Supplier Development / True Partnership

• Delivering Results to Increase Value for Everyone - Everyone means Supplier, CVG & OEM
• Supplier initiated VA/VE (Value Analysis/Value Engineering) cost savings ideas
• Cooperation of both organizations emphasizes shared, common goals and objectives
• Sharing of ideas provides opportunities to improve margins for Partners
• Strengthening relations by treating Suppliers as Partners creating a mechanism to encourage and foster mutually beneficial ideas
• Mutually shared goals drive positive behavior in both organizations
• Supplier Partners can expect greater profitability through shared savings and continual improvement of delivered products
• Supplier Partners will be a natural extension of the CVG Value Chain and will have the opportunity to grow as CVG grows

Overview

• DRIVE is the CVG Purchasing mechanism to generate, submit, develop, implement & track cost savings suggestions
• Via standardized format, ideas will be submitted by suppliers for review by DRIVE Team Members (including CVG Commodity Managers)
• Process will follow standard idea generation, submission, review, team establishment, implementation & savings achievement format
• Idea sharing will strengthen relations & ultimately, directly strengthen both organizations
• Savings suggestions will focus on the total value chain

Goals

• Specific savings goals will be set annually by CVG Commodity Managers
• Goals will be based on (a % of) current annual sales to CVG and specific CVG contract language
• Requirement of, at least, one DRIVE suggestion (implementation) per quarter
• Communication of annual goals (for the following year) will occur during 4^th quarter
• Meeting &/or exceeding goals will be essential to strengthening our long term partnership

Expectations

• DRIVE participation is expected; successful participation further enhances Supplier's viability as a long-term Partner
• Supplier will meet or exceed all goals (savings dollars and participation) established by their CVG Commodity Manager
• Supplier should expect full commitment & follow-up of CVG associates
• All suggestions must maintain or improve the current level of quality

Shared Savings & Credit

• Crediting of savings between CVG & suppliers is key to DRIVE success
• Sharing of Savings occurs when the suggestion reduces the internal costs at the suppliers facility--supplier will retain 50% of the savings & receive credit toward their DRIVE goal for the amount they share with CVG
• Credit Only (toward Suppliers DRIVE goal) will occur when suggestions result in savings for/at CVG facility--total realized savings will be credited (100%)
• All Supplier generated ideas are considered eligible for DRIVE credit
• Savings credit will be applied to the supplier's goal at the time of implementation
• Once supplier achieves DRIVE goals for the year, ideas credited there after may apply toward next year(s) goals
• Proposals that result in savings to a part of/from another supplier will be applied to the goal of the supplier that submitted the idea
• Savings calculations will be shared/agreed upon by DRIVE Team Members

Benefits

• Cooperation of both organizations emphasizes shared, common goals and objectives
• Sharing of ideas provides opportunities to improve margins for both the Supplier and CVG
• Suppliers can expect greater profitability in the future through shared savings and continual improvement of delivered products
• DRIVE will strengthen relations by treating Suppliers as Partners creating a mechanism to encourage & foster mutually beneficial ideas
• Suppliers will be a natural extension of the CVG Value Chain Mutually shared goals drive positive behavior in both organizations