LAST UPDATED JUNE 2015, REV 01
AVAILABLE AT WWW.LEVANTPOWER.COM
SUPPLIER REQUIREMENTS MANUAL
Table of Contents:
1
2
3
4
DOING BUSINESS WITH LEVANT POWER .............................................................................................................. 4
1.1.
Purpose of the Supplier Requirements Manual ........................................................................................4
1.2.
About Levant Power ..................................................................................................................................4
1.3.
Scope .........................................................................................................................................................5
1.4.
Supplier Responsibilities............................................................................................................................5
1.5.
Standards of Business Conduct and Ethics ...............................................................................................5
1.6.
Supplier Confidentiality .............................................................................................................................5
1.7.
Business Changes.......................................................................................................................................5
1.8.
Communications........................................................................................................................................5
1.9.
SRM Changes and Updates........................................................................................................................5
SUPPLIER QUALITY SYSTEM REQUIREMENTS ........................................................................................................ 6
2.1.
Product Safety, Liability and Warranty......................................................................................................6
2.2.
Quality Planning ........................................................................................................................................6
2.3.
Sub-Tier Supplier Control...........................................................................................................................6
2.4.
Lot Traceability ..........................................................................................................................................7
2.5.
Lot / Batch Definition ................................................................................................................................7
2.6.
Internal Audits ...........................................................................................................................................7
2.7.
Dock Audit .................................................................................................................................................7
2.8.
Annual Layout Inspections ........................................................................................................................7
2.9.
Operator and Inspection Instructions .......................................................................................................8
2.10.
Record Retention.......................................................................................................................................8
2.11.
Drawing and Change Control .....................................................................................................................8
2.12.
Change Management ................................................................................................................................8
2.13.
Right of Entry and Audits ...........................................................................................................................9
SUPPLIER ASSESSMENT AND QUALIFICATION ....................................................................................................... 9
3.1.
Initial Supplier Profile ................................................................................................................................9
3.2.
Supplier Screening/Data Analysis Process .............................................................................................. 10
3.3.
Supplier Assessment ............................................................................................................................... 10
3.4.
Assessment Results ................................................................................................................................ 10
3.5.
Approval status for Business Awards...................................................................................................... 10
QUALITY PLANNING AND PRODUCT APPROVAL.................................................................................................. 10
4.1.
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General Requirements............................................................................................................................ 10
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5
4.2.
Production Part Approval Process (PPAP) .............................................................................................. 11
4.3.
Detailed PPAP Submission Requirements .............................................................................................. 11
PROJECT MANAGEMENT ..................................................................................................................................... 14
5.1.
Project Team........................................................................................................................................... 15
5.2.
Project workflow .................................................................................................................................... 15
6
COST OF POOR QUALITY ...................................................................................................................................... 15
7
CLOSED LOOP CORRECTIVE ACTION .................................................................................................................... 15
8
SUPPLIER DEVELOPMENT .................................................................................................................................... 16
9
SUPPLIER MANAGEMENT .................................................................................................................................... 16
10
CONTINUOUS IMPROVEMENT ........................................................................................................................ 16
11
SUPPLY CHAIN RISK MANAGEMENT AND BUSINESS CONTINUITY GUIDELINES ............................................. 17
12
LOGISTICS ........................................................................................................................................................ 17
12.1.
Packaging ................................................................................................................................................ 17
12.2.
Labeling .................................................................................................................................................. 18
12.3.
Contract Requirements .......................................................................................................................... 18
12.4.
Deliveries ................................................................................................................................................ 18
13
ENVIRONMENTAL REQUIREMENTS ................................................................................................................. 18
Table of Figures:
Figure 1: Supplier Development Cycle.......................................................................................................................... 4
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1
DOING BUSINESS WITH LEVANT POWER
1.1. Purpose of the Supplier Requirements Manual
The purpose of this manual (referred to herein as the “SRM”) is to define the minimum requirements,
processes, and systems for doing business with Levant Power Corporation. The manual outlines processes
used to ensure that Levant Power’s supply base is continually improving to prevent quality and delivery
disruptions, provide the lowest cost, and top level service (Reference Figure 1). Implementation of the
processes outlined in this manual will not only reduce risk of supply chain disruptions, but will also help
Levant Power and its suppliers to increase our competitive industry position and ensure our continued
mutual success.
In this manual, the terms “shall” and “must” mean that the described requirement is mandatory, while the
term “should” means that the described requirement is needed and expected with some flexibility in
how it is implemented.
Figure 1: Supplier Development Cycle
1.2. About Levant Power
Levant Power is reinventing the future of the automobile. Our product, GenShock, virtually eliminates the
perception of road bumps while enabling unprecedented handling. The technology has broad application
across motion control industries including aviation, transportation, industrial manufacturing, and robotics.
For more information, visit www.Levantpower.com.
Levant Power works with suppliers who deliver the best quality, value and service at the most competitive
cost. Our suppliers are innovative and dedicated to driving continuous improvement in their operations.
Together we address all aspects of cost reduction, waste elimination and efficiency improvement in a
dynamic global environment. To learn more about doing business with Levant Power, please access our
web-site.
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1.3. Scope
This manual is applicable to all external suppliers developing and/or supplying production material to Levant
Power or one of its contract manufacturers at the request of Levant Power.
The SRM was developed with the intent to cover customized parts and sub-assemblies. For standard
catalogue parts the SRM may be partially applied at the discretion of Levant Power Supplier Quality.
Levant Power’s Terms and Conditions (T’s & C’s) take precedence over this document in the event of
conflict.
1.4. Supplier Responsibilities
It is the responsibility of all suppliers to review, understand and ensure compliance with this manual as part
of doing business with Levant Power. This must be confirmed by returning the SRM-Supplier
Acknowledgement Letter.
The supplier is required to ensure that the Levant Power requirements are understood, trained, implemented
and maintained at the supplier.
In case of any questions the supplier should contact the responsible Levant Power Lead Buyer or Supplier
Quality Engineer.
1.5. Standards of Business Conduct and Ethics
This standard outlines Levant Power’s minimum expectations regarding workplace standards and ethical
business practices. Levant Power requires our suppliers to adhere to this Code. Please make your
employees aware of our Supplier Code of Conduct. The Supplier Code of Conduct may be downloaded
from the website to share with your organization as appropriate.
1.6. Supplier Confidentiality
Documents furnished by Levant Power to the Supplier are solely for the purpose of doing business with
Levant Power. These documents shall be controlled by the Supplier and must not be transmitted to others
without the consent and approval of Levant Power. All Suppliers are required to sign a non disclosure
agreement before doing business with Levant Power.
1.7. Business Changes
Any significant changes in business climate such as acquisitions, divestitures, pending litigation, or any
activity that may change the financial viability of the supplier’s organization must be communicated to Levant
Power within 30 calendar days.
1.8. Communications
All documentation must be communicated to Levant Power in English unless otherwise specified. Suppliers
must maintain and have access to an electronic form of communication i.e., the internet/worldwide web.
1.9. SRM Changes and Updates
Suppliers will be notified of any major changes to the SRM. The latest revision of the SRM will be maintained
and available on the Levant Power Supplier Info website.
Nonconformance to changes and updates for any reason must be reported by the supplier to the
responsible Levant Power Lead Buyer within 10 business days of release of the SRM.
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Supplier improvement proposals on the Manual should be submitted to the responsible Buyer.
2
SUPPLIER QUALITY SYSTEM REQUIREMENTS
All suppliers must be compliant to ISO 9001, certified by a 3rd party registrar, at a minimum. Certification to
ISO/TS 16949 is strongly recommended. If the supplier does not currently have certification to one of these
standards, they shall have a documented plan approved by Levant Power for obtaining such certification within 18
months.
Suppliers must notify Levant Power within 30 days if their third party registration status changes.
The following additional requirements also apply:
2.1. Product Safety, Liability and Warranty
The supplier is responsible to ensure that any and all materials, components, products and services
supplied to Levant Power in all respects conform to Levant Power specifications, drawings, quality
requirements and that such materials, components, products and services are free from defects in design
(to the extent designed by supplier), material and workmanship.
All nonconforming materials, components, products and services can cause product safety, liability and
warranty issues that will be claimed against the supplier.
Therefore all supplier staff members, who are responsible for or working with instructions related to product
quality and performance, must be educated and understand the principles of product safety, liability and
warranty.
The supplier must introduce adequate systems, ensuring the following:




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Information and qualification of the affected personnel
Compliance with and use of state-of-the-art technology
Development, production and quality assurance processes and their supervision are according to the
latest status of technology (it may not be sufficient only to comply with the standard)
Limitation of fault consequences by documentation and traceability system
Immediate information is provided to Levant Power of any discovered nonconformity
2.2. Quality Planning
Suppliers shall follow industry standard Quality Planning as defined in the AIAG APQP Manual. Please
see the Advanced Product Quality Planning (APQP) section of the Supplier Info website and section 5
herein for additional requirements. Quality planning must be maintained throughout all phases of the
product life cycle, from inception to delivery to the customer. The results of each activity during the
project shall be made available to Levant Power on request. The supplier must report progress
and the current status of all projects to Levant Power on a regular basis.
2.3. Sub-Tier Supplier Control
The supplier must maintain sub-tier supplier/contractor qualification records along with on-going quality
and performance test data as applicable on products purchased through these sub-tier suppliers.
Supplier shall flow down requirements to their sub-tier suppliers that enables supplier to meet Levant
Power product print, specification, quality expectations, and any contractual agreement.
Levant Power reserves the right to specify or approve sub-tier suppliers contracted by its suppliers
for work performed on Levant Power material. This applies to all suppliers including, but not limited
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to, special process (non-destructive testing, heat treating, welding, chemical processing, plating and
coatings), material testing services, and distributors.
2.4. Lot Traceability
Suppliers shall establish a lot traceability system that tracks components throughout the value stream, from
raw material through shipment to Levant Power. This includes all process steps including inspection and
test procedures, rework and sub-tier supplier operations. Critical and significant characteristics as indicated
on Levant Power drawings and specifications shall be traceable and recorded from the lot/batch number of
the delivered part to the raw material(s) lot(s)/batch(s) from the sub supplier. This is also applicable for all
process parameters affecting such characteristics and raw material certificates or analyses.
All records shall be provided to Levant Power immediately upon request.
Where a 'shelf life' restriction applies, suppliers shall ensure that materials are tracked and
controlled to prevent expired materials from being used in production.
Suppliers must certify, as part of sample submission, compliance with current constraints on
restricted substances as specified by PO or contract, especially toxic and hazardous substances
(i.e. International Material Data System).
Additional detailed requirements may be flowed down based on product type / commodity.
2.5. Lot / Batch Definition
If not otherwise specified, the supplier’s manufacturing lot/batch size shall not exceed one (1) day (24
hours) production, with a maximum of 20,000 parts. The supplier’s definition of the lot/batch size shall
be done in consideration of traceability requirements.
2.6. Internal Audits
Suppliers must conduct regular internal audits to ensure continued compliance with internal procedures
and customer requirements.
2.7. Dock Audit
When required by Levant Power, the supplier shall complete a Dock Audit prior to shipping a manufacturing
lot of product.
A Dock Audit is a product inspection that is performed on product after the manufacturing activity and final
inspection is completed (prior to shipment). A Dock Audit Report (DAR) shall be in required format and on
file at the supplier’s facility and available upon request by Levant Power.
2.8. Annual Layout Inspections
The supplier shall conduct a one piece, 100% layout inspection of each part number minimum once per
year from each manufacturing process and tool. This layout shall include all dimensions / characteristics
specified on drawings and specifications, if not otherwise specified. Annual layout inspection and dates
shall be included in the supplier’s production control plan. Any characteristics which are enumerated on the
production control plan and are measured more frequently than once per year will not require annual layout
inspection.
The data shall be available on request from Levant Power. In the event there is an nonconformance, all
related data shall be submitted to Levant Power Supplier Quality.
For multi-cavity tooling, all cavities must be represented.
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If a complete new PPAP submission is required, the PPAP will substitute the Annual Layout Inspection.
2.9. Operator and Inspection Instructions
To ensure manufacturing and quality personnel are qualified, the supplier will prepare written operator and
inspection instructions for employees who have responsibilities for completing production process and
inspection tasks. In addition, suppliers will prepare, train and appropriately maintain operator and
inspection instructions. Operator training records shall be maintained and made available to Levant Power
upon request.
The supplier may use reduced-frequency (sampling) inspection plans only when historical records indicate
that a reduction in inspection can be achieved without jeopardizing the level of quality. The supplier may
employ sampling inspection in accordance with nationally accepted or customer required standards, asspecified by Levant Power. If sampling identifies a defect or discrepancy, 100% inspection of the lot is
required.
The supplier shall maintain quality records in sufficient detail to establish evidence that required tests and
verifications were properly performed by trained personal, and that only material meeting specified
requirements have been accepted for production and delivery to Levant Power. These records shall be
available for review by Levant Power. Copies of individual records shall be furnished to Levant Power upon
request.
2.10. Record Retention
All documents and records demonstrating product quality conformance and traceability, must be stored in
safe condition in order to prevent destruction and maintained for a minimum of 20 years after shipment of
related items or longer if required by legislation. In addition to that specified in ISO 9001 or ISO/TS 16949,
the following records shall require retention:








Production conformity test reports
Training records
Critical process parameters as defined in the supplier Control Plan
Raw material certificate
Test procedures and results
Receiving inspection results
PPAP submission and response
Master samples
2.11. Drawing and Change Control
The supplier’s quality system must ensure that the latest engineering drawings and specifications are
available at the manufacturing, test and inspection location. A written procedure should indicate the
method utilized for receipt, review or distribution of all changes and the method of recalling and disposing
of an obsolete item. A review process must be established within the system to confirm that
applicable drawings and specifications are at the latest revision level with the issuing source.
If Levant Power contract/PO is for purchase of previous revision, then supplier must ensure the
applicable prior revision documentation is available for manufacturing, test and inspection; in this case,
additional care must be exercised to ensure correct revision is produced.
2.12. Change Management
Levant Power understands that change is necessary to achieve continual product and process
improvement and is in support of this; however it is a decision that must be made mutually with input from
all the affected parties. Unauthorized changes to products and/or processes can have a significant
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financial impact on both of our organizations. Levant Power requires all suppliers to submit and obtain
change request approval in writing prior to any change being implemented. The applicable changes
covered under this requirement are adopted from AIAG PPAP manual and is referenced in the table below.
Levant Power may elect to require formal PPAP submission and approval for verification of changes. In
these cases, suppliers shall not ship products to Levant Power sites prior to approval.
Failure to contact Levant Power and obtain formal approval prior to implementing changes and shipment
of product may result in a hold being placed on open purchase orders and responsibility for compensating
Levant Power for all associated costs as a result of the unapproved change.
Conditions requiring Levant Power notification include, but are not limited to the following:

Change of material

New or modified production tooling
Production parts produced at a new facility



Product or process changes (internal or externally by sub-suppliers)
Change of raw material suppliers or sub-supplier for outside services (heat treat, plating, nondestructive
testing, etc.)


Change in test/inspection methods (techniques)
Change in engineering drawings or specifications
2.13. Right of Entry and Audits
The supplier shall ensure Levant Power and its customers have right of entry to supplier and sub-tier supplier
facilities as requested by Levant Power and without undue delay.
Based on the supplier classification level and status, Levant Power may require annual on-site supplier
quality assessments. In addition, Levant Power has the right to carry out product, process and system
audits at the supplier and their sub suppliers.
Levant Power reserves the right to schedule additional assessments based on factors not limited to risk,
performance and/or non-compliance to quality system requirements. The cost associated with audits
performed as a result of risk induced by supplier performance or compliance issues may be charged
to the supplier at Levant Power’s option.
Third party quality system registration may be recognized in lieu of a periodic on-site assessment if Levant
Power deems it appropriate. Any third party providing certification to these standards must be accredited
from a country authorized entity such as ANAB (USA).
3
SUPPLIER ASSESSMENT AND QUALIFICATION
Levant Power maintains a supplier selection and sourcing process that adequately evaluates and identifies
potential sourcing partners.
Levant Power suppliers must be capable of meeting Levant Power’s quality, delivery, cost, environmental health
and continuous improvement requirements. Levant Power will validate these requirements as a part of their
supplier selection process through supplier assessment and qualification activities.
The supplier assessment and qualification process includes the following:
3.1. Initial Supplier Profile
The “Initial Supplier Profile Survey” or similar tool is used to obtain initial data and information concerning
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a supplier that will be used throughout the sourcing and assessment process.
3.2. Supplier Screening/Data Analysis Process
The Supply Chain Group will perform the screening process based on several factors, most important
considerations below:

Supplier’s current delivery performance based on 100% on-time expectation (measured to supplier
first commit date)

Supplier’s quality performance

Supplier’s registration to an industry-standard quality system. (i.e., TS 16949)

Cost competitiveness

Supplier’s financial strength for future growth
Upon completion of the initial screening process, the group responsible for sourcing approval will meet
and review the outcome. This group will make a determination whether the supplier qualification process
will continue. Further follow-up and/or corrective actions may be requested of the supplier. If the results
are considered acceptable the process continues.
3.3. Supplier Assessment
Once the initial screening process is completed and the supplier is identified as a potential supplier to Levant
Power, a thorough assessment of the supplier’s Quality System shall be completed either on-site or via
desk-audit or self-assessment.
Levant Power may also, at its option, conduct financial assessments/reviews on a periodic basis.
3.4. Assessment Results
When system deficiencies are identified, a response time expectation will be provided by Levant Power
personnel for the supplier to define corresponding corrective actions. Failure to provide a suitable response
in a timely manner is cause for a supplier to be removed from further consideration. Levant Power
reserves the right to discontinue the qualification process at any time.
3.5. Approval status for Business Awards
Status of approvals:

Full approval – enables Levant Power to award business with a supplier at any time within the
capabilities or categories identified for that supplier.

Conditional approval – enables Levant Power to award business to a supplier that is pending a
corrective action completion/verification from the assessment. A corrective action plan must be
submitted and approved by Levant Power.
Once approval has been established, the supplier will be added to an Approved Supplier Listing (ASL).
4
QUALITY PLANNING AND PRODUCT APPROVAL
4.1. General Requirements
Advanced Product Quality Planning (APQP) is a structured method of defining and establishing the
steps necessary to assure that a product meets customer expectations, and that the Supplier’s
manufacturing processes have the capability to consistently meet these requirements. Details of this
process are documented in the AIAG Advanced Product Quality Planning and Control Plan – APQP manual
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which may be obtained from the AIAG website (www.aiag.org).
This section defines the general requirements for production part qualification and approval.
Additional requirements may apply.
Prior to first production shipment, each part or component being sourced must be approved for production
by Levant Power through the PPAP process.
4.2. Production Part Approval Process (PPAP)
The PPAP submission will be based on the latest edition of the Production Part Approval Process (PPAP)
Manual, available through AIAG (Automotive Industry Action Group).
A Levant Power representative from Quality Assurance or Supplier Quality will identify the appropriate
PPAP submission level and additional requirements for the part or component to be sourced. Unless
otherwise specified, a Level 3 PPAP shall be submitted.
All PPAP samples must be produced using production tooling and processes at the production line rate.
Supplier shall ensure compliance to all requirements listed on Levant Power Design Record (drawings and
specifications) and purchase orders. Additional acceptance testing may be required.
All PPAP documents shall be in English and shall be submitted along with sample parts to specified Levant
Power personnel.
The supplier is responsible for ensuring all PPAP elements are kept up to date to reflect the current approved
part and process whenever required to be submitted by Levant Power.
PPAP Status (As determined by Levant Power):

Approved: Indicates that the product meets all Levant Power requirements and authorizes supplier
to ship production quantities of the product.

Interim Approval: Permits supplier to ship product on a limited time and/or piece quantity basis.
A PPAP re-submission is required by the supplier, along with a corrective action, to obtain a
status of “Approved”. Additional guidelines on product containment should be reviewed in the latest
edition of the AIAG PPAP manual.

Rejection: Indicates that the PPAP documentation and/or product does not meet Levant Power’s
requirements for approval. Appropriate action shall be taken by the supplier to correct the deficiency
and PPAP re- submission is required. Re-submitted samples following rejection must be accompanied
by all Levant Power documentation as required for the original PPAP samples.
Note: Supplier is not authorized to ship product until product is at least interim approved by Levant Power.
4.3. Detailed PPAP Submission Requirements
1) Design Records
The supplier shall include 2-dimensional controlled copies of the design records. The records include
component drawings, product specifications and hardware / software specifications.
2) International Material Data System (IMDS)
Where required by our customers, Levant Power may request supplier’s entry of product data into
IMDS (http://www.mdsystem.com/imdsnt/startpage/index.jsp). It is Levant Power’s full
expectation of supplier cooperation and agreement to fully enter product data into the IMDS and to
manage that data as required. Where necessary Levant Power may provide assistance to suppliers
not otherwise enabled to engage the IMDS.
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The supplier shall complete the IMDS entry in the IMDS database a reasonable time period before the
agreed PPAP submission date. This procedure will give Levant Power the opportunity to approve the
IMDS entry prior to the supplier's PPAP submission date. In case Levant Power does not respond to the
IMDS declaration before supplier's PPAP submission date, it is sufficient for the supplier to submit only
the IMDS entry confirmation with the PPAP package. PPAP approval can only be done with an approved
IMDS Declaration.
Since the IMDS declaration is a full declaration of materials, the absence of forbidden substances will be
confirmed by the IMDS declaration.
3) Engineering Change Documents
The supplier shall include any authorized engineering change documents not yet recorded in the design
records but implemented in the product, part, process or tooling.
4) Customer Engineering Approval
If samples are evaluated by Levant Power e.g. form, fit or function, the approval and comments shall be
documented. Samples shall be delivered to Levant Power for approval (Ref. AIAG PPAP Manual - ESA
form).
5) Process Flow Diagram
Flow diagrams that clearly describe the production process, steps and sequence. All steps in the
manufacturing process shall be identified and keyed to the PFMEA and Control Plan.
Traceability requirements confirmed by a traceability specific flow chart shall also be included.
6) Process Failure Modes and Effects Analysis (PFMEA)
Reviewed and approved PFMEA for actual process, all steps shall be keyed to Flow Chart and Control
Plan. Ensure all CC and SC characteristics have been identified and included from the design records,
including manufacturing process Special Characteristics and evidence actions have been defined and
implemented.
7) Control Plan
Production Control Plan, keyed to Process Flow Diagram and the PFMEA. CC/SC and process special
characteristics shall be identified and methods to control defined on the control plan.
Any rework/repair operations shall be approved by Levant Power and included in the control plan.
Layout Inspection shall be included in control plan.
8) Measurement System Analysis (MSA) Studies
The Supplier shall perform Measurement Systems Analysis (MSA) studies for all test and measuring
methods used for serial production as referenced in the Control Plan. Gauge R&R and measuring data
shall be reported for all measuring methods used to accept product, and noted on control plan, including
operators, material and environmental variations. Special attention shall be paid on methods used for
verifying special characteristics CC/SC. Gauges funded or directed by Levant Power shall be included.
Any Gauge R&R over 30% is unacceptable. Due to the importance of the application of Levant Power
products, Levant Power’s expectations are Gage R&R to be under 20%.
Suppliers should reference the latest version of the AIAG Measurement Systems Analysis manual for
further details.
9) Dimensional Results
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Reports of all dimensions and parameters documented in the design records for all cavities and each
unique manufacturing process. The dimensional report must be keyed to the design record (ballooned).
The supplier shall respond to each drawing note and specification item and blanket statements are not
allowed, test results and a “pass / fail” statement is required. Number of samples unless otherwise
agreed is five (5).
10) Material / Performance Test Requirements
If performance testing is required to be done by the supplier to confirm that current production meets
design requirements, Supplier shall document the test requirements in a control plan and perform testing
accordingly.
When design records or Control Plans specify chemical, physical, metallurgical performances and /
or functional requirements the supplier shall be responsible to ensure that the tests are performed for
all parts and product materials:
 Functional measurement; Report of the products functional characteristics, e.g. electrical
measurements, sensitivity, force etc.
 Material performance; Report of the products material characteristics, e.g. structural strength,
retention force, composition etc.
 Validation results; Report of the products performance/reliability qualification, e.g. vibration,
moisture, ESD, temperature etc.
All testing shall be less than one (1) year old at the time of PPAP and serial status on product and
process. Blanket statements are not allowed, test results and a “pass / fail” statement is required.
Performance test failures are cause for a supplier to stop production immediately, pending analysis of
the process and corrective action. Suppliers are required to immediately notify the Levant Power
location of test failures, suspended shipments, and identify suspect shipped lots, if quality or deliveries
to Levant Power will be impacted.
11) Initial Process Capability Studies
When Special Characteristics (including CC’s and SC’s) are identified, the supplier shall perform process
capability analyses at new product launch and when product or process changes affect these
characteristics. Additional periodic capability analyses may be required by Levant Power.
If no special characteristics are identified, the Supplier should evaluate and identify product and/or
process characteristics that can be used to ensure process capability. This should be reviewed and
agreed to by Levant Power representatives to ensure alignment with Levant Power expectations.
Levant Power minimum requirements for short-term capability and stability is Ppk > 1.67; minimum
requirements for long-term capability and stability is Cpk >1.33.
If acceptance criteria are not satisfied, Supplier shall contact Levant Power with a corrective action plan
and a modified Control Plan providing for 100% inspection and/or error-proofing mechanism. Variation
reduction efforts shall continue until the acceptance criteria are met, or until approval is obtained from
Levant Power. Note: 100% inspection methodologies are subject to review and concurrence by Levant
Power.
For special cases where the annual usage volumes do not meet the guidelines for a thorough process
capability assessment, requirements shall be defined by Levant Power.
Suppliers should reference the latest version of the appropriate AIAG manual for further
details.
12) Qualified Laboratory Documentation
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If the supplier uses an external testing and/or calibration laboratory, it shall be accredited to ISO/IEC
17025 (or equal regional accreditation) and a copy of their ISO/IEC 17025 Certificate shall be included
in the PPAP. If an internal lab is used the supplier shall provide evidence of ISO/IEC 17025, ISO/TS
16949 or ISO 9001 certification, as well as a lab scope which defines all the tests the lab is able to
perform.
13) Sample Product Parts
The supplier shall submit sample parts as requested by Levant Power. The sample specific quality
characteristics shall be clearly indicated on the samples or on an attached label. The amount of
samples are to be defined in conjunction with Levant Power.
14) Master Sample Parts
Unless specified otherwise, the supplier shall:
 Identify three (3) parts as Master Sample Parts and label them with Master Sample tags.
 Retain two (2) Master sample Parts and submit one (1) with the PPAP submission.
15) Checking Aids
If requested by Levant Power, the supplier shall include in the PPAP submittal, any part specific
Checking Aids. Checking Aids can include: fixtures, gages, models, templates, and/or mylars used to
accept product, as identified in the Control plan. The supplier shall certify that all aspects of the
Checking Aid(s) agree with the part dimensional and functional requirements. The supplier shall
provide for preventive maintenance for any checking aids for the life of the part.
16) Special Processes – Heat Treat, Coating, Plating, and Welding
Supplier shall audit heat treat, plating and coating processes (their own or subcontractors) utilizing
the AIAG CQI-9, 11, and 12 Special Process surveys for existing business or prior to initial award.
Supplier shall maintain records of the audit and process improvement subject to periodic review by
Levant Power Hydraulics. Once in production, annual audit shall be done and be available for
review at Levant Power’s request. The focus of annual audit shall be the processes provided to Levant
Power. Results of the latest audit are to be submitted with the PPAP.
17) Part Submission Warrant
A completely filled out PSW must be provided including the supplier’s declaration that all product and
process requirements are fulfilled, unless otherwise stated. Sub-supplier PSWs shall be available for
review by Levant Power upon request.
5
PROJECT MANAGEMENT
Close and frictionless project collaboration between suppliers and Levant Power is a key success factor.
Project collaboration is supported by:

Professional project management processes on both sides, structured collaboration processes and well
defined interfaces.

Regular meetings and effective communication.
If any project inputs are missing, the supplier shall pro-actively request missing information. If missing inputs
compromise the project time line, the supplier shall inform the responsible Buyer immediately in writing.
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5.1. Project Team
Supplier projects shall be driven by an interdisciplinary team and led by a project leader. The supplier’s
management shall assign to the project team the full responsibility and competence for the defined project
tasks and results. Key personnel and the roles and responsibilities with the project team shall be identified
and provided to Levant Power upon request.
5.2. Project workflow
Every supplier project must follow a defined, supplier specific workflow, which shall be separated into
different (project) phases.
6
COST OF POOR QUALITY
Any costs incurred by Levant Power that are associated with the failure of a supplier to meet Levant Power’s
quality requirements may be charged back to the supplier.
Supplier shall pay a minimum $250 Administration Fee for any Defective Material Report (DMR) issued
regardless of the value of rejected lot received or number of parts being rejected.
Costs incurred beyond this administration fee will be assessed separately; below is a sample list of Cost of
Poor Quality charges:
Sorting
Premium product cost paid to
support production
Rework i.e. labor, tooling, and
fixturing
Added inspection, certification
of product, etc.
7
Line Disruption / Speed
Reduction
Overtime
Scrap
Premium Freight
Outside processing & testing
required
Reimbursement of all charges
from customer
Warranty costs
CLOSED LOOP CORRECTIVE ACTION
All suppliers for Levant Power must establish and maintain documented procedures for implementing a system
of closed loop corrective and preventive action with disciplined problem solving methods. This shall be used
when a nonconformance to specification or requirements occurs.
When supplier nonconformances are identified within Levant Power or its customers, a Corrective Action Request
(CAR) will be issued to the supplier by Levant Power.
Containment actions must be completed within the appropriate time indicated by Levant Power. Failure to do
so may negatively impact the supplier’s quality performance metric.
Suppliers should be cautious to avoid root causes of “operator error” and instead look deeper for underlying
factors. If operator error is truly the cause, error-proofing actions must be employed to prevent recurrence; retraining alone is insufficient.
Suppliers shall include adequate detail and supporting data in the corrective action response to assure that
appropriate system improvements have been completed. Responses are to be returned by the date required on
the CAR.
Levant Power may require an on-site review of implemented corrective actions to validate effectiveness.
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Failure to respond to a corrective action request may result in loss of future business awards.
Supplier shall ensure that all quality system documents affected by any implemented corrective action are updated
to accurately reflect the changes.
8
SUPPLIER DEVELOPMENT
Levant Power selects suppliers for development who present the best opportunity for improvement and the
greatest potential impact to the organization.
Suppliers may be selected for development based on the following
factors:

Strategic growth suppliers

Provider of critical parts

Risk revenue partner

Key to manufacturing flow

Performance issues
Suppliers selected for development projects must demonstrate a willingness to change and improve, and show
evidence of internal continuous improvements efforts.
9
SUPPLIER MANAGEMENT
Levant Power recognizes that our suppliers are key to delivering world class products and services to our
customers and the marketplace. To support these efforts our suppliers must share our vision, goals and
performance expectations.
Levant Power’s supplier management process recognizes that establishing supplier performance on a regular
basis requires: a) Measuring results through a standardized supplier scorecard process; b) Business Reviews;
and c) Continuous improvement to drive value for our end customers.
Levant Power’s standardized supplier performance management process ensures that key direct, indirect and
logistics suppliers understand our expectations and meet our requirements. Our governance processes include,
but are not limited to, the following key measures:



Quality: DPM, # DMRs
Delivery: on time delivery (OTD) measured to supplier’s first commit date
Service: measure of responsiveness to Levant Power requirements including
o Third Party Certifications
o PPAP/FAI - acceptance & timeliness
o CAR responsiveness
o Continuous Improvement
10 CONTINUOUS IMPROVEMENT
Levant Power requires all of its suppliers to pursue continuous improvement initiatives and the deployment
of these initiatives are the responsibility of Levant Power’s suppliers.
The supplier shall identify and implement potential manufacturing process improvements as a continuous
improvement effort. It is strongly suggested that suppliers implement a lean manufacturing system.
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The goals of such manufacturing process improvements include:

Productivity / operational efficiency improvements

Cost reductions

Reduced process variation

Reduction of inventory
11 SUPPLY CHAIN RISK MANAGEMENT AND BUSINESS CONTINUITY GUIDELINES
Levant Power is challenging its suppliers to establish Supply Chain Risk Management and Contingency Plans.
While it is clear that contingency plans cannot be developed for all potential scenarios, Levant Power is asking
suppliers to establish recovery plans and steps that will facilitate quick response, reaction and resumption of
parts and services in the event of disruptions.
Levant Power suppliers are expected to establish a comprehensive crisis management approach to deal with
potential disruptions (proactive) and disasters (reactive). The approach should include plan of action, checklist
of activities, communication plans, escalation procedures, and organization with teams, roles, and
responsibilities.
When Levant Power deems necessary, based on the risk situation or as part of the Business Performance
Review process, the supplier may be asked to provide risk management and business continuity plans. Levant
Power will notify suppliers in writing when identified as part of a risk situation or as part of the Business Review
process. Also, in case of financial risks, Levant Power expects their suppliers to provide requested financial
information wherever applicable.
Levant Power suppliers must plan for the following (as applicable) disruptions:

Business Continuity to deal with event-based risks such as fires, chemical spills, natural disasters,
terrorist threats, medical emergencies, and human resources issues

Supply Chain Continuity to check and prepare the “Supplier’s” suppliers to deal with potential disruptions
(proactive) and disaster situations (reactive)
IT Disaster Recovery and IT Security for “Supplier” telecommunications, data, systems and infrastructure


Eliminate potential disruptions due to Financial and Regulatory Non-Compliance [Example: For US
publicly traded companies – SOX404 or International Financial Reporting Standards (IFRS) in Europe],
as applicable

Confidentiality Policy (including protection of Levant Power Intellectual Property), as applicable
Levant Power suppliers are expected to develop, deploy and maintain these business continuity planning
requirements.
12 LOGISTICS
12.1. Packaging
All packaging shall be in accordance with import/export regulations and approved by Levant Power prior to
any delivery. Packaging shall be evaluated by qualification tests upon Levant Power’s request.
Where feasible, it is Levant Power’s preference that returnable packaging be utilized.
procurement, and logistics handling of such packaging is the responsibility of the supplier.
The design,
It is the supplier's responsibility to ensure delivery of non damaged parts and to inspect the packaging with
regard to suitability before using it.
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Any form of disposable packaging (including sub-packaging) shall comply with all international and local
recycling regulations. Cartons and pallets shall be of sufficient quality to protect goods in transit.
Packaging shall be stored and maintained dry, clean and usable.
All pallets shall be in perfect condition to ensure stackability and usage without risk. During transportation,
pallets shall be loaded and secured to avoid any kind of damage. Metallic straps are forbidden.
12.2. Labeling
Correct labeling is the supplier’s responsibility and is mandatory on each box and on both sides of each
individual pallet. All labels shall be in English to avoid any confusion.
If additional screening methods are mandated as a result of nonconformities or other quality concerns,
additional labeling shall be applied as indication of such screening.
Labeling shall be approved through the PPAP process.
12.3. Contract Requirements
Capacity planning of tools, production lines, and personnel training needs to be anticipated, achieved
and checked by the supplier to meet the required volumes, based on forecasts given by Levant Power.
If the forecasts or orders are showing demands higher than the supplier’s capacity, the supplier shall make
immediate contact with the Levant Power Buyer and propose an alternative supply solution.
A defined reserve of production capacity shall be available within a defined lead time at the supplier upon
Levant Power request. This should be specified and verified through a run at rate. This must be performed
sufficiently in advance of firm production orders in order to allow for any corrective action if run at rate
cannot achieve required production rates.
12.4. Deliveries
Levant Power requires 100% conformance to delivery and service requirements from all suppliers. It is
the supplier's responsibility to ensure that goods are available at the right location on time required by
Levant Power, even in the case where Levant Power has defined the forwarding agent.
In all cases, the supplier shall make arrangements to have material shipped to meet all required dates
even if the supplier is on holiday or shut down. Shipments received up to 5 days prior to and 0 days later
than supplier’s first commit date will be considered on time.
Deliveries must follow the First-In-First-Out (FIFO) principle in respect to the oldest batch available.
13 ENVIRONMENTAL REQUIREMENTS
Levant Power requires its suppliers to undertake environmental responsibility. For all activities, the supplier
shall comply with legal (local, national, and global) environmental requirements.
Suppliers shall implement an Environmental Management System, preferably based on ISO 14001 and be
certified accordingly.
All substances used in production part materials shall be declared electronically in IMDS (International Material
Data System). The IMDS declarations shall comply with the IMDS Recommendations published on the IMDS
web site (http://www.mdsystem.com).
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Suppliers to Levant Power must meet the requirements under the European Regulation on Chemicals,
REACH. Communication through the supply chain is obligatory. For more information about REACH, see AIG,
Automotive Industry Guideline on REACH, published on the ACEA website (http://www.acea.be/).
All electronic components supplied to Levant Power shall meet the requirements of the Restriction of
Hazardous Substances Directive (RoHS). For more information about RoHS, see RoHS in EEE on the
European Commission website (http://ec.europa.eu/environment/waste/rohs_eee/).
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