Supplier Management Briefing PACK

Supplier management work stream The Supplier Management work stream has three key components: Segmentation: Each supplier manufacturing site has been given a segmentation ranking based on its strategic importance to JLR Scorecard: The Global Supplier Scorecard, measures suppliers’ quality and performance, utilising quantitative information as well as buyer driven qualitative information Engagement: Using the information provided by the segmentation and scorecard, JLR will establish a cadence of reviews to discuss the results and identify areas to further develop relationships with suppliers

SUPPLIER MANAGEMENT WORK STREAM PROBLEM AND PROPOSED SOLUTION PROCESS PROBLEM SOLUTION SCORECARD JLR does not have a common and cross functional view of supplier performance beyond JLRQ JLR does not have visibility of the cross functional improvement activity being carried out at supplier sites. Scorecard capturing 21 different performance metrics with input from cross functional teams deployed and produced monthly for top 150 JLR PP/ AMSO suppliers A central repository and reporting of performance data and process compliance across the top 150 suppliers. Central support to line to effectively manage supplier relationship SEGMENTATION JLR does not have a numerate model for differentiating suppliers in terms of impact and strategic importance Segmentation output is not aggregated to reflect supplier parent interactions across COC including leverage opportunities Supplier Management team will run and maintain a model of all PP supplier sites annually allowing for supplier positioning, and enhancing strategic discussion at a site, parent and regional level ENGAGEMENT JLR does not have consistent structured cross functional , reviews at a plant, divisional and parent level with Suppliers JLR Does not have a consolidated overall cross functional improvement plan for suppliers focused around a standard set of metrics. Central team will support the bespoke design and implementation of structured and cross functional supplier performance reviews at a plant, divisional and parent level. Utilising outputs from the scorecard at the top 25 suppliers. A bespoke supplier improvement plan will be implemented to improve areas of performance highlighted by the scorecard results.

SUPPLIER MANAGEMENT WORK STREAM SUPPLIER SCOPE PP/AMSO The central support resource will offer the following services, depending on Supplier group: Scorecard Central storage and analysis of results Community of interest Facilitated/documented engagement design Central support ongoing mgmt./briefings through named central person Central storage and analysis of results JLRQ only Group 1 Suppliers (top 25) ‘Heavy Central Support’ 55% spend coverage 80 %spend coverage Group 2 Suppliers (25 - 150) ‘Light Central Support’ Group 3 Suppliers (150 onwards) Priority set by purchasing No Central Support

Roles/Responsibilities SUPPLIER MANAGEMENT WORK STREAM Roles/Responsibilities SUPPLIER MANAGEMENT PROCESS – ROLES AND RESPONSIBILITIES SUPPLIER MANAGEMENT ‘OFFICE’ Create scorecards Maintain master data, analytics, trending etc. Provide support to champion (e.g. relating to meeting attendance, population of action plans) Report on process adherence Facilitate and maintain segmentation and engagement models DIRECTORS Sign off engagement approach for each supplier Support the supplier champion (meeting attendance, representation etc.) Co-ordinate cross functional engagement for supplier activities CHAMPIONS Lead the actions of the engagement process Co-ordinate internal meetings, ensure cadence of meetings is being maintained Ensure scorecards are issued to supplier Ensure supplier is producing credible improvement plans

SUPPLIER MANAGEMENT WORK STREAM PROCESSES MAPPED - Highlighting Line and Office Responsibility SCORECARD SEGMENTATION ENGAGEMENT PROCESS SMO PRINCIPALS Lower cost central resource to produce scorecards / segmentation output / administrative activity around reporting / meetings and ongoing support for line Consistency in approach and output for strategic suppliers allowing trending and comparison Process health and Supplier performance reported on monthly at senior levels Line resource freed to action improvement actions / build relationship Produce Scorecards / pack Add additional scores Check the outputs Issue to supplier Generate action plan Meet to review and sign off action plan Execute actions Review/ map out Wiring Diagram for supplier Review/ validate wiring diagram Review/ design engagement approach Organise meetings Facilitate meetings Create action plan Review completion of actions Report on actions completed Score/check the tool scores for the site Update master data Produce reports as required RESPONSIBLE PARTY Supplier Management Office Line Supplier

Supplier management work stream SCORECARD Excel based tool Encompassing over 20 measures Suppliers will be measured on areas such as: Quality, Risk, Aftermarket Performance, Cost and Technology and Innovation. Key areas: Summary: Highlights the overall GSS and JLRQ score. Indicates if the supplier has achieved a pass score JLRQ Scores: Highlights the specific score for each metric and how it is calculated. GSS Scores: Highlights the specific score for each metric and how it is calculated. Heat map: Highlights supplier site specific performance issue as well as parent level structural issues

Supplier management work stream SEGMENTATION Supplier manufacturing sites will be given a segmentation ranking which can be rolled up into a single parent ranking Cross functional teams will be engaged to determine the segmentation ranking Segmentation will be plotted on a matrix to highlight strategic importance Segmentation ranking based on 9 factors: Supplier Competition Willingness to invest Commodity Category Contractual commitment Difficulty to move JLR future sourcing plan for supplier Level of JLR dependency on technology Supplier's footprint

Supplier management work stream Engagement A structured session to review the segmentation and scorecard results Consolidation of the fragmented discussions between suppliers and JLR A forum to discuss any ongoing issues or opportunities for innovation. Establish and maintain a bespoke improvement plan