Monticello Spring Corporation Quality Management System Supplier Quality Manual (QQS 100.00) 1.0 Introduction 1.1 Scope The details stipulated in this manual are the minimum mandatory requirements for production goods and service suppliers to Monticello Spring Corporation (hereafter referred to as MSC). 1.2 Purpose The purpose of this document is to communicate MSC s requirements with respect to the Quality management of those companies that supply production goods and/or services to MSC. MSC requires that its suppliers: a) Implement appropriate systems and controls to ensure the 100% on-time delivery of conforming, defect free products to MSC. b) Manage facilities, processes, Quality Systems and personnel to consistently and cost effectively produce products and furnish services that meet and / or exceed MSC and its customer s requirements. c) Develop and implement a documented Quality System, including an Advanced Product Quality Planning process, in accordance with the requirements of ISO 9001 as a minimum and the AIAG Advanced Product Quality Planning and Control Plan reference manuals in order to assure that all MSC requirements are met. d) Provide objective evidence that all supplier products and services satisfy AIAG Production Part Approval Process requirements including acceptable process capabilities for special characteristics and for those characteristics that are agreed with MSC, as applicable. e) Utilize appropriate statistical techniques for on-going process control and improvement (as established in the AIAG Fundamental Statistical Process Control reference manual and as agreed upon with MSC. f) Continuously improve their processes by reducing variation in the process and reducing waste. g) Conduct its operation to assure that all material and product provided to MSC meets or exceeds all applicable environmental laws and regulations. Suppliers are encouraged to obtain ISO 14001 certification. Document Title: QQS 100.00 Supplier Quality Manual Page 1 of 8
Monticello Spring Corporation h) Comply with all applicable government statutes and regulations. i) Are able to provide necessary capacity to produce the forecasted volumes according to the request for quote. 1.3 The requirements in this document are based upon the ISO TS-16949 Quality System Requirements. These requirements are an integral and legally binding aspect of the MSC Purchase Order. Although this does not alter or reduce any other requirements of the contract, it is intended to provide a concise understanding of our Quality expectations. The controlled copy of the MSC Supplier Quality Manual is posted on the MSC website and is the responsibility of the supplier to check for the latest version. This can be located at: www.monticellospring.com 2.0 Quality System Requirements 2.1 General Quality System Requirements Present and potential suppliers to MSC must operate within a comprehensive Quality System. Suppliers shall provide to MSC Purchasing written confirmation and objective evidence of third party certification to current version of ISO 9001 and /or ISO TS 16949. Suppliers are also encouraged to be certified to ISO 14001. Certified suppliers must submit their initial and renewal Quality system certifications to MSC Quality Assurance Department. Also, all MSC suppliers are required to immediately notify MSC if their third party registrar places them on Probationary status. Suppliers who are not ISO 9001 or TS 16949 compliant must have a working plan to become compliant and the plan must be available for MSC review. Suppliers must also conform to the requirements specified in the following AIAG Reference Manuals: Advanced Product Quality Planning and Control Plan (APQP) Production Part Approval Process (PPAP) Potential Failure Mode and Effects Analysis (FMEA) Measurement Systems analysis (MSA) Statistical Process Control (SPC) Additional requirements are noted in the MSC Supplier Quality Manual, such as record retention, calibration, corrective actions etc. MSC may communicate other requirements as our needs and /or the need of our customer s change. It is the responsibility of MSC suppliers; both present and future, to obtain and maintain the current version of all ISO TS 16949 and AIAG related documents (see element 4.1 of this document for ordering information). 2.2 Advanced Product Quality Planning (APQP) Suppliers are required to generate an Advanced Product Quality Plan in accordance with the AIAG APQP reference manual. Document Title: QQS 100.00 Supplier Quality Manual Page 2 of 8
Monticello Spring Corporation This plan shall include, but is not limited to: a) Notification of risks that affect product integrity or the project plan. b) Implementation of error-proofing to achieve Zero Defects to MSC c) Identification of needed product or process specifications. 2.3 Engineering Prototype Sample Submissions Each container of samples or prototype must be clearly labeled as such and accompanied by a completed level three PPAP when requested by MSC. Specific instruction, in addition to these stated requirements, may be agreed upon and documented by MSC in the Purchase Order. 2.4 Special Characteristics Special Characteristics are any product or process characteristics that affect safety or compliance with regulations, fit, function, performance or subsequent processing of product. In accordance with the requirements of ISO TS16949, Special Characteristics shall be identified and specifically addressed in the PFMEA, Control Plan, Process Flows, Work Instructions and other associated documents. If Special Characteristics are not specified, they will by identified by MSC to the supplier. 2.5 Process Capability and Control Suppliers are required to meet the process capability requirements as defined in the AIAG PPAP and SPC reference manuals, unless otherwise specified by MSC. The supplier is responsible to ensure process capability and control requirements are documented in their control plan and that capability indices are achieved and improved throughout production. Evidence for process capabilities requirements shall be provided with PPAP, as applicable. Standard Requirements: Preliminary process capability of 1.67 Long-term process capability of 1.33 If process capability is not achieved, a corrective action plan must be provided to MSC, along with a containment plan by supplier personnel. 2.6 Supplier Control All MSC suppliers are responsible for control and continuous improvement efforts. The supplier shall establish preventive/predictive maintenance procedures on all tooling and equipment. Evidence of procedure execution shall be made available upon request. Preventive/predictive maintenance schedules and tool history records shall be documented and available for review. Document Title: QQS 100.00 Supplier Quality Manual Page 3 of 8
Monticello Spring Corporation 2.7 Manufacturing Process Review A systematic review of a supplier s manufacturing process may be conducted at the supplier s facility at the request of MSC. This process may include run at rate (capacity capability) study and evaluation. 2.8 Production Part Approval Process (PPAP) All production sample submissions shall be in accordance with the AIAG PPAP manual requirements. Level 3 PPAP is the default submission level unless otherwise agreed upon with the MSC Quality Department. For products other than raw material, a minimum of a six piece dimensional layout is required. PPAPs received with non-conforming dimensional results, without accompanying approved deviation will be rejected. Rejected PPAPs require that corrective action be submitted to the MSC Quality Department. PPAP product shall be clearly labeled as such and addressed to the MSC Quality Department. Full or interim approved PPAP is required prior to shipping parts to MSC. Any shipments received by MSC prior to obtaining this approval may be rejected. Any exceptions must be documented and approved by MSC. 2.9 Changes to Approved Product and Processes Suppliers are not to make any unauthorized changes to a product or the process used to produce a product that has been previously PPAP approved by MSC. This includes changes to the Process Control Plan. MSC notification and submission requirements are outlined in Section 3 of the AIAG PPAP manual. MSC shall be notified of intention to change a product or process prior to making any changes. Written authorization to proceed with the change must come from MSC. Any change made without prior written approval by MSC may be a breach of MSC purchase order terms and conditions. Suppliers who do not adhere to this requirement will be held responsible for all damages, losses and liabilities attributable to any unapproved changes (e.g. customer rejections, customer line stoppage penalty fees, and/or warranty costs. In addition the supplier may be placed on New Business Hold until the systemic issue is addressed. 2.10 Annual Re-qualification Unless waived in writing by MSC, the supplier shall inspect and test annually each active product supplied to assure conformance to all MSC specified requirements (e.g. dimensional, material and performance). These inspection requirements shall be included in the supplier s production control plan. Annual validation documentation shall be on file at the supplier and available to MSC Document Title: QQS 100.00 Supplier Quality Manual Page 4 of 8
Monticello Spring Corporation upon request. If a non-conformance is found during the annual validation, the supplier must submit a corrective action plan to MSC Quality Department. 2.11 European ELV Directive and IMDS Requirements All MSC suppliers are responsible to ensure that the ELV-Directive is fulfilled, and need to inform MSC about the contents of every part you deliver to MSC through the IMDS system. The IMDS product identification number shall be recorded on the PPAP PSW. 2.12 Verification Reviews of Purchased Product The supplier shall allow MSC personnel to verify, at the suppliers premises that the product conforms to specified requirements. The Supplier shall give access to all areas that are relevant for MSC product. 2.13 Product Identification and Packaging Identification shall permit traceability back to the supplier raw materials lot numbers, as well as the manufacturing, inspection and test records. Suppliers are required to ship material on a first in, first out basis (FIFO). Suppliers shall ensure their products are transported in a manner that prevents damage or deterioration to the product. Suppliers shall maintain documentation detailing proper packaging, cleanliness level, and storage and shipping instructions of its products. 2.14 Delivery and Performance Requirements The supplier shall provide 100% conformance to the delivery and quality requirements as specified by MSC. Those requirements are 100% On Time Delivery performance and Quality requirements of Zero Defects. All costs incurred by MSC as a result of a delivery or quality nonconformance caused by a supplier shall be the responsibility of the supplier, not just the incremental costs. (See elements 3.1, 3.2, 3.3, 3.4 of this manual) 2.15 Contingency Plans Suppliers are required to prepare contingency plans (e.g. utility interruptions, labor shortages, logistics disruptions, key equipment failure, etc.) to protect MSC s supply of product in the event of an emergency. 2.16 Continuous Improvement The supplier shall continually improve Quality, delivery, cost and other services provided. To aid in fulfillment of this requirement the supplier s organization shall establish, monitor, prioritize, and act upon key performance objectives and targets. The objectives and targets should be established based upon (at a minimum) business plans, management systems, product Quality, process capability, and customer satisfaction goals. Document Title: QQS 100.00 Supplier Quality Manual Page 5 of 8
Monticello Spring Corporation MSC reserves the right to visit any supplier site to assess its continuous improvement programs and practices. In addition, MSC may deploy personnel to focus on a specific improvement issue. 2.17 Supplier Corrective Action and Problem Avoidance Suppliers shall have trained personnel with the ability to quickly and permanently resolve product and process issues using data driven problem solving tools and techniques. Problem resolution must be conducted using a defined structured process such as the 8-Dicipline process or any process that includes verification of the root cause and validation of corrective action effectiveness and future recurrences. Timeline to answer a MSC non-conformance report (if not otherwise agreed upon): Immediate response to request for containment 24 hours after notification to confirm receipt of complaint and submit feedback on immediate actions and containment. 10 days (or sooner if requested by MSC) after notification to submit root cause analysis 15 days (or sooner if requested by MSC) after notification to submit the final corrective action. Root cause analysis and actions must cover occurrence and non-detection reason for nonconformance. FMEAs, Control Plans will be updated as required by AIAG manual and corrective actions will be implemented on similar parts/processes as applicable. Unless otherwise agreed, after having verified the effectiveness of implemented corrective actions, future shipments must be clearly labeled with minimum information of applied corrective action and inspection for the next three consecutive shipments. 2.18 Record Retention Suppliers are required to maintain production part approval process (PPAP) packages, annual layout and validation records, traceability records, engineering records, purchase orders and any amendments for the life that the part is active for production plus fifteen calendar years. The above time periods are considered minimum. All retention times shall meet or exceed the above requirements and any governmental requirements. Document Title: QQS 100.00 Supplier Quality Manual Page 6 of 8
Monticello Spring Corporation 3.0 Supplier Cost Recovery & Debits 3.1 An appropriate charge may be imposed by MSC for the followings circumstances: a. Nonconformance Report (e.g. Quality Notification or Nonconforming Service). b. Nonconforming Product Deviation Requests. c. PPAP submission rejections, delays, or shipments of unapproved products. d. Delivery Performance Failures (in addition to any specific costs incurred by MSC associated with the failure). 3.2 Administrative Handling Fees, Sorting Costs at MSC and / or the Customer Location, Travel Fees, or other applicable fees may be issued as a result of Defective Supplied Product. Suppliers will be contacted to arrange sorting at their own expense. Non-response will result in a sort process being initiated by MSC and charge back to the Supplier at a rate of $50.00 per man-hour. Administrative Fees will be charged back to the Supplier at a rate of $250.00 per occurrence. 3.3 MSC will identify any costs incurred from defective products/services provided to MSC and will initiate a Supplier Cost Recovery Chargeback procedure. The chargeback for nonconforming products or services will be the responsibility of the Supplier and are expected to cover failure costs imposed by the end customer of Monticello Spring Corporation. The terms of the chargeback for nonconforming material are determined by MSC based on root cause analysis. 3.4 Costs associated with shipping, handling, reworking, inspecting, and replacing defective material including the costs of value-added operations prior to its discovery shall be charged to, and paid by the Supplier. All Freight / Expediting Costs for Replacement Material will be the sole responsibility of the Supplier. Document Title: QQS 100.00 Supplier Quality Manual Page 7 of 8
Monticello Spring Corporation 4.0 Reference Documents 4.1 The following list of documents/specifications include the quality tools and characteristics that are applicable to all Suppliers to MSC, unless noted or superseded by information contained in the MSC Supplier Quality Manual and / or the MSC Purchase Order. Reference the latest revisions of the following documents: ADVANCED PRODUCT QUALITY PLANNING (APQP) MEASUREMENT SYSTEM ANALYSIS (MSA) FAILURE MODE EFFECT ANALYSIS (FMEA) STATISTICAL PROCESS CONTROL (SPC) PRODUCTION PART APPROVAL PROCESS (PPAP) CQI 9 (As Applicable) CQI 11 (As Applicable) CQI 12 (As Applicable) ISO 14001 (As applicable) NOTE: All documents listed above may be acquired by contacting the Automotive Industry Action Group (AIAG), at website address: www.aiag.org Document Title: QQS 100.00 Supplier Quality Manual Page 8 of 8