Supplier Consignment

2009

Why Consignment
1. Reduction of expedites Less over time, airfreight, disruption to the factory 2. Smoother demand profile Eliminate reschedules Improved material flow Level load factory 3. Significantly Improved Vendor Scorecard (40 points guaranteed) if 100% on consignment 4. POU (pay on use) No invoice needed Eliminate the matching errors from receipts to invoice 5. Visibility to suppliers inventory and net requirements in iSupplier Portal 6. Improved OTTR 7. Improved LT

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Weekly Steps to Take to Maintain Program

1. 2. 3. 4. 5. 6. 7. 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.

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Example of Inventory to Start Manufacturing

Minimum Stocked Inventory Level = 200 pieces Current Stocked Inventory = 150 pieces Manufacturing LT = 20 (in 5 day weeks)

week 1 0

week 2 0

week 3 75

week 4 90

week 5 125

week 6 100

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. (50+165-100)

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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.

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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.

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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.

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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.

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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.
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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.
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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.
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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.

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E-mail Alert:

Consigned Material Used by Honeywell Intl Inc

From: Email Notifications (HBC Oracle Instance - HBCPRD03) [mailto:OracleWF@honeywell.com] Sent: Wednesday, July 16, 2008 11:56 PM To: Supplier_Portal_Contact@AnySupplier.com Subject: 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 Qty Used: 300 Unit Price: .04 Hywl Loc: WCO
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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

CONSIGNMENT CONSIGNMENT CONSIGNMENT CONSIGNMENT CONSIGNMENT

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