DENSO & DMIT Outline Suppliers Performance and …151.13.27.194/fy06/overview06-en.pdf · DENSO & DMIT Outline-Suppliers Performance and Targets May 22th, 2006 2 CONTENTS 1. COMPANY

DENSO Manufacturing Italia

DENSODENSO & DMIT Outline & DMIT Outline

Suppliers Performance and TargetsSuppliers Performance and Targets

May 22th, 2006May 22th, 2006

2DENSO & DMIT Outline- Suppliers Performance and Targets May 22th, 2006

CONTENTS

1. COMPANY PROFILE & 2005 FY RESULT

2. SUPPLIERS PERFORMANCE

3. 2006 FY TARGET SUMMARY


CONTENTS <COMPANY PROFILE & 2005 FY RESULT>

A. DENSO GROUP

B. DMIT

1. Outline

2. Sales & ROE

3. Sales by Products

4. Global Network

5. World No.1 Share Products

1. DMIT Sales by products

2. Diversified Business

3. 2006 Company Policy

1. COMPANY PROFILE

& 2005 FY RESULT




DENSO GROUP Outline

Consolidated Data (FY 2005)

187 mld ¥(1.34 mil euro)

Capital

+9 Companies211 CompaniesSubsidiaries & Affiliates

+1.0 point9.4%ROE

+27.9%170 mld ¥(1.21 mld Euro)

Profit

+13.9%3.188 mld ¥(22.8 mld Euro)

Sales

A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


B. DMIT

1. DMIT Sales by Products

2. DMIT Diversified Business

3. 2006 CompanyPolicy

1. COMPANY PROFILE

& 2005 FY RESULT




2.015

2.401 2.332

2.562

2.800

3.188

9,4

(8.4)

(4,4)(5,0)

(7,9)(7,6)

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

FY2000 FY2001 FY2002 FY2003 FY2004 FY2005

(Bil yen)

0

5

10

(%)

DENSO GROUP Sales & ROE

<Sales> <ROE>

A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


B. DMIT




1. COMPANY PROFILE &

2005 FY RESULT




DENSO GROUP Sales by Products

222,8 billions Euro2,8 billions Euro

Thermal Systems32,4 %

Power-train Control Systems

24,1%

Electronic Systems15,3%

ITS 4,7%

Others 5,1%

Electric Systems11,4%

Small Motors7,0%

A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


B. DMIT




1. COMPANY PROFILE

& 2005 FY RESULT




DENSO GROUP Global Network

(54.2%)12,3 bil €JAPAN

(21,4%)4,9 bil €NORTH & SOUTH AMERICA

(100%)22,8 bil €TOTAL

(11.4%)2,6 bil €ASIA & OCEANIA

(13,0%)3,0 bil €EUROPE

Sales

A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


B. DMIT




1. COMPANY PROFILE

& 2005 FY RESULT




DENSO GROUP World No.1 Share Products … 1

Increased 64% in these 6 years

Number of World No.1 Share DENSO Products

14

1719 19

2021

23

0

5

10

15

20

25

30

'98 '99 '00 '01 '02 '03 '04 <FY>

<# of Products>

A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


B. DMIT




1. COMPANY PROFILE

& 2005 FY RESULT




DENSO GROUP World No.1 Share Products … 2

25,2%Condenser1534,6%VVT3

20,0%Radiator2028,3%Long Lasting Plug8

17,6%Power Relay2128,1%ISCV9

17,6%Navigation2227,2%Ignition Coil10

26,1%Fuel pump1345,2%Direct Injection1

25,9%Crash Sensor1438,3%Compressor2

25,1%Wiper Motor 1631,3%Exhaust Sensor4

24,8%Washer System1730,7%FDL (HID) Ballast5

23,9%Bus A/C1829,6D-VSV6

21,2%Starter 1928,5%Power Window Motor7

16,4%Small Robot2327,2%Cooling (A/C) Unit11

26,7%

Share

Alternator

Product

12

Rank ShareProductRank1. COMPANY PROFILE

& 2005 FY RESULT



A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


B. DMIT





DMIT DMIT Sales by Products

Sales Trend

(M Euro)

0

50

100

150

200

250

300

350

'00 '01 '02 '03 '04 '05 '06 AP

ALTERNATORS

STARTERS

SMALL MOTORS

258 251

218

250271

279

• Sales was increased 3%

•Profit still suffered from Material

Price Increase

05 Actual

• Improve Profit to reach Breakeven

•Improve Quality to assure

Customer Satisfaction: > OE<10 ppm

>Important Quality Problem 0

>Reduce scrap Internal-External

06 Plan

1. COMPANY PROFILE

& 2005 FY RESULT



A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


B. DMIT




286


2005FY Sales by Customers 279 mil.€

DMIT Diversified Business

FIAT20%

DAIMLER CHRYSLER1%

OPEL5%

DNTS4% BMW

4%

Toyota17%

Inter-company11%

SUZUKI1% OES/AM

5%

PSA3%

DNMN/TR2%

VOLVO3%

VW/SEAT1%

Ford12%

Others11%

1. COMPANY PROFILE

& 2005 FY RESULT



A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


B. DMIT





DMIT 2006FY Company Policy

Speed-up “MUDA 0” by All

• Direct communication

• Training & Education

Reinforcement of TAISHITSU

• Long term high-volume Trouble 0

• Build-in high quality at each process

• Perfect flow-out prevention

Quality improvement to win Customer Trust & Satisfaction

• No profit product elimination

• Expense reduction

• Indirect job efficiency

Profitability Kaizen to reach breakeven

A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


6. World Share of Rotating Machine

B. DMIT

1. 2004 Business Topics

2. DMIT Business Plan

3. Diversified Business

1. COMPANY PROFILE

& 2005 FY RESULT



A. DENSO GROUP

1. Outline

2. Sales & ROE


4. Global Network


B. DMIT





CONTENTS <SUPPLIERS PERFORMANCE>

A. QUALITY

B. DELIVERY1. 2005FY Result

a) Summary

b) ID index tracking

2. DMIT Expectation for 2006FY

1. 2005FY Result

a) Summary

b) OE Customer Claim (ppm)

c) Failure Notice to Suppliers

d) IQ index tracking



2. SUPPLIERS

PERFORMANCE



⊗ O.E. claim Customers target NOT ACHIEVED : double then expectation

⊗ Failure notice number increasing at DMIT incoming inspection due to “ strong activity of flow-out prevention” .

⊗ Iq index stable : not enough improvement by Suppliers especially for “ reoccurrences prevention” .

See next slides

A. QUALITY

1. 2005FY Result


B. DELIVERY

1.2005FY Result


QUALITY 2005FY Result: Summary


2. SUPPLIERS

PERFORMANCE



0

20

40

60

2000 2001 2002 2003 FY 2004 FY 2005 FY

PPM OCCURRENCE

Target

Starters

0

20

40

60

2000 2001 2002 2003 FY 2004 FY 2005 FY

PPM OCCURRENCE

Target

Alternators

0

20

40

60

80

2000 2001 2002 2003 FY 2004 FY 2005 FY

PPM OCCURRENCE

Target

Small Motor

TREND GETTING BETTERbut

TARGET NOT ACHIEVED

QUALITY 2005FY Result: OE Customer Claim (ppm)

A. QUALITY

1. 2005FY Result


B. DELIVERY

1.2005FY Result



2. SUPPLIERS

PERFORMANCE



11 9 3

4838

40

4153 57

0%

20%

40%

60%

80%

100%

03 04 05

QII

EOL

Customer

199 7

43 5751

38 3442

0%

20%

40%

60%

80%

100%

QII

EOL

Customer

S/M

# of

failu

re n

otic

e 465497 497

0

100

200

300

400

500

600

700

'02 '03 '04

# of

failu

re n

otic

e

S/A

396

'05

516421

647

0

100

200

300

400

500

600

700

'02 '03 '04 '0

536

QUALITY 2005FY Result: Failure Notice to Suppliers

• Incoming Inspection increased # of Failure Notices due to Supplier Poor Flow-out prevention.

[by Detection Area]

A. QUALITY

1. 2005FY Result


B. DELIVERY

1.2005FY Result



2. SUPPLIERS

PERFORMANCE



scorescore

100100

90

80

70

60

50

40 2004fy Jun 05 Sep 05 De2004fy Jun 05 Sep 05 Dec 05 Mar 06c 05 Mar 06

2005 FY

EXCELLENCE

Trend is stable = no improvement

35% of Failures are reoccurrences due to insufficient “root cause” eradication at Supplier process

QUALITY 2005FY Result: IQ Index Tracking

A. QUALITY

1. 2005FY Result


B. DELIVERY

1.2005FY Result



2. SUPPLIERS

PERFORMANCE



Target Supplier’s contribution

• 0(zero) defect @ Customer

• Good flow-out prevention

• 0 (zero) Failures reoccurrences

• Iq index improvement till 100

• Implement continuous analysis of your process with full application of PDCA (Plan, Do, Check, Action)

• Establish an immediate 100% sorting activity when failure happen and increase End of Line checks

• Eradicate defect root cause in a permanent way by continuous follow-up

• Do not be relaxed if your Iq index is just above the minimum required: your goal is 100

Please refer to DMIT SUPPLIER WEB SITE for DMIT issues such as New Supplier ‘s Procedures, Performance,etc..

http://fornitori.denso-mfg.it/

QUALITY DMIT Expectation for 2006FY

A. QUALITY

1. 2005FY Result


B. DELIVERY

1.2005FY Result



2. SUPPLIERS

PERFORMANCE



DELIVERY 2005FY Result: Summary

A. QUALITY

1. 2005FY Result


B. DELIVERY

1.2005FY Result



2. SUPPLIERS

PERFORMANCE


05FY ID trend was not satisfactory:

Many Suppliers do not still strictly respect DMIT Material Release. This means:

⊗TOO MANY DELIVERIES IN DELAY

� Impact on DMIT Production for material shortage

� Expensive Urgent Transportation to avoid late deliveries to Customer

� Poor DMIT Performance in front of Customers

⊗TOO MANY DELIVERIES IN ADVANCE

� High value of DMIT overstock


scorescore

100100

90

80

70

60

50

402004fy Jun 05 Sep 05 De2004fy Jun 05 Sep 05 Dec 05 Mar 06c 05 Mar 06

2005 FY

EXCELLENCE

DELIVERY 2005FY Result: IQ Index Tracking

In 2005 FY the trend was not satisfactory:fluctuating and still far from excellence

A. QUALITY

1. 2005FY Result


B. DELIVERY

1.2005FY Result



2. SUPPLIERS

PERFORMANCE



Reduce over stock in DMIT

Improve Transportation and Packaging

Supplier Delivery on time

• No Delivery in advance • Increase receiving frequency• Reduce ordering lot size

• Expand small returnable boxes to supply DMIT lines

• Implement milk-run transportation method

• Delivery according to Material Release respecting due dates & quantities

• Fast Reaction Time in case oforder change

• Communicate to DMIT production capacity for each p/n

• Agree about lead time and % of order fluctuation

• Communicate to DMIT Production Control any possible problem in advance

• Agree with DMIT delivery frequency and lot size

Target Supplier’s contribution

DELIVERY DMIT Expectation for 2006FY

• Cooperate with DMIT in order to optimize and accelerate these projects

A. QUALITY

1. 2005FY Result


B. DELIVERY

1.2005FY Result



2. SUPPLIERS

PERFORMANCE



Cost

DeliveryQuality

Parts & Materials stock reduction

Internal Processes Efficiency

Zero Reoccurrence

Zero defects

Good Flow out Prevention

Improvement of Transportation & Packaging

Delivery on Time

Muda (waste) elimination

Optimization of raw material usage

<2006FY TARGET SUMMARY>

NOTES:IQ = Quality IndexID = Delivery IndexCD= Cost Down



3. 2006 FY TARGET

SUMMARY IQ=100IQ=100

ID=100ID=100

CD=6%CD=6%

Documents

DENSO & DMIT Outline Suppliers Performance and …151.13.27.194/fy06/overview06-en.pdf · DENSO & DMIT Outline-Suppliers Performance and Targets May 22th, 2006 2 CONTENTS 1. COMPANY