-Lorain Manufacturing Supplier Requirements Manual REVISION APPROVAL SHEET CAMACO-Lorain Manufacturing Vice President Assistant General Manager Quality Manager Accounting Manager Materials Manager Production Manager Tooling Manager Engineering Manager Human Resource Manager Maintenance Manager David Smith Mark Blair Danny Burgess Open Steph Fox Bill Glover Marshall Shreve Kevin Behm Cheryl Semmelroth Scott Hayes --Lorain Manufacturing 1
Supplier Requirements Manual INTRODUCTION The purpose of this manual is to establish a clear understanding of CAMACO-Lorain Manufacturing requirements regarding supplier quality and reliability. It is our Company policy to deliver defect-free products and services on time to our customers. So that we may consistently fulfill this obligation, our suppliers shall have control systems in place that are based on defect prevention, and are directed toward the philosophy of Continuous Improvement. To this end, CAMACO-Lorain Manufacturing requires all new suppliers to comply with the requirements set forth by our Corporate Office in Novi, MI. The requirements defined in this manual are provided as a supplement to, and do not replace or alter other terms and conditions covered by the purchase documents or included as requirements of engineering drawings or specifications. Suppliers are expected to conform to Global Working Conditions and federal, state, local, and other requirements, as applicable. CAMACO-Lorain Manufacturing 2
Accounting System Requirements 1. INVOICES The following is a brief description of CAMACO-Lorain Manufacturing, accounting practices as applied to invoices. Invoice shall cross-reference packing list, bill of lading, and purchase order number. Invoice shall include the CAMACO-Lorain Manufacturing part number Invoice pricing will not be changed until a CAMACO-Lorain Manufacturing purchase order amendment form is issued in writing by the Purchasing department. 2. PRICING ADJUSTMENTS All labor costs are firm for the life of the program. Material price adjustments will pass through a purchase order price amendment at the point in time when our customer grants a price increase. 3. TOOLING COSTS Payment for tooling costs incurred by the supplier will be handled as per agreed upon negotiations and as described on the Purchase Order. 4. CHARGEBACKS Suppliers are required by contract to provide CAMACO-Lorain Manufacturing with confirming product, shipped and delivered to the releases. CAMACO-Lorain Manufacturing specifies the scheduled timing and carriers unless the supplier is contracted prepaid delivery. Failure to comply will result in monetary penalty. Below is a list of non-compliances. The list includes, but is not limited to: DMN Processing Charge $250.00 per occurrence Sort by CAMACO Employee $55.00 per hour per person Engineering Assistance, Warranty Investigation $55 per hour Reoccurring Issues, clean point break $1000 plus any customer related costs Shipping Discrepancies $2000 each occurrence Late/Missing ISF10+2 Filing $5000 each occurrence Shipping material without PPAP approval (1 st time) $30,000 o Includes Annual PPAP with $500 for the 1 st day Conflict Minerals Reporting $100 each additional day Customer Returns or charges Pass through Lack of valid, on time, written, Corrective Action $500.00 first day $100 each additional day Machine downtime $75 per hour, per employee Assembly line downtime Minimum of $4000 plus detailed costs Failure to provide on site support for $2500 3
o Problem resolution Tow motor support $75 per hour 5. REJECTIONS Rejected material will be charged back to the supplier at current prices. The supplier will be responsible for all expenses incurred by CAMACO-Lorain Manufacturing resulting from their nonconformity, which shall include, but not be limited to: Sorting time Equipment downtime Premium freight costs Administrative costs CAMACO-Lorain Manufacturing customer charge backs and sort time Product recall costs MATERIALS SYSTEM REQUIREMENTS 1. PURCHASE ORDERS All purchased items are assigned a Purchase Order Number. The PO will reference all requirements or will reference where the information is available. When a Purchase Order is issued along with it is an acknowledgment that must be signed and returned to the buyer. All invoices, shippers, and material tags must reference the Purchase Order Number. 2. RELEASES Supplier releases are created every week. It is the responsibility of the supplier to notify CAMACO-Lorain Manufacturing if they do not receive their weekly release or if there is concern once the release is received. Releases are processed each Wednesday (unless delays occur from our customer), reviewed, and telecommunicated or emailed on Wednesday. Suppliers must monitor current release with the previous week releases for increases/decreases that would affect weekly shipments. Suppliers must be able to react to a 15% increase in released quantities and requirements. Potential problems in meeting an increase in schedules must be immediately communicated to the plant Material Expediter. If Premium Freight is incurred because of a 15% or less increase, the supplier could be debited for that charge. Suppliers are expected to use First In/ First Out inventory control methods. Material Authorization CAMACO mirrors our customer s material authorization. All suppliers are authorized by CAMACO to the following Standard Release Authorization: 2 weeks Fabricated 6 weeks raw Any deviation from this time frame needs to be authorized (via a Purchase Order) by CAMACO Purchasing and Materials. A sign-off of the Purchase Order by both Corporate and Plant Management is required to validate any deviation from the above. 3. PACKAGING All products must be shipped in quality packaging unless otherwise requested by CAMACO-Lorain Manufacturing. Failure to comply may result in return of shipment and/or additional costs of warehousing and handling. Shipment of multiple part numbers in one container is not allowed (unless otherwise requested). This part number(s) must appear as the same part number referenced on our weekly releases. Reusable containers must be stripped of all old labels. 4. LABELS 4
All suppliers are required to ship with AIAG approved bar code labels. Automotive Industry Action Group Standard B-3 for purchased parts and Standard B-5 for steel and wire coils must be followed unless otherwise authorized by CAMACO-Lorain Manufacturing. 5. PACKING SLIPS Each shipment must be accompanied by a packing slip for both receipt and payment. The carrier (truck driver) must present the packing slip upon delivery to the receiving plant, unless prior agreement was finalized. It must contain the following information: Supplier name Supplier number Release number Part description Part quantity Notification of 1 st shipment of New Engineering Change Part accumulations (accums) shipped to date Packing slip number Purchasing order number Material release number Complete CAMACO part number with current engineering revision level 6. ISF10+2 FILLING Suppliers must comply with United States Customs and Boarder Protection. Completed ISF10+2 forms must be filed 72 hours prior to sailing. 7. OBSOLESCENCE Suppliers must submit their claims to the Purchasing Materials Buyer within fifteen (15) working days of final production date. All claims will be audited. Payments of claims will be dependent on remittance from our customer. It is the responsibility of the supplier to contact CAMACO-Lorain Manufacturing, in writing, if they have obsolescence to submit within the required time frame. We request that you comply with the following procedure for submitting your obsolescence: The form Supplier Cancellation Claim is to be used for claims that involve the purchased parts supplied to CAMACO-Lorain Manufacturing. Copies of this form are available from the buyer. Only one part number per form is allowed. A copy of the release schedule, which establishes your high points and verifies your final accum shipped into our plant, must accompany each claim form. The claim must exceed $500.00 to be considered. A claim is for one part number All claims must be received on or before required due date, otherwise the claim will be denied and CAMACO-Lorain Manufacturing and or the customer will not be responsible for any costs. All pertinent information must be completed. This includes finished goods (purchased parts); work in process, and raw material. We must know the usage per assembly for each raw material and in process item claimed, as well as the material claimed for work in process, otherwise, the claim will be returned unprocessed. All claims must be in U.S.D. Incomplete or illegible forms will be returned unprocessed. All claims should be sent to: CAMACO-Lorain Manufacturing 3400 River Industrial Park Road Lorain, OH 44052 Attn: Materials Purchasing Buyer All materials must remain at the supplier until the Customer audit has been completed and written disposition for material has been received from our Accounting Department. 8. SERVICE PARTS It is the responsibility of each supplier to fulfill any service part order for CAMACO-Lorain Manufacturing. Service part orders must be fulfilled for seven (7) years or per Customer requirements, or after tools are declared obsolete by our customer. All components are eligible for service parts orders. The CAMACO- 5
Lorain Manufacturing, Lorain, Ohio Plant, will convey any service orders to the supplier upon receipt. All service parts must be produced from production tooling, therefore, continued preventative maintenance of tooling is required. Pricing parts for service will be at production prices for as long as any claimed obsolete inventory exists. Requirements for service parts will be communicated through the regular EDI transactions or phone contact followed by faxed transaction. QUALITY SYSTEMS REQUIREMENTS 1. PPAP & PRODUCT QUALITY All suppliers are required to submit a PPAP for new parts or revisions in compliance with the AIAG PPAP Manual. A Level 3 PPAP submittal is required, unless otherwise approved, in writing, by the CAMACO Lorain Manufacturing Quality Manager. In addition, an Annual Dimensional Layout will be provided along with current material certification (less than 12 months old). When deemed necessary the supplier will have the material used in their product tested by a certified lab and the results forwarded to the CAMACO Supplier Engineer. CAMACO Lorain Manufacturing reserves the right to request and / or attend a run at rate verification. 2. CONTAINMENT/CORRECTIVE ACTION If defective material is identified and/or a DMN issued, the supplier is responsible for adequate containment actions, including all product warehoused and/or in transit. When corrective action is taken, the supplier must notify the CAMACO Supplier Quality Engineer of the clean point, including the date, time and trailer of the conforming product. Corrective action requirements may include 100% sort with an appropriate charge-back, certification of shipments, a formal 8D, a visit/audit of the suppliers facility by CAMACO Supplier Quality Engineer or a require meeting at the CAMACO Lorain facility. When defective material is found, a Return Material Authorization must be issued within 24 hours or the material will be scrapped and the supplier debited accordingly. 3. ISO/TS16949 CERTIFICATION All suppliers are encouraged to be 3 rd party registered to ISO/TS16949, or self certified to ISO/TS16949. CAMACO Lorain Manufacturing reserves the right to perform an on site audit regardless of third party certifications. 4. MATERIAL CERTIFICATION All products are required to have a certificate of conformance and material certification, where applicable, with every shipment or available upon request by CAMACO. 4.1 Conflict Minerals Reporting To be compliant with the U.S. Securities and Exchange Commission (SEC), Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Camaco is requiring all suppliers to submit documentation on an annual basis in regard to the use of Conflict Minerals. Currently there are 2 options to achieve compliance ti the requirements: Register your company for the ipoint Conflict Minerals Platform (ipcmp) tool, endorsed by General Motors and many tier one and OEM partners. This tool enhances the ability for information exchange up and down the supply chain and can found at http://www.conflict-minerals.com/. If it is not possible to provide reports through the ipcmp tool, return a completed Electronic Industry Citizenship coalition and Global e-sustainability Initiative (EICC-GeSL) Conflict Minerals Reporting Template to smalone@lorain.camacollc.com. This template can be found at www.conflictfreesmelter.com. 6
5. NAFTA CERTIFICATES OF ORIGIN All suppliers are required to provide annual NAFTA Certificates of Origin prior to beginning of new calendar year. 6. IMDS All suppliers are required to provide IMDS declarations for end of vehicle life (ELV). 7. RATING SYSTEM Suppliers to the CAMACO Lorain facility are rated on performance monthly. Quality (PPM s) and On Time Delivery are the key components of the rating system. A MQR (Management Quality Review) at the CAMACO Lorain facility may be requested if PPM s exceed 25. The CAMACO Audit Team will perform audits of the Quality Systems of selected suppliers. Supplier performance can be used as a basis for the award of new business. 7