INTRODUCTION. New Mather Metal Incorporated specializes in manufacturing quality stabilizer bars for suspension systems for the automotive industry.

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1 INTRODUCTION Welcome to, New Mather Metal Inc. (NMMI) New Mather Metal Incorporated specializes in manufacturing quality stabilizer bars for suspension systems for the automotive industry. You can view our worldwide locations by referencing the NHK web page at New Mather Metals, Inc. 326 Page Drive, Franklin KY Tel: Fax: Introduction to Manual Scope In today s competitive manufacturing environment it is essential to maintain and improve customer satisfaction. Nonconforming product found at receiving or during production, late deliveries, and mislabeling issues cause serious disruptions to NMMI and to our customers. Even the best Receiving Inspection program cannot detect all defective material. NMMI requires suppliers to control the quality of material shipped to NMMI, so that NMMI does not need to inspect the entire product when it is received. This manual describes NMMI s expectations for its suppliers in order to ensure that purchased material meets NMMI s requirements and our customer s requirements. The NHK International Inc. (R&D Center) is responsible for product design functions. This information applies to all suppliers, outsourced partners or subsidiaries that have interest in doing business with NMMI. Supplier Expectations Clear communication of expectations and requirements is a critical element in any supplier customer relationship. This supplier quality manual conveys our quality expectations and provides a foundation in which we in turn can provide a quality product to our customer. Our expectations are: % On-Time Delivery on all supplied products and services. 2. Supply errors in quality, inventory management or delivery resulting in line disruptions to either NMMI or our customers will result in cost recovery by NMMI. NMMI will issue corrective actions as necessary. 3. Supplier must respond to Corrective Action Reports in a timely manner that meets NMMI s customer requirements for response time. SQM-001 Page 1 of 18

2 4. All critical suppliers must conform to NMMI specific requirements found in this manual. 5. Suppliers must be certified to ISO 9001 or TS by an accredited third-party certification body. 6. Supplier notification of possible disruptions of service including: A. Potential quality issue B. Potential supply shortages C. Immediate notification of major equipment failures or line down time. D. 30-Day notice of any changes in production. E. Potential capacity issues F. 180 Day notice of closing of business or potential Chapter 11 or Chapter 7 situation. NMMI Quality Policy New Mather Metals is committed to the achievement of World Class Status through the unending improvement of customer satisfaction, employee involvement, and product quality. Quality performance is the responsibility of every New Mather Metals employee. We will consistently and fully satisfy the quality and on time delivery expectations of all internal and external customers. SQM-001 Page 2 of 18

3 Table of Contents INTRODUCTION TO MANUAL... 1 SUPPLIER EXPECTATIONS QUALITY MANAGEMENT SYSTEM REQUIREMENTS QUALITY MANAGEMENT SYSTEM QUALITY MANUAL AND PROCEDURES NON-DISCLOSURE CONTROL OF SUB-TIER SUPPLIERS SUPPLIER QUALIFICATION & MONITORING PROCESS NEW SUPPLIER SELF ASSESSMENT ON-SITE ASSESSMENT PERIODIC REEVALUATION SUPPLIER MONITORING SUPPLIER AUDITS INSPECTION AUDITS MANUFACTURING CONTROL PROCESS CONTROL LOT CONTROL TRACEABILITY WORKMANSHIP SAFETY MAINTENANCE CUSTOMER PROPERTY SUPPLIER DEVIATION REQUEST CONTROL OF MONITORING AND MEASURING DEVICES CONTROL CALIBRATION MEASUREMENT AND ANALYSIS DIMENSIONAL INSPECTION REPORT MATERIAL CERTIFICATION/TEST REPORT GAGE REPEATABILITY & REPRODUCIBILITY (R&R) STUDIES FAILURE MODES AND EFFECTS ANALYSIS (FMEA) CONTROL PLAN DRAWINGS/CHANGES DRAWING AND CHANGE CONTROL PROCESS CHANGES, ENGINEERING CHANGES PRESERVATION, PACKAGING & LABELING OF PRODUCT PRESERVATION OF PRODUCT PACKAGING OF PRODUCT LABELING OF PRODUCT CORRECTIVE ACTION / CONTINUOUS IMPROVEMENT INITIATIVES NON-CONFORMING PRODUCT CORRECTIVE ACTION PROCESS APPROACH CORRECTIVE ACTION REQUESTS (C.A.R) ERROR PROOFING SUPPLIER-FURNISHED LOT DOCUMENTATION CHARGE BACK RATES AND REWORK SQM-001 Page 3 of 18

4 REVISION HISTORY SQM-001 Page 4 of 18

5 1.0 Quality Management System Requirements 1.1 Quality Management System Each NMMI supplier is required to maintain an effective quality management system, preferably one that conforms to ISO 9001 or TS Quality Management System Requirements. In addition, the supplier must meet all other requirements of this manual. 1.2 Quality Manual and Procedures The supplier, as requested, will furnish NMMI with a copy of the supplier s Quality Manual and supporting procedures. This includes detailed documents and work instructions specific to production of material for NMMI. 1.3 Non-disclosure The supplier shall not disclose or use any confidential information concerning NMMI or its customers regarding current products or projects under development. Confidential information is defined as any information that has not been specifically designated for being released to the public. 1.4 Control of Sub-tier Suppliers Suppliers are responsible for the quality of materials and components provided by their sub-tier suppliers and sub-contractors. NMMI suppliers must impose controls on their sub-tier suppliers that provide quality results and documentation comparable to the controls applied to suppliers by NMMI. The extent of the controls may vary, depending on the nature and complexity of the product and processes, but should normally include: Evaluation and qualification of sub-tier supplier facilities. Control to ensure that raw materials used meet NMMI s requirements. Controls to ensure that the sub-tier suppliers of components used are those approved by NMMI, where applicable. Part qualification, including first article inspection and process capability studies of as applicable. Control of drawings/revisions. Control of nonconforming material. Corrective action and preventive action programs. A continuous quality improvement program. Where appropriate, NMMI may specify the sub-tier suppliers that may be used, evaluate and qualify the sub-tier supplier s facilities, and assist the supplier in controlling the subtier supplier. Typically, this occurs when the sub-tier supplier is an essential component of the supply-chain process. NMMI will evaluate the supplier s quality system and records of such sub-tier suppliers as necessary. In the event of NMMI s involvement, it does not absolve suppliers of the ultimate responsibility for the quality performance of their sub-tier suppliers. SQM-001 Page 5 of 18

6 2.0 Supplier Qualification & Monitoring Process All suppliers of production materials to NMMI must be qualified suppliers. The extent of the qualification process is dependent upon the criticality of product purchased and other factors determined by NMMI. The qualification process in its most complete form consists of these parts: Supplier Questionnaire Form (F-PU-004) completed by the supplier. An on-site assessment by NMMI personnel or their authorized agents if applicable. NMMI periodically reevaluates suppliers through the use of quality performance data and/or onsite assessments. 2.1 New Supplier Self Assessment When a new supplier is being considered, they are sent a Supplier Questionnaire. The supplier completes form(s) and returns it along with a copy of their quality manual and supporting documents. NMMI will review the quality manual, procedures, and questionnaire to determine if the documented quality system meets NMMI s requirements. 2.2 On-Site Assessment For suppliers of critical components, an on-site assessment of the supplier s facility may be performed. The on-site assessment includes three components: A quality assessment to determine whether the supplier s quality management system is in place and functioning effectively. A business assessment to determine whether the supplier has financial resources, production capacity, and other business resources needed to fulfill NMMI s production needs. A technology assessment to determine whether the supplier has the needed technical resources, inspection equipment, facilities, engineering resources, etc. If the assessment team determines that the supplier meets NMMI s requirements, NMMI qualifies the supplier to bid on new business and supply production materials. 2.3 Periodic Reevaluation NMMI periodically reevaluates current production suppliers through the use of quality performance data and/or on-site assessments if needed. NMMI will perform on-site supplier audits to those suppliers who are performing poorly. If requested, the supplier shall make their facility available for on-site process verification by NMMI personnel, or NMMI customers with reasonable notice. SQM-001 Page 6 of 18

7 2.4 Supplier Monitoring NMMI continually monitors its suppliers to ensure they continue to meet NMMI s requirements, and to ensure that the supplier continues to ship acceptable parts. This may consist of: A quality management system surveillance audit at the supplier s facility An on-site audit of the supplier s control plan A random incoming inspection audit of a batch of product Source inspection of product at the supplier s facility Review of supplier-furnished data packages A supplier progress review meeting conducted periodically at the supplier s site or NMMI to review supplier performance and progress 2.5 Supplier Audits NMMI s supplier shall make their facility available for on-site process or QMS audits by NMMI personnel with reasonable notice. This may be a full or abbreviated documentation and on-site audit. The purpose is to evaluate any changes that may have occurred in the supplier s quality management system, and to assess the supplier s continuing commitment to quality improvement. Periodically, NMMI may also audit the supplier s continuing conformance to the control plan or other quality documents. 2.6 Inspection Audits NMMI expects its suppliers to furnish material that conforms to all requirements, and that does not need to be inspected when NMMI receives it. At NMMI s discretion, in order to meet production requirements, 100% sorting may be done as necessary at the supplier s expense. NMMI may inspect product at the supplier s facility to detect potential problems prior to shipment. NMMI may also inspect product at sub-tier suppliers. 3.0 Manufacturing Control 3.1 Process Control NMMI suppliers are required to control all manufacturing processes in accordance with the control plan, which is approved during part qualification. 3.2 Lot Control A lot consists of product of one part number and revision that are made at the same time, under the same processing conditions, from the same lot of raw materials. The primary purpose for identifying lots is to determine the scope of actions that must be taken when problems arise during further manufacturing or with customers. Each container of material shipped to NMMI must be identified with the Supplier s lot number. Inspection records must be traceable to lot numbers. SQM-001 Page 7 of 18

8 The following are typical conditions that result in a change of lot numbers: Change of part number or revision Change of part number or revision of components Interruption of continuous production (typically for more than a few hours) Repairs or modification to the tooling or equipment Tooling changes (other than minor adjustment or replacement of consumable tooling) Change to a different lot of raw materials Process changes 3.3 Traceability Every product shall have a process to identify it during all stages of production. Traceability allows for parts to be matched to a certain time frame or process. Should a problem arise NMMI and the supplier need to identify suspect parts. A supplier shall establish and maintain documented procedures for product identification. The supplier shall have product traceability to the extent required so that if a discrepancy is found, product can be contained and corrective action initiated. 3.4 Workmanship When workmanship standards are not referenced on NMMI drawings or specifications, the supplier is expected to follow industry-accepted standards (e.g. ASTM, SAE, JIS, ANSI, IPC). When in doubt, consult with NMMI for clarification. 3.5 Safety At no time should any customer, or person at a NMMI facility, be exposed to hazardous material or situations that are not inherent in a component s structure. Residues, films, out-gassing products and packaging materials should comply with OSHA (Occupational Safety & Health Association) standards. For items with inherent hazards, safety notices must be clearly observable. As applicable, MSDS sheets must be provided during the First Article process. 3.6 Maintenance The supplier must maintain all facilities, manufacturing machines, tools, measuring devices, and other equipment in such a manner that the supplier can support NMMI s production requirements, and the quality of parts manufactured for NMMI is not degraded in any way. 3.7 Customer Property The supplier shall exercise care and protect all NMMI property while it is under the suppliers control or being used by the supplier. Any NMMI property that is lost, damaged or otherwise found to be unsuitable for use shall be recorded and reported to NMMI. Supplier must submit an NMMI property summary annually if applicable. SQM-001 Page 8 of 18

9 3.8 Supplier Deviation Request A supplier is never permitted to knowingly ship product that deviates from the print, specification limits, or design intent without written authorization from NMMI. If such a condition exists, the supplier may request NMMI to allow shipment of the product. This is accomplished by initiating a Deviation Request Form. If directed by NMMI, the supplier must send samples of non-conforming items to NMMI for evaluation. NMMI will charge back any testing costs required to determine the acceptability of the product. NMMI will determine the item s acceptability and what corrective actions (if any) are required beyond the deviation. If approved, NMMI will send a written deviation approval to the supplier. The deviation is only intended to be an interim action and is not to be construed as an engineering change. The supplier must begin work immediately to correct the condition in question. This must be accomplished within the time frame stated on the deviation. In all cases, the supplier must fully contain all product suspected of being nonconforming at their facility. In addition, the supplier may be required to sort any suspect product at NMMI. Any parts sent to NMMI that have been approved on a Deviation must be clearly identified on the box, container, or other packaging method with the appropriate markings decided jointly by NMMI and the supplier. 4.0 Control of Monitoring and Measuring Devices 4.1 Control - Supplier shall determine the monitoring and measurement needed to be done and the devices needed to provide evidence of conformity to NMMI requirements. A supplier shall establish and maintain documented calibration procedures for inspection and test equipment. All new, reworked, or modified test & inspection equipment shall be inspected for accuracy before releasing for inspection purposes. 4.2 Calibration The supplier must calibrate measuring or test equipment against an established standard or master traceable to the National Institute of Standards and Technology (NIST). If the calibration is not within the lab scope, an approved/qualified lab or the manufacturer must be used. Measuring or test equipment may either be purchased with a certification of calibration (or accuracy) or be certified by the supplier following the purchase. All calibrated equipment must be identified with equipment identifying ID #, last calibration date, calibration due date and description of device. SQM-001 Page 9 of 18

10 4.3 Calibration Records Supplier must keep records of calibrations performed on gauges and measuring/test equipment. Records should include: equipment ID, calibration date, description of device, measurement standard which the gage was calibrated against, any out of specification condition and/ or an assessment of the impact of out-of-specification condition. 5.0 Measurement and Analysis 5.1 Dimensional Inspection Report NMMI notifies the supplier of the quantity of parts to be inspected, typically five from each tool or cavity. The supplier inspects or tests each sample for all dimensions, drawing notes, and specification requirements listed on the current revision of the NMMI drawing and/or specification. The supplier records the results on a Data Report form or equivalent. The supplier numbers a copy of NMMI s drawing and/or specification to correspond with the supplier s results. The dimensional inspection report must include the specification number, specified requirements, and the inspection/test results. A simple statement that the material meets the requirements is not acceptable. Each report must be traceable to the supplier s material, through lot/heat/coil/batch numbers or equivalent, and must be signed by the organization that performed the testing. For any requirements that the supplier does not have the equipment to inspect or test, the supplier may obtain reports from their sub-supplier or other test agency. Parts inspected for the dimensional inspection report are randomly selected from a production run of parts. The minimum quantity for the production run is agreed upon between the supplier and NMMI. The parts must be produced under volume-production conditions, including material, machines, tooling, processing parameters, cycle times, etc. Any exceptions to the volume-production conditions must be approved in writing by NMMI, and included in the data package submitted to NMMI. 5.2 Material Certification/Test Report When requested, the supplier must provide a material certification/test report. This report must include the specification number, specified material and/or physical requirements, and the inspection/test results. A simple statement that the material meets the requirements is not acceptable. Each report must be traceable to the supplier s material, and must be signed by the organization that performed the testing. SQM-001 Page 10 of 18

11 5.3 Gage Repeatability & Reproducibility (R&R) Studies For those characteristics specified by NMMI, the supplier must perform gage R&R studies using procedures described in Measurement Systems Analysis published by AIAG. NMMI must approve R&R values greater than 10 percent of the tolerance. Normally for variable gages, three different operators measure ten samples three times each. For attribute gages, the Attribute Gage Study (long method) is required. NMMI must approve any alternative methods. 5.4 Failure Modes and Effects Analysis (FMEA) When requested, the supplier must perform a Process Failure Modes and Effects Analysis (PFMEA), and submit it for approval. For parts and assemblies that are designed by the supplier, the supplier should also perform a Design Failure Modes and Effects Analysis. The PFMEA considers all reasonably foreseeable potential failure modes of each process. Based on the potential seriousness and likelihood of the problem, the supplier develops manufacturing controls. The PFMEA should be a living document, and should be updated when process changes occur, or when defective material is produced. PFMEA methods and examples can be found in Potential Failure Mode and Effects Analysis 3 rd Edition published by AIAG. 5.5 Control Plan When requested, the supplier must develop a control plan using AIAG format, and submit it for approval. The control plan is a detailed description of the supplier s proposed processing steps required to produce the part, and the controls that are put into place to control the quality 6.0 Drawings/Changes 6.1 Drawing and Change Control The supplier must have a documented system for assuring that the latest NMMI drawings are in effect at their facility. The supplier s quality management system must contain a documented procedure that describes the method used for the receipt, review, distribution, and implementation of all changes to drawings and specifications. In addition, the procedure must address control of obsolete drawings and specifications. A documented procedure should also detail the method used to contain new or modified parts until approved by the customer. SQM-001 Page 11 of 18

12 6.2 Process Changes, Engineering Changes Suppliers must have systems in place to control changes to drawings, specifications, processes, or produced parts. Systems should be capable of handling changes being requested by the customer, and also changes requested by the supplier. Suppliers may not make any changes in their process, location, material, or to the part without written approval from NMMI. The supplier must formally request a process change on all NMMI components. PPAP s or Part Approvals must be completed and signed off by NMMI for all process changes. When monitoring is required, the appropriate markings must be identified on the lots etc. for a specified time frame as decided jointly with NMMI and the supplier. 7.0 Preservation, Packaging & Labeling of Product 7.1 Preservation of Product The supplier shall establish and maintain a material handling system that eliminates the potential for damage through all operations and transportation to NMMI. The supplier shall systematically review material handling processes and equipment to prevent damage to in-process parts and finished goods. At a minimum the following items shall be reviewed: Appropriateness of transfer mechanisms and containers. Parts damaged through in-house material handling. Process to address or resolve damaged caused through material handling. PFMEA is an appropriate method for this review. 7.2 Packaging of Product The supplier shall establish and maintain a procedure to assure that the NMMI packaging requirements are met. All packaging must match NMMI standard packaging requirements. One part number per container. All old labels to remove from containers prior to shipment to NMMI. Shipments not matching packaging specification will be subject to corrective action. Supplier may request a supplier deviation with Quality Engineering approval which may allow temporary use of packaging that does not meet requirements. Suppliers will provide packaging that provides protection from any damage that may occur. Packaging, labeling, and shipping materials must comply with the requirements of common carriers, in a manner to secure the lowest transportation costs. Packaging must protect the components from contamination, including fibers from the packaging materials. Whenever possible, only one part number and one supplier lot is to be packaged in a shipping container. When more than one part number or lot number is packaged in a shipping container, each part number and/or lot number must be separately packaged (i.e. bags or boxes) inside the container, with each labeled as to the contents. SQM-001 Page 12 of 18

13 7.3 Labeling of Product Each shipping container or inside package must contain following information: NMMI part number (if no NMMI number exists, supplier part number is used) Quantity Supplier s Name Purchase Order Number Lot Identification Work Order Number Bar Code Identification The supplier shall establish and implement an audit procedure to verify correct parts to labels. 8.0 Corrective Action / Continuous Improvement Initiatives NMMI requires suppliers to utilize a closed-loop corrective action system when problems are encountered in their manufacturing facility, or after nonconforming product has been shipped to NMMI. In the event we are asked to complete a customer CAR and it is a supplier issue NMMI requires its suppliers to fully support corrective action activities so NMMI can respond to the customer in a timely manner. 8.1 Non-Conforming Product All material that is not within blueprint or purchase order specifications will be rejected for production use. The supplier shall establish and maintain documented procedures to ensure that parts not conforming to the specified requirements are prevented from unintended use or installation. If Supplier Shipped NMMI Nonconforming product The supplier must immediately notify NMMI with the part number, quantity, description of nonconformance, shipment dates, temporary containment action, supplier contact and part identification method. Supplier must segregate the Suspect Material and hold for New Mather determination. If supplier has received Nonconforming product from NMMI The supplier must immediately notify NMMI with the part number, quantity, description of nonconformance, NMMI Traceability Tag, supplier contact and part identification method. Supplier must segregate the Suspect Material and hold for New Mather determination. IF NMMI issues RMA, supplier must follow RMA Procedure listed below. SQM-001 Page 13 of 18

14 RMA Procedure Supplier is required to contact NMMI Quality Dept. when non-conforming product is to be returned to NMMI to obtain an RMA#. The returned product (rack/skid/pallet) must be marked on four sides (using 8 ½ x 11 neon green paper or other bright paper) with RMA#, who authorized return, and why product is being returned. NMMI reserves the right for cost recovery if the supplier does not follow the correct procedure for returning Suspect/Non Conforming Product. Product cannot be returned unless an RMA is issued. 8.2 Corrective Action Process Approach The corrective action system utilized should be similar to the process outlined below. The focus should be on identifying the root cause(s) of the problem and taking action to prevent its recurrence. 1. Use a team approach 2. Describe the problem 3. Contain the problem 4. Identify and verify root causes(s) (5 why or A3 are recommended) 5. Implement permanent corrective actions 6. Verify corrective action effectiveness 7. Close the corrective action 8.3 Corrective Action Requests (C.A.R) Corrective Action Requests may be issued as a result of receipt of nonconforming product, late deliveries or supplier audit. When corrective action is required: The supplier shall take immediate containment action upon notification of the nonconformance. The containment plan must clearly define the containment actions at the supplier s facility to assure that no nonconforming product is shipped to NMMI. If suspect product has already been shipped, the supplier must address all suspect stock in transit and any stock at NMMI. The supplier will assist NMMI in identifying customer risk by identifying all suspect lot numbers and associated quantities involved. The supplier must submit a written response to NMMI, reporting the supplier s initial observation and defining the interim containment plan within 24 hours of notification. Within 2 weeks after the original notification, the supplier must report the results of the supplier s investigation into the cause of the problem. Within 3 weeks from the initial notification date, the supplier must submit the corrective action to be taken to prevent recurrence of the problem, and the effective date (the date the corrective action will be implemented.). Actions such as train the operator, discipline the operator, or increase inspection, are typically not acceptable corrective actions to our end customers or to us. The supplier is required to keep NMMI informed of progress towards implementing the corrective action. When corrective action implementation is complete, the supplier and NMMI verify that the corrective action is effective in preventing the problem s recurrence. 8.4 Controlled Shipping SQM-001 Page 14 of 18

15 NMMI may place any of its suppliers on Controlled Shipping at its discretion, when a supplier fails to meet expectations for delivering quality products. The decision to place a supplier on Controlled Shipping will be made by NMMI Quality Dept. with approval from the Plant Manager. Typically, the Quality Staff will notify the supplier verbally followed up with a written letter. If NMMI is placed into a re-inspection program by one of its customers resulting from the supplier s actions, the supplier will be placed into Controlled Shipping at an appropriate level for the associated parts. Controlled Shipping has two levels, Level 1 and Level 2. Entrance into level 1 is part of entrance into Level Controlled Shipping I Entrance Conditions (Any) Failure to provide an initial response with 24 hours of the issuance of a formal report of a quality issue. Failure to provide a CAR within 14 days of the issuance of a formal report of a quality issue. Exit from Level 2 on a part. Requirements (All) One hundred percent off-line re-inspection of all products. Each container of re-inspected product will be marked certified as 100% re-inspected. Exit Conditions (All) Thirty day calendar period (without repeat Quality Report on part & feature in 1. question. An accepted CAR form which includes verification of the Permanent Corrective 2. Actions. Updated documentation showing revised PFMEA s, control plans and or work 3. instructions. Evidence that shows every effort was taken to implement mistake error proofing. 4. Written approval from NMMI Plant Manager or Quality Dept Controlled Shipping II Entrance Conditions (Any) NMMI being placed in 3 rd party inspection by its customers. Repeat quality issue. Failure to provide a CAR/8D after a formal CAR was issued. Quality Containment Level 1 fails Special circumstances as determined by Plant Manager or Quality Dept. Requirements (All) One hundred percent off-line reinspection of all products. One hundred percent off-line reinspection by a 3 rd party of all products. Each container of re-inspected product will be marked certified as 100% reinspected. Exit Conditions (All) Thirty day calendar period (without repeat Quality Report on part & feature in question. An accepted CAR form which includes verification of the Permanent Corrective Actions. Updated documentation showing revised PFMEA s, control plans and or work instructions. Evidence that shows every effort was taken to implement mistake error proofing. Written approval from NMMI Plant Manager or Quality Dept. 8.5 Error Proofing SQM-001 Page 15 of 18

16 In order to assure quality delivery to our customers, it is necessary for NMMI suppliers to utilize error proofing such as Poka-yoke and other mistake-proofing measures. NMMI requests suppliers to use quality history (PFMEA, CAR s) to identify parts or processes that have a high frequency of past failures or parts that could have a high frequency of failure as identified by the PFMEA. Examples of area s that could be poka-yoked/error proofed: Segregation of nonconforming product Labeling Cases where nonconforming product is mixed How To Error Proof Identify Analyze Plan Implement Evaluate Identify error-proofing opportunities: PFMEA Quality Data PRR Brainstorm Prioritize Opportunities Determine Level of Error Proofing Brainstorm Error Proofing Mechanisms Build on past experience Can use more than one mechanism Select error proofing mechanism Most cost effective Simple Plan (Process Mechanisms) Action Plan Error Proofing Control Plan Implement Error Proofing Mechanism Installation Validation Checksheet/log Operator Instructions Evaluate Results 9.0 Quality Records All quality records shall be kept for three years unless otherwise specified in the supplier s quality manual and agreed to by NMMI. Examples of records: Measurement Data PFMEA MSA Data Capability and SPC Data Major Process Change Data Deviation Records Scrap Records 9.1 Supplier-Furnished Lot Documentation SQM-001 Page 16 of 18

17 NMMI may require the supplier to furnish inspection, or other quality data with each shipment to ensure that the product meets NMMI s requirements. When data submission is required, the data must accompany each shipment, or be ed or faxed to NMMI at the same time the lot is shipped. All documentation must be clearly identified with NMMI s part number, and the supplier s lot number. When specified by NMMI, the supplier must submit monthly data packages. Data packages typically consist of copies of control charts and process capability calculations for specified characteristics. Once the supplier has completed two consecutive quarters of data submissions, the supplier may request elimination of the data submission if records show that the characteristic consistently satisfies NMMI s requirements for process stability and process performance, and if the characteristic has caused no problems in NMMI s production. NMMI will notify the supplier in writing if the data submission may be discontinued. Charge back Rates and Rework Rework/sorting by NMMI due to unacceptable supplier quality will be billed at a rate of $50.00 per man-hour with an administrative fee of $ Authorization will be obtained from the supplier and charges will be debited against current invoices. The buyer reserves the right to charge back any premium freight incurred due to late, rejected or mis-shipments that include mixed parts and damaged packaging that may be unacceptable. NMMI works with its suppliers to accurately forecast its inventory needs. If NMMI has to add overtime or perform an emergency changeover to compensate for suppliers inventory inaccuracy the supplier will be charged back. The supplier must strive to maintain accurate inventory levels. A NMMI Cost Recovery Form will be sent to the supplier prior to any charge back situation. The supplier will then have the chance to appeal the charge back if there are any discrepancies Supplier Removal SQM-001 Page 17 of 18

18 A vendor may be removed from the Approved Supplier List if they do not meet NMMI s requirement for price, quality, delivery, flexibility, service or if NMMI s business strategy changes. A vendor s ability to meet these criteria may be evaluated by the Buyer along with plant management as necessary. When a quality problem / concern occurs, QA Dept will notify the Buyer. The vendor is notified by Buyer and QA Dept together and provided an opportunity to correct the problem. Cases of poor performance are handled based on the severity of the problem, and may include: i) Verbal notification without written vendor corrective action required ii) Verbal notification with written vendor corrective action required. iii) Written notification with written vendor corrective action required. iv) Verbal or written notification of removal from Approved Supplier List Any vendor with less than 100% on time delivery will be subject to removal. The Materials Dept will monitor delivery of each vendor, and notify the Buyer when a problem / concern occurs. The Buyer will notify the vendor of the problem, and a decision will be made based on the circumstances. Vendors may be removed from the Approved Supplier List for non-performance issues at the discretion of the Buyer. Vendors of critical product may be subject to on-site inspection by the Buyer, as deemed necessary. Vendors that are specified as a Single Source Vendor may be worked with, to a further extent, to correct problems. These vendors may not be removed from the Approved Supplier List without approval from the customer who required their use. Revision History Revision Date Responsible Person Change Record Description of Change B M. Jones Updated 8.1, added RMA request. Added Sec. 5.0 Control of monitoring & measuring devices. C A. Billau Updated RMA Procedure, Section 2.4,Section 7.2 and Section 8.4 D M. Henderson Updated Section 6.2 concerning supplier process E Kunihiro Ichikawa changes. Establish NMMI Franklin Purchasing Dept. Manual SQM-001 Page 18 of 18