SUPPLIER MANUAL 6/25/2014
PAGE 1. PURPOSE OF THE SUPPLIER MANUAL 1 2. SUPPLIER CODE OF CONDUCT 1 Introduction and General Guidelines 1 Work Environment 2 Health and Safety 2 Environment 2 Ethics 2 Gifts, Gratuities & Improper Payments 2 Confidential Information 3 Supplier Management System 3 Compliance Monitoring 3 Code Violations 3 3. SUPPLIER INVOLVEMENT 3 4. VERIFICATION REQUIREMENTS 4 5. COMMERCIAL REQUIREMENTS 4 6. MINORITY SOURCING 4 7. SERVICE 4 8. LEAD-TIME DELIVERY 4 9. SHIPMENT QUANTITIES AND PACKAGING 5 10. SHIPPING DOCUMENTS 5 11. DROP SHIPMENTS 6 1 P a g e
12. PLANT LOCATIONS 6 13. SUPPLIER PERFORMANCE DEVELOPMENT 6 Supplier Rating System 6 Supplier Performance Reporting (Score Card) 6 Overall Scoring 7 PPM Scoring 8 On Time Delivery Scoring 9 Cost and Innovation Scoring 10 Composite Scoring 11 Supplier Control 12 14. FORMALIZING YOUR QUALITY SYSTEM 12 15. QUALITY REQUIREMENTS (APQP) 12 16. PRODUCTION PART APPROVAL PROCESS (PPAP) 13 17. PROBLEM RESOLUTION 14 18. SUPPLIER RESPONSE 14 8-D Flow Chart 15 19. HANDLING NONCONFORMING PRODUCT 16 20. CHARGE BACK POLICY 16 21. TRACEABILITY 17 22. CONFLICT MINERALS REPORTING 17 2 P a g e
1. Purpose of the Supplier Manual The Janesville Acoustics (JA) Supplier Manual has been developed to communicate our expectations. As a supplier, you must comply with the requirements listed in this manual and to the terms and conditions of Janesville Acoustics (JA s) purchase orders. This is a mandatory requirement of suppliers doing business with JA. Here at JA we see suppliers as a key factor in our current and future business as well as an extension of our own company. This manual should be used as a minimum guideline for Supplier Quality requirements in doing business with JA. We expect our suppliers to have 100% on time delivery, zero PPM, accurate ASN/EDI, best value, and excellence in service. To become a supplier to JA a supplier must be able to do and meet the following at a minimum: Must be value added and cost reduction driven. Be cost and quality competitive. Deliver product on time and in the correct quantities as requested. Flexible to meet the constant changes and requirements as customers expect. Able to demonstrate compliance to ISO 9001, and preferably TS 16949. Competitive technology advances in product development and engineering. JA believes in treating all suppliers fairly and equally regardless of size or national origin. 2. Suppler Code of Conduct Introduction and General Guidelines Janesville Acoustics, a Unit of Jason Incorporated ( Janesville ), is one of the world s largest producers of acoustical and thermal fiber insulation, and a leading producer of automotive decorative trim and molded fiber products, with operations throughout the United States and several foreign countries. Janesville strives to consistently treat its employees, customers, suppliers ( Suppliers ) and the communities in which it operates with honesty, dignity, fairness and respect. Janesville is committed to be a responsible and engaged corporate citizen, and its goal is to conduct operations in accordance with the highest standards of ethical behavior and business integrity. Janesville s reputation and commitment to compliance are important assets of Janesville. For this reason, it is the policy of Janesville to conduct business in accordance with the highest ethical standards and in accordance with the applicable laws and regulations of the United States and the laws and regulations of other jurisdictions in which Janesville operates. However, ethical conduct goes beyond just obeying the law, 1 P a g e
but also includes conducting business in a fair, honest and open manner. This Code embodies these principles. This Code applies to all Suppliers and their employees, and they and all third-parties retained by them (including agents, representatives, consultants and other business partners) are expected to comply with this Code. 2. A. Work Environment Janesville is committed to compliance with all applicable employment laws and regulations in all jurisdictions in which it operates, and Janesville does not employ child or forced labor, even if allowed by local laws. Suppliers must comply with all applicable employment laws and regulations and may not use (and may not purchase for resale to Janesville materials or services from companies using) child or forced labor, and Suppliers must be able to verify their compliance with this policy. Health & Safety Janesville is committed to the safety and security of its employees, customers, Suppliers and visitors and to providing safe, secure and healthy working conditions for its employees. Janesville will not tolerate any aggressive, violent, intimidating or threatening behavior in the workplace, and no Supplier or visitor may bring a firearm, weapon or explosive onto Janesville property. Suppliers must provide their workers with safe and healthy working conditions. Suppliers should take proactive measures that support accident avoidance and minimize exposure to health risks, should support the continuous improvement of working conditions and must at all times comply with the applicable health and safety laws and regulations of the jurisdictions in which the Supplier manufactures products for Janesville. 2. B. Environment Suppliers are expected to conduct their operations in a manner that minimizes the impact on natural resources and protects the environment. Suppliers must act in accordance with all applicable environmental laws and regulations and immediately implement corrective action should any non-compliance be found. 2. C Ethics Gifts, Gratuities & Improper Payments Janesville has worked hard and will continue to work hard in gaining and maintaining the trust of its Suppliers and such trust is integral to the continued success of Janesville. Janesville expects to secure and maintain Supplier business relationships based on the value of the goods and services it purchases, not based on improper payments. Accordingly, Janesville policy strictly prohibits bribes, kickbacks or any other form of improper payment (whether direct or indirect) from any Supplier or its associates to obtain or maintain a contract, business relationship or any other improper advantage. No Janesville employee will be influenced by gifts or favors of any kind from any Supplier, and Janesville employees will not accept any payment, reward or any other incentive of any kind from any person or company to secure any kind of preferential treatment. Janesville Employees will never solicit gifts from any Supplier. Janesville Employees may accept invitations for occasional meals or entertainment events or accept gifts of nominal value from 2 P a g e
Suppliers, however, all such invitations, gifts or other business courtesies will be reported to the employee s supervisor. Suppliers and their employees must honor these policies. Confidential Information Suppliers may be provided access to confidential and proprietary information about Janesville, including, without limitation, schematics, drawings, formulas, specifications, know-how, compilations of data, machinery, products, forecasts, sales methods, customer lists, customer usages and requirements, financial information and all other confidential information, trade secrets and data (collectively referred to as "Confidential Information"). Such Confidential Information is not ordinarily communicated to the public, is strictly confidential, and represents a significant asset of Janesville. All Suppliers must protect and safeguard Janesville s Confidential Information and must not disclose any Confidential Information to any person or entity other the Supplier employees who have a need to know the Confidential Information for purposes of Supplier s business relationship with Janesville. Nothing in this paragraph or Code is intended to limit or affect the rights of Janesville pursuant to any confidentiality or nondisclosure agreement between Janesville and any Supplier. Supplier Management System Suppliers are expected to have a management system that ensures they comply with all applicable laws, regulations and Janesville policies. Compliance Monitoring Suppliers must allow Janesville or its representatives or agents access to their facilities and all relevant records associated with goods and services provided to Janesville. Such access will be given at reasonable dates and times; however, risk to Janesville s business may require immediate access, and Suppliers must accommodate such access as is necessary or required. Code Violations If a Supplier does not comply with this Code, Janesville may require the Supplier to implement a corrective action plan to cure the noncompliance within a time period specified by Janesville in writing. If the Supplier fails to meet a corrective action plan commitment, Janesville may terminate the business relationship, including, without limitation, by terminating or suspending existing orders. Janesville reserves the right to hold Suppliers responsible for reasonable costs of investigating noncompliance with this Code. Janesville s remedies are cumulative and not exclusive, and nothing in this paragraph or Code is intended to limit or affect Janesville s rights and remedies under any law, terms and conditions or other contract. 3. Supplier Involvement JA also believes in early supplier involvement on the basis of cross-functional-team cooperation in the development process. This will help to drive innovation, to shorten development times, improve quality and 3 P a g e
to reduce cost. At JA our aim is to provide the best added value paid by customers and to support a product delivery to the market in the best-in-class time, quality and costs. 4. Verification Requirements Suppliers must complete a JA Supplier Self-Assessment (SSA) when requested by the JA Purchasing group. This SSA is to give JA a general understanding of the supplier s facilities and quality systems. At times a formal audit called the JA Supplier Evaluation Process may be conducted at a supplier s facility. Suppliers will be notified in advance if an Evaluation Process Audit is going to be needed. 5. Commercial Requirements Terms and Conditions Normal JA payment terms are net 60 days. See www.janesvilleacoustics.com suppliers (menu item) for all terms and conditions for purchase orders. 6. Minority Sourcing At JA we are required and rated by our customers to purchase products and services from Certified Minority Business Enterprises (CMBEs). Our suppliers are also required to use these companies whenever possible. A CMBE is defined as a company certified by the National Minority Supplier Development Council or one of its affiliates such as Minority and Women Business Enterprise (MWBE). Any supplier using a CMBE is to report this to the Supplier Development Manager at JA on a quarterly basis. 7. Service All suppliers are required to have a fully trained backup to our primary customer service contact. This person must have a thorough understanding of all requirements. 8. Lead-Time Delivery JA and the supplier will agree to an assigned lead-time for the purchased product or service before or during the ordering process. Transit time is to be considered in the development of lead-time. When lead-time is not formally agreed upon, lead-time will be interpreted as a maximum of seven calendar days. Changes or anticipated changes in lead-time must be communicated to the JA Supply Chain Department and to the appropriate plant Materials Manager. 100% on-time delivery performance is required. The delivery date is defined as the date the complete order is delivered to the correct JA facility. For all purchased materials, components, tools, and supplies, delivery is measured against our Purchase Order and release date. The release date is not the supplier s ship date; it is the date JA requires the product delivered to our facility. 4 P a g e
As soon as it is available, the supplier will communicate all holiday and scheduled plant closures to the JA shipping location plant Materials Manager. JA responds to customer requirements and may ask a supplier to supply product prior to the agreed upon delivery date. Suppliers are required to respond and assist JA in meeting these requirements. If a supplier cannot meet these requirements, it is the supplier s responsibility to advise JA of the best possible delivery date after all options have been investigated. 9. Shipment Quantities and Packaging Unless otherwise specified, JA s allowable shipping tolerance for bulk items is +/-10%. Shipments received outside of this tolerance are subject to rejection unless authorized by the JA Purchasing Department or Plant Materials Manager. Packaging for all materials, components, supplies, tools and parts returned from outside operations must be sufficient to provide suitable protection against nonconforming conditions. Unless otherwise specified, parts returned from outside operations must be delivered back to JA in their original container and the quantity per each container should approximate the original container quantity. When bin liners are used for finished parts returned from outside services, they must be closed to prevent contamination. All labeling will require Bar Code labels. Suppliers will use the AIAG B-10 bar code format. Part numbers on bar codes must be the JA part number not the suppliers part number. All mixed skids must also be identified with a Master Label on the skid. Any questions on Labeling can be addressed by using the AIAG guidelines. We also encourage you to contact your Materials Manager at the JA Plant to have any specific requirements understood. 10. Shipping Documents All shipments must include the following: JA requires the use of an Advance Shipping Notification, indicating part number, shop order, quantity, and number of containers. This information is to be faxed or e-mailed to the correct JA Materials Manager prior to shipment. At JA, the Materials Management Operations Guideline (MMOG) is used to evaluate the supply chain for continuous improvement and material definitions as recommended and used by our customers. Suppliers can obtain current information and training via AIAG. 5 P a g e
11. Drop Shipment On special occasions drop shipments may have to be made by the supplier. All shipments of this type will be at the direction of the Commodity Manager or the Materials Manager from the plant making the request. Drop Shipments will still need to adhere to the same quality requirements as listed in this manual. 12. Plant Locations and Receiving Hours See Supplier Portal for locations 13. Supplier Performance & Development All suppliers that have a current ISO or TS certification may or may not be subject to a JA Supplier Evaluation audit. This will be at the discretion of the JA Purchasing Group. If no audit is performed, it is because supplier has met JA s criteria for wavier. 13 A. Supplier Rating System This rating is to be used by the supplier as a benchmark for continuous improvement by the supplier. The rating system will also be used internally by JA as a guide for current and new business sourcing decisions. 13 B. Supplier Performance Reporting The JA supplier scorecards will be posted on a quarterly basis. Suppliers will be rated on PPM, Delivery, and Cost Reduction/Innovation. Quality defects will be defined by using the PPM method. Maximum points for PPM are 35. Delivery will be based on a percentage of on time deliveries. This will be defined as 2 days early or 1 day late based on the required due date. Maximum points for on time delivery (OTD) are 35. Cost/Innovation is divided into 4 categories: cost reductions, cost savings / innovation ideas (one per quarter), minority program, and response to business issues. Maximum points are 30. 6 P a g e
OVERALL SCORING 7 P a g e
PPM Scoring 30 Points 0 PPM 35 1-5 PPM 30 6 10 PPM 25 11 20 PPM 20 21 30 PPM 15 31 49 PPM 10 > 50 PPM 0 8 P a g e
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Preferred >85% Conditional 70 85% Poor <70% 11 P a g e
13.C Supplier Control Suppliers with a green composite score are preferred for current and new business. Suppliers with a yellow composite score are preferred for current business, but, may be questionable for new business.. Any Supplier with a poor composite score in any given quarter is subject to a loss of business and a corrective action plan (8D) must be submitted to the Commodity Manager. Two or more consecutive quarters of a composite score of poor will result in meetings with the supplier with JA to review progress and offer assistance. 14. Formalizing Your Quality System JA suppliers will be certified to a minimum of ISO 9001 unless waived by JA. Conformance is demonstrated through (either/or) ISO or TS certifications. All certifications for ISO and TS are to be supplied and updated by the supplier to their JA Commodity Manager. 15. Quality Requirements Advanced Product Quality Planning (APQP) JA performs APQP on its products and asks that program critical suppliers that are identified by the APQP Team participate with JA in this endeavor. The supplier and JA must understand and agree on all applicable quality standards and requirements. Agreement must be reached on all critical quality characteristics, control items, check fixtures, packaging requirements, and all other quality related matters. Program Critical Suppliers identified by the APQP Team are responsible for creating Control Plans, Process Flow Charts, and Process Failure Mode Effects Analysis (PFMEA), etc., in order to substantiate conformance to all applicable product requirements. These suppliers are to follow the program elements in the APQP Timing Plan. Suppliers are not authorized until they receive PPAP approval, unless a written deviation has been granted by JA. APQP elements will be the following: 1. Submit Team feasibility Commitment Form 2. Source selection by JA 3. Initiate APQP Activity 4. Develop Product Quality Timing Plan 5. Complete Preliminary Process Flow Diagram 6. Complete Preliminary Listing of Special Product and Process Characteristics 7. Design FMEA 8. Design Review 9. Review Specifications Engineering, Material, Drawing 10. Review Subcontractor APQP Status 11. Facility and Layout 12 P a g e
12. Complete Machinery, Equipment, Tooling Design and Build 13. Prototype Builds 14. Gage Reviews. Gage R&R Team Feasibility Commitment Form - Design 15. Review Quality Systems, Procedures, Work Instructions 16. Final Production Process Flow Chart 17. Complete Process FMEA 18. Complete Pre-Launch Control Plan 19. Complete Packaging Specifications 20. Complete PPAP Production Run, Capability Studies, Control Plans 21. Complete Early Production Containment Plan 22. Submit PPAP 23. Complete Run @ Rate 24. Submit IMDS 25. Complete Conflict Minerals Report 26. Lesson Learned Review JA recommends that all suppliers use the latest revision of the AIAG Manuals (which can be found at the AIAG Website) for: Advanced Product Quality Program Production Part Approval Process Failure Modes and Effects Analysis Statistical Process Control Measurement System Analysis JA requires that the supplier use a formal sampling plan. At JA, we use a Zero-Based Acceptance Plan. Suppliers must use the same criteria for JA shipments. 16. Production Part Approval Process (PPAP) All submissions will be specified by JA at the commencement of the Advanced Quality Planning Process. If no submission is requested the default will always be to follow the APQP guidelines and processes. Any material testing must be by an A2LA accredited laboratory unless otherwise communicated by the JA Program Manager and/or Plant Quality Department. All PPAP s will be a level 3 unless otherwise directed on the purchase order. 13 P a g e
17. Problem Resolution If a nonconformance issue is found at the plant, the plant may initiate a Supplier Corrective Action Request (SCAR). JA requires that a systematic problem-solving method be utilized. The Supplier is required to implement short-term and long-term corrective action plans and verify the effectiveness of the corrective action taken. Initial response/containment is required within 24 hours, and final response is required within 10 calendar days. The JA Plant Quality Assurance Manager must approve further extensions. Suppliers should include opportunities to mistake-proof (Poka Yoke) the product or process and apply the corrective actions to all JA products in their facility (if possible). 18. Supplier Response Suppliers must respond to the SCAR by using the 8-D format. Suppliers are to be fact- based and data driven in defining root causes. Once a root cause has been identified Suppliers are to update all relevant documentation that is affected to standardize corrective actions into the quality system. For example, Process FMEA, control plan, and job instructions.. These are some examples of processes to define root causes. 5 whys Fishbone Is / Is Not Pareto Charts DOE Cause and Effect Diagrams DEFINE MEASURE CONTROL 14 P a g e
Example of 8-D flow Chart: 15 P a g e
19. Handling Nonconforming Product When a supplier detects or suspects nonconforming material, they are expected to contact the JA Plant Quality Department of the affected plant before shipment. The supplier can submit a supplier deviation request. It is up to the Plant Quality Department to decide if the deviation is acceptable or not. Deviations may be accepted as the following: 1. One Time Request 2. Temporary Request All shipments that are shipped under an approved deviation are to be identified as such. It is the supplier s responsibility to disposition nonconforming product identified at the JA location promptly. Nonconforming product held at JA for more than one week after determination and confirmation of the nonconforming condition will either be returned freight collect to the supplier or scrapped at JA. JA does not provide scrap credit to suppliers. JA reserves the right to invoke Level II containment with each lot of material to verify that corrective actions are implemented and conformance maintained. Under Level II containment, the supplier will absorb all the costs associated for any and all third party sorting or JA in house sorting. The supplier is also responsible to contain any material that is at their location or is in transit to JA. The supplier will also furnished data from the sort, for the condition (mixed parts, missing treatment), that warranted the sort. All sorted material must be identified as certified material that is defect free. To exit Level II containment, the supplier must: Submit a corrective action, which is verified effective by the JA Quality Assurance Department. Supply defect free product based on a mutually agreed upon plan. 20. Charge Back Policy Costs associated with supplier part quality or delivery issues and PPAP rejection issues, that are deemed the supplier s responsibility, will be charged back to the supplier at actual costs. Costs may include customer-imposed charges if the quality or delivery issue resulted in a late order or quality complaint from our customer. Other costs for quality issues can include, but are not limited to: 1. Premium freight and air freight to and from the customer or JA facilities. 2. Additional labor, third party, overtime, any added expense associated with labor. 3. Customer claims. 4. Downtime. 5. Scrap. 16 P a g e
6. Administrative support fees 7. Fees associated with follow up actions and assessments. 8. Other fees associated with the defective condition. 21. Traceability The quality system shall ensure that all applicable quality records and data are traceable to the appropriate drawing revision level. Additional traceability requirements may be requested by JA. Any and all reworked materials must be traceable back to the sorting process as agreed by JA and the supplier. The supplier will have a Quality System in place to trace supplied manufactured products back to the raw materials and/or settings of the manufacturing process. All products must be identified and traceable by using date codes, lot codes, or by some other means. 22. Conflict Minerals Reporting Conflict minerals is a term used to describe certain minerals such as gold, wolframite, casserite, columbitetantalite and their derivative metals which include tantalum, tin, tungsten and are used in numerous automotive components with various applications. These items and any other compounds designated by the Secretary of State that are sourced from mines under the control of violent forces in the Democratic Republic of Congo (DRC) or the surrounding countries (Angola, Burundi, Congo, Central African Republic, Republic of Tanzania, Rwanda, Sudan, Uganda and Zambia) are prohibited. In order to support accurate reporting, suppliers should: Determine which parts/assemblies incorporate one or more of the identified minerals or their derivatives Map the supply chains associated with those same parts/assemblies Engage with suppliers to identify the smelters used in the supply chain to process the raw materials (or validate the origin of materials as recycled/scrap). For more information, please feel free to contact your Janesville Commodity Manager or go to www.aiag.org. 17 P a g e
Revised 4/22/2013 Revised scoring, wording pages 5 and 11 J Rogers Revised 7/31/2013 Added Bar Coding page 5 J Rogers Revised 5/30/2013 Controlled Document J Rogers Revised 12/11/2013 Added Section 22, revised sections 13, 14, 15 & reviewed manual J Rogers Revised 1/22/2014 Revised scoring page 11, section 13.C J Rogers Revised 4/09/2014 Revised PPM Scoring and OTD Scoring, section 13.B J Rogers Revised 4/21/2014 Revised wording Quality Requirements, section 15. J Rogers Revised 6/25/2014 Revised wording Section 19 & 20. J Rogers Prepared by Date Reviewed/approved by Date Reviewed/approved by Date Department Head: Management Representative: John Rogers 5/30/2013 Sandra Dorfman 1/22/2014 John Rogers 6/25/2014 18 P a g e
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