MMOG/LE Assessments & Govt Regulation of Conflict Minerals

Report
Midwest User Group
MMOG/LE Assessments and U.S. Government
Regulation of Conflict Minerals
David Doyle, Senior Solutions Consultant
Terry Onica, Director, Automotive
Kathryn Sepke, Senior Solutions Consultant
September 24, 2013
Safe Harbor Statement
The following is intended to outline QAD’s general
product direction. It is intended for information
purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver
any material, code, functional capabilities, and
should not be relied upon in making purchasing
decisions. The development, release, and timing
of any features or functional capabilities
described for QAD’s products remains at the sole
discretion of QAD.
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Midwest User Group
Agenda
• Introduction
- What is MMOG/LE?
- The “real” value of MMOG/LE
• MMOG/LE version 4
• Conflict Minerals
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Midwest User Group
MMOG/LE Assessments
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What is MMOG/LE?
What it IS…
• Supplier Self-Assessment Tool
• Guidelines for building a solid supply chain strategy
• An evaluation of the Quality of customer service
• An assessment of supply chain performance and capability
• An AIAG/Odette Excel-based document
• Purchased through AIAG or Odette
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What is MMOG/LE?
What it IS NOT…
• Completed by customer
• Step-by-step Instructions for managing supply chain
• An evaluation of Quality of product
• A formal TS16949 Quality certification process
• Owned by the customer
• Free or distributed by customer
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MMOG/LE is Good for YOU
• Let’s talk about why…
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Who Says it is Good for You?
• Case studies
- 14+ Tier 1 and 2 suppliers
- Located around the world
- Supplier executive management
• OEMs
- Recognized supplier improvements
• Performance ratings
• Proactive risk management
- Increased competitiveness
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Why it is Good for YOU!
• Customer satisfaction
• Inventory
• Planning system
• Sub Supplier Performance
• Increase Revenue
• Employee satisfaction and training
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Customer Satisfaction
• Better understanding customer expectations
-Customer Specific Answers
• Increased customer satisfaction
• Enhanced our relationship with the customer
• Improved customer delivery ratings
“Our customer validated our operations to be a Level A”
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Inventory
• Reduced inventory by 17-50%
• Reduced physical inventory frequency from
monthly to annually
• Increased available floor space
• Reduced scrap
• Real time inventory tracking by lot
• More efficient inventory management
“We have confidence in our inventory levels”
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Midwest User Group
Planning System
• Improved capacity planning process
• Eliminated spreadsheets for tracking and reporting
• Employees are better informed
• Employees are empowered to resolve issues quicker
• Increased visibility of customer requirements
“We used to spend all of our time just trying to get the
numbers. Now, we spend our time trying to understand
the numbers and correcting the issues they help us to
identify.”
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What About spreadsheets?
• Spreadsheets are OK for “analysis” of data
- OK
: Truck windows and returnable containers
- Not OK: MRP, capacity planning, supplier
scheduling, inventory management,
scrap reporting, etc.
• Difficult to share information across departments
• Complex spreadsheet (e.g., macros, linked data)
are dependent upon a few people to maintain
• Spreadsheets do not validate data
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Midwest User Group
Sub Supplier Performance
• Reduced inventory by 17% after implementing
EDI/Web
• Reduced supplier expediting/premium freight by
18%
• Improved communications within the supply chain
- Shared customer forecast
- Improved responsiveness and decision making
“It helped to bring our suppliers closer to our expectations”
“100% connected with suppliers in just two weeks
on the web”
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Increase Revenue
• New capabilities and efficiencies attracted new
customers
“We doubled sales in 3 years without increasing staff”
“We booked business that will double our revenue”
“It gave us confidence to double our business in five years”
“Operating more efficiently has helped us to taken on more
business and not have to add employees”
“We were able to grow the business without growing
inventory”
“Time gained from efficiencies goes to focusing on new
business”
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Midwest User Group
Employee Satisfaction and Training
• Increased employee confidence in managing daily
tasks
• More accurate work instructions that are better
aligned to daily operational activity, best practices
and customer requirements
• Documenting and mapping processes lead to a
50% reduction in time to train new users on a new
product launch
“We now have processes and procedures
anyone can follow”
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Midwest User Group
MMOG/LE Version 4
• Work group is engaged in analysis
- VDA (Germany) has formed a MMOG/LE Work Group
• MMOG/LE version 4 includes two groupings for
Assessment Questions:
- Full Assessment required by OEMs of Tier 1 Suppliers
- Separate Assessment for Sub-tiered suppliers
• Assessment and Gap analysis tabs are combined
into one
• Target completion date December 2013
- AIAG/Odette will announce when v4 is available
- Check OEM bulletins for adoption of v4
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Conflict Minerals
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Conflict Minerals Q&A
• What are conflict minerals?
- Currently include gold, tantalum, tin, and tungsten
• What is the Conflict Minerals Rule?
- Mandated by the Dodd-Frank Act
- Enacted by the SEC in August 2012
• What does this rule mean?
- Determine and disclose whether these raw
materials in the organization’s supply chain
originated at mines in the Democratic Republic of
the Congo or its nine adjoining countries
Midwest User Group
Conflict Minerals Q&A
• What if conflict minerals originated in the DRC or its
neighboring countries?
- The issuer must determine and disclose whether the sale of
these minerals financed or benefited armed groups.
• What does this Dodd-Frank act hope to
accomplish?
- Using minerals from “conflict” mines is legal, but human
rights groups hope that the disclosure requirement will
cause companies to source from conflict-free mines
• When are the first reports due?
- The first Conflict Minerals Reports are due to the SEC on
May 31, 2014, and will report on the 2013 calendar year.
Midwest User Group
Conflict Minerals Q&A
• What Functions May Be Impacted?
-
Corporate executive management
Purchasing
Quality
Engineering
Chemical Management
Materials, Planning and Logistics
Sales
Legal
IT
Midwest User Group
Conflict Minerals Q&A
• What if I am a privately held company?
- While the organization may not be not required to report
to the SEC, your customers, or your customers’ customers
may have reporting obligations.
- These entities may require you to conduct similar inquiries
and due diligence activities for the purposes of their own
conflict minerals obligations.
• How is the data collected and reported?
- The EICC/GeSI Reporting Template is used to facilitate the
exchange of data related to due diligence and smelter
information between companies in the supply chain
- iPoint developed the iPCMP system, which is a web-based
tool (database with reporting mechanism)which is
recommended to manage data from the EICC/GeSI
Template
Midwest User Group
EICC/GeSI Template
• Available at www.aiag.org
Midwest User Group
More Information Available at AIAG
• Located at www.aiag.org,
Initiatives, Corporate
Responsibility, Conflict
Minerals
• Scroll down towards bottom
• Resources/Links/Tools
• Documents available to
assist you
- AIAG Executive Summary
Post Rule
- FAQs
- Templates to help gather
information from your
suppliers
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More Information Available at AIAG
• Located at www.aiag.org,
Initiatives, Corporate
Responsibility, Conflict
Minerals
• Scroll down to the bottom
• Resources/Links/Tools
• Documents available to
assist you
- EICC GeSI Conflict Minerals
Reporting Template
- iPoint Conflict Minerals
Platform
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Midwest User Group
More Information Available at AIAG
• Located at www.aiag.org,
Events
• Scroll down
- Industry webcasts
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Midwest User Group
For QAD customers using .Net UI, a ‘temporary’
solution is possible by following a few steps
1.
Using Configurable screens, Modify the Supplier
Maintenance (SE) and Supplier Data Maintenance (EE)
screens.
a)
Add and re-Label, one of the Logical User Fields to be “Conflict Free”
(Y/N). Make this a required field, with Default = Yes.
b)
Add and re-Label a second Logical User Fields to be “ EICC/GeSI
Conflict Minerals on File (Y/N)? Make this a required field, with Default =
Yes.
2.
Attach the supplier answered EICC/GeSi Conflict doc to the
vendor’s record.
3.
Using the Browse Maintenance Update the Supplier Browse
to include these fields, and link the answered doc as part of
the browse
Midwest User Group
For QAD customers using .Net UI, a ‘temporary’
solution is possible by following a few steps
Next:
1.
Using Configurable screens, Modify the Item Master
Maintenance screen (SE and EE).
a)
Add and re-Label, one of the Logical User Fields to be “Conflict Free
Item?” (Y/N). Make this a required field, with Default = Yes.
b)
Add and re-Label a Character User Fields to be “Country of Origin”,
build a generalized code of acceptable country codes. Make this a
required field, with Default = USA.
c)
Connect a country code look up to the new CoO field
Next:
• Modify the Item Browse to sort on CoO, and or Conflict Item =
Yes, to show the Conflict Minerals
Midwest User Group
Supplier Data Maintenance
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Supplier Data Maintenance
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Supplier Browse
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Supplier Browse
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Item Master Maintenance
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Item Browse
Add fields to Item Browse
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Item Browse
Filter for Conflict Free
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Additional Updates
• Available on QAD App Store
- Automotive Process Maps v2
- Easy On Boarding Bundle v2
- Customer Schedule Variance
Browse
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Questions & Answers
• Dave Doyle: [email protected]
• Terry Onica: [email protected]
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www.qad.com
©QAD Inc. 2013
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