal Casting
P/N Part Number
PA Project Agreement
PD Product Development
PPA Product & Pricing Agreement
PPAP Production Part Approval Process
PPAP RFTOT PPAP Right First Time on Time
PPM Parts per Million – Quality Performance Measurement indicating the quantity of non-conforming
parts resulting from C0, C1, C1M, C2 and C3 incidents; identified in a selected time period and
divided by the quantity of parts received in the same period of time, normalized over one million
parts

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 PSO Part Submission Order
PSR Product Safety Representative
PSW Part Submission Warrant
QAA Quality Assurance Agreement
QCD Quality, Cost, Delivery
QR6S Quick Response Six Sigma
RCL Regional Commodity Leader
RFQ Request for Quotation
RPL Regional Purchasing Leader
RSQL Regional Supplier Quality Leader
CSR Corporate Social Responsibility
SHEE Sheet Metals
SICR Supplier Initiated Change Request
SLC Safe Launch Concept
SMA Safety Management Audit
SOP Start of Production
SORM Supplier Offer Review Meeting
SPA Supplier Process Audit
SPIP Supplier Process Improvement Plant
SPQ Supplier Profile Questionnaire
SPRI Springs
SQ&LIM Supplier Quality and Logistic Incidents Management
SQAP Supplier Quality Assurance Plan
SQEP Supplier Quality Escalation Path
STAP Standard Parts
STRAP WABCO Strategic Planning Process
TA Tooling Agreement
TR Technical Review
TURN Turned Parts
TWS Top Worst Supplier
WCM WABCO Change Management
WOS WABCO Operating System
WPCP WABCO Product Creation Process

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GLOBAL HEADQUARTERS
WABCO Global GmbH
Giacomettistrasse 1
CH-3000 Bern 31
Switzerland