BDR Thermea
Supplier excellence manual
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Andrew Vaughan - Group Procurement Director
We recognise the importance of effective and open working relationships with our
suppliers and are committed to building and developing these relationships.
The supplier excellence manual helps support this collaborative approach which is
crucial to maximising mutual benefits.
Patrick van de Werdt – Group Quality Director
BDR Thermea’s success is dependent on our ability to offer the highest value to
our customers through quality, service and price. A close and professional working
relationship with our supplier base is key, and helps to overcome challenges as we
strive to lead the industry.
Andrew Horton – Group Supply Chain Director
As we look to achieve operational excellence by adopting lean principals, it is crucial
that our suppliers are aligned with our vision. We recognise that we must work
together with our suppliers during the continuous improvement journey.
This supplier excellence manual is intended to support this collaborative approach
which is vital in achieving our goals.
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CONTENTS
1 Doing business with BDR Thermea
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1.1 Purpose of this supplier manual
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1.2 About BDR Thermea
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1.3 Key roles and responsibilities BDR Thermea
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1.4 Key roles and responsibilities supplier
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1.5 L anguage
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1.6 S
ustainability
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2 Supplier selection and management
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2.1 P
urpose and segmentation
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2.2 D
efinitions
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2.3 Contracts and other agreements
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2.4 Risk management
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2.5 Supplier quality assessment
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2.6 Corporate social responsibility
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2.7 Supply chain
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2.8 Information technology
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2.9 P
artnership
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2.10 R
&D
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2.11 Commercial
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3 Product qualification and release
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3.1 New product creation process (NPCP)
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3.2 Stage gates
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3.3 Product qualification process
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3.4 Production part approval process (PPAP) and submissions
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3.5 PPAP level
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3.6 Parts submission warrant (PSW)
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3.7 Design legality
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3.8 Declaration of performance document (DOP)
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3.9 Timing and scope of the program
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3.10 Advanced quality planning and PPAP deliverables
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4 Lifecycle management
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4.1 Logistics requirements
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4.2 Delivery lead times
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4.3 F
actory gate collections
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4.4 Waste
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4.5 F
orecasts
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4.6 Call-off
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4.7 Delivery notification
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4.8 Packaging requirements
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4.9 Service level
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4.10 Returns of non-compliant goods and packaging
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4.11 N
on-conforming material
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4.12 C
hange management process
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4.13 S
upplier complaint handling
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4.14 Traceability at supplier
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4.15 Process audits
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4.16 Quality management systems
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4.17 Documentation and archiving
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4.18 Spares requirements
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5 Supplier evaluation
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5.1 Overview
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5.2 Vendor rating
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5.3 KPI Calculation
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5.4 Supplier relationship management (SRM)
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6 Revision history
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7 Addendum 1 - Cost breakdown template
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8 Addendum 2 - Parts submission warrant
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9 Addendum 3 – Product change request (PCR)
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1. Doing business with BDR Thermea
1.1 Purpose of this supplier manual
The purpose of this supplier manual is to clearly communicate to our suppliers the requirements for high quality
components and assemblies which need to be delivered effectively to BDR Thermea and its subsidiaries. It will
outline how we work together with our suppliers to reduce the total cost of supply and remove waste from the
whole supply chain.
We appreciate that suppliers are key to the success of BDR Thermea enabling delivery of high quality products
to our customers. It is therefore important that we tell the supplier about our expectations so that we can
both clearly identify opportunities for improvement and be able to effectively monitor improvements.
BDR Thermea values long-term relationships with suppliers who achieve the required standards of quality, cost,
delivery and continuous improvement. The intention is to achieve our zero defect target throughout the supply
chain through cooperation based on partnership.
We understand that our suppliers provide a diverse range of commodities which may have unique customer
requirements. The processes and tools described in this manual represent the core BDR Thermea expectations and
requirements. The differences suppliers may encounter across the BDR Thermea organisation will generally be
minimal and driven by customer, product, and/or market specific requirements.
1.2 About BDR Thermea
BDR Thermea owns some of the leading brands in the European market for heating products. These include
De Dietrich, Baxi, Remeha, Brötje, Chappée and Baymak. The Group has a high market position in key European
countries and strong positions in the rapidly growing markets of Eastern Europe, Turkey, Russia, North America
and China. In total BDR Thermea operates in more than 70 countries worldwide.
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1.3 Key roles and responsibilities BDR Thermea
We understand that the way our individual businesses operate may differ slightly and in some cases have
unique roles and responsibilities. However, the roles and responsibilities represented in this section represent
the core of our business and the differences the supplier will see across our organisation will be minimal.
Buyer
The buyer is the primary contact for all purchasing-related issues. The supplier must inform the buyer of any
issue that impacts delivery, or to request any changes.
Commodity Manager
Many of BDR Thermea’s suppliers are engaged with multiple BDR Thermea business units. The Group Commodity
Manager is responsible for ensuring that there is one face to BDR Thermea and our suppliers’ actions support the
global strategy through a consistent approach.
1.4 Key roles and responsibilities supplier
Customer Representative
The supplier will identify a contact within the supplier organisation to communicate with BDR Thermea.
This customer representative is the primary contact within the supplier’s organisation for any key communications
including any quality, delivery, or commercial issue resolution.
1.5 Language
The language to be used for all communications between BDR Thermea and the supplier is English.
1.6 Sustainability
BDR Thermea believes in a sustainable future based on developments that meet the needs of the present without
affecting resources required for the future. We recognise and support all national and international environmental
legislation and we believe we have a duty to pursue sustainable development in all we do.
Protecting the environment for a sustainable future is important to BDR Thermea and is reflected in our innovative
products and sustainable initiatives. We are focused on ensuring our supply chain correctly manages recycling,
disposal, packaging and transport. We work with our partners to remove waste from our shared supply chain.
Sustainable procurement policy
This policy describes the framework within which BDR Thermea group companies’ procurement functions will
conduct their activities in order to contribute towards our total sustainable objectives. Our sustainable procurement
policy is available on the BDR Thermea website.
Ethical sourcing code
The principles of this code apply to all suppliers to the Group, but, within the EU, compliance will be defined as
adherence to local legislative minimum standards. This code of practice is written specifically as a guide for
supplying companies and factories based outside the EU. The ethical sourcing code is available on the
BDR Thermea website.
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2. Supplier selection and management
2.1 Purpose and segmentation
BDR Thermea collaborates with suppliers that best support our business and who can deliver the required level
of quality, cost, delivery performance and innovation. The diagram below reflects how we segment our supply
base. We work in close collaboration with those suppliers we identify as partners, actively manage the supplier
relationship with our supplier relationship management (SRM) suppliers at a Group level, those identified as
preferred suppliers are eligible to be shortlisted to take part in the development of new products and vendor rating is
carried out at local sites in a consistent way with a larger selection of important suppliers.
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2.2 Definitions
BDR Thermea is constantly striving to achieve the most relevant supply base and the pyramid below shows how
suppliers are categorised to achieve this.
Preferred supplier Supplier
performance
New supplier Specialist supplier Ac4vely eliminate Essen4al parts No new business To achieve preferred supplier status new suppliers are evaluated using our supplier selection criteria listed below.
This ensures that suppliers are of a sufficiently high standard to supply consistent quality products on time at a
competitive price and are also able to collaborate with BDR Thermea on new products and initiatives.
Only suppliers that meet these criteria will be considered eligible to be selected for inclusion in our NPCP.
The following table describes the evaluation criteria.
Item
Criteria
Contracts
Is a contract in place
Risk
BDR Thermea risk assessment score
Dunn & Bradstreet risk rating
Quality
Supplier potential review score
Quality performance (PPM)
Warranty Performance (PPM)
CSR
CSR audit results (EcoVadis)
Supply chain
Delivery performance (on time in full)
Supply methods (Kanban/VMI)
Systems compatibility
Supplier integration CAD/IT
Supplier partnership
Level of collaboration
Supports multi sites
Continual improvements
R&D
New development support
Support future needs
Commercial
Provides open book costing
NPCP target agreement
Collaborate in VA/VE/product teardowns
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2. Supplier selection and management
2.3 Contracts and other agreements
Order of precedence
The requirements within this document are intended to be a supplement, not a replacement for or altering of
the terms or conditions within existing supply agreements, engineering drawings, or specifications. If conflicting
interpretations of the standards arise, the following order of precedence applies unless agreed otherwise in
our agreements:
1. Confidentiality agreements
2. Specification requirements
3. Supply agreements/contracts/trade products agreement
4. Terms and conditions
5. Design and development agreement
6. Service level agreement
7. BDR Thermea purchase orders
8. This supplier manual
Explanation and use of agreements
• Confidentiality agreements
All suppliers to BDR Thermea must sign a non-disclosure agreement. It is our policy to use a BDR Thermea
standard form that has been created for this purpose. The supplier shall not use, transmit or disclose confidential
information to any third party except in accordance with the terms of the non-disclosure or any other written
agreement. We value the relationship with our suppliers and therefore would like to protect it through the use of
this formal agreement. The non-disclosure agreement can be found on the BDR Thermea website.
• Specification requirements
A drawing or technical/part specification created by BDR Thermea R&D and used to describe components
or materials. A specification will contain the dimensions, functionality, quality requirements and other details
necessary to manufacture reliable parts.
• Supply agreements
In addition to the requirements contained in this manual, we will determine if a supply agreement is required with
the supplier. Once the need is determined based on risk and strategic benefit, it is expected that suppliers will work
with BDR Thermea to put this agreement in place.
Our supply agreement outlines our specific requirements for cost, quality, supply chain and other elements of our
business relationship. The purpose is to outline the responsibilities of the two parties and the problem
resolution process.
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• Trade products agreement
Occasionally we will buy in finished goods and services and brand them. If we do this we will want to agree on
issues such as branding, contract period, exclusivity etc.
• Design and development agreement
We may want to design a new product or service in cooperation with our suppliers, and will require our chosen
partners to agree to the process and project details including timescale, deliverables and IP ownership. We will do
this under our design and development agreement.
• Terms and conditions (available on the BDR Thermea website)
Our general terms and conditions.
• Service level agreements
Our specific logistics requirements pertaining to individual sites
• BDR Thermea purchase orders
An order raised by a manufacturing site to authorise the manufacture of products. This is normally preceded by a
supply agreement which sets out the working arrangements. The order may be for an open quantity to cover such
parts as we wish to order or it may be for a specific quantity.
• This supplier manual
2.4 Risk management
Business continuity
As a supplier to our business we require the supplier to have a formal business continuity/disaster recovery plan in
place to ensure no interruption in supply to our production line. We understand that contingency plans cannot be
developed for all possible scenarios, but we do expect the supplier to maintain robust plans to enable a rapid
resolution in the event of disruptions.
We need the supplier to have a crisis management approach to deal with potential disruptions. The approach should
include action and communication plans, activity checklists, escalation procedures, and the organization of teams,
roles, and responsibilities. This plan should address the recovery time needed for a variety of business interruptions,
contact information for key locations, supply chain assessment of risk to our products and/or services provided.
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2. Supplier selection and management
2.5 Supplier quality assessment
Supplier potential review
The supplier assessment process is designed to get an insight into a supplier’s ability to meet our quality,
delivery and cost requirements during the creation and realisation of products and services.
An audit of the main suppliers process, the supplier potential review, is part of the process and will focus on :• Product development process
• Product realisation process
• Management process
• Customer satisfaction
• Change management
The supplier potential review score will result in a final rating of A to D.
Rating
Requirements
A. Quality capable / no action plan required
Potential score > 85% and all individual elements
score a minimum of 71%
B. Partially quality capable / action plan voluntary
Potential score > 71% ~ 84% or score > 85% with
elements < 70%
C. Potentially quality incapable
/ action plan mandatory
Potential score > 60% ~ 70%
D. Not quality capable / supplier is non-preferred
Potential score < 59% or one or more elements
score < 59%
2.6 Corporate social responsibility
Our suppliers must meet our minimum standards of CSR and must achieve our minimum required standard
using the EcoVadis sustainable supply management online audit. See http://www.ecovadis.com and also
comply with our Ethical Sourcing Code GPP.01.003 available to download on the BDR Thermea website.
2.7 Supply chain
Suppliers must deliver on time and in full. BDR Thermea has appointed a fourth party logistics provider who
organises all collections and deliveries to BDR Thermea sites and suppliers must follow the required process.
2.8 Information technology
Our minimum compatible CAD file type that suppliers should be able to output is a neutral format IGES file and
suppliers must have the ability to communicate electronically. If required electronic consolidated invoices, delivery
information and other two way data sharing using EDI and other data transmission methods will be used.
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2.9 Partnership
• Collaboration
Suppliers should consider BDR Thermea as the customer of choice and will allocate resources to BDR Thermea first
and be prepared to share intellectual property for our mutual benefit. Suppliers must be prepared to integrate with
project teams and potentially other suppliers in the BDR Thermea NPCP and join quality improvement teams as well
as providing market intelligence and assistance with the sales and marketing of products.
• Support
Our suppliers should support us with a high level of commitment in providing a timely service.
Communication is essential so any situation can be jointly managed at the earliest point to minimise adverse effect.
Rapid response to enquiries for new products, changes in specification or other communications should be dealt
with in a positive way. When a problem occurs the supplier should be prepared to own and positively resolve it in
a timely and effective way.
• Continuous improvement
Suppliers should be prepared to integrate with BDR Thermea and may be asked to participate in the BDR Thermea
procurement excellence - vendor rating and SRM programme.
2.10 R&D
BDR Thermea would like suppliers to have an open dialogue to present on-going development strategies and
interesting new technologies for products and processes which can be shared with senior management both
at the supplier and/or BDR Thermea.
BDR Thermea would also like to work with suppliers so that specifications are developed to remove transactional
costs through investment in equipment and processes and to quickly and effectively overcome technical
challenges during the design process to achieve reliable, affordable and cost effective components.
Suppliers to BDR Thermea should be capable of supporting the BDR Thermea product road-map and
allocate sufficient resources to product development projects which may include providing development resource,
embedded team members or expertise to support BDR Thermea in achieving reliable specifications, the correct total
cost outcome and on time project completion.
2.11 Commercial
• Open book costing
We want to work with suppliers to reduce the total cost of the parts we purchase and cost breakdowns enable us to
understand the elements of total cost and enable us to work with suppliers in reducing this. Cost breakdowns should
be on the BDR Thermea cost breakdown template.
• NPCP target agreement
Suppliers should be willing and able to work with target costing agreements to achieve the correct product cost.
• VA/VE
Value analysis/value engineering is a technique used in BDR Thermea to remove unnecessary product cost.
Suppliers should be willing to collaborate with VA/VE cost down initiatives which could include product teardowns
and deliver cost saving ideas to improve competitiveness.
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3. Product Qualification and Release
3.1 New product creation process (NPCP)
Introduction
It is our expectation that our suppliers actively participate in our NPCP. It is essential that we work together to
understand requirements, design for manufacture, design robust processes where capabilities are understood and
effectively controlled so that together we will deliver a cost effective and reliable solution. We want our suppliers
to actively participate in the entire process, be open to changes and look for ways to continuously improve in all
aspects of the product and processes.
BDR suppliers should be familiar with the NPCP concepts:
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3.2 Stage gates
Introduction
Stage reviews between stages of a project are described as process stage gates and the structure of each stage gate
is similar. A decision to progress the project is judged by a measurement of the quality of the pre-determined stage
deliverables against set criteria. Criteria are what the project is judged against in order to make the go/kill decisions.
These criteria should be agreed prior to the stage gate review meeting. Criteria should contain both financial and
qualitative criteria but change from gate to gate.
3.3 Product qualification process
The BDR Thermea product and qualification process involves the advanced quality planning (AQP) process and the
production part approval process (PPAP). These are structured methods to define the steps necessary to assure all
manufactured parts always meet the customer requirements. These steps are standardised and defined in 15 quality
planning requirements, the 15 PPAP elements. These 15 PPAP elements shall be worked out during the different
phases of the project.
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3. Product qualification and release
3.4 PPAP and submissions
The following circumstances shall require a part approval submission:
• New product/routine re-submissions
• Engineering changes
• Tooling transfer, replacement or refurbishment
• Correction of a discrepancy
• Changes to optional construction or material
• Sub-supplier or material source change
• Parts produced at additional location or original location has changed
• Process change
This list is not exhaustive and all changes must be communicated to BDR Thermea supplier quality assurance (SQA).
The BDR Thermea PPAP checklist should be used to track and report PPAP progress.
3.5 PPAP Level
PPAP submission levels will be defined as part of the BDR Thermea Advanced Quality Planning Process system.
Unless otherwise advised by BDR Thermea SQA, the PPAP will default to level 3. Level requirements are in-line
with the automotive Industry.
3.6 Parts submission warrant (PSW)
The parts submission warrant (PSW) shall have all the relevant sections completed and clearly identify the
engineering drawing change revision level and part specification approval.
3.7 Design legality
Where specified the design of the device must meet relevant international standards and regulations. The
supplier shall therefore perform all the required actions to obtain the related approvals and provide all the test
reports or any needed information to allow the customer to demonstrate the compliance on request of any local
authority. Where a specific country of manufacture or sale is specified by the customer it is the responsibility of
the supplier to identify all relevant standards and ensure product design of the device is compliant therewith.
3.8 Declaration of performance document (DOP)
The supplier must be compliant with the DOP. The DOP is the key concept in the construction products regulation
(CPR). The DOP gives the manufacturer the opportunity to deliver the information about the essential characteristics
of the product he wants to deliver to the market. The manufacturer shall draw up a DOP when a product covered by
a harmonised standard (hEN) or a European technical assessment (ETA) is placed on the market.
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3.9 Timing and scope of the programme
At BDR Thermea, projects are carried out according to the NPCP. In the NPCP nine stage gates are defined.
According to supplied parts the key deliverables for the supplier are shown in key deliverables supplier.
The BDR Thermea AQP shall be matching with these stage gates and shall be part of the project planning of
the supplier.
IMAGE
The scope of the BDR Thermea AQP, in other words the scope of applicable PPAP requirements, depends on the type
and complexity of the part.
The scope will be mentioned in the request for quotation (RFQ) and will be identified and communicated on the PSW
which will be submitted by BDR Thermea at the start of the project.
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3. Product qualification and release
3.10 Advanced quality planning and PPAP deliverables
BDR Thermea will review the status of the PPAP file at the different stage gates. The PPAP requirements shall
either be submitted to BDR Thermea or reviewed by BDR Thermea at the location of the supplier.
Beside the PSW for series validation at stage gate 6, BDR Thermea will define a PSW for sample delivery at each
stage gate. On this PSW the applicable stage gate is mentioned and the requested PPAP requirements are marked
with an S (submitted to BDR Thermea) or an R (required and to be reviewed at BDR Thermea)
IMAGE
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4. Lifecycle management
4.1 Logistics requirements
Our basic logistics requirements are flexibility, good communication and the ability to supply to our
manufacturing sites on a next day just in sequence basis. Any agreement detailing how this will be achieved
will be recorded in a BDR Thermea multi site agreement. If there are circumstances where an individual country
has exceptional requirements, they can be found in the local logistics “service level agreements” (SLAs).
4.2 Delivery lead times
BDR Thermea embraces the principle of lean supply and requires suppliers to commit to and adopt the same
philosophy. Suppliers will be required to be able to offer and maintain lead times in keeping with lean supply chain
(ie Kanban or Just in Sequence (JIS)) using logistics arrangements, relocation, local stock or other techniques.
4.3 Factory gate collections
BDR Thermea uses a nominated logistic provider to organise all collections of goods from suppliers’ premises and to
deliver goods to BDR Thermea production facilities. Suppliers should comply with the processes employed by the
nominated carrier in order to achieve agreed lead times. The logistic provider will measure supplier compliance
with requested lead times and quantities and report them to BDR Thermea.
4.4 Waste
We strive to remove waste throughout the supply chain and therefore we require our suppliers to embrace lean
techniques such as value stream mapping and process capability and work together with BDR Thermea and our
customers to make materials flow effectively.
4.5 Forecasts
BDR Thermea will provide a forecast of our requirements in order to help suppliers plan the demand of BDR
Thermea in their facilities. It is the supplier’s responsibility to monitor this information along with actual usage and,
to the fullest extent possible, adjust its capacity and processes to accommodate any indicated changes in demand.
Any large variances should be checked and confirmed with BDR Thermea purchasing department.
4.6 Call-off
Suppliers should use lean principles to enable supply to BDR Thermea with a maximum of one day’s stock being
held at BDR Thermea. The supply methods, delivery point, packaging and other details should be in line with the
BDR Thermea standard methods as defined in the BDR Thermea logistics SLA.
BDR Thermea will give advance notice of delivery requirements. Where it is agreed that suppliers are supporting a
lean manufacturing processes this will be a maximum of one day in advance.
If a supplier is unable to adhere to any delivery requirements notification is required immediately and the
consequences and remedies can be agreed.
Parts delivered which are not in accordance with any delivery request will be rejected. In the event of a late or
incorrect delivery or other failure, we will require a full investigation and corrective actions to ensure the standards
we require are met in full.
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4. Lifecycle management
4.7 Delivery notification
A detailed delivery note is required. If agreed this may be in electronic form and be input directly to the BDR
Thermea ERP system. Any outer packaging containing a delivery note must be marked accordingly.
4.8 Packaging requirements
Packaging should be as detailed in the BDR Thermea labelling and packaging service level agreement.
4.9 Service level
Deliveries should be on time and in full. Compliance with this requirement will be measured and communicated to
key suppliers each month.
Any site specific requirements are available from the specific BDR Thermea site logistics team.
• Baxi Commercial
• Baxi Spain
• Heatrae Sadia
• Baymak
• Baxi UK
• Remeha
• Chappée
• Brötje
• SenerTec
• Baxi Italy
• De Dietrich
• Sofath
Site contact details are listed on the BDR Thermea website.
4.10 Returns of non-compliant goods and packaging
This will be managed through our fourth party logistics provider at the supplier’s cost.
4.11 Non-conforming material
Notification of nonconforming material - customer
Suppliers must notify BDR Thermea of nonconforming or suspect material immediately, whether they are may be in
transit or already delivered. This action is required by BDR Thermea to reduce the impact of a quality incident.
Communications must be directed to the BDR Thermea site that receives the goods, and to the commodity manager
and local buyers.
Containment of nonconforming material at the supplier facility
Suppliers must contain any nonconforming or suspect parts immediately to minimise the impact on BDR Thermea
production and shall implement 100% off-line inspection of suspect parts. Records of nonconforming material and
customer notification shall be kept per quality system requirements and made available if requested by BDR
Thermea supply chain management and/or the receiving BDR Thermea site.
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Deviation request
Suppliers must quarantine nonconforming, suspect, or unapproved material and may be granted a concession in
order to continue shipments. A request to be granted a concession should be directed to the receiving BDR Thermea
site and copied to the commodity manager and buyer. BDR Thermea will evaluate any risks in using nonconforming
material and any impact on production schedules and customer deliveries prior to approval being given.
Material must not be delivered under concession unless written approved is given by the receiving BDR Thermea
site. Concessions will be for a specific quantity or time period which will be determined by the receiving BDR
Thermea site. Should a concession be granted and parts shipped to BDR Thermea, these parts must be labelled on all
four sides of the packaging. If necessary a receiving site could request additional labelling at the supplier’s expense.
4.12 Change management process
Suppliers shall request in writing, approval from BDR Thermea for ALL changes prior to their implementation by
means of a product change request (PCR). This includes, but is not limited to, changes in supplier(s) of raw
materials, packaging, package size, product name, product specification or dimensions, manufacturing location,
process conditions, manufacturing equipment, raw materials or sub-components. Requests for changes shall be
submitted using a BDR Thermea PCR form shown and sent to the local commodity manager and the buyer.
Change requests to BDR Thermea are only considered to be received when the requesting supplier receives a
confirmation back from BDR Thermea after submitting the PCR. A request and an acknowledgement is not
a guarantee that approval will be granted. When the request is reviewed the supplier will be notified:
• if the request is rejected,
• if a PPAP should be submitted for the change
• or if a waiver of PPAP is approved.
BDR Thermea reserves the right to determine the timeline for change implementations. No change will be allowed
without prior written approval from the receiving BDR Thermea site. BDR Thermea may require test samples for
plant trial run requirements.
All suppliers are expected to notify BDR Thermea when a change in the management structure and/or ownership of
the organisation occurs.
4.13 Supplier complaint handling
BDR Thermea has implemented a uniform complaint handling system. A complaint notification is documented
by BDR Thermea when a complaint occurs and the complaint handling form should be available from the affected
BDR Thermea site.
Suppliers are expected to use structured problem solving techniques such as 8D or 5-why, to generate a timely
response with corrective actions that permanently eliminate the root cause of the defect (see structured problem
solving section). Responses are expected in common electronic format (e.g. MS Word, MS Excel) and should be
submitted via e-mail.
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4. Lifecycle management
Structured problem solving
Suppliers to BDR Thermea are expected to implement and support a system of structured problem solving.
Suppliers are welcome to use their own systems or the BDR Thermea system as long as a cross-functional team is
able to identify the root cause of a problem and implement permanent corrective actions. The root cause definition
should include the process root cause (how did the manufacturing process fail), the system root cause (how did
the quality system fail) and the detection root cause (why was the non-conformance not discovered). Suppliers
should evaluate the effectiveness of the corrective actions for long-term system support within their company.
4.14 Traceability at supplier
Suppliers will ensure, by identification of the parts, or if this is not possible then by other suitable means, that if
defects are detected in a product, it can immediately be established which other products could be affected.
BDR Thermea should not be obliged to accept any products that are not adequately marked and shall be entitled to
return them to the supplier at the supplier’s expense.
Tracing must be designed in such a way that parts have traceable delivery data back to the original workstation and
also to the sub-suppliers level.
4.15 Process audits
BDR Thermea conducts process audits of Tier 1 and 2 suppliers if one or more of the following events occur:• Product change
• Process change
• Supplier evaluation
• Material change
• Sub supplier change
• Complaints
The extent of the audit is based on the VDA 6.3 standard as defined by the German association of the
automotive industry.
4.16 Quality management systems
It is our minimum requirement that our suppliers are certified to ISO 9001 or equal.
If a supplier quality system certification is suspended, placed on probation, expired, receives any major
non-conforming compliance or a warning letter from ISO notified bodies then the supplier must let us know within
five days of this occurring. New quality system certification is required by BDR Thermea if the old one becomes
invalid, for example under mergers, acquisitions etc.
4.17 Documentation and archiving
Suppliers must archive all resulting quality data for a period of at least 10 years.
4.18 Spares requirements
The supplier should supply and maintain availability of spare parts for a minimum of 15 years after the cessation
of serial supply.
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5. Supplier evaluation
5.1 Overview
The following diagram describes the supplier management processes of vendor rating and SRM:
IMAGE
5.2 Vendor rating
BDR Thermea will measure supplier performance and report the results on a monthly basis to top suppliers.
Elements of measurement
Quality
Line PPM
Field PPM
Response to quality issues
Number of corrective action reports per month
Logistics
OTIF
Supply chain flexibility/communication
NPCP
Support and achieve targets
Commercial
Commercial performance and MPV
• MPV – Price variance against budgeted standard price.
• OTIF – Delivery on time in full
• PPM – Parts per million rejects
Evaluation will be against our specific requirements as detailed in a multi-site agreement.
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5. Supplier evaluation
5.3 KPI Calculation
OTIF =
On time in full
calculation
Sum of all correct lines
Coverage (12mth)
Stock (Average last 12mth)
x 100
Sum of All lines the OTIF was calculated for
x 30 days
Consumption (Average last 12mth)
PPM
Quantity Rejected
x 1,000,000
Quantity Receipts
5.4 Supplier relationship management
Purpose
To identify those suppliers which are strategically important and provide a methodical process for supplier
performance improvement in key areas and identify areas of value which are available to be exploited to improve
profit and customer satisfaction.
To formalise the SRM process such that Group companies adopt a common approach when using the Group SRM
process. BDR Thermea has multiple sites and may receive varying levels of service.
The focus of SRM is:
• to develop mutually beneficial relationships with strategic supply partners
• to deliver greater levels of innovation and competitive advantage than could be achieved by operating
independently or through a traditional, transactional purchasing arrangement
To be eligible to take part in our SRM programme a supplier should:
• Deliver in the top section of criticality and value
• Deliver strategically important components
• Be open to work in mutually beneficial cooperation.
BDR Thermea uses a supplier scorecard to rate suppliers for strategic meetings.
• Strategic meetings are usually held once or twice a year to discuss the results and improve collaboration between
us. These should be supported at a high level by the supplier.
26
6. Revision history
This table shows the date and responsible person for each revision to the supplier excellence manual.
Revision number
Issue number
Date
Responsible
Revision 1
First Issue
29th Jan 2014
T. Tilford
27
7. Addendum 1 - Cost breakdown template
QUOTATION ANALYSIS FORM
Summary
CONFIDENTIAL
Supplier:
BT 03/01/01 quote_anal1.xls
Date:
QAF Ref. No.
of
QAF
Sheet:
Code:
Part No.:
1
1. Procured Parts
Desc.:
Issue/Release No:
Model / Type:
(from sheet 2)
Volume:
0 Sub Total (1) =
B.O.P. Scrap Value =
0
2. Raw Material
MPE
Ex.
UOM
Gross
Net
Price/
Scrap
Re-
Mat, O/H
Unit
Desc./Type/Size/Grade/Supplier
Y/N
Rate
(e.g. Kg)
Usage
Usage
UOM
(%)
claim
%
Cost
0.00
0.00
0.00
0.00
0.00
0.00
0.00
"2.0 Raw Material Analysis" QAF - Yes/No
3. Process Costs
Working
Op. Operation/facility/machine-size
Hrs/Wk
TROLLEY SYSTEM
Sub Total (2) =
Mat. Scrap Value =
37.5
Heads
C/Time
Dir. Lab.
Soc. O/H Res. O/H
No./Hr.
Rate/Hr.
Rate/Hr.
1
80
9
Rate/Hr.
8.3
0.000
Tot Lab.
M/C
M/C
Scrap
Unit
Cost
Rate/Hr.
Cost
%
Cost
0.21625
0
0
0.00%
0.21625
0
0
0
0
0
0
0
0
0
Process Scrap Value =
"3.0 Process Cost Analysis" QAF - Yes/No
Assumptions:
Sub Total (3) =
TOTAL MANUFACTURING COST
0.21625
(1) + (2) + (3)
4. Other Costs
calculation:
0.21625
"4.0 O/Head Analysis" QAF - Yes/No
General Overheads
Design & Development
Other Costs (PL specify)
5. Tooling Costs
Tooling Amortisation (if applicable)
28
Production Location:
TOTAL PART COST
Working Days/Year:
(1) + (2) + (3) + (4) + (5)
Component Weight:
6. Logistics Costs
Del. Quality (ppm):
Transport
Inco & Duty:
Packaging
Quoted Currency:
Pallet Amortisation/Maintenance
Exchange Rate:
GDA Pallet cost =
Signed Supplier:
TOTAL OFFER PRICE
Date:
(1) + (2) + (3) + (4) + (5) + (6)
from Sheet (2)
Sub Total (4) =
0
Sub Total =
0
Sub Total (5) =
0.21625
"6.0 Logistics" QAF - Yes/No
Sub Total (6) =
0
0.21625
8. Addendum 2 - Parts submission warrant
Company
LOGO
here
Part Submission Warrant
Submission Number:
PART INFORMATION
Part Name
Part Number
Engineering Drawing No
Issue Level
SUPPLIER INFORMATION
CUSTOMER INFORMATION
Company Name
Customer Name / Division
Contact Name
Buyer
Address
Address
REASON FOR SUBMISSION
New Submission
Dated
SQE
Re-submission
Initial Submission
Sub-Supplier or Material source change
Engineering change(s)
Change in part processing
Tooling transfer, replacement or refurbishment.
Parts produced at additional location
Tooling change or correction
Other - please specify below
Material Change
Additional Comments :
SUBMISSION REQUIREMENTS (to be agreed in advance between Supplier & BDR Thermea: A=Applicable, S=Submit)
Quantity
Sample Parts are required with this submission
Required
Result
Required
Result
1 Customer Inputs / Drawing / Design Records
9 Packaging Specifications
2 Design FMEA
10 Measurement System Analysis
3 Part Function / Reliability Test Plan & Results
11 Dimensional Report
4 Material Property / Composition Data Sheets
12 Appearance Approval Report
5 Material Safety / Environment Data Sheets
13 Master / Boundary Samples
6 Process Flow Chart
14 Process Capability Studies
7 Process FMEA
15 Production Process Review
8 Control Plan
Additional Comments :
SUPPLIER DECLARATION (to be completed and signed by the Supplier before sending sample parts or documentation)
YES
These results meet all drawing and specification requirements:
NO (explain below)
Explanation / Comments :
I affirm that the samples represented by this warrant are: i. Representative of our parts. ii. Have been made to the applicable customer
drawings and specifications from specified materials. iii. Parts have been made using regular production tooling with no operations other
than the regular production process. iv. I certify that documented evidence of such compliance is on file and available for review. v. I agree to
inform the customer SQE / Buyer of any further changes to this part as could be described in "Reason For Submission" section above.
Name
Title
Supplier Authorised Signature
Date
Phone No
CUSTOMER APPROVAL
APPROVED
INTERIM APPROVED
NOT APPROVED
Re-submission Date :
Additional Comments :
Name
Doc.Nr: xx.xx.xx
Released: 24.04.2012
Signature
Part Submission Warrant
Date
Template owner: P.vd.Werdt
BDR Thermea Group BV
29
9. Addendum 3 - Product change request (PCR)
PRODUCT CHANGE REQUEST (sheet 1)
Requested By :
(Company/name)
PRODUCT TYPE AFFECTED:
(Please type Y in appropriate box)
Department:
Date Requested:
15/02/2014
Requested Target
Date for
Implementation :
Apr-14
Project Number
WHB
FSB
BBU
Commercial
Boiler
Heating
Box
mCHP
SOLAR
EWH
Biomass
Other
Quality
issue
Manufac.
efficiency
Cost
Saving
Health & Safety
Component
Standardiz.
Logistic
aspect
Standard
variation
Document.
update
Market
need
VAVE
Design authority :
(Please type Y in appropriate box)
Bassano
Preston
Barcelona
Le Blanc
Mesnil
Rastede
Apeldoorn
Mertzwiller
HSH
Market :
(Please type Y in appropriate box)
UK
IT
FR
SP
East
Europe
USA/CA
China
South
America
Germany
Russia
ECR TYPE:
(Please type Y in appropriate box only)
WHAT IS THE
CHANGE
PROPOSAL:
WHY IS THE
CHANGE REQUIRED:
AFFECTED PRODUCTS / ITEMS :
PRODUCT DESCRIPTION
TOP LEVEL PRODUCT CODE NUMBER
Position
Approvers "Concept"
NAME
Group Approvers List
ITEM DESCRIPTION
AFFECTED ITEM NUMBER
DATE
Requesting Buyer
Group Comodity Manager
R+D Competence Center Manager
Local Procurement Manager
Approvers "in Progress"
Group Procurement Projects Manager
Group Category Director
Group Quality Director
Group R&D Director
Group Procurement Director
Issue1
23/04/2014
30
31
Glossary
Term
Issue number
Responsible
5-whys
5 Why’s
An iterative question-asking technique used to explore the cause-and-effect
relationships underlying a particular problem.
8D
Eight Disciplines
Eight Disciplines Problem Solving is a method used to approach and to resolve
problems, typically employed by quality engineers or other professionals.
AQP
Advanced Quality
Planning
Framework of procedures and techniques used to develop products in industry.
BBU
Back Boiler Unit
BDR Thermea Product.
CAD
Computer Aided
Design
The use of computer systems to assist in the creation, modification, analysis,
or optimization of a design.
CPR
Construction
Products Regulation
European Union (EU) regulation harmonising performance information on
construction products across the EU.
CSR
Corporate Social
Responsibility
CSR is a process with the aim to embrace responsibility for the company’s
actions and encourage a positive impact through its activities on the
environment, consumers, employees, communities, and all stakeholders.
DFMEA
Design Failure Mode
Effects Analysis
Design Failure Mode and Effects Analysis (DFMEA) is used to uncover design
risk, which includes possible failure, degradation of performance and
potential hazards.
DOP
Declaration of
Performance
Gives the manufacturer the opportunity to deliver the information about the
essential characteristics of the product.
EDI
Electronic Data
Interchange
Electronic communication system that provides standards for exchanging
data via any electronic means.
ERP
Enterprise Resource
Planning
Enterprise resource planning is a business management software—usually
a suite of integrated applications—that a company can use to collect,
store information.
ETA
European Technical
Assessment
An ETA is an approval based on testing carried out to agreed European levels.
EWH
Electric Water Heaters
BDR Thermea Product.
FMEA
Failure Mode
Effects Analysis
FMEA activity helps to identify potential failure modes based on experience
with similar products and processes - or based on common physics of
failure logic. It is widely used in development and manufacturing industries
in various phases of the product life cycle. Effects analysis refers to
studying the consequences of those failures on different system levels.
32
FOT
First Out of Tool
First set of samples.
FSB
Floor Standing Boilers
BDR Thermea Product.
HEN
Harmonised Standard
Harmonised European Standards provide a basis for manufacturers for
testing the performance of their products. Using these standards the
manufacturer will be in position to make the declaration of performance (DoP)
of his product as defined in the Construction Products Regulation (CPR) and
to affix the CE marking.
IGES
Initial Graphics
A file format which defines a vendor neutral data format that allows the
Exchange Specification digital exchange of information among Computer aided design (CAD) systems.
JIS
Just In Sequence
Just in sequence is an inventory strategy that matches just in time (JIT) and
complete fit in sequence with variation of assembly line production.
Components and parts arrive at a production line right in time as scheduled
before they get assembled.
Term
Issue number
Responsible
Kanban
Japanese word for
Signboard or Billboard
Scheduling system for lean and just-in-time (JIT) production.
MCHP
Micro Combined Heat
and Power
A micro-CHP system is a small heat engine (power plant) which provides
all the power for an individual building; heating, ventilation, and air
conditioning, mechanical energy and electric power.
MPV
Material Price Variance
The difference between standard cost and current cost.
MSA
Measurement
System Analyses
Purpose of MSA is to have measurement systems where the readings
can be replicated on each part.
NPCP
New Product
Creation Process
The complete process of bringing a new product to market.
OTIF
On Time In Full
Delivery of all lines of an order at the correct time and in the correct quantity
and quality.
PCR
Product Change
Request
Document containing a call for an adjustment of a system; it is of great
importance in the change management process.
PFMEA
Process Failure Mode
Effects Analysis
A Process Failure Mode Effects Analysis (PFMEA) is a structured analytical
tool used by an organization to identify and evaluate the potential failures
of a process.
PPAP
Production Part
Approval Process
Used for establishing confidence in component suppliers and their production
processes, by means of demonstrating that all customer engineering design
record and specification requirements are properly understood by the supplier
and the process has the potential to produce product consistently meeting
these requirements during an actual production run at the quoted
production rate.
PPM
Parts Per Million
Calculated as the quantity that would be rejected if a million parts
were supplied.
PSW
Part Submission
Warrant
Summary of the PPAP documents. Approval indicates that the customer has
not identified any issues with a new part.
RFQ
Request For Quotation
Invite to suppliers to participate in a bidding process to bid on specific
products or services.
SG
Stage Gate
Stage-Gate divides the effort into distinct stages separated by management
decision gates.
SLA
Service Level
Agreement
An SLA is a definition of services, performance measurement, problem
management, customer duties, warranties, disaster recovery, termination
of agreement.
SQA
Supplier Quality
Assurance
SQA Engineers are responsible for all aspects of the quality of purchased parts.
SRM
Supplier Relationship
Management
Comprehensive approach to managing an enterprise’s interactions with
suppliers. The goal is to streamline and make more effective the processes
between BDR Thermea suppliers.
VA/VE
Value Analysis /
Value Engineering
Value Analysis is analyzing and understanding details of a situation.
Value Engineering helps in identifying specific solutions to these
detailed problems.
VMI
Vendor Managed
Inventory
The supplier takes full responsibility for maintaining an agreed inventory
of the material.
WHB
Wall Hung Boilers
BDR Thermea Product.
33