Qualitas 2016 Annual Strategy Meeting and Supplier Awards
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QUALITAS 2016 ANNUAL STRATEGY MEETING & SUPPLIER AWARDS CEREMONY Confidential Information – ©2016 FCA US LLC WELCOME Scott Thiele Chief Purchasing Officer, FCA – Global Head of Purchasing & Supplier Quality, FCA – North America Confidential Information – ©2016 FCA US LLC Theme of the Event QUALITY MAKERS: Aligning for Excellence Confidential Information – ©2016 FCA US LLC Agenda Corporate and Global Update Scott Thiele Supplier of the Year Awards 3rd Party Perspective from JD Power Jacob George Corporate Quality Update Scott Garberding Intermission North America Update Scott Thiele Industrialization Plan Steve Beahm Supplier of the Year Awards Product Design Ralph Gilles Supplier of the Year Award My Background Manager Director Global Commodity Buyer Supply Base Commodity Analyst Management Management General Manager Director Director Director Global Raw Purchasing Product Cost & Global Technology Materials (2 Positions) Standardization = Whirlpool Director Vice President Vice President Finance Global Product Global P&SQ (2 Positions) Finance = FCA Confidential Information – ©2016 FCA US LLC CORPORATE UPDATE Confidential Information – ©2016 FCA US LLC “Being a supplier to this Group is not a walk in the park, and never will be, because our commitment to the customer is not negotiable.” SERGIO MARCHIONNE Chief Executive Officer - FCA Confidential Information – ©2016 FCA US LLC 2015 Key Figures 15 150 4.6M €110.6B €5.3B COMMERCIAL MARKETS VEHICLES NET ADJUSTED BRANDS SHIPPED REVENUE EBIT 164 40 238,162 84 €4.1B* PLANTS COUNTRIES EMPLOYEES R&D CENTERS INVESTMENT OF OPERATION IN R&D * Includes Ferrari, Capitalized R&D and R&D Charged Directly to the Income Statement Confidential Information – ©2016 FCA US LLC Key Actions for Success: Meeting Business Plan Targets LATAM APAC NAFTA EMEA . Localize and invest . Develop the GAC . Shift from cars to . Continue product in production FCA joint venture trucks and UVs in mix from Jeep and facilities: to support local the market Fiat 500 family Pernambuco and Jeep production in . Utilize existing Cordoba China . Invest in premium infrastructure to brands: Alfa Romeo . Increase exports out . Re-cadence accommodate long & Maserati of Brazil product launch range plan plans for Alfa Romeo Jeep Volume Targets Increased to ~2M Units Worldwide Key Actions for Success: Unique Brands and Products Jeep Renegade Alfa Romeo Giulia Fiat 500 Ram 1500 Rebel Maserati Quattroporte GTS Fiat Toro Lancia Ypsilon Confidential Information – ©2016 FCA US LLC Chrysler Pacifica Key Actions for Success: New Product Launches Production in Windsor, Canada Production in Betim, Brazil Chrysler Pacifica Chrysler Pacifica PHEV Fiat Mobi Production in Cassino, Italy Production in Torino, Italy Production in Guangzhou, China Alfa Romeo Giulia Maserati Levante Jeep Renegade Confidential Information – ©2016 FCA US LLC Key Actions for Success: Regulatory Compliance . Regulatory compliance planned through GLOBALLY OPTIMIZED CO2 new product technologies and COMPLIANCE PLAN architecture efficiency actions Battery / Electric Technologies: – Mild hybrid – 48V (2018) . Prioritizing vehicle efficiency – Hybrid Electric Vehicles (HEV/2008) improvements and powertrain – Plug-in Hybrid Electric Vehicles (PHEV/2016) technologies across all regions – Battery Electric Vehicles (BEV/2013) . Leveraging global systems to incur the least amount of cost needed to comply Confidential Information – ©2016 FCA US LLC Key Actions to Success: Global Common Culture FCA IS WORKING TOWARDS BECOMING ONE UNIFIED TEAM Confidential Information – ©2016 FCA US LLC GLOBAL UPDATE Confidential Information – ©2016 FCA US LLC Quality Makers: Aligning for Excellence What does Aligning for Excellence mean for Group Purchasing? What are we doing to work better together globally? What are we doing to better align with you? Confidential Information – ©2016 FCA US LLC Global Purchasing Organizational Changes GLOBALLY ALIGNED MERGED TO OLD STRUCTURE TO ENGINEERING & SQ 4 DEPARTMENTS BODY & METALLIC BODY M B B RAW MATERIALS INTERIOR & CHEMICAL INTERIOR C I I ELECTRICAL CHASSIS & ELECTRICAL CHASSIS E C C ENGINE SYSTEMS P POWERTRAIN E ELECTRICAL P POWERTRAIN E ENGINE SYSTEM P POWERTRAIN Confidential Information – ©2016 FCA US LLC Global Group Purchasing Leadership NORTH AMERICA EMEA Scott Thiele Monica Genovese Chief Purchasing Officer Head of EMEA Group Purchasing Head of North America Purchasing & Supplier Quality . INTERIOR: Marlo Vitous . BODY & RAW MATERIALS: Marco Dalla Vedova . CHASSIS & ENG SYS: Doug Doran . ELECTRICAL: Marcello Bariani . POWERTRAIN ELECTRIFICATION: Paolo Sasso . CAPEX: Sara Lovera . POWERTRAIN: Fred Solomon . MOPAR: Marco Manavello . SERVICES: Jay Wilton . STANDARDIZATION: Leonardo de Toma . SUPPLIER RELATIONS & RISK: Sig Huber . SUPPLIER QUALITY: Tony Brenders . HUMAN RESOURCES: Daniela Antovski . FINANCE: John Patel LATAM APAC Antonio Filosa Larry Walker Head of LATAM Group Purchasing Head of APAC Group Purchasing Confidential Information – ©2016 FCA US LLC Destination 2020 Initiative DESTINATION STATEMENTS: GROUP PURCHASING VISION 1. Perfect quality products and services that The efficient selection, management and enable FCA to exceed all corporate development of the world’s highest quality, best objectives. performing automotive supply base 2. Aligned commodity strategies across FCA and the supply base. 3. Fastest and most effective OEM sourcing process. 5 YEARS 4. All supplier relationships consistent with Foundational Principles. 3 YEARS 5. Maximized value by basing decisions on a fundamental understanding of total life 1 YEAR cycle cost. Foundational Principles Confidential Information – ©2016 FCA US LLC Destination 2020 Pillars and Objectives Sourcing & Program Management Pulling ahead sourcing activities to enable earlier vehicle development Commodity Strategy Creating common global strategies to source the best quality suppliers Developing robust processes and tools that will allow more consistent and Supplier Relationship efficient business practices Total Life Cycle Cost Reducing costs for FCA and suppliers by analyzing historical metrics Minimizing risks by having more cross-functional engagement in the sourcing Quality process and additional time to complete testing and validation External Balanced Scorecard Measuring supplier performance consistently across all regions Confidential Information – ©2016 FCA US LLC Commodity Strategies Pillar Developments Complete In-Progress . Implemented commodity . Establishing one common methodology changes global material group Cross-functional process that . Trained production buyers . Launching a new supports long-term planning globally and provided commodity strategy system and improves supplier continuous mentorship . Providing enhancements to alignment . Aligned material groups the training and extending it globally and reduced the to engineering number of codes by 73% Confidential Information – ©2016 FCA US LLC Sourcing & Program Management Pillar Developments Complete In-Progress . Implemented pre-sourcing . Creating Cost Model processes that can reduce Element Agreements source selection time by up Allows earlier supplier to 11 weeks . Developing a common involvement in the product global source package development process, provides . Prioritized quality and process and automated consistency globally, and warranty within sourcing system increases transparency. decisions globally Confidential Information – ©2016 FCA US LLC External Balanced Scorecard Pillar Developments Complete In-Progress . Global agreement on . Development, testing and consistent operational validation of the new global measurement categories scorecard and weights More consistent performance . Launch strategy and measurement of global . Approved funding for communication plans suppliers implementation Anticipated Launch Q1 2017 Confidential Information – ©2016 FCA US LLC Supplier Relationship Pillar Developments Complete In-Progress . Launched a Supplier Help . Developing strategies for Desk in North America and production schedule EMEA stability in all regions Advocates open two-way . Standardized the Supplier . Supporting packaging best communication and drives Advisory Council practices practice efforts efficiency . Rolled out the Foundational . Training employees and Principles globally suppliers on the Foundational Principles Confidential Information – ©2016 FCA US LLC Supplier Relationships We still have work to do… Confidential Information – ©2016 FCA US LLC Our Commitment To Act in Accordance with the Foundational Principles Integrity Empathy & Advocacy Mutual Transparency Sense of Urgency Proactive Collaboration Continuous Improvement Personal Accountability Long-Term Mindset Confidential Information – ©2016 FCA US LLC Quality Makers: Aligning for Excellence Following one path together for long-term success Confidential Information – ©2016 FCA US LLC OVERVIEW OF SUPPLIER AWARDS Confidential Information – ©2016 FCA US LLC 2016 Award Categories 1. Body Quality 11. Diversity Supplier Development – Production 2. Capital Equipment Quality 12. Diversity Supplier Development – Non-production 3. Chassis Quality 13. Foundational Principles – Logistics 4. Electrical Quality 14. Foundational Principles – Production 5. Engine Systems Quality 15. Foundational Principles – Non-production 6. Interior Quality 16. Innovation – Production 7. Mopar Quality 17. Innovation – Logistics 8. Powertrain Quality 18. Logistics 9. Raw Materials Quality 19. Supply Chain Management 10. Services Quality 20. Sustainability 21. Technical