Document Number: L1-743I003/09 Supplier Quality Requirements

Transcription

1 : Author - Manager of Supplier Quality Director of Supply Chain Senior Director of Production & Supply Chain Kip McGuire Andrew Toache Andy Short Non-ITAR Notice: This document contains no technical data subject to the EAR or the ITAR.

2 Revision History Revision Date Change 01 05/09/2017 Initial release 02 06/16/2017 Updates to SQC Numbering and Shelf Life Requirements 03 08/15/2017 Chapter 7: Updated with website information, and additional clarity. Chapter 9: Actions Required: Completed Response / Notification /23/2017 Chapter 7: Updated to include request from Engineering 05 09/07/2017 Chapter 7: Minor update to match new deviation request process 06 09/13/2017 Sections 6.1, 6.2, 10.3, and 10.4: Added clarity 07 10/09/2017 Section 7.3: Added clarification 08 05/01/2018 Section 6.3.4: Added Quality Clauses, Added SQC19 Serial Numbers Required, Various editing changes /14/2018 Section 6.1: Revised APQP and Section 10 Proof of Capacity requirements. Section Added Quality Clause SQC20 2

3 Contents 1 Supplier Quality Policy Quality System Requirements The Virgin Orbit Website for the Supply Chain Supplier Approval Sub-Supplier Management Procedure Flow Down of Requirements Advanced Product Quality Planning (APQP) Criticality Levels Defined Criticality Levels On Purchase Orders Production Part Approval Process (PPAP) When a PPAP Submission is Required Criticality Level and Document Requirements Documentation Submission Requirements and Descriptions Criticality Level 1 Material Criticality Level 2 and 3 Material Proprietary Documentation Quality Clauses Quality Clause Descriptions Product Specific Inspection (SQC7) and Functional Testing (SQC15) Requirements Printed Circuit Board Assemblies and Electronic Devices Electromechanical Devices Wiring Harnesses Pneumatic and Hydromechanical Devices Mechanical Devices PPAP Approval Definitions Full PPAP Interim PPAP Rejected PPAP Non-Conforming Material Definition SCARs

4 8.3 Third Party Certification If The Supplier is Aware of a Non-Conformance Request for Deviation from Requirements Situations Where a Deviation May Apply Supplier Requests to Deviate from Requirements Buyer Requests to Deviate from Requirements How to Request a Deviation Deviation Disposition Proof of Capacity Purpose Method Duration Timing Approval Corrective Action Other Requirements Design Changes Product Obsolescence Record Retention Material Traceability Responsibilities Raw Materials Critical Components Shelf Life Prevention of Use of Counterfeit Material Protection of Electrostatic Discharge (ESD) Sensitive Material Part Marking Criticality Level 3 Product Criticality Level 2 Product Criticality Level 1 Product Supplier Scoring Supplier Development Program Description

5 13.2 Suppliers Audit Acronyms and Definitions Reference Documents

6 1 Supplier Quality Policy At Virgin Orbit, we are dedicated to our mission of opening up space to everyone. Going to space is not an easy task and we can t do it alone. Our suppliers provide a large proportion of our launch vehicle. As a result, our success depends on developing and maintaining the strongest possible supply base. Our intent, through the supplier quality process, is to develop long term and mutually beneficial relationships with our suppliers to enable us to be successful in achieving our mission. Thus, our Supplier Quality Policy (SQP) is a combination of the following significant factors: A Drive to Zero Defects and 100% On-Time Delivery - A commitment to ship defect free product, with 100% on time delivery. Quality System Based on Prevention of Defects - Emphasis will be on the prevention of defects throughout the supply chain as our primary method of ensuring quality. Open and Honest Communication - Our supplier will share all contributing factors that impact our relationship: Cost, Timing, Quality, and Delivery. Accountability - We expect our suppliers to be accountable for all factors that impact our products. Continuous Improvement - Virgin Orbit and its suppliers will share a desire to learn and have a commitment to continuous improvement in all aspects of the business. 2 Quality System Requirements We recognize that there are multiple relevant worldwide business system standards and certifications such as AS9100, TS16949, NADCAP, ISO9001, and SMC-S-003. We expect our suppliers to have policies, procedures, and work practices in the following areas, at minimum: 1) Process to Identify and Review Product Requirements a. Understand special requirements and how the product will be used. b. Review requirements, and maintain records of reviews. 2) Control Changes in Product Requirements a. An established engineering change process (including hardware and software). 3) Process and Product Monitoring and Measurement a. When required, the use of a Process Quality Control Plan (PQCP) to monitor characteristics of the process and product to ensure that all requirements will be met. b. Records that prove conformity, or appropriate steps to address non-conforming processes or product. 6

7 4) Operator Training a. Documentation that proves operators are trained to do the jobs that they perform, and can identify non-conforming product. 5) Production Control a. Document scheduling process to ensure product will be delivered on time. 6) Protection of Property and Product a. Due care with regard to storage and processes, and appropriate packaging that prevents: contamination, Foreign Object Debris, (FOD), spoiling, shelf life expiration, and or damage to the product (including consigned material). 7) Calibration of Measuring Devices a. Calibration of all measuring devices using best available and cost effective industry standards such as ISO10012 and ANSI/NCSL Z540. 8) Control of Non-Conforming Product a. Procedure that defines the process, personnel, and responsibilities for dealing with nonconforming product. b. Ensures that non-conforming product is identified and contained to prevent further use. c. Including records of non-conformances and steps to address them. 9) Corrective Action Process a. Review of all non-conforming processes or product, including disposition. b. Root cause analysis, implementation and verification of corrective action. 10) Tracking and Improvement of Key Performance Indicators (KPI s) a. Identification, tracking, and improvement plans for KPI s. b. Willingness to share data and plans. 3 The Virgin Orbit Website for the Supply Chain Virgin Orbit maintains a website for the supply chain that contains valuable information. The Web address is The website includes information on: Contracting Data Shipping, Receiving and Logistics Supplier Quality Assurance How to contact Virgin Orbit Export and ITAR compliance 4 Supplier Approval To become an approved supplier, an assessment of the supplier s manufacturing capabilities must be conducted. The assessment may be conducted at the supplier s facility by a representative of the Buyer or it may be conducted by the Buyer requesting specific information from the supplier. The supplier may be asked to conduct the assessment themselves and communicate the results with the SQE. The areas of the suppliers business to be assessed will include the following: 7

8 1) Quality System a. Organizational chart, roles and responsibilities, demonstrated quality system, and evaluation of quality system effectiveness. 2) Manufacturing Capabilities a. 5S, standard work, quality processes, measuring devices, maintenance, materials management, sub-supplier management. 3) Engineering Capabilities a. Engineering resources, CAD capabilities, configuration management, engineering change procedure, test capabilities. 4) Manufacturing Processes a. Machining, extrusion, anodizing, casting, plating, composites, electronics, wiring harnesses, assembly. The Buyer may request periodic reviews at the supplier location to ensure that quality standards remain high. If a review is requested, the supplier shall ensure that the Buyer has access to all applicable manufacturing records. 5 Sub-Supplier Management 5.1 Procedure Each supplier is expected to have a procedure for managing their suppliers. This procedure should ensure that they have the following quality system procedures in place, at a minimum: Control of design changes, material traceability, documented system of inspections, and control of non-conforming material. We also expect our suppliers to evaluate and assist in the improvement of their sub-suppliers quality, delivery performance, and cost management. Buyer reserves the right to evaluate its suppliers and sub-suppliers. If the Buyer elects to do this, it may require access to applicable manufacturing records. 5.2 Flow Down of Requirements Quality requirements (called out on the print, in technical specifications, or on the purchase order), are to be flowed down to sub-suppliers to ensure that all the Buyer requirements are met throughout the supply base. 6 Advanced Product Quality Planning (APQP) APQP is a methodical process that mitigates risk at the beginning of production efforts. It contains a number of elements (outlined below), from sourcing to ramp up. The Buyer will implemented APQP by imposing different Quality Clauses or listing other requirements on the Purchase order The APQP process will be dependent on the Criticality Level of the component being delivered. 6.1 Criticality Levels Defined Criticality Levels are used by the Buyer to establish the baseline documentation requirements. Criticality Level 1 items are components that represent less risk to mission success and therefore have a lower level of documentation required. Criticality Level 2 have increased risk and require more documentation. Criticality Level 3 represent the highest risk and have the highest amount of documentation required. 8

9 6.1.1 Criticality Levels On Purchase Orders The Criticality Level for each component will be listed on the Purchase Order. The purchase order will establish the Criticality Level for each part. APQP task may be assigned based on the Criticality Level. The Criticality Level (1, 2 or 3) of the component will determine the possible APQP tasks to be done (see chart below). If imposed, APQP requirement will be listed on the PO. Below is a table of the typical requirements. Please refer to the PO for the actual requirements, Criticality Level Table 1 Typical Criticality Levels and APQP Task Requirements Task 1 Supplier Program Reviews 2 Demonstrate effectiveness of your Quality System 3 Production Part Approval Process 4 Proof of Capacity Task 1: Supplier Program Reviews A. Initial Program Review a. Supplier identifies product team (if required by Buyer). b. Reviews of design and technical specifications. c. Program timing. Note, a fully executed Non-Disclosure Agreement may be required B. Manufacturing Development Program Review a. Design and technical specifications. b. Status of facilities, equipment, tooling, and functional testing. c. Program timing. C. Production Part Approval Process / First Article Inspection (PPAP/FAI) Program Review a. Design changes requested by the Buyer or supplier. b. Status of facilities, equipment, tooling, and functional testing. c. Manufacturing and quality documentation. d. Proof of capacity. D. Post Production Start Program Review a. Design changes requested by the Buyer or supplier. b. Initial production issues and PPAP/FAI status. c. Proof of Capacity, ramp up plan. d. Lessons learned, as appropriate. 9

10 Task 2: Demonstration of an effective Quality System. A. The supplier is required to provide documentation to demonstrate that they have an effective Quality System. This may be done be showing a current certification to an appropriate Quality standard including, AS9100, ISO9001, another quality standard or through other means at the discretion of the Buyer. Task 3: PPAP/FAI (See Section 7) Task 4: Proof of Capacity (See Section 10) 7 Production Part Approval Process (PPAP) 7.1 When a PPAP Submission is Required Criticality Level 2 and 3 suppliers must receive a PPAP approval (prior to the initial shipment) if any of the following cases occur: 1) New production of a part or system by the supplier. 2) An engineering, process, or tooling change that may affect fit, function, or durability. 3) An Interim PPAP/FAI Approval has expired or will expire soon. 4) A change in the supplier s manufacturing location. 5) A change in the supplier s source for subcontracted parts or raw material. 7.2 Criticality Level and Document Requirements The criticality level (3, 2, or 1) defines the maximum PPAP requirements in order for the supplier to be fully approved for a particular part. See Table 2 below for details. The actual requirements will be established via the Quality Clauses called out on the Request For Quote and the resulting purchase order. 10

11 Table 2 Criticality Levels and Maximum Requirements Criticality Level Supplier Quality Clause Requirement SQC1 - Certificate of Conformance SQC2 - Material and Process Certifications SQC3 - Proof of Traceability SQC4 - Buyer Interim PPAP/FAI / Deviation Request SQC7 - Process Quality Control Plan SQC8 - Dimensional Inspection Results SQC13 - Discrepancy Summary SQC15 - Functional Test Results SQC16 - Shipping Certification SQC9 - Ballooned Print SQC10 - Production Sample Parts SQC11 - Process Capability Studies SQC12 - Measurement Systems Analysis SQC17 - Validation Test Results SQC18 - Validation Test Results Approval Form SQC5 - Process Flow Diagram SQC6 - Process Failure Modes and Effects Analysis (PFMEA) SQC14 - Evidence of Sub-Supplier approved PPAP/FAIs If the supplier plans to begin production with temporary tooling or equipment, the supplier shall notify the associated Buyer s SQE, and follow the instructions in Section 9. If the supplier is in doubt of the criticality level, contact the associated Buyer s SQE. 7.3 Documentation Submission Requirements and Descriptions Criticality Level 1 Material Suppliers of criticality level 1 material shall submit PPAP documentation with each shipment. It is preferred that the documentation is packed with the packing slip Criticality Level 2 and 3 Material Suppliers of criticality level 2 or 3 material shall submit documentation to the Buyer s SQE for approval, prior to the initial shipment of product, and can only ship product after receiving approval. The documentation, C of C, Material Certifications, Inspection Reports, Ballooned drawings etc. must be submitted to the SQE using an encrypted system. For information on using an encrypted system see the Virgin Orbit website for suppliers: For subsequent shipments, the supplier may be required to provide key documents with each shipment Proprietary Documentation Documents marked as proprietary by the supplier are not required to be delivered to the Buyer. These documents are to be made available for review at the supplier s facility if requested. 11

12 7.3.4 Quality Clauses The drawing and referenced documents will contain the requirements for parts shipped by suppliers, however, the Buyer may impose additional requirements via Quality Clauses listed on the Purchase Order. Compliance with a Quality Clauses shall be required if the Quality Clause number is listed on the Purchase Order. The Quality Clause number and associated definitions are listed below Quality Clause Descriptions SQC1 Certificate of Conformance A Certificate of Conformance (C of C) shall be submitted with each shipment. 1) Suppliers of Level 2 or 3 criticality material shall use the Buyer s Certificate of Conformance form. 2) Suppliers of Level 1 criticality material may use their own form. This form shall include the following, at a minimum : a. Supplier name and address. b. Purchase order number. c. Part name (Buyer, Manufacturer, or Distributor). d. Part number (if applicable) (Buyer, Manufacturer, or Distributor). e. Supplier part number (if applicable). f. Specification number and material condition (if a raw material). g. Engineering revision level. h. Date of manufacture. i. Batch/lot number. j. Expiration date and shelf life (for materials impacted by shelf life) k. Serial number(s) (if applicable). l. The raw material manufacturer s batch/lot number (if a raw material). m. The name and location of the raw material manufacturer (if a raw material). n. Statement that the product meets all Buyer requirements noted or referenced in the purchase order. o. Name of responsible manager, along with the responsible manager s signature. SQC2 Material and Process Certifications The following certifications shall be included with the shipment if applicable. Material Certification - Document with chemical/physical test results that demonstrate compliance with the applicable raw material specification requirement. A copy is required for all purchased raw material. Process Certification - Document that certifies that a chemical/physical process meets Buyer requirements. A copy is required whenever a process is performed that changes a material s chemical or physical properties. 12

13 SQC3 Proof of Traceability 1) Document that shows an unbroken chain of custody from the lowest level component to the final product. Note: The supplier shall always be able to provide traceability of the finished parts to lot numbers, test data and raw material as appropriate. That requirement is found in paragraph The SQC3 requirement is to actually submit documents showing the chain of custody. SQC4 Buyer Interim PPAP/FAI / Deviation Request Form 1) Submitted by the supplier if there are any incomplete or non-conforming PPAP/FAI requirements at due date. See Section 7 for a full description. a. Only if the supplier believes that the non-conformances or inadequacies have no negative effects on the product. 2) Contains the status, action plans, and target completion dates for them. 3) A blank form is available from the Buyer. SQC5 Process Flow Diagram 1) Document that graphically depicts all steps of the manufacturing process, including receiving, material handling, processing, inspection, testing, storage, and shipping. SQC6 Process Failure Modes and Effects Analysis (PFMEA) The purpose of a PFMEA is to identify potential risks and prioritize quality improvement efforts reduce that risk. 1) The supplier shall complete a PFMEA on the item listed on this P. O. The PFMEA shall include the following: a. List all possible manufacturing failures... b. Explain the effects of the failure. c. Determine the severity of the failure d. Determine the potential cause of the failure. e. Determine the probability of the failure f. Determine the detectability of the failure g. Calculate a Risk Priority Number (RPN) h. Determine the recommended actions. i. Describe how the error will be detected if the process fails. 2) A blank form is available from the Buyer. SQC7 Process Quality Control Plan 1) Documentation of inspections and tests that are conducted to ensure that all products conform to the Buyer s requirements. a. Describe the feature that is inspected, the specification, the frequency, the measuring device, and the reaction plan if the feature is out of specification. b. Show emphasis on special controls for critical dimensions and characteristics. c. See Section 6.4 for Product Specific Inspection Requirements 2) A blank form is available from the Buyer. 13

14 SQC8 Dimensional Inspection Results 1) Shows results of inspections for all critical characteristics, critical dimensions, non-reference dimensions, and notes on the drawing. 2) Gather and submit data for the first part of the initial shipment. 3) Include the device / method of inspection for each feature. SQC9 Ballooned Print 1) Print that has the dimensions and notes numbered to match the dimensional inspection report. SQC10 Production Sample Parts 1) As many as three (3) parts may be requested for review by Buyer s Supplier Quality department prior to regular shipment. SQC11 Process Capability Studies These studies are only required for critical characteristics that are defined on the drawing. 1) During initial production (first thirty (30) pieces) the supplier shall measure and retain data for all critical characteristics and dimensions. Once 30 pieces are reached, the data shall be used to calculate process capability. Until 30 pieces are reached, the supplier shall only provide the data for the characteristic(s). 2) Process capability (Cpk > 1.33, four sigma) shall be maintained throughout production or one hundred percent (100%) inspection of the affected characteristic(s) is required. 3) Capability data shall be provided to the associated Buyer s SQE upon request. 4) Process controls over and above normal controls (statistical process control at minimum) are required. 5) Critical characteristics shall be mentioned appropriately on the supplier s PFMEA, Quality control plan, and work instructions. 6) The supplier shall report findings to the Buyer upon request. SQC12 Measurement Systems Analysis 1) Required study for all devices used to measure critical characteristics. 2) Performed to determine if measurement devices are appropriate for their application. 3) Use Gage Reproducibility and Repeatability (Gage R&R) method. Guidelines for acceptance of the measurement system are: a. Acceptable if error < 10%. b. May be acceptable if 10% < error < 30%, depending on importance of characteristics, and the nature of the measuring device. c. Unacceptable if error > 30%. Improvement to the measurement system is required. 4) If the supplier requires guidance, it should contact the associated Buyer s SQE. A blank form (that performs all calculations) will be available. SQC13 Discrepancy Summary (for Suppliers of Carbon Fiber Rolls and Uni Tape only) 1) Provide a report that summarizes characteristics or dimensions that do not meet the Buyer s requirements. Provide with shipment of product. SQC14 Evidence of Sub-Supplier Approved PPAP/FAI Packages (Critical Components Only) 1) Copies of PPAP / FAI approvals from relevant sub-suppliers. 14

15 SQC15 Functional Test Results 1) Summary of results of testing performed on each production unit. See Section 6.4 for product specific requirements. SQC16 Shipping Certification 1) Required if product is shipped to the Buyer in an environmentally controlled storage unit. SQC17 Validation Test Results 1) Summary of results for all tests specified by Buyer Engineering a. Name of test, passing criteria, date of test(s), number of parts tested, and results. SQC18 Validation Test Results Approval Form (Completed and Passed) 1) Form evaluated and approved by the appropriate Buyer s Product Engineering SQC19 Serial Numbers Required 1) Serial numbers are required to be applied to the products ordered by this Purchase Order. The serial number shall be unique for each unit of the same part number. Serial numbers may be duplicated if applied to different part numbers. The serial numbers shall comply with requirements as called out on the drawing if specified. If no requirements for the serial number format is called out on the drawing, then they shall be as assigned by the Buyer and communicated to the supplier. If permanent serial numbers can t be applied to the parts, the supplier shall mark the parts using a temporary method and submit a Deviation Request. The supplier shall record the serial number on all test reports, inspection reports and other applicable documentation. The supplier shall maintain records that provide traceability of any unit provided by this Purchase Order to the manufacturing information at the supplier including, but not limited to, lot number, manufacturing date, raw material and processing certifications etc. Once a serial number is applied to a part, it must not be removed or altered without written instructions to do so from the Buyer. SQC20 First Article Inspection Reports 1) The supplier shall submit a First Article Inspection Report (FAIR) in accordance with the current revision of AS9102 when the first shipment is made of the part on the PO. A. The first submittal must be a Full FAIR as defined in paragraph 3 below. B. Subsequent FAIRs may be Partial Fairs as defined in paragraph 5 below. 2) The products that are physically verified must be from the same production run as the remainder of product being verified by that FAIR. Excess products remaining from a previous production run must not be used. 3) A full FAIR submittal package must include: A. AS9102 Form 1 A list of the applicable part numbers and sub-assemblies. B. AS9102 Form 2 A list of raw materials, specifications and special processes. 15

16 C. AS9102 Form 3 A list of the required design features including the tolerances and drawing notes as well as the actual measurement results. D. A ballooned drawing identifying each of the features on form 3. 4) A new full FAIR is required when any of the following occur: A. A change in the location of manufacture. B. A significant change in a numerical control program used to manufacture the component or translation of the program to another media that can potentially affect fit, form, or function. C. A natural or man-made event, which may adversely affect the manufacturing process. Example a flood, fire or earthquake. D. A lapse in production for two years or more. This lapse is measured from the completion of the last production operation to the actual restart of production. 5) Partial FAIRs A. A partial FAIR does not address all the features of a part. It only addresses features that have changed or need to be verified since the last approved FAIR. B. At the supplier s discretion, a partial FAIR may be used to document those changes. C. Conditions where a partial FAIR may be submitted include: 1. The revision number or letter has changed. 2. When required as part of implementation of a corrective action. 3. A change in manufacturing source(s), process(es), tooling or materials that can potentially affect fit, form, or function. D. If multiple revisions to a drawing are being verified, they may be submitted on one partial FAIR that combines the changes of each revision. E. A partial FAIR bay be based on another partial FAIR. F. No more than 3 partial FAIRs may be done before a full Fair is done G. A partial FAIR may be used to address a rejection on a FAIR submittal. In that situation, only the features that were rejected need to be addressed 7.4 Product Specific Inspection (SQC7) and Functional Testing (SQC15) Requirements For these product families, the supplier shall perform inspection and functional testing on each unit, which shall meet the following minimum requirements, as appropriate: Printed Circuit Board Assemblies and Electronic Devices The supplier shall conduct the following inspections and tests, and meet IPC-6011, Class 3: 1) Coupon analysis (bare boards). 2) Automatic optical inspection. 3) Electrical tests for circuit continuity. If the product contains software, the supplier shall also: 16

17 4) Conduct a functional test that ensures that the product meets specifications Electromechanical Devices The supplier shall conduct testing that ensures: 1) The product functions within its full, specified range of motion. 2) The product moves from one end of its operation to the other in the specified amount of time (both directions). 3) Any parts that spin are balanced within specification. 4) Electrical inputs over the Buyer defined range yield results that conform to the print and technical specifications over the full range of motion. 5) Outputs based on position yield conforming electrical values Wiring Harnesses The supplier shall conduct and provide results for the following tests: 1) Continuity. 2) Hi-Pot testing. 3) Insulation resistance Pneumatic and Hydromechanical Devices 1) The product functions within its full, specified range of motion. 2) The product moves from one end of its operation to the other in the specified amount of time (both directions). 3) Hydraulic pressure input over the Buyer defined range yields results that conform to the print and technical specifications over the full range of motion. 4) Output load conforms to Buyer s requirements Mechanical Devices The supplier shall conduct testing that ensures: 1) The product functions within its full, specified range of motion. 2) The product moves from one end of its operation to the other in the specified amount of time (both directions). 3) Any parts that spin are balanced within specification. 4) Mechanical inputs over the Buyer defined range yield results that conform with the print. 5) Devices that will be pressurized or hold fluids are leak tested. 7.5 PPAP Approval Definitions Full PPAP Buyer has approved all required quality documents, including capability results (if required) and is confident that the supplier s processes will yield conforming product. The supplier is approved to ship product for regular production after award of subsequent purchase order or Production Agreement (PA) Interim PPAP The Buyer has approved all conforming documentation, plus deviations to all required documentation that is incomplete or has discrepancies. The supplier is approved to ship product for regular production 17

18 in limited quantities. Buyer will communicate the quantity on the approved Interim PPAP/FAI Deviation form (See Section 7 for a description of the process) Rejected PPAP The Buyer has determined that due to significant discrepancies, or inadequate quality documentation, the supplier s product cannot be used. Therefore, the supplier is not approved to ship product. 8 Non-Conforming Material 8.1 Definition Non-conforming product is any product that does not meet one or more of the requirements as defined on the drawing, including notes, referenced documents or standards. 8.2 SCARs If non-conforming material due to the supplier is identified at the Buyer s facility, a Supplier Corrective Action Request (SCAR) may be issued. If the statement at the top of the SCAR instructs the supplier to complete initial response and corrective actions, the supplier shall: 1) Within one business day, respond to the following on the SCAR form: a. Acknowledgement of the issue, and comment on the Problem Description b. Provide a Return Material Authorization Number, Shipper Name, and any other shipping information required to return the material to the supplier (if Buyer requests that the material is to be returned). i. Supplier is responsible for paying for the shipment. c. Provide Immediate Actions that isolate the effects of the non-conformance from the Buyer until corrective action is implemented. Documentation of this shall be included with all shipments, until the SCAR is closed. 2) Within ten (10) business days, the supplier shall provide a corrective action plan that is acceptable to the Buyer. All steps taken from root cause to corrective action verification shall be documented on the SCAR, including the following, at a minimum: a. Identification and Verification of the root cause of the problem b. Identification and Implementation Plan for the Corrective Action(s) c. Validation Plan for the Corrective Action(s) 3) If reworking or replacing discrepant material, the supplier shall provide the RMA, SCAR, and Non- Conformance ticket numbers on the documentation when shipping the material to the Buyer. 4) If the disposition of the material is for the supplier to sort it at the Buyer s facility: a. Provide a representative to perform sorting of all parts at the Buyer s facility, at their cost. The representative shall have familiarity with the product and the ability to communicate with the supplier plant for containment and corrective actions. b. The supplier s measuring devices shall have proof of calibration. c. The supplier shall identify all sorted material to show either Accepted or Rejected and label each container with part number, quantity, and date. 18

19 If the statement at the top of the SCAR instructs the supplier that it is a notification only, the supplier shall implement corrective actions, but not provide a response. Regardless of the disposition of non-conforming material, the supplier will be responsible for a complete response to the corrective action request. 8.3 Third Party Certification If the Buyer discovers another identical defect prior to the implementation of a corrective action, the supplier may be required to implement third party certification of shipments with no additional cost or schedule changes to the Buyer. 8.4 If The Supplier is Aware of a Non-Conformance If the supplier becomes aware of a shipment of non-conforming product, or discovers non-conforming consigned material, they shall contact the Buyer s SQE immediately. In addition, the Buyer encourages the supplier to participate in the Government Industry Data Exchange Program (GIDEP). 9 Request for Deviation from Requirements 9.1 Situations Where a Deviation May Apply Supplier Requests to Deviate from Requirements If either of the two cases below apply, the supplier can request a deviation that would allow them to ship product that does not meet Buyer requirements, on a limited basis: 1) Supplier manufactures product out of specification (such as not meeting print tolerances, or technical specifications), but believes there are no negative effects. 2) Supplier has not completed PPAP/FAI document requirements, but believes the inadequacies will have no negative effects Buyer Requests to Deviate from Requirements The Buyer may request that the supplier deviates from requirements. In this case, the Buyer Supplier Quality Engineer will provide a completed Deviation Request form instructing the supplier what deviation(s) shall apply to the purchase order. After receiving this type of deviation request, the supplier shall send an acknowledgement to the associated Buyer SQE. Also, when shipping the associated product, the supplier shall include a copy of the approved form. 9.2 How to Request a Deviation 1) Fill out the Deviation Request Form, found on the Buyer s website: and forward it to the Buyer s Supplier Quality Department for approval, at L1SupplierQuality@virginorbit.com. a. Complete the top section with all applicable information. b. In the next section, check the box that best categorizes the discrepancy, indicating the number of parts affected, and provide a full description of the discrepancy. c. In the third section, name the discrepancy, and summarize plans to address it, along with the target date. Then provide the other information indicated. The Organization Authorized Signature must be an actual signature (hand or electronic). 19

20 2) The Buyer s SQE will review the request with the Buyer s Engineering department and determine if the deviation is approved. Note: The supplier must use the process above to request a deviation. Verbal or requests are not acceptable. 9.3 Deviation Disposition 1) If the deviation is approved: a. The Buyer s SQE will provide the approved copy to the supplier. This authorizes the supplier to ship material on a limited basis. See Section above for details. b. The supplier shall include a copy of the approved form with all associated shipments. If the deviation references multiple part numbers, the supplier shall include a copy of the deviation with each one. c. Applicable documents such as inspection data and serialization shall be retained. 2) If the deviation is rejected, the supplier shall: a. In the first case in Section 7.1.1, correct the discrepancy and provide documentation proving that it has been corrected, prior to shipment. b. In the second case in Section 7.1.1, complete, provide, and receive approval for all documentation, prior to shipment. 10 Proof of Capacity 10.1 Purpose The purpose is to verify that the supplier s manufacturing process is capable of meeting the Buyer s production rate on a sustained basis. This procedure may apply to suppliers of criticality 2 and 3 components and systems when both 1) It is called out on the PO and 2) Any of the following occur: 1) Production of a new design 2) Buyer s production requirements are significantly higher than what is stated in the current purchase order 3) Significant process changes that may impact capacity 4) Tooling and equipment moves to a new manufacturing location 10.2 Method Buyer s SQE will determine which method is applicable, which will be communicated on the purchase order: 1) Production run. a. The supplier conducts a production run. All sub-supplier data shall be provided to the Buyer s SQE, prior to the run (using the applicable Buyer form) for review. 2) Documentation a. The supplier provides documentation that shows that it has adequate capacity to meet Buyer s requirements (using the applicable Buyer form). Documentation shall include data from sub-suppliers. 3) Exemption 20

21 a. Buyer determines that due to the type of product and manufacturing process, there are no unacceptable capacity risks Duration The duration will be sufficient to verify that the process can meet Buyer s production requirements Timing If a production run is required, it will be conducted after the supplier has attained Full or Interim PPAP approval Approval If the Buyer s SQE determines that the supplier has provided adequate evidence that it can meet production requirements, the Buyer s SQE will sign, approve, and return the form to the supplier Corrective Action If the supplier fails to meet the requirements of this procedure, the Buyer SQE will issue a request for corrective action. A response shall be submitted to the SQE within two (2) business weeks from the date of issue. Upon full implementation and verification of the corrective action plan, the SQE will sign, approve, and return the applicable Buyer form to the supplier. 11 Other Requirements 11.1 Design Changes Under no circumstance is the supplier allowed to change the design, or Bill of Materials (BOM) of a product, without prior written approval of Buyer If the supplier finds a design or BOM change necessary, the supplier shall request the change by completing the Buyer s Supplier Design Change Request (SDCR) form and providing it to the Buyer s SQE. If approved, the supplier may proceed with the change, but may not make any shipments until receiving PPAP approval from the Buyer s SQE. See Section 6.1 for details Product Obsolescence If the supplier decides to obsolete a product, the Buyer shall be provided advanced notification of at least the lead time for new product. In addition, the supplier shall provide a plan to ensure seamless continuity with the new version: 1) Projected date of last shipment, along with the quantity. 2) Plan to build bank of parts to satisfy Buyer requirements until new version is ready. 3) Provide adequate quantities of the new version to the Buyer for evaluation and testing. 4) PPAP/FAI Plan for new version Record Retention The supplier shall retain quality records for seven (7) years after the last delivery of products, unless otherwise specified on the purchase agreement or order. Prior to discarding, transferring to another organization, or destruction, the supplier shall notify Buyer purchasing in writing (at least 30 days notice) and give the Buyer the opportunity to gain possession. Upon request, the supplier shall deliver requested records to the Buyer within two (2) business days from time of request. 21

22 11.4 Material Traceability Responsibilities The supplier shall be responsible for creating and maintaining controlled documentation of product material traceability throughout all stages of receipt, production, and delivery. Traceability records shall be maintained throughout the life of the product, and shall be made available to the Buyer upon request Raw Materials Raw Materials shall be traced to their original material manufacturing lot / batch at a minimum. All raw material shipped to the Buyer that fulfills a purchase order individual line item shall be from the same heat lot Critical Components For critical components, process Information shall be traced to purchased components. At a minimum, this includes the operator, date performed, shift, manufacturing instructions used, use of validated equipment, identification of equipment used, BOM / design revision and configuration, resolution of any discrepancies, and record of any rework performed Shelf Life Unless otherwise specified by the purchase order or agreement, all shelf life limited materials or products delivered to the Buyer shall have a minimum remaining shelf life of six months, or 75% of total shelf life, whichever is longer. Remaining shelf life is to be calculated from the Date of Shipment Prevention of Use of Counterfeit Material The supplier shall have a documented procedure in place that prevents the use of counterfeit material. Electronics manufacturing suppliers shall reference SAE AS5553, and distributors of electronic parts shall reference SAE AS6081 for guidance. To minimize the risk of using counterfeit material, the supplier should procure directly from original manufactures, and manufacturer-authorized distributors/resellers with evidence that parts were procured by the original manufacturer and have not been altered or misrepresented. The Buyer reserves the right to audit the procedure Protection of Electrostatic Discharge (ESD) Sensitive Material The supplier shall have a documented procedure in place that protects ESD sensitive material, when appropriate. The supplier shall reference MIL-STD-1686, ANSI-S20.20, and EIA 625 for guidance. The Buyer reserves the right to audit the procedure Part Marking Criticality Level 3 Product The supplier shall mark the product in accordance with the drawings and technical specifications referenced by the purchase order Criticality Level 2 Product Design Provided by Buyer The supplier shall mark the product in accordance with the drawings and technical specifications referenced by the purchase order. 22

23 Design Provided by Supplier The supplier shall mark the product in accordance with the latest revision of ISO Criticality Level 1 Product The supplier shall mark the product in accordance with the latest revision of ISO Supplier Scoring In order to rate the performance of the supplier, the Buyer s SQE and purchasing agent will monitor the following performance metrics: 1) On time delivery 2) Quality escapes 3) Number of corrective active requests 4) Corrective action responsiveness The Buyer may choose to alter the selection of required metrics. Quality scores will be combined with scores from purchasing and materials to make up the entire supplier score. They will be available to the supplier. Scores will be used by the Buyer to measure performance and may impact future decisions regarding sourcing. 13 Supplier Development 13.1 Program Description If a supplier s scores do not meet our minimum requirements, they may be placed in our Supplier Development Program. This will involve regular reviews of the action plans to improve quality, delivery, and cost issues, until performance improves to acceptable levels. It may also involve audits of the supplier s processes that impact the Buyer Suppliers Audit The Buyer reserves the right to conduct periodic audits at the supplier s facilities. The purpose will be to continuously ensure the capability of the supplier to control quality and to deliver conforming product on time. The supplier will be responsible for implementing corrective actions for any audit findings. In addition, if the Buyer becomes aware of any significant changes with a supplier (quality, leadership), the supplier may be subject to an immediate audit. 14 Acronyms and Definitions 1) Buyer: Virgin Orbit, the procurement entity. 2) Supplier: The legal entity that is the contracting party with the Buyer with respect to the procurement document(s). 3) Procurement document: The purchase order (P.O.) or subcontract between the parties. 4) APQP: Advanced Product Quality Planning. See section 6. 5) PPAP: Production Part Approval Process. See section 7. 6) FAIR: First Article Inspection Report: 7) SQC: Supplier Quality Clause. See section

24 8) SQE: Supplier Quality Engineer 9) RMA: Return Material Authorization 10) SCAR: Supplier Corrective Action Request 11) BOM: Bill of Materials 12) Product: Goods or services 13) Metrics: Statistics of key performance indicators that will be generated to measure the performance of the supplier 15 Reference Documents AS Aerospace Standard - Quality Management Systems - Requirements for Aviation, Space and Defense Organizations AS9102 Aerospace First Article Inspection Requirement TS Quality management systems - Particular requirements for the application of ISO 9001:2008 for automotive production and relevant service part organizations ISO Quality Management Systems Requirements SMC-S Space and Missile Systems Center Standard - Quality Assurance for Space and Launch Vehicles SAE AS Counterfeit Electronic Parts; Avoidance, Detection, Mitigation, and Disposition MIL-STD Electrostatic Discharge Control Program for Protection of Electrical and Electronic Parts, Assemblies and Equipment ANSI-S Parts, Electrical and Electronic, Assemblies and Equipment, Protection, for the Development of an Electrostatic Discharge Control Program EIA Requirements for Handling Electrostatic Discharge Sensitive Devices ISO 28219: Packaging - Labelling and direct product marking with linear bar code and twodimensional symbols 24