LKQ-UK-IRELAND-LOGISTICS-SUPPLIER-MANUAL-JUL2024 (1)

2 : Introduction

Prior to the launch of T2 in 2017, we advised all our suppliers that the new £75m state of the art, semi automated distribution centre would be ‘a game changer’ for Euro Car Parts. We explained that the new site would support us through the next stages of our business expansion and provide the best platform for your business to grow with us. Three years on and T2 is performing over and above expectations. Since then, Euro Car Parts has grown significantly, acquiring Andrew Page in the UK and Team PR Reilly in the Republic of Ireland, all facilitated by the additional storage and throughput capacity provided by T2. We have worked hard to improve safety, quality and productivity. Everyday service levels from T2 to our national network of branches are consistently above 99.9%, highlighting how we continue to provide our customers with industry leading levels of product availability. As we move into 2020 however, it has become apparent that there are still opportunities to further improve the efficiency and service levels provided by T2. Like any automated facility, the efficiency of its output is very much reliant on the efficiency of its input. In the case of T2, its ability to improve productivity is dependent on supplier deliveries and their conformance with best practice. Best practice for supplier deliveries into T2 were set out in the ‘T2 Supplier Manual’ issued to all suppliers in March 2017 . This manual sets out very clearly all aspects of how deliveries need to be made into T2, both from a physical and administrative perspective. As promised, we have now updated our T2 supplier conformance manual.

We wish to work collaboratively with all our suppliers and ask that you thoroughly review our best practice conformance manual against your actual practices. Where we see instances of non-conformance from deliveries made into T2 we will be sending you details over the next few weeks and months to help make it clear where remedial action is required. For clarification, and as per the details set out in the manual, non-conformance by supplier’s costs Euro Car Parts real money and there are set compensation charges for specific instances of non-conformance. Given that Euro Car Parts has already absorbed a significant non-compliance cost since the start of T2 in 2017, we believe that it is now reasonable to start applying these compensation charges for any instances which contravene our conformance manual. These will be presented to you as a separate invoice for payment within 30 days. Our hope and desire is that no compensation charge will be necessary as all our suppliers will make the changes required to fully comply with these reasonable performance standards. However, after three years of practice we should all be getting it right by now and it is unreasonable for Euro Car Parts to carry the costs of supplier non-conformance. So, let’s work together to get T2 working even better for our own benefit as well as, of course, the benefit of our customers...

Richard Morgan Chief Supply Chain Officer Euro Car Parts Ltd

Supplier Manual: Logistics

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