2010-07-14 Selling to General Motors

Selling to General Motors

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Selling to General Motors WORKING AND WINNING TOGETHER

Success in today’s fiercely competitive worldwide marketplace begins with product. For General Motors to continue to present opportunities for our company, our customers, and our suppliers, we must focus on building vehicles that consumers want to buy and at competitive prices. At GM Global Purchasing and Supply Chain (GPSC) our primary responsibilities are to procure the parts and services that go into developing vehicles and our secondary responsibility is to drive waste and cost out of our company and improve our overall value to employees, consumers, and shareholders.

The foundation we rely on to accomplish this is to make sourcing decision based on performance to our four priorities: Supply Chain & Logistics, Quality/Launch, Program Management, and Current/Future Business. GM’s requirements of our supply base include developing and executing supply chain capabilities, providing world-class quality parts, launching new programs at the right quality, the right time, and the right cost, service that goes beyond expectations, technologies that differentiate our products, and competitive prices. It is the combination of these elements that will help us succeed. Suppliers have consistently made outstanding contributions to GM and played a major role in our success. The entire GPSC team is focused on making sure our best performing suppliers grow with us. We will work closely with them to develop new opportunities. Please use this booklet as a resource to understand GM and the vital role suppliers play in our success and hopefully we can work together to find your company new opportunities. Regards, Robert E. Socia Vice President GM Global Purchasing and Supply Chain

TABLE OF CONTENTS

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Summary of GM Business …………………………………………………………… 3 Gateway into GM ……………………………………………………………………… 4 Summary of Global Purchasing and Supply Chain ………………………………… 5

Global Purchasing Process ……………………………………………………. 6

What We Buy ……………………………………………………………………. 7

What We Expect ………………………………………………………………… 8

What suppliers Can Expect from Us ………………………………………… 9

Contacting Us …………………………………………………………………………… 12

SUMMARY OF GM BUSINESS

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Sometimes success is about determination. In times of challenge and uncertainty, often it is those with the strongest will to keep moving forward who ultimately win. GM has been moving aggressively to answer the call for leadership to continue the momentum we have begun to establish as a company. While we know we have a long way to go, we are encouraged by the attitude we see in GM people, dealers, and suppliers. It is a desire to win and a commitment to continuous improvement and achieving our goals. It is a sense that we will continue to push for excellence, no matter what. This is the true foundation of our future success, and we could not be more proud and determined.

DETERMINED. CONFIDENT. COMMITTED. That is the GM the world sees today: Determined to be the industry leader in every measure of performance. Confident in our ability to innovate, in our energy to succeed, and in our passion to create. Committed to win. Automotive media, analysts, and, most important, our customers are strongly endorsing our new products and steadily we will increase market share around the world and preparing for future growth. We know the challenges ahead. We know rival automakers will introduce more competitive,

more refined vehicles, and we know this is not time to let up. We will maintain our momentum by continuing to focus on increasing our market share in all our markets around the globe, on progressing toward industry leadership in quality and productivity, and on creating innovative, head-turning cars and trucks. Under our product development leadership, we will infuse our vehicle lineup with the same kind of passion, innovation and vehicles that consumers around the world want to buy. We have just begun to show the world what innovation, leadership in performance, and vision mean for General Motors. Over the past decade, the GM team has worked hard to become a truly global company, one that uses its size to our customers’ advantage. Today we are moving with speed and purpose, winning new customers the world over, and making them proud to be part of the GM family. The road ahead is long and challenging, but momentum is clearly on our side. We are determined to build on that momentum as we move forward and we would like to bring our best performing suppliers with us.

GATEWAY INTO GM

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Any successful business relationship is a two-way street. While GM employs a variety of tools and programs to choose, support, and strengthen valued suppliers, those same suppliers represent a pool of talent and innovative ideas that in turn help and support GM. Main avenues through which new suppliers can bring a product or an idea are outlined in this brochure along with an Internet link to help you get started selling your products and services to GM. GIFT, ENTERTAINMENT, AND GRATUITY POLICY Consistent with the values inherent in the GM vision, GM’s policy regarding gifts, entertainment and other gratuities offered GM by suppliers emphasizes the company’s determination to base business done with suppliers exclusively on the superior value of goods and services purchased. All GM employees everywhere will conduct GM business with integrity and adhere to the gift and gratuity policy as stated in this brochure. The Gift, Entertainment, and Gratuity Policy is global in scope and application. It reads in part: Both as a matter of sound procurement practice and basic business integrity, we at GM must make our purchase decisions solely on the basis of which suppliers offer GM the best value of goods and services we need. We avoid doing anything that suggests that our purchase decision may be influenced by any irrelevant or improper consideration whether illegal, such as a kickback or bribe, or technically legal, such as personal friendship, favors, gifts, or free entertainment.

Consequently, it is GM’s policy that no GM employees accept any gift, entertainment or other gratuity from any supplier to GM or bidder for GM’s business, including supplier units which are part of GM. This policy applies to all employees whether or not they are directly involved in purchasing activities. The Gift, Gratuity, and Entertainment policy is put in place to ensure ongoing ethical and intelligent business practice. GM employees have been advised that the best course of action always is to decline any gift, entertainment or other gratuity from any supplier. However, in execution of this stated policy, a certain degree of common sense should prevail. The introduction of items of nominal value – e.g.: “yellow sticky” pads, logo pens, and similar items – into a business meeting should not be presumed to invalidate that meeting. AWARELINE A supplier who observes actions taken by a GM employee that seem to conflict with the company’s stated Gift, Gratuity, and Entertainment policy may call the GM global confidential toll-free GM AWAREINE at 1-800-244-3460.

GLOBAL PURCHASING AND SUPPLY CHAIN

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GM Global Purchasing and Supply Chain (GPSC) is responsible for procuring all goods and services used by GM and its joint venture and alliance partners in all four business-regions of the world. This includes parts used in the production of vehicles and all products and services used in the support of the development and production of vehicles. Because of this, GM suppliers are able to do business in unprecedented volumes and are offered an opportunity to expand their own operations worldwide. GPSC has adopted an integrated organizational structure to work effectively in today’s business environment. Purchasing Regions around the world are led by executives that have the responsibility and resources responsible for the execution and implementation of sourcing decisions.


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Commodity executives are responsible for the commodity strategies across all regions and are accountable for results from a global perspective. They work closely with process executives to drive integration and they work together to ensure each sourcing decision and strategy is the best for GM and that there is a balance between worldwide and regional goals and objectives. Supply Chain is a critical part of the structure. Supply Chain is responsible on a worldwide basis for the flow of all materials and components to manufacturing facilities and it is also responsible for the outbound distribution of vehicles to dealers. GLOBAL PURCHASING PROCESS GPSC’s decision-making process is truly a global initiative. A weekly global teleconference gathers all GPSC leaders – including the GPSC vice president, commodity, regional, and process executives – to review and recommend sourcing decisions and to set strategies and analyze results. GM sources $130 billion worth of goods and services annually. GPSC has Creativity Teams that are in place to research, gather, and analyze opportunities and then forward recommendations to the sourcing table. The Creativity Teams also implement sourcing decisions for components,

modules, systems, and services on a global basis. Creativity Teams members include representatives from purchasing, engineering, design, quality, marketing, and finance. These teams are managed by the Commodity executives and meet weekly to coordinate global strategies. GPSC decision making is supported by two processes – Advance Purchasing and Global Sourcing – that ensure decisions being made are the best for GM and that they remain good business decisions for GM. Advance Purchasing is the entry point for new components, modules and systems not yet introduced on GM vehicles. The Advance Purchasing Process operates by utilizing specifications from Engineering when executing a sourcing process to determine the appropriate suppliers. It facilitates the evaluation of multiple alternative materials, processes, technologies, and design proposals prior to GM locking into a specific design. The process allows GM to look at the entire corporate product portfolio on a worldwide basis to find opportunities for communization, cost savings, mass reduction, quality improvements, and the introduction of advanced technologies. Global Sourcing is the process used to work with existing suppliers to ensure that their products are benchmarked to world class standards for quality, service, technology, and price.


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WHAT GM BUYS CHASSIS/ICE - The Chassis team purchases parts that typically cannot be seen from outside of the vehicle. Some of Chassis components are more visible to the customer such as tires, wheels, and steering columns. BODY/EXTERIOR -

The Body/Exterior team purchases raw materials and parts that make up the exterior, framework and structure of our vehicles such as steel, sunroofs and stampings. ELECTRICAL SYSTEMS, BATTERIES/HYBRIDS -

The Electrical Systems, Batteries/Hybrid team purchases parts powered by electrical connections such as radios, switches, and electronic modules. The team is also responsible for purchasing parts that provide an electrical connection throughout the vehicle such as wire harnesses, connectors, and batteries. These parts are both visible to the customer and hidden within the vehicle. HVAC/Powertrain Cooling - The HVAC/Powertrain Cooling team purchases compressors, hoses and lines, and other cooling components. INTERIOR/SAFETY -

The Interior/Safety team purchases parts that can be seen while sitting inside the vehicle. The team consists of three main groups; Hard Trim, Soft Trim and Safety related components. These parts have significant impact on customer perception as they are not only visible but come in contact with the customer on a daily basis

(i.e. Seats, Steering Wheel, Center Console, Door Trim, etc.). POWERTRAIN – The Powertrain team purchases assemblies, component parts, electrical systems, and raw materials that are used to make all engines and transmissions. INDIRECT/MACHINERY & EQUIPMENT – The Indirect team purchases materials that support the building of a vehicle, rather than being directly assembled onto a car or truck, e.g.: industrial, building, janitorial and business supplies; spare parts; corporate services; health care; and sales and marketing services and agencies. Customer Care / Aftersales (CCA) – The CCA team purchases and insures availability of all components covering all commodity groups. These parts are required for servicing customer vehicles as well as supplying aftersales component part needs.


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WHAT GM EXPECTS FROM SUPPLIERS The successful GM supplier optimizes design and manufacturing on a world class level, uses environmentally responsible practices, and adopts a lean manufacturing philosophy. All suppliers are measured by their performance in the following areas: SUPPLY CHAIN & LOGISTICS Achieve a world class supply chain focused on quality and total cost QUALITY / LAUNCH Implement quality initiatives PROGRAM MANAGEMENT Launch new programs at the right quality, right time, and right cost CURRENT / FUTURE BUSINESS Best total enterprise cost ISO/TS 16949 CERTIFICATION ISO/TS 16949 is a global set of quality standards adopted by the International Automotive Task Force (IATF) that includes GM. ISO/TS 16949 incorporates automotive quality system standards and requirements utilizing the world standard of

ISO-9000 as the foundation. Supplier organization compliance to ISO/TS 16949 including vehicle manufacturer customer specific requirements can result in certification that satisfies the quality system requirements of GM and the other IATF automotive manufacturers. “LEAN MANUFACTURING” Lean Manufacturing (the production of durable goods with a minimum consumption of capital investment, floor space, labor, materials, time, and distance) is key to the implementation of GM’s corporate vision. Lean material flow concepts are an essential part of the total Lean Production System. The responsibility to adopt a lean philosophy is shared by all GM groups. For GM to be successful as low-cost producer of quality vehicles, GM suppliers also must be committed to lean ethic. LOGISTICS GM strives to use the most economical, efficient, and innovative methods available to manage the movement of raw materials, components, and vehicles. To coordinate the transportation network with manufacturing activity, GM relies on:

Efficient, effective design and use of containers.

Just-in-Time (JIT) manufacturing.

Utilization of various distribution strategies including maintenance of regional distribution facilities and synchronous support centers for JIT rail, as well as use of third party management for some transportation services.


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WHAT SUPPLIERS CAN EXPECT FROM GM In order to increase the overall performance of our suppliers, GM has established a number of tools to help suppliers help themselves. GLOBAL SUPPLIER QUALITY IMPROVEMENT PROCESS Supplier participation in the GPSC quality improvement process is essential for suppliers to earn increased business with GM in any region of the world. The process identifies 16-steps, the first of which are designed to help suppliers understand GM’s business procedures around the world. The second set of eight emphasizes the continuous improvement process and elimination of identified quality issues. ADVANCE PLANNING & PROBLEM PREVENTION (1 – 8) 1. Potential Supplier Assessment – An on-

site evaluation of a potential supplier’s ability to meet minimum systems requirements.

2. Sourcing Decision – Sourcing Committee approval of a recommended source.

3. Advanced Product Quality Planning (APQP) & Control Plan – definition and establishment of steps necessary to assure that a product satisfies the customer.

4. Pre-Production Meeting – meeting to establish customer requirements, including part qualification.

5. Preproduction Part Quality Process (PPQP) - includes specification of requirements for prototype parts (common industry practice).

6. Productions Part Approval (PPAP) 7. Run @ Rate (GP-9) – physical

verification that the supplier production

process is capable of producing quality products at quoted rates.

8. Early Production Containment (GP-12) - represents significant enhancement of the supplier’s PPAP, and is synonymous with the Pre-Launch Control Plan referenced in the Advanced Product Quality Planning and Control Plan Reference Manual.

PROBLEM RESOLUTION (9-16) 9. Continuous Improvement (GP-8) –

definition of the supplier’s responsibility to have an ongoing process for continuous improvement.

10. Performance Monitoring (PPM) – measurement of supplier performance, providing communication and driving focused improvement.

11. Problem Reporting & Resolution (PRR, GP-5) – communication process for reporting and resolution of identified supplier problems.

12. Controlled Shipping (Level 1) – containment process at the supplier location supplementing GP-5, if necessary.

13. Controlled Shipping (Level 2) – problem containment process under customer control, administered by an outside organization at the supplier’s expense.

14. Quality Workshops – workshop conducted at the supplier location to resolved specific quality issues.

15. Supplier Quality Improvement Meeting – meeting between supplier and GPSC management.

16. Global Sourcing – ongoing global search for the best value for the customer, can result in re-sourcing of the business if desired quality/value cannot be achieved by original supplier.


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SUPPLIER DIVERSITY PROGRAM GM has a longstanding commitment to working with suppliers from diverse backgrounds. Our commitment dates back to 1968 when we were the first automotive company to initiate a program dedicated to supplier diversity. Today the company’s ongoing commitment has resulted in billions of dollars being spent annually with diverse businesses. The scope of our program includes the following business entities: Ethnic Minority-Owner Business Enterprises:

African American

Asian

Hispanic

Native American Women-Owned Business Enterprises Small Business Enterprises:

Small Business Concerns

Service Disabled Veteran-Owned

Veteran-Owned Small Business

HUB Zone Small Business

Small Disadvantaged Business

Women-Owned Small Business A minority supplier is a company within the United States, whose majority ownership is 51% owned and controlled by an individual or group certified as a minority by the National Minority Supplier development Council (NMSDC) or an affiliated council. Minority Principles must control daily business operations as well as making decisions. A Woman Business Enterprise (WBE) is an independent business concern that is at least 51% owned and controlled by one or

more women who are U.S. citizens or Legal Resident Aliens; whose business formation and principal place of business are in the US or its territories; and whose management and daily operation is controlled by one or more of the women owners. GM recognizes the Women Business Enterprise National Council (WBENC) certification for women-owned companies in its program. The law defines a small business concerns as “one that is independently owned and operated and which is not dominant in its field of operation.” GM recognizes Small Business Administration (SBA) certification for small companies in its program and specifically seeks opportunities with the categories listed above. Additionally, GM encourages its Tier 1 suppliers to purchase goods and services from certified diverse companies. GPSC tracks purchases from diverse supplier companies for all materials, goods, and services purchased, whether utilized within GMNA or other General Motors regions. For more information about GM’s Supplier Diversity Program, please visit: www.gm.com/supplierdiversity

http://www.gm.com/supplierdiversity


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SUPPLIER OF THE YEAR AWARDS

GM suppliers are part of the company’s winning strategy, and each year GPSC recognizes the best performing suppliers at its Supplier of the Year Awards ceremony. In the course of the celebration, selected suppliers are given the opportunity to visit with top GM executives and are made privy to details about GM strategies and future business plans. The event kicks off a year-long commitment from GM to enhance its relationship with its best suppliers, specifically through the GM supplier champion program which matches award winners with a GM executive. The GM

champion will help the winners to devise a business plan that helps them to continue to grow their business with GM.

HOW TO CONTACT US

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Whether you are a supplier of direct material auto components, manufacturing equipment, or services such as banking, insurance, construction, etc. . . . .if you have ideas or think you can help us, we want to hear from you. Just click on the link below and you will be taken to the GM New Technology Ideas website where you can submit your information online. Good luck and thank you for helping General Motors. www.gmideas.com

http://www.gmideas.com/

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2010-07-14 Selling to General Motors

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