NASDAQ: NWL

How We Measure Our Suppliers

The aim of our supplier assessment tool is to estimate the total quality environment of the supplier.

The Supplier Development and Scorecard process at Newell Brands helps to ensure that the purchasing organizations can identify, qualify, monitor, and reward its supplier base. The main components to this program are:

Assess and Qualify

Measure and Scorecard

Rate and Recognize

We call this our "5-Step Supplier Development Process". This tool helps to ensure that we have a developed supply base that can help us compete for our fair share of business with our own customers.

This methodology also will help to ensure that we can compete for capacity at the declining number of world-class suppliers in our global market.

The following pages document the overall rating process, the scoring methodology, the supplier categorization process, and our award process for those suppliers who become eligible. As part of our ongoing relationship, it is important for both of our organizations to communicate effectively with each other. Accordingly, we would like to introduce the Newell Brands Supplier Performance Scorecard (SPS). The purpose of the SPS is to give suppliers timely feedback on their performance as a supplier to our organization.

A supplier's SPS rating will be based upon four specific performance criteria or metrics in the areas of quality, service level, productivity, and responsiveness. Each of these ratings, with the exception of Responsiveness, will be attributable to specific fact-based metrics of your organization's performance. The ratings for each of these aspects are weighted equally at 25 percent of your overall SPS Score, which then drives your categorization as a Category 1, 2, or 3 supplier of Newell Brands.

The chart below summarizes the overall SPS Score, the supplier category rating, and the associated commercial response Newell Brands will pursue.

spschart.jpg

To read more about how Newell Brands classifies its supply base, including the potential benefits of being a category 1, 2, or 3 supplier, please click here .

We will communicate the Supplier Performance Scorecard in a reasonable time after the close of each calendar quarter. We encourage and solicit our supplier's feedback on their SPS score and category rating, and are more than willing to meet on a quarterly basis to discuss.

The following pages will set forth in detail the associated metrics, calculations, and ratings for each of your performance criteria.

Quality

Definition: Adherence to defined specifications

Performance Metric: Defective Parts per Million (DPPM)

DPPM Calculation: Number of parts defects / number of parts shipped x 1,000,000

Scale:

qualityscalesuppliers.jpg

Overall rating impact percentage: 25

Service Level

Definition: On-time shipment to request date in a window defined as zero days late and no more than two days early

Performance Metric: Percentage of orders shipped to our request date

Calculation: Number of ordered line items shipped on time divided by total number of line items requested

Scale
TKTK

Overall rating impact percentage: 25

Productivity

Definition: Year-over-year total cost reduction

Performance Metric: Total cost reduction percentage

Calculation: Total Cost Reduction / Total Purchase CostsBonus points will be granted for every 1 percent over 10 percent, up to eight points maximum. To achieve bonus points, the supplier must have a minimum quality score of two points. Two points will be deducted for every 1 percent cost increase

Scale:

productivityscalesupplier.jpg

Overall rating impact percentage: 25

Definition: Subjective rating issued by purchasing personnel. Ratings will be based upon meeting our expectations and may include but are not limited to the following:

Lead time improvement
Responsiveness to corrective actions
Product development and implementation
Emergency orders inside agreed lead times
Compliance to Irwin requested payment terms
Commercial relationship within the context of Supply Agreement
Overall supplier/customer relationship

Performance Metric: Subjective rating

Scale:

responsivenesschartsuppliers.jpg

Overall rating impact percentage: 25

Related Links