1. ESC Toulon - Andres GARCIA Purchasing area : a key mission in the business §Reminder of key topics concerning last year §Purchasing involvement into the Tender Vet stage §The Sourcing stage for Purchasing activity §Purchasing missions during the upstream stage §Procurement activity

2. Andres GARCIA Purchasing Marketing Analysis

3. Andres GARCIA Suppliers visit rating

4. Andres GARCIA Grading : Suppliers evaluation

5. Andres GARCIA SWOT Analysis: MARTIN Ltd STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Possible Cost Reduction year after year ISO 9001v2000 R/D new materials invest. 8-9% of turnover Positive Training Plan Training Cost 3% of turnover Double sourcing Reactiveness and flexibility Transfer possibility towards Spain Offset Chile + USA Wish to work with us : - Skill level - Technical knowledge - Engineering Too expensive, Cost structure problem Top-of-the-range Production Market Change Impact Cost Raw materials obsolescence risk Retraining problem Logistic Aspect risk / Spain Independence. No big principal Risk to leave the Funichem group Sub-contracting oriented. To secure. Double sourcing risk / Production Equipment.

6. Andres GARCIA SWOT Analysis: GREW Ltd STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Created 37 years ago Flexibility / Market More & more global offers. Project Mgt Products Mgt more & more complex ISO 9001, quality oriented / Aeronautics Business Mgt Policy Experienced to work with us Human knowledge As from today too expensive but works to decrease the costs. Better Productivity 5S can be improved Increase of competiton Need to train the « new generation » Externalise in low cost countries Globalize the projects up-stream Offset Opportunity

7. Andres GARCIA SWOT Analysis: LA RUEDA SA STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Part of ENASA Group 100% su-contracting, different activities Large Number of machines Manage global assembly Works up-stream with us Industrialisation & value analysis Materials knowledge No problem financially 5S, Reactiveness, sub-contracting network Make the difference between technical & quality problems Stronger exchanges with research Department, present but to be formalised. Study & global making to be developped Wishes to expand at the European level Works with big Companies for the techniques exchanges Develop Assembly activity at the general level Quality & delivery time problem / sub-contracting companies Formal communication problems. Formalise our needs Look for low cost sub-contracting companies / offset Do not believe in partnership but only in sub-contracting Sub-contracting activities at risk Management risk Start low cost countries quickly Lack of human resources Lack of Commercial openess High claims / TUS Too confident regarding their know how.

8. Andres GARCIA SWOT Analysis: EUROCASE SA STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Positive customer culture Project management Culture Production Means and resources flexibility Average age is 30 Part of a network group Production means & Tests 3% of yearly turnover investment Raw material purchase at low cost Results: 2% of 2003 turnover EUROCASE has become too independent 60% of the job dedicated to our competitors No profitability on new projects No traceability (bar code) / ERP for dossiers preparation. Low Cost deployment Competitors in crisis also Structurel plan, multi-products Network development Technologies control Put in place and implementation of QA + delivery measurements Young staff maturity Nightmare scenario does not exist Sites Safety + badge access at the entrance Not enough English skill

9. Andres GARCIA Action plan for Purchasing Team

10. ESC Toulon - Andres GARCIA Yearly Supplier Audit Plan §Purchasing Segment Quality Engineers ( PSQEs ) have set up “Audit Teams” composed of: Members from Manufacturing Members from Technical Dept Members from Business Lines l In order to: Identify the critical supplier to be audited and followed up by Purchasing Centralise information and Company historic on the audited company Organise global team audits on the critical supplier

11. ESC Toulon - Andres GARCIA EXAMPLE OF PSQE MISSION

12. ESC Toulon - Andres GARCIA FLOW-DOW OF THE SUPPLIER SELECTION & ASSESSMENT Request from Originator Do we have a qualified supplier ?. If NO SOURCING POTENTIAL SUPPLIER Financial - Sales Assessment Quality System Assessment Technical & industrial Assessment Product Assessment QUALIFICATION SUPPLIER QUALIFIED Supplier Questionnaire AGREEMENT PHASE On-site Assessment stage

13. ESC Toulon - Andres GARCIA KEY RELATIONSHIPS BUYER/SUPPLIER Relationships characteristics § operational § tactical§ strategic Time horizon § from order to order§ 1 year§ 1 – 3 years§ 1 – 5 years Quality § as requested by manufacturer § quality control by manufacturer §as requested by manufacturer § quality control by manufacturer and supplier § ‘ sign-off’ by supplier § quality assessment by supplier § ‘ sign-off’ by supplier § early supplier involvement in design Logistics § P.O§ Yearly buy agreement + blanket orders § periodical scheduling of materials requirements by producer § electronic document interchange Contracts § from order to order§ Yearly buy agreement 1 year § Yearly buy agreement > 1 year § quality agreement § design contract Price / Cost§ price§ price + discount§ price + cost reduction target § price based on open calculation § contiious improvement supplier Design partner supply partner Preferred supplier

14. ESC Toulon - Andres GARCIA EXAMPLE OF SUPPLIER SELECTION & ASSESSMENT QUESTIONNAIRE and ON-SITE ASSESSMENT

15. ESC Toulon - Andres GARCIA REDUCTION OF SUPPLIERS In order to get an accurate monitored suppliers list connected with particular targets according to the spend’ category. Target Suppliers Specific Suppliers Suppliers to give up Leaders, partners with several Improvement Contracts. Essential ( duly proved and validated*). No essential.Monitored removal stage must be done within an internal joining Plan. *as know-how, Customer’ rules, Offset business, local suppliers, design’ file no monitored….. Breeding ground

16. ESC Toulon - Andres GARCIA REDUCTION OF SUPPLIERS FOLLOW-UP SELECTION TARGETS + SPECIFICS BREEDING GROUND FOLLOW-UP CANCELLATION -+-+ - + Suppliers to cancel cost service - key data's of the Company - innovation’ capabilities - know-how and technologies master - competitiveness, service, quality - quick reaction - ……………. Delivery, price, service, competitiveness