Tim Millwood Vice President - Procurement Cummins Supplier Conference August 4
Purchasing Leader Team Tim Millwood VP-Procurement Megan Sinclair Executive Admin Support Xiang Yongdong China ABO Rebecca Serino EMEA ABO Prafulla Neema India ABO Angela Cuellar Latin America ABO Mike Gonsalves Direct Purchasing Priscila Mendes Indirect Purchasing Mike Trueblood CBU Allison Kley DBU Scott Mann EBU Con O Sullivan Power Systems John Wolfe Supplier Quality Mike Kirsch NPD and Chief of Staff Elizabeth Hoegeman Procurement Central Services Helena Hutton Diversity Procurement Jenny Monday Human Resources Ginger White Finance OPEN Legal Gina Stead IT
Technology leadership Cummins Key Capabilities Scale advantage Global distribution Partnerships & customers 3
Growth Platforms Powertrain & Components Move Up in Power Distribution & Service Expansion Digital Accelerator Connected Diagnostics 4
Eaton-Cummins JV A leading global powertrain supplier Longtime Partners Benefit to our Customers Global Growth
Our vision for electrification Similar to our current position in diesel. Recognized as an industry expert. Creating sustainable competencies. Supporting all market segments. 6
Electrification Opportunities Energy storage Battery Management Systems Cell Materials &Construction Thermal & Structural Design Life Prediction Standards & Regulations Reuse and Recycling Power electronics IGBT & WBG Devices Filters Controls Thermal Robustness Slide 7/ Generator Rotating electrics Electromagnetic Design Vehicle and/or engine integration Low cost manufacturing Traction System integration Vehicle Control Application Modeling Functional Safety Infrastructure Communications Engines/Prime Movers Downsizing Alternate Fuels Electrical Integration Installation specific Electric accessories Cooling systems Gear boxes LV and HV wiring
MANUFACTURING ANALYTICS An integrated Supply Chain is critical to Cummins success PLANNING SUPPLY CHAIN ENVISION CUMMINS A number of key initiatives are underway or being kicked off: 1. Working Capital / Inventory Strategy SC STRATEGY PROCUREMENT 2. Planning (SBP / FPC) 3. Elevate Manufacturing QUALITY LOGISTICS 4. Purchasing
Cummins needs to be a VPI machine Tom Linebarger CMI Chairman & CEO
Develop new and improved products Engines 1998 2007 2017 1984 6BT5.9 ISB5.9 ISB B6.7 1 Reality - Lack of capacity ahead of demand for new 2017 B6.7L..
Develop new and improved products Single Module aftertreatment system Up to 60% improvement in space claim Previous aftertreatment system Single Module system Up to 30% in weight reduction 1 Reality - Supply base not adequately prepared for launch from tier 1 to tier 2.
Develop new and improved products QSK 95 12 Reality - Supplier quality issues resulting from immature mfging processes..
The Quality Picasso Reality History of quality spikes at launch..
Partnering for Success Cummins Category Partner List (CPL) Cummins and our suppliers must provide products and services that delight our customers Category Partner List Cummins is selecting Category Partners to achieve competitive Approved advantage Suppliers in our markets (Current Business, Service Parts, PPAP Approved) Cummins must partner with select suppliers Cummins will develop or strengthen relationships with category partners
Partnering for Success CMI expectations of Category Partners: Collaborate on innovation & new product introduction Zero defects with joint responsibility to eliminate warranty Jointly achieve lower TCO costs for our customers Excellent delivery with capacity ahead of demand Sustainability environment, diversity & community
Partnering for Success Cummins Expectations of Our Suppliers Make safe work environments for employees a priority Drive a zero defect mentality in your company Supplier PPM as reported by Cummins Plants 1000 800 600 400 200 0 2010 2011 2012 2013 2014 2015 2016
Partnering for Success Cummins Expectations of Our Suppliers Supplier Warranty Transformation Cummins customers rely on our products to be more reliable than our competitors Cummins is partnering with suppliers to reduce warranty and align value chain accountability Suppliers are partners in delivering quality products Improved product problem solving and standard warranty sharing agreements enable focus on quality improvement
Partnering for Success Cummins Expectations of Our Suppliers Excellent delivery with capacity ahead of demand Many Global Markets Near the Bottom After 4 years of lower markets some markets returning NA MD Truck China Truck India Truck NA Pickup NA Construction China Construction India Construction 28 Commercial Marine Power Generation Brazil Truck NA HD Truck Oil & Gas Global Mining
Partnering for Success Cummins Expectations of Our Suppliers Mitigate supplier risk in your supply chain Supplier Expectations Materials Compliance What To Expect: What We Need From Suppliers: A email request for disclosure will be made in industry standard IPC Format Complete Submit disclosure a full material within disclosure 45 days from (FMD) inquiry Self Partial Guided declaration Training: supplier.cummins.com is helpful but not preferred environmental stewardship Failure to provide FMD may limit Cummins access to regulated markets and impact our sales Questions: supplier.compliance@cummins.com 24 Public To Sell Our Products Suppliers Must Provide Substance Disclosure For more information visit http://supplier.cummins.com or email your questions to supplier.compliance@cummins.com Cummins Packaging Requirements Compliance to Global Packaging Standards Located in the Standards and Processes tab https://www.supplier.cummins.com Always use the most current revision of the Packaging Data Sheet Submission of fully completed Packaging Data Sheet with quote (Spec and Cost tabs) Collaboration on design and cost optimization Use of environmentally sustainable materials Technology Security Recent global security events have highlighted the need for continued security diligence throughout our entire supply chain Assess Monitor Mitigate
Partnering for Success Cummins Expectations of Our Suppliers New product and service opportunities for suppliers in Connected Solutions, Powertrain, Electrification Growth Platforms Powertrain & Components Distribution & Service Expansion Move Up in Power Digital Accelerator Connected Diagnostics Eaton-Cummins JV A leading global powertrain supplier 5 Engines Longtime Partners Benefit to our Customers Global Growth Technology leadership Energy storage Battery Management Systems Cell Materials &Construction Thermal & Structural Design Life Prediction Standards & Regulations Reuse and Recycling Power electronics IGBT & WBG Devices Filters Controls Generator Traction Rotating electrics Electromagnetic Design Vehicle and/or engine integration Low cost manufacturing Engines/Prime Movers Downsizing Alternate Fuels Electrical Integration Installation specific Electric accessories Cooling systems Gear boxes System integration LV and HV wiring Vehicle Control Application Modeling Functional Safety
Partnering for Success Cummins Expectations of Our Suppliers Sustainability SCOC, Environment, Diversity & Community Corporate Responsibility 2016 Engagement 26 81% Of Cummins employees 409,729 Every Employee Every Community hours
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