MEVION SOURCING STRATEGY SUPPLIER CODE OF CONDUCT
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1 MEVION SOURCING STRATEGY The MEVION S250, while being the mst cmpact prtn therapy system in the wrld, is still a relatively large and cmplex prduct. As such, ur supply chain utilizes a high-mix, lw vlume surcing strategy. In rder t cpe with the lw-vlume, high-change nature f ur business, we pursue a mix f lean strategies, including Vendr Managed Inventry (VMI), Supplier Kanbans, and rlling frecasts fr lng lead items. We give preference t suppliers wh are willing t engage in a lean and visible material flw thrughut the supply chain. We rely n suppliers t be respnsive t changes f demand, changes in frecast, and changes in design. As we must, s must ur suppliers minimize n-hand material t minimize rewrk csts, while still maintaining 100% n time delivery f cnfrming material. Mevin Medical Systems recgnizes the very imprtant rle ur Suppliers have in the value we ffer ur custmers. As an extensin f ur wn peratins, we rely n ur Suppliers t prvide material, prducts, and services which meet all f the requirements f Mevin purchase rder/cntracts (PO), applicable specificatins, and the quality management requirements. SUPPLIER CODE OF CONDUCT Suppliers shall ensure peratins are being perfrmed in a manner that is apprpriate, as it applies t their ethical, legal, envirnmental, and scial respnsibilities. Belw is a listing f the basic requirements: Cmpliance with Lcal Laws and Regulatins Suppliers must adhere t the laws and regulatins in the lcality in which they reside. This includes all lcal, state, and federal laws/regulatins in the cuntry f rigin. Cmpliance with Envirnmental, Health, and Safety Laws The Supplier must maintain and perate its manufacturing/prductin facilities and prcesses in accrdance with lcal, state, and federal laws/regulatins in the cuntry f rigin. At n time shall any Mevin persn be expsed t hazardus materials r unsafe cnditins as a result f Supplier shipments t a Mevin lcatin, r while visiting a Supplier s lcatin. Fr items with inherent hazards, safety ntices must be clearly visible. As applicable, dcumented safety handling and prtectin infrmatin must be prvided. Prduct Safety In all instances where a prduct is manufactured t a new design, fr a new system, r fr a new applicatin, it is imprtant that Supplier and Mevin allcate respnsibility fr assuring that all perfrmance, endurance, maintenance, safety and warning requirements are met. It is preferred that this allcatin f respnsibility be in writing. Nn-Discriminatin
2 Suppliers shall nt discriminate against race, clr, sex, religin, age, physical disability, plitical affiliatin, r ther defining characteristics as prhibited by lcal, state, and federal laws/regulatins in the cuntry f rigin. Labr Child Labr Suppliers shall emply wrkers f minimum legal age in accrdance with lcal, state, and federal laws/regulatins in the cuntry f rigin. Child labr laws must be fllwed. Frced/Indentured Labr Suppliers shall nt practice the use f frced r indentured labr. Wrk Hurs/Days Suppliers shall nt exceed the daily and weekly wrking hurs as permitted by lcal, state, and federal laws/regulatins in the cuntry f rigin. Wages and Benefits Suppliers shall cmpensate wrkers in accrdance with lcal, state, and federal laws/regulatins in the cuntry f rigin. This includes minimum legal wage, vertime wages, and benefits (required by law). Ethics Evidence f crruptin, bribes, imprper advantage, r any ther frm f illegal practice by the Supplier r assciated peratins will terminate all relatins with Mevin. Cde f Cnduct and Plicy Enfrcement This plicy applies t Suppliers and their sub-tier surces. It is the respnsibility f the Supplier t verify and mnitr cmpliance f this cde at their peratins and sub-tier surce peratins. Cnfidentiality The Supplier shall ensure the cnfidentiality f Mevin-cntracted prducts and prjects under develpment, and related prduct infrmatin, as well as intellectual prperty shared as a result f the wrking relatinship. SUPPLIER APPROVAL PROCESS Mevin requires all f its Suppliers t be apprved by Mevin, regardless f apprvals by custmers r ther entities. Supplier Qualificatin The Supplier Apprval and Qualificatin Prcess may include the fllwing: a) Supplier Initial Assessment - Mevin may request the Supplier t prvide a cpy f its quality management system certificate and/r cmplete a Supplier Questinnaire. Mevin persnnel may als visit the Supplier's facility and perfrm an initial assessment f its business and quality management system and capabilities (i.e., quality, delivery, technlgy, cst, and cntinual imprvement bjectives). b) On-site Audit - In thse cases where a tp-tier Supplier s quality management system has nt been certified by an accredited certificatin bdy, Mevin will cnduct an n-site audit and may als request a
3 cpy f the Supplier s Quality Manual and supprting prcedures (and perhaps internal audit reprts) t determine if the Supplier s quality management system meets Mevin requirements. c) On-Site Assessment - Generally, when a Supplier is certified t a related standard by an accredited certificatin bdy, Mevin will nt cnduct an n-site assessment f the Supplier s quality management system against the same criteria. Hwever, frm time t time, as part f its cntinual assessment prcess, Mevin and/r its custmers, due t prduct/prcess cmplexity r criticality, may elect t cnduct n-site assessments f a Supplier s prduct r prcess capabilities. If any gaps in the Supplier's quality management system are fund and the Supplier is nt able t remedy thse gaps in a timely fashin, Mevin may chse t n lnger issue any purchase rders until the gaps have been crrected. GENERAL SUPPLIER QUALITY REQUIREMENTS The fllwing set f general quality requirements applies t all Suppliers. Cmpliance t Cntractual Requirements Upn accepting a Mevin PO, the Supplier is respnsible fr cmpliance t all PO (e.g., engineering drawing, specificatin, purchase rder) requirements. All dcuments, drawings and specificatins, regardless f rigin, are applicable t the Supplier when specified in the PO r dcuments referenced in the PO, and are required t be used at all levels f the supply chain. Unless therwise specified in the PO, the dcument revisin in effect n the date f issue f the PO applies t the PO. Neither audit, surveillance, inspectin r tests made by Mevin, representatives f Mevin, at Supplier's facilities, at any sub-tier facilities, r upn receipt at Mevin, relieves the Supplier f the respnsibility t furnish acceptable prducts r services that cnfrm t all PO requirements; nr des it preclude subsequent rejectin by Mevin. Mevin Designated Surces Where specified by PO, the Supplier shall purchase prducts, materials r services frm Mevin designated surces. Hwever, the Supplier is respnsible t ensure that items prcured frm such surces meet all applicable technical and quality requirements. Cntrl f Sub-Tier Suppliers The Supplier, as the recipient f the PO, is respnsible fr meeting all requirements, including wrk perfrmed by the Supplier's sub-tier Suppliers (als knwn as Sub-Suppliers r subcntract Suppliers). When the Supplier uses sub-tier surces t perfrm wrk n prducts and/r services scheduled fr delivery t Mevin, the Supplier shall include (flw-dwn) n its PO, t its sub-tier surces, all f the applicable technical and quality requirements cntained in the Mevin PO, including quality system requirements, regulatry requirements, the use f Mevin designated surces, and the requirement t dcument and cntrl 'key characteristics' and/r 'key
4 prcesses,' and t furnish certificatins and test reprts as required. Mevin reserves the right fentry t sub-tier facilities, subject t prprietary cnsideratins. Cntrl and Release Of Mevin Furnished Dcuments Drawings verses Cad Mdel cases: A fully dimensined drawing is prvided alng with the CAD mdels, r, A drawing with ntes regarding the use f CAD mdels is prvided alng with the CAD mdels. In the first case, it is expected that the part is t be fabricated t the print and that the CAD mdels are being prvided as a curtesy t the supplier t either use, r nt use, in facilitating CNC equipment prgramming. These mdels, ptinally, are supplied t the fabricatr via a request frm Mevin purchasing department. In the secnd case, it is expected that the supplier will nly take ntice f nn-referenced dimensins and ther call-uts n the drawing, and will use the CAD data explicitly t fabricate the part. In this case, the prvisin f CAD mdels is nt ptinal. In ther wrds, the fabricatr simply cannt make the part withut the mdel(s). Fr nn-referenced dimensins and ther calluts, the supplier is respnsible fr making the part t print. In either case, if a discrepancy is discvered between the drawing and the CAD mdel, ntify Mevin purchasing r supplier quality grup fr reslutin f the discrepancy. Dcuments furnished by Mevin t the Supplier are furnished slely fr the purpse f ding business with Mevin. Prprietary dcuments may be furnished t the Supplier in hard cpy, electrnic r ther media. The Supplier is respnsible fr cntrlling and maintaining such dcuments t preclude imprper use, lss, damage, alteratin and/r deteriratin. Unless authrized by the Mevin Buyer in writing, the Supplier may nt transmit r furnish any Mevin furnished dcuments, r cpies f such dcuments, t anyne utside the Supplier's business rganizatin except t a sub-tier surce used by the Supplier fr perfrmance f wrk n the Mevin PO. The Supplier shall return t Mevin, r purge electrnic cpies f, all prprietary dcuments with the last delivery f prducts r services n the PO. Mevin may request the Supplier t furnish bjective evidence r certificatin that prprietary dcuments have been purged. The Supplier shall flw dwn this requirement t all sub-tier surces, when such surces will be in receipt f Mevin prprietary dcuments during perfrmance f wrk fr the Supplier. E-Business Requirements Mevin currently uses, and is cntinually expanding the use f, electrnic business tls t facilitate day-t-day activities using electrnic linkages between Mevin internal peratins as well as with Mevin Suppliers. Purchase rders, delivery schedules, ntificatin f prduct rejectins, requests fr crrective actin, etc., may be transmitted t Suppliers electrnically, and Mevin expects that Suppliers will adpt these tls t reduce errrs and imprve efficiency. Electrnic Dcuments The accuracy and authenticity f electrnic dcuments and frms submitted t Mevin is f highest imprtance. The fllwing rules apply and may be subject t review by Mevin at Suppliers facilities:
5 The issue f electrnic dcuments and applicatin f electrnic signatures must be under the direct cntrl f the individual whse name appears n the electrnic dcument, The electrnic signatures may nly be applied at the place where the individual is lcated and the individual must have direct access and respnsibility fr the prducts r services described in the electrnic dcument, The applicatin f the electrnic signature certifies that the signature (individual) represents an authrized cmpany fficial. SUPPLIER PERFORMANCE Mevin s evaluatin system uses factrs, such as Quality and Delivery t evaluate Suppliers. Prcess Imprvement and Custmer Service are ther factrs that may als be used in the evaluatin. All suppliers are reviewed by Supply Chain n a quarterly basis. Any supplier that is belw the acceptable scre (currently set at 95% fr quality and 97% fr delivery) may be reviewed in greater detail by the Mevin Rutine Supplier Evaluatin Team based n factrs such as number f gds received, value f gds received, r dependency f gds. At Mevin s discretin, the Mevin Buyer may determine that t address the Supplier's perfrmance deficiencies, a meeting with Supplier s management is necessary and a Supplier dcumented crrective actin and imprvement plan is required. In sme cases, Supplier Crrective Actin Requests (SCARs) may be issued t address a systemic supplier prblem affecting quality and/r delivery ratings. Any SCARs pen fr greater than ninety (90) days may result in an n-site audit, a reductin f rder placement, and/r remval frm the Mevin Apprved Supplier List.
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