VA/VE

Section 1: Paulstra’s VA/VE Overview		Section 2: Paulstra’s VA Savings Practices
I. VA/VE Program II. VA Definition III. VA Expectation IV. VA Process V. VA Idea Submission		I. VA Supplier Expectations II. Requirement for Documentation to Support Savings III. VA Targets
Section 3: Submission
I. VA Submission Instructions II. Submission Summary III. Instructions for Request for Quotation Form IV. Request for Quotation Suppmental Information V. Tool & Die Information Sheet Directions
VAVE Forms

Section 1: Paulstra’s VA/VE Overview

The PaulstraVA (Value Analysis) program is a formal requirement of Supply Chain partnership and development to assure commitment to ongoing improvement and mutual competitiveness. The supplier has the lead responsibility for meeting Paulstra’s expectation for Value Analysis (VA) submissions and implementations each fiscal year. The VA performance target will be evaluated and communicated to the supplier each fiscal year by the Purchasing Group. The measure of success is Purchase Order price reductions.

The Value Engineering (VE) element on future development programs is an important and vital aspect of the total supply partnership. The formal process to capture and implement VE will be developed in the future phase. Recognition of supplier participation and contribution through VE will be followed manually by the Purchasing Department.

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A viable VA idea is considered any change to the current production design or processing of a component or sub-assembly, which maintains or improves functionality and quality. The VA idea will promote the elimination of waste.

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The VA process should include a functional analysis approach to idea generation and result in the submission of actionable and sustainable ideas.

Functional analysis defines the value of product components and helps to extend definition beyond cost. It focuses on the relationship between cost/function and provides for improved value through delivering equivalent or improved function at a lower cost.

Paulstra’s expectation is that the supplier will provide VA implementations and submissions throughout the year. Other ideas can be generated as a result of planned VA events at the supplier’s and/or Paulstra’s facilities such as workshops, teardowns, and visits to plants.

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1. Paulstra’s VA Process:

• Develop Business VA targets
• Identify VA project teams
• Gather product information
• Evaluate Potential of VA proposals
• Submit for approval
• Develop validation plan & evaluate results
• Obtain approval and implement
• Review VA targets
• Close

2. Supplier’s VA Integration Process:

• Supplier generates VA idea
• Submits VA idea to Purchasing Director for preliminary analysis
• Purchasing Director will notify supplier of disposition of idea
• Purchasing enters idea into VA Tracking list & notifies supplier of Tracking # if idea is accepted
• VA Coordinator reviews idea with Engineering group for validation requirements & implementation plan
• Idea passes validation
• Idea is implemented
• Close

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V. VA Idea Submission

Each idea submitted to Paulstra must be submitted as a package. The Supplier VA Submission Package includes the following:

• VA Submission Form
• Checklist
• Current Quote information sheet
• VA Quote information sheet
• Variance Quote information sheet
• Tool and Die information sheet
• Drawings or marked prints

This package must be submitted complete for consideration. Each VA submission will be assigned a tracking # which will be the vendor code/2-digits of year/submission # for supplier. (i.e.: XXXX001-06-1)

Paulstra CRC requires detailed information from the supplier in order to expedite the VA idea through the VA process. All documentation submitted must be on Paulstra forms. Consequently, if the idea lacks information on any of the documentation submitted, the Purchasing Director will return the idea during the initial screening process. In this case the idea is considered “ineligible” and the Purchasing Director will respond to the supplier via e-mail and let the supplier know the idea has been “declined”.

The idea also can be considered “declined” due to an idea not fitting the VA parameters by definition. In this case the Purchasing Group will inform the supplier as described above.

The VA idea submitted must be specific to a Program or process. The VA idea submitted must be a net value of at least ten thousand dollars ($10,000.00). If the idea does not equal the minimum value, it should not be submitted to Paulstra for consideration.

Any idea submitted and consequently rejected can be appealed to the Purchasing Director.

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Section 2: Paulstra’s VA Savings Practices

I. VA Supplier Expectations

Paulstra expects and requires suppliers to participate in Value Analysis and Value Engineering as a part of normal business practices between Paulstra and its supply base. This includes sufficient and support resources to implement the idea in a timely manner.

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II. Requirement for Documentation to Support Savings

The supplier must fully disclose a reasonable and justifiable cost breakdown for the VA; tooling or other related costs; and describe the full cost save associated with the VA idea. The quote must be submitted on Paulstra forms available to the supplier in the VA/VE section of the Paulstra Purchasing Website. If the supplier does not provide this detail with the VA Supplier Submission Package the Purchasing group will return to the supplier for re-submission.

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III. VA Targets

Paulstra CRC’s goal for the implemented Supplier VA activity is a minimum of 5% of supplier sales to Paulstra CRC. All implementation costs, including engineering, design, testing, tooling, and validation cost will be netted against projected savings. VA activity is incremental to productivity agreements with suppliers and will be shared as a 50/50 split, after any savings shared with the customer.

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3Section 3: Submission

I. VA Submission Instructions

Every section in this book must be completed, including the checklist, before this package can be submitted. There are several sections to this book and they are as follows:

	1.		VA Submission Checklist
	2.		VA Submission Summary
	3.		Current Piece Price Quote
	4.		VA Proposal Piece Price Quote
	5.		VA Variance Piece Price Quote
	6.		VA Tooling Quote ( If applicable)

If this package is not completed in its entirety, the package will be rejected by your Buyer upon submission. It is important that you assure your group thoroughly reviews this package before submission. The more detailed your submission the quicker your submission can make its way through the process.

II. VA Submission Summary

The VA Submission summary must be discreet for each part number. The summary sheet can not combine several part numbers and/or programs.

You need to thoroughly describe your idea. It is suggested that you do NOT try to describe your idea in the box provided on the summary page. Instead, provide a separate document that accurately and clearly defines your VA idea such as marked prints, separate drawings, etc.

III. Instructions for Request for Quotation Form

Use the following information as a guide for the RFQ for production materials and for tool & dies.

For RFQ Parts:

Use appropriate fields below (A through UUU). Suppliers are requested to provide as much information as possible in order to enable an accurate comparison among quotations. Not all fields are expected for every quote. Buyer and supplier discretion is to be used in order to obtain the most relevant information on a case by case basis.

	A		Indicate here if an original request for quotation
	B		Indicate here if a variance quote to the original request for quotation
	C		Indicate in this area 1) Business Unit (e.g.Ford) 2) Model Year 3) Program Name
	D		Indicate supplier name
	E		Indicate revision level
	F		Indicate part number
	G		Indicate part name
	H		Indicate PCR number
	I		Indicate PPAP lead time in weeks
	J		Indicate production lead time in weeks
	K		Indicate raw material being used (By name)
	L		Indicate material specification
	M		Indicate material source
	N		Indicate unit of measure
	O		Indicate unit cost (For unit of measure)
	P		Indicate width of material (Where applicable)
	Q		Indicate progression (Where applicable)
	R		Indicate minimum gage (Where applicable)
	S		Indicate maximum gage (Where applicable)
	T		Indicate gross weight of material
	U		Indicate weight loss (of material) during manufacturing process
	V		Calculate net weight = (gross weight (T) - weight loss (U) )
	W		Indicate scrap value
	X		Calculate material cost = (gross weight (T) x cost of material (O)) - (weight loss (U) x scrap (W) value)
	Y		Indicate all purchased part numbers/external services
	Z		Indicate description of purchased parts
	AA		Indicate supplier name for all purchased parts/external sources
	BB		Indicate quantity used per part or assembly
	CC		Indicate cost per part
	DD		Calculate total cost = (quantity (BB) x cost per part (CC))
	EE		Indicate each internal component process
	FF		Indicate tool description
	GG		Indicate number of cavities or stations
	HH		Indicate press tonnage
	II		Indicate cycle time
	JJ		Indicate parts/hour
	KK		Indicate minutes/hour (efficiency)
	LL		Indicate number of direct laborers
	MM		Indicate labor rate/hour
	NN		Calculate labor cost/part = (labor rate/hr (MM) / parts/hour (JJ)
	OO		Indicate burden cost/hour
	PP		Calculate burden cost/piece (burden cost/hour (OO) / parts/hour (JJ)
	QQ		Calculate total cost/hour = (labor rate/hour (MM) + burden cost/hour (OO)
	RR		Calculate processing cost (labor cost/part (NN) + burden cost/piece (PP)
	SS		Indicate subassembly part number
	TT		Indicate process description
	UU		Indicate parts/minute
	VV		Indicate parts/hour
	WW		Indicate labor/hour
	XX		Indicate labor cost/assembly
	YY		Indicate fixed burden cost/assembly
	ZZ		Indicate variable burden cost/assembly
	AAA		Calculate total assembly cost = (Labor cost/assembly (XX) + fixed burden/assembly (YY) + variable burden/assembly (ZZ)
	BBB		Indicate final assembly part number
	CCC		Indicate process description
	DDD		Indicate parts/minute
	EEE		Indicate parts/hour
	FFF		Indicate labor/hour
	GGG		Indicate labor cost/assembly
	HHH		Indicate fixed burden cost/assembly
	III		Indicate variable burden cost/assembly
	JJJ		Calculate total assembly cost = (labor cost/assembly (XX) + fixed burden/assembly (YY) + variable burden/assembly (ZZ)
	KKK		Indicate packaging/dunnage description
	LLL		Indicate whether returnable or expendable packaging
	MMM		Indicate packaging type
	NNN		Indicate dimensions of package
	OOO		Indicate container cost
	PPP		Indicate parts/container
	QQQ		Calculate packaging cost/piece (container cost (PPP) / parts/container (QQQ) )
	RRR		Indicate SG&A
	SSS		Indicate profit
	TTT		Indicate freight (FOB origin/Freight collect)
	UUU		Calculate total cost

VI. Request for Quotation Suppmental Information

	1)		All costs associated with component PPAP submission are the responsibility of the supplier.
	2)		The supplier must quote tool capacity based on a 16-hour day, five days per week or other eighty hours per week equivalent. Suppliers must be capable of absorbing weekly variations in schedule of plus or minus 20 percent. Any deviations must be clearly stated in your quotation.
	3)		Paulstra requires suppliers to maintain, refurbish and replace as required, all tooling for the life of the part.
	4)		Quote appropriate Inco-terms for the region. State conditions for duty paid or unpaid if applicable. You must clearly note from which country part(s) are shipped. NOTE: Clearly state currency for the transaction.
	5)		Paulstra requires 1.67 Ppk minimum (short term) process capability and 1.33 Cpk minimum (long term) process performance on special characteristics. All characteristics must conform 100% to specification for the life of the part/material.
	6)		Unless otherwise directed in the Request for Quotation package, Paulstra owns all tooling used to produce purchased parts and the supplier must properly identify and tag all Paulstra tooling.
	7)		A bimonthly tooling status report/Gantt chart is required. The supplier is expected to identify roadblocks and to recommend strategies to overcome any problems that could effect PPAP submission commitments.
	8)		Suppliers awarded new business become liable for service part coverage that can last up to ten years past the last date of OEM production. The supplier must maintain and properly store all production tools, equipment and gages for required service period. The supplier must receive buyer authorization before disposing of any tooling.
	9)		Engineering changes required for prototype, pilot and start of regular production can occur. Suppliers must ensure that engineering changes are incorporated without jeopardizing cost or timing and then only when authorized by the buyer.
	10)		Warranty recovery per terms and conditions of the purchase order or as negotiated in the terms and conditions of the long term contract.
	11)		Once a supplier has successfully completed all the requirements of our source selection process, a pre-production meeting is held with the successful supplier. The purpose of this meeting is to develop a common understanding between our companies regarding the total requirements for this program.

V. Tool & Die Information Sheet Directions

	AA		Currency
	BB		Unit of Measure
	A		Identify operation number
	B		Identify tooling description
	C		Identify parts / stroke (Where required)
	D		Identify parts / hour
	E		Identify required tonnage of press (Where required)
	F		Identify design cost / hour
	G		Identify total hours attributable to design
	H		Identify fabrication cost / hour
	I		Identify total hours
	J		Identify material type
	K		Identify material cost
	L		Identify total cost / tool
	M		Identify subtotal for tooling
	N		Identify gage cost
	O		Subtotal tooling (M) + gage cost (N) = Total tooling cost
	P		List design source
	Q		List fabrication source
	R		List tool capacity
	S		List tool lead time
	T		List gage source
	U		List type of gage
	V		Estimated tool life

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