Contents
1 Purchasing 3
1.1 Introduction 3
1.2 Definitions 3
1.3 General Requirements 4
1.4 Sourcing Process 4
1.5 Source Selection 5
1.6 Scheduling Agreements /
Purchase Order 6
1.7 Scheduling Agreements 6
1.8 Material Surcharge Agreements 13
1.9 Supplier Master Agreement 14
1.10 Production Part Tooling 14
2 Materials Planning 15
2.1 Introduction 15
2.2 MTU America, Inc.
Planning Methodologies 15
2.3 Replenishment Strategies 16
2.4 Release Delivery Schedules -
How to Read and Understand 17
2.5 Timing Zones 18
2.6 Supplier Responsibilities 19
2.7 Material Planning Ship to:
Info and Contact Info 21
2.8 Attachments 22
3 Supplier Quality 26
3.1 Introduction 26
3.2 Quality Management
System Requirements 26
3.3 Return Material Process 29
3.4 Specifications 30
3.5 Glossary 30
3.6 Attachments 30
4 U.S. Customs Import Guidelines 30
4.1 Purpose 31
4.2 Scope 31
4.3 Definitions 31
4.4 Responsibility 31
4.5 Procedure 31
4.6 Non Compliant Shipments 35
4.7 Fines and Penalties 35
4.8 Records 35
4.9 Attachments 36
5 Packaging/Preservation 55
5.1 Introduction 55
5.2 Expendable Packaging /
Returnable Packaging 56
5.3 Packaging Approval Process 56
5.4 Part Protection, Cleanliness
and Preservation 57
5.5 Packaging of Hazardous Materials 57
5.6 Import / Export 57
5.7 Regulations on Wood Packaging
Material (WPM) 58
5.8 Shipment Marking Requirements 58
5.9 Production Parts Container Labels 58
6 Accounts Payable 59
6.1 Introduction 59
6.2 Invoicing Standards 59
6.3 Invoicing Submission 60
6.4 Invoicing Processing 60
6.5 Payments to Suppliers 61
6.6 Payment Inquiries & Disputes 61
6.7 Statement Submission 61
6.8 Vendor Master Record Creation
and Changes 62
1 Purchasing
1.1 Introduction
This chapter explains the purchasing procurement process and identifies the documents that suppliers will receive via the Purchasing Organization. It also provides an explanation as to which documents are required for proper processing of MTU America orders.
1.2 Definitions
Supply base providers consist of the following: suppliers, brokers, sub-contractors, re-packers, licensees, or providers of a service.
Supplier
A provider of equipment, materials, packaging or services.
Broker
An agent who negotiates and/or contracts the purchase of equipment, materials, packaging or services which are to be used in the manufacturing of MTU America products.
Sub-Contractor
An outside manufacturer who takes raw state materials and thru machining, assembly or packaging converts them into a finished product or semi-finished product.
Re-packer
An outside manufacturer who takes “finished product” or “work in process” product produced either internally or at another external location and packs into a primary packaging container. There is direct product exposure to the environment.
Licensee
A third party who is granted authorization to manufacture, distribute and /or market a
product under the MTU brand name.
Service
The providing (or a supplier) of accommodations and activities required by MTU America Inc., such as maintenance, repair, etc.
Purchasing Contract
A legally binding document agreed between a purchaser and a vendor that defines the purchasing and supply of goods or services at agreed prices and conditions.
1.3 General Requirements
All suppliers shall be knowledgeable and in compliance with the following:
o All federal, local, regional and state regulatory requirements
o International regulatory requirements for exported product (if applicable) as well as US regulatory
requirements for importation of materials or services
o US export regulations specific to the International Traffic in Arms Regulations (ITARS)
o Requirements as described in this manual
Supply base providers shall ensure that their suppliers are in conformance with these requirements
as well.
1.4 Sourcing Process
A MTU America supplier is carefully selected by the buyer based upon several factors. he buyer will review key criteria such as delivery, quality, cost, and financial stability when making their final selection. All MTU production suppliers must be ISO or TS certified, or must already be a MTU America approved supplier. Suppliers who are asked to participate in the quote process need to be in good standing with all MTU manufacturing locations.
Suppliers will be asked to participate in the quoting process via an official Request For Quote (RFQ) inquiry from the buyer (i.e., email or phone call). Each quote must be submitted via our standardized Request for Quote (RFQ) form or via an email to the buyer with the requested information listed. To view RFQ document follow link: MTU America Request For Quote
When submitting a quote for consideration of new business, it is necessary to identify all costs that would be required to meet the specifications and function of the product. Suppliers should break out specific surcharges, packaging costs, tooling changes or any other applicable pricing conditions relevant to the product. The supplier should also insure that accurate lead times, initial and ongoing, are listed on their quotation. Lead time should include the supply of raw material, and the manufacturing time, and transportation time to customers dock if you are responsible. We would also ask that suppliers include and identify a packaging proposal when submitting quotes to the buyer if they are unable to adhere to the standard MTU Packaging Specifications listed in this document. This proposal should identify what packaging material / process will be used to ensure the parts get to our designated facility in an efficient and effective manner. All packaging proposals will be reviewed by our Packaging Department. Please refer to the Packaging Specifications (Section 5) in this manual for further information. Suppliers should also list on the quotation final product Country of Origin for export purposes. Please refer to the Logistics portion of this document (Section 4) for more details in regards to exportation.
1.5 Source Selection
Upon receipt of the quotes and careful analysis, a decision will be made as to which supplier (or suppliers) will be awarded new business. The majority of MTU parts are single sourced, however, there are some instances where multiple suppliers are used. In those circumstances, we consider that part to be multi-sourced. The process and the criteria for single sourced vs. multi sourced Suppliers would still be the same.
As a new supplier to MTU America a Vendor Master Record Request Form will be required to be filled out and returned to the requesting buyer along with a completed W-9 form (Domestic Supplier) or W-8 (International Supplier) form.
To view Vendor Master Record Request Form and Tax Documents follow these links:
Vendor Record Request Form
W-9 Form
W-8 Form
If the supplier that is selected is already an approved vendor of MTU they will receive an order (Purchase Order/Scheduling Agreement) from the Buyer with the part number(s) and agreed to pricing listed. The PO or SA will also list out any stipulations that apply to the order. For example specific PPAP requirements, ship to location, terms of payment, etc. The specifics of the purchasing agreements will be discussed in more detail in the next section.
For suppliers that are currently supplying material to our counterparts in Friedrichshafen (MTU-FN) buyers for MTU America will still submit an official Request for Quote in an email or RFQ form to be filled out for parts that MTU America and MTU-FN have requirements for. We expect that base price and surcharge that have been quoted to MTU-FN are also quoted to MTU America for the same parts and lot sizes. The supplier should be aware that most price negotiations that are made with MTU-FN would be applicable for MTU America as well. After price negotiations are approved and completed it will be the supplier's responsibility to communicate all pricing to MTU America.
1.6 Scheduling Agreements / Purchase Order
Once a supplier has been selected to supply a part or parts to MTU America, Purchasing will issue either a Purchase Order or Scheduling Agreement to the supplier. These documents are contracts and provide important information to the supplier on pricing, shipping location, terms and conditions among other things. If any changes are required to the Scheduling Agreement or Purchase Order, the supplier must notify the buyer in writing well in advance of the first shipment to avoid invoicing issues or payment issues. This notification must provide supporting documentation for price change request.
Below are more detailed descriptions of each type of document to help distinguish between the two.
1.7 Scheduling Agreements
The Scheduling Agreement is a contract between the supplier and MTU America, Inc. This document contains key information including unit price, supplemental conditions, payment terms, target quantity (estimated annual volume), delivery address, contract term, and appropriate MTU Buyer information. Scheduling Agreements are made for reoccurring/frequent requirements, i.e., for parts that are required on a routine basis (also referred to as a Blanket Order). Please note a scheduling agreement is not authorization to ship product to MTU America, the required delivery dates and quantity of pieces to be shipped are provided to the supplier by means of separate agreement called Delivery Schedule. The Supplier can find more information about the delivery schedule in the Planning portion of this document (Section 2).
The supplier's Scheduling Agreement will consist of a 10 digit number beginning with the prefix "4600" for production orders to be delivered to the warehouse or manufacturing location in South Carolina and for Aftersales orders to be delivered to the warehouse in Brownstown, MI.
Please see a few print screens below of examples of a Scheduling Agreement with key data identified.
- Target Quantity:This field represents an estimated annual volume that is entered when the part gets initially set up on a Scheduling Agreement. This quantity is only for informational purposes and should not be used by the supplier to plan for shipments or to order component items. The Planning Department at MTU America is in charge of sending out weekly Delivery Schedules which will list out the quantities and dates that parts are required. The dates and quantities listed on this Planning document are what should be used by the supplier for manufacturing and planning purposes. Please pay careful attention to the firm zone on Delivery Schedules.
- Pricing: For reporting and tracking purposes MTU America requires that suppliers submit pricing with supplemental conditions broken out, such as: material surcharge, packaging, etc. These pricing conditions will be listed out individually on the Scheduling Agreement as pointed out in the print screens above. Due to some limitations of our internal MRP system that we use we are only allowed to use two decimal places when entering pricing. If a supplier's pricing exceeds this two decimal limitation they may see the pricing extended in a higher unit per quantity than what was originally quoted. Example: Quote Price = 3.562 per 1 pc, Price on SA = 35.62 per 10 pcs.
If the supplier receives the Scheduling Agreement and notices any error in price they are to notify their MTU Buyer immediately to get the discrepancy corrected in order to avoid payment issues.
- Payment Terms: Terms will be established for a supplier prior to any issuing of purchasing documents. The terms should be agreed upon by both parties at the time of contract negotiation. It is important that the supplier understand that payment terms commence after receipt of invoice or date of goods receipt in an ERS scenario. It is important for suppliers that are set with ERS (Evaluated Receipt Settlement) payment terms to be aware that they will get paid whatever price is listed on this Scheduling Agreement document at time of goods receipt regardless of what may be invoiced.
- Contract Term - Validity Period: MTU America typically prefers to have fixed or negotiated 2-3 year pricing. During that time supplier Scheduling Agreement number(s) will remain the same and pricing will be updated where necessary (i.e. quarterly surcharges) on this document until the end of the contract term. If any additional parts are sourced with the specific supplier they will be added to the existing Scheduling Agreement. At the end of the contract term if no significant price changes or negotiations occur the contract (Scheduling Agreement) will be extended an additional 2-3 years.
* MTU America Buyers MUST be informed of any price changes on existing parts (for material surcharge changes, see section 1.7 for more information) 90 Days in advance. This will allow for the Buyer and Supplier to react and make any necessary changes.
- PPAP Requirements: PPAP requirements are no longer listed on Scheduling Agreements and Purchase Orders. If there is a PPAP requirement for parts awarded to MTU America suppliers the information will be communicated on the PPAP Supplier Award Letter. This letter will be sent to the supplier along with the Scheduling Agreement or Purchase Order. Below is an example of the PPAP Supplier Award Letter:
- Ship to Address:
· Aiken/Menlo (Plant 91) Scheduling Agreements starting with the number sequence "4600"
Production parts that are ordered for Plant 91, our South Carolina facility (also known as Aiken Warehouse), for assembly and/or in-house manufacturing should have the following ship to address:
MTU America, Inc.
Aiken Warehouse
1025 Textile Ct.
Graniteville, SC 29829
United States
· Brownstown Warehouse (Plant 90) Scheduling Agreement starting with the number sequence "4600"
Service parts that are ordered for Plant 90, our Brownstown, MI facility, for distribution to customers should have the following ship to address:
MTU America, Inc.
Parts Logistics Center, N.A.
19771 Brownstown Ctr. Dr.
Suite 760
Brownstown Township, MI 48183
United States
* Please remember that neither current requirements nor delivery dates are included in the scheduling agreement. This data is provided to the supplier on a weekly basis via the Delivery Schedule. The Delivery Schedule indicates the requested date of delivery and quantities to be shipped. More information can found in the planning portion of the document (section 2).
1.7.1 Purchase Order
Unlike the Scheduling Agreement, the Purchase Order includes information on the required quantity to be shipped, and date of delivery for a specific part(s). Therefore, there is no separate Delivery Schedule provided like with a Scheduling Agreement. The MTU America buyer or planner will send the supplier a Purchase Order via email, fax, or electronically. The supplier should then confirm that they have received the order and commit to supplying the parts in accordance with the conditions stipulated on the order itself. The Purchase Order number will consists of 10 digits starting with the prefix "4561" for the production location in Graniteville, SC and a"6000" for the aftersales facility in Brownstown, MI .Below are more detailed descriptions to help the supplier to distinguish key information on a MTU America Purchase Order.