Upplier Valuation Odel Work Sheet: Godrej Material Handling Supplier Evaluation Model
Upplier Valuation Odel Work Sheet: Godrej Material Handling Supplier Evaluation Model
Upplier Valuation Odel Work Sheet: Godrej Material Handling Supplier Evaluation Model
Appendix 1
upplier
S
Evaluation
Model
Work sheet
Date Location
Supplier Project
Evaluation team
COMPANY PROFILE
1.2 Global ability
Global presence. 3p
Continental supplier (ex. Europe). 2p
National, regional supplier. 1p
Local supplier (limited support to one company). 0p
Assessment guidelines:
The manufacturing plant delivering to GMH is to be evaluated and if it is part of a bigger group it has to be
taken into consideration.
Global: supplier means a supplier who has presence on several continents and could support GMH on all
continents where GMH is active and when so required by building up activities locally. Supplier is useful to
GMH and gives support in all markets.
Continental: supplier means a supplier who has activities in one continent (e.g. Europe, Asia, North
America) and in addition has extensive experience in global export and support.
Regional: supplier is present and makes majority of deliveries within one country or one region (e.g. India,
China) and has some experience in supporting within one continent.
Local: supplier is acting only on a one-to-one basis with customers.
Activities could mean technology, pre-production facilities, and production and supply facilities. In some
cases, the demand for local content and also offset business has to be considered. Links to co-operative
arrangements with other companies should be considered as well as industrial networks. Export knowledge
as well as market, industry and customer situation are also contributing factors.
Data:
Supplier's presence in various locations - information to be obtained from supplier.
Type of activities for each location (storage/shipping - manufacturing).
Co-operation arrangements with other companies, such as logistics, customer support.
Agents/Representatives/Branch offices.
If the site plant of the supplier is part of a bigger group (the supplier has a group of companies), then this
question is applicable to the group.
Assessment guidelines:
Dependency deals with degree with which the supplier depends on GMH in his activities but also to which
degree GMH depends on a supplier as seen from a general risk management point, e.g. will the supplier
give necessary support to GMH in relation to other customers. A well-covered and represented business in
the automotive branch should be considered positive for the GMH. Normally the preferred range of
dependency upon GMH is 10 - 30%. What is the turnover relation between GMH and other Customers?
How big is the business with GMH and other customers, today and plans for future?
Does the supplier depend on any other customer to a high extent? Are there any connections to companies
competing with GMH (might be positive or negative)? Export share, customer structure and the ambitions of
the supplier should also be considered.
The GMH’s business should be considered first, and then the business with the biggest customer should be
checked.
Assessment guidelines:
If the company structure is considered in the evaluation this must be noted on the excel sheet.
Check that the well proven methods used by the Global Company are applied.
Evaluate whether there are modern work procedures (e.g. lean manufacturing and 6 sigma) in the
company? Are there cross-functional teams and does it give appropriate attention to GMH as customer?
What is the attitude, knowledge of the management team? and long-term perspective? Does the company
have a well-defined business plan (including investments plan), covering 3 - 5 year including action plans?
Is the supplier willing to share the highlights in the business plan? What is the level of investments
compared to the turnover? Who are their customers? It is also very important that GMH has good
communication with the key persons in the company. If the supplier is working via representative channels,
e.g. an agent, it mustn’t give GMH any problem. Supplier must be willing to work in a confidential manner,
and willing to enter in a long-term relationship. The supplier shall give GMH a high priority in all aspects to
get high score.
Data:
Organisation chart.
List of current customers. Copy of TQM-award.
Presentation of business plan.
Is the company working per TQM philosophy? Any awards given should affect the score
in a positive way.
Describe the organisation and responsibilities.
How is attention given to GMH business?
Describe the role and handling of the business plan.
How does the supplier work to strengthen confidence with GMH?
Describe your attitude to long-term relationship with GMH.
How are the labour relations arranged?
Assessment guidelines:
The monitoring system for customer satisfaction, ref to ISO 9001:2015 clause 8.2 should be evaluated. The
procedure could include questionnaires that are sent out to customers regularly as well as improvement
plans.
Also, the internal supplier/customer relations are of important, as well as consideration of the end use.
If the company is belonging to a bigger group, the routine may be handled by the group. Nevertheless, the
following items should be checked:
Is the global routine taking into consideration the audited site?
Is the audited site taking in account remarks from the customer survey by implementing action
plans and measuring results?
Data:
Customer satisfaction statistics:
Customer survey document, results and action plan including the improvements
achieved.
MANAGEMENT
2.3 Ethical standards
GMH is committed to a Code of Conduct which describes GMH employee intension on how to behave when
GMH does business and how GMH employees interact with their stakeholders.
No stopping parameter and Has contractual requirements on its suppliers,
ethics policy, Involved in CSR. 3p
No stopping parameter and Has contractual requirements on its suppliers,
ethics policy. 2p
No stopping parameter and Has contractual requirements on its suppliers. 1p
A stopping parameter, no contractual requirements on its suppliers,
no ethics policy, not involved in CSR 0p
Data:
Suppliers own ethics policy
Documents Corporate Social responsibility/ Any Social Activities within company
Ask for evidence supporting management directives.
Observe conditions and ask questions in production
Any code of conduct for tier 2 suppliers/ Contractual requirements for tier 2 suppliers
Data:
Appointed risk manager or organisation with risk management tasks, information to be
given by supplier.
Fire protection; A written security policy in place.
Structural protection - fire walls,
Supply of raw material and parts.
Active fire protection - sprinklers, water fire
extinguishers etc, Legislation, legal affairs.
Special fire protection areas – (testing
Environmental protection.
areas, presses, plastic presses and
mouldings, ovens…)
Protection for natural hazards; Business contingency plan (including
water related hazards, flooding, landslides, emergency, business continuity
earth quakes, hail, ice storms, typhoons… management and crisis communication)
Computer and soft-ware protection/ Power supply (e.g. generators), water
Computer data backup process/ storage supply and air pressure for tools
Insurance for part and tooling Political risks.
replacement.
Union relations. Risk of terrorism.
Any needs of extra safety stocks Machine/tool breakdown.
required for critical suppliers?
Up to date tooling list for unique GMH Any past example of managing the risk
tools. effectively
Are there any possibilities for alternative production in case of a problem?
On site, within the company group either on the continent or elsewhere in the world, or in
cooperation with other company. In case with another company which?
Which is the lead time to start up alternative production?
Assessment guidelines:
The environmental management system is similar to quality assurance systems. There are different
standards to follow when building up the system, such as ISO 14001.
Certified system means that a nationally accredited 3 rd party organisation, such as LRQA or DNV etc. has
audited the supplier and issued a certificate. The supplier must also show that non-compliance found at
audits is corrected. If the supplier fulfils the local legal requirements, but shows no evidence of documented
routines and procedures for environmental management and with no clear plans & objectives should be
scored with 0 p.
Data:
Environmental system certificate or audit result, to be obtained from Supplier
Plans for further development in the environmental system, in auditing and certification.
Results from last three periodical audits, including improvement plan.
Documental Evidence indicating concern towards enviornmental effects
of business/production activities and action taken.
Identification & Closure/Prevention of Environmental hazards
Hazardous waste generated & Its Disposal
Energy & Water Management
Purchase of energy efficient & environment friendly products
Any activities for making environment Green
Assessment guidelines:
The OHSAS management system is similar to quality assurance systems. There are different standards to
follow when building up the system, such as OSHAS 18001.
Certified system means that a nationally accredited 3 rd party organisation, such as LRQA or DNV etc. has
audited the supplier and issued a certificate. The supplier must also show that non-compliance found at
audits is corrected. If the supplier fulfils the local legal requirements, but shows no evidence of documented
routines and procedures for OHSAS management and with no clear plans & objectives should be scored
with 0 p.
Data:
OSHAS 18001 certificate or audit result, to be obtained from Supplier
Plans for further development in the OSHAS system, in auditing and certification.
Results from last three periodical audits, including improvement plan.
Documental Evidence indicating concern towards OHSAS effects
of business/production activities and action taken.
Identification & Closure/Prevention of hazardous activities
Identification & availability of PPE’s
Availability Fire extinguishers
Fire fighter training & Effectiveness
Availability of First aid box; First aid training & its Effectiveness
Past incidence
QUALITY
5.1 Quality Management System
Data:
Quality system certificate or audit result, to be obtained from Supplier
An ISO TS 16949/ISO 9001 certified supplier must have a routine to evaluate their
suppliers.
Verify that the supplier quality system is applied in the Tier 2 suppliers that is of
interest for GMH.
Results from last three periodical audits, including improvement plan.
Evidences for continuous improvement, Customer Satisfaction
Actions implemented on NCRs received in last 3 periodic ISO/TS audit
QUALITY
5.2 Quality Planning, Part Quality Assurance
Request for -RFQ/RTS handling -Process includes Review of -Review done by -Review done only by -No process
Quotation (RFQ) process/guideline drawing being done by supplier experts in their fields but marketing team/Owner to review
handling/RTS prior to quoting, answer to quality process not well with no specific specification
target formalized industrial or project before
-Review being done by CFT skills quoting.
including all necessary
departments.
-Procedure gives a lead time
target to answer RFQ/RTS
Setting quality targets -Quality target analysis -Targets set for all criteria like -Targets set only for only -Target setting without - No target
for new products document quality, productivity, cost, delivery, few criteria. considering actual setting
reliability and so on. -Target setting based on performance. before start
-Targets set based on market actual performance of of new
survey and claim analysis also set past projects without projects.
targets based on competitor input of competitor
benchmark. benchmarking.
White books (lessons -White books (lessons -System of making White books -White book and / or -A documented -No white
learned) / History of learned) or equivalent. (lessons learned) to track things lessons learned are process exists book
past problems -Things gone wrong gone right and things gone wrong being made but no referencing the making (lessons
in the project. evidence of usage in all of white books, learned)
-Activity of review of previous projects. lessons learned and / /things gone
lessons learned (white books) -Effectiveness of actions or things gone wrong, wrong
included in the initial stage of put are not verified. but is not implemented. concept
project. being used.
-System exists to verify
Effectiveness of actions.
PFMEA -PFMEA -Clear rules to assess Severity, -Severity rating rightly -Severity rating not -NO PFMEA
Occurrence, Detection and level identified but no regular linked to part fit and or being
from which an action is required review of PFMEA function. done only on
-Clear targets exists for any document -No targets exist or not customer
countermeasures to be taken. . challenging or no request and
Targets are challenging. countermeasures no self-
-Evidence of regular review of initiative.
PFMEA.
-Update of PFMEA during quality
complaints or instances of high
internal rejections.
Control Plan -Control Plan -Control plan includes all -Control plan have some -No clear guidelines for -Very basic
operations from Receiving, operations missing or fixing control methods or no control
intermediate and delivery steps. have wrong sequence. and parameters. plan exists.
-All control items including part -Process controls are
and process characteristics are not mentioned on the
listed. control plan. Poka Yoke
-Clear links between P-FMEA and concept partially
control plan (control methods and implemented for critical
parameters are fixed according parameters
severity, process capability)
-Poka Yoke implemented for
critical dimensions wherever
Ramp up activity -Ramp up monitoring tool -Supplier uses a ramp up -Supplier uses a ramp -Ramp-up plan -No ramp up
-PPAP action plan monitoring tool to capture influence up monitoring tool to contains only volume plan
-PTR results vs target of increasing volumes. Ability to capture influence of information. No monitoring
-cpk improvement detect defects (by operator and increasing volumes. specific measure tool exists.
-internal defect rate poka yoke is measured. Release Ability to detect defects during ramp-up period.
-process audit result is done when targets are all met. (by operator and poka -No requirement of
improvement -Safety stock target exists based yoke) is measured. safety stock exists.
on manufacturing and transit lead -Target exists for safety
time and it is monitored. stock but not monitored
Process audit is performed after or no actions taken when
SOP (at least each year) below requirement.
Documents to check: Supplier data collection & measurements for new or potential suppliers.
SQE should judge against benchmark level of current suppliers in the same commodity.
For castings, blanks and raw material the following table should be used as a guide
Supplier Fault Frequency and warranty costs are very low (compared to the
benchmark of the commodity), showing a positive trend during latest 3 years.
Supplier is proactive in solving problems 3p
Supplier Fault Frequency and warranty costs are low (compared to the benchmark
of the commodity). Supplier is active in solving problems each time requested by the
customer 2p
Supplier Fault Frequency and warranty costs are low but not in positive trend
Or supplier is quite reluctant to co-operate in the reliability/warranty process 1p
Supplier is ignoring reliability and reluctant to co-operate on warranty issues 0p
Assessment guidelines:
In case of simple part with 0 or few warranty issues, at least serviceability has to be judged
FF target can be the target agreed between the supplier and their current customers.
Warranty Cost can be a amount of money or a ratio compared to the yearly turnover.
The trend of the indicators has to be estimated based on figures covering 3 years.
Suppliers with design responsibility shall be judged from design and manufacturing point of view while
suppliers of components designed by GMH shall be judged from manufacturing point of view.
If the company is belonging to a bigger group, this subject can be handled at the group level. Nevertheless,
the company has to know the status.
Documents to
Sub Item check 3 points 2 points 1 points 0 point
Method of -8D or equivalent Use tool to make their analysis Use tool to make One root There is
cause analysis -additionnal (Ishikawa,5why, 5M…). For analysis for the main cause is not no
documentation 100% of the problems They problems or analysis analysed procedure
(Ishikawa, 5 why) analyze root cause of sometimes not deep (occurrence or or tools
occurrence and non detection. enough non detection) are not
used
Check -8D or equivalent Use a tracking chart for past Use a verification Use a No
efficiency of -Tracking chart or and new defects. Efficiency is system tracking for verification confirmati
actions verification system confirmed with measurable past and new system on of
of defects indicator. No reoccurrence defects. Efficiency is tracking for efficiency
confirmed with past and new of actions
measurable problem. No
indicator. efficiency
proved.
Prevention of -8D or equivalent Update all necessary Update all necessary Some Do not
recurrence -FMEA documents after each problem documents after documents update
-Control plan solving. Modifications are each problem are not document
-Process applied and deployed in the solving. updated or not s
instruction plant and in all other company Modifications are applied
-Training records plants. applied and deployed
in the plant
Control of -8D progress There is an indicator to There is a target There is a No target
problem solving control list measure the duration of time for customer target time but time for
progress different problem solving steps. protection: less than too long or customer
Customer protection is made 48 hours (exept for sometimes protection
less than 48 hours (exept warranty issues). It is not respected. or almost
warranty problems). It is always always respected. never
respected. Supplier atitude is respected
very good.
Non conforming NC treatment Defect parts are identified Defect parts are Identified but Not
part treatment procedure clearly and isolated (at least identified clearly and not isolated or identified
(SHOPFLOOR) Records once a shift) in a dedicated isolated (once a day) isolated but and not
area. in a dedicated area. not identified isolated
Rework Rework There are specific rework There are generic Rework flow is No control
operations instructions instructions. OK reworked parts rework instructions. not secured. after
(SHOPFLOOR) Records are marked, controlled then put OK reworked parts rework.
into the process before are marked,
inspection station. Repair controlled then put
operations are recorded. into the process
before inspection
station.
Assessment guidelines:
SEM - Appendix 1 - Issue 1 2017-08-04 18(42)
Godrej Material Handling Supplier Evaluation Model
Appendix 1
This chapter is applicable for both line problems and warranty.
LOGISTICS
6.1 Capacity management
LOGISTICS
6.2 Delivery precision /Service level
Data:
Delivery performance measured by Materials departments.
For potential supplier, ask for data concerning major other customers.
Number of assembly line stops or incomplete vehicles during the last year.
GMH plant: Service level Comments:
%:
LOGISTICS
6.3 Electronic communication
Data:
Check with our own EDI/Logistic expertise.
Note the systems that are used by supplier.
(EDI in this question is for logistic area)
Assessment guidelines:
Mandatory for suppliers with design responsibility.
To get a high score the supplier has to provide evidence of ability to provide spare parts over a long time
and have a life cycle approach including improvements and active cost saving programmes.
If the supplier is a competitor, direct or indirect, to GMH on the aftermarket, highest grading cannot be
given. Also, consider if the supplier is part of a bigger group competing with GMH on the aftermarket.
Does the supplier have process and ability to provide the necessary services in connection with cases of
emergency orders?
Are there any weaknesses in commitment or sense of service or need for prompt response when needed?
And if, are these being improved?
Pricing principles for spare parts is very important to the aftermarket; same base price for parts common
with production and cost based price for parts going out of production.
Data:
Does the supplier have a formulated aftermarket-parts policy? Do they live up to it?
How does the supplier give after market and spare parts support over an extended
period of time, i.e. for 15 years after the serial production ends?
Suppliers should have the capability for supplying low volumes for spare parts and/or
process for adapting production method to decreasing volumes.
Same price for same specification for aftermarket and production.
Type of price adjustment when parts go out from production.
-It is the supplier’s specific policy to fully furnish customers with required
documentation as hard-copy or electronic media, for drawing breakdown
and service manual(s) in such a format that it does not have to be revised
by GMH. 3p
-Supplier has no specific policy to furnish customers with drawings or
service manual(s), or only furnishes documentation in formats that need
to be converted by GMH. 2p
-Supplier only partly furnishes customers with drawings and/or
service manual(s), and in a format, that needs to be converted by GMH 1p
-Supplier will not, nor has ability/possibility, to furnish either manuals
nor drawings on customers’ requests. 0p
Assessment guidelines:
Mandatory for suppliers with design responsibility.
GMH require detailed drawings and samples of special tools for planning and comprehensive service
information for supplier-designed components.
GMH expects this information to be entirely furnished by its suppliers. Requested information should be
received by GMH at least one month before SP start.
Format, media and detail level for drawings to be agreed with concerned GMH spare parts organisation.
Data:
Verify the supplier’s process and routines for providing customers with required
documentation and specific tools.
Is the supplier supporting the common electronic interfaces used by GMH?
Schematics of electronics, diagnostic support (for suppliers of electronics)?
Is the supplier supporting the drawing formats used within GMH?
-The supplier has an ongoing fully proficient operation and process in place
for quality assured remanufacturing, with warranty, of own products
according to customers’ specification when applicable. 3p
-The supplier has an ongoing fully proficient operation and process in place
for remanufacturing, with warranty, of own products but only according to
own fixed specification(s). 2p
-The supplier has an ongoing operation and process in place for
remanufacturing of own products but not according to one technical
regulation for one uniform specification (e.g. more as functional repair) 1p
-The supplier has no remanufacturing process. 0p
Assessment guidelines:
Only applicable to remanufacturing suppliers, and suppliers with design responsibility and who will become,
or already are, providers to any GMH brand for any of the products listed in the table at the bottom of this
section (6.3)
This competence is related to the supplier's overall competence and experience from an industrial point of
view.
The supplier has competence and capability to supply remanufactured parts to GMH.
The “fully proficient” for 3 or 2 points means that manufacturing and quality processes are on the same level
as for the original product.
A process for an assured even level of quality according to Technical Regulation is important.
Data:
Receiving inspection of products from the market to be used as ingoing material, wholly
or partly to determine serviceable parts.
System for keeping track of serviceable stock.
Traceability of remanufactured parts.
Are dismantling and cleansing activities performed in a professional way?
Look for Technical Regulations connected to suppliers’ own or customers’ products.
Are assembly and testing activities performed in a professional way?
Quality inspections and follow up? Documentation?
Assessment guidelines:
This competence is related to the supplier's overall competence and experience from an industrial point of
view, research (own or in relationship with other actors e.g. universities/Technical Societies), product,
processes, company-wide industrial development etc.
The supplier has competence and capability to supply services, manufacturing and design to GMH. The
degree and maintenance of good working relations and the supplier's sense of service. Education of
personnel according to established programs (competence programs and training/skill matrix). Time spent
on education should be above 2 % annually for a high rating.
Data:
Data concerning time spent on education and training, to be obtained from supplier.
For past 3 years.
Expenditure and/or time spent per employee and year.
Training/skill matrix
Qualification procedure for special processes (e.g. welding, painting, heat treatment
etc.)
How does the supplier compare itself with competition benchmark wise? Does the
supplier perform global benchmarking to position themselves compared to the biggest
competitors?
Incoming area and Storage area Storage area is well defined, Storage area is well defined, Storage area not well FIFO not
inspection Incoming inspection and packaging identified. and packaging identified. identified implemented
area Incoming inspection are done Incoming inspection are done Or some incoming Packaging not
according control plan and according control plan and controls are missing. identifed
recorded. FIFO is completely recorded. FIFO is Or FIFO is not well
secured (based on computer implemented. implemented.
system,…)
Process flow -Control of WIP Wip levels in process are Wip levels in process are Wip levels in process are Wip levels in
control (Work In between stations controlled using kanban or acceptable but no evidence of inconsistent and not well process are very
Progress) and similar controls. visual management.. balanced throughout the high and not
work instruction process. controlled (no
Kanban or similar
controls)
Housekeeping -Workplace The workplaces are well The workplaces are The workplaces are The workplaces are
cleanliness and organized with no evidence of organized; some stations are organized; but have trash not organized; have
organization clutter or items out of place not following the disciplines. and clutter within the trash and clutter
-Workplace lighting Lighting for all workstations Some parts of the plant have stations within the stations
allow for excellent visual part poor lighting Some stations have poor Poor lighting at the
inspection. The entrances and exits for lighting at the workstation workstations -
Product is prevented from the building are easily Or there are risk of difficult to visually
damages all along the accessible; and the company damaging product inspect parts
process. maintains a security group The entrances and exits The entrances and
The entrances and exits for for the building are easily exits for the building
the building are easily accessible; but not free of are not easily
accessible; and the company debris. accessible; and free
maintains a security group of debris
Continuous -Daily meetings There are daily meeting for Analysis of internal defect Analysis is not deep Poor analysis or no
improvement (daily -Improvement plan analysing internal defects done but not daily. enough or internal defect analysis
management) for internal defetcs Action plan is documented Few actions are late. Internal rate is increasing.
(shopfloor) and followed. defect rate is improving
Internal defect rate is
improving.
Calibration -Calibration records All control instrument are All control instruments are Some calibrations are No calibration
Poke Yoke use calibrated. calibrated missing
Many poke yoke being used. Little poke yoke being used No poke yoke being used
Final inspection, -Control instructions Final control are done Final control are done Some final controls are Controls not done
packaging and -Control Plan according to control plan. OK according to control plan. not handled in a good way Or FIFO not
delivery Inspected parts are clearly FIFO is implemented (missing or no boundary implemented
identified. Packaging style Packaging style preserves sample for visual Or delivery area not
preserves from damage. FIFO from damage inspection,…) safe (part damages)
is completely secured (based Delivery area is safe (no risk) Or some packaging are
on computer system,…) and damaged
delivery area is safe. Or Fifo is not well
implemented
Assessment guidelines:
Evaluate the supplier’s presence and speed of action, especially in the case of field related problems. Also,
regard knowledge about GMH and willingness to show interest and energy at all times.
What GMH needs for an easy quick and safe communication on all levels?
COMPETENCE
8.4 Maintenance
Assessment guidelines:
In case of TPM certified company, the questionnaire shall be used to check anyway
Note: 9.1 to 9.5 are Applicable only to the suppliers with design responsibility
Assessment guidelines:
The supplier shall have a documented development process that describes the different steps in the
process. It shall also be cost driven (continuous improvement).
Supplier shall also be able to build up a project organisation to support GMH product development process.
Team Project Managers must be accountable, accessible and be empowered to perform efficiently.
For a high grade, the supplier shall be closely and early involved in our development process. He shall also
exceed cost targets in all areas, such as prototypes, tools and development
The supplier should show evidence that he has developed systems or components for other customers in
the chosen industry, or has a long experience and co-operation with GMH. In this way we can benefit from
earlier development both in function and cost. The supplier has leading competence and has awareness of
the global market.
Data:
Detailed description of testing facilities, to be obtained by supplier.
Describe the product development process, what are the key steps or phases?
How are projects organised?
How are test facilities made available? Teamwork?
Check different tools, risk analysis, design-FMEA
Describe examples of systems which have been engineered:
Within automotive area.
Outside automotive.
Major customers.
Assessment guidelines:
To be able to draw full benefit of design development in a modern IT-environment the availability of CAE
technology and computer communication links are of prime importance. In this element, the supplier’s
knowledge, equipment, systems and prepared communication must be evaluated.
If the company belongs to a bigger group which is handling this subject at a global level, it must be taken
into consideration. Nevertheless, the way to transfer the information from the group to the company must be
assessed.
Data:
Supplier level of CAE communications to be obtained from EDI department.
Describe the computer aided engineering systems used?
Computer links to GMH or other customer.
Ability to receive information in CAD-models.
Quality assurance of CAD-communication: document control, security, conversation
accuracy.
Assessment guidelines:
It is a strong demand that the supplier shall be able to supply prototypes. The assessment deals with ability
to make prototypes regardless of any prototype orders from GMH. Preferably the prototypes shall be made
in-house. The reason for this is that the prototypes must have production-like quality for durability test etc.,
and if they are produced in production process, the supplier can detect problem areas in the process before
mass-production. Another demand is that the prototypes are delivered in time so it does not offset our test
programmes. The supplier’s system for monitoring delivery schedules and quality output must be evaluated.
In-house = in the company’s facilities and under the company’s management.
Data:
Describe how prototypes are manufactured.
Rapid prototyping.
In production process.
Test samples.
1st off / production samples.
Delivery on time.
Assessment guidelines:
The supplier must invest in R&D in order to improve the products and stay competitive. The basis for
evaluation of this element is the average of investment rate for R&D over 3 year-
period, specifically within the scope we are evaluating the supplier. Consideration must be taken to the
availability of corporate resources as well as links to universities, Research Institutions etc.
Data:
Ratio R & D / turnover %, to be obtained from supplier.
Year: Year: Year:
-Procedure is existing and there are evidences that the PPCN process (or equivalent)
is used. Traceability is done on all changes, process or design. Same process is
deployed to tier 2 suppliers 3p
-Procedure is existing and there are evidences that the PPCN or similar form is used
internally. Some weaknesses regarding traceability or tier 2 changes. 2p
-No formal routine in place. PPCN is used upon customer demand. 1p
-No consideration of informing customer in case of product or process change 0p
Assessment guidelines
This chapter is applicable for changes requested by either supplier or GMH.
PRODUCTIVITY
10.1 Process of internal cost reduction
Assessment guidelines:
The supplier should have a high competence and capability to reduce costs in both manufacturing and
design (when applicable). If they have design responsibility, cost reduction activities should be part of their
product development process (see 7.1 / 7.2 and 8.1 for full picture). The supplier should use methods like
cost split-up VA (value analysis), IPPS (Improved Production Process with Supplier: cost reduction tool),
PVA (Product Value Added), Kaizen or similar, etc. to improve productivity and realize rationalizations.
Data:
Describe the internal cost reduction programme?
What methods are used (such as Value analysis, Cost split-up, OEE, and IPPS)?
Procedure to propose cost reduction to customer.
Verify targets and results for internal cost programs for the latest three years.
How does the supplier work with follow up for poor quality (waste, internal scrap and
waiting time etc.)
Check if agreement for cost reduction with GMH exists? Yes
Is the supplier ready to perform and share a bottom-up costing?
Improvements -8D reports -For each quality incident ,ask -For each quality -Does not -None
and Problems Meeting minutes for an Action Plan (using 8D incident ,ask for an Action systematically
Solving report). Time plan to come Plan (using 8D report). ask for an
back to the target is well Time plan to come back Action Plan. Or
controlled. There is somebody to the target is sometime responsible
responsible for follow up. not controlled. There is people to follow
somebody responsible for up not well
follow up. identified.
Process to -Escalation process -There is an escalation system -There is an escalation -No well defined -No
manage low -Business review for managing Low sytem for managing Low process or not process
performing meeting minutes Performancing Suppliers Performancing Suppliers. well applied.
suppliers (LPS). For the worst cases it Special activities are
leads to supplier phase out. required for worst sub-
Special activities are required suppliers, including audits
for worst sub-suppliers, and reviews with top
including audits and reviews management.
with top management
Assessment guidelines:
Glossary:
A
B
BVQI: Bureau Veritas Quality International, national accredited organisation.
BLANKS: Blanks are defined as materials where further processing, such as machining, will take place,
e.g. castings and forgings.
Bottleneck: The point in a process that limits total output.
C
CAE: Computer Aided Engineering.
CAD: Computer Aided Design.
CSR: Corporate Social Responsibility
D
DNV: Det Norske Veritas, national accredited organisation.
E
EDI: Electronic Data Interchange.
F
FMEA: Failure Mode and Effect Analysis. There are three different areas to run a FMEA on, Design, Process
and Environmental impact evaluation.
G
H
I
IPPS: Improved Production Process with Supplier. Cost reduction tool/procedure focusing on the suppliers’
production process.
ISO 14001: International environmental standard.
J
K
Kaizen: KAIZEN means improvement. Moreover, KAIZEN means continuing improvement in personal life,
home life, social life, and working life. When applied to the workplace KAIZEN means continuing improvement
involving everyone - managers and workers alike.
KPI: Key Performance Indicator.
L
LRQA: Lloyd’s Register Quality Assurance, national accredited organisation.
M
N
O
OEE: Overall Equipment Efficiency, the evaluation of the production set up, capacity and capability by
means of a study of at least one production shift. The maximum OEE value is 100 % and is a calculation of
machine availability, performance efficiency and the rate of quality.
P
PD: Product Development
SEM - Appendix 1 - Issue 1 2017-08-04 41(42)
Godrej Material Handling Supplier Evaluation Model
Appendix 1
PDCA: Plan Do Check Act.
PPCN: Product Process Change Notification
PPM: Parts Per Million.
Q
R
R&R: Stands for Repeatability & Reproducibility. Statistical method for measuring the capability of
measurement devices. This method comes from the MSA (Measurement System Analysis) which is one of the
reference manuals of TS 16949.
S
SQA: Supplier Quality Assurance
SQE: Supplier Quality Engineer
T
TQM: Total Quality Management.
TS16949: ISO/TS 16949 is an ISO Technical Specification, which aligns existing automotive quality system
requirements within the global automotive industry. In conjunction with ISO 9001/9002:1994, ISO/TS 16949
specifies the quality system requirements for the design/development, production, and where relevant,
installation and servicing of automotive-related products.
U
V
VA: Value Analysis. Cost reduction tool/procedure focusing on the parts total cost.
W
X
Y
Z
1 – 10
6 Sigma: Sigma (σ) is character of the Greek alphabet which is used in mathematical statistics to define
standard deviation. The standard deviation indicates how tightly all the various examples are clustered around
the mean in a set of data. Six Sigma is a business method for improving quality by removing defects and their
causes in business process activities.
8D: Problem Solving Process for the automotive Industry.