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Delivering Results to Increase Value for Everyone

 

CVG implemented the DRIVE program in early 2006 as a means of collaborating with key suppliers to identify and implement savings opportunities for total cost improvement.  Savings are often shared with suppliers, further strengthening supply partner relations and offering mutual benefit.  DRIVE is the foundation of a strong partnership between CVG and key suppliers ensuring we achieve continued future growth together.

 

Suppliers & CVG in Partnership

  • Delivering Results to Increase Value for Everyone - Everyone means Supplier, CVG & Customer
  • Supplier initiated VA/VE (Value Analysis/Value Engineering) cost savings ideas
  • Cooperation of both organizations emphasizes shared, common goals and objectives
  • Sharing of ideas provides opportunities to improve margins for Partners
  • Strengthening relations by treating Suppliers as Partners creating a mechanism to encourage and foster mutually beneficial ideas
  • Mutually shared goals drive positive behavior in both organizations
  • Supplier Partners can expect greater profitability through shared savings and continual improvement of delivered products
  • Supplier Partners are a natural extension of the CVG Value Chain and have the opportunity to grow with CVG

 

Overview

  • DRIVE is the CVG Purchasing mechanism to generate, submit, develop, implement & track cost savings suggestions
  • Via standardized format, ideas are submitted by suppliers for review by DRIVE Team Members (including CVG Commodity Managers)
  • The process follows a standard idea generation, submission, review, team establishment, implementation & savings achievement format
  • Idea sharing strengthens relations & ultimately, strengthens both organizations
  • Savings suggestions focus on the total value chain

 

 

Expectations

  • DRIVE participation is expected; active participation enhances Supplier's viability as a long-term Partner
  • Suppliers will meet or exceed the savings and participation goals established by their CVG Commodity Manager
  • Suppliers should expect full commitment & follow-up of CVG associates
  • All suggestions must maintain or improve the current level of quality

 

Goals

  • Specific savings goals will be set annually by CVG Commodity Managers
  • Goals will be based on (a % of) current annual sales to CVG and specific CVG contract language
  • Requirement of, at least, one DRIVE suggestion (implementation) per quarter
  • Communication of annual goals (for the following year) will occur during 4th quarter
  • Meeting and / or exceeding goals will be essential to strengthening our long term partnership

 

Shared Savings & Credit

  • Crediting of savings between CVG & suppliers is key to DRIVE success
  • Sharing of Savings occurs when the suggestion reduces the internal costs at the suppliers facility--supplier will retain 50% of the savings & receive credit toward their DRIVE goal for the amount they share with CVG
  • Credit Only (toward Suppliers DRIVE goal) will occur when suggestions result in savings for/at CVG facility--total realized savings will be credited (100%)
  • All Supplier generated ideas are considered eligible for DRIVE credit
  • Savings credit will be applied to the supplier's goal at the time of implementation
  • Once supplier achieves DRIVE goals for the year, ideas credited there after may apply toward next year(s) goals
  • Proposals that result in savings to a part of/from another supplier will be applied to the goal of the supplier that submitted the idea
  • Savings calculations will be shared/agreed upon by DRIVE Team Members

 

Benefits

  • Cooperation of both organizations emphasizes shared, common goals and objectives
  • Sharing of ideas provides opportunities to improve margins for both the Supplier and CVG
  • Suppliers can expect greater profitability in the future through shared savings and continual improvement of delivered products
  • DRIVE will strengthen relations by treating Suppliers as Partners creating a mechanism to encourage & foster mutually beneficial ideas
  • Suppliers will be a natural extension of the CVG Value Chain Mutually shared goals drive positive behavior in both organizations