Tailored Supply Chain Solutions. SCSI Overview QUALITY CONTAINMENT LOGISTICS ENGINEERING TAILORED SOLUTIONS

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2 Manufacturing Committee Meeting SCSI Vietnam April,

3 Tailored Supply Chain Solutions #

4 Global Footprint 27 US locations in 10 states AL, GA, IA, IL, IN, KS MN, SC, TX, WI Brazil Mexico 6 locations in Europe France (3) Belgium Romania Germany Morocco UK 10 locations in Asia China (7) Thailand (2) Vietnam Wuhan Guangzhou In development Founded employees Privately owned & operated $34 million sales worldwide (2015)

5 Secured Flow and Control Gates Supply Chain Model #

6 Primary OEMs Served

7 1,100+ Suppliers Served Annually

8 Vietnam Supply Chain Lessons Learned and Best Practice

9 Asia Labour Cost Overview

10 Customers Challenges Thailand Pre 1996: Thailand OEM,s relied on local family factories for parts and assembly supply. CKD assembling shops in BKK (assembling partner) Huge damage to the OEM,s global reputation. High Warranty Cost. OEM,s brought in their suppliers #

11 Structure of Thai Automotive Supplier

12 Expats working in Thailand / Region Perimeter % Central % Thailand Bangkok % South % Northeat % North % South Northeat North Central Perimeter Bangkok

13 Vietnams Automotive Market Automotive Production till 2020: Automotive Production till 2035: Estimated 5/2015 by Vichay Jirathiyut, President TAI 2014: Cars Produced in Vietnam + 43% 2015: Cars Produced in Vietnam + 56%

14 Opportunities for Vietnamese Manufacturing Industry Increasing production cost in Thailand due to increase of min. wages. Increase of requirements on quality, productivity and management. Thailand s move to upper middle income country. From production to development. TPP and other trading agreements coming into effect soon. Thailand s weakness in education, language knowledge and business behavior. Increase of unemployment rate, Vietnam need to improve the quality and technology level of local companies to become a qualified Tx supplier (automotive, electronics, textile, food processing ) To go global, Vietnam should extend the number of expats and experts in the field of quality, development, production, project management and sales. Learn from the best. Vietnam need to get positioned for the upcoming trade agreements in terms of quality, management, productivity and HR. Get ready as T1 for global supply

15 How to Improve - S u p p l i e r D eve l o p m e n t P r o d u c t i o n P r o c e s s I m p r ove m e n t - Supplier Assessment (IQA, Process and Product Audit, PDI ) - Gap analysis and setup of Quality system - Management Review and Decision - Implement actions and reliable QMS Reach Certification Level - Top down approach, high commitment of all parties necessary - Long term process depending on company- and personal culture

16 Cost of Non - Quality Cost related to supply of scratched door finisher to an OEM, operating inside a Freezone 2.5 USD Finisher cost: 2.5 USD The finisher is assembled to the door, the complete door is delivered JIS to the assembling line of the OEM Order new finisher per Airfreight + 250,- USD + 15,- USD claim handling Re-transport door, Custom documentation, Transport: + 40,- USD Door disassembling, new finisher assembling, Customs, Transport: + 40,-USD Scrap cost damaged finisher custom controlled scrap : + 10,- USD Car off line in rework, door assembling in rework: + 25,- USD Total cost: USD Not considered: Impact on Direct Runner Statistics at OEM, PPM level for Supplier, Q-reporting, 8D, Q- Team involved

17 Contact Us Frank Weiand General Director Vietnam Supply Chain Service International 4.Floor, B11, Hoang Van Thai Street Phu My Hung International Finance Center Tan Phu Ward, Dis.7, Ho Chi Minh City Mobile:

18 Thank you for attention #