TSR PEES Purchasing Training Introduction and Working Rules (For Internal)

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Purchasing training: introduction and working rules
Department: PE ES Purchasing TSR

Designed for: IE, SMT, NPL Groups and R&D BU
www.continental-corporation.com
Summary
1 Production Equipment Purchasing Organization
2 Procurement Process
3 Record of Negotiation & Sourcing Committee
4 Guidelines & Procedures
5 Summary
6
Space for Sender Information 28 July 2019

Confidential Emina Balanescu, © Continental AG 2
Global PE Organization Matrix Production
Equipment
Category & Regions RBG M. Wachtveitl
PE PE PE PE Machines,
Electronics/ Mechanical Electronical Tools &
Proces.&Systems Assembly Assembly Components
RBG M. Wissinger NBG J. Fitzner RBG S. Sobotta RBG N. Fernandez Rojo
PE PE PE PE PE PE PE Machines, PE Machines,
Electronics Electronics Mechanical Mechanical Electronical Electronical Tools & Tools &
Assembly Assembly Assembly Assembly Components Components
RBG M. Janker RBG E. Fritz NBG R. Schmeichel NBG W. Hong RBG J. Eichhorn RBG P. Häring FFM K. v. Lüde LBO K. Meyer **
PE PE PE PE PE PE Machines,
Electronics Electronics Mechanical Electronical Electronical Tools &
Assembly Assembly Assembly Components
RBG K. Prey RBG P. Baumann LBO K. Meyer RBG K. Balk NBG R. Ciocan NBG Ch. Seyferth
PE PE
Electronical Electronical
Assembly Assembly
RBG D. Frischmann BLN R. Marzban
PE PE
Europe Europe
HU&RO HU&RO
PE East TSR C. Tudor TSR A. Turcu
Europe
PE PE PE PE PE
TSR S. Stiru Europe Europe Europe Europe Europe
CZ&SK CZ&SK CZ&SK CZ&SK CZ&SK
BDY S. Cervenkova BDY N.N. BDY I. Vanek TRU J. Mannova FST K. Nemcova
PE
Europe PE PE
Europe Europe
Germany /
West Europe
TLS T. Malgouyres TLS Y. Bienkowski
RBG(M. Wissinger)
PE Americas
PE PE PE PE
NA NA NA Brazil
GDL U. Mendoza GDL K. Oropeza GDL S. Manjarrez GUH R. Fonseca

GDL O. Lugo
PE Asia PE PE PE
Asia Asia Asia
SHA B. Quan CHA Zhu Lei CHA Yan Gong

SHA S. Wang
** Double Function
Space for Sender Information July 28, 2019
Confidential M. Wachtveitl, © Continental AG 3
Global ES Organization Matrix
Engineering Services and Equipment Global Organization
Engineering Assistant
Services &
Equipment
RBG J. Trapp RBG M. Peter
Category Category Category Category

Category
E-S/E-GS E-S/E-GW E-S/E-EU ES-N
E-S/E-A
RBG K. Lauch FFM I. Felzer RBG J. Trapp (act.) SHA (S. Wang) GDL O. Lugo
Category Category Category Category Category

E-S/E-GS E-S/E-GW E-S/E-F E-S/E-I ES-N
RBG O. Wagner FFM S.Sleeman TLS H. Camon BGL (K. Nayak) GDL R. Medina
Category Category Category

Category A= Asia
E-S/E-GS E-S/E-F ES-N
E-S/E-I B= Brazil
SGP BGL = Bangalore
RBG A. Achhammer TLS S. Balas SGP (K.H. Tan) GDL V. Valdes F= France
GDL = Guadalajara
GRU = Guarulhos
Category Category GS = Germany South
E-S/E-GS ES-EU CategoryE-
GW = Germany West
RO & HU S/E-B
HU = Hungary
RBG T. Klimt I= Italy
TSR S. Stiru GRU R. Fonseca N= NAFTA
RO = Romania
Category SGP = Singapore
ES-EU TSR = Timisoara
E-S/E = Engineering Services
RO & HU
and Equipment
TSR A. Danescu
Space for Sender Information July 28, 2019

Confidential Engineering Services@Conti.de 4
TSR Organization Matrix
Purchasing PE ES
SRCM PE ES
(East Europe)
Serban Stiru
PE (TSR) – TC
(maternity leave) CAT PE CAT ES
(HuRo) (HuRo)
Emina Balanescu
Ciprian Tudor Nicoleta Martin
PE (TSR) PE (TSR) CAT PE CAT ES + NSI

Plant PSS Plant ID (HuRo) (HuRo +
incl standard Incl standard
Orders > 5k EUR Orders > 5k EUR East Europe)
ERSA
Anamaria Toth Andreea Sehuta Adrian Turcu Andrei Danescu
PE (TSR) PE ES (TSR) Technical Purchaser

R&D eq. ES
(TSR+IAS) (TSR)
Orders > 0 EUR
Orders > 0 EUR
Plant TSR
Petru Velciov Ionut Larion
Orders < 5k EUR Vladimir Putnic
ES + R&D eq. Student (TSR)

(TSR) PO tracking
(maternity leave)
Raisa Negrea Gabriela Mazuru Timisoara Regional

Confidential Author, © Continental AG 5
Summary
5 Summary
6

Procurement Process
Define organizational purchasing strategy
periodically
Identify RFQ
Technical Select PO / PO/ Contract Accept
Warranty
Project
Items Alignment Supplier Contract Tracking Delivery
relevant
Evaluate Supplier
(yearly & project based)
periodically

Procurement Process
Identify RFQ Technical Select PO/ PO/Contract Accept

Items Alignment Supplier Warranty
Contract Tracking Delivery
 Responsible: Requester
 Tasks:
 Issue neutral Technical Specifications and align with TSR IE CEP Dept. (eSign)
 SMT – non standard (or standard with more variants) to be aligned with TSR IE CEP (eSign)
 Issue the Shopping Cart (SC) in the CEOS system
 Make sure that SC contains all relevant information (e.g. technical specifications, technical contact
person, quotations if available, CEOS acquisition form)
Close cooperation with PUR department allows clarification of open topics and can save time!

Procurement Process
Identify Technical Select PO/ PO/Contract Accept

RFQ Warranty
 Responsible: Buyer
 Tasks:
 Agree with Requester upon the Supplier panel insuring the compliant * number of potential Suppliers who
meet the defined criteria
 Insure the signing by new Suppliers of: NDA, Business Partner Code of Conduct, Third Party Due
Diligence Form, ESH Convention
 Check the Supplier’s financial risk
 Prepare RFQ** and send it to all potential Suppliers with all the relevant documents (can be done by
Requester too)
 Handle all RFQ
* Minimum 2 Suppliers if amount between 5.000-25.000 EUR. Minimum 3 Suppliers if amount >25.000 EUR
** Including functional & non-functional requirements, all constraints with respect to schedule, quality,
maintenance, warranty, quotation deadline etc.

Procurement Process

RFQ Warranty
 Tasks:
 After the first round of quotations received, the Requester must analyze all quotations from technical point
of view
 If there are unclear points in the quotations, the Requester must contact the Supplier and make all
necessary technical clarifications
 The requester will inform the buyer that new, corrected quotations are expected
 After the correct quotations have arrived, the Requester will send a feedback to the Buyer, regarding the
technical alignment of all quotations so that the Buyer can start the commercial negotiations.

Procurement Process

RFQ Warranty
 Responsible: Buyer
 Tasks:
 After receiving the Requester’s confirmation that the quotations are technically aligned, the Buyer will
negotiate all commercial and legal aspects with the Suppliers
 Perform a detailed analyses in terms of money - TOCO approach (Total Cost of Ownership)
 Perform Record of Negotiation, if necessary

 Select Supplier according to de the defined criteria – close cooperation with Requester
 Perform Sourcing Committee, if necessary

Procurement Process
Identify Technical Select PO/Contract Accept

RFQ PO/ Contract Warranty
Items Alignment Supplier Tracking Delivery
 Responsible: Buyer & Location Management

 Tasks:
 After the SC is fully approved*, Buyer will issue the Purchase Order (PO) in SAP
 For services:
• Buyer will provide the commercial contract

• Buyer will negotiate the key issues in contract
• Buyer will check the contract with Legal Services

• Buyer will track the contract signatures of local management & Supplier
*Tracking of SC approval flow is the Requester’s responsibility

Procurement Process
Identify Technical Select PO/ Contract Accept

RFQ PO / Contract Warranty
 Tasks:
 Project management: track the Supplier activities (schedule, effort, risks, quality, deliverables etc.)
 Monitor the process compliance of both the Supplier and the internal organization
 Conduct project status meetings with the Supplier
 Report the project status internally to the senior management

 Define and initiate corrective actions if necessary
 Document the deviations
 Involve the Buyer in case of significant deviations from the agreed schedule of lack of cooperation from
Supplier’s side
Buyer will obtain the confirmation of PO delivery date

Procurement Process

 Responsible: Logistic Department

 Tasks:
 Check if invoice is according to PO or contract
 Inform and hand over the goods to Requester
 Make the reception in SAP
If the deliverables are accepted successfully (including final acceptance, if case), the warranty period
begins as applicable.

Procurement Process

 Tasks:
 Identify the defects related to the supplied items and if necessary inform the Buyer who will check if
identified defects after final acceptance are covered by warranty
 Contact the Supplier
 Plans and track the tasks to solve the warranty and maintenance issues
 Involve the Buyer in case of lack of cooperation from Supplier’s side.

Purchasing Flow
Initiate Send RFQ Negotiation
ordering and and Select PO / Track PO / Accept
analyze Contract contract Delivery Warranty
process offers Suppliers
Requester R R S I R R R
NPL R I I I S I I
Buyer PE ES S R R R S S S
Location R
S
management
Logistic
R
department

Summary
5 Summary
6

Record of Negotiation
A Record of Negotiation (RON) is an internal document, used on global level in order
to keep an evidence of the agreed technical and commercial conditions between
Continental and the Supplier. It will be the base of the Purchase Order.
Both the Buyer and the Requester are involved in filling in the RON together with the
potential Supplier. The Requester and the Launch Manager will provide support during
negotiation upon request of PUR.
RON Technical PO
+ +
Specifications
CONTRACT
Record of Negotiation
RON is mandatory for projects > 100.000 EUR
RON is recommended for projects < 100.000 EUR
RON not necessary if: a Generic Sourcing decision exists (regional or world-wide
valid) for defined segments and has to be negotiated regularly and signed by the
responsible category management and the segment responsible person.

Sourcing Committee (SDS)
A Sourcing Committee is mandatory for projects > 25.000 EUR.

A Sourcing Committee is initiated by the Buyer either as a meeting or eSign.
A Sourcing Committee is not needed when:
• A Generic Sourcing decision exists (A generic Sourcing Committee is based on agreements
(regional or world-wide valid) for defined segments and has to be negotiated regularly and
signed by the responsible category management and the segment responsible person (e.g. CEP
Central Electronic Plant Organization – Electronic standard equipment list, head of Business
Unit…)
• Projects between 25K EUR -100K EUR can be identified according to the following rules:
- Maintenance and repair of already existing machines and equipment
- Upgrading/modification or duplication of already existing machines and equipment

Sourcing Committee - Sourcing Decision Sheet

GUIDELINES
Sourcing Committee - Participants
• Structured Decision
Process
• All responsible parties
involved
• Clear Status after
Division Sourcing Committee
Launch Management
Management • Total Cost of Ownership
approach
IE
• No PO without a Sourcing
Committee if no preferred
Supplier and PVO > 25k €
Local • Budgets have to be
Management Purchasing respected
• No SDS without eCR
• Each decision must be
signed by participants
after the Sourcing
Committee meeting

Summary
5 Summary
6

PE Purchasing Procedures
 Corporate Policy Purchasing of Indirect Material P90.1
 CAP0700074-04 Purchasing of Non Production Material (Capital Goods, Services &

MRO) Description of purchasing process of materials not intended for production
(production assets, services and MRO).
 CAP0709064-02 Content and requirements for a sourcing review (to be done before
final negotiation) for PE and ES Supplier selection process and rules (RFQ, number of
bids, SDS, SSL).
 CAP0607275-01 Strategic Supplier List for ECMT Procedures for adding / removing
vendors to / from SSL, deviations from approved SSL.

Key elements of Success – TO DO
Involve Purchasing from the beginning as a strong partner: IE & NPL to participate in the regular
meetings with Purchasing and update on new investment plan
Provide neutral technical specifications aligned with IE CEP for RFQ in order to respect the compliance
rules regarding minimum number of quotations required
Ensure compliant nondiscriminatory conditions for all Suppliers (send the same information at the same
time to all competitors)
Always respect the CEP Strategic Supplier List (SSL) for Electronics Core Manufacturing Technologies -
Approved Equipment (Deviations according CAP0607275 Strategic Supplier List for ECMT)
For services, both the Requester and the Supplier must sign a service report. The invoices for services
will not be booked & paid without a signed service report.
Record of Negotiation to be performed for projects > 100.000 EUR

Sourcing Committees to be performed for projects >25.000 EUR
Protect our pricing and other competitive information (i.e. volume, technical performance, price list from
Suppliers etc.)
Allow the Buyer efficient time to negotiate excellent commercial conditions
For urgent deliveries (Production Stop) keep the Buyer in CC and issue the SC latest the next morning,
otherwise => Maverick Buying
After the Final Acceptance make the internal evaluation of Supplier (valid for Plant)

Key elements of Success – DO NOT DO
 Do NOT discuss commercial issues with Suppliers – it is Buyer’s responsibility
 Do NOT promise purchase orders
 Do NOT nominate a Supplier. Letter of Intent (LOI) is forbidden
 Do NOT favor any Supplier (time, information, materials)
 Do NOT promise a lower price now, and „next time it will be handled somehow“
 Do NOT participate in events organized by Supplier (concerts, theater, gourmet dining etc.)
hidden under presentation of new technologies
 Do NOT share price offers
 Do NOT share Budget amount
 Do NOT say to a Supplier: „I do not have anyone else“, „I want it from you“ etc.
 Do NOT share results of the tender without approval of PUR
 Do NOT buy without Shopping Cart => Maverick Buying
 Do NOT store invoices or bank guarantee letters. These documents must be sent to
Accounting Department.
 Do NOT send RFQ to new Suppliers without prior alignment with PUR. Potential Supplier must
follow certain introduction steps.

Important Miscellaneous
Advance payments are accepted for PO value > 50k EUR (30% to 40%) but only after receipt
of a non-limited bank guarantee, followed by payment after delivery and 10% after the final
acceptance
Maverick buying: If no purchase order or contract is used or exists and an invoice is

received by Account Payable, it will not be processed for payment. The user has to start a
separate authorization (eSign) according P20.1 integrating in the following approval flow:
Projects with approved eCR have priority for Purchasing process

PURCHASING IS CONSIDERED TO BE ONE OF THE HIGHEST RISK AREAS
(Purchasing process and activity are regularly and thoroughly audited)

Summary
5 Summary
6

Summary
eCR
Technical Specs aligned IE CEP
Technical clarification of offers
Project Management after PO
SC RON&SDS PO
Requester
Purchasing Handover packages
SAP reception
Invoice booking
Logistics & payment
& Requester
Accounting
& Requester
Thank you for your attention !
We look forward to further

cooperation


TSR PEES Purchasing Training Introduction and Working Rules (For Internal)

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Bitte decken Sie die schraffierte Fläche mit einem Bild ab.

Please cover the shaded area with a picture.

Purchasing training: introduction and working rules

Department: PE ES Purchasing TSR

1 Production Equipment Purchasing Organization

3 Record of Negotiation & Sourcing Committee

4 Guidelines & Procedures

Space for Sender Information 28 July 2019

Category & Regions RBG M. Wachtveitl

RBG M. Wissinger NBG J. Fitzner RBG S. Sobotta RBG N. Fernandez Rojo

GDL U. Mendoza GDL K. Oropeza GDL S. Manjarrez GUH R. Fonseca

SHA B. Quan CHA Zhu Lei CHA Yan Gong

RBG J. Trapp RBG M. Peter

Category Category Category Category

Category Category Category Category Category

Category Category Category

Space for Sender Information July 28, 2019

PE (TSR) PE (TSR) CAT PE CAT ES + NSI

PE (TSR) PE ES (TSR) Technical Purchaser

ES + R&D eq. Student (TSR)

Space for Sender Information 28 July 2019

1 Production Equipment Purchasing Organization

3 Record of Negotiation & Sourcing Committee

4 Guidelines & Procedures

Space for Sender Information 28 July 2019

Define organizational purchasing strategy

Space for Sender Information 28 July 2019

Identify RFQ Technical Select PO/ PO/Contract Accept

Space for Sender Information 28 July 2019

Identify Technical Select PO/ PO/Contract Accept

Space for Sender Information 28 July 2019

Identify Technical Select PO/ PO/Contract Accept

Space for Sender Information 28 July 2019

Identify Technical Select PO/ PO/Contract Accept

 Perform Record of Negotiation, if necessary

 Perform Sourcing Committee, if necessary

Space for Sender Information 28 July 2019

Identify Technical Select PO/Contract Accept

 Responsible: Buyer & Location Management

• Buyer will provide the commercial contract

• Buyer will check the contract with Legal Services

*Tracking of SC approval flow is the Requester’s responsibility

Space for Sender Information 28 July 2019

Identify Technical Select PO/ Contract Accept

 Report the project status internally to the senior management

Buyer will obtain the confirmation of PO delivery date

Space for Sender Information 28 July 2019

Identify Technical Select PO/ Contract Accept

 Responsible: Logistic Department

 Inform and hand over the goods to Requester

 Make the reception in SAP

Space for Sender Information 28 July 2019

Identify Technical Select PO/ Contract Accept

 Contact the Supplier

 Involve the Buyer in case of lack of cooperation from Supplier’s side.

Space for Sender Information 28 July 2019

Space for Sender Information 28 July 2019

1 Production Equipment Purchasing Organization

3 Record of Negotiation & Sourcing Committee

4 Guidelines & Procedures

Space for Sender Information 28 July 2019

RON is mandatory for projects > 100.000 EUR

RON is recommended for projects < 100.000 EUR