Delivery Capability

Delivery Capability Based On Different Sourcing Models At Continental

Delivery Capability calculation is standardized and backed by an IT-System: when goods receipt is posted in Continental’s ERP System, instantly the delivery is evaluated with respect to date and quantity requested. Each and any goods receipt is evaluated on Contract Product basis vs. the information in the Delivery Schedule. The individual measurements are aggregated for each Continental location and the Continental Automotive Group each month and then represent a percentaged evaluation of Supplier’s monthly delivery capability.

Delivery Capability for Ship-to-Stock

Ship-to-Stock Sourcing Model supposes Supplier to ensure that the correct quantity of Contract Product arrives at Continental on the date specified in the Delivery Schedule. The delivery capability measures the deviation in time to the date the quantity of the Contract Product must be received by Continental. These dates are indicated in the Delivery Schedule together with the required quantity.

Each delivery which is received ± 1 day from the requested delivery date and matches exactly the requested delivery quantity is valued with 100%. Early or late deliveries receive a proportional penalty deduction. In the event Continental receives a delivery too early this is subject to lower reductions as this represents a lower risk for Continental. Late deliveries are a risk; therefore, late deliveries are evaluated with a higher proportional penalty deduction. In the event the quantity differs to the requested quantity, this difference is taken into account proportional to the quantity falling short or being delivered in excess. An over delivered quantity is calculated towards the next delivery item and results in a delivery that is too early.

Delivery Capability in case of CMI

In case of CMI deliveries, only receipts within tolerance -10/+4 days from the requested delivery date get 100% evaluation. Beyond the tolerance range, early or late deliveries receive a proportional penalty deduction. In comparison with ship-to-stock model, a higher tolerance is allowed since the supplier receives via EDI information about stock levels. As a part of CMI consignment process Continental manages the material planning in terms of restocking and the Supplier resupplies the Contract Products as indicated in a Delivery Schedule. However, Supplier can optimize his delivery frequencies and deliver earlier or later as indicated in the Delivery Schedule since Supplier is well informed of the stock levels. However, due to storage capacity, Continental limits this tolerance on 10 days earlier; else, the storage capacity is exceeded.

Delivery Capability in case of VMI

In the case of VMI, the delivery capability measures the compliance of the Supplier to keep the stock of Contract Products within the agreed minimum and maximum inventory limits. The limits are documented in Individual Logistics Agreements for VMI. The min inventory level is defined as the required stock in days/weeks based on the current averaged production demand. The max inventory level is defined as maximum inventories in stock in days/weeks based on the current production demand. Continental’s IT-System calculates the min/max levels once daily and checks the current stock vs. the agreed levels. Stock levels within the defined limits get 100% evaluation, deviations from the defined min/max limits leads to a linear-proportional deduction up to 0%. If the current stock level falls 50% below the min limit or exceeds 150% of the stretched max limit the logistics performance is evaluated as 0%. The monthly result for delivery capability is an aggregated figure of theses daily measurements

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