2017 yfai supplier expectations day eu region feb …...cayenne, daimler glc, maserati levante, vw...

Welcome & Logistics

2017 YFAI Supplier Expectations Day

EU Region – Feb 22nd, 2017

Ioanna Orkopoulou

• Ioanna Orkopoulou

• Manager Procurement Process

2016 Supplier Awards / 2017 Expectations Day Agenda

Welcome & Logistics Ioanna Orkopoulou 01:00 – 01:05

Opening Remarks James Bos / Wang Tao 01:05 – 01:15

YFAI Europe Strategic Outlook Joseph Lee 01:15 – 01:30

Innovation at YFAI / Presentation of XIM ´17 Han Hendriks 01:30 – 01:45

Industry 4.0 Michael Schachler 01:45 – 02:00

Cooperation Customer and Supplier Ulrich Dahmen (BMW) 02:00 – 02:30

BREAK 02:30 – 02:50

2016 Award Recipient Recognition Various 02:50 – 04:00

Driving Sustainable Value in Indirect Procurement Eva Kalhotkova (DSSI) 04:00 – 04:05

2017 Supplier Performance Expectations Gunnar Büchter 04:05 – 04:20

BREAK 04:20 - 04:40

Supplier Development Kevin Oprea 04:40 - 04:50

Materials Best Business Practice Dan Middleton 04:50 - 05:05

Risk Management Scott Postma 05:05 - 05:15

Compliance Dr. Christoph Bremkamp 05:15 - 05:25

Concluding Remarks / Q & A James Bos / Wang Tao 05:25 – 05:45

Opening Remarks

James Bos/ Wang Tao

• James Bos

• Vice President Procurement

• Wang Tao

• Vice President Procurement

Industry Leading Shareholders

Source: Company Information. Data as of November 1, 2016.

Note: 1. By 2015 revenue. 2. On July 2, 2015, Adient completed its global automotive interiors joint venture with Yangfeng Automotive Trim Systems and deconsolidated the contributed interiors business since that date. 3. Segment income is defined as income before

income taxes and non-controlling interests excluding net financing charges, restructuring and impairment costs in accordance with U.S. GAAP, and net mark-to-market adjustments on pension and postretirement plans. 4. SAIC motor has a public float of 15.6% and

HASCO has a public float of 39.5%.

Largest OEM in China

LargestAuto-parts Supplier in China

#16 Largest Globally1

Market Cap

Financial Profile of Shareholders

(HASCO)

US$38.6bn

US$15.6bn

US$13.2bn US$47.6bn

Enterprise Value

Sales Volume 2015

4.9mm units

Revenue in 2015

US$105.8bn

Net Income in 2015

US$4.7bn

US$7.7bn

US$1.5bn

US$4.0bn US$6.3bn

US$5.5bn

US$3.6bn

US$610mm US$4.4bn

Revenue 2015

US$14.5bn

EBITDA in 2015

US$1.0bn

Net Income in 2015

US$0.8bn

LTM Revenue

US18.1bn2

LTM EBITDA

US$1.5bn3

LTM Segment Income

US$1.2bn3

Enterprise Value

Listed on Shanghai Stock Exchange4

Listed on New York Stock Exchange

70% 30%

(HASCO)

Largest Seating Company

Globally

#27 Top Automotive Supplier

113+ Global Locations

Americas

28 Locations

around 12,000+ Employees

Europe & South Africa

15 Locations

Asia Pacific

70 Locations

18Countries

33,000Global employees

1Seamless global network

Global HQ

Regional HQ

Tech Center/Innovation center

Plant/office

Business CenterUp to Dec. 2016

Footprint of the facilities highly matched with customers

<<<<<<<<<

Yanfeng Automotive Interiors2017 Priorities

Execution Excellence

Internal Restructure

Deliver on Program Launch

and Production Requirements

Innovation

Meet the Demands of the Accelerated Pace

of Interior Design Changes

Differentiation in Product and Process

Sustainable Growth / Continuous Improvement

Lean Methodology / Total Business Approach

Yanfeng Automotive InteriorsDevelopments over the Past Year - Procurement

Completion of Procurement Level 2 Procedures Globally

Completion of one Global Supplier Standards Manual, Supplier

Assessment Survey, Supplier Award Process

Strengthened Global Sourcing Board ( weekly )

Established Global Risk Management Process

Decision to integrate Supply On as Global Procurement Solution

Achievements in Supplier Performance – SPPM results better than

targets in each Region

Business Integration of Fountain Inn, BJC, and Malaysia Operations

Continued progression of Materials Best Business Practice

Global Structure with Regional Execution

YFAI Global Procurement Framework

Objectives

Product Business Support

Commodity and Cost

Understanding

Support

Infrastructure an

Business Model

Objectives

Settin

rmance M

MBBP /Cost Modeling

Supplierrelations/ mgmt

Commodity strategy

People development, training, resource planning and capability requirements

Negotiating + managingproposals / contracts

Launch support

Under-standing Business Strategy + Planning mgmt(Innovation)

Transactional Processes & Systems Support

Strategic IT( Buyer Efficiency )

People Development

Organization and Decision Rights

Supplier DevelopmentGlobal supply

base strategy

Supplier development

(Pre-award to launch)

Operationssupport

Global Procurement Framework

“Optimal Procured Value, Most Globally Capable Suppliers”Mission

Global Procurement Framework continues as Global Structure

Congratulations to the 2016 Supplier Award Recipients

Yanfeng Europe Strategic OutlookJoseph Lee

• Li Liangjun (Joseph Lee)

• Deputy General Manager

Yanfeng Automotive Interiors

Europe

Market Environment in Europe

Product Environment

YFAI Environment

Growth

EU Business Awards

EU Footprint expansion

Agenda

EU Annual Production Volume2006-2021 (M units)

Russia is not included in EU market

Market EnvironmentProduction Volumes EU

2017 is hopeful to witness a

20M of production volume,

close to that volume summit

at 2007.Europe is recovering from a

double dip recession

showing strong growth last

year and forecast continued

positive growth.

Market EnvironmentProduction Volumes

The amount of new models is increasing:

• Daimler just announced to make 8 cars on the new MFA platform

On top, they talk about a certain amount of new electric cars

• VW announced to launch 25 e-cars until 2025 at a volume of 1m units

• BMW started with the i-brand years ago already to launch the first e-cars

with the models i3 and i7. They will grow this segment significantly in the

next few years.

• Opel launches three Insignia versions i.o. one

Increased amount of models will drive

a) Smart manufacturing environment in order to ensure competitive

manufacturing of complex, lower volume versions

b) New solutions for packaging in order to avoid investments

Product Environment

Change of the car interior

All OEM‘s announced or are in process of finalizing plans for electric cars.

The electrification of cars drives weight and cost.

• OEM‘s start again looking for weight saving

• Cost of batteries drive down OEM margins and drive up cost per car OEM‘s

try to mitigate impact on purchased components

• Autonomous driving will be a major changer to the automotive interiors

The market requires an increased focus

on innovations. YFAI supports these

innovations: the latest study XiM17

shows 22 innovations ready to sell and

further items wich are under

development

YFAI Environment

Growth

We continue to execute

YFAI‘s growth strategy:

After meeting plan of

8.5 billion $US revenue

in 2016, the plan for

2017 is 10 billion $US.

In EU, many customers

are requesting

additional production

capacity for carlines in

production as well as

for carlines to be

launched soon.

Revenue [billion $US]

2016 20172016 2017

Lüneburg

Namestovo

Bratislava

PápaNeustadt

MelfiRocca

Cicerale

Trencin

Expansion

Namestovo, SK

Expansion

Papa, HU

Expansion

Zatec, CZ

New Plant South

Bohemia, CZ

YFAI is expanding

our footprint to better

serve our customers

Expanding business

with BMW, Porsche,

Mercedes, Maserati,

and Volkswagen

Major area of focus for our footprint expansion

Zatec Hall IV expansion

Source: EU Operations Team

Hall 4 construction is completed

21 Source: EU Operations Team

Status

• Facade and roof construction finished

• Floor construction on going

• Office building construction finished

• Installation of technologies running

Plana nad Luznici – new site setup

Shopfloor area 1st skin production

Injection moulding areaGas pressure reduction station

Papa plant expansion

Status:

• Hall construction is finished

• New Silo´s installed

• All IM machines installed

YFAI Environment

Main events

Just launched: BMW 5-series

Next launches: Cayenne, Touareg

Besides the above, customers are asking for volume increases on Porsche

Cayenne, Daimler GLC, Maserati Levante, VW Tiguan

Our plant extensions of Žatec, Czech Republik, and Papa are close to being

completed

New YFAI plant setup in progress in Planá nad Lužnicí, Czech Republik and

in Rosslyn, South Africa.

Industry 4.0Dr. Michael Schachler

• Dr. Michael Schachler

• Executive Director Industry 4.0

Industry 4.0- Initiative at YFAI “Smart Factory”

Supplier Expectations Day

Düsseldorf, February 22nd, 2017

We have passed a technological tipping point

Industry 4.0 is the vision for the industrial production of the future – It is enabled by 8 technology drivers

Big Data and Analytics

• Comprehensive evaluation of available data (e.g.,

from ERP, SCM, MES, CRM, and machine data)

• Real-time decision- making, support and

optimization

Advanced Robots

• Autonomous, cooperating industrial robots

• Numerous integrated sensors

• Standardized interfaces

Additive Manufacturing,

e.g., 3D

• 3D printing particularly for

spare parts and prototypes

• Decentralized 3D facilities to

reduce transport distances

and inventory

Augmented Reality

• Augmenting reality for

maintenance, logistics and

all kinds of SOPs

• Additional information

displayed, e.g. in glasses

Cloud and Cyber-security

• Manage huge data volumes in

open systems

• High level of networking

between intelligent machines,

products, and systems leads to

particularly high security

requirements

Industrial Internet

• Network of machines, and

products

• Multidirectional communication

between networked objects

Horizontal/Vertical Integration

• Cross-company data integration

based on data transfer standards

• Pre-condition for fully automated value

chains (from supplier to customer, from

mgmt. to shop floor)

Simulation

• Simulation and optimization of

value networks based on real-time

data from intelligent systems

The eight

Technology

Drivers of

Industry 4.0

Source: The Boston Consulting Group

Several trends influence YFAI’s priorities in Industry 4.0E

5 Megatrends

Driving

Smart Factory

Lower Barrier to Entry

leading to new OEMs

More, less qualified

“drivers”

Smaller transports

Differentiated type of

vehicles, e.g. Segways,

Interior more important

Utilization per vehicle will go

up, total demand down

Market Regulation

Advanced

Manufacturing

Protectionism makes

crossing borders

increasingly difficult

(Global Trade Alert, 2016)

Shortage in skilled labor

around the world:

Brazil (Wharton 2012)

China (WSJ 2016)

India (Reuters 2015)

US (CNBC 2015)

Vastly greater

manufacturing

complexity, smaller

lot sizes

Source: YFAI, various

What is Industry 4.0 (I4) „Smart Factory“

Industry 4.0 describes the fourth industrial revolution

the mechanization based on steam power,

the mass production through electric power and

the invention of the assembly line

the process automation using electronics and IT.

The goal of Industry 4.0 at YFAI is the “Smart Factory” that is characterized by flexibility,

resource efficiency and ergonomics as well as by the horizontal and vertical integration

of internal and external business partners in automated physical and business

processes and value chains based on current and automatically generated data

Individual customer demands (internal and external) i.e. short term flexibility, the use of

more generally useable equipment (long-term flexibility) the use of large amounts of

data and environmental considerations are important parts of this concept.

Other topics which are typically subsumed under „Industry 4.0“,

like 3D-Printing will be monitored but not pursued actively here.

The Smart Factory-Initiative strives for 5 Improvements

“Smart Factories for Smart Interiors” with

I. Improved Manual Labor (Automation)

II. Reduce Single Use Equipment (Design for Manufacturability, Modular

Design)

III. Eliminate Incidents (Robustness)

IV. Reduced Scrap, no Defects (Design and Process Integration)

V. No more Delays (Holistic Program Management and Supply Chain

Integration)

Energy Management

Mechanization

Automation

Quality

Maintenance

Visualization

MESHorizontal Integration

Vertical Integration

Governance

Compliance

To ensure focus and progress YFAI takes a strategic view on Smart Factory, launching an initiative

YFAI established a Global Operations Team, including a Smart Factory Initiative

Clear guidelines are developed to provide guidance and ensure effectiveness

Increase automatic Datafication, Automation, Flexibility

Allow for across plant comparison/benchmarking of station/sub-process/process

Increase collection of knowledge and communication

“Industry 4.0 is process automation using electronics and IT to achieve the Smart Factory”

Plant 1 Plant 2 Plant 3

WIKI/Knowledge Base

Discussion Forum/Ops Community/Chat

Data Warehouse/MES Backbone

A 3 tiered Set Up will Ensure Peak Performance is Achieved throughout the Organization

Visionary and world leading

showcase to establish us firmly as

leading thought partner for our

customers.

Partner with customers, suppliers

and universities

Guidelines and Standards to

wider organization for driving

Smart Factory around the globe

Targeted pilot projects and

build out of lighthouse plants

in every continent

Achieve world class values in

Safety

Maintenance

„SF20“

YFI Manufacturing System

Maturity Models

I. Improved Manual Labor

II. Reduce Single Use Equipment

III. Eliminate Incidents

IV. Reduced Scrap, no Defects

V. No more Delays

Award Ceremony

Yanfeng Automotive Interiors Supplier

Expectations Day

Feb 22nd, 2017

Supplier ExcellenceService

Supplier Excellence - Service

• Verena Weigand

• Senior Manager Procurement

Business Unit &

• Financial Risk Management

Supplier Excellence - ServiceCIE Plasfil

Performance Awards: BronzeCoatex NV

Congratulations!

• Houda Mounib

• Manager Procurement

Commodity Specialist

Supplier Excellence - ServiceHalung GmbH & Co. KG

Congratulations!

• Stanislava Slezacek

Supplier Excellence - ServiceSurtechno n.v.

Congratulations!

• Lucia Hrusovska

• Buyer Indirect Procurement

Supplier Excellence - ServiceDSSI International, LLC

Congratulations!

Supplier ExcellenceQuality

• Simon Pella

• Supplier Development

Supplier Excellence – QualitySFS intec GmbH

Congratulations!

Supplier ExcellenceCustomer Satisfaction

• Michael Wolf

Supplier Excellence – Customer SatisfactionMürdter Werkzeug- und Formenbau GmbH

Congratulations!

Supplier ExcellenceInnovation

• Dr.-Ing. Oliver Becker

• Executive Director Process

Innovation

• Advanced Product Development

& Sales

Supplier Excellence – InnovationBeaulieu Fibres International

Congratulations!

Distinguished Supplier

• Raja Ott

Distinguished SupplierTotal Research & Technology Feluy

Congratulations!

• Sergey Kolmagorov

Distinguished SupplierLübke & Vogt GmbH & Co. KG

Congratulations!

• Christian Theile

• Senior Buyer Business Unit

Distinguished SupplierDr. Schneider Kunststoffwerke GmbH

Congratulations!

• Fabian Joost

• Buyer Business Unit

Distinguished SupplierIzoblok S.A.

Congratulations!

• Niclas Schumann

Distinguished SupplierTR Fastenings Ltd.

Congratulations!

Supplier of the Year

Supplier of the year

• Lenka Fuskova

Supplier of the yearAlgontec S.L.

Congratulations!

• Alexander Herzog

Supplier of the yearHOEKO Automotive s.r.o.

Handling with Poka

Cooling and

compressors

5S work desks

Piovan drying equipment Tooling & visualization

Clear standardsAutomatization of 100%

assembling componentsUp to 1.000 ton machines

Flocking Process

Congratulations!

• Claudia Rauhe

• Senior Manager Procurement

Commodity

Supplier of the yearBASF Polyurethanes GmbH

Congratulations!

Driving Sustainable Value in Indirect ProcurementEva Kalhotkova - DSSI

Driving Sustainable Value in Indirect Procurement

The Big Idea

DSSI Background

• DSSI currently sources,

manages and or processes

MRO spend in excess of $500

million.

• DSSI’s beginnings go back to

the early 1990’s

• DSSI supports client

locations throughout the US,

Mexico, Canada and Europe.

Spend Aggregation and Supplier Negotiation in Indirect Materials

MRO BUSINESS

BASICS

INFORMATION

TECHNOLOGY

CHEMICALS SUPPORT

SERVICES

Achieve Big Savings Quickly in Specific Categories with DSSI’s

Sharp Sourcing Bids

Item master sourced content database and

catalog for managing the buy

Item level detailed sourcing contract

management

Best price, from best source, every time you buy the item for every user at every site

Manufacturer Name and Part Number for each item

Defined service level expectations for each site and performance measures

to support these requirements

DSSI Cleans Up the Cloudy and Complex Picture

Sharp Sourcing 2017 Bid Schedule

Safety

Gloves

Ear Protection

Sleeves

Glasses

Hammers

Pliers

Screwdrivers

Drills

Electric

Sensors

Cables & Wires

Connectors

Switches

Janitorial

Tissues

Hand cream

Deliverables

Access to new

contract pricing that

is an average of 10-

15% lower than your

current pricing

Vital benchmarking data on

your current pricing versus

similar companies and

DSSI’s aggregated price

Increase Supply

Base Visibility and

Management

Contact Eva Kalhotkova

ekalhotkova@directsourcing.com

Thank you!

2017 Supplier Performance ExpectationsGunnar Büchter

• Gunnar Büchter

• Director Procurement

Europe & South Africa

What are our expectations in 2017?

• Quality

• Commercial

• New Business Launch

• Supply Chain

• Tooling and Capex

• Risk Management

• IT - Changes

What are our expectations on Quality in 2017?

• Achieve 0 PPM and 0 incidents. Ensure YOY improvement in PPM and incidents

• No Management Quality Reviews, no customer disruptions, no product safety

issues (PPSC’s)

• Meet the new IATF 16949 Standard

• Achieve ISO 14001 certification. Minimum expectation is to meet all safety and

environmental requirements of the local government

• Be responsive and collaborative. Onsite service for your plant customers

• Drive continuous improvement within your products and process

• Ensure compliance to the YFAI Global Supplier Standards Manual

Supplier

Maintenance / Process Team

Plant Logistics

Plant Finance Team

Plant Management

Responsiveness and Collaboration: Involve your final customer early enough

Clear relationship´s with the receiving

plants, avoid any misunderstandings,

escalation´s and other issues. Assure

earliest engagement. Specifically in

regard to new plants or new launches.

Accelerate your time to respond,

especially in case of emergency and

define a recovery process for

escalations especially during the

weekend´s.

Develop support strategies for eastern

European plant environments, they

need more speed and enhancement.

• Full commitment to YFAI’s MBBP preferred partnership strategy

• Full commitment to strong Continuous Improvement approach and partnership

with YFAI to achieve MBBP/PACT cost targets

• 100% on time Quote responsiveness to required due dates

• 100% on time SSOW responsiveness to required due dates

• Provide accurate, detailed quotes incl. pricing per piece and detailed tooling

cost breakdowns

• Provide Best Cost position for Pursuit and Awarded business upfront

What are our 2017 Commercial expectations?

• Timely completion of APQP

• Demonstrated Process Sign Off (PSO) and Run at Rate (R@R)

• PPAP on time, PPAP first time through

What’s our expectation on Launches in 2017?

Launch:Perform Run@Rate at the right time with volume

Run@Rate with low volume does not

help to detect failure influences. We

need to test the whole system !

Run@Rate documentation needs to

include real scrap rate and downtime.

Shifts need to be fully trained on time!

Measurement capacity and gauge

availablility is a must for Run@Rates.

Direct feedback about IO Parts needed.

• ASN/EDI capable

• Proactive notification for delivery/capacity constraints

• Premium expectation for delivery misses

• The correct paperwork, Customs declaration and Label standards

• Adherence to packaging U-Spec requirements and logistical routings

What’s our expectation on Supply Chain in 2017?

Supply Chain: Anticipate ramp up scenario´s in launches

Anticipate higher premium content within

ramp up of programs (leather, chrome, etc.)

Alignment with local customers (plants) is

required and needs to be updated on-time,

offer feedback if call-offs do not make sense.

Overseas pipeline (if you produce overseas)

replenishment needs to be highlighted to the

plant logistics team (6 weeks)

Customer call-offs will change, make sure you

are ready and have enough stock in place!

• Review Technical Specifications and product designs for critical data and accuracy

• *Best Cost* (up front)

• Timely turn around of quotations (2-8 working days depending on complexity)

• Provide accurate detailed quotes in the requested format.

• Provide detailed timelines that match the quoted lead-times

• Real time communication of potential delays

• Support engineering changes (48 hour quote turnaround)

• Escalate and document any issues / push back when critical

• Strong technical support at machine commissioning events (on schedule)

• Local technical support is mandatory for complex equipment and tooling.

What are our Tooling & Capex expectations for 2017?

Early Involvement in Development Process: Product and Process Supplier Involvement in SDT

During Acquisition and the

Product Definition Phase,

specific suppliers are invited to

join SDT´s to provide the input

for the Product / Process

Alignment to identify the best

total cost per application

Cost Targets to be discussed at

each project kickoff. Open Book

Policy to be agreed. MBBP

suppliers should be preferred to

join the teams.

Edge Wrapping Process

Cutting

Leather

Texile

Backing

Substrate

Supplier Expectations DayIT Landscape changes

• Introduction of a new ERP Sytem for the areas of Production, Finance and

Procurement

• EU Pilot Plants 2017

• Production Plants Neustadt and Namestovo

• Shared Service Center Bratislava

• Engineering Center Trencin

• Rollout to all EU plants until July 1st 2018

• Suppliers will be effected by new Supplier numbers, PO and SA numbers

• EDI connections will need to be updated

Supplier Expectations DayIT Landscape changes

• YFAI will introduce SupplyOn as Sourcing Collaboration Platform globally

• About SupplyOn

• Leading Supplier Collaboration Platform that is connecting buyers and suppliers on

one platform

• Focused on Automotive, Aerospace and Rail

• 40 Buy side Customers including Airbus, Bosch, Continental, Siemens, ZF

• 40.000 suppliers connected

• What is expected from YFAI Suppliers?

• Register on SupplyOn – book connect “Sourcing Manager” with YFAI

• Appoint company administrator and users

• Receive eRFQ´s and submit quotes to YFAI via SupplyOn Sourcing Manager

• YFAI will start using SupplyOn to source Direct Material and select Indirect

Materials with Pilot Projects as of July 2017.

• SupplyOn will support YFAI and strategic suppliers with onboarding & training

2016 Supplier Awards / 2017 Expectations Day Agenda

Welcome & Logistics Ioanna Orkopoulou 01:00 – 01:05

Opening Remarks James Bos / Wang Tao 01:05 – 01:15

YFAI Europe Strategic Outlook Joseph Lee 01:15 – 01:30

Innovation at YFAI / Presentation of XIM ´17 Han Hendriks 01:30 – 01:45

Industry 4.0 Michael Schachler 01:45 – 02:00

Cooperation Customer and Supplier Ulrich Dahmen (BMW) 02:00 – 02:30

BREAK 02:30 – 02:50

2016 Award Recipient Recognition Various 02:50 – 04:00

Driving Sustainable Value in Indirect Procurement Eva Kalhotkova (DSSI) 04:00 – 04:05

2017 Supplier Performance Expectations Gunnar Büchter 04:05 – 04:20

BREAK 04:20 - 04:40

Supplier Development Kevin Oprea 04:40 - 04:50

Materials Best Business Practice Dan Middleton 04:50 - 05:05

Risk Management Scott Postma 05:05 - 05:15

Compliance Dr. Christoph Bremkamp 05:15 - 05:25

Concluding Remarks / Q & A James Bos / Wang Tao 05:25 – 05:45

Flawless ExecutionSupplier Development/ Supplier QualityKevin Oprea

• Kevin Oprea

• Supplier Development

Agenda

2016 Overview

YFAI Global Supplier Standard Manual

Flawless Execution / Key Points

2017 Expectations

What did we observe?

19 SPPM for Controlled suppliers (down from FY15)

6 Management Quality Reviews (down from FY15)

0 MQR3 level and NBH (same as FY15)

0 PPSC’s (same as FY15)

YF SD Performed 137 supplier on site audits / visit

14 Rating Improvements (R>Y>G) of SAS audits,

focusing on strategic suppliers

2016 OverviewThings gone right – FY 2016

What did we observe?

Directed suppliers PPM went up 50% (number of

rejects are 20% bigger than controlled suppliers

for shipping quantities 5 times smaller)

Feasibility Commitment not properly used

Timing not always respected

(especially tool tracking)

Continue to see lack of resources especially in

Program Management and EE childs

Onsite support in YF plants is still lacking

Run at Rates and OEE not properly prepared

Too many surprises as the notification process

for changes was not followed

2016 OverviewOpportunities for improvement

NEW Global Supplier

Standards Manual released

January 3, 2017

Global Supplier Standards ManualNew Release

Highlights

One manual one file > prior version was

broken in 4 different files

Expanded APQP section which provides

clear expectations that ensure flawless

execution and perfect PPAP’s

Expanded expectations of sub-supplier

management

Comprehensive expectations for managing

day to day quality and interactions with

YFAI plants

New YFAI supplier award types and criteria

outlined

Valid for all regions

Where can I find it?

Announcement and file are posted to

www.yfai.com in the Suppliers section

All new website coming in 2nd Quarter

What can be done better to ensure flawless execution?

Feasibility form added to SSOW, use it and be vocal !

Understand & Respect the customer requirements

Participate early with SDT and be onsite for slow builds

MANDATORY Launch Containment plans; successful Run@Rates and

OEE’s. Protect us !

We expect PPAP perfection (timing and content).

Has your team ever been trained (AIAG/VDA/Formel Q) and is aware

of customer specific requirements ?

Manage your sub-suppliers; incoming inspection, audits, continuous

improvement.

Service your plant customers; ensure up to date contact information,

escalation matrix, go and see!

Supplier Change Request: Remember 3 things; FORM, TIME, QUALITY

MANAGER

Flawless ExecutionKey points

What We Need from You FY17

Drive towards 0 PPM

No Management Quality Reviews (MQR)

100% on-time deliveries

Help our plants succeed ! Onsite support to see the issue first hand and

ensure you understand critical needs

Real root cause or fake news? Show me the data !

Supplier Change Request Process: FORM, TIME, QUALITY MANAGER

Proactive APQP to achieve on time PPAP perfection

Focus on prevention as opposed to reaction, early involvement

Containment / Boundaries / Appearance parts

Ensure alignment to new IATF 16949 standard

2017 Expectations

Supplier RiskManagementScott Postma

• Scott Postma

• Commodity Resin &

• Financial Risk Management

Risk Management Team Structure

Global/NA Director

Scott Postma

Holland, MI

EU Risk Manager

Verena Weigand

Munich, Germany

Sr. Risk Analyst

Sona Bojnanska

Bratislava, Slovakia

Risk Analyst

Lenka Buriankova

Bratislava, Slovakia

AP Risk Manager

Pan Yuru

Shanghai, China

Global Market – December 2016

EU Automotive Market Conditions

14.3 14.213.4 13.1

12.1 11.912.5

13.714.6

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

EU Country Vehicle Registrations

+23% since 2013

Key Market Factors Western EU countries provided strong start to 2017, expect to moderate

Economic growth of 1.5% YoY

Aging fleet – 10 years vs 8.5 years last decade

Expect flat to +1-3% growth for 2017

Political uncertainties could impact consumer confidence

Risk Management Scope

Preventive Intensive Care Special Projects

Watch List Work-Out List Projects

Financial Ratings Strategy Targeted Initiatives

Commodity Strategy Project Management

Rating Tool - 3PI by KPMG

17 Ratio’s clustered in 4 categories

Profitability (Cash flow, Operating Profit)

Efficiency (DPO, DIO, DSO, etc.)

Liquidity (Cash-to-cash cycles, etc.)

Leverage (Debt levels, etc.)

3PI is

Globally standardized (web based)

Accepted in the industry

Transparent to both parties

Easy, current, confidential, free

Risk Assessment Process

Current Scope: Direct Material and Tooling/Capex Suppliers to NA/EU regions

Indirect/Logistics at discretion of team

Implementing in AP region in 2017. Focus on Direct Material suppliers.

Evaluate each legal entity or require parental commitment

Suppliers submit minimum 2x per year

Confirm submitted templates with independently reviewed statements

Condition of controlled/directed supplier sourcing

Supplier information confidential to RM team. R/Y/G rating provided to buyers

Yanfeng Global ComplianceDr. Christoph Bremkamp

• Dr. Christoph Bremkamp

• Director Legal Europe

Sustainable Growth

Sustainable growth is a key element of our company values. A keen sense of

entrepreneurial responsibility that’s intensely focused on sustainability is a key

pillar of our company strategy. Profitable long-term growth is our aim, and

responsible value creation is paving the way for our success.

Our Code of Conduct lays the foundation in dealing with customers, suppliers,

employees, competitors and the public with integrity and in an ethical and

appropriate manner.

Health and Safety

Environmental

Social Responsibility

Risk Management

Conflict Minerals

Ethics

Integrity & Compliance

Zero tolerance for non-compliant behavior

We conduct our business responsibly in compliance with all of the laws and

regulations in the countries where we do business. The company does not

tolerate illegal and unethical behavior.

We have one Code of Conduct globally. We expect ALL of our employees,

partners and agents to behave ethically and obey the local laws and regulations

where we do business.

The Guiding Principles contained in the Code of Conduct form the basis of our

relationships with our employees, business partners, customers and competitors.

Guiding Principals

1. We obey the laws and regulations of all countries where

we conduct business and comply with our company’s

policies and procedures.

2. We do not tolerate corruption in our businesses.

3. We ensure our records are accurate, complete and

appropriately maintained and our internal controls

sound.

4. We do not use illegal or unethical means to gain an

advantage over a competitor.

5. We comply with international trade laws.

6. We protect the privacy of individuals

7. We act in the Company’s best interests at all times.

8. We safeguard the health and safety of our employees.

9. We use company assets responsibly and honorably.

10. We protect the Company’s confidential information

and respect that of our customers and competitors.

11. We are committed to providing safe and high-

quality products and services.

12. We value diversity and equal treatment in our

workplace.

Guiding Principals

1. We obey the laws and regulations of all

countries where we conduct business and

comply with our company’s policies and

procedures.

2. We do not tolerate corruption in our

businesses.

3. We ensure our records are accurate,

complete and appropriately maintained and

our internal controls sound.

4. We do not use illegal or unethical

means to gain an advantage over a

competitor.

5. We comply with international trade laws.

6. We protect the privacy of individuals

Guiding Principals

7. We act in the Company’s best interests

at all times.

8. We safeguard the health and safety of our

employees.

9. We use company assets responsibly and

honorably.

10.We protect the Company’s confidential

information and respect that of our

customers and competitors.

11.We are committed to providing safe and

high-quality products and services.

12.We value diversity and equal treatment in

our workplace.

Partnership

Common Goals

Mutual Trust

Risk Sharing

Long-term Cooperation

Just as YFAI may be liable for

misconduct of our business partners your

company may be liable for the

misconduct of your supply base!

Integrity Help Line

The YFAI Integrity Help Line is an avenue for employees or

third parties to report any Code of Conduct violation or to

report any unethical behavior of a YFAI employee.

The Helpline is available either via phone or web in all local

languages.

A dedicated team looks into these issues / reports and

deals with them based on the merits of the case.

The reporter has the option to remain anonymous if he /

she so chooses.

The Helpline complies with all EU data privacy rules.

Access to the Help Line: www.yfai.ethicspoint.com

By phone:

400-820-1938

000-117

Dial 855-831-3125

0066-33-830645/

00531-11-0414/

0034-800-600286

1-855-831-3125

001-844-291-1779

0-800-225-5288

Dial 855-831-3125

800-144-254

0-800-000-101

Dial 855-831-3125

800-787814

900-99-0011

Dial 855-831-3125

0800-980-905

06800-21139

Integrity Help Line

The YFAI Integrity Help Line is an avenue

for employees or third parties to report any

Code of Conduct violation or to report any

unethical behavior of a YFAI employee.

The Helpline is available either via phone

or web in all local languages.

A dedicated team looks into these issues /

reports and deals with them based on the

merits of the case.

The reporter has the option to remain

anonymous if he / she so chooses.

The Helpline complies with all EU data

privacy rules.

Integrity Help Line

Access to the Help Line: www.yfai.ethicspoint.com

By phone:

400-820-1938

000-117 Dial 855-831-3125

0066-33-830645/ 00531-11-0414/ 0034-800-600286

1-855-831-3125

001-844-291-1779

0-800-225-5288 Dial 855-831-3125

800-144-254

0-800-000-101 Dial 855-831-3125

800-787814

900-99-0011 Dial 855-831-3125

0800-980-905

06800-21139

ThinkRecognize the warning signs

Escalate your concerns.

Ask about questionable actions

Question ActEscalate your concerns

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