SUPPLIER DAY Universal EVSE

December 12, 2011 Lear HQ - Southfield, MI

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• 9:00 – 9:15 AM: Introduction to LEAR = Lani Dryja

• 9:15 – 9:30 AM: Program Overview/Timing plan = David Lach

• 9:30 – 9:45 AM: Supplier Portal Overview = Lou Minna

• 9:45 – 10:15 AM: Supplier Development Quality and Systems

Requirements = Ed Porter

• 10:15 – 10:30 AM: Global Logistics = Mark Henzi

• 10:30 – 11:00 AM: Q&A

AGENDA

Introduction to LEAR

Lani Dryja

Global Advanced Purchasing Manager

Electronics and Advanced Efficiency Systems

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4

Lear Profile

• Leading Tier 1 global automotive supplier

– $12 billion annual sales in 2010

– $2.4 billion three-year sales backlog*

• Strong global market positions and low-cost footprint in:

– Seating

– Electrical Power Management Systems

• Leader in product quality, customer service and innovation

• Diversified sales and customer base serving all of the world’s

major automakers

• Strong balance sheet and liquidity position

* 2011 to 2013 Sales Backlog as of August 4, 2011

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Leading Tier 1 Global Automotive Supplier

Approximately 93,000 Employees

At 200 Locations In 35 Countries

Low-Cost Engineering Centers

China, India, Philippines

Low-Cost Operations

21 Countries

6

We Serve All the World’s Major Automakers

Lear Content On Over 300 Vehicles Worldwide

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Lear Philosophy

• Stay focused on what we can control – quality, customer

service, cost and innovation

• Operate lean with a LBO mentality

• Work together as a cohesive team

• Continuously improve the fundamentals of our business

• Conduct our business with integrity and humility

• Never quit until the customer is completely satisfied

Geographic Sales Diversification

2005 2006 2007 2008 2009 2010

BRIC Markets*

(in millions)

Total Company

* Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.

Brazil, Russia and India

China

$566

$834

$982

$1,171

$1,521

$1,973

2010 Consolidated Sales

Two-Thirds of Global Sales

Outside North America

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Europe

42%

$12.0 Billion

North America

34%

Rest of World

8% Asia

16%

Compact 23%

Mid Size 24%

Sports 5%Full Size

4%

Luxury 9%

SUV/ Crossover

22%

Trucks 13%

9

Customer and Vehicle Segment

Sales Diversification (By Revenue)

All Other

GM Ford

BMW

VW/Audi

Fiat

Renault/Nissan

PSA Group Mercedes Benz Hyundai

Other Asian OEMs

Jaguar/Land Rover

Saab/Volvo

Chrysler

By Customer

By Vehicle Segment

2010 Consolidated Sales

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Global Capability in Electrical Power Management

Systems – Traditional and Hybrid

HIGH-POWER CONNECTORS HIGH-POWER BATTERY CHARGER HIGH-POWER WIRE HARNESS

SOLID STATE

SMART JUNCTION BOX™

TRADITIONAL WIRE HARNESS

• Annual 2010 sales of $2.6 billion

• Lear engineers and manufactures complete automotive

electrical power management systems

• One of four suppliers with global capability in both traditional

and high-power electrical power management systems

• Competitive footprint with 90% of headcount located in

14 low-cost countries

• Outpacing industry growth, further opportunity:

– Additional consumer demand for features & functionality

– Greater electrification and signal management of

alternative powertrain design

• Lear has won high-power and hybrid business with BMW,

Coda, Daimler, General Motors, Land Rover, Nissan

and Renault

Electrical Power Management Systems Technologies

2

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High Power

Lear is at the forefront of advanced high power technologies

critical to powering a new-generation of hybrid and electric vehicles

- Lear awarded production programs with 9 OEMs

- Full product portfolio including Energy Management Systems,

Charging Systems and Power Distribution Systems

Superior efficiency among the product portfolio

- Broad capabilities to deliver efficient system solutions by

reducing multiple enclosures, cold plates, interconnects, etc

- Industry first Battery Charging Module (OBCM): First high

volume plug-in hybrid production implementation with

industry leading efficiency >93% for nominal operating

conditions at full load

Shared technology across OEs to limit investment

Global Center of Excellence for research and development in

Southfield, MI

- Supported by global, low cost manufacturing and

engineering centers

Advantages / Capabilities

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High Power

OEs Supplied:

2010 Program - Hybrid Battery Charger, Charging Cord Set,

High Voltage Wire Harness

2011 Program - Hybrid Battery Charger, High Voltage Wire

Harness, Hybrid Distribution Box

2012 Program – High Voltage Wire Harness

2010 Program – Hybrid Battery Charger, Charging Cord Set,

Charge Station

2011 Program – Charging Cord Set, Charge Station

2012 Program – High Voltage Wire Harness

2009 Program – High Voltage Wire Harness

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2010 Program – Hybrid Battery Charger

2010 Program – High Voltage Wire Harness

Program Overview and Timing Plan

David Lach

Program Manager

Universal EVSE

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Wall Stations

Universal Electric Vehicle Supply Equipment (UEVSE)

Product /Customer Summary: NA Cordset - GM, Daimler, Chrysler, Fisker, Coda,

Legrand

EU Cordset - Daimler, GM, Fisker

16A NA Wall Station - Fisker, Legrand, GM

16A EU Wall Station - GM

32A NA Wall Station - Coda, Legrand

SAE Receptacle - Fisker, Coda, GM

Lear Manufacturing Locations Plant Apodaca, Monterrey, MX – PCBs

Plant Monarca, Juarez, MX – Final Assembly

Customer Vehicle Assembly Locations: Chrysler, Mexico

Fisker, Finland

Coda, China

Legrand, USA

Daimler, France

GM, USA

Product Descriptions Cordset

– ETL listed to UL & IEC requirements

– Travel device with power cord, vehicle plug, & electronics for 120V AC

Wall Station – ETL listed to UL & IEC requirements

– Permanent wall mount device with cord, vehicle plug, & electronics for 240V AC

Vehicle Inlet Receptacle – Conforms to SAE J1772 requirements

– Vehicle mounted connector that interfaces with vehicle plug

16

Travel Cordsets

Receptacle SAE/IEC Adapter

Lear Supplier EVSE Volumes & MRD Schedule

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UL / IEC

/ PV

Test

Proto 1 Proto 2 Pilot 1Run at

Rate

PPAP

Submit

w /IMDS

PPAP

ApprvdPilot 2

System

Fill

SOP / J1

(Estimated sets/day)

260 w ork days/yr

CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017

Product Customer Platform Key Dates 08/02/11 11/11/10 09/05/11 11/28/11 01/25/11 01/18/12 02/16/12 02/19/12 03/02/11

03/12/12

(assumes pull ahead

into current model

year)16A NA SAE Wall Station Done Done Done N/R 25 50 160 sets/day 27600 41400 41400 21150

16A EU SAE Wall Station Done Done Done N/R 25 50 40 sets/day 6900 10350 10350 5500

EU SAE Cordset Done Done Done 50 25 25 4 sets/day 12000 1000 1000

NA SAE Cordset Done Done Done 20 100 300 200 sets/day 30158 51700 51700 21245

Product Customer Platform Key Dates 08/02/11 09/02/11 10/24/11 12/22/11 01/07/11 01/18/12 01/25/11 12/23/11 01/28/12 02/01/12

EU IEC Cordsets Done DoneIn

Process200 N/R 300 34 sets/day 8798 8798

NA SAE Cordset Done DoneIn

Process100 N/R 100 66 sets/day 11220 17000

Product Customer Platform Key Dates 02/23/12 N/R N/R 01/16/12 01/07/11 01/18/12 02/06/12 02/09/12 02/16/12 02/23/12

32A Wall Station 5 N/R N/R 10 15 100 46 sets/day 9000 12000 12000 12000 12000 2000

NA SAE Cordset 5 N/R N/R 10 15 100 46 sets/day 9000 12000 12000 12000 12000 2000

Product Customer Platform Key Dates 02/23/12 N/R N/R 01/16/12 01/07/11 01/18/12 02/06/12 02/09/12 02/16/12 02/23/12

16A NA SAE Wall Station 5 N/R N/R 5 N/R N/R 3 sets/day 667 800 800 800 800 800

32A NA SAE Wall Station 5 N/R N/R 5 N/R N/R 1.5 sets/day 267 400 400 400 400 400

NA SAE Cordset 5 N/R N/R 5 N/R N/R 1.7 sets/day 200 450 450 450 450 450

Product Customer Platform Key Dates 02/23/12 N/R N/R 01/04/12 06/10/12 07/01/12 07/22/12 08/19/12 10/11/12 12/06/12

NA SAE Cordset Chrysler Fiat 500 EVEstimated

Volumes 5 N/R N/R 85 150 300 11 sets/day 340 2385 2675

Product Customer Platform Key Dates 02/23/12 N/R N/R 01/16/12 01/07/11 01/18/12 02/06/12 02/09/12 02/16/12 02/23/12

16A SAE Wall Station 5 N/R N/R 25 15 100 26 sets/day 5063 6750 6750 6750 6750

EU SAE Cordsets 5 N/R N/R 25 15 100 33 sets/day 6413 8550 8550 8550 8550

NA Cordset 5 N/R N/R 25 15 100 25 sets/day 4838 6450 6450 6450 6450

Product Customer Platform Key Dates 02/23/12 09/10/11 11/10/11 07/30/12 09/20/12 09/27/12 10/11/12 N/R 10/18/12 11/05/12

16A SAE Wall Station 5 N/R N/R 25 N/R 100 208 sets/day 500 49500 54000 54000 54000 54000

EU SAE Cordsets 5 N/R N/R 100 N/R 300 125 sets/day 500 29700 32400 32400 32400 32400

NA SAE Cordset 5 N/R N/R 75 N/R 200 290 sets/day 500 69300 75600 75600 75600 75600

Fisker Karma

Estimated

Volumes

Estimated Volumes - Volumes Continue to 2020

(Actual build qtys based on Lear spot buys & EDI)

Fisker Nina

Estimated

Volumes

Estimated Volumes

(Actual build qtys based on Lear spot buys & EDI)

Legrand Aftermarket

Estimated

Volumes

Estimated Volumes

(Actual build qtys based on Lear spot buys & EDI)

Estimated Volumes

(Actual build qtys based on Lear spot buys & EDI)

Estimated Volumes

(Actual build qtys based on Lear spot buys & EDI)

Daimler Smart EV

Estimated

Volumes

Estimated Volumes

(Actual build qtys based on Lear spot buys & EDI)

Coda EV

Estimated

Volumes

Build Events

Estimated Volumes

(Actual build qtys based on Lear spot buys & EDI)

GM Volt

Estimated

Volumes

Supplier Portal (Covisint) Overview

Lou Minna

lminna@lear.com (248) 447-5164

Global Non Production Purchasing and Systems Director

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Overview

From www.lear.com

Select “Supplier Information”

Overview

Deployment of Lear Global Purchasing Systems - SRM

(Supplier Relationship Management) from May 2006 to

end 2007.

All Lear Suppliers will be required to submit quote

responses via the Online Supplier Quoting System

(SQS)

Supplier will continue to provide the required detail cost

breakdowns via e-mail to their appropriate buyer.

Step-By-Step Process

Lear Corporation’s Global Supplier portal is available via two different addresses via the internet

– www.lear.com

• Select Supplier Information at the bottom of the Lear Corporation homepage which will direct you to the Global Supplier homepage

– www.lear.covisint.com

• This link will take suppliers directly to the supplier home page – Select the Web Applications tab

• Suppliers can view their appropriate Terms & Conditions, access the Online Quoting System, retrieve purchase orders, and many other selections are available

Click here to

access

Supplier Web

Applications

Overview

Scroll down

to view more

Important

Overview

Select the required

application

Scroll down

to view more

Overview

If supplier is new to

Lear, a supplier

administrator must

be assigned.

Provide the required

information to gain

access to Supplier

Web Applications.

Overview

Supplier Online

Quoting can be

accessed by

clicking here.

Overview

Click here

for access

Click here to send

an e-mail to the

Lear administrator

Overview

Provide your user

name and password

*Note: these fields

are case sensitive

Overview

Overview

To change your

personal setting

click here

Overview

You may modify the

language for all the

label headings. All

part descriptions

and other

engineering data

will be in English

only

Mouse over

Corporate

Purchasing to view

options.

Overview

Corporate Purchasing

Online Supplier Quoting

Supplier quote inbox, online quoting and history of previous quotes submitted to Lear

Purchase Order Retrieval

Suppliers can view and print all new and existing purchase orders

• Display changed parts only

• Display the entire purchase order

Mouse over

Supplier Tracking to

view menu choices.

Overview

Mouse over the

Manuals section to

view menu options

Overview

Manuals

All online training manuals can be accessed through this menu

option

SRM Supplier Online Training Videos

– Detailed screen descriptions

– Piece price quote example

– Tooling quote example

Mouse over the

category to display

the menu choices

Overview

Supplier Development

Quality & System Requirements

Ed Porter Global Supplier Development Manager

Advanced Efficiency Systems

Hybrid and EV

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Supplier Development Organization

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North America

• Nicole Schulz – Director, Global Supplier Development

nschulz@lear.com – (248) 447-1535

• Ed Porter – Global Supplier Development Manager

eporter@lear.com – (248) 447-5158

• Adrian Puentes – Supplier Development Manager – Mexico

apuentes@lear.com - (915) 787-4188

• Jaime Hendon – Sr. Supplier Development Engineer

jhendon@lear.com – (248) 447-5188

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Why Supplier Day? Purpose:

• Communicate program information and timelines

• Introduce the key players for Lear’s program teams

• Outline performance expectations for delivery, quality, document submissions, and

open the lines of communication

• Reinforce a sense of URGENCY – We must meet our customer’s compressed deadlines

Support for a Common Goal:

• Provide Zero Defect material

• All deliveries on-time

• Promote Proactive Communication

• Attack Problems and Prevention

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Philosophy of Lear Supplier Development

OUR GOAL: Help Suppliers be Successful Tools: • AIAG guidelines (APQP, PPAP, MSA, etc.) • Automotive Standards (Run-at-Rate, Launch Containment etc.) Measures: • Zero PPM • No launch issues • Rapid problem resolution • All milestones completed on-time • Supplier Rating System (SRS)

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Lear Global Supplier Quality Manual

This manual contains almost everything you will need to know regarding being a Lear Supplier.

www.lear.com

All information found in the “Supplier Information” icon on Lear’s homepage.

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Lear Quality Expectations

ZERO DEFECT Performance In:

1. Part Quality

2. Development Activities

3. On time Delivery Performance

4. Service / Responsiveness / Communication

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Do Everything Necessary to Assure Zero Defects!

How to Achieve Zero Defects?

1. Assure complete Understanding of Every Requirement

2. Investigate Processing to Remove Causes of Defects

3. Validate Your Processes, Procedures, and Controls

4. Address and Resolve Problems Quickly and Effectively

5. Be proactive in your communication!

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1. Requirements • Know and Understand the Design record (drawing and specifications)

• Know the Automotive requirements (e.g., AIAG guidelines, PPAP, etc.)

• Know the Validation requirements (e.g., DV, PV etc.)

• Know Electrical / Electronic requirements (e.g., AEC-Q, UL, etc.)

• Know the Applicable UL requirements (will plug into home)

• Know the Documentation requirements (e.g., PPAP, 8-Ds, traceability, etc.)

• Know these Additional Automotive Requirements (e.g., DPR, Run-at-Rate, etc.)

• Know Your Logistics and packaging requirements

• Know Your Lear Purchasing terms & conditions

• Know Global Supplier Quality Requirements Manual

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1. Automotive Specific Requirements

• AIAG requirement manuals (APQP, PPAP, FMEA, etc)

• Documentation of product and process development

• Traceability of Components

• Shipping, Packaging, and Logistics

• OEM specific requirements

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1. Supplier System Requirements

Supplier Reporting and Certifications • Supplier Certification Requirements

• SQTS (Supplier Quality Tracking System)

• SRS (Supplier Rating System)

• Profile Supplier APQP (High Impact Suppliers)

• Supplier Bulletins

• IMDS Requirements (International Materials Data System)

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1. Supplier System Requirements

Supplier Certification Requirements

• ISO/TS 16949:2009 (3rd Edition) & ISO 14001:2004 (Supplier Bulletin #56430-91).

• Distribution centers are NOT EXEMPT: ISO 9001:2009 or TS 16949:2009.

• Verification of sub suppliers 3rd party certification.

• Certificates must be submitted via e-mail to: suppliercertificates@lear.com

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1. Supplier System Requirements

SQTS (Supplier Quality Tracking System)

• Supplier performance qualification relating Quality, Delivery, Warranty and Customer Satisfaction.

• Supplier’s System Administrator must enroll supplier contacts (i.e. Quality, Customer Service, Logistics, etc).

• When QN is generated, supplier must respond in 24 hrs with containment implementation

• Supplier must provide root cause analysis in 72 hrs and verification of effectiveness for permanent corrective action within 30 days (Final Response – 8Ds).

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1. Supplier System Requirements SRS (Supplier Rating System)

• Supply base performance of Quality (RPPM), Written complaints, Delivery, Customer Satisfaction, Warranty and Competitiveness.

• Corporate Vendor Supplier Scorecard. • Common Vendor Supplier Scorecard. • Scorecards available on the 12th day of the following month.

Profile Supplier APQP (High Impact Suppliers)

• Global project management software system. • Supplier Risk Assessment • Component Review Meeting • Supplier Document and Process review • Run at Rate • Early Production Containment • Launch support

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1. Supplier System Requirements

IMDS Requirements (International Materials Data System)

• Reporting of product material content, recyclability, weight and other information.

• Lear IMDS Site 632. • All suppliers must provide evidence of product data submission

acceptance by Lear with every PPAP submission, or as requested. A copy of the print out or “screen shot” of the Recipient Data.

• Part numbers must match the part numbers submitted for PPAP. • Suppliers responsible for sub suppliers collecting data. • IMDS can be accessed from the following link

http://www.mdsystem.de

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IMDS Screen Shot

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1. System Access • Each system can be accessed through eSRM at

https://access2.lear.com or by using the following link: https://lear.portal.covisint.com, select Web Applications by hitting the following links:

• Supplier Rating System

• Supplier Bulletins

• Profile Supplier APQP

• Supplier Quality Tracking System

• User manuals are available in eSRM under manuals menu option after a successful login.

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2. Remove Causes of Defects

TOOLS:

APQP - Advanced Product Quality Planning DFMEA and PFMEA - Failure Modes and Effects Analysis PPAP - Production Part Approval Process Run@Rate 8-Ds

SCR - Supplier Change Request Sub-Supplier Management

Communication

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2. APQP Intent: • Find problems early and resolve them prior to launch (production). • Determine Supplier Readiness for Production Content: • Develop a robust manufacturing process to deliver Zero Defects by examining all necessary details to identify all possible problems before they cause interruptions in production. • DFMEA, PFMEA, Feasibility Review, Control Plan, Gauge Plan, etc.

– APQP Deliverable checklist (31 Elements) can be accessed by using the following link: https://lear.portal.covisint.com, in Home page select Supplier presentations and then select Volt Supplier Day – APQP Deliverable Checklist.

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2. Sub-Supplier Management

Intent:

• Assure Zero Defects from sub-suppliers.

Content:

• Apply the same requirements to your suppliers – Zero Defects (e.g., APQP, IMDS, PPAP, Responsiveness, SQE resources, etc.)

56

2. Key Characteristic Identification Intent: • Assure common understanding of important product features. Content: • Identify dimensions / features on the drawing that: “reasonably anticipated manufacturing variation could cause

significant change in customer satisfaction” • Suppliers are required to conduct meetings with Sub Suppliers to

identify key/critical characteristics.

• Request a design review if there are concerns regarding any specific dimension or dimensions. Identify how these dimensions will be measured and the frequency of the measurements.

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3. Production Part Approval Process (PPAP)

Intent:

• Assure manufacturing process can produce conforming material during a significant production run.

Content:

• Level 3 submission required (all documentation).

• Level 3 PPAP has up to 23 separate elements. • May require on-site PPAP review of processes.

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PPAP Approval

• Do not ship any material PRIOR to getting PPAP approval. Make sure you have an interim approval, at a minimum!

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3. Early Production Containment (EPC) Intent: • Temporary and extra-ordinary controls put in place during launch

to absolutely guarantee Zero Defects regardless of effort or cost. Content: • Additional Control Plan to assure Zero Defects are delivered to the

customer. • In-process additional controls/checks. • GM GP-12. • Early Production Containment (EPC)

• Start with 1st saleable shipment • GP-12 for 1 full year • EPC exit for VOLT must be approved in writing by Lear SQE

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3. Change Control Intent: • Obtain appropriate approval to assure no build/performance

issues. Content: • Review examples of situations in PPAP (4th edition) section 3.

• Use SCR to request approval for changes by using the following

link: https://lear.portal.covisint.com, in Home page select Supplier Development – Information and forms and then pick Lear Supplier Change Request for Electrical Components.

• Submit SCR form properly filled to electricalscr@lear.com at least 3 months prior to implementation.

• PTR required for changes that affect Fit, Form & Function, supplier is responsible to send sample parts to each Lear affected plant.

• PPAP approves the change was made correctly and provide authorization to ship parts.

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3. Change Control – Production location changes

Intent: • Obtain advance approval for all production location changes to

avoid any Lear plant disruptions Content: • Suppliers need to submit a completed “Request for Written

Approval for Global External Production Suppliers to Change/Move Production Location” form to their Lear Corporate buyer and the Lear receiving plant(s) to obtain approval for a production location change.

• Form can be found by using the following link: https://lear.portal.covisint.com

• PPAP approves the change was made correctly and provide authorization to ship parts.

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4. Problem Solving Intent: • Aggressively address every problem with management

involvement Content: • Documentation of:

• Immediate containment measures • Root cause analysis • Permanent corrective action implementation • Preventive actions (poke-yoke) • Verification of effectiveness

• Should be used on any problem (e.g., late delivery,

miscommunication) • Build and cascade lessons learned throughout the

organization • Supplier Quality Tracking System

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4. Communication Intent: • Communication must be Clear, concise, and complete.

Content: • Any product/process change communication

• Problem solving activities • Documentation in 8-D’s

• Know when to raise a flag – NEVER ASSUME ANYTHING!

• Adverse news affecting progress needs to be communicated immediately!

64

4. Non-Performance Tools

• Quality Notices (QN) – Lear’s formal 8-D

• Controlled shipping level 1 & 2 (CS1 & CS2)

• Downtime & premium freight chargeback

• Quality issue chargeback

• SRS ratings reduced

• New business hold

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Next Steps

• Meet PPAP deadline

• Create IMDS Submission

• Launch Containment

• Compliance to all requirements

• Meet packaging standards and guidelines

• Ship quality material on time

Thank you!

66

67

Global Logistics

Mark Henzi

Global Logistics Director

67

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Guiding Principles for Establishing optimal supply chain

68

Guiding Principles

• Integrated Global Logistics Strategy executed regionally

• Clear responsibilities and interaction process between Logistics, Operations,

Purchasing and Supply Chain

• Develop capabilities and tools in line with a best practice Logistics

Organization

• Upfront involvement in material source selection process in order to deliver

best Total Cost

69

Supply Chain

4 Strategic Areas of Attack

Result = Sustainable -OI & Cash Flow Improvement

Spend Consolidation: Rationalize Global Supply Base versus Regional

Compress 30% of regional suppliers through Global leverage

Supply Chain Overhaul: SIOP Process

Inventory Entitlement

Optimal Transportation Planning / Lowest Cost

Sustainable Processes will result in lowest cost

Premium Freight Reduction / Avoidance

Lowest Cost mode choice (i.e. LTL, Truckload, Ocean, Consol. Rail, etc.)

Enforce Routing Compliance (Lowest Cost Mode)

Drive 100% Compliance to on-line bidding for Premium Freight

Result in YOY avoidance (freight percent / COGS & Materials favorable

One Global IT System : ASN , TMS + MRP

Challenge Customer & Supplier Inco-terms Standardized Inco-term Training for

Result true understanding of carrying costs driven by title transfer / ownership

Avoid unnecessary investment: (Warehousing, Human Capital and Packaging)

Global Continent Connectivity – Flexible Logistics

Distribution for Raw & Finished:

Strategic Export Consolidation centers

Business can relocate with no penalty from forwarder when footprint changes

Export / Import Consolidations – Freight Forwarders Facility = No Investment!

Optimize inventory planning through forwarders supply chain visibility network

Lean logistics supply chain process

Value Stream Mapping oLean tool

oOptimize inventory, reduce E&O, mode and delivery planning

oShared with logistics service providers and customer

oMap for every plant – Customer & supplier supply chain

Design for Logistics Improve pack density and MOQ without comprising quality to drive optimal cube for

transport

oAdvanced Logistics planning

oPre and post Award design for raw and finished goods from surrogate data

oCurrent state Logistics impact study (New programs & top 10 Trade lanes)

oChallenge improvements to current packaging and product design

oLogistics Modeling (Current state versus future)

oPipeline considerations (Manufacturing footprint & supplier location)

oBusiness case

opackaging type and investment(i.e. expendable versus returnable)

oLogistics savings versus investment

oImplementation

oSavings achieved through shipping more product less frequently

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• Shipment readiness – Routing Instructions

• Deviation from “standard routing”

– Requires LEAR PTA#

• Electronic Data Interchange

– 830 Transmission and 856 Issuance

• Documentation Accuracy

– Bill of Lading

– Commercial Invoice

Requirements

Supply Base Transportation and Logistics

72

Suppliers are required to ship the right parts, in the right

quantity, in the right container, to the right location, at

the right time - every time - to ensure zero “0” supply

disruptions.

Lear has identified several key practices / functions that

we expect from all of our suppliers:

100% ASN timeliness; at conveyance departure

Routed Logistics Supplier compliance - shipping performance

100% EDI ASN accuracy

100% quality parts; zero shipping discrepancies

ZERO off-lines or production losses due to supplier failure

Manufacturing flexibility for unexpected plant shortages / requirements

Error-proofed processes / building & staging for delivery within window

Optimal packaging and execution

Electronic communication capability and execution

Advanced problem notification and quick resolution

Internal training procedure / process

(Ref. MMOG – AIAG 8.3.1 / CSCMP)

Supply Chain: Transportation Requirements

73

Example of Routing instructions for Suppliers

Supplier Shipping point Destination point

Mode of Transportation

74 7

4

Continual Cost &

Quality

Improvement

Develop &

Execute Daily Current / Future

Business

Eliminate Logistics waste through :

ASN compliance Network Optimization Logistics For Every Supplier Route Collaboration

Supplier ASN & route Compliance will lower Lear’s Logistics Costs

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• Educate suppliers at the onset of the importance and the requirement of

EDI.

• Define clear business rules and consequences for ASN Timeliness.

Enforce 30 minute rule for ASN after shipment departure

Implement EDI compliance as scorecard measure

• Develop a systematic process for establishing suppliers on EDI.

• Developing methodology to monitor suppliers for lack of compliance.

Determine reasons for noncompliance.

Work purchasing agents to influence suppliers.

• Eliminate the process of providing release information via email or faxes.

• Resource suppliers that fail to comply.

• Develop corporate methodology to monitor supplier status based on the

release and ASN data.

Long Overdue Improvements

75

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• Process efficiency for monitoring material from the supplier facility to the

final destination.

Plants and corporate will be able to access the status of each part based on the release

requirements and the material shipped.

Traffic will be able to determine the actual ship time of material therefore able to

evaluate the proper escalation process if required.

Logistics will be able to gauge the actual flow of data versus the projected.

All parties will be able to understand the released quantities versus the requested

material amounts by the plant then take the necessary corrective action to implement

change.

• These process changes will provide cost benefits in areas of expedites and

manpower efficiencies in traffic, plant and corporate.

Benefits

77

EDI Guidelines

78

Electronic Data Interchange – Supplier

Requirements • Lear employs EDI Standard AIAG ANSI X12 (v.002040) for all inbound and

outbound EDI transmissions (with the exception of 862 daily releases if required, which use ANSI X12 (v.004010).

• EDI Release transmission – 830 Weekly Planning Release – Lear will transmit a weekly 830 planning schedule

(X12 v.002040) using the ANSI standard. • Apodaca use ANSI X12 v. 003040

– If supplier is not EDI capable, it is expected that the supplier will use Web EDI through COVISINT to view/download their weekly schedules.

– Lear will provide the WEB EDI requirements.

– NOTE: Lear v.002040 sends a cum based release and v.003040 sends a requirements based release. Supplier ERP system is responsible for netting requirements based on cum shipped and prior cum required data.

• EDI Advanced Shipping Notification – 856 ASN (Advanced Shipping Notification) – Lear requires that its Suppliers utilize

the A.I.A.G. 856 ANSI X-12 Version 002040 EDI format for transmission of ASN data.

• Apodaca uses ANSI X12 v. 003040

– If supplier is not EDI capable, it is expected that the supplier will use Web EDI through COVISINT to send Advanced Shipping Notification.

– All ASN’s are to be transmitted from the Supplier to Lear within 30 minutes of the shipment departing the Supplier’s shipping dock.

– An ASN is required for each shipment that departs the Suppliers shipping dock.

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Electronic Data Interchange – Supplier

Requirements

• Advanced Shipping Notice (856 ASN) Data Elements

– ASN’s must follow the ANSI X-12 Version 002040 format (v.003040 for Apodaca) and must

contain the correct data elements.

– The following have been identified as critical data elements:

• Part Number – Lear ESG Part Number as appearing in the ESG Weekly 830 Schedule

Release

• Purchase Order Number – Purchase Order Number that appears in the ESG Weekly

830 Schedule Release (May be different than the Blanket Order number received from

Purchasing)

• Correct Unit of Measure

– EA = Each used for materials shipped as pieces

– GA = Gallons for materials shipped in Gallons

– FT = Feet for materials shipped in linear feet

– LB = Pound for materials shipped in pounds

• Ship From – Supplier code as transmitted on the 830 release (00006xxx)

• Ship To – Lear plant code as transmitted on the 830 release.

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Lear EPMS EDI Contacts

• Electrical

– David Quinones

• 915.787.2148

• dquinones@lear.com

– Claudia DeLeon

• 915.787.4178

• cdeleon@lear.com

– Gustavo Marquez

• 915.787.4165

• gmarquez01@lear.com

– Covisint Compuware (VAN)

• 1.888.222.1799

• www.covisint.com

• Electronics Plants

– Mohan Prabhakar

• 248.447.7877

• mprabhakar@lear.com

– David Quinones

• 915.787.2148

• dquinones@lear.com

– Claudia DeLeon

• 915.787.4178

• cdeleon@lear.com

– Covisint Compuware (VAN)

• 1.888.222.1799

• www.covisint.com

Supplier Documents can be found at:

https://lear.portal.covisint.com/web/portal/home

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Supplier Packaging Requirements

• Download the Lear Supplier Packaging Requirements and the Unit Load Data Sheet

(ULDS) document and form.

• Confirm the planned expendable / returnable container carton specifications do meet

the criteria for packaging requirements. The supplier must follow these guidelines or

the packaging will be rejected until it does conform to Lear’s guidelines.

All packaging MUST follow the 48”x45” automotive standard

footprint to be accepted into the plant.

All packaging must first and foremost protect the quality of

the part, but also take into consideration the cost per piece

price.

• ULDS form approval process:

– First send to Corporate Packaging Engineer for approval

t approval Packaging Guidelines ULDS

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Prior to making your first production shipment please contact the Lear

receiving location to confirm the following:

Lear Designated Transportation Carrier & Customs Broker

Bill of Lading requirements

Normal & Premium Carriers

Documentation

Commercial Invoice Details

ASN Requirements

– Delivery Window Requirement

EDI Requirements

Packaging Audit

Optimal design

Contacts

Luis Perez - Transportation (lperez04@lear.com)

Supply Chain: Recommendations

8

3

Opportunities

Strengths Weaknesses

Threats

• Oil Demand Exceeding Capacity

• Rising Labor Rates in Developing Nations

• Rising Security & Customs Fees

• Decline in Air Cargo Capacity

• Financial Strains of Carriers Due to Increasing Cash

Flow Restrictions

• Political Unrest in Developing Countries

Global Logistics – SWOT Analysis

• Strong Carrier/Forwarder Base

• Global Team – Expertise, Leveraging Spend, Drive One

Strategy

• Lane flexibility

• Visibility of freight spend in US & most of Europe with a

3rd Party Freight Bill Audit company

• Supplier Compliance – ASN, EDI, Routing Instructions,

etc.

• Length of Supply Chain

• Lack of Systems – Rate Management, Engineering, 3rd

Party Payment(Asia/SA/parts of Europe)

• Control of Logistics Purchasing in European T & C

Plants and Asia Plants

• Inventory vs. Transportation Cost Balance

• Supply Chain Transformation (PRTM)

• Advanced Logistics

• Network Optimizations: Mode Rationalization, Regional

Consolidation, Synergies with SSD or Other Tier 1

Suppliers

• European Land Transport RFQ

• Utilize Forwarder Based Shipment Visibility Systems

• Supplier Compliance to drive efficiencies

Exte

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Joe Duran Transportation and Distribution Manager

Luis Perez Transportation and Logistics Manager

Silvio Marquez Transportation and Systems Manager

Pedro Gil

Traffic and Logistics Analyst

Miriam Talamas

Traffic and Logistics Analyst

Vicky Abrego

Local Dispatch Traffic 1st shift

Ediberto Cobos

Traffic Systems Analyst

Rosario Camacho

Premium Analyst

Elsa Lopez

Premium Analyst

Angel Olivas

Local Dispatch Traffic 2nd Shift

Maria Carlos

Premium Analyst

Gilberto Arzu

Honduras Traffic Coordinator

Odalin Reyes

Apodaca Traffic Coordinator

Ivan Gonzalez

Apodaca 2nd shift Analyst

Kevin Robbins

Ryder ESD Manager

Hugo Villalobos

Ryder Apodaca

Mexico & Honduras Traffic & Logistics Organization

• Lear Corporation thanks you for your participation in this event!

Conclusion

Q & A

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