Direct Material AE Basics

Direct Material AE Basics Document Overview This manual will introduce the JDSN Direct Material Achieving Excellence AE Basics.

Prerequisites The following activities must occur before a user will be able to access JDSN Direct Material AE:  Users need to have a John Deere User ID and password.

Document Objectives The following objectives will be covered in the JDSN Direct Materials Achieving Excellence Basics.

 Displaying Reports

 Displaying Supplier Performance Summary

 Displaying Ratings

Table of Contents Direct Material AE Basics...... 1 What is Achieving Excellence?...... 3 Starting Achieving Excellence...... 3 AE Roles...... 6 When Is Report Information Updated?...... 7 Displaying Reports...... 7 AE Main Menu...... 8 JD Supply Network Support...... 9 JD Supply Network Support...... 9 Help Information...... 9 FAQ Link...... 9 Glossary Link...... 9 Contact Us Link...... 9 Error Messages...... 10 General Messages...... 10 Displaying your Supplier Performance Summary...... 11 Printing the Supplier Performance Summary...... 12 Printing All Other Reports...... 12 Direct Materials AE Reports...... 13 Finding a Deere Contact...... 13 Unit Reports Available...... 13 Supplier Performance Summary...... 13 SPS Notification...... 13 Parent Supplier Performance Summary...... 13 Quality Nonconformance Report...... 13 Delivery Nonconformance...... 14 Service Parts Delivery Performance...... 14 Net Cost Reduction Performance (OFP)...... 14 EDI Transaction Status...... 15 Enterprise Reports...... 16 Fiscal Year to Date Summary...... 16 Quality PPM Summary...... 16 Last 12 Months Summary...... 18 Delivery PPM Summary...... 19 Past Performance...... 21 Display Ratings...... 22 Quality Rating...... 22 Delivery Rating...... 23 Technical Support Rating...... 23 Wavelength (Relationships) Rating...... 23 Cost Management Rating...... 24 Display Comments...... 26 Glossary...... 29

What is Achieving Excellence?

Achieving Excellence (AE) is an enterprise-wide supply chain performance communication process providing mutual competitive advantage in delivering the world’s finest solutions and value in equipment, services and support. The mission is to set consistent performance standards, communicate results, demonstrate improvement, and recognize outstanding achievements. The Achieving Excellence web-site is a tool used by suppliers and Deere employees to aid in the communication process. Achieving Excellence is accessed through the JDSN Network using Internet Explorer. Starting Achieving Excellence Use the steps listed below to display the Achieving Excellence page.

1. Display the JD Supply Network page.

This page is located at https://jdsupply.deere.com

2. Position the mouse over the Business Processes tab. The mouse-over menu illustrated at the right is displayed.

You can click the Business Processes link to display a page listing the mouse-over menu options.

3. Click the Achieving Excellence link.

4. Click the Access Achieving Excellence button.

Achieving Excellence informational brochures are also available for download from this page.

5. Type your Deere userid (i.e., hx32400) in the User Name box.

6. Click in the Password box and type your password.

7. Click the Submit button.

8. Click the I Agree button to agree to the JD Supply Network terms and conditions of use agreement and display the JDSN Achieving Excellence Main Menu page.

If you click the I DO NOT AGREE button, you will not be able to display the Achieving Excellence application.

9. Click the Direct Material Achieving Excellence link.

10. The Achieving Excellence main menu will display.

Use the Achieving Excellence documents link to download the Achieving Excellence manual and other related documents.

AE Roles There are several roles that individuals can be defined to within AE. Each role is briefly described below.

Coordinator A Deere employee assigned by each unit to help maintain a supplier's AE information and support the evaluation teams.

Team Leader A team leader is one individual from a team who has been designated as the team leader for a supplier. The team leader is responsible for managing the Achieving Excellence process by working with members of the evaluation team and the supplier.

Team Member Individual that participates in the evaluation of a supplier.

Deere Employee Internal Deere employees can view AE information for a supplier.

Suppliers A supplier can view their AE data defined for their supplier number and they may enter comments regarding their rating.

When Is Report Information Updated? Report information will be updated on a monthly basis. The most current month's data will be displayed in reports by default. Previous months' reports (history) will be available from the Month dropdown button.

 The Net Cost Reduction Performance (OFP) report information will be updated monthly, but the information is displayed as a fiscal year to date value in the report.  The Nonconformance reports display the most current month's data if it is available. If there are no nonconformances for the month, a report is not displayed.  The Display Rating will display fiscal year to date rating data or will display mid year ratings.

Displaying Reports Use one of the methods listed below to display any report available from the Achieving Excellence page.

 Click any link on the AE Main Menu page.

 Click the Select a Page dropdown button and select one of the options from it. The Select a Page list button is available from any screen.

If you cannot get to this page, please call the Supply Management Enterprise Support Center.

Click the Achieving Excellence Documents link to access the manuals and other AE supporting documents.

AE Main Menu When working in the AE application, click the AE link in the top, left corner to return to the Main Menu page.

The link following the AE link identifies the current page being displayed.

JD Supply Network Support Suppliers with access to JD Supply Network can call the Supply Management Enterprise Support Center at 800-939-1499 for help with applications available from JD Supply Network. Anyone calling will be asked for their userid. In Europe call 00800.33373.456. Help Information Several types of application-specific help links are available in the toolbar at the top of the page. Click the Help link to display Help information pertinent to the Achieving Excellence application.

FAQ Link Select the FAQ link to display frequently asked questions about the application.

Glossary Link Select the Glossary link to display terms used in the application.

Contact Us Link Select the Contact Us link to display the [email protected] email link and the Supply Management Enterprise Support Center phone number.

Click the Close link to close the Help window and return to the application.

Error Messages When an error occurs, a message is displayed at the top of the page in red. The field with the problem has a red background.

 Click the error number link to display specific help for the error message.  Click the Close button to close the Help window for the error message.

General Messages A general message area exists on the Achieving Excellence Main Menu page. Check this area of the page for information about when the server may be down for maintenance or notes of general interest, such as a new release being implemented.

If information is not available, this area of the screen is blank.

Displaying your Supplier Performance Summary Use the steps listed below to display your Supplier Performance Summary. The same process is used to display other reports available.

1. Click the Supplier Performance Summary link. The performance summary most current month's data will be displayed by default.

2. If you work with multiple Deere units, click the Unit list button to display other units. Click the unit whose performance you wish to review. Units where you are an AE supplier will show (AE) after the unit name.

3. Select a different date from the Month list button to see a Supplier Performance Summary for another time period.

4. Click the Retrieve button to refresh the report. Suppliers with multiple Supplier Numbers are able to have more than one supplier number associated with their userid. Check the Supplier number list box for additional supplier numbers associated with your userid. You must first set up the additional supplier numbers by using the Supplier Profile Application. If applicable for the supplier, the Division(s) or Enterprise name will appear in the Unit drop-down list.

Printing the Supplier Performance Summary Use the steps listed below to print the Supplier Performance Summary on one portrait page.

1. Display the appropriate Supplier Performance Summary report.

2. Click the Print Preview button.

3. Choose File - Print from the menu or click the Print button in the browser toolbar.

Printing All Other Reports All other reports except the Parent Supplier Performance Summary do not have a Print Preview button available. Choose File - Print from the menu or click the Print button in the browser toolbar.

Direct Materials AE Reports Finding a Deere Contact In the Supplier Performance Summary, Deere contacts and their phone numbers appear at the top of the Supplier Performance Summary report. In other Unit reports, a Deere contact's name and phone number is listed in the Detail information about a part. Unit Reports Available Supplier Performance Summary This report displays a summary of a supplier's performance for the last 12 months, the Fiscal Year to Date and each month.

SPS Notification SPS (Supplier Performance Summary) Notification will be sent by email to those Achieving Excellence contacts that are listed in the Supplier Profile contact list. The contact listing must include Achieving Excellence as a Business Role, and a valid email address. Supplier Profile is accessible from the JD Supply Network home page under the tab labeled Our Suppliers.

Parent Supplier Performance Summary This report displays quality and delivery performance on a rolling 12 month basis for those suppliers selected to be rated at a Parent Supplier level. The unit coordinator is responsible for setting up the report selection.

Quality Nonconformance Report This report displays supporting information for nonconforming or suspected nonconforming parts that had an impact on Quality PPM. The Summary section contains the total Quality PPM, supplied pieces, quality nonconformance pieces, quality impact points and quality nonconformance dollars; while the Detail section lists all non-conforming parts. Specific information about each part is available, such as the problem with the part, and its disposition.

 The Impact Level Detail section displays the number of nonconformance occurrences and the severity level of any disruption the nonconformance may have created at the Unit.  This report will display the first 50 nonconforming parts. If more than 50 parts are in nonconformance, a Previous and Next button will be available to move between the pages.  You may wish to print this report with a landscape orientation or decrease the font until the report fits the page width.  You may download nonconformances for either the current selected month, fiscal year- to-date, last 12 months, or a specified date range.

Delivery Nonconformance This report displays supporting information for nonconforming parts that had an impact on Delivery PPM. The Summary section contains the total Delivery PPM, percent of delivery conformance, receipt pieces, nonconforming pieces delivered and the receipt dollars; while the Detail section lists all non-conforming parts. Specific information about each part is available, such as the whether the part delivery was early or late, under delivered or over delivered.

 This report will display the first 50 nonconforming parts. If more than 50 parts are in nonconformance, a Previous and Next button will be available to move between the pages.  You may wish to print this report with a landscape orientation or decrease the font until the report fits the page width  You may download nonconformances for either the current selected month, fiscal year- to-date, last 12 months, or a specified date range.

Service Parts Delivery Performance This report displays by month the delivery nonconformance detail (part number, receipt, date disposition) for service parts received at PDC (Parts Distribution Center) and the offsite packaging facilities.

Net Cost Reduction Performance (OFP) This percentage is used as part of the overall cost metric evaluation of the supplier in Achieving Excellence.

It is calculated by establishing a base value for the supplier which consists of all the parts currently supplied by the supplier. This base could change throughout the year as parts are added or dropped. Price changes that are recorded through the Cost Management Quote Module throughout the fiscal year are compared against the base to determine a percent of change.

This report displays all the parts where the price changed from the base calculation at the beginning of the year. The summary section shows the fiscal year to date net cost reduction performance percent and the values that are used in the calculation. The number of current effective parts is to give an indication on how many parts are involved in this calculation. The detail section shows all the parts where the price change from one month to another

You can sort the detail in four ways:

 Extended Difference Descending  Extended Difference Ascending.  Month Descending  Deere Part Number Ascending

 This report will display the first 50 parts. If more than 50 parts are listed, a Previous and Next button will be available to move between the pages.  You may wish to print this report with a landscape orientation.  When you click on a part you will see a popup window and more detail on the price change of the part.  Negative Extended Differences and Percentages will be displayed in a red font.  A net cost reduction goal is established at the beginning of the year and is displayed in the SPS.

EDI Transaction Status This report identifies the EDI transactions the supplier is currently performing with the selected Deere unit and also the status of those transactions. It also shows the transactions sent to the supplier from the same Deere unit. The supplier’s ASN Quality score and invoice accuracy scores are also displayed.

Enterprise Reports Fiscal Year to Date Summary This report displays the fiscal year to date information for a supplier across all Deere units with which the supplier does business. The characters (AE) appear after the unit name if the supplier is an AE supplier for that unit.

The report information is summarized by enterprise and divisions. The unit information for the division is summarized below the appropriate division total. Click the unit link to display the Supplier Performance Summary for that unit.

 The Fiscal Year to Date value is a combined value from November through the current fiscal month.  You may wish to print this report with a landscape orientation or reduce the font so the report fits on one page.

Quality PPM Summary This report displays the Quality PPM information for the last twelve months for a supplier across all Deere units with which the supplier does business. The characters (AE) appear after the unit name if the supplier is an AE supplier for that unit.

The information is summarized by total enterprise and division. The unit information for the division is summarized below the appropriate division total. Click the unit link to display the Supplier Performance Summary for that unit. This report is updated monthly at most units.

Total Enterprise and Division summarize the information. The unit information for the division is summarized below the appropriate division total. Click the unit link to display the Supplier Performance Summary for that unit.

 The lower the value for Quality PPM, the better the performance.

Select Quality PPM Interactive Graph tab to see a graphical view.

Using the links, you may select a different supplier and choose the units to display on the graph.

Supplier Number: 00055571 Supplier Name: Test Supplier

Last 12 Months Summary This report displays the summary information for the last twelve months for a supplier across all Deere units with which the supplier does business. The characters (AE) appear after the unit name if the supplier is an AE supplier for that unit.

You may wish to print this report with a landscape orientation or reduce the font so the report fits on one page.

Delivery PPM Summary This report displays the Delivery PPM information for the last twelve months for a supplier across all Deere units with which the supplier does business. The percent of delivery conformance is listed below the total number of conforming parts. The characters (AE) appear after the unit name if the supplier is an AE supplier for that unit.

The lower the number for Delivery PPM, the better the performance.

Select Delivery PPM Interactive Graph tab to see a graphical view.

Using the links, you may select a different supplier and choose the units to display on the graph.

Past Performance This report displays the classification history, along with the results for a supplier across all Deere units. Only AE suppliers are rated at the end of the year. This report is updated at fiscal year end.

 Use the Group by list button to sort the report by unit or by fiscal year.

 This report will display the first 50 classification entries. If more than 50 entries are available, a Previous and Next button will be available to move between the pages.

Display Ratings The Display Ratings report is shown on a single page, and is a combination of the individual rating screens for the period of a fiscal year. The Detail shows all the criteria for that rating. The Deere Comments section shows comments that the evaluation team entered for that supplier.

 The supplier has the ability to add/edit comments for the current fiscal year rating data. When a comment is added, the Deere Supply Management Team Leader will get email notification.

 The supplier has the ability to add attachments. When an attachment is added, the Deere Supply Management Team Leader will get email notification.

Quality Rating A supplier's performance for the Quality criteria on a fiscal year, or fiscal year to date basis, displays on this report. The Summary section shows the overall rating for the Quality criteria. The Detail shows all the rating criteria. The Impact Level Detail section shows the number of nonconformances occurrences and their effect at the Unit. The Comments section shows comments that the evaluation team entered for that supplier.

Click the Quality Rating link in the Summary section to display the Rating Classification Guidelines.

The Quality Rating provides a supplier with statistical evidence of their product quality. The rating is expressed in parts per million (PPM) as follows:

Total Nonconformances x 1,000,000 = PPM Supplied Pieces

Compared to the previous year, if a supplier achieves a 50% improvement in their Quality PPM rating, that supplier shall receive a one level increase in their Quality Rating. This increase will not allow a supplier to move to partner Classification within the category.

Delivery Rating This report shows a supplier's performance for the Delivery criteria on a fiscal year or fiscal year to date basis. Overall rating for the Delivery criteria is displayed in the Summary section. The Detail shows all the rating criteria. The Comments section shows comments that the evaluation team entered for that supplier.

Click the Delivery Rating link in the Summary section to display the Rating Classification Guidelines used to determine the ratings.

The Delivery Rating provides a supplier with statistical evidence of their ability to comply with order quantities and delivery dates. A Delivery Rating is expressed in parts per million (PPM) and is derived from early, late, over or short deliveries. The Delivery Rating is calculated as follows:

Total Nonconformances x 1,000,000 = PPM Receipt Pieces

Compared to the previous year, if a supplier achieves a 50% improvement in their Delivery PPM rating, that supplier shall receive a one level increase in their Delivery Rating. This increase will not allow a supplier to move to partner Classification within the category

Technical Support Rating This report evaluates the supplier's knowledge and use of industry technology to support development and manufacture of product, and the supplier's ability to provide technically advanced products when applicable.

 Click the link in the Summary section to display the Classification Guidelines  Use the links in the Detail section to see a description of the Technical Support criteria guidelines used to determine the ratings.

Wavelength (Relationships) Rating This report evaluates the supplier's initiative to support the business relationship.

 Click the link in the Summary section to display the Classification Guidelines.  Use the links in the Detail section to see a description of the Wavelength criteria guidelines used to determine the ratings.

Cost Management Rating A supplier's performance for the Cost Management criteria displays on this report. Overall rating for Cost Management shows in the Summary section. The Detail shows all the rating criteria, and the Comments section shows comments that the evaluation tem entered for the supplier.

Where supplier is set up to participate in JD CROP, a minimum of one suggestion submitted per fiscal year is required. A 10% deduction will be applied to the Cost Management rating score if supplier does not participate.

Click the Cost Management Rating link in the Summary section to display the Rating Classification Guidelines.

Use the links in the Detail section to see a description of the Cost Management Rating criteria used to determine the ratings.  Suppliers are able to do an assessment anytime for Technical Support, Wavelength or Cost Management.

1. Click the Supplier Self-Assessment link.

2. Complete the Supplier Self-Assessment details.

3. Click the save button.

Display Comments Use the steps listed below to display comments for all or individual categories. A division or unit must be selected before comments can be retrieved.

1. Select the Display Comments link.

2. The Current Fiscal Year will display by default.

3. Select the desired Category. The default will display All Categories.

4. Select a Division or Unit(s).

5. Click the Retrieve Comments button.

Comments will be sorted by Division/Unit then Date within the category..

Suppliers can only view comments when they are in the Display comments. To add a comment you must go to the Display Ratings page.

Glossary

Term Definition A Accumulated Weighted The sum of the weighted scores determined by the evaluation team for Score each category criterion multiplied by the corresponding weight. If a criterion is not rated, it is not included in the accumulated weighted score. Approved (A) A supplier who meets minimum performance criteria. Classification Average time from Rates the supplier’s performance on providing a valid and error free Ocean Sailing to receipt of BOL Bill of Lading to the John Deere designated Freight Forwarder. (logistics – Ocean) Total Conforming Bills of Lading / Total Number of Bills of Lading = % of Time from Sailing to Receipt of the Bill of Lading B BOL (logistics) Bill of lading C Category One of five areas in which a supplier's performance is evaluated. The categories include: quality, delivery, wavelength, technical support and cost management. Classifications Partner (P) = A supplier who exceeds the highest performance criteria in all five categories – quality, delivery, wave length, technical and cost management. This supplier maintains ongoing activities to insure continuous improvement and has world-class performance levels.

Key (K) = A supplier exceeds our minimum performance criteria in all five measurements and is working towards best in class and world-class performance levels.

Approved (A) = A supplier who meets minimum performance criteria. Improvement plans are to be completed and reviewed each year. Conditional (C) = A supplier that does not meet minimum performance criteria and is a candidate reduction. A supplier with this classification must Retrieve a plan to improve. First year suppliers for a Deere unit are automatically assigned a Conditional classification. Classification History A section on the Supplier Performance Summary report that lists the overall classifications for the supplier for the previous years. Comments (direct) There are three types of comments:

← Supplier Performance Summary – An area for the Deere unit to display comments for the supplier to read on the SPS.

← Deere - A designated area for members of Deere’s Evaluation team to enter comments, which support the final performance evaluation. Supplier – A designated area for suppliers to enter comments responding to Deere comments and ratings

Term Definition

Comments (indirect) There are two types of comments:

← Deere comments - A designated area for members of Deere's Evaluation team to enter comments, which support the final performance evaluation. Supplier comments – A designated area for suppliers to enter comments responding to Deere comments and ratings. Conditional (C) A supplier that does not meet minimum performance criteria and is a Classification candidate for reduction. A supplier with this classification must Retrieve a plan to improve. Contact The person responsible for the part at a Deere unit. Contact this person with any questions regarding the part’s nonconformance. The telephone number for the contact will be listed. Contact names and telephone numbers appear in the Supplier Performance Summary, Quality Nonconformance Report and Delivery Nonconformance Report. Continuous Improvement If a supplier achieves a 50% improvement (as compared to the previous Credit (Quality & Fiscal Year) in their Quality or Delivery PPM rating, that supplier may Delivery) receive a one level increase in their Quality or Delivery Rating. For Quality, this is applied after the PPM and Impact criteria are scored for. This increase will not allow a supplier to move to the Partner classification within the category. Coordinator Deere employee assigned by each unit to help maintain a supplier's IM&S information and support the evaluation teams. Cost Management Category that evaluates a supplier's ability to be price competitive and to Category contain or continuously improve costs. Cost Management Rating The Cost Management Rating is based on the five factors listed below:

← Cost Reduction Suggestions (JD CROP) (10% weighted value) ← Net Cost Reduction Performance (OFP) (25% weighted value) ← Cost Management Initiative (Quote Form Use) (15% weighted value)

← Performance During PDP (50% weighted value) ← Globally Market Competitive This rating is option at mid-year and required at year end of all AE suppliers Criteria (direct) The specifications that must be met to qualify for each supplier classification – Partner, Key, Approved and Conditional. The evaluation period is from 1 November through 31 October.

← A rating is kept by a supplier for a fiscal year. The lowest rating in a single category will determine the overall supplier classification. Criteria (indirect) A group of conditions which describe the expected performance from a supplier. Each category contains criteria, which will be used to determine a supplier's overall performance level.

Term Definition Criterion An individual condition which describes the expected performance from a supplier. C-TPAT (logistics) Custom – Trade Partnership Against Terrorism C-TPAT is a joint government-business initiative to build cooperative relationships that strengthen overall supply chain and border security. D Data Thru The data in the report is current through the date displayed. Deere Contact Personnel Deere employee(s) the supplier can call if there are any questions concerning the report. Deere Part Number The part number assigned by Deere systems. Delivery The total number of delivered pieces that were received outside of a Nonconformance specified delivery window or the quantity received did not match the quantity ordered.

Delivery Performance A delivery rating is derived from early or late deliveries based on the (logistics - Ocean) advertised sailing date at the time of booking. Calculated on a percentage basis as follows:

Total Conforming Loads = Delivery Performance Number of Loads

Delivery Performance – A delivery rating is derived from early or late deliveries. Rating is Outbound calculated on a percentage basis as follows: Total Number of Conforming Loads = Delivery Performance (logistics – Ground) Total Number of Loads

Delivery PPM ← Delivery PPM = (Delivery Nonconformance) / (Received Pieces) * 1,000,000

← Delivery is calculated by the ratio of Delivery Nonconformance (pieces not delivered within specified delivery window) and Received Pieces (total pieces received by unit) during a period of time. The lower the value, the better the performance. Delivery Category Category that evaluates a supplier's ability to respond to Deere's delivery needs. Delivery Rating The Delivery Rating provides a supplier with statistical evidence of their ability to comply with order quantities and delivery dates. Disposition The action that was taken at the Deere unit after the part was identified as nonconforming. Documentation Supplier ensures receipt of accurate distribution of documents within 4 distribution (logistics – days (6 days for RORO) after Confirmed on Board. Freight Forwarders) Number of Conforming Documents = % of Documents on Time Total Number of Documents Distributed Due Date The date ordered parts are to be delivered to the Deere unit.

Term Definition

E eCommerce Connectivity AE suppliers are expected to be e-connected, and therefore, need to be Deduction making measurable progress towards implementing the required EDI transaction sets. If a supplier is not making suitable progress with a Deere unit, a deduction of 30% will be automatically applied, making the supplier’s Wavelength rating Conditional. eCommerce Quality - % An objective metric that automatically rates the supplier’s ASN (Advance ASN Correct Ship Notice) quality. This reads as a percentage of ASN correctness and is calculated by dividing the total number of good ASN line items by the total number of all ASN line items. This is on a fiscal year to date basis. Early – Late field This field identifies materials received outside the specified delivery window. If you see an L, the delivery was late. If you see an E, the delivery was early. EDI Electronic Data Interchange. Evaluation Period Fiscal period for data. Options include Begin Year, Mid Year and Year- End. Evaluation Team Deere employees assigned to evaluate a supplier's performance. Export documentation Supplier ensures receipt of accurate Bill of Lading within two days (4 days (logistics – Freight for RORO) after Confirmed on Board. Forwarders) Number of Conforming Bill of Lading Receipts = Bill of Lading % Accuracy Total Number of Bill of Lading Receipts F Fiscal Year to Date The combined value from November through the current fiscal month. For example, if the current month is August 2004, the Fiscal Year to Date value would total all values from November 2003 through August 2004. FAST (logistics) Free and Secure Trade Program This program allows U.S./Canada and U.S./Mexico partnering importers expedited release for qualifying commercial shipments. G Goals Supply management goals are established each fiscal year for suppliers by each unit. H I Impact Levels There are four levels of impact:

Level 1 Critical 1000 pts. Level 2 Major 100 pts. Level 3 Minor 10 pts. Level 4 Incidental 1 pt. Impact Points Per The calculation used to determine Quality impact rating: Million $ Impact Points / Receipt Dollars (USD) X 1,000,000 = IPM$

Term Definition Invoice Accuracy Invoice reflects the contracted price and is paid on first pass. Calculation (logistics) is as follows: # of Conforming Invoices = % Invoice Accuracy Total # of Invoices 810 Invoice Accuracy Measures the supplier’s ability to transmit correct electronic invoices. (indirect) Calculated as follows: Total good 810’s/Total 810’s * 1,000,000 = % Good 810’s J John Deere Cost John Deere Cost Reduction Opportunities Process (JD CROP) is a criteria Reduction Opportunities in the Achieving Excellence Cost Management category. It is an on line Process (JD CROP) supplier cost reduction and communication process that enable suppliers to submit proposals for reducing costs of products or services purchased by Deere. K Key (K) Classification A supplier who exceeds the minimum performance criteria in all five categories – Quality, Delivery, Wavelength, Technical Support and Cost Management and is working towards world-class performance levels. L Last 12 Month The combined values from the past 12 fiscal months. For example, if the current month is August 2004, the Last 12 Months value would total all values from August 2003 through August 2004. Load Securement Carrier meets all requirements to properly block, brace and tie down (logistics – Ground) product to insure damage free products to consignee. Calculation is as follows:

Number of Nonconforming Loads = % of Overages/Shortages & Damages Total Number of Loads M Maximum Weighted The total number of rated category criteria multiplied by 5 (the partner Score weight). This is the maximum score the supplier can attain. N Net Cost Reduction This rates the supplier’s efforts to provide continuous cost improvement for Performance current parts in current fiscal year. It is calculated by establishing a base value for the supplier which consists of all the parts currently supplied by the supplier. This base could change throughout the year as parts are added or dropped. The report detail shows all cost UPS and DOWNS and shows aggregate amount against the goal. Goals can be enterprise, divisional or unit annual goals. NonCF Date The date a part was in nonconformance. NonCF Number A number generated for every nonconformance part. Depending upon the rejection and disposal system at the Deere unit, it can be the rejection number, QNote number, etc. NonCF Qty The quantity for nonconformance parts.

Term Definition Order Fulfillment Process Order Fulfillment Process or OFP is a business process that focuses on (OFP) the forecasting, planning and manufacturing of machines and attachments for delivery to Deere customers based on their demand. Other field This field identifies parts that were in nonconformance due to other reasons like the wrong container. An x will appear in the field if the delivery nonconformance was due to anything other than Early, Late, Over or Under delivery. Over – Under Field This field identifies quantities received that exceeded the order quantity by a specified percent or the value of the order by a specific dollar amount. If you see an O, the delivery was over the order quantity. P Parent Supplier To allow the ability of rating various groupings of supplier numbers Company Rating pertaining to one parent company. Parent Supplier A Webi report available to Deere employees that will allow a user to select Company Roll Up various suppliers, units, and divisions for AE data. Parent company roll-up reporting in Webi will not assign a final classification for the group being reported on. It is intended for management purposes Partner (P) Classification A supplier who exceeds the highest performance criteria in all five categories - Quality, Delivery, Wavelength, Technical Support and Cost Management. This supplier maintains ongoing activities to insure continuous improvement and has world-class performance levels. Percent Delivery Delivery Performance = (Received Pcs – Delivery NonCF) / (Received Conformance Pcs) * 100 This is another way to view Delivery performance. The higher the percentage, the better the performance. Pick Up Performance – Supplier accepts, pick up and initiates transportation of the load in Inbound (logistics – accordance to contractual commitments. Calculation is as follows: Ground) Total Number of Conforming Loads = Load Service Performance Total Number of Loads PO / Quote Number The purchase order number for the part delivery. If the delivery nonconformance is generated by the KanBan system, a QNote number will be displayed in this field when a PO number if not available. PPM Parts Per Million. Q Qty Applied The quantity that was applied to the order. Qty Due The number of parts ordered. Qty Received The actual quantity received at the Deere unit. QNote Number If the delivery nonconformance for a part is generated by the KanBan system, a QNote number will be displayed in the PO/QNote field when a PO number is not available. Quality Impact Points This value contains the total impact points for a given month

Term Definition

Quality Impact Rating Quality impact rating allows Deere to measure the level of impact the quality non-conformance had on the unit. Each occurrence will have some impact. The impact level for each occurrence will automatically default to incidental (Level 4) if not assigned a higher level of impact.

The quality impact rating is expressed in Impact Points Per Million $ (IPM$). Impact Points / Receipt Dollars (USD) X 1,000,000 = IPM$ Quality Nonconformance The total number of supplied pieces that were rejected during inspection. Quality Nonconformance The total amount (in unit currency) for supplied pieces that were rejected Amount during inspection due to quality for a given time period.

Quality PPM ← The range of values the supplier has to meet for the different classification status for Quality PPM .

← Quality PPM = (Quality Nonconformance) / (Supplied Pieces) * 1,000,000

← Quality is calculated by the ratio of Quality Nonconformance (Rejected Pieces) and the number of supplied pieces (Pieces Used by Unit) during a period of time.

← PPM stands for parts per million. The lower the value, the better the performance. Quality Category Category that measures the ability of the supplier to satisfy our needs, expectations and requirements of the material and/or service provided. Quality Rating The Quality Rating provides a supplier with statistical evidence of their product quality. A Quality Rating is expressed in parts per million (PPM). R RFP (logistics) Request for price RORO (logistics) Roll-On, Roll Off Method of transport (as a ferry or train or plane) that vehicles roll onto at the beginning and roll off of at the destination Rate Quotes (logistics) Measures the average number of days supplier takes to respond, via the quote form provided, for requested service Rating The percentage value that determines the category classification rating. It is calculated based on the following formula -- Rating = (Accumulated Weight Score)/(Maximum Weighted Score) * 100 Receipt Pieces The total number of pieces delivered by the supplier. This value is used to calculate Delivery PPM Receipt Amount The total amount (in unit currency) for the received pieces for a given period of time.

Term Definition Reports (logistics) Supplier electronically provides a monthly service report and a monthly exception report by the 10th day of the subsequent month in the format specified by John Deere. Number of Reports Received on Time = % of Reports on Time Total Number of Reports Due S Shipping documents Carrier provides consignee with full and complete delivery documents. (logistics – Ground) This includes, at a minimum, a copy of the bill of lading and the packing list provided by the supplier. Calculation is as follows: Number of Nonconforming Documents = % of Conforming Documents Total Number of Loads Supplied Pieces The total number of pieces that were used during the month to manufacture equipment. This value is used to calculate Quality PPM. Supplier Information The supplier number, name and address. Supplier Self Suppliers have the ability to rate themselves in the following categories: Assessment Technical Support, Wavelength and Cost Management T Team Leader One individual on a team who has been designated as the team leader. The team leader is responsible for managing the Achieving Excellence process by working with members of the evaluation team and the supplier. Technical Support Category that measures the service and technical support provided within Category the supplier's scope of business. Technical Support Rating This rating is derived from a consensus ratings established by the sourcing team at each unit. The rating is optional at midyear and required at year-end for all AE suppliers.

Total Spend Purchased dollars spent with supplier. Track and Trace Is the process of monitoring and recording events of a shipment from origin (Logistics) to destination. U V W Warranty Agreement This field shows if the supplier has signed a warranty agreement with a Deere unit. Working Agreement This field shows if the supplier has assigned a long term agreement with a Deere unit. Wavelength Category Category that consists of a composite analysis of the supplier's initiative, attitude, responsiveness, attention to detail, communication and safety performance.

Term Definition

Wavelength Rating The rating is a composite analysis of the supplier's initiative, attitude, responsiveness, attention to detail, and communication performance with a unit.

The wavelength standard seeks to measure a supplier's commitment to excellence through the working relationships of their people with a unit's personnel. The rating is optional at midyear and required at year-end for all AE suppliers. Weight Weight is determined by Deere to reflect the value placed on each performance level Weighted Score Weighted Score is the scoring for all criteria with the same rating multiplied by the weight. For all criteria with a rating of Not rated, the weighted score is zero. It is calculated by the following formula: Weighted Score = Scoring * Weight X Y Z