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1
Supplier Conference Call
AE Operations
• Introduction
• Changes for the suppliers
• Next steps
• More information & Johnson Controls contacts
AGENDA
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
• Introduction
• Changes for external suppliers
• Next steps
• More information & Johnson Controls contacts
AGENDA
6 Johnson Controls, Inc. - INTERNAL
4
Goods Receipt
Payment based on goods receipt
7 Johnson Controls, Inc. - INTERNAL
Tomorrow Benefits & Impacts Next Steps
• 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)
EDI Requirement
Suppliers will have to use EDI
8 Johnson Controls, Inc. - INTERNAL
Tomorrow Benefits & Impacts
• Electronic communication,
ERS payment processing
(Evaluated Receipt Settlement
= credit note process) speed
up the flow of information and
reduce manual activities.
Next Steps
• 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.
• 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
5
Introduction to our EDI partner - GXS
Johnson Controls9
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 go-live date.
Next Steps
• 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).
EDI Format
JCI will only support one global format EDIFACT
10 Johnson Controls, Inc. - INTERNAL
Tomorrow
• 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.
Benefits & Impacts
• One single way to
communicate to JCI using a
global standard.
You will find message guides and examples on the supplier portal.
6
Next Steps
• 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.
ASN content
One global standard for content and structure
11 Johnson Controls, Inc. - INTERNAL
Tomorrow
• 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)
Benefits & Impacts
• Standardized ASN structure
for JCI.
You will find message guides and examples on the supplier portal.
Pick Up Sheet
Include PUS Number on ASN
12 Johnson Controls, Inc. - INTERNAL
Next Steps
• 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.
Tomorrow
• 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.
Benefits & Impacts
• A single PUS format that is
electronic being sent from
every JCI plant.
You will find message guides and examples on the supplier portal.
7
Supplier Label Format
Johnson Controls, Inc. - INTERNAL13
Next Steps
• 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.
Tomorrow
• 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.
Benefits & Impacts
• Suppliers will need to do some
development to link the
internal system data into the
label segment.
You will find GTL specifications and guidelines on the supplier portal.
GTL-Label
Global Transport Label and EDIFACT DESADV D96A
Last 18 digits of Licence Plate = HU-
Number (1st 9 digits is the DUNS,
second 9 digists is a serial #)
HU-Number transferred
in GIR-Segment
EDI Implementation Guidelines: DESADV UN D96A
Version 2.0
8
Supplier Releases
Demand Due Dates
15 Johnson Controls, Inc. - INTERNAL
Next Steps
• 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.
Benefits & Impacts
• Consistent release types from
all JCI plants
Tomorrow
• 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.
Supplier Releases
Content Changes
16 Johnson Controls, Inc. - INTERNAL
Next Steps
• None
Benefits & Impacts
• Additional information to
improve transparency.
Tomorrow
• 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.
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 email 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
18
Tomorrow
� In the future the supplier will get an
email 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
Johnson Controls, Inc. - INTERNAL
Next Steps
• .
10
An example of the new Interactive PDF
19
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 e-mail notification.
� Send the form by clicking
the send button at the end
of the document.
� Possibility to attach
documents in the iPDF.
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
Johnson Controls, Inc. - INTERNAL
A transparent Issue Managing Cost process
20
Tomorrow Benefits & impact� Detailed cost calculation .
� The fee will automatically
settled by a debit note on the
supplier‘s invoice once a
month.
� 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.
On the next slide you will find an example of a Debit Note and its cost variables
Johnson Controls, Inc. - INTERNAL
Next Steps
11
An example of Debit Note and its cost variables
21
On the Debit Note you will find:
� Issue Id
� Issue Type
� Issue Status
� Total amount of the issue based on the cost
variables below
Johnson Controls, Inc. - INTERNAL
Electronic Management Quality Review (MQR) process
Tracking and automated MQR invitation
22 Johnson Controls, Inc. - INTERNAL
Tomorrow
• MQR invitation and escalation
letters will be generated from
SAP MQR issues.
• An automatic generated email
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.
Benefits & Impacts
• JCI will track MQRs per supplier for all plants on the new system.
• Once the issue is generated in the system the MQR invitation email will be sent.
• A more standardized process for both Johnson Controls and the supplier.
Next Steps
• Continue to respond to the MQR invitation.
12
An automatic generated email which contains the MQR
notification
23
NEW
Johnson Controls, Inc. - INTERNAL
The Quality Roadmap that has to be filled out before the MQR
meeting
24
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
PPM Monthly
ReductionOwner Open Date
Plan (original)
Comp. Date
Revised
Completion Date
Actual Completion
Date
Long Term:
Long Term:
PPM Contributer #2 Short Term:
PROBLEM STATEMENT: Enter the Problem Statement here. (What, Where, When and to what extent.)
DEFECT AND RPPM BY MONTH
Problem Statement (What, where, when, to
what extent)Root Cause Root Cause Verification
Short-term corrective action / Long-
term countermeasure (list as
deliverable)
Verification of Corrective Actions
PPM Contributer #1 Short Term:
0 00
100
200
300
400
500
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 YTD
FY12 Goal
PPM Reduction by Month Forecasted PPM Actual PPM
0% 0% 0% 0% 0% 0%0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
PPM Contributer #1 PPM Contributer #2 PPM Contributer #3 PPM Contributer #4 PPM Contributer #5 PPM Contributer #6
Pareto PPM % Contribution
NEW
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
Johnson Controls, Inc. - INTERNAL
13
Tomorrow
• 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
Management Quality Review Level 3 (MQR3)
Automated requests and action reminders
25 Johnson Controls, Inc. - INTERNAL
Benefits & Impacts
• Enhanced Purchasing visibility of supply issues.
• Automated monitoring to support timely resolution of supply issues for JCI and the supplier.
Discrepancy Material Report Processing
Automated DMR Process could increase email notifications
26 Johnson Controls, Inc. - INTERNAL
Tomorrow
• 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 email notifications for the suppliers.
Benefits & Impacts
• Focus on DMR issues and reduce repeating issues.
Next Steps
• JCI will provide an example of the email notification.
On the next slide you will find an example of an Email notification.
14
• Introduction
• Changes for external suppliers
• Next steps
• More information & Johnson Controls contacts
AGENDA
27 Johnson Controls, Inc. - INTERNAL
Next steps
28 Johnson Controls, Inc. - INTERNAL
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
15
• Introduction
• Changes for external suppliers
• Next steps
• More information & Johnson Controls contacts
AGENDA
29 Johnson Controls, Inc. - INTERNAL
More Information on the Johnson Controls Supplier Portalhttp://www.johnsoncontrols.com/content/us/en/suppliers/automotive_experience/Global_Standardization.html
30 Johnson Controls, Inc. - INTERNAL
2
31
www.johnsoncontrols.com
16
Please familiarize yourself with the provided information and prepare yourself for the successful transition.
More Information on the Johnson Controls Supplier Portalhttp://www.johnsoncontrols.com/content/us/en/suppliers/automotive_experience/Global_Standardization.html
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
Johnson Controls, Inc. - INTERNAL31
Johnson Controls Contacts
32
Area Name Email
General Supply Chain Mgmt. (SCM) Jon Karel [email protected]
EDI or Web EDI related topics Jon Karel [email protected]
EDI related topics - GXS Randy Almodal [email protected]
Quality Management (QM) Craig Millar [email protected]
Purchasing (PUR) Your JCI Buyer
Purchasing – Supplier Numbers Your JCI Buyer
Johnson Controls, Inc. - INTERNAL
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-51399 Burscheid, Germany
Phone: +49 (0)2174 65-3761
eMail: [email protected]