Supplier Compliance Guidelines - Lear Corporation

1 Supplier Compliance Guidelines Supplier Training Currently, Lear uses a network of cross-docks to optimize inbound freight for its seating plants in North America. The network consists of five facilities: 1)Romulus, MI 2)Indianapolis, IN 3)El Paso, TX 4)Laredo, TX 5)San Luis Potosi, Mexico: (Launched June 2013) Current Cross-dock Network Electrical Power Management Systems (EPMS) will be joining the seating cross-dock network in 2013 Supplier Compliance is crucial to success Consequences of non- Compliance : Quality Notices (QN s) require submission of appropriate root cause analysis and corrective/preventive action Debits for associated costs and losses Downgrade on Supplier scorecard EPMS Integration Current vs Improved Network Operations Current Process Routing orders rec d only when there is a change.

2 Current cross docks with Central Transport Unmanaged pick-up windows and ship days One bill of lading per plant destination Improved Process Routing orders will be received weekly New cross docks with Linc Managed pick-up windows and ship days Combined bill of lading per shipment standard bar code labeling stack-ability/standardized component packaging Advanced Shipping Notice (ASN) : EDI-856 Lists, Bills of Lading, Commercial Invoices and Customs Paperwork Routing / Packaging Supplier Compliance Requirements AIAG bar code labels are required for every part Must conform to samples below, and contain all information Part number, quantity, and serial number are required for scanning Box labels and master skid labels are required Final Lear destination must be clearly identified Label Examples: 1.

3 Bar Code Labeling - AIAG Sample box label Sample master label Mixed load label shall be used to identify multiple parts on one pallet shipping to a single plant For a pallet with mixed parts, a Master Label is required for each part Master Labels shall be placed on one side of the pallet where they can be easily scanned 1. Bar Code Labeling AIAG (cont d) 1. Bar Code Labeling AIAG (cont d) 1)Individual Master Labels 2)Mixed Label 3)Container/Box Label 4)Packing Slip Example - label locations on a pallet: *Each label should be easily accessible for scanning 4 Supplier ship-from location and final Lear destination are required in human readable fields Additional details can be accessed at (click on Supplier Information > Web Guides > Logistics Requirements for Suppliers > Supplier Packaging Requirements & Guidelines ) AIAG training courses can be found at (select Training) 1.

4 Bar Code Labeling AIAG (cont d) Pallets must be stackable up to a height of 102 and individual pallets cannot exceed 51 high. Pyramiding, box overhanging, brick stacking and center column stacking are unacceptable All pallets must be shrink-wrapped or banded (min of 2 bands in each direction) Pallets over 2,000 pounds must be banded using non-metal banding 2. Packaging and Palletizing Requirements 2. Packaging and Palletizing - Examples 2. Packaging and Palletizing - Examples Bad: Pallet height too high (tower loaded) 2. Packaging and Palletizing - Examples Good: Load dimensions = 47 x 45 x 50 2. Packaging and Palletizing - Examples Bad: Excess headspace in carton *Excess headspace is inefficient leading to crushed boxes and damaged goods 2.

5 Packaging and Palletizing - Examples Good: Carton filled to capacity 2. Packaging Videos What happens when you don t comply with packaging requirements How to properly package Palletize in level layers to maximize stackability It is imperative that material for each Lear final destination is palletized separately Cross-docks will not break down and reconfigure pallets 2. Packaging and Palletizing - Shipping ASNs must be sent out within 20 minutes of shipment departure ASNs must be electronically sent to Lear s final destination. Each Lear part and quantity shipped requires an ASN for each plant. MX02MO37 - Monarca - 160 (Cd Juarez, Mexico) MX02AZ79 - Planta Juarez - 164 (Cd. Juarez, Mexico) MX02TR48 - Planta Torres TR48 (Cd.)

6 Juarez, Mexico) MX02 NOV2 Nova - 169 (Chihuahua, Mexico) MX02SI65 - Sicomoro/Americas - 163 (Chihuahua, Mexico) HN02NC72 Naco - 213 (Honduras) HN02 HEHE - HEDS-214 (Daws-Honduras) PH02GM71 Cebu - 224 (Philippinnes) PH02GM71 Gabriela - 271 (Philippines) 3. Electronic ASN EDI 856 Plant Code / Name / Location ASN required elements: Number Number & Date Shipped List Number Plant Destination Gross Weight 3. Electronic ASN EDI 856 To find instructions for sending ASNs (EDI 856): Supplier Information Lear EDI Guidelines from the left menu your region your plant the Dispatch Advice Guidelines file to access the detailed information 3. ASN Submission Guidelines The following documents are required to be sent to each final Lear destination: All documents must be printed (hand-written is not accepted) Drivers must be provided each document to present at cross-dock Commercial invoice / Packing list must be completed timely & accurately, and sent separately for each final Lear destination (a separate, exclusive document for each destination) 4.

7 Required Shipping Documents Packing list: (must match the ASN and must include the correct gross weight, must include Lear Plant, & must be attached to pallet in a packet) Bill of lading (Current process): (must be separate for each final location) Commercial invoice: International Shipments Only ( Brazil, Honduras, Argentina and Cebu) Bill of lading (New Process): (must be one BOL for the entire shipment including all final locations) Single Plant BOL Current Process Commercial Invoice - Example Invoice Number Invoice Date Shipper Name and Address Sold to Party (if different than consignee) Ship to (Consignee Name and Address) Notify Party Name and Address Mode of Transport (air, ocean, truck) Transport Company Name Customs Broker at (if known) Freight Terms (collect or prepaid) Terms of (FOB, CIF, Ex-Works, Consignment, Inter-Company Transfer, etc.)

8 Currency of Description of Articles Quantity Unit Price Extended Price Country of Origin of Article: (Mandatory) TOTALS Signature of Shipper Phone Number of Shipper The Bill of Lading must contain the following: Description of Goods per Package Type of Package: Box or Pallet Dimension of the Package: L x W x H Unit of Measure: Meters or Inches Net Weight and Gross Weight Unit of Measure: Kilograms or Pound BOL s must also contain the Final Destination (Lear Plant) as well as the cross-dock address in the consigned area Examples: Correct consignee : Incorrect consignee: Lear NACO 213 Central Transport c/o Central Transport 921 Beiger St.

9 921 Beiger St. Mishawaka, IN 46544 Mishawaka, IN 46544 USA USA 4. Required Shipping Documents BOL s The packing list must always refer to the related commercial invoice (if applicable) & must include: Lear Part Number Description of Goods per Package Type of Package: Box or Pallet Dimension of the Package: L x W x H Unit of Measure: Meters or Inches Net Weight and Gross Weight Unit of Measure: Kilograms or Pound 4. Required Shipping Documents Packing List Packing list(s) must be consolidated per load, per plant Global Logistics Supplier routing instructions must be followed Instructions identify standard carrier, shipment day, shipment mode, detailed shipping requirements, etc.

10 Upon receipt, instructions must be reviewed, signed, and returned If necessary, contact respective Lear plant for expedited shipping instructions (Premium Transportation Authorization # required) Contact information: Kevin Robbins / 915-892-2239) Francisco Rodriguez / 011-52 (81) 1157 0403 Transportation Operations Luis Perez / 915-787-7679) Ruben Lazo / 915-787-7752) Global Logistics Cheri Goodman / 248-447-1333) 5. Supplier Compliance / Routing Info 5. Current Supplier Routing Instructions - Example Supplier Shipping Point Destination Point Mode of Transportation Must be signed & returned Supplier specific Ship day Shipping Requirements 5. New Supplier Routing Instructions - Example Supplier Shipping Point Destination Point Mode of Transportation Supplier specific Ship day Shipping Requirements Must be signed & returned Additional costs generated by missed ship-days or window times will be suppliers responsibility Additional costs generated by the use of incorrect transportation mode will be suppliers responsibility Routing instructions may change as a result of the EPMS integration into the Seating Division network.