supplier conference call - johnson controls

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Supplier Conference Call

AE Operations

• Introduction

• Changes for the suppliers

• Next steps

• More information & Johnson Controls contacts

AGENDA

2 Johnson Controls, Inc. - INTERNAL

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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.


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.


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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.


• Introduction

• Changes for external suppliers

• Next steps


AGENDA


4

Goods Receipt

Payment based on goods receipt


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


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

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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


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


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).


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


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.


Pick Up Sheet

Include PUS Number on ASN


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


portal page)..


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.


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

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Supplier Releases

Demand Due Dates


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


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.


An interactive PDF to support the problem-solving process

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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

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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


A transparent Issue Managing Cost process

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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


Next Steps

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An example of Debit Note and its cost variables

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On the Debit Note you will find:

� Issue Id

� Issue Type

� Issue Status

� Total amount of the issue based on the cost

variables below


Electronic Management Quality Review (MQR) process

Tracking and automated MQR invitation


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.

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An automatic generated email which contains the MQR

notification

23

NEW


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!






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


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


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


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


• Next steps


AGENDA


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

15

• Introduction


• Next steps


AGENDA


More Information on the Johnson Controls Supplier Portalhttp://www.johnsoncontrols.com/content/us/en/suppliers/automotive_experience/Global_Standardization.html


2

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www.johnsoncontrols.com

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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


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]

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Questions?

Johnson Controls33

supplier conference call - johnson controls

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