X.    Packaging, Labeling, Delivery & Ordering/Inventory

Packaging Standards

  • The supplier is responsible for submitting packaging proposals to the appropriate department by completing the Standardized Packaging Form.
  • The Company’s preference is to utilize returnable containers wherever feasible.  The weight of handheld containers must not exceed 40 pounds (18 kilograms), unless otherwise directed by the Company’s Production Control Department.
  • Packaging is not considered approved until the Supplier receives approval from the Company’s Management.
  • The Company also requires the supplier to have backup packaging in case of returnable issues.  The backup packaging must be the same size and shape as the primary packaging.
  • The Company requires all suppliers to fill out and return the Company’s Container Inventory when requested.  The count must be the inventory of  SumiRiko Ohio, Inc., SumiRiko Tennessee, Inc., or S-Riko Automotive Hose de Chihuahua, S.A.P.I. de C.V. owned returnable containers at the Supplier’s facility after the last shipment of the year is made.
  • Bulk packaging is NOT acceptable.
  • The Company requires the use of AIAG standard sized pallets (45” x 48”). The Company’s preference is the use of returnable skids and lids.
  • SumiRiko Ohio, Inc. Loaded pallets must not be higher than 54” tall due to warehouse constraints, SumiRiko Tennessee, Inc. Loaded pallets must not be higher than 48” tall due to warehouse constraints, unless directed by the Company’s Production Control Department and approved on the Standard Packaging form.
  • All containers must be properly secured to the pallet (i.e. stretch wrapped, banded, etc.)

Packaging Standard Deviation

  • In order to clearly communicate an abnormal returnable packaging condition, the Company requires each Supplier to request approval for any packaging deviation.
  • Requests MUST be made at least 24 hours before shipment of backup packaging.
  • Suppliers cannot ship alternative packaging until receiving signed approval from SRK.
  • Bulk packaging is NOT acceptable.

Ø  Please make sure the form is filled out completely so that the Company will be able to understand and countermeasure appropriately.

Wood Treatment Requirements

Suppliers using wood packaging materials in connection with shipments entering the United States must comply with the US Department of Agriculture (USDA) and the International Plant Protection Convention (IPPC) standards for wood packaging material (WPM).  The ISPM 15 (International Standards for Phytosanitary Measures publication 15) became effective September 16, 2005 for all countries shipping into the United States with the exception of Canada.

ISPM 15 calls for treatment (either by methyl bromide fumigation or heat treatment of core temperature at 56oC for at least 30 minutes) of coniferous (softwood) and non-coniferous (hardwood) wood packaging material (WPM) to eliminate the risk for most quarantine forest pests.  WPM includes, but is not limited to pallets, crates, boxes and dunnage.

Certified WPM Must Bear the Marks Below

     Example of WPM Marking – must be on at least two opposite sides of the article:

     Approved International symbol for compliant wood packaging material

     XX – Two letters of ISO code for the ISO country

     000 – Register Number granted by the local authority to the authorized person for the use of the mark

     YY – Abbreviation to identify the type of treatment used (HT = Heat Treated, MB = Methyl Bromide)

     (AAA) – Code of the identification of the authorized person

Shipments found to be non-compliant with ISPM15 could be rejected, returned, destroyed, quarantined, and/or repackaged at the exporter’s expense. 

It is the responsibility of the exporter to comply with ISPM 15 regulations.  Please ensure that you follow the internationally-specified regulations for wood packaging materials for all shipments to the United States.

Labeling

  • Container Labeling
    • The Company requires each individual container to be labeled in accordance with the AIAG “Shipping/Parts Identification Label” Manual.  The standard AIAG format contains the following fields:
      • Part number – The barcode should contain only numbers and letters. Dashes cannot be in the barcode field because it will not scan in the Company’s system.  The barcode qualifier for this field must be P.
        • i.e.  part number 10-101A-1 must read 10101A1 in the barcode.
      • Quantity – Represents the number of pieces in the container using a defined unit of measure.  The barcode qualifier for this field must be Q.
        • i.e. each, meter, gallon, kilograms, etc.
      • Supplier Code – Each Supplier’s code must be on the AIAG label. Suppliers can find their Supplier code on the Company’s manifests or by contacting the Company’s Purchasing Department or Production Control Department.  The barcode qualifier for this filed must be V.
      • Lot number – The lot number needs to be barcoded.  Each supplier is required to have a lot number barcoded on the label.  This lot number is used in traceability through the manufacturing processes at the Company and each supplier must be able to trace their product through this lot number.  The barcode qualifier for this field must be 1T.
      • Serial number – This is a sequential number, generated by the supplier, to uniquely identify each set of labels.  The barcode qualifier for this field must be S.
      • Before revising the part number level on the label, the supplier must ensure that PPAP approval has been given by the Company.
  • SumiRiko Ohio, Inc., SumiRiko Tennessee, Inc., or S-Riko Automotive Hose de Chihuahua, S.A.P.I. de C.V/Customer Label – only for Specified Suppliers
    • Suppliers are given access to a Secure FTP Server
    • Suppliers are assigned to a drive which contains the the Company’s/Customer Labels
    • Files are then copied to a designated printer
    • Information printed on a 4” x 6 ½ “ size label
    • Once labels are printed, suppliers need to delete the file.  This will eliminate the possibility of duplicate serial numbers.  (The Companywill not accept duplicate serial numbers).
    • SumiRiko Ohio, Inc., SumiRiko Tennessee, Inc., or S-Riko Automotive Hose de Chihuahua, S.A.P.I. de C.V/ Toyota Label contains:
      • PartNumber – with Barcode
      • Quantity – with Barcode
      • Description of Part
      • Serial Number – with Barcode
      • Traceability Lot Data – needs to be completed by Supplier
      • Customer Destination (ex:  TMMK, NUMMI, etc.)
      • Toyota Kanban Number
  • Pallet Labeling
    • The Company requires each pallet to be labeled so as to identify the pallet as a Master or Mixed pallet.
    • Master Pallets
      • A Master pallet is defined as a pallet with only one (1) part number on the pallet.
      • The Master pallet label must include the same components highlighted in the container labeling section.
        • The quantity on the Master label is the total part quantity on the skid.
      • The Master label can either be on an 8½” x 11” sheet of paper containing the words “Master Pallet” that is attached to the pallet or on the shrink wrap around the pallet.
    • Mixed Pallets
      • A Mixed pallet is defined as a pallet with more than one part number on the pallet.
      • The Mixed pallet label must include the same components highlighted in the container labeling section.
        • The quantity on the Mixed label is the total part quantity on the skid for each part number on the skid.
      • The Mixed labels can either be on an 8½” x 11” sheet of paper containing the words “Mixed Pallet” that is attached to the pallet or on the shrink wrap around the pallet.
        • A Mixed pallet must have a label for the total quantity of each part on the skid.

 

  • Cross dock Labeling
    • Cross docked parts are defined as parts that pass-thru a SumiRiko Ohio, Inc., SumiRiko Tennessee, Inc., or S-Riko Automotive Hose de Chihuahua, S.A.P.I. de C.V facility in route to another facility with no processing occurring at the Company’s facility.
    • Pallets that are cross docked at a Company’s facility need to be identified with the Company’s Cross Dock form copied on orange paper.
  • Failure to comply with the Company’s labeling standards may result in penalties.  See “Charges” section for details.

Delivery

  • The Company requires all suppliers to fill out and return the Supplier Logistical Questionnaire one time per year or as changes occur.  This questionnaire helps to clearly communicate logistical related concerns for both the Company and our Suppliers.  This questionnaire focuses on:

o   Manufacturing Facility- General name and address.

o   Hazardous Material- Hazardous material related issues.

o   Shipping Facility- Shipping Facility name and address (if different than Manufacturing Facility).

o   Time Zone- Time of Shipping Facility.

o   Shipping Hours- Hours available for pick-up and delivery at the Shipping Facility.

o   Carrier Procedures-  Safety related issues including

§  Safety equipment (i.e. safety glasses, ear plugs, etc.)

§  Designated or restricted areas for drivers

§  Entering and exiting requirements

o   Local Expediter- Local expediting service information.  This should include both land and air expediting options.

·        The questionnaire must be complete by January 31st of each year.

·        Transportation

o   Depending on the Supplier’s location, the Company will be requested to ship in a manner that best serves the Company’s needs and capabilities.  This may include milkrun shipments, LTL shipments, Truckload shipments, specialized carriers, etc.

§  Milkrun Shipments- The Company will set up as many Suppliers as possible utilizing milkrun.

·       The supplier will be notified of a pick-up schedule including the day(s), time, and window.

·        Trucks must be loaded within the window time.

·        If the Supplier shipment is not complete within the window time, it is the Supplier’s responsibility to arrange an alternative means to ship the product to SumiRiko Ohio, Inc., SumiRiko Tennessee, Inc., or S-Riko Automotive Hose de Chihuahua, S.A.P.I. de C.V.

§  Other shipping methods- will be determined on a case by case basis with each Supplier.

o   All miss-shipments and expedites must be reported to the Production Control Department as soon as the Supplier is aware of any upcoming shortages.  Notification must be made prior to the scheduled shipment.

§  Report these to the the Company’s Production Control Department

·        First by phone call to the appropriate Production Control Specialist

·        Secondly by completing the Delivery Shortage Form and e-mail or fax to the appropriate Production Control Specialist.

§  All expenses related to miss-shipments will be the responsibility of the Supplier.

·        Advance Shipping Notice (ASN)

o   Suppliers may be requested to submit an ASN.  This is necessary to confirm shipment quantities and timing. 

§  ASNs must be sent to the Company within ½ hour of shipment departure from the Shipping Facility.

§  The Delivery Shortage Form is not considered an ASN.

·        Manifest / Packing List

o   A Company Receiving Associate will verify all Supplier’s shipping quantities and Supplier payment will be based on the verified count by the Company’s Receiving Associate and deemed to be the actual quantity received.

o   Signatures by the Company’s Associates for receipts will not be considered final proof of delivery.  A signed transportation bill of lading, UPS log, etc. is only considered verification of receipt of a container(s).  It will not be considered a confirmation or verification of the contents or condition of the goods received.

o   The supplier will be notified if there are any discrepancies in the count verification by SRK Associates as compared to the Manifest/Packing List.  If no Manifest/Packing List is included with the shipment, the Company’s count will be considered valid and no notification to the supplier will be required.

o   The Company’s Purchase Order number (PO) MUST be included on all documents that accompany shipments to SumiRiko Ohio, Inc., SumiRiko Tennessee, Inc., or S-Riko Automotive Hose de Chihuahua, S.A.P.I. de C.V.

o   Manifests

§  The Company’s manifests are system generated orders to the Suppliers that originate from our MRP System.

§  Manifests MUST accompany each shipment and must be easily accessible to the Company’s Receiving Associates.  The Company must have each manifest to receive material correctly.

§  The manifest replaces the Material Release / Purchase Order forms and the Supplier packing lists for the Company. 

§  Manifests are firm orders, not forecast.

§  Manifests can be shipped against one (1) time only.  The manifest number is closed in the Company’s system whenever the first receive takes place. 

§  If a shortage occurs, the Supplier must contact their Production Control Specialist to receive an expedite manifest number and to discuss expedite timing and recovery plans.  All shorted quantities must then be shipped against this new manifest number.

§  All shorted quantities must be expedited at the Supplier’s cost.

§  Manifests will be faxed or emailed to the Suppliers.

§  Suppliers are required to acknowledge the receipt of the manifest.  The confirmed manifest must be faxed or emailed to the issuing Production Control Specialist.

§  Manifests will contain all information needed to ship parts to the Company (see example below).

§  Each Supplier will complete the manifest by verifying shipment quantity vs. order quantity.  If the number of parts shipped is different than the order quantity, the Supplier will enter the actual quantity shipped in the Modified Quantity column and notify the Company’s Production Control immediately with a phone call and the Delivery Shortage Form. 

§  Do not mark out or change any information on the manifests (i.e. crossing out the original quantity).    The only Supplier marking on a manifest should be in the Modified Quantity column if a shortage/overage occurs.

o   Packing Lists

§  Packing lists are Supplier generated documents that provide the Company with shipment content and quantity.

§  The Supplier must submit a packing list with each shipment if the supplier is not on the Company’s Manifest system and must be easily accessible to the Company’s Receiving Associates. 

§  The packing lists must match the shipment content exactly.  Likewise the packing list and shipment must match the Supplier’s invoice to ensure timely processing.

§  If a shortage occurs, the Supplier must contact their Production Control Specialist to discuss expedite timing and recovery plans.  All shorted quantities must expedite at the Supplier’s cost.

o   Failure to comply with the Company’s Manifest or Packing List requirements may result in penalties.  See “Charges” section for details.

Ordering/Inventory

  • SumiRiko Ohio, Inc., SumiRiko Tennessee, Inc., and S-Riko Automotive Hose de Chihuahua, S.A.P.I. de C.V. are a Just-In-Time facility to the Automotive Industry.  It is imperative that Suppliers meet the Company’s delivery schedules on time and in the correct quantities.  Failure to do so will disrupt the Company’s manufacturing abilities and has the possibility to disrupt our Customers as well. 
  • Late or early shipments are unacceptable and will affect the Supplier’s delivery performance rating.
  • Over or under shipments are unacceptable and will affect the Supplier’s delivery performance rating.
  • The Suppliers are expected to maintain regular and appropriate communications with the the Company’s Production Control Department related to meeting delivery requirements. 
  • Ordering
    • Under normal conditions, the Company will issue regular forecasts for product and services to the supplier base.  The Company will provide at least a 3-month rolling forecast.  (This information is to be used for planning purposes only and is not to be miss-interpreted as a firm order).
    • The Production Control Specialist and Supplier will determine the optimal firm order and forecast schedule timing.
    • The forecasts, and occasionally the firm orders, may change due to changes in customer demand.
    • Any significant changes will be discussed with the Supplier and appropriate schedules developed based upon this discussion.
    • Occasionally, the Company may need exception or expedite orders due to abnormal conditions or changes in demand.
  • Inventory
    • The Company requires Suppliers to hold at least 3 days of inventory (of each part) at their facility.  If more inventory is required, that will be negotiated with individual Suppliers. 
    • One day of inventory is equal to an average daily demand issued through the Company’s forecasts and/or firm orders.
    • Returnable containers will be issued to Suppliers based on their expected inventory levels, number of parts supplied, and shipping frequencies.  (*Note-not all suppliers will use returnable containers)
    • Overproduction of parts will lead to returnable container shortages that will be the Supplier’s responsibility to resolve.  The Company will not supply returnable containers to be used for supplier WIP.
    • The Company requires all suppliers to fill out and return the Company’s Container Inventory when requested.  The count must be the inventory of the Company owned returnable containers at the Supplier’s facility after the last shipment of the year is made.
    • Failure to comply with ordering and inventory requirements may result in penalties.  See “Charges” section for details.
  • Charges
    • The Company reserves the right to charge its Supplier’s for failure to comply with the standards set forth in the Packaging, Labeling, Delivery & Ordering/Inventory section of the Supplier Policy Manual.
    • The Company will also charge an administration fee for the additional processing time from such occurrences.
    • Charges are as follows:
      • No Manifest or Packing Lists-         $100.00 per occurrence
      • Labeling issues-                            $100.00 per occurrence
        • Additional charges may occur if the Company or their Customers experience line stoppage, sorting, or transportation costs associated with labeling issues.
      • Bulk or unapproved packaging-      $150.00 per container
      • Excessive expedites-                     $50.00 per occurrence
      • Failure to ship against the correct   $50.00 per occurrence
        Manifest or PO #

·        Failure to call for shortages or       $ 30.00 per occurrence
 miss shipments

      • Non-conforming paperwork –      
        • Packaging Deviation Form                   $ 25.00 per occurrence
        • Packaging Standard                               $ 25.00 per occurrence
        • Delivery Shortage Form                        $ 25.00 per occurrence
        • DIS & Countermeasure                          $ 50.00 per occurrence
        • Logistics Questionnaire                         $ 25.00 per occurrence
        • The Company Container Inventory     $ 25.00 per occurrence
      • Administration Fee-                       $100.00 per month
        • The administration fee will be charged for any of the non-conforming issues.
      • Past Due DIS/Countermeasure Fee  $ 300.00 per occurrence
        • The fee will be charged each occurrence any delay of DIS / Countermeasure submission that is not requested in advance of due date.