Common use of SUPPLY CHAIN MANAGEMENT EVALUATION Clause in Contracts

SUPPLY CHAIN MANAGEMENT EVALUATION. Vitesco Technologies evaluates the quality and Supply Chain Management performance of its suppliers on a monthly basis using standardized evaluation criteria. The results are incorporated in the annual evaluation of Strategic Suppliers to Vitesco Technologies called ‘Basic Annual Supplier Evaluation’ (BASE). Within BASE, Strategic Suppliers’ performance in the previous calendar year is evaluated with focus on purchasing, quality, Supply Chain Management and technology elements. BASE results influence sourcing decisions help to select suppliers, and supplier classification. They are updated once a year and then shared for Strategic Suppliers in the SupplyOn Performance Monitor. 6.1 SUPPLIER EVALUATION MEASUREMENT Vitesco Technologies’ standardized evaluation criteria are as follows: The Delivery Performance, the degree of implementation of Preferred Sourcing Models (PSM Rate), feedback of the Self-Assessment MMOG/LE (if any) and a choice of service criteria. The target is to achieve 100% in each criterion. Each criterion is considered with a certain weight according to its importance when calculating the total result. The Supply Chain Management performance is reported through the SupplyOn Performance Monitor to Supplier once per month. If the Supply Chain Management performance fails to meet the committed goals, Supplier implements immediate corrective actions and provide a get-well plan upon request. The plan includes actions on how to solve and avoid these sorts of incidents in the future. Deviation in actual performance may result in corrective actions from Vitesco Technologies to bring Supplier’s Supply Chain Management performance in line with expectations.