Supplier Conference Call

Transcription

1 AE Operations Supplier Conference Call AGENDA Introduction Changes for the suppliers Next steps More information & Johnson Controls contacts 2 Johnson Controls, Inc. - INTERNAL

2 Welcome to our supplier meeting! During this meeting we would like to Inform you about the changes you will see due to our transition to SAP for our logistics, manufacturing and operations functions. Provide details on actions required by you to support ongoing successful interaction with Johnson Controls facilities. Present next steps for our transition and the actions required. Confirm Johnson Controls contacts that will help you with any question. As this is a conference call with multiple participants we would like you to consider following guidelines during the call You will be automatically put on mute to avoid disrupting background noise. At the end of the presentation we will open the call for any questions you might have. Please do not address commercial issues during this call as this needs to be done offline with the Buyer in a separate call or meeting. 3 Johnson Controls, Inc. - INTERNAL Who is invited for this call? We invited from every supplier several contact persons, to make sure the right people are involved. For this conference call we need representatives from: Logistics Sales EDI / Labels Quality Please make sure that your respective colleagues in your organization are all informed of the upcoming changes. 4 Johnson Controls, Inc. - INTERNAL

3 Purpose of this meeting The Automotive Group of Johnson Controls, Inc. (JCI) is in the process of enhancing its SAP solution as a key enabler to establish common global business processes in EMEA, the America s and Asia. SAP is already in use in JCIs Purchasing and Finance functions and will be extended for Manufacturing, Quality, Logistics and Operations. All Johnson Controls plants globally will be converted over the next few years. Key changes that will affect your company when supplying the above JCI facility: Johnson Controls will only accept demand and shipment related communication via Electronic Data Interchange (EDI). The standardized platform to be used will be EDIFACT. Alternatively the Johnson Controls Web EDI solution can be used. Johnson Controls will implement a global standard for the content and structure of the Advanced Shipping Notice (ASN) including container, handling unit number / serial number and optional pick up sheet reference as well as the labels that are applied to the product. This information must match what is on the Label. The required new label format is the Global Transport Label (GTL). The integrated SAP solution will automate our Discrepancy Material Report, Supplier Material Rejection Report and Management Quality Review processes and make them more transparent. Johnson Controls will continue to consolidate all information into the Global Supplier Scorecard. 5 Johnson Controls, Inc. - INTERNAL AGENDA Introduction Changes for external suppliers Next steps More information & Johnson Controls contacts 6 Johnson Controls, Inc. - INTERNAL

4 Goods Receipt Payment based on goods receipt When the supplier sends a shipment, the receipt will be entered based on: exactly what was received a physical count or a scan of the product. A DMR will automatically be created and communicated to the supplier. Payment will be for the actual quantity. We will implement SAP standard functionality for incoming goods inspection with the possibility to create SMRR issues as an outcome of this process. Suppliers will no longer get a payment in full based on the ASN/Invoice and then a debit for the discrepancy. The payment will be for the actual quantity. Communicate internally to your AR. Supplier has to communicate these processes to its Accounting Receivables (AR) 7 Johnson Controls, Inc. - INTERNAL EDI Requirement Suppliers will have to use EDI With the implementation of SAP, reliance on electronic information to and from the supplier is much more critical. EDI with JCI is no longer avoidable for the suppliers. JCI will standardize the EDI format to EDIFACT only All suppliers would need to attain an EDI system or utilize the JCI Web EDI solution through our EDI partner GXS. It will be important to have your own DUNS number created. Please note: There is a parallel project underway to replace HP, Covisint and Seeburger with GXS Electronic communication, ERS payment processing (Evaluated Receipt Settlement = credit note process) speed up the flow of information and reduce manual activities. If the supplier does not have an EDI system, they would need to attain one or utilize the JCI Web EDI solution. In addition, if a DUNS number is not assigned, please attain one for each shipping location. JCI will provide EDI technical requirements and documentation (On the Supplier portal page). Please review and prepare for the changes. Suppliers to be contacted by GXS to initiate on-boarding and testing. 8 Johnson Controls, Inc. - INTERNAL

5 Introduction to our EDI partner - GXS Who is GXS? GXS provides JCI and our trading partners EDI connectivity. They are the hub that passes messages to and from JCI and its Suppliers/Customers. If you do not have an EDI system, they provide a web tool to receive releases, print labels and delivery paperwork, and enter ASN information that is sent to JCI. How are they different from HP One Link, Covisint and Seeburger? They are very similar as they are our EDI hub for EDI transactions. The benefit is to have one EDI hub for all JCI plants and trading partners globally. What are the next steps? Each Supplier will be contacted by GXS to fill out a questionnaire. This information will be used to setup the EDI connection to each supplier. Once the setups are complete you will go through connectivity testing with GXS. Then, JCI will send a test release to each supplier and we expect confirmation of the release and an ASN/Label test sent back to JCI for verification. If you do not have an EDI system, GXS/JCI will put you on a free Web EDI tool GXS offers. You will receive training and registration information closer to the golive date. 9 Johnson Controls EDI Format JCI will only support one global format EDIFACT With the complexities of Pick Up Sheets, etc, JCI will consolidate to one global standard utilizing Edifact (96 for ASN, DelFor, DelJIT (DELJIT, DELFOR) / 97 for Pickup Sheet). Suppliers will need to adopt the new format and JCI will be making the changes to support on our end. One single way to communicate to JCI using a global standard. Suppliers will need to implement the new format and integrate into their systems and processes. JCI will provide EDI technical requirements and documentation (On the Supplier portal page). Please review and begin to make the changes required for EDIFACT. Suppliers will be contacted by JCI to initiate testing (JCI to send release, supplier to send ASN). You will find message guides and examples on the supplier portal. 10 Johnson Controls, Inc. - INTERNAL

6 ASN content One global standard for content and structure JCI will have a global standard for the content and structure of the ASN. Depending on the region, the change may be minor: Container in the structure of the message Handling unit number/serial number for each container must be sent on the ASN along with the container part number. The Supplier Batch # and JCI Engineering Change Level (Revision Level) will become mandatory Pick Up Sheet reference (where PUS are used) Standardized ASN structure for JCI. Suppliers will need to do some development to link the internal system data into the label segments and then transmit the data in the ASN. JCI will provide ASN documentation & example (On the Supplier portal page). Suppliers to be contacted by JCI to initiate testing. You will be required to send an example to be signed off. You will find message guides and examples on the supplier portal. 11 Johnson Controls, Inc. - INTERNAL Pick Up Sheet Include PUS Number on ASN Automated pick up sheet number (PUS #) generation in the system. The PUS will be sent via EDI to the supplier. The supplier must send the PUS # back in the ASN as a reference to match up for supplier performance tracking. A single PUS format that is electronic being sent from every JCI plant. Suppliers must be able to receive EDI, ship the required quantities, and put the PUS # on the ASN going back to JCI. Some system changes may be required. JCI will provide example of PUS and PUS ASN documentation (On the portal page).. Suppliers to be contacted by JCI to initiate testing. You will find message guides and examples on the supplier portal. 12 Johnson Controls, Inc. - INTERNAL

7 Supplier Label Format In order to scan to receive and incorporate warehouse management with only scanning one barcode, JCI requires the supplier send a License Plate bar code (consisting of the supplier Duns #, and the HU/Serial #). The label format recommendation is the GTL label format. Suppliers will need to do some development to link the internal system data into the label segment. Review the required label format specification (On the portal page). Contact your JCI contact if you do not know your supplier #. Use the DUNS# of supplier s shipping location Begin to create the label and provide an example to your JCI contact so that it can be validated and signed off. You will find GTL specifications and guidelines on the supplier portal. 13 Johnson Controls, Inc. - INTERNAL GTL-Label Global Transport Label and EDIFACT DESADV D96A HU-Number transferred in GIR-Segment Last 18 digits of Licence Plate = HU- Number (1st 9 digits is the DUNS, second 9 digists is a serial #) EDI Implementation Guidelines: DESADV UN D96A Version 2.0

8 Supplier Releases Demand Due Dates If JCI pays the freight, the supplier will receive a ship schedule including transportation time. If the supplier pays the freight, JCI will send a delivery schedule with arriving dates and the supplier needs to consider the transportation time according to the shipping instruction. Consistent release types from all JCI plants Understanding the difference and getting clarification from the schedulers which they are receiving from the schedulers which are receiving the goods. Adjust lead times if necessary. 15 Johnson Controls, Inc. - INTERNAL Supplier Releases Content Changes JCI sends a pretty standard Delfor (DELFOR) and Deljit (DELJIT) schedule. Delfor (DELFOR) and Deljit (DELJIT) releases will continue to be sent and the content will be pretty much the same. There may be additional receipt information to assist in cum comparisons. Additional information to improve transparency. None 16 Johnson Controls, Inc. - INTERNAL

9 Overview of three most important changes in Quality 1. An interactive PDF (ipdf) to support the problem-solving (8D report) process between Johnson Controls and its suppliers. 2. The introduction of a more transparent Issue Managing Cost process based on the degree of impact of the Supplier issue to JCI plant. 3. The MQR process will be handled by SAP which means that in the future suppliers get an automatic generated and we ask you to fill out a Quality Roadmap template (in excel) for the MQR meeting. 17 Johnson Controls, Inc. - INTERNAL An interactive PDF to support the problem-solving process In the future the supplier will get an notification with the ipdf attached. This ipdf contains the issue details and an integrated interactive 4D / 8D part. All mandatory input fields are clearly marked. The ipdf can be send back to JCI by only clicking a button inside the document. The option to attach documents directly inside the ipdf. Possibility to add yhe Return Material Authorization Number. The possibility to flag in the ipdf if a material needs to be returned or can be scrapped by Johnson Controls. Benefits & impact ipdf template is following the VDA standard. User friendly format (all mantatory fields are marked). Easy resending (Automated) of the ipdf document by clicking only a send button inside the ipdf. Option to attach documents directly inside the ipdf. Clear documentation for RMA and defective parts follow up. Option to decline the issue directly inside the ipdf with a reason. In case you supply to multiple Johnson Controls facilities you might be confronted with the new ipdf and today s way of working (Excel template coming from IRIS). Eventually all JCI facilities will use the ipdf.. On the next slide you will find an example of the excel file currently used and the interactive PDF 18 Johnson Controls, Inc. - INTERNAL

10 An example of the new Interactive PDF Empty excel sheet to fill out: Besides a PDF with the issue details, the supplier receives an excel form to provide input on the issue. NEW An Interactive PDF to fill out: A description of the issue in the Issue Header and Issue Details and the possibility to enter supplier feedback directly in the form, so only one document attached to the notification. Send the form by clicking the send button at the end of the document. Possibility to attach documents in the ipdf. 19 Johnson Controls, Inc. - INTERNAL A transparent Issue Managing Cost process The admin fee item will have a detailed breakdown of costs. We will calculate the administration costs based on the complexity of an issue and based on different labor hour rates per different regions. We will debit issue managing costs only on closed SMRR / DMR issues that have been acknowledged by supplier. Debit note will contain a breakdown on single administration workload activities. Benefits & impact Detailed cost calculation. The fee will automatically settled by a debit note on the supplier s invoice once a month. On the next slide you will find an example of a Debit Note and its cost variables 20 Johnson Controls, Inc. - INTERNAL

11 An example of Debit Note and its cost variables On the Debit Note you will find: Issue Id Issue Type Issue Status Total amount of the issue based on the cost variables below 21 Johnson Controls, Inc. - INTERNAL Electronic Management Quality Review (MQR) process Tracking and automated MQR invitation MQR invitation and escalation letters will be generated from SAP MQR issues. An automatic generated which contains the MQR notification (in a PDF file) and an excel template, the Quality Roadmap, which we ask you to fill in before the MQR meeting. JCI will track MQRs per supplier for all plants on the new system. Once the issue is generated in the system the MQR invitation will be sent. A more standardized process for both Johnson Controls and the supplier. Continue to respond to the MQR invitation. 22 Johnson Controls, Inc. - INTERNAL

12 An automatic generated which contains the MQR notification NEW 23 Johnson Controls, Inc. - INTERNAL The Quality Roadmap that has to be filled out before the MQR meeting PROBLEM STATEMENT: Enter the Problem Statement here. (What, Where, When and to what extent.) NEW PPM Reduction by Month Forecasted PPM Actual PPM Pareto PPM % Contribution % 90% % 70% % 50% % 30% % % 0 0% 0% 0% 0% 0% 0% FY 11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 FY12 FY12 0% YTD Goal PPM Contributer #1 PPM Contributer #2 PPM Contributer #3 PPM Contributer #4 PPM Contributer #5 PPM Contributer #6 DEFECT AND RPPM BY MONTH FY 11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 YTD PPM FY12 Goal Forecasted Pcs. Rejected Forecasted Pcs. Shipped Monthly Forecasted RPPM #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! % Contribution % Contribution % Contribution PPM Contributer #1 0% #DIV/0! PPM Contributer #2 0% #DIV/0! PPM Contributer #3 0% #DIV/0! PPM Contributer #4 0% #DIV/0! PPM Contributer #5 0% #DIV/0! PPM Contributer #6 0% #DIV/0! Actual Pieces Rejected Actual Pieces Shipped Monthly Actual RPPM #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! FY 11 Actual #DIV/0! PPM FY12 YTD #DIV/0! PPM FY12 Goal In the excel file that you will receive you will find a separate tab with instructions how to fill out the Quality Roadmap shown on the left Problem Statement (What, where, when, to what extent) Root Cause Root Cause Verification Short-term corrective action / Longterm countermeasure (list as Verification of Corrective Actions PPM Monthly Reduction deliverable) Owner Open Date Plan (original) Revised Actual Completion Comp. Date Completion Date Date PPM Contributer #1 Short Term: Long Term: PPM Contributer #2 Short Term: Long Term: 24 Johnson Controls, Inc. - INTERNAL

13 Management Quality Review Level 3 (MQR3) Automated requests and action reminders The Purchasing department will be automatically notified of all MQR3 requests by the Quality and Logistics Departments giving the Buyer greater visibility of current supply issues. MQR3 requests will be reviewed by the Buyer together with senior management of the Commodity Group and Supplier Development to determine next steps. If an MQR3 is raised on a Supplier, the Buyer will track Supplier actions from the MQR3 meeting(s) and monitor progress through automated reminders. When the MQR3 actions are completed, the Buyer will close the MQR in the system. The Purchasing department could initiate an MQR3, if deemed necessary, irrespective of whether an MQR1 or 2 exists. Escalation of intercompany MQR3 will be handled by the Quality Manager Enhanced Purchasing visibility of supply issues. Automated monitoring to support timely resolution of supply issues for JCI and the supplier. 25 Johnson Controls, Inc. - INTERNAL Discrepancy Material Report Processing Automated DMR Process could increase notifications Whenever JCI received material with information quality issues DMR s will be automatically created by the system (instead of manual creation). Information quality issues are: No ASN Quantity discrepancy Pick up sheet reference missing Re-printing of a supplier label for wrong format or incorrect information Packaging missing on the ASN This will likely result in an increase in DMRs and notifications for the suppliers. Focus on DMR issues and reduce repeating issues. JCI will provide an example of the notification. On the next slide you will find an example of an notification. 26 Johnson Controls, Inc. - INTERNAL

14 AGENDA Introduction Changes for external suppliers Next steps More information & Johnson Controls contacts 27 Johnson Controls, Inc. - INTERNAL Next steps The next steps Distribute this information to your colleagues Go to the Johnson Controls Supplier Portal and download the necessary information GXS will contact your EDI person to set up the EDI connection, if you are not connected already. Prepare yourself for EDI testing Implement the Quality process changes Prepare yourself for the Global Transport Label testing Implement new JCI supplier number (if applicable) Get prepared for Go-live of our transition 28 Johnson Controls, Inc. - INTERNAL

15 AGENDA Introduction Changes for external suppliers Next steps More information & Johnson Controls contacts 29 Johnson Controls, Inc. - INTERNAL More Information on the Johnson Controls Supplier Portal Johnson Controls, Inc. - INTERNAL

16 More Information on the Johnson Controls Supplier Portal On the Global Standardization page you will find Background information This presentation Frequently Asked Questions (FAQ) EDI Specifications Message guides for DELFOR, DELJIT, DESADV Global Transport Label Specifications GTL Guideline and background information Quality Process Information ipdf help guide Please familiarize yourself with the provided information and prepare yourself for the successful transition. 31 Johnson Controls, Inc. - INTERNAL Johnson Controls Contacts Area Name General Supply Chain Mgmt. (SCM) Jon Karel Jonathan.B.Karel@jci.com EDI or Web EDI related topics Jon Karel Jonathan.B.Karel@jci.com EDI related topics - GXS Randy Almodal Randy.Almodal@gxs.com Quality Management (QM) Craig Millar Craig.Millar@jci.com Purchasing (PUR) Purchasing Supplier Numbers Your JCI Buyer Your JCI Buyer Contact for EDI questions outside of global standardization scope: Johnson Controls Information Technology / Global EDI Clearing Center and Center of Excellence for EDI and B2B Communications Industriestrasse 20 30, D Burscheid, Germany Phone: +49 (0) b2b-europe@jci.com 32 Johnson Controls, Inc. - INTERNAL

17 Questions? 33 Johnson Controls