Supplier Consignment

1
Supplier Consignment

• 2009

2
Why Consignment

• Reduction of expedites
• Less over time, airfreight, disruption to the
  factory
• Smoother demand profile
• Eliminate reschedules
• Improved material flow
• Level load factory
• Significantly Improved Vendor Scorecard (40
  points guaranteed) if 100 on consignment
• POU (pay on use)
• No invoice needed
• Eliminate the matching errors from receipts to
  invoice
• Visibility to suppliers inventory and net
  requirements in iSupplier Portal
• Improved OTTR
• Improved LT

3
Weekly Steps to Take to Maintain Program

• Retrieve the weekly Net requirements forecast
  from iSupplier Portal.
• Load forecast into suppliers MRP system to drive
  component requirements.
• Calculate the inventory quantity below the
  stocking agreement minimums or above the
  maximums.
• Calculate quantity on the forecast within
  suppliers internal manufacturing LT.
• Calculate the inventory in-transit.
• Schedule production to maintain the stocking
  program inventory along with material within the
  manufacturing LT.
• Ship product for the consignment item on the
  delivery document (standard PO) received via
  iSupplier Portal.

4
Example of Inventory to Start Manufacturing

• Minimum Stocked Inventory Level 200 pieces
• Current Stocked Inventory 150 pieces
• Manufacturing LT 20 (in 5 day weeks)
• Minimum Inventory Calculation
• 200 150 50 pieces needed to maintain minimum
  stocking agreement
• Forecast Calculation
• 75 90 165 pieces needed to maintain building
  to the 20 day forecast to provide a 5 day LT
• Work in Process at Supplier 100 pieces
• Need to start 115 pieces in production this week
  to maintain the Honeywell Stocking Program
  Agreement. (50165-100)

5
Viewing Consignment via iSupplier Portal
When first opened, the Product tab page will show
No data exists until a search is run. We
recommend that you always enter a Honeywell Item
and click Go. If you do not enter a specific
Honeywell item and click Go, it will return all
of the items sourced to your Company active and
obsolete.
6
Viewing Consignment Item Data
Under the Product tab you will have visibility to
the Consignment Item data. From the sub-tab
Supplier Item Summary Consignment Items will
have a blue data sheet in the Consignment
Inventory column. Click on the blue data sheet
and it will open the Consigned Inventory page.
7

Viewing Consigned Inventory Quantities
Click on the Consigned On-Hand blue data sheet
and you will open the On-Hand Items page. The
Quantity listed is the inventory you own at
Honeywell. This is the quantity you use to
maintain your minimum inventory levels and stay
at or below your maximum inventory levels per the
Consignment Contract signed with Honeywell.
8
Viewing Consigned Receipt Data
Click on the Consigned Receipts blue data sheet
and you will open the Receipt Transactions
page. You will see the quantity received into the
Honeywell consignment inventory location.
9
Viewing Consumption/Pull Data
Click on the Consumption Advices blue data sheet
and you will open the Consumption Advices page.
The PO Number shown are the Blanket Releases
created from consigned inventory used. Click on
the Consumption blue data sheet and you will open
the Material Transactions page. This will show
the detail of the consigned inventory used at
Honeywell.
10
Viewing Consigned Use Invoices
When first opened, the Account tab page will show
No data exists until a search is run. From the
sub-tab View Invoices you will have visibility to
the Consigned Use Invoices. Click on the
Advanced Search link. Change the Invoice
search to starts with and enter USE. The
returned information are the Consigned Use
Invoices.
11
Viewing Payments
From the sub-tab View Payments you will have
visibility to the Honeywell payments to your
company. Enter the Honeywell Blanket Agreement
Number in the PO Number field and click Search.
The information shown is the payment data
associated with that Blanket Agreement.
12
Consignment Invoice/Payment Process

• Honeywell will generate the USE invoice based on
  the Blanket Agreement price and pull (or USE)
  quantity. You wont need to invoice for any
  consigned product.
• Sending in invoices on these parts after they are
  on consignment will put your invoices on hold.
  Confirm you arent sending an invoice to
  Honeywell on these consignment items.
• Payment cycle starts based on the invoice date as
  triggered by a material pull from the consigned
  location at Honeywell.
• 1 delivery document number will be given for
  shipping material against. This will be the same
  delivery document for a 1 year period.
• 1 Blanket Agreement number will be given that the
  invoices will generate against. This Blanket
  Agreement will be updated or replaced as
  necessary for price adjustments.
• Payments will be made with the agreed upon terms
  per the Honeywell check run / EFT / WFT pay
  schedule based on the invoice date as triggered
  by the pull of the inventory from consignment.

13
E-mail Alert Consigned Material Used by
Honeywell Intl Inc

• From Email Notifications (HBC Oracle Instance -
  HBCPRD03) mailtoOracleWF_at_honeywell.com Sent
  Wednesday, July 16, 2008 1156 PMTo
  Supplier_Portal_Contact_at_AnySupplier.comSubject
  Consigned Material Used and/or Invoiced by
  Honeywell Intl Inc.
• Supplier the below Consigned Blanket Release has
  been created based on material used.
•    Doc Nbr  7499730
•    Release Nbr         96
•    Shipment Nbr       1
•    Invoice Nbr  USE-16-JUL-08-92735
•    Hywl Item Nbr  4561AA
•    Supplier Item Nbr 4561BB
•    Qty Used              250
•    Unit Price             2.46
•    Hywl Loc  WCO
•    ----------------------------------------------
•    Doc Nbr  7499739
•    Release Nbr           121
•    Shipment Nbr         1
•    Invoice Nbr  USE-16-JUL-08-92738
•    Hywl Item Nbr  4562AB
•    Supplier Item Nbr 4562CD

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Shipping Instruction Summary Key
Points

• Each consigned item has one shipping/delivery
  document associated with it.
• Ship items against their respective delivery
  document numbers.
• NO skids with both consigned and non-consigned
  items.
• But
• It is ok to mix consigned items on a skid with
  other consigned items.
• If it is appropriate to the part size and type,
  partial skids are ok
• It is ok to ship quantities that are not on skids
• Attach the Consignment Label (see next slide) to
  each skid of consigned items.
• It needs to be placed prominently on at least 2
  sides, and we recommend placing it on all 4
  sides.

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Shipping Label
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www.honeywell.com