supplier consignment

Supplier Consignment

2010

2 File Number

Why Consignment

1. Reduction of expedites • Less over time, airfreight, disruption to the factory

2. Smoother demand profile• Eliminate reschedules• Improved material flow• Level load factory

3. Significantly Improved Vendor Scorecard (40 points guaranteed) if 100% on consignment

4. POU (pay on use)• No invoice needed• Eliminate the matching errors from receipts to invoice

5. Visibility to supplier’s inventory and net requirements in iSupplier Portal

6. Improved OTTR 7. Improved LT

3 File Number

Weekly Steps to Take to Maintain Program

1. Retrieve the weekly Net requirements forecast from iSupplier

Portal.

2. Load forecast into supplier’s MRP system to drive component

requirements.

3. Calculate the inventory quantity below the stocking agreement

minimums or above the maximums.

4. Calculate quantity on the forecast within supplier’s internal

manufacturing LT.

5. Calculate the inventory in-transit.

6. Schedule production to maintain the stocking program inventory

along with material within the manufacturing LT.

7. Ship product for the consignment item on the delivery document

(standard PO) received via iSupplier Portal.

4 File Number

Example of Inventory to Start Manufacturing

• Minimum Stocked Inventory Level = 200 pieces• Current Stocked Inventory = 150 pieces• Manufacturing LT = 20 (in 5 day weeks)

Minimum Inventory Calculation• 200 – 150 = 50 pieces needed to maintain minimum stocking agreementForecast Calculation• 75 + 90 = 165 pieces needed to maintain building to the 20 day forecast

to provide a 5 day LT Work in Process at Supplier = 100 pieces

Need to start 115 pieces in production this week to maintain the Honeywell Stocking Program Agreement. (50+165-100)

week 1 week 2 week 3 week 4 week 5 week 6

0 0 75 90 125 100

5 File Number

Viewing Consignment via iSupplier Portal

When first opened, the Product tab page will show ‘No data exists’ until a search is run.

We recommend that you always enter a Honeywell Item and click Go.

If you do not enter a specific Honeywell item and click Go, it will return all of the items sourced to your Company – active and obsolete.

6 File Number

Viewing Consignment Item Data

Under the Product tab you will have visibility to the Consignment Item data.

From the sub-tab Supplier Item Summary – Consignment Items will have a blue data sheet in the Consignment Inventory column. Click on the blue data sheet and it will open the Consigned Inventory page.

7 File Number

Viewing Consigned Inventory Quantities

Click on the Consigned On-Hand blue data sheet and you will open the On-Hand Items page.

The Quantity listed is the inventory you own at Honeywell. This is the quantity you use to maintain your minimum inventory levels and stay at or below your maximum inventory levels per the Consignment Contract signed with Honeywell.

IMPORTANT: The minimum inventory level is NOT the re-order point: your key input for replenishment is Honeywell’s forecast that you download weekly from iSupplier Portal. (Reference: Slide 3).

8 File Number

Viewing Consigned Receipt Data

Click on the Consigned Receipts blue data sheet and you will open the Receipt Transactions page.

You will see the quantity received into the Honeywell consignment inventory location.

Note: The PO Number you see for receipts is the Delivery Document (or Cosigned Standard PO number for shipping and receiving), NOT the Blanket Agreement number for invoicing and payment. (Reference: Slide 12.)

9 File Number

Viewing Consumption/Pull Data

Click on the Consumption Advices blue data sheet and you will open the Consumption Advices page. Click on the Consumption blue data sheet and you will open the Material Transactions page. This will show the detail of the consigned inventory used at Honeywell.Note: The PO Number shown is the Blanket Agreement for invoicing and payment, and its Release number, created from consigned inventory used. (Reference: Slide 12.)Example: 7376844-2 from the screen shot above is Blanket Agreement 7376844, Release 2.

10 File Number

Viewing Consigned Use Invoices

When first opened, the Account tab page will show ‘No data exists’ until a search is run. From the sub-tab View Invoices you will have visibility to the Consigned Use Invoices. Click on the Advanced Search link. Change the Invoice search to “starts with” and enter USE. The returned information are the Consigned Use Invoices.

Note: The PO Number you see for invoices is the Blanket Agreement for invoicing and payment, and its Release number, NOT the Delivery Document for shipping and receiving. (Reference: Slide 12.)Example: 7398352-1 from the screen shot above is Blanket Agreement 7398352, Release 1.

11 File Number

Viewing Payments

From the sub-tab View Payments you will have visibility to the Honeywell payments to your company.

Enter the Honeywell Blanket Agreement Number in the PO Number field and click Search. The information shown is the payment data associated with that Blanket Agreement.

Note: The PO Number you see for payments is the Blanket Agreement number for invoicing and payment, NOT the Delivery Document for shipping and receiving. (Reference: Slide 12.)

12 File Number

Consignment Invoice/Payment Process

• Documents

- 1 Blanket Agreement number will be given that the invoices will generate against. This Blanket Agreement will be updated or replaced as necessary for price adjustments.

- 1 delivery document number (or “consignment standard PO”) will be given for shipping material against. This will be the same delivery document for a 1 year period.

• Invoicing

- Honeywell will generate the USE invoice based on the Blanket Agreement price and pull (or “USE”) quantity. You won’t need to invoice for any consigned product.

- Sending in invoices on these parts after they are on consignment will put your invoices on hold. Confirm you aren’t sending an invoice to Honeywell on these consignment items.

• Payment

- Payment cycle: starts based on the invoice date as triggered by a material pull from the consigned location at Honeywell.

- Payments will be made with the agreed upon terms (as stated on the Blanket Agreement) per the Honeywell check run / EFT / WFT pay schedule based on the invoice date as triggered by the pull of the inventory from consignment.

13 File Number

E-mail Alert: Consigned Material Used by Honeywell Intl Inc

From: Email Notifications (HBC Oracle Instance - HBCPRD03) [mailto:[email protected]]

Sent: Wednesday, July 16, 2008 11:56 PMTo: [email protected]: Consigned Material Used and/or Invoiced by Honeywell Intl Inc.

Supplier the below Consigned Blanket Release has been created based on material used. Doc Nbr: 7499730 Release Nbr: 96 Shipment Nbr: 1 Invoice Nbr: USE-16-JUL-08-92735 Hywl Item Nbr: 4561AA Supplier Item Nbr: 4561BB Qty Used: 250 Unit Price: 2.46 Hywl Loc: WCO ---------------------------------------------- Doc Nbr: 7499739 Release Nbr: 121 Shipment Nbr: 1 Invoice Nbr: USE-16-JUL-08-92738 Hywl Item Nbr: 4562AB Supplier Item Nbr: 4562CD Qty Used: 300 Unit Price: .04 Hywl Loc: WCO

14 File Number

Tips: Supplier Internal Invoicing & Inquiry

Program Feature 1: Although this program requires that no invoices be mailed to Honeywell, most suppliers still have invoices generated in their system for the material, against which they reconcile Honeywell’s payments.

Tip: Use Honeywell’s “USE” Email Alerts to help with this payments matching! We designed these alerts with this function in mind.

Program Feature 2: Honeywell’s system cannot tie a specific shipment or receipt of consigned material to a specific material pull or “USE” release or invoice.

Tip: If possible, use Honeywell’s “USE” Email Alerts to trigger generating internal invoices and having those invoices reference the information on these alerts – as opposed to having supplier internal invoices generated when material is shipped to or received at Honeywell.

Program Feature 3: Since you won’t be mailing us your invoices, when inquiring to Honeywell about payment status, we cannot use your invoice numbers to see the data.

Tip: Provide us with this information so we can answer your payment questions:

- Item # - Date

- Blanket Agreement Number - Honeywell “USE” Invoice Number

- Blanket Release Number

15 File Number

Shipping Instruction Summary Key Points

• Each consigned item has one shipping/delivery document associated with it. Ship items against their respective delivery document

numbers.

• NO skids with both consigned and non-consigned items. But:

It is ok to mix consigned items on a skid with other consigned items.

If it is appropriate to the part size and type, partial skids are ok

It is ok to ship quantities that are not on skids

• Attach the Consignment Label (see next slide) to each skid of consigned items. It needs to be placed prominently on at least 2 sides, and we

recommend placing it on all 4 sides.

IMPORTANT: As part of the program set up process, confirm shipping requirements with Honeywell Logistics.

16 File Number

Shipping Label

CONSIGNMENTCONSIGNMENTCONSIGNMENTCONSIGNMENTCONSIGNMENT

www.honeywell.com