Optimizationof Delivery

Performance

Dear supplier!

We can only optimize the value added chain with yourcooperation. A trustworthy relationship, early involvementand strong business ties are the common goals.We see the optimization of the delivery performance as oneevidence of a better communication!

In this guideline we inform you about the project “Optimization of Delivery Performance”. You will realize how important your contribution is, what role you play and what we intend to contribute.

The result of our cooperation will be not only the optimization of the cost structure along the supply chain but also a stronger, trustworthy and cooperativerelationship. With your cooperation we will optimize the procurement process to everyone’s benefit.

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For the ZF Group and our suppliers an intensification ofrelationships with the aim of permanent improvements andagreement of measurable goals for mutual benefits is aprerequisite for joint business success.

Our goal is to have the best suppliers as partners. In orderto achieve and experience this together, measuring thedelivery performance also brings you advantages as a supplier, transparency of the logistics service, recognition

of customer satisfaction and possibility of benchmarkingwith other companies.

The emphasis of this measurement is on the developmentof delivery performance and thus the supplier development.Our aim is to achieve at least 90 % delivery performanceand to keep the optimized delivery factor at this level.Direct communication in potential problem areas of supplyis an essential prerequisite.

Measurement of delivery performance is based on ISO / TS 16949.

Measuring Delivery Performance

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Supplier Development

A catalog of action which should include regular suppliermeetings, process analyses and examinations of potentialfor improvement will be compiled in cooperation with the suppliers where we have identified a need for action. The necessary measures for permanent avoidance and elimination of weak points will be defined and agreed.Goals and their monitoring will be agreed. However, weexpect you to have a natural interest in self-development.We will place the evaluations of the delivery performanceat your disposal for support. A development of your com-pany will be documented by the “delivery performancequota”.

The Measurement Method

ZF Friedrichshafen AG measures delivery performance as follows:

The evaluation tool is adapted to the operative conditionsby the following parameters:

Control of require-ments and con-sumption

Kanban

JIT/JIS

VMI

Control of require-ments and con-sumption – withconsignment

Schedule effectiveness (%) =(Sum of individual evaluations per incoming article / total number of evaluated in coming articles)

with each article being rated 0% or 100%. If time and quantitytolerances are observed, an incoming article is rated 100%.

Quantity tolerance Schedule tolerance

+/– 10% +/– 1 day

+/– 0% Agreed replacementtime (plant related) + 0 days

+/– 0% +/– 0 days

Evaluation within min / max limits

+/– 10% + coverage agreedupon / – 1 day

Monitoring of Delivery Date /

Quantity

Short notice changes in delivery calls on our part are

included in the evaluation but the system only goes back

to the past two delivery calls to check whether the incom-

ing goods report matches one of the last two delivery calls

in date and quantity. If it does you get 100 % even if the

delivery call was changed again later.

Restriction:

The delivery calls may not be more than 20 days old.

The system only checks the last two delivery calls in the

past period of up to 20 days.

Note:

We understand scheduled dates as goods receipt dates.

Therefore, the supplier should plan the goods so that the

specified date can be kept as a goods receipt date.

Example

The evaluation you get looks like this:

ZF Friedrichshafen AGCorporate Headquarters88038 FriedrichshafenGermanyPhone +49 754177-0Fax +49 754177-908000www.zf.com

Optimization

of Delivery

Performance

Delivery performanceevaluation

Fax

ZF-Friedrichshafen AG

1/ 2

Plant:

Location:

Managing clerk:

Phone:

CommercialVehicle/Special Transmissions

Supplier:

Pages:

Werk 1505-FGCompany

Supplier name

Street

Zip City

Country

Number of Shipments:

Evaluation categories:

Period:

Schedule effectiveness:

on time:

too late:

days too late on average:

too early:

days too early on average:

0

2

2,5

0

0,0

1

01.06.2004 - 01.06.2004

0,0%

Driveline and Chassis Technology

ZF Lief.-brosch. EN 4_2008 21.04.2008 8:56 Uhr Seite 1

Note:

We understand scheduled dates as goods receipt dates.Therefore, the supplier should plan the goods so that thespecified date can be kept as a goods receipt date.

Example

The evaluation you get looks like this:

Delivery performanceevaluation

Fax

ZF-Friedrichshafen AG

1/ 2

Plant:

Location:

Managing clerk:

Phone:

CommercialVehicle/Special Transmissions

Supplier:

Pages:

Werk 1505-FGCompany

Supplier name

Street

Zip City

Country

Number of Shipments:

Evaluation categories:

Period:

Schedule effectiveness:

on time:

too late:

days too late on average:

too early:

days too early on average:

0

2

2,5

0

0,0

1

01.06.2004 - 01.06.2004

0,0%

ZF Friedrichshafen AGCorporate Headquarters88038 FriedrichshafenGermanyPhone +49 754177-0Fax +49 754177-908000www.zf.com

Driveline and Chassis Technology