Success Factors in Supplier and Warranty Management

1. VDA QMC Regionalkonferenz Supplier and Warranty Management as a success factor

2. - Success needs a lot of fathers - Supplier and warranty management Wolfgang Alram AK-Lead: Wolfgang Münch, Dr.-Ing. Bernhard Fuchsbauer

3. Content • Initial situation • Challenges • Functions and areas of activity • Forecast and summary

4. Initial situation and core issue Globalization Complexity Processes International projectstructure Percentage ofelectonic Mani- Facturing costs Synchrone product developmentprocesses Dependance OEM - supplier • Suppliernetwork • Productioncapacity at suppliers Networking Current performance Integration of Tier 2 … n costs 2016

5. Growing Complexity of the Automotive Business Challenge Segments (vehicle class) 90ies 80ies today 80ies today Volumes of the vehicles Derivates

6. Audi model development Numberofmodels

7. Cost situation Warranty Accruals per Vehicle, 2002-2014 (in US$ per vehicle per year) Newsletter O9.07.2015

8. Change of the proportion of added value Supply proportion Source: Statista 2015

9. Inhaltübersicht • Initial situation • Challenges • Functions and areas of activity • Forecast and summary

10. The main areas of risks • Managing the global supply network • Vehicles are becoming increasingly complex • Platform and common-part strategy • Shortening of the development period • caused of a multi project landscape

11. Global supply network • How do I organise the global project work for new products? • Which strategy is needed to ensure the trouble-free security of supply of parts around the world? • How can I speed up the fault elimination process for supply chains that operate world-wide?

12. Increasing complexity of vehicles … MB W113 MB W212 Production time frame: Production time frame: 1963 - 1971 from 12/2013 Gearing: Gearing: 2003 2013 1963 1983 4 gearsmanual (Series) 9 gearsautomatic

13. Increasing complexity in terms of electronics Source: MP-BusinessManagement

14. What lies ahead for the automotive industry? Projects:- New drive and emissions technology - Driver assistance even to the extent of autonomous driving - Connectivity - Shorter development times (time tomarket) Industry 4.0- New manufacturing technology and processes - New inspection processes and areas - New materials and assembly technology - New standards to be developed Market and field:- Higher client expectations - Greater sensitivity in terms of authorities - Faster fault identification and analysis - Faster and sustainable elimination of faults

15. Inhaltübersicht • Initial situation • Challenges • Functions and areas of activity • Forecast and summary

16. Core issue: Do we know all our responsibilities in terms of supply and warranty management and how effectively have we put these into practice? Organization Customer Supply Chain

17. Functions Series production Productdevelopment EOL Project team customer Strategy Purchasing/part management Tactic Quality assurance Supplier and warranty management Operation

18. Requirements national - international • Statutory provisions & • standards • International requirements • VDA volumes / AIAG / ISO/TS 16949 • National / international law • Legal requirements • Industry specific requirements • Customer specific requirements Supply chain Tier 1 • Formel Q, MBST; • MAN 239; ZF QR83... Tier 2 Administration of Quality Supervision, Inspection and Quarantine Tier n

19. Implementing specific requirements Customer Specific Requirements T&Cs ... etc. Company- specific terms andconditions for purchasing

20. Mastering Challenges • Managing risks • Reducing development period • Assuring manufacturing processes • Implementing requirements in the complete supply chain • Controlling changes • Understanding requirements • Customer • Legislator • Market • Supplier Lessons Learned • Recognizing root cause quickly • Eliminating problems sustainable • Understanding errors as a learning opportunity • Communicating error potentials

21. Areas of application in supply management Material group strategy Material group segmentation Definition of procurement goals Strategy Admission Classification Selection Development Evaluation As an expert in supplier management, the supplier quality engineer operates throughout the supply chain

22. The basics have been set out! Procurement Customer Deployment QA Persons involved Production Supplier Logistics SOP Phases observed Series Product creation • APQP • Maturity level assurance according to VDA • Audits • FMEA • Assess risks • Supplier management • Planning for EM / analysis of defective parts • PPF for VDA 2 • PPAP • Launch support • MSA/SPC • Audits • Evaluate suppliers • Qualify suppliers • Robust management procedures • Requalification • Subcontractors • 0km /field-related complaints • Audits Areas of activity

23. Areas of activity of supplier development Organization Customer

24. Supplier development – a key component • Supplier development is ……. • controlling of supplier relationships • by active planning of measures • measure monitoring • expansion of business relationship • With the objective of an optimized supplier portfolios Supplier development Supplier development Supplier development Supplier development Key technologies Market power supplier

25. Active supplier development 1 2 3 4 5 Preparation Implement measures Tracking measures & effectiveness test Quittance/ Lessonslearned Kickoff/target management • Performance kickoff date • Target system • Definition of measures incl. timeline • Implementation of measures • First verification • Effectiveness test • If necessary: revision/correction of the first measures • If necessary: initiation of an escalation process • Actual quantity taken • Forming development teams • Preparation kickoff date • Lessons learned

26. Inhaltübersicht • Initial situation • Challenges • Function and areas of activity • Forecast and summary

27. The Switzerland cheese model of error formation and error prevention Series production Product development Field Controlling of product and process risks SOP Transfer point RG7 Management cockpit Risk minimizing during product development

28. Overlaps of SQE/FQE and control loops Warrantymanagment Suppliermanagement

29. Key items of a warranty management system Warranty Manual General guidelines Warranty Organization Organization chart warranty Training records Roles and responsibilities Warranty procedures: Standard tests and tests under load; NTF-project Warranty inspections instructions: Inspection instruction by part number to perform Standard tests and tests under load Warranty Infrastructure Warranty database, inspection instruction, remote locations (engineering, test under load) tools, caged warranty area

30. Summary SQE • The SQE operates as an expert throughout the supply chain • The SQE operates in the global environment • Areas of activity extend from production development to the time at which the production of spare parts end • Central contact partner internal / external

31. Training opportunities of VDA-QMC Processes and interfaces Mindset General principles Launch process Field failure analysis Field data management NTF (no trouble found) project Corrective action management Prevention and Lessons Learned

32. Thank you for your kind attention!