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International Truck and Engine Corporation

Supplier Scorecard

Supplier Guide

Copyright © 2006 International Truck and Engine CorporationConfidential Unpublished Property of International Truck and Engine Corporation

Printed in U.S.A., All rights reservedThe International logo and the International logotype are trademarks

of the International Truck Intellectual Property Company, LLC.All other registered and unregistered trademarks in this document are the sole property of their respective owners.

Version 2.007/20/07


Contents

1.0 OVERVIEW...............................................................................................................31.1 Purpose of the Guide.............................................................................................31.2 User Types: Suppliers...........................................................................................31.3 Using the Guide.....................................................................................................31.4 The Scorecard Concept.........................................................................................4

1.4.1 Scorecard ratings...........................................................................................41.4.2 Business rules................................................................................................41.4.3 Rules as metrics.............................................................................................51.4.4 Calculating a rating.........................................................................................51.4.5 The scoring process.......................................................................................61.4.6 Multiple score levels.......................................................................................61.4.7 Setting supplier expectations..........................................................................81.4.8 Applying the scorecard.................................................................................10

1.5 How the Guide is Organized................................................................................11

2.0 GETTING STARTED..............................................................................................122.1 Web Sites............................................................................................................12

2.1.1 Accessing the SPM web site........................................................................132.1.2 Accessing SPM............................................................................................14

2.2 Windows..............................................................................................................152.2.1 Navigating.....................................................................................................152.2.2 The mouse....................................................................................................152.2.3 Links.............................................................................................................152.2.4 Scrolling........................................................................................................152.2.5 The contents of windows..............................................................................162.2.6 Icons.............................................................................................................17

3.0 SUPPLIER PROCEDURES....................................................................................183.1 Finding Supplier Status at the Corporate Level—Procedure 1............................183.2 Finding Supplier Status at the Plant Level—Procedure 2...................................26

4.0 SUPPLIER PERFORMANCE METRICS: BUSINESS RULES..............................334.1 Truck Supply Chain.............................................................................................34

4.1.1 Delivery.........................................................................................................344.1.2 Logistics........................................................................................................404.1.3 EPFC............................................................................................................414.1.4 EDI................................................................................................................414.1.5 Responsiveness...........................................................................................434.1.6 Packaging.....................................................................................................46

4.2 Service Parts.......................................................................................................494.2.1 On Time Delivery..........................................................................................494.2.2 PRR (Problem Reporting and Resolution)....................................................544.2.3 Critical Orders...............................................................................................65

4.3 Engine..................................................................................................................674.3.1 Web Site Logins...........................................................................................674.3.2 SM IMin/Max.................................................................................................674.3.3 EDI Compliance............................................................................................68

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4.3.4 Packaging.....................................................................................................684.3.5 Labeling........................................................................................................694.3.6 Order Shortage.............................................................................................694.3.7 Premium Freight...........................................................................................70

4.4 Quality..................................................................................................................714.4.1 Quality Defects.............................................................................................714.4.2 Red Tag........................................................................................................754.4.3 Global 8D’S..................................................................................................804.4.4 Warranty.......................................................................................................80

4.5 Business Impact..................................................................................................844.5.1 Compass Ideas Submitted...........................................................................84

4.6 Product Development..........................................................................................874.6.1 Quality..........................................................................................................874.6.2 Delivery.........................................................................................................904.6.3 Meeting Cost Estimates................................................................................92

5.0 GLOSSARY............................................................................................................935.1 Truck Supply Chain.............................................................................................935.2 Parts....................................................................................................................955.3 Engine..................................................................................................................965.4 Quality..................................................................................................................965.5 Business Impact..................................................................................................975.6 Product Development..........................................................................................97

6.0 SCORECARD ADMINISTRATOR..........................................................................996.1 Responsibilities....................................................................................................996.2 Disputing a Violation............................................................................................99

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1.0 Overview

1.1 Purpose of the GuideThe purpose of this Supplier Scorecard Supplier Guide is to explain how a supplier can benefit from the features of the Supplier Performance Metrics System (SPM). The Guide discusses these topics:

Scorecard concept. Scoring methodology (calculations). Procedures for accessing and navigating SPM. Business rules (metrics) used in the rating process.

1.2 User Types: SuppliersThe Guide is designed for suppliers. These external users access the system to view their performance status and receive timely feedback on their performance.

Suppliers use the Guide to learn about, and perform, the following tasks. Access and search SPM to find their status (green, yellow, red or blue). Access and print reports with supplier data, as needed. Access and review the rules and related information that explains and

clarifies them.

After reading this Guide, you can use the supplier scorecard to accomplish the following:

Reference SPM data when communicating with International personnel about current and past performance.

Identify performance areas that need improvement.

1.3 Using the GuideYou can use the Guide for self-directed learning. The Guide provides step-by-step procedures that help you navigate the system for the first time and enable you to accomplish specific tasks using SPM.

Each procedure is self-sufficient and can stand alone: it contains all the steps you must take to complete it. A brief introduction discusses its purpose, any procedure(s) that come before it, and other useful information you need to know before taking the first step. So you can go directly to a procedure and complete it without first finishing a previous procedure.

You can also follow the procedures in the order in which they appear in the Guide. When doing this, you will note that certain initial steps (such as logon and going to a home window) repeat. You are prompted to skip these beginning steps and go straight to the steps that are new in the procedure.

The rules are organized in numeric order by Business Unit for easy reference.

After becoming familiar with SPM, you can use the Guide as needed to refer to a specific procedure or rule.

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1.4 The Scorecard ConceptThe Supplier Scorecard is a table that clearly indicates how well suppliers are performing by displaying an organized group of numbers, text, and colors on a computer screen or in a hard copy report.

Performance is tied to the specific actions of suppliers, at a particular time and place. SPM takes information about supplier created incidents from various sources and compares it with rules that precisely state when a supplier action violates those rules.

The Supplier Scorecard will capture information across all Business Units within International. The current Business Units participating in the Supplier Scorecard are:

Truck Supply Chain:

o BDT – Blue Diamond Truck

o CAP – Chatham Assembly Plant

o CBP – Conway Bus Plant

o EAP – Escobedo Assembly Plant

o GAP – Garland Assembly Plant

o SAP – Springfield Assembly Plant

o TBP – Tulsa Bus

Engine:

o CDS – Indianapolis

o ODW – Melrose Park

o Perez and IBBD – Huntsville

Service Parts

Quality

Business Impact

Product Development

1.4.1 Scorecard ratingsThe scorecard shows supplier performance criteria called Performance Categories. A specific supplier action is evaluated according to these criteria. Performance criteria have assigned point values. When added together, these points comprise the supplier scorecard rating. Ratings are systematically built up from the specific actions of a supplier at a precise time and place, and involve a particular deliverable (e.g., a visibly flawed part) or occurrence (e.g., a late delivery).

Each Business Unit has Performance Categories that International expects its suppliers to meet. For example, On Time Delivery is a Performance Category used to measure the performance of a supplier in a relationship with the Truck Supply Chain Business Unit.

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1.4.2 Business rulesThe On Time Delivery performance category contains specific business rules used to assess specific supplier actions. Supplier actions either comply or fail to comply with a rule. Rules are stated very precisely, so that a non-compliant action can be clearly identified as a violation.

On Time Delivery, Rule #7 reflects this precision when it states: “Supplier Receipt not correct – incorrect part received”.

1.4.3 Rules as metricsA rules violation is a metric because it is fact-based. For example, both International and its suppliers can objectively measure when an incorrect part is received. A unique, measurable supplier action is assigned a number. The numeric values of many actions are then easily combined and calculated to produce a score, or rating, for the entire Performance Category.

The process of calculating scores includes several elements.

1.4.4 Calculating a ratingOne element in calculating a rating is the number assigned to each rule violation. This number is called the Base Points per Event and is 6 in this example. Another element is the Rule Weight Factor. Violations are given a “weight” or importance. Rule # 7 has a weight factor of 1.

Here is the penalty calculated for this rule.

Base Points Per Event Rule Weight Factor Penalty Per Business Rule6 X 1 = 6

If this violation occurs twice, the calculation (6 x 1 = 6) is repeated and the results added (6+6 = 12).

Figure 1

All the rules in a Performance Category have the same Base Points per Event. But the rules differ in their weight, and weight impacts the outcome of a calculation. For example, Rule # 4 states: “866 Supplier Sequencing Content – Undership Violations per Shipment”. The Rule Weight Factor is two.

Here is the penalty calculated for this rule.

Base Points Per Event Rule Weight Factor Penalty Per Business Rule6 X 2 = 12

Figure 2

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1.4.5 The scoring processThe scoring process allows each supplier to begin the month with 100 points. As violations occur, points are deducted from that total of 100. For this example, assume the performance is being measured for activities supporting the Springfield Assembly plant, and that the supplier was compliant with all the rules for Delivery except for Rules 7 (Receipt Discrepancy) and 4 (866 Sequencing Overship).

To calculate a supplier score, we subtract the sum of these two violations (6+12 = 18) from the supplier’s total of 100.

The supplier score is 82 (100-18 = 82).

Suppose that the supplier has perfect scores for all other Performance Categories.

Then the score for Springfield would be the same as the lowest score for a Performance Category (Delivery).

The preceding calculation process can be extended to include all the Performance Categories used to evaluate supplier performance at the plant, Business Unit, or Corporate levels. Suppliers receive a score for each plant or Business Unit with which they have a relationship. In addition, that score rolls up to the Corporate Scorecard and gives the supplier an overall rating with the Corporation.

1.4.6 Multiple score levelsThe scorecard is a monthly report, based on calendar months, which provides each supplier with their numeric score for each business unit they are associated with. There may be up to three levels of reporting, based on which business unit a supplier ships to: the specific Location level (i.e. the Tulsa Assembly Plant), the Business Unit level (Truck Supply Chain), and the overall Corporate level.

1. The suppliers’ final score at each Location Level is the total of all deductions for each of the Performance Categories.

2. The suppliers’ final score for the Business Unit Level is determined by comparing all the Performance Category scores of each Location against each other and keeping the lowest score (i.e., all Truck Plant scores are considered, and the lowest score is brought forward as the Truck Business Unit score).

3. The suppliers’ final score at the Corporate level is determined by comparing all the scores of each Business Unit against each other and keeping the lowest score.

These scores equate to a rating system that is indicated by 4 color schemes: Green, Yellow, and Red (which are dependant on the suppliers’ numeric score) and a fourth color of Blue (which is not driven by the suppliers score, but rather by occurrence). When a supplier causes a major negative impact to International’s ability to do business, their rating falls into the Blue category regardless of their overall score. The color of a suppliers overall rating drives the type of corrective actions that needs to take place (this is explained in section 1.4.7 below) to ensure the improvement of the suppliers’ rating.

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To help explain these features, please consider a supplier who has a relationship with the Truck Supply Chain. It may provide component parts to several of the Truck Assembly Plants. It also may have a relationship with the Quality, Business Impact, and Product Development Business Units.

The following table shows how the scores for supplier performance roll up to the Truck Business Unit level and to the Corporate level.

Score Level Color Rating CommentChatham (Location Level) Green 90Springfield (Location Level) Yellow 62Garland (Location Level) Yellow 88Overall Score for Truck Supply Chain (Business Unit Level)

Yellow 62 The best score that the supplier can receive for the Truck Supply Chain Business Unit is equal to the lowest score of all the Locations in that Business Unit. In this case, this is a rating of 62 (yellow) at the Springfield plant.

Quality (Business Unit Level)

Blue 85 One Red Tag violation at the Springfield plant. While the numeric score indicates a color rating of Yellow, any Red Tag violation will automatically put the Supplier in a “Blue” status.

Business Impact(Business Unit Level)

Green 90

Product Development (Business Unit Level)

Green 95

Overall Score at the Corporate Level

Blue 62 The best overall score that the supplier can receive at the Corporate level is equal to the lowest score of all Business Units. In this case, although the yellow status in Springfield is the lowest score, the Blue rating from Quality overrides all other colors and makes this supplier rating Blue at the Corporate level.

Current Supplier Score Legend: Red=0 to 25. Yellow=26 to 89. Green=90 to 100.

In this example, since the score from the Springfield Assembly Plant was the lowest score of all the other Truck locations and other Business, the supplier’s score at the Corporate Level becomes 62, but the Blue rating from the Quality Business Unit becomes the supplier’s rating at the Corporate Level.

In summary – 1. A specific supplier action that violates a business rule starts the process that

results in a supplier score and rating. 2. The numeric values of all violations are calculated and combined to create

the score at the Performance Category level. 3. These categories are then combined and a Location level score is determined. 4. The lowest scoring location then becomes the Business Unit score.5. The Business Unit’s are then all compared, and the lowest Business Unit

score and rating becomes the overall supplier score at the Corporate level.

The suppliers score dictates their rating, unless they have caused a major negative impact to International’s ability to do business, in which case their rating automatically becomes Blue. This system of numeric scores and color coded

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ratings helps our two companies work towards a solution by making it clear and easy to identify the severity of the suppliers’ issues.

1.4.7 Setting supplier expectationsSuppliers are responsible for responding to their performance ratings with the appropriate actions. Whenever suppliers incur sub-standard or poor ratings, they must take corrective actions to become compliant. The following discussion summarizes expected supplier responses to the color-coded ratings.

Responding to Ratings: GreenA green rating indicates compliant performance. No corrective action is necessary.

Responding to Ratings: Yellow• First occurrence: The supplier is expected to understand the root cause

of non-compliance and to take corrective action to return to green.

• Second consecutive month at yellow• The supplier is expected to understand the root cause of non-

compliance and to take corrective action to return to green.• The supplier may receive a call from the appropriate International

representative, who needs to fully understand the supplier’s corrective action plans.

• Third consecutive month at yellow• The supplier is expected to understand the root cause of non-

compliance and to take corrective action to return to green.• The supplier is contacted by the appropriate International

representative for a required “face to face” meeting.• The supplier action plans must be fully understood and steps

immediately taken to return to green.

Responding to Ratings: RedFor any occurrence of a red score:

• The supplier may receive a call from the appropriate International representative, who needs to fully understand the supplier’s corrective action plans.

• The supplier is contacted by the appropriate International representative for a required “face to face” meeting.

• The supplier action plans must be fully understood and steps immediately taken to return to green.

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Responding to Ratings: BlueA “Blue” rating will be applied only when particular violations occur. These violations are deemed to be severe in nature, causing a Red Tag, a No-Roll, or a Line Shutdown. The supplier’s status will show the Blue color – however, the numerical rating will not change. The violations leading to a Blue rating are shown below:

Within the Truck Supply Chain Business Unit:

Rule 12 – Part Arrival, Supplier causes NO ROLL

Rule 13 – Part Arrival, Supplier causes Line Shutdown

Rule 14 – Part Arrival, Supplier causes Red Tag

Within the Quality Business Unit:

Rules 410 through 418 – Supplier Quality causes Red Tag.

For any occurrence of a blue score:• The supplier may receive a call from the appropriate International

representative, who needs to fully understand the supplier’s corrective action plans.

• The supplier is contacted by the appropriate International representative for a required “face to face” meeting.

• The supplier action plans must be fully understood and steps immediately taken to return to green.

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1.4.8 Applying the scorecardThe scorecard is a tool that helps International develop and refine an optimum supplier base containing the best suppliers. Suppliers have a relationship with one or more of the plants or Business Units listed below.

Business Unit DescriptionTruck Supply Chain

Chatham Assembly Plant Springfield Assembly Plant Tulsa Bus Plant Conway Bus Plant Garland Assembly Plant Escobedo Assembly Plant Blue Diamond Truck

Individual scores at the plant level.

Engine Melrose Park (ODW) Huntsville (Perez, IBBD) Indianapolis (CDS – Celadon Dedicated

Services)

Individual scores at the plant level.

Service Parts This Business Unit is at the Corporate level for all PDC’s.

Quality This Business Unit is at the Corporate level for all locations.

Business Impact This Business Unit is at the Corporate level for all locations.

Product Development This Business Unit is at the Corporate level for all locations.

Supplier performance is evaluated monthly at two levels: A supplier receives a score at the individual Business Unit level. A supplier’s score at the plant or Business Unit levels rolls up to the

Corporate level.

By communicating the scorecard monthly, International gives suppliers timely feedback on their performance. This timely feedback strengthens interaction between International and supplier team members.

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1.5 How the Guide is OrganizedThe Guide includes two supplier procedures and a list of the rules used in the rating process.

Topic ExplanationSupplier Procedure 1—Corporate level.

Parts Quality Product Development Business Impact

You follow this procedure to view information about these four Business Units. The status of suppliers who interact with these units appears at the Corporate level.

Supplier Procedure 2—Plant level.

Truck Supply Chain Chatham Assembly Plant Springfield Assembly Plant Tulsa Bus Plant Conway Bus Plant Garland Assembly Plant Escobedo Assembly Plant Blue Diamond Truck

Engine Melrose Park (ODW) Huntsville (Perez, IBBD) Indianapolis (CDS – Celadon

Dedicated Services)

You follow this procedure to view information about Truck and Engine suppliers. The status of suppliers who interact with these units appears at the plant (or Location), not the Corporate, level.

Rules used in the rating process This section of the Guide lists the rules that you see in the scorecard. They are organized under the Business Units with which they are associated. Each rule has a number and is associated with a Performance Category.

The following information is provided for each rule:

A description of the rule. An explanation of when the

violation is applied. Specific information about the

violation. Data that the supplier must

provide to dispute the violation.

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2.0 Getting StartedThe terms and concepts discussed below are included in the procedures that you follow as you use SPM. By reviewing these terms now, you will already be familiar with them when you find them in the procedures below.

2.1 Web SitesSPM is a web-based software program that presents supplier performance information in a scorecard format. Recall that the web is one information type among several that travel over the Internet. Just as a truck carrying specific cargo travels over a highway, web information travels over the Internet.

Web information is organized in pages. Similar in function to a paper page, a web page is an electronic document that contains text, graphics and other types of data.

You view SPM pages on your computer screen. Because SPM is web-based, however, it is not stored on your computer. Instead, it is stored in a web site that is located on a server—a large computer system shared by many users.

This web site consists of a collection of related files. And each file is a defined group of related information about a particular topic—for example, text and numbers about a supplier’s deliveries to a certain plant. The files that comprise a web site are available on the web.

Each time you want to use SPM, you must download (receive) it from the server in which it is stored and open it in your computer.

Before you can download SPM, you must find the SPM web site. And to find it, you need to use a web browser like Internet Explorer or Netscape. Browsers are programs that enable you to connect to the web site. Here is how you use your browser to access the SPM web site.

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2.1.1 Accessing the SPM web siteBefore you are able to access the SPM web site, you will need a user ID and a password. You will have received these in the announcement letter. Additional User IDs or changes to existing IDs must be requested through our Scorecard Analyst, at [email protected]. Note the following security information:

One ID and password is assigned per person If the ID owner does not use it to log in at least once every 90 days, the ID is

deactivated International must be notified when a supplier employee with an ID leaves

the supplier’s company

After turning on your computer and activating your browser, type the following in the browser’s Address, as shown below: http://evalue.internationaldelivers.com/supplierscorecard/

07/20/07 Note: The Supplier Scorecard website has had enhancements added since it was first rolled out to a group of Pilot suppliers. The link listed above is the new and improved website. The screen shots in this document may show the old address – please disregard. Use the address shown above to access the Supplier Scorecard website.

You typed in the SPM web site address, or location name. An address is also called a URL, an abbreviation for Uniform Resource Locator.

Now you are ready to click your mouse on the go button, or press the Enter key.

NOTE: Clicking is one of several actions you can take with a mouse.

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http://evalue.internationaldelivers.com/supplierscorecard/

mailto:[email protected]


This device has one or more buttons—a mechanism that you press once and let go (“click”). You can click to select from a menu (a list of choices). You can also move the mouse to position a pointer on the display without using the keyboard.

This is the screen that will appear. The user must log in to the Scorecard with the User ID and password that was provided.

The International Truck and Engine Corporation – Login View window is displayed on your computer screen.

2.1.2 Accessing SPMIn the International Truck and Engine Corporation – Login View window, type your User ID and Password in the areas (fields) shown. Then click Log In. The Supplier Performance Metrics home window appears, as shown below:

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Up to this point, you have accessed the SPM web site and have arrived at the Supplier Performance Metrics home window. From this window, you can go to other windows on the SPM web site.

2.2 WindowsYou have seen how windows are displayed on your computer screen. “Window” is a term used often in the procedures. A window is a part of the display screen with visible boundaries and it contains information. You move from window to window and from place to place within a window, and you interact with the contents of windows.

2.2.1 Navigating“Navigating” is another name for methodically moving through the SPM system as you take specific steps in a procedure. You navigate within SPM by taking these actions.

Clicking links to change your position inside a window or to jump to a different window.

Scrolling, or continuously moving through the text and images in a window. Selecting from a list of choices (menu). Clicking icons to display data or cause actions, like opening or closing a

window.

Depending on what you want to do inside a window, you will navigate primarily by using the mouse, clicking links and icons, and scrolling.

2.2.2 The mouse

ClickingClicking is how you activate buttons. To double click, rapidly press the left mouse button twice. Double-clicking typically activates a command.

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The cursorThe cursor is another useful mouse feature. The cursor is a pointer used to locate some element on a window. It changes shape as you move it within a window. For example, it may turn into an I-beam ( I ) for editing text, an arrow for selecting menus, and a hand when it touches a link. Any time you lose track of the cursor, start moving the mouse around until you see something crossing your screen. This is probably the cursor.

2.2.3 LinksWhether a link appears as a text or as a picture, it is an address to a place in a window. Click a link and you go to another part of the same window or to a different window.

2.2.4 ScrollingScrolling is an action where you continuously move forward, backward or sideways through the text and images within a window. Use your mouse to place the cursor on a window. Then scroll by turning the wheel between the left and right mouse buttons (if your mouse has this feature).

You can also scroll by clicking on the up or down arrow at the side of a window and holding the left button down. You can also click the button between the arrows, shown below; then drag it up or down by holding the left mouse button down and moving the mouse. The following screen shows an example of the scroll bar on the right of the screen.

2.2.5 The contents of windowsYou will view and interact with several different content types inside a window.

A pull-down menu drops down when you selects a particular display element, like months, as shown here.

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A pop-up menu appears usually when you click the right mouse button. The menu contains a list of options. The option you choose depends on where you are in the procedure.

A Box is a rectangular shape with boundaries surrounding text or a table. Boxes come in varying sizes.

A Field is a specified area in which you type, or select, a particular kind of data, like your password, as shown below.

2.2.6 IconsAn Icon is a graphical representation or picture of a choice you select. An icon can stand for:

A document or file format: PDF (This is short for Portable Document

Format. A PDF displays formatted text). Excel (This is a spreadsheet format with rows and columns in which text, numbers, and graphics can be displayed).

An action that you want to do: refresh a window; close a window.

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3.0 Supplier ProceduresThe following procedures explain the steps that you take to view the supplier scorecard. Each procedure stands alone. You can go directly to a procedure, take the steps, and accomplish a specific task. You can also complete the procedures in the order in which they appear.

NOTE: The windows and their contents, which appear in the following procedures, are intended merely as examples; they are used to illustrate the features of the system. When you access the system as a real-world supplier, you view performance status information that is unique to your organization and different from what these sample procedures show.

3.1 Finding Supplier Status at the Corporate Level—Procedure 1The procedure that follows illustrates the typical steps you take to find information about a supplier in the Business Impact Unit. This procedure also applies to suppliers who have relationships with Service Parts, Quality, and Product Development. The status of suppliers who interact with all these Business Units is treated at the Corporate level.

After completing Procedure 1, you will be able to:

Access the scorecard, inspect supplier violations, and note the supplier status (green, yellow, red, or blue) for Business Units whose score displays at the Corporate Level.

View data in report format and print the report.

NOTE: You cannot add information to the scorecard.

NOTE: At setup, a supplier with multiple locations can request one supplier ID, which allows it to see the scores for all locations. Or it can request multiple IDs; each ID allows a supplier at each location to see the scores for only that independent location. The default is one ID to see scores for all locations.

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1. Type this address in your browser:https://evalue.internationaldelivers.com/supplierscorecard/NOTE: Remember, the address above is the correct address. Those pictured in screen shots may not be correct.

The window International Truck and Engine Corporation – Login View appears, as shown in Fig. 1.

Figure 1

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https://evalue.internationaldelivers.com/supplierscorecard/%20


2. Type your Login ID and Password to access the system (already discussed in 2.1.1 above, Accessing the SPM web site).

The Supplier Performance Metrics Welcome Window appears, as shown in Fig. 2.

Figure 2

On this Welcome screen, the user has three files available for download. This User Guide, a PowerPoint Training Presentation, and the Business Rule Matrix can be downloaded and saved to the user’s computer for reference.

Use the link “Click here to begin viewing Performance Metrics” to access the next page.

The next page to appear will vary according to user. If the user id has been given access to more than one supplier location, i.e., 00000X1 and 00000S1, the following screen will appear as shown in Step 3. If the user id has been given access to just one supplier location, the website will open to that particular supplier location (Step 4).

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3. Choose Supplier

If the user has been given access to view more than one Supplier Location (defined by the supplier code and postal code – 00000X1, for example), this screen will provide the user with a list of the supplier locations. The user must choose a location to view by clicking once on the specific location, as shown below:

Figure 3

If the user’s list of supplier locations is quite long, the Search tool can be used. To use the Search, the user can either type in the Supplier’s name, or the Supplier’s code assigned by International.

After highlighting your choice, click “View Violations” to begin viewing supplier performance metrics.

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4. View single Supplier Location Performance Metrics

If the user has been given access to just one supplier location, the Scorecard will skip the “Choose Supplier” screen and take the user directly to the Performance Metrics webpage.

NOTE: The supplier name Julie’s Metal Products is not genuine and was created for the purpose of being used as an illustration in this sample procedure.

Figure 4

If there is no violation data, you must change the month to one for which data is available.

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5. Click the arrow in the Month field and from the pull-down menu click July, 2007 (for this sample procedure).

Figure 5There is a column for each of the six Business Units and the supplier’s score for each unit. You can click the score for a Business Unit in any order. The scores are links that provide you with more detail.

NOTE: This sample procedure explains how to view scores at the Corporate level for four Business Units. You view Business Impact, the Unit listed first in the table.

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6. Single click the score under Business Impact.

A window with the score for this Business Unit appears, as shown in Fig. 4.

Figure 6

NOTE: The name of this window, for this sample procedure, is: Julie’s Metal Products: Business Impact.

The score (85 in our sample) is at the Corporate level. Clicking 85, which is underlined, links you to more detailed information about Business Impact.

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7. Single click the score (85) again.

A window with the performance categories for Business Impact appears, as shown in Fig. 5.

Figure 7

NOTE: The name of this window is: Julie’s Metal Products: Business Impact: BUSINESS IMPACT.

The window includes: The number of violations in the Performance Category. Total number of points deducted from the 100 point total. Total Points (always 100). Supplier Score (Total points minus Total deductions).

This window gives the most detail about the supplier relationship with this particular Business Unit (Business Impact in this example).

NOTE: Depending on the color-coded rating you see, you should be prepared to take the appropriate action, as discussed in section 1.4.7, Setting supplier expectations, above.

To see more details about the supplier scores for all the other Business Units, return to the window that shows all the Business Units.

You must first close down the last two windows that you opened, as shown in Fig. 8.

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8. Click the Close button in the upper right corner of the last two windows that you opened, as shown in Fig. 6.

Figure 8

You return to the following window, as shown in Fig. 9.

Figure 9

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Note the PDF icon , the Excel icon , and the Chart icon under the supplier code and name.

These icons will all provide reports. The PDF and Excel reports are the same, just available in different file formats. This report provides detail information about the performance metrics.

The Chart icon will provide the opportunity for the user to print a rolling 12-month Trend Report. The Trend Report will be discussed in subsequent steps.

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9. Click the PDF icon

The following window appears, as shown in Fig. 10.

Figure 10

The report shows a Corporate Scorecard that includes Business Impact as well as all the other Business Units with which you have a relationship.

The report provides the following details: violation dates, part number, RefNo, Comments, Rule Violation, Weight, and Cost. You get all the information that International has.

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10. Scroll down the report.

Note that all the Business Impact violations are added for a Total Violations Deductions of 15 (in this example).

The deductions are subtracted from 100 (the Total Available Points). This gives a Supplier Score of 85 for Business Impact (in this example).

NOTE: For Business Units with multiple locations (the Truck and Bus Plants, and the Engine plants), the report shows a Supplier Score for each location, as shown in Fig. 11.

Figure 11


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11. Click the Close button in the upper right corner to leave the PDF report.

A window with the Business Units appears, as shown in Fig. 12.

Figure 12

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12. Click the Chart icon

Figure 13 below shows the screen shot of the new window that will open.

Figure 13

To print the Trend Report, first select the individual Business Unit (or ALL) for which you’d like to see the Trend performance scores.

With regards to Report Type, the Trend Report is the only choice at this time.

The Active Only box, being checked, indicates the report will show the scores based on “Active” violations only – not those violations that may have been reversed as a result of a dispute request.

Choose the starting month and year for the report. As stated, the Trend Report is a rolling 12-month report.

Next, highlight by clicking once, the supplier for which the report is to be printed. It may be that you have just one supplier location available. Highlight your choice, and click the link “Create Report”. The report will generate in PDF format. See Figure 14 below for an example:

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Figure 14

This is simply part of one page of the report. The “ALL” choice will list the scores for all Business Units, for the given period of time. Or, the user can select to print the Trend Report for each Business Unit individually.

13. At the Business Units window, you have three choices.

You can click a different Business Unit from Business Impact, which presents supplier scores at the Corporate level, and review your status. (Continue with step 4, above, for that Business Unit).

You can continue with Procedure 2: Finding Supplier Status at the Plant Level (applied to Truck and Engine) and review your status. Then continue with Procedure 2, step 4.

You can click Log-Off and return to the Log In window. To resume using SPM, you must log in again.

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3.2 Finding Supplier Status at the Plant Level—Procedure 2Procedure 1 enables you to review your status with Business Units that display supplier scores at the Corporate level.

Procedure 2 enables you to review your status with the Truck and Engine Business Units. After completing this procedure, you will be able to:

Access the scorecard, inspect supplier violations, and note the supplier status (green, yellow, red, or blue) for Truck Supply Chain and Engine Business Units whose score displays at the Plant, Business Unit, and Corporate Levels.

View data in report format and print the report.

NOTE: You cannot add information to the scorecard.

If you just finished Procedure 1, you are at the Business Units window. To continue with Procedure 2, go to Step 4.

To begin Procedure 2, using Truck Supply Chain as an illustration, go to Step 1.

NOTE: At setup, a supplier with multiple locations can request one supplier ID, which allows it to see the scores for all locations. Or it can request multiple IDs; each ID allows a supplier at each location to see the scores for only that independent location. The default is an ID to see scores for all locations.

1. Type this address in your browser:https://evalue.internationaldelivers.com/supplierscorecard/

The window International Truck and Engine Corporation – Login View appears, as shown in Fig. 1.

Figure 1

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https://evalue.internationaldelivers.com/supplierscorecard/default.aspx


2. Type your Login ID and Password to access the system.

The Supplier Performance Metrics window appears, as shown in Fig. 2 if the user has access to just one supplier location. If user has access to more than one supplier location the “Choose Supplier” screen will open (see Figure 3 in Section 3.1).

NOTE: The supplier name Julie’s Metal Products is not genuine and was created for the purpose of being used as an illustration in this sample procedure.

Figure 2

You must change the month to one for which data is available.

3. Click the arrow in the Month field and from the pull-down menu click July, 2007 (for this sample procedure).

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Figure 3

There is a column for each of the six Business Units and the supplier’s score for each unit. You can click the score for a Business Unit in any order. The scores are links that provide you with more detail.

NOTE: This sample procedure explains how to view scores at the plant level for Truck and Engine.

NOTE: The score for Truck is 85.

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4. Single Click the Score under Truck.

The following window appears, as shown in Fig.4.

Figure 4NOTE: The name of this window is: Julie’s Metal Products: Truck.

You see plant locations and their scores. The underlined scores are links that provide you with more detail when you click on them.

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5. Click the Score under Springfield.

The following window appears, as shown in Fig. 5.

Figure 5

NOTE: The name of this window is: Julie’s Metal Products: Truck: Springfield Assembly Plant.

The window includes: The number of violations in each of six Performance Categories. Total number of points deducted from the 100 point total (12 in this

example). Total Points (always 100). Supplier Score of 88 (= Total points minus Total deductions).

This window gives the most detail about your relationship with this particular plant—Springfield Assembly Plant in this example.


To see more details about the supplier scores for all the other Truck plants, as well as the score for the entire Truck Business Unit, return to the window that shows all the Business Units.

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You must first close down the last two windows that you opened, as shown in Fig. 6.

Figure 6

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6. Click the Close button in the upper right corner of the last two windows that you opened, as shown in Fig. 6.

You return to the following window, as shown in Fig. 7.

Figure 7

Note the PDF icon , the Excel icon , and the Chart icon under the supplier code and name.

The PDF and Excel reports are the same, simply available in different file formats. The Chart icon will open a new window, allowing the user to print a Trend Report. The instructions for the Trend Report are shown in Section 3.1, Step 12.

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7. Click the PDF icon.The following window appears, as shown in Fig. 8.

Figure 8

The report shows a Corporate Scorecard that includes Truck and all the other Business Units with whom you have a relationship.

The report provides the following details: violation dates, part number, RefNo, Comments, Rule Violation, Weight, and Cost. You get all the information that International has.


8. Scroll down the report and note the following: The supplier does business with different locations (e.g., Springfield,

Chatham, Garland, etc.). The report therefore shows violations at the plant level.

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All violations at the plant level are added for a Total Violations Deductions (12 points for Springfield, in this example).

The deductions are subtracted from 100 (the Total Available Points). Subtracting Total Violations from Total Available Points gives a

Supplier Score for a particular plant (e.g., 88 for Springfield, in this example).

The Business Unit Supplier Score (for Truck) is taken from the lowest supplier score for any of its locations (85 points for Blue Diamond, in this example).

This process applies to Engine, as well. Like Truck, Engine has several plant locations.

9. Click the Close button in the upper right corner to leave the PDF.

A window with the Business Units appears, as shown in Fig. 9.

Figure 9

10. At the Business Units window, you have three choices.

Click Truck. Continue with step 4, above, and repeat this procedure to see your status for a different Truck plant.

Click a Business Unit that presents supplier scores at the Corporate level and review your status.Continue with step 4 of Procedure 1, Finding Supplier Status at the Corporate Level, for that Business Unit.

Click Log-Off.You return to the Log In window. To resume using SPM, you must log in again.

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4.0 Supplier Performance Metrics: Business RulesBusiness Rules play a central function in the supplier scorecard. Rules are unambiguous statements of desirable outcomes of supplier actions. They are used to assess specific supplier actions for all Business Units and to identify non-compliant supplier action.

The following tables provide all the scorecard rules, listed in numeric order by Business Unit. Each rule includes this information:

Performance Category to which the numbered rule belongs. Point value of the Performance Category. This is the most number of points

that suppliers will lose if they fail that category completely. A description of the rule and an explanation of the rule violation. Information about the violation, such as date, cost, plant location, etc. Required supplier data if the supplier disputes the violation. The Rule Weight Factor—the importance assigned to the rule. The Penalty per Business Rule. Total Violation Points = Rule Weight Factor x Penalty per Business Rule.

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4.1 Truck Supply Chain

4.1.1 DeliveryPerformance Category Business Rule Violation

Delivery (30 points) # 1Description Supplier did not deliver to schedule

Explanation 1. This violation will be applied if it is determined that the supplier has not delivered to schedule.

Information provided

This Scorecard metric is currently being developed, and more information will follow in an addendum to this document.

Required supplier data if violation disputed

Rule Weight Factor Penalty per Business Rule Total Violation Points1 6 6

Performance Category Business Rule ViolationDelivery (30 points) # 2

Description Supplier did not deliver to scheduleExplanation 1. This violation will be applied if it is determined that the supplier has

not delivered to schedule in a more severe manner than in Rule #1.Information provided

This Scorecard metric is currently being developed and more information will follow in an addendum to this document.



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Description 866 Supplier Sequencing Content—Overship Violations per Shipment

Explanation 1. This violation is applied if the supplier over ships the amount stated in the daily 866 sequencing schedule.

2. The supplier shipped more than the amount required to be shipped in a specified sequence, as stated in the 866 schedule.


Violation date, violation cost, part number, reference number (if applicable), and plant location.


The supplier must provide copies of e-mail responses and records of phone calls that confirm the 866 schedule required the shipment.



Description 866 Supplier Sequencing Content—Undership Violations per Shipment

Explanation 1. This violation is applied if the supplier under ships the amount stated in the daily 866 sequencing document.

2. The supplier shipped less than the amount required to be shipped in a specified sequence, as stated on the 866 schedule.




The supplier must provide copies of e-mail responses and records of phone calls that confirm the 866 schedule required the shipment.

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Description Supplier Over-shipped—part level more than 1 week early

Explanation 1. This violation is applied if the supplier ships more than the required quantity.

2. The supplier shipped a greater amount than required, more than one week early.






Description Supplier delivery—with no requirements

Explanation 1. This violation is applied if the supplier delivers parts without receiving valid requirements.

2. The supplier ships parts to an International assembly plant without receiving valid requirements from International.





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Description Receipt Discrepancy—Supplier Receipt is not correct - incorrect part

Explanation 1. This violation is applied if the wrong part number is in the Advanced Shipment Notification (ASN) that is transmitted to the International Assembly Plant.

2. The supplier ships a wrong part to the International assembly plant.




The supplier must show proof that the correct number of parts was shipped and received (the 861 report with date and time stamp).



Description Part Arrival—Part late, causes special handling / extra effort but does not cause a NO ROLL, LINE SHUTDOWN or RED TAG situation

Explanation 1. This violation is applied if parts do not arrive at the International assembly plant in the proper time, which causes International to take extraordinary handling measures.

2. The delay is not severe enough to cause a NO ROLL, LINE SHUTDOWN or RED TAG situation.




The supplier must show proof that the correct number of parts was shipped and received (the 861 report with date and time stamp).


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Description Part Arrival—Supplier causes NO ROLL (automatic BLUE rating)


2. The delay causes a NO ROLL situation. This violation automatically puts the supplier in a BLUE status.




The supplier must provide Advance Shipment Notification (ASN) and carrier data (e.g., pick log, Bill of Lading (BOL), etc.).



Description Part Arrival—Supplier causes LINE SHUTDOWN (automatic BLUE rating)


2. The delay causes a LINE SHUTDOWN situation. This violation automatically puts the supplier in a BLUE status.






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Description Part Arrival—Supplier causes RED TAG (automatic BLUE rating)Explanation 1. This violation is applied if parts do not arrive at the International

assembly plant in the proper time, which causes International to take extraordinary handling measures.

2. The delay causes a RED TAG situation. This violation automatically puts the supplier in a BLUE status.






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4.1.2 Logistics

Performance Category Business Rule ViolationLogistics (20 points) # 18

Description Supplier not ready for pick up at Scheduled Date & Time

Explanation 1. This violation is applied if the supplier is not ready to load a carrier who has arrived at a scheduled pick up time.

2. The supplier holds the carrier up past a scheduled departure time, compromising the on-time delivery of the parts.


Penske’s tracking number, scheduled pick up time, actual pick up time, scheduled departure time, actual departure time.


The supplier must provide any document with the carrier signature that shows that the carrier either arrived late for pick up or departed on time.


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4.1.3 EPFC

Performance Category Business Rule ViolationEPFC (15 points) # 20

Description EPFC—Premium freight charges required to meet delivery schedule.

Explanation 1. This violation is applied if the supplier must use excessive premium freight transportation to meet a delivery schedule.

2. The supplier is at fault for using excessive premium freight and is charged back for costs.


Excessive Premium Freight Charge (EPFC) number, reason code, originator.


The supplier must provide information showing that scheduled requirement quantities were ready to ship, based on the original scheduled pick up date and time.


4.1.4 EDI

Performance Category Business Rule ViolationEDI (15 points) # 21

Description ASN compliance—Supplier ships without ASNExplanation This violation is applied if the supplier fails to meet these requirements:

Supplier must send an Advance Shipment Notification (ASN) to an International assembly plant for each shipment of material.

International’s facility must receive and accept the ASN without errors before the shipment arrives.


A shipment arrives without an ASN.


The supplier must provide a copy of the ASN with a time stamp or mail bag number, or explain in writing why the ASN was not sent.


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Description Inter-works suppliers who cannot generate and send ASNs (Auto Yellow)Explanation 1. This violation is applied if Inter-works suppliers are unable to provide

an Advance Shipment Notification (ASN).2. Inter-works suppliers are International plants that provide parts to

other International plants.


An Inter work supplier cannot generate ASNs at this time, and therefore receives this violation.


The supplier cannot dispute this violation. The supplier should be encouraged to become compliant.



Description Supplier is NOT EDI Compliant (automatic failure of EDI category)Explanation 1. This violation is applied if the supplier is not Electronic Data

Interchange (EDI) capable in its dealings with International.2. The supplier cannot accept these inbound documents: 824, 830, 861,

864, and 866 (if 866 is required).3. The supplier is unable to send the 856 document to International, as

required.Information provided

Violation description, violation date, violation cost, and plant location.


The supplier cannot dispute this violation. The supplier’s only recourse is to become compliant.


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4.1.5 Responsiveness

Performance Category Business Rule ViolationResponsiveness (10 points) # 25

Description Supplier Response / Communications Failure—1 issue per month

Explanation 1. This violation is applied if the supplier fails to do one of the following: Return phone calls on time, especially if a problem is urgent. Provide requested information on time. Fulfill previously agreed commitments. Show a sense of urgency in resolving critical issues. Provide action plans or actions to prevent recurrence of major

impact issues or of behind schedule conditions. Provide accurate and complete information.

2. This violation causes significant added labor / follow-up to the Material Planning Function.


Name of vendor contact and date, a brief description of the issue on the SPM window, violation date, violation cost, part number, and plant location.


The supplier must provide copies of action plans and e-mail responses, a record of phone calls, etc., to prove that timely, accurate, and complete responses were made.


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Description MAR Activity - Plant Managed - Level 1 & 2 Issues—0 - 1 instance Green

Explanation 1. Level 1: This violation is applied if the supplier is involved in these isolated issues: Usually always ships on time, but has incurred late shipment this

month. Usually requires little management, but has required special

handling this month. Usually provides reliable promises of on-time shipments, but has

missed promised dates this month.2. Level 2: This violation is applied if the supplier is involved in these

isolated issues: Once in a while is behind schedule, but planner sees an

escalating level of lateness. Has an escalating level of scheduling issues resolved by

planners/expeditors. Provides promises that shipments will be on time, but planner

sees escalating pattern of late shipments.


Violation date, violation cost, part number, reference number (if applicable), plant location.

The Comments section describes the issue; the description will vary plant by plant.


The supplier must provide copies of e-mail responses and records of phone calls that confirm the supplier took corrective action that the plant accepted.



Description MAR Activity OS managed issues—1 incident

Explanation 1. The violation is applied if the supplier is unable to meet the plant’s needs for parts and to avoid red-tag.

2. The supplier is unable to make promises or to meet the promises made.


General description of the incident causing the escalation.


The supplier must provide written evidence of how the violation can be disputed.


Performance Category Business Rule Violation

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Responsiveness (10 points) # 28

Description Supplier has a Level 3 or 4 MAR (automatic failure of Responsiveness category)

Explanation 1. This violation is applied if the supplier has a part or multiple parts that are behind schedule and is the prime cause of red-tags, with no recovery in sight.

2. The Risk Reduction Team is taking the lead to resolve the issue.The team can consist of various International and Supplier personnel.

International personnel can include the Operations Specialist, the Purchasing Program Manager, the Plant Supply Manager, the Cantera Supply Manager, and the Purchasing Director.

Supplier personnel can include the production manager, the supplier plant manager, and the account manager.

The make-up of the team is defined by requirements and circumstances like the following:

The type of commodity The volume of parts needed The number and frequency of violations The potential for creating a massive red tag or of shutting

down one or more International plants.

Within the team, the Operations Specialist (OS) coordinates and communicates the completion of tasks like these:

Scheduling and identifying part requirements by plant. Where multiple plants are involved, the OS or other International representative (listed above) prioritizes which plant gets parts when the supplier is unable to supply all the plants.

Logistics authorizations for EPFC or air charters, etc.


General description of the incident causing the escalation.


The supplier cannot dispute this violation. The supplier should be encouraged to become compliant.


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4.1.6 Packaging

Performance Category Business Rule ViolationPackaging (10 points) # 29

Description Parts labeled incorrectly—mislabeled or misidentified parts, no pack slip, not compliant with D13 instructions

Explanation 1. This violation is applied if the supplier ships parts that are mislabeled or misidentified, are missing a packing slip, or are packaged in non- compliance with D13 instructions.

2. This violation is entered manually and depends on the assessment of the person at the dock who receives and inspects the parts.




The suppliers must investigate why parts have been incorrectly labeled and show documentation of the corrective action taken. Suppliers must provide a copy of the packing slip and a written explanation of how they complied with D13.



Description 866 Supplier—Load is not in unload order in trailer

Explanation 1. This violation is applied if the supplier ships a trailer load of sequenced material to an assembly plant location and unloads it.

2. The supplier has shipped the material in an incorrect “unload” order.




The supplier cannot dispute this violation. The supplier’s only recourse is to become compliant.


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Description Non standard pack quantity to line side inventoryExplanation 1. This violation is applied if the supplier ships material in quantities

other than standard pack quantities.2. The supplier delivers parts directly to line side that are not in standard

pack quantities.




The supplier must provide contract information about ship quantities and show proof of ship quantity/split (e.g., a label, BOL).



Description Damage to parts due to incorrect packagingExplanation 1. This violation is applied if the supplier incorrectly packaged parts and

caused part damage.

Information provided Violation date, violation cost, part number, reference number (if applicable), and plant location.


The supplier must show proof that International approved a packaging deviation.

Such authorization must come from one of two International sources: For returnable containers or racks, the source is the Supply

Chain Containerization Group headed by John Pavlansky. For expendable packaging, the source is the Plant Supply Chain

Supply Manager or the manager’s representative.

A supplier may want to use, or substitute, expendable packaging instead of a designated returnable rack or container. Only the Supply Chain Containerization Group can authorize such usage.

A Cantera Supply Manager’s authorization for either type of packaging is not acceptable.


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Description Plant delivery system cannot handle incorrect packagingExplanation 1. This violation is applied if the supplier shipped incorrectly packaged

material.2. The supplier ships incorrectly packaged material that the plant

delivery system cannot support.




The supplier must show proof that International approved a packaging deviation.

Such authorization must come from one of two International sources: For returnable containers or racks, the source is the Supply

Chain Containerization Group headed by John Pavlansky. For expendable packaging, the source is the Plant Supply Chain

Supply Manager or the manager’s representative.

A supplier may want to use, or substitute, expendable packaging instead of a designated returnable rack or container. Only the Supply Chain Containerization Group can authorize such usage.

A Cantera Supply Manager’s authorization for either type of packaging is not acceptable.


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4.2 Service Parts

4.2.1 On Time DeliveryPerformance Category Business Rule Violation

On Time Delivery (40 points) # 101

Description Receipt Dollar Late (10,000-99,999)Explanation 1. This violation is applied if the supplier is late delivering parts whose

cost is in the range $10,000 to $99,999. A receipt is considered late if the International receipt date is

more than seven days later than the supplier delivery due date on the purchase order.

This late delivery applies only to orders where the supplier had received the full material lead time.

Lead time is based on the purchase order’s last change date, instead of the original order date, so that the supplier is given enough time to make the delivery.

2. International can vary the lead time by up to three days. If the material lead time is 30 days and International gives the supplier 27 or more days lead time, this number is considered a full lead time.


Violation date, violation cost.


Within the SPM – Violation Details window, Parts provides a link to an Excel spreadsheet with details behind the rating. Suppliers must then present their own shipping information, which should be relevant to what the detail report shows that they did.


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Performance Category Business Rule ViolationOn Time Delivery (40 points) # 102

Description Receipt Dollars Late (>=100,000)Explanation 1. This violation is applied if the supplier is late delivering parts whose

cost is $100,000 or more. A receipt is considered late if the International receipt date is

more than seven days later than the supplier delivery due date on the purchase order.

This late delivery applies only to orders where the supplier had received the full material lead time.

Lead time is based on the purchase order’s last change date, instead of the original order date, so that the supplier is given enough time to make the delivery.



Violation date, violation cost..




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Description Percent Delivered Receipt lines on time (70% - 89%)

Explanation 1. This violation is applied if a supplier makes between 70% and 89% of his deliveries (the pieces due on a purchase order) on time.

2. The supplier delivers against a purchase order on time if he meets these requirements: The International Parts Distribution Center (PDC) receives 97%

or more of the pieces due on the purchase order. Delivery is made on or before the purchase order due date plus

seven days. This delivery applies only to orders where the supplier had

received the full material lead time. Lead time is based on the purchase order’s last change date,

instead of the original order date, so that the supplier is given enough time to make the delivery.







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Description Percent Delivered Receipt lines on time ( < 70% )

Explanation 1. This violation is applied if a supplier makes less than 70% of his deliveries (the pieces due on a purchase order) on time.

2. The supplier delivers against a purchase order on time if he meets these requirements: The International Parts Distribution Center (PDC) receives 97%

or more of the pieces due on the purchase order. Delivery is made on or before the purchase order due date plus

seven days. This delivery applies only to orders where the supplier had

received the full material lead time. Lead time is based on the purchase order’s last change date,

instead of the original order date, so that the supplier is given enough time to make the delivery.



Violation date, violation cost




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Description Percent Delivered receipt lines shipped full (95% - 98%)

Explanation 1. This violation is applied if the supplier delivers all the pieces for a given purchase order on the same day 95 to 98% of the time.

2. This delivery applies only to orders where the supplier had received the full material lead time.

3. Lead time is based on the purchase order’s last change date, instead of the original order date, so that the supplier is given enough time to make the delivery.


Violation date, violation cost





Description Percent Delivered receipt lines shipped full ( < 95% )

Explanation 1. This violation is applied if the supplier delivers all the pieces for a given purchase order on the same day less than 95% of the time.

2. This delivery applies only to orders where the supplier had received the full material lead time.

3. Lead time is based on the purchase order’s last change date, instead of the original order date, so that the supplier is given enough time to make the delivery.






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4.2.2 PRR (Problem Reporting and Resolution)

Performance Category Business Rule ViolationPRR (30 points) # 110

Description Delivery—Documentation (No packing slip received, Quantity not on packing slip, No or Bad Purchase Order Number, No or Bad International Part Number on the packing slip)

Explanation 1. This violation is applied if the supplier delivers a shipment to International Parts Distribution Centers (PDCs) with missing documentation/information.

2. The supplier delivers a shipment with the following documentation / information problems: A packing slip is missing. A quantity of parts is not listed on the packing slip. A correct purchase order number is not listed on the packing slip. The correct part number is not listed on the packing slip.


QA-Debit, mailed monthly to the supplier, which contains the following information: Invoice number, supplier code, part number, part name, purchase order number, PDC number in which the violation occurred, occurrence date, description of the problem, standard minimum charge, International contact person’s name and telephone number.


The supplier must provide a copy of the packing slip that is sent with the applicable PDC shipment.


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Description Delivery—Pallet Size (Pallet exceeds 42” * 45” or the pallet is too small)Explanation 1. This violation is applied if the supplier delivers a shipment to

International Parts Distribution Centers (PDCs) on improperly sized pallets.

2. The supplier delivered a shipment on pallets deemed unacceptable for violating the following size restrictions: A maximum size requirement of 42” by 45”. A pallet too small to safely contain, transport and hold the parts.




Supplier information is not required because International PDCs take pictures of the pallet when this condition occurs. They can provide these pictures to the supplier, upon request, as proof of the violation.



Description Delivery—Serial ID (No Serial Number ID on shipment pallets or the packing list does not list by Serial ID)

Explanation 1. This violation is applied if the supplier delivers a shipment to International Parts Distribution Centers (PDCs) with missing Serial ID information.

2. The supplier delivered a shipment with the following Serial ID information missing: A Serial ID number (pallet number) on each individual pallet in

the shipment. A list of each part / product, by Serial ID number (pallet number),

on all packing slips.




The supplier must provide a copy of the packing slip, showing pallet ID numbers, or a copy of Pallet Manifest documentation.


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Description Delivery—Unitizing (Same part number on several mixed load pallets or load height exceeds 45”)

Explanation 1. This violation is applied if the supplier delivers a shipment to International Parts Distribution Centers (PDCs) that contains a “mixed load” (several different part numbers on one pallet).

2. The supplier delivered the following “mixed load” shipment: The same part numbers were spread across several pallets in

the shipment and needed consolidation. The height of the parts containers on each pallet exceeded 45”.







Description Delivery—Load Integrity (Loose banding/ stretch wrap or unusable/ unsafe pallet)

Explanation 1. This violation is applied if the supplier delivers a shipment to International Parts Distribution Centers (PDCs) on unsafe pallets.

2. The supplier delivered a shipment on pallets deemed unsafe for violating these requirements: Each pallet must be banded using banding material; or it must be

stretch wrapped to contain the items neatly and safely on each pallet.

Each pallet must also be in good condition, enabling a fork lift truck or other similar device to safely transport the material on the pallet.






Performance Category Business Rule Violation

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PRR (30 points) # 115Description Delivery—Shipping Labels (Missing or wrong address or incomplete or

illegible)Explanation 1. This violation is applied if the supplier delivers a shipment to

International Parts Distribution Centers (PDCs) with missing or improperly prepared shipping labels.

2. The supplier delivered a shipment that violated these shipping label requirements: Shipping labels must be used for all shipments to International

PDCs. The supplier address and PDC address must be included in the

shipping label information. All labels on the shipment must be legible, so that PDC

personnel can read them.







Description Delivery—Poor loading (Trailer) and under utilization of the cube.Explanation 1. This violation is applied if the supplier delivers a shipment that

inefficiently uses the interior volume of a trailer.2. The supplier delivered a shipment that violated these cube utilization

requirements: The supplier making truckload shipments is responsible for the

legal and logical loading of the carrier’s vehicle. The supplier making truckload shipments must comply with

International’s specifications; otherwise, the non-compliant supplier is directly charged with any additional cost for processing and handling damaged materials and with recovered cost.






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Description Delivery—ASN (Advance Ship Notice) No Quick Receive Label, ASN # does not process, No Pallet Breakdown in the ASN data, other ASN related failures.

Explanation 1. This violation is applied if the supplier delivers a shipment with missing labels and improper Advance Shipment Notification (ASN) data.

2. The supplier delivered a shipment that violated these label and ASN requirements: The supplier must include a Quick Receive Label on the

shipment packing slip. The supplier must send usable and accurate ASNs for each

shipment. The ASN data must include a pallet manifest (breakdown).




The supplier must provide EDI 997 (acknowledgement), signaling that International received EDI 856 (Advance Ship Notice). The PDCs can furnish copies of any non-compliant Quick Receive Labels or non-compliant pallet manifests.


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Description Deviation—Wrong Part (Supplier ships a part that was not ordered)Explanation 1. This violation is applied if the supplier delivers a wrong part to an

International Parts Distribution Center (PDC).2. The supplier delivered a shipment that an International PDC did not

order.Information provided






Description Deviation—Operation Omitted (Part not machined completely)Explanation 1. This violation is applied if the supplier delivers an incompletely

machined part to an International Parts Distribution Center (PDC).2. The supplier shipped a part that is not machined completely or

accurately to the print specifications.






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Description Deviation—Identification (No idea what the correct part number is)Explanation 1. This violation is applied if the supplier delivers an unidentifiable part

to an International Parts Distribution Center (PDC).2. The supplier shipped a part to an International PDC that receiving

personnel cannot identify.







Description Deviation—Part Missing (Incomplete kit, package assembly is missing pieces)

Explanation 1. This violation is applied if the supplier shipment is missing parts.2. The supplier shipped a part to an International Parts Distribution

Center (PDC) that is a kit and is missing parts or is incompletely assembled.






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Description Deviation—Visual Problems (Damage, scratches, dents)Explanation 1. This violation is applied if the supplier delivers a visibly flawed part to

an International Parts Distribution Center (PDC).2. The supplier shipped a part to an International PDC that is visibly

damaged, scratched, or dented and is not sellable.







Description Dimensional Problems (Will not fit application)Explanation 1. This violation is applied if the supplier shipped an improperly fitting

part.2. The supplier shipped a part to an International Parts Distribution

Center (PDC) whose dimensions are incorrect and that will not fit into the assigned application.






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Description Deviation—Functional Problem (Received right instead of left, received left instead of right, received wrong color part, Other, explain).

Explanation 1. This violation is applied if the supplier delivers a functionally incorrect part to an International Parts Distribution Center (PDC).

2. The supplier shipped a part that violates functional requirements: The part ordered was left handed, but the part received was right

handed (or vice versa). The part received was not the same color as the part ordered.






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Description Packaging—Packaging Errors (Received parts bulk instead of packaged, parts not in correct multiples, parts not labeled with the International part number or labeled with the wrong International part number, Wood packaging not ISPM compliant).

Explanation 1. This violation is applied if the supplier commits packaging errors when delivering parts to an International Parts Distribution Center (PDC).

2. The supplier shipped parts that violate these packaging requirements: Parts are shipped bulk when they should have been packaged. Parts are not packaged in the correct multiples (correct number

of parts per package). Parts are not labeled with an International part number. Parts are labeled with an incorrect International or supplier part

number. Wood packaging material is not ISPM 15 compliant.





Pictures of pallets and wood packaging that is not ISPM 15 compliant are also included.


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Description Packaging—Rust proofing problems Explanation 1. This violation is applied if the supplier delivers a rusty part.

2. The supplier shipped a rusty and unsellable part to an International Parts Distribution Center (PDC).







Description Packaging—Retail Bar Codes No Retail Bar Code, Labels damaged, Label does not scan.

Explanation 1. This violation is applied if the packages in which the supplier ships parts to an International Parts Distribution Center (PDC) have bar code and label errors.

2. The supplier shipped parts that violate these packaging requirements: The part shipped to an International PDC does not include the

retail bar code label. The label is damaged and unreadable. The bar-code scanner cannot read the label.




Supplier information is not required. International PDCs provide the packing slip or the bar code from the retail label.


4.2.3 Critical Orders

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Performance Category Business Rule ViolationCritical Orders (30 points) # 140

Description Broken Shipping Promise—when supplier does not ship on the date promised.

Explanation 1. This violation is applied if the supplier does not ship on the date promised.

2. The supplier failed to ship parts on the date promised, violating the requirements described in this procedure: The Dealer Parts Support Specialist (DPSS) contacts the

supplier with a critical order. The primary objective of the DPSS is to have the supplier ship the required part as soon as possible.

The supplier notifies the DPSS with the promised ship date. The DPSS notifies the dealer, via the COPS system, about the

supplier’s promised ship date. Contact between the DPSS and supplier takes place to confirm

routing information: The day after the shipping promise, DPSS contacts the

supplier for follow-up routing information. During the call, the supplier tells the DPSS that the shipment

did not occur on the date promised.3. The violation is reflected in the scorecard. This is true for both early

and late shipments.4. The DPSS must communicate the exact shipping promise to its

dealers so they can notify the customer.


Vendor Code, date of incident, part number.


The supplier must provide proof of shipment (an Automatic Shipping Notice—ASN or a copy of the Bill of Lading) including: date shipped, shipping location, carrier, pro or tracking number, number of pieces, and weight.


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Description No Shipping Promise—when supplier cannot advise shipping promise

Explanation 1. This violation is applied if the supplier cannot promise a ship date.2. The supplier failed to promise a ship date for parts, violating the

requirements described in this procedure: The Dealer Parts Support Specialist (DPSS) contacts the

supplier with a critical order. The primary objective of the DPSS is to have the supplier ship the required part as soon as possible.

The supplier notifies the DPSS that no firm shipping date is possible.

The DPSS notifies the dealer, via the COPS system, about the supplier’s inability to promise a firm shipping date.


Vendor Code, date of incident, part number.


The date and DPSS with whom the supplier spoke.



Description Critical Order caused by Past Due Schedule—supplier will be penalized when a critical order is received because supplier has not shipped on time

Explanation 1. This violation is applied if the supplier has not made a shipment on time, and therefore caused a critical order.

2. The supplier failed to make a scheduled shipment on the date promised, causing a critical order.

3. International will start keeping track of the number of critical orders caused by missed, scheduled shipments that had been given the required lead-time.

4. The supplier will not be penalized for critical orders that occurred because of Emergency Order Changes or because International pulled a shipment forward, which did not give the supplier the stated lead-time.


Vendor code, date of incident, part number.


The supplier must provide proof of shipment.


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4.3 Engine

4.3.1 Web Site LoginsPerformance Category Business Rule Violation

Web Site Logins (20 points) # 200

Description Suppliers are required to login to logistics provider’s web site.

Explanation 1. This violation occurs if the supplier does not comply with the requirement to log in to the logistics provider’s web site for each International Engine Plant that the supplier services.

2. The supplier failed to access the corresponding logistics provider’s web site, which must take place on each day that the Engine Plant operates.


The web site includes bulletin board information and all information related to receipts, shipments and inventory levels. The violation will identify the specific date(s) on which the supplier did not access the web site.

Required supplier data if Violation disputed

Not Applicable.


4.3.2 SMI Min/MaxPerformance Category Business Rule Violation

SMI - Min/Max Violations (20 points) # 210

Description Supplier Managed Inventory levels are below the minimum levels or have exceeded the maximum levels.

Explanation 1. This violation is applied if the supplier does not maintain daily inventory levels between the established minimum and maximum. Inventory levels do not include any non-conforming material.

2. The supplier did not maintain acceptable levels for specific part numbers and for specific dates.

3. Logistics provider’s system reviews Supplier Managed Inventory (SMI) levels daily after all receipt and shipment activities have occurred.


The web site indicates the expected minimum and maximum levels, as well as the actual material on-hand that is usable for production. Each violation lists the specific part number(s) and date(s).


The supplier must provide written documentation from plant personnel, which permitted a violation for an established date or period of time.


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4.3.3 EDI CompliancePerformance Category Business Rule Violation

EDI Compliance (10 points) # 220

Description An EDI 856 (Advance Shipping Notice – ASN) is required for each inbound receipt.

Explanation 1. This violation is applied if the supplier shipments, when received, do not meet these EDI 856 requirements. The EDI 856 must: Be available at the time of receipt by the logistics provider. Be properly formatted to AIAG/International standards. Contain accurate information.

2. The shipment must show that a properly formatted Quick Receive Label is affixed to the packing list.


All receipts on the web site indicate the EDI 856 used to receive goods. If a valid EDI 856 is not available, a number is assigned by the Logistics provider. Each violation identifies the date(s) and ASN number(s) involved.


Supplier must provide documentation and evidence of all disputed violations.


4.3.4 PackagingPerformance Category Business Rule ViolationPackaging (10 points) # 230

Description All supplier parts must be received in returnable packaging.

Explanation 1. This violation is applied if the supplier ships parts in non-returnable, i.e., disposable, packaging (e.g., corrugated containers, wooden skids, etc.).


Each violation indicates the date(s) and ASN(s) for each violation.


The supplier must provide written documentation from plant personnel approving the use of disposable packaging.


4.3.5 Labeling

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Performance Category Business Rule ViolationLabeling (10 points) # 240

Description Each shipment must be properly identified.

Explanation 1. This violation is applied if a supplier’s shipments do not meet these requirements: Each container received must be labeled with a proper B-10

label. “Mixed Load” labels must be used in the event of a mixed load

shipment. Master labels are required for the receipt of pallets containing

more than one movable unit (i.e., totes on a skid, etc.). All labels must be properly formatted per AIAG/International

standards.Information provided

Each violation indicates the date(s) and ASN(s) for each violation.


Not Applicable.


4.3.6 Order Shortage

Performance Category Business Rule ViolationOrder Shortage (25 points) # 250

Description Order requests from the plant must be available in their entirety.

Explanation 1. This violation is applied if the Plant sends a requisition and the logistics provider does not have the total amount of parts available.


Each violation identifies the part number(s) and date(s) of the violation.


Not Applicable.


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4.3.7 Premium FreightPerformance Category Business Rule Violation

Premium Freight (5 points) # 260

Description Designated routings must be adhered to.

Explanation 1. This violation is applied if the supplier does the following when shipping to a plant: Uses a truckload carrier other than a designated carrier. Uses an L-T-L carrier other than a carrier provided by the

instructions on the International L-T-L matrix. Uses an expedited carrier.


To Be Determined.


The supplier must provide written documentation from plant personnel who approved the use of the types of transportation listed above.


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4.4 Quality

4.4.1 Quality DefectsPerformance Category Business Rule Violation

Quality Defects (55 points) # 400

Description PDN Events—occurrence of a part defect at Springfield Assembly Plant

Explanation 1. This violation is applied if a part defect occurs at the Springfield Assembly Plant.

2. The Springfield Assembly Plant Supplier Quality organization issues a total number of Product Deficiency Notifications (PDNs) for a specific month.


Violation date, part number, supplier code, PDN number, and a brief description of the defect.


The supplier must provide a PDN number, date of violation, reason for dispute, documented concurrence from the plant stating supplier not at fault or the International credit memo showing debit being reversed.


Performance Category Business Rule ViolationQuality Defects (55 points) # 401

Description DMR Events—occurrence of a part defect at Chatham Assembly Plant

Explanation 1. This violation is applied if a part defect occurs at the Chatham Assembly Plant.

2. The Chatham Assembly Plant Supplier Quality organization issues a total number of Defective Material Reports (DMRs) for a specific month.


Violation date, part number, supplier code, DMR number, and a brief description of the defect.


The supplier must provide a DMR number, date of violation, reason for dispute, documented concurrence from the plant stating supplier not at fault or the International credit memo showing debit being reversed.


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Description MRR Events—occurrence of a part defect at Garland Assembly Plant

Explanation 1. This violation is applied if a part defect occurs at the Garland Assembly Plant.

2. The Garland Assembly Plant Supplier Quality organization issues a total number of Material Reject Reports (MRRs) for a specific month.


Violation date, part number, supplier code, MRR number, and a brief description of the defect.


The supplier must provide a MRR number, date of violation, reason for dispute, documented concurrence from the plant stating supplier not at fault or the International credit memo showing debit being reversed.



Description QN Events—occurrence of a part defect at Camiones y Motores International (Escobedo)

Explanation 1. This violation is applied if a part defect occurs at the Escobedo Assembly Plant.

2. The Escobedo Assembly Plant Supplier Quality organization issues a total number of Quality Notifications (QNs) for a specific month.


Violation date, part number, supplier code, QN number, and a brief description of the defect.


The supplier must provide a QN number, date of violation, reason for dispute, documented concurrence from the plant stating supplier not at fault or the International credit memo showing debit being reversed.


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Description QN Events—occurrence of a part defect at Blue Diamond Truck (Escobedo)

Explanation 1. This violation is applied if a part defect occurs at Blue Diamond Truck (Escobedo).

2. The Blue Diamond Truck Supplier Quality organization issues a total number of Quality Notifications (QNs) for a specific month.


Violation date, part number, supplier code, QN number, and a brief description of the defect.


The supplier must provide a QN number, date of violation, reason for dispute, documented concurrence from the plant stating supplier not at fault or the International credit memo showing debit being reversed.



Description Occurrence of a part defect at Conway Bus Plant

Explanation 1. This violation is applied if a part defect occurs at the Conway Bus Plant.

2. The Conway Bus Plant Supplier Quality organization issues a total number of Quality Defects (QDs) for a specific month.


Violation date, part number, supplier code, QD number, and a brief description of the defect.


The supplier must provide a QD number, date of violation, reason for dispute, documented concurrence from the plant stating supplier not at fault or the International credit memo showing debit being reversed.


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Description Occurrence of a part defect at Tulsa Bus Plant

Explanation 1. This violation is applied if a part defect occurs at the Tulsa Bus Plant.2. The Tulsa Bus Plant Supplier Quality organization issues a total

number of Quality Defects (QDs) for a specific month







NOTE: This violation will be implemented in a Phase III enhancementDescription Occurrence of a part defect at Cab and Assembly (CAS).

Explanation 1. This violation is applied if a part defect occurs at the Cab and Assembly (CAS) plant.

2. The CAS Supplier Quality organization issues a total number of Quality Defects (QDs) for a specific month.






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NOTE: This violation will be implemented in a Phase III enhancementDescription Occurrence of a part defect at CFI (Centre For Innovation-Windsor)

Explanation 1. This violation is applied if a part defect occurs at the Centre For Innovation-Windsor (CFI) plant.

2. The CFI Supplier Quality organization issues a total number of Quality Defects (QDs) for a specific month.






4.4.2 Red Tag

Performance Category Business Rule ViolationRed Tag (15 points) # 410

Description Supplier quality caused units in Red Tag at Springfield Assembly Plant – (Automatic BLUE rating)

Explanation 1. This violation is applied if the supplier delivers a poor-quality part.2. The Springfield Assembly Plant identifies the total number of

Supplier-Quality Caused Red Tags.


Violation date, part number, supplier code, and a brief description of the defect.


The supplier must provide the date of violation, part number, reason for dispute, documented concurrence from the plant, or an International credit memo showing debit being reversed.


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Description Supplier quality caused units in Red Tag at Chatham Assembly Plant (Automatic BLUE rating)

Explanation 1. This violation is applied if the supplier delivers a poor-quality part.2. The Chatham Assembly Plant identifies the total number of Supplier-

Quality Caused Red Tags.







Description Supplier quality caused units in Red Tag at Garland Assembly Plant (Automatic BLUE rating)

Explanation 1. This violation is applied if the supplier delivers a poor-quality part.2. The Garland Assembly Plant identifies the total number of Supplier-

Quality Caused Red Tags






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Description Supplier quality caused units in Red Tag at Camiones y Motores International (Escobedo) (Automatic BLUE rating)

Explanation 1. This violation is applied if the supplier delivers a poor-quality part.2. The Escobedo Assembly Plant identifies the total number of Supplier-








Description Supplier quality caused units in Red Tag at Blue Diamond Truck (Escobedo) (Automatic BLUE rating)

Explanation 1. This violation is applied if the supplier delivers a poor-quality part.2. The Escobedo Assembly Plant identifies the total number of Supplier-







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Description Supplier quality caused units in Red Tag at Conway Bus Plant (Automatic BLUE rating)

Explanation 1. This violation is applied if the supplier delivers a poor-quality part.2. The Conway Bus Plant identifies the total number of Supplier-Quality

Caused Red Tags.







Description Supplier quality caused units in Red Tag at Tulsa Bus Plant (Automatic BLUE rating)

Explanation 1. This violation is applied if the supplier delivers a poor-quality part.2. The Tulsa Bus Plant identifies the total number of Supplier-Quality

Caused Red Tags.






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NOTE: This violation will be implemented in a Phase III enhancementDescription Supplier quality caused units in Red Tag at Cab And Stamping Assembly

(CAS) (Automatic BLUE rating)

Explanation 1. This violation is applied if the supplier delivers a poor-quality part.2. The Cab and Assembly (CAS) plant identifies the total number of

Supplier-Quality Caused Red Tags.







NOTE: This violation will be implemented in a Phase III enhancementDescription Supplier quality caused units in Red Tag at CFI (Centre For Innovation-

Windsor) (Automatic BLUE rating)

Explanation 1. This violation is applied if the supplier delivers a poor-quality part.2. The Centre For Innovation-Windsor (CFI) identifies the total number

of Supplier-Quality Caused Red Tags.






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4.4.3 Global 8D’SPerformance Category Business Rule ViolationGlobal 8D’s (15 points) # 420

Description Open Global 8D's recorded in International's Prism Portal system

Explanation 1. This violation applies if the supplier did not close a Global 8D at the end of the month.

2. International identifies all open Global 8Ds recorded in the Prism Portal system, which is used to track documented issues.

Information provided Global 8D number as assigned in the Prism Portal system.


The supplier must provide the Global 8D number and evidence that the Global 8D was closed (through step 8) before the end of the reporting period for the month in question, with documented concurrence from International’s Supplier Quality representative.


4.4.4 WarrantyNOTE: These Warranty violations will be part of a Phase III enhancement, and are subject to change.

Performance Category Business Rule ViolationWarranty (15 points) # 430

Description Warranty Claims by Dollars 0 – 250

Explanation 1. This violation is applied if the supplier has less than $250 in International warranty claims documented against the supplier for the month.

Information provided Each warranty claim and its respective dollar value.


The supplier must provide evidence that the warranty claim(s) were not the supplier’s responsibility. The evidence must include concurrence from International’s Supplier Recovery group.


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Description Warranty Claims by Dollars ) > 250 - < 750

Explanation 1. This violation is applied if the supplier has between $251 and $750 in International warranty claims documented against the supplier for the month.



The supplier must provide evidence that the warranty claim(s) were not the supplier’s responsibility. The evidence must include concurrence from International’s Supplier Recovery group.



Description Warranty Claims by Dollars > 750

Explanation 1. This violation is applied if the supplier has in excess of $750 in International warranty claims documented against the supplier for the month



The supplier must provide evidence that the warranty claim(s) was not the supplier’s responsibility. The evidence must include concurrence from International’s Supplier Recovery group.


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Description Warranty Claims by Occurrences (Frequency 0 - 1)—Weighted < 5

Explanation 1. This violation is applied if the monthly number of International warranty claims against the supplier is less than 5.

2. Each claim is noted as one occurrence.

Information provided Each warranty claim assigned to the supplier.





Description Warranty Claims by Occurrences (Frequency 0 - 1)—Weighted 5 - 10

Explanation 1. This violation is applied if the monthly number of International warranty claims against the supplier is from 5 to 10.






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Description Warranty Claims by Occurrences (Frequency 0 - 1)—Weighted > 10

Explanation 1. This violation is applied if the monthly number of International warranty claims against the supplier is greater than 10.






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4.5 Business Impact

4.5.1 Compass Ideas SubmittedPerformance Category Business Rule Violation

Ideas Submitted to meet Compass Annual Goal is less than Goal – First Quarter (10

points)

# 501

Description Ideas Submitted to meet Compass Annual Goal < Goal – First Quarter

Explanation 1. This violation is applied if the supplier submits ideas that do not meet the dollar value of the COMPASS Annual Goal.

2. The dollar value of supplier-submitted ideas is determined as follows: Suppliers who have been given COMPASS goals are required to

submit into IdeaStream ideas that will achieve these goals. International tracks and reports the progress of idea submission

and compares the supplier’s goal with the total estimated savings that the submitted ideas produce.


The number of ideas submitted and the total estimated dollar savings for those ideas.


The supplier must provide a list of COMPASS ideas that have been fully submitted and remain active. The ideas must have estimated savings that reach the fiscal COMPASS goal that the supply manager has set for them.


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Performance Category Business Rule ViolationIdeas Submitted to meet Compass Annual Goal is less than Goal – Second and Third

Quarters (15 points)

# 502

Description Ideas Submitted to meet COMPASS Annual Goal - < Goal Second and Third Quarters

Explanation 1. This violation is applied if the supplier has not submitted any ideas to meet the dollar value of the COMPASS Annual Goal or has submitted ideas that have no dollar value.









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Performance Category Business Rule ViolationIdeas Submitted to meet Compass Annual Goal is less than Goal – Fourth Quarter (75

points)

# 503

Description Ideas Submitted to meet COMPASS Annual Goal - < Goal – Fourth Quarter

Explanation 3. This violation is applied if the supplier has not submitted any ideas to meet the dollar value of the COMPASS Annual Goal or has submitted ideas that have no dollar value.









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4.6 Product Development

4.6.1 QualityPerformance Category Business Rule Violation

Quality (35 points) # 601

Description PPAP—No Part Approval submitted for Build Event for Major ProgramsExplanation 1. This violation is applied if the supplier ships parts without submitting a

Part Approval.2. The supplier shipped parts that violated International’s part approval

requirement: The part’s submission approval must precede or accompany the

part shipment. To determine if that happened, a system compares each required

part number with the Part Approval record for that part.

Information provided Description of violation, part number, plant location, part receipt date.


The supplier must provide a copy of the Part Submission Warrant (PSW), which International signed before the required date.


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Performance Category Business Rule ViolationQuality (35 points) # 602

Description PPAP—Pre-production Part Approval submitted for Build Event for Major Programs

Explanation 1. This violation is applied if the part’s part approval submission is at the status “Certification.” Certification indicates that the supplier’s production processes cannot support the pre-production Build Event.

2. The part’s part approval submission status is determined by a system that compares each required part number with the Part Approval record for that part. If the comparison shows that the part’s part approval submission

status is “Approved” or “Interim,” no violation is applied. If the comparison shows that the part’s part approval submission

status is “Certification,” a violation is applied.Information provided Description of violation, part number, plant location, part receipt date.


The supplier must provide a copy of the Part Submission Warrant (PSW) which International signed before the required date indicating Approved or Interim status.

If a specific International requirement caused a delay in production process availability, and this necessitated a Certification Part Approval submission, the supplier must provide a brief explanation of the requirement’s impact.


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NOTE: This violation will be implemented in a Phase III enhancementDescription Open Pyxis Development Concerns—low severityExplanation 1. This violation is applied at the end of the month if, at that time, there

are any open, low-severity Pyxis Development Concerns assigned to supplier.

2. The supplier caused low-severity Pyxis Development Concerns to be open at the end of the month.

Information provided Pyxis number and Summary Report.


The supplier must provide a Pyxis number and International confirmation that the Pyxis Development Concerns were closed by the end of the month.



NOTE: This violation will be implemented in a Phase III enhancementDescription Open Pyxis Development Concerns—medium severityExplanation 1. This violation is applied at the end of the month if, at that time, there

are any open, medium-severity Pyxis Development Concerns assigned to the supplier.

2. The supplier caused medium-severity Pyxis Development Concerns to be open at the end of the month.





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NOTE: This violation will be implemented in a Phase III enhancementDescription Open Pyxis Development Concerns—high severityExplanation 1. This violation is applied at the end of the month if, at that time, there

are any open, high-severity Pyxis Development Concerns assigned to the supplier.

2. The supplier caused high-severity Pyxis Development Concerns to be open at the end of the month.





4.6.2 Delivery


Description Supplier Response to ATT exceeds 7 daysExplanation 1. This violation is applied if the supplier fails to acknowledge, sign, and

return the Authorization To Tool document (ATT) to ITEC Purchasing within seven days after receiving it.

2. The supplier response to the ATT violated these requirements: The ATT sender must receive the supplier responses to the ATT

within seven days. To determine if that happened, a system compares each

Authorization To Tool (ATT) sent to the supplier with the received supplier responses.


Description of violation, violation date, number of points lost, ATT date sent, supplier response date, ATT number, part number(s) affected.


A copy of the supplier response to the ATT with documentation to show it was returned to the ATT sender in 7 days (dated e-mail, confirmation fax)


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Description Supplier Response to RFQ exceeds 14 daysExplanation 1. This violation is applied if the supplier fails to respond to a Request

For Quote (RFQ) within 14 days after receiving it. The supplier’s RFQ response must be a proposal that includes the following: Price Tooling cost/breakdown Delivery date (as stated on the RFQ)—if applicable

2. The supplier failed to respond with a proposal within 14 days after receiving the RFQ.


Description of violation, violation date, RFQ date sent, quotation received date, RFQ number, part number(s) affected.


Supplier to provide copy of completed quote along with proof of delivery within expected timeframe; i.e., e-mail or fax receipt. Or communication to purchasing informing of delay in quote with acceptable reason.



Description Tooling is complete to support Pre-production Build (EM, Q, VC)Explanation 1. This violation is applied if the supplier did not produce a part number

that complies with a pre-production build requirement.2. The supplier did not use the production tools and processes required

to ensure that a part number complies with a pre-production build requirement.

Equipment/Materials build event (EM): Initial Prove-Out of Process & Equipment in Production Environment Using Actual Production Process and Production Equipment

Quality build event (Q): Final Confirmation of Production Parts and Processes to Meet Program Quality Goals

Volume/Complexity build event (VC): Final Confirmation of Production Rate Capability and configuration mix

Information provided Part number, part receipt date, tool complete


The supplier must provide a copy of any engineering change request.


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4.6.3 Meeting Cost Estimates

Performance Category Business Rule ViolationMeeting Cost Estimates (40 points) # 621

Description Piece Price does not meet estimated PriceExplanation 1. This violation is applied if the supplier provides a piece price that is

greater than the estimated price.2. The supplier provides a piece price for a part that, when compared to

the estimated price, is not less than or equal to the estimated price.

Information provided Description of violation, part number, cost variance.


The supplier must provide cost transparency and explanation of gap to estimate.


Performance Category Business Rule ViolationMeeting Cost Estimates (40 points) # 622

Description Tooling Targets estimatesTooling Cost is not a Competitive Price

Explanation 1. This violation is applied if the supplier provides an actual tooling cost that exceeds the target cost.

2. The supplier is expected to show competitive global tooling quotes, which includes a quote from at least one of the integrators on International’s List of Global Tooling Integrators.


Description of violation, part number, global tooling estimate cost variance.


The supplier must provide competitive quotes, which must include at least one quote through our global tooling integrators.


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5.0 GlossaryGlossary entries include selected abbreviations, terms, and concepts that appear in the Business Rules. Entries are organized in alphabetical order by Business Unit.

5.1 Truck Supply Chain

Electronic Data Interchange (EDI) is the transmission of business information between computers of independent organizations. When computers exchange business information electronically, they must do so in a format that both the receiving and sending computer recognizes. For that reason EDI requires the use of standards—agreed upon rules that tell users how their electronic data should be structured.

A transaction set is the electronic equivalent of a paper business document like a purchase order, invoice, etc.

810, EDI transaction, Invoice – A transaction set of a paper Invoice or bill.

820, EDI transaction, Remittance Advice – A transaction set that records payment for goods or services purchased.

824, EDI transaction, Application Advice – A transaction set that International uses to communicate shipping notice rejection and acceptance information. This transaction set reports the status of a transaction set and the edits made to its contents.

830, EDI transaction, Materials Release – A transaction set (Version 002040) used primarily as a materials planning schedule. It contains actual truck orders, collateral demand, and production forecast. The EDI-830 serves as a shipping authorization for selected suppliers identified by each of the Truck Assembly plants.

850, EDI transaction, Purchase Order – A written authorization prepared by a buyer for the acquisition of goods or services at a specified price.

856, EDI transaction, Shipment Notification – A transaction set (Version 003050) that all suppliers must send to International before the manufacturing/assembly facility receives the material.

The Shipment Notification must be representative of the supplier’s shipment, containing shipping information and material contents.

The supplier must communicate this information as soon as a shipment leaves the supplier’s location, or at an agreed upon time if the supplier is located near by.

The supplier’s timely communication of this information is used to facilitate the receiving process at International facilities as well as the subsequent generation of ERS Payment Process data submitted to the Knoxville Accounting Center.

860, EDI transaction, Purchase Order Change – A buyer-initiated change to a previously submitted purchase order.

861, EDI transaction, Receiving Advice – A transaction set that International uses to communicate quantity/part discrepancies, which result when the Advanced Shipment Notification (ASN) is reconciled with supplier shipment content. Additionally, if an ASN is

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not present when the shipment is received, International generates and transmits an EDI 861.

862, EDI transaction, Shipment Authorization – A transaction set (Version 002040) used to communicate daily lineset requirements and weekly truck orders. The transaction covers a five-week horizon: i.e., 15 days lineset and two weeks of orders. These requirements will be actual truck orders and production forecast.

864, EDI transaction, Text Messages – A transaction set (Version 003040) that enables users to electronically move broadcast type messages and other one-time communications.

866, EDI transaction, Sequenced Components – A transaction set (Version 004010) used to identify component requirements in actual production build sequence. This transaction also communicates “Production Linking” requirements, which identify multiple part numbers linked to specific assembly lines, sequence number, and job number.

997, EDI transaction, Functional Acknowledgement – A transaction set that an EDI transaction set receiver returns to the EDI transaction set sender. All EDI transactions require an EDI 997 to be sent back. For example, when International sends an EDI Purchase Order to a supplier, it expects a 997 to be returned.

Advance Shipment Notification (ASN) – A transaction set (Version 003050) that all suppliers must send to International before the manufacturing/assembly facility physically receives shipment material.

The Shipment Notification must be representative of the supplier’s shipment, containing shipping information and material contents.

The supplier must communicate this information as soon as a shipment leaves the supplier’s location, or at an agreed upon time if the supplier is located near by.

The supplier’s timely communication of this information is used to facilitate the receiving process at International facilities as well as the subsequent generation of ERS Payment Process data submitted to the Knoxville Accounting Center.

D 13 instructions – This standard describes the packing procedures, identification methods, and loading principles that International requires suppliers to use when shipping products to International operations within the continental U.S.A., Canada, and Mexico. Acceptance of an order or contract to supply products will be understood as an agreement by the supplier to follow D13 specifications.

Excessive Premium Freight Charge (EPFC) – EPFC’s are issued when a part number has to be expedited, meaning it needs to be delivered to the plant as soon as possible and is shipped outside of the normal transportation routing set-up.

ITEC (15)—International Truck and Engine Corporation

Line shutdown – A situation where the production line is shut down (or stopped) because a critical part (or parts) is not available for vehicle installation.

MAR Activity – A Material Action Request is submitted if the plants have indicated that they are not getting commitments for shipping promises and have exhausted all avenues for resolution at the local level.

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MAR Level 1 and MAR Level 2 are usually managed at the plant level. MAR Level 3 and MAR Level 4 are managed at a corporate level.

No roll – A situation where a part (or parts) was not available for installation before the vehicle reached the end of the production line. The vehicle is therefore not able to complete the final validation testing. It is placed in a repair area until parts are available. It then is repaired and taken back into the production environment for validation testing (rolls).

OS – Operation Specialist – Purchasing personnel, located at Purchasing and Logistics International headquarters in Chicago, who communicate with suppliers via telephone, e-mail, etc. OS personnel usually get involved with suppliers when the plants indicate that they are not getting commitments for shipping promises and have exhausted all avenues for resolution at the local level.

Penske – A Lead Logistics Provider responsible for the routing and management of the inbound freight into ITEC truck plants.

Red tag – A situation where parts are unavailable in station for installation or are not available before the vehicle reached the end of the production line. The vehicle is able to pass the final validation testing (rolls), but it must be sent to the repair area to wait for the required part (or parts) before it can be repaired.

5.2 Parts

COPS system – Critical Order Processing System is used by International Parts Operations to process and manage dealer parts orders for truck down situations.

Dealer Parts Support Specialist – DPSS, the user of COPS, is a critical order expeditor whose role is to fill dealer parts orders for truck down situations.

Emergency Order Changes – Purchase order changes or new purchase orders where the supplier is given less than full material lead time because Parts Distribution Centers are very low on inventory for the material being ordered.

ISPM 15 compliant – Refers to an international wood packaging standard that requires wood packaging material to be either heat treated or fumigated and to display a mark indicating such treatment.

Pallet Breakdown – Refers to the Quantity and Part Number of material on each pallet in a specified shipment.

Pallet Manifest documentation – A document containing the Quantity and Part Number of material on each pallet in a specified shipment.

Parts Distribution Center (PDC) – International’s abbreviation for a parts warehouse and distribution center.

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PRR – A Problem Reporting and Resolution form filled out by PDC personnel for non- conforming shipment reporting.

QA-Debit – A charge filed against a supplier’s account for a non-conforming shipment.

Quick Receive Label – A bar code label attached to the front of a supplier’s pack list. It indicates the Vendor I.D. number and ASN number, which are sent electronically for a specific shipment.

Serial ID, Serial ID number (pallet number) – A Number assigned to each pallet in a shipment.

5.3 Engine

AIAG – Automotive Industry Action Group. A not-for-profit association of companies involved in the automotive industry. AIAG’s purpose is to provide an open forum where members cooperate in developing and promoting solutions that enhance the prosperity of the automotive industry. The focus is to continuously improve business processes and practices involving trading partners throughout the supply chain.

AIAG B-10 Trading Partner Label – This label is used to identify the contents of an individual container, of a single part number, for a shipment. Two identical labels must be affixed to two adjacent sides of each container shipped. Definitions and examples of this label can be found at www . internationalsupplier.com.

Expedite – A shipment identified as requiring special service, which may require delivery sooner than the agreed to standard.

L-T-L – Less than Truckload. A shipment of 15,000 pounds or less; or less than 60% of a trailer.

SMI – Supplier Managed Inventory. The ownership and management, by the supplier, of mutually agreed upon inventory levels at a designated facility.

5.4 Quality

Assembly Plant Supplier Quality organization – Each International Truck Assembly Plant has a Supplier Quality Organization.

Defective Material Reports (DMRs) – Quality defect notification used by the Chatham Assembly Plant.

Global 8D – The eight disciplines process of rigorous problem solving developed by Ford

Material Reject Reports (MRRs) – Quality defect notification used by the Garland Assembly Plant.

Product Deficiency Notifications (PDNs) – Quality defect notification used by the Springfield Assembly Plant.

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Quality Defects (QDs) – Quality defect notification used by the Tulsa Bus Plant and the Conway Bus Plant

Quality Notifications (QNs) – Quality defect notification used by Escobedo Assembly Plant.

Returned Material Authorization (RMA) – An authorization issued by a supplier to an International Assembly Plant for material (goods) to be returned to the supplier.

Supplier Quality representative – A representative of International that works with suppliers to administer and enforce International’s Supplier Quality processes and procedures.

Supplier Recovery group – A group at International dedicated to recovering warranty money from the supply base for quality issues determined to be the responsibility of the supplier.

5.5 Business Impact

COMPASS – COst Management PArtners Sharing Savings, a program that suppliers participate in to generate cost and waste reduction ideas.

COMPASS Annual Goal – Annual goal for COMPASS ideas, which is set each fiscal year for suppliers to achieve.

IdeaStream – Name of the system into which COMPASS ideas are input, then tracked and managed.

5.6 Product Development

Authorization To Tool document (ATT) – Document issued by purchasing to authorize tooling in advance of P.O. ATT is fully approved by purchasing, engineering, tooling and finance

Part Approval - Approval that part meets fit, form & function, usually in the form of a PPAP, see the supplier quality manual for more details

Part Submission Warrant (PSW) – most simple level of part approval typically used for non-production level parts, see supplier quality manual for more details

PPAP – Production Part Approval Process; an AIAG standard for part approval, see supplier quality manual for more details.

Pre-production – prior to full production at International assembly facilities

Pre-production Build (EM, Q, VC)

Equipment/Materials build event (EM) – Initial Prove-Out of Process & Equipment in Production Environment Using Actual Production Process and Production Equipment.

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Quality build event (Q) – Final Confirmation of Production Parts and Processes to Meet Program Quality Goals.

Volume/Complexity build event (VC) – Final Confirmation of Production Rate, Capability and configuration mix.

Pre-production Build – pilot builds conducted prior to production to confirm readiness, see definitions above.

Pyxis – report of a product development issue usually discovered at a build event; issue can be design, assembly, or quality driven. Pyxis assigned to suppliers are for supplier quality issuesPyxis Development – creation of a Pyxis report

Request for Quote (RFQ) – document sent to supplier from Purchasing requesting a quote on a particular part, prints/drawings are sent along with other special instructions as needed. RFQ’s are usually sent electronically through eSPEC.

RUR document – Abbreviation for Supplier Are You Ready. A supplier “Are You Ready” event is conducted with all suppliers with new parts on a major program. The document is provided by Purchasing for supplier to complete showing supplier readiness in various areas.

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6.0 Scorecard Administrator

6.1 Responsibilities

The Scorecard Administrator will be responsible for the following:

Receive, record, track and verify that supporting supplier dispute data (as detailed in the Business Rules) is complete.

Reconcile violations as appropriate.

Communicate disputed data to the appropriate person/group at International for additional review if needed.

General follow-up for responses not received in a timely manner.

Review dispute findings prior to rendering decision.

Communicate and record final dispute findings and decisions in the internal database.

6.2 Disputing a Violation

If a supplier feels that a violation was assigned in error, or feels there is justification for the violation, it is possible to dispute it. There will be a link on the Supplier Scorecard website that says “To dispute a violation, click here”. The link will bring up another website, where the supplier must provide the relevant information. The website will generate an email to the Scorecard Administrator, and he or she will process the request.

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