• Category Weighting
• Quality Category
• Delivery Category
• SCSS (Supplier Cost-Saving Suggestions)
  
  
  

Road to Supplier Performance Excellence
2007 Supplier Rating Criteria
Overview

Introduction

Federal-Mogul Corporation uses the following criteria to rate the performance of our suppliers for all Federal-Mogul manufacturing and distribution facilities.

Purpose

• Identification of continuous improvement and cost-savings opportunities
• Promote and encourage improved communication on performance issues
• Provide objective data for use in supplier management and sourcing decisions
• Recognition of exceptional supplier performance

Terminology

Category: These are the main groupings by which suppliers will be measured. The initial set of categories for which measurements will be compiled are Delivery, Quality and Supplier Cost-Saving Suggestions (SCSS). Each category has assigned weighting, which is rolled into the overall score. Category scores range from 0 to 100 points.

Overall Rating: The Overall Rating is a description of the performance level of supply as viewed by Federal-Mogul. Scores for each category are multiplied by the weighting, and the summation entails the overall score for the supplier. Overall Ratings associated to the overall score are as follows:

Overall Rating Weighted Point Score:
Preferred: 90 to 100
Acceptable: 70 to 89
Developmental: 0 to 69

“Preferred” Supplier Rating:
1. Federal-Mogul will work with these suppliers on new product development.
2. Federal-Mogul will assist these suppliers in maintaining a competitive position.
3. Federal-Mogul will maintain a listing of “Approved for New Business” suppliers.

“Acceptable” Supplier Rating:
1. Federal-Mogul will require a plan from the supplier outlining how to achieve preferred status.
2. Federal-Mogul will monitor supplier improvement.

“Developmental” Supplier Rating:
1. Federal-Mogul requires corrective action if the supplier is rated at this level for three consecutive months during the calendar year.
2. The supplier must provide plans to improve performance to an acceptable level.
3. Federal-Mogul will look at alternative sources if performance does not improve.

Supplier Rating Qualifications:
The rating system will entail any supplier deemed appropriate by the Federal-Mogul Manufacturing/Distribution Purchasing Team.

• Delivery 40 percent 
• Quality 40 percent
• Supplier Cost-Saving Suggestions (SCSS) 20 percent

A value is displayed in each category on the Global Scorecard for every Federal-Mogul facility receiving product(s) or service(s) from the supplier.

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Quality Category: Rating Criteria

The Quality category is comprised of two components:

• Parts Per Million (PPM) 50 percent
• Quantity of supplier corrective action requests (SCARs) issued 50 percent

PPM is based on SCARs. Both the number of SCARs and PPM are reported monthly. SCAR responsiveness does not factor into the supplier’s Overall Score. Currently, it is only displayed on the Scorecard.

PPM Count       Points       # of SCARs        Points
      0                100               0                  100
   1 – 25              90               1                   70
 26 – 50              80            2 – 4                 40
 51 – 100            60              5+                    0
101 – 250           40
251 – 500           20
501+                  0

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Delivery Category: Rating Criteria

On-time delivery:
The delivery score is based on the average percentage across using plants for the current month. On-time delivery percentage has a window of one day early and zero days late to the due date and +/- 5 percent of order quantity. The on-time delivery percentage is determined by line items received on time divided by the number of line items due by the supplier for the month.

Consignment programs receive a 100 percent delivery percentage unless a stockout is caused. The score is reduced by 10 percent for each day of the stockout.

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SCSS (Supplier Cost-Saving Suggestions): Rating Criteria

                  Score                       SCSS Measurement
                   100                             5% and above
                     85                             4% to 4.9%
                     70                             3% to 3.9%
                     40                             2% to 2.9%
                     20                             1% to 1.9%
                       0                             0.9% and below