Supplier Quality Manual

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Advanced Green Innovations, LLC
Supplier
Quality Manual
Advanced Green Innovations, LLC
7030 West Oakland Street, Suite 103
Chandler, AZ 85226
CONFIDENTIAL
PROPERTY OF ADVANCED GREEN INNOVATIONS, LLC
The latest official version of this document is available from your
AGI Supply Chain or Quality Representative or AGI Website.
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
1
Advanced Green Innovations, LLC
Signature: ______________________________________
Date: _______________
James Cristiano, Senior Vice President Supply Chain
For further information concerning AGI's Supplier Quality or the content of this Manual, you
may contact your AGI Quality Representative at: [email protected]
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
2
Advanced Green Innovations, LLC
TABLE OF CONTENTS
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1. INTRODUCTION
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1.1 PURPOSE
1.2 SCOPE
1.3 APPLICABLE DOCUMENTS
1.4 TERMS, DEFINITIONS AND ACRONYMS
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2. GENERAL REQUIREMENTS
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2.1 QUALITY MANAGEMENT SYSTEM ISO COMPLIANCE
2.2 CODE OF CONDUCT
2.3 COMPLIANCE WITH CONTRACTUAL REQUIREMENTS
2.4 CONTROL OF SUBCONTRACTORS
2.5 AGI SUPPLIER QUALITY PORTAL
2.6 SUPPLIER QUALITY COMMUNICATION
2.7 SUPPLIER DEVIATION REQUEST
2.8 CONTROL AND RELEASE OF AGI FURNISHED DOCUMENTS
2.9 SHELF LIFE
2.10 SUPPLIER FACILITY ACCESS
2.11 RECORD RETENTION
2.12 DUNS NUMBER
3. COMMERCIAL AND LOGISTICS REQUIREMENTS
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3.1 PRODUCT SUPPLY AUTHORIZATION
3.2 TOOLING IDENTIFICATION AND OWNERSHIP
3.3 FIRST IN FIRST OUT
3.4 CONTINGENCY PLANS
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4. ADVANCED PRODUCT QUALITY PLANNING
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4.1 SUPPLIER RESPONSIBILITIES
4.2 AGI RESPONSIBILITIES
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5. PRE-PRODUCTION PRODUCT APPROVAL PROCESS
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5.1 PRE-PRODUCTION PRODUCT
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6. PRODUCTION PRODUCT REQUIREMENTS
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6.1 PRODUCTION PRODUCT
6.2 LAUNCH CONTROL PLAN
6.3 PROCESS CONTROL
6.4 CHANGE NOTIFICATION AND APPROVAL
6.5 DOCUMENT CONTROL PROCESS
6.6 MANUFACTURING CONTROL PROCESS
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
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Advanced Green Innovations, LLC
6.7 CONTINUOUS IMPROVEMENT
6.8 CAPACITY
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7. PACKAGING, LABELING, DELIVERY AND RECORD RETENTION
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7.1 PRESERVATION
7.2 STORAGE
7.3 PACKAGING
7.4 LABELING
7.5 DELIVERY
7.6 DROP SHIPMENTS
7.7 REQUIRED DOCUMENTATION
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8. CORRECTIVE ACTION AND RELATED REQUIREMENTS
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8.1 PROBLEM SOLVING PROCESS
8.2 CORRECTIVE ACTION REPORT
8.3 SUPPLIER CONTAINMENT
8.4 CONTROLLED SHIPPING
8.5 RMA REQUEST
8.6 COST RECOVERY
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9. SUPPLIER PERFORMANCE AND SUPPLIER SCORECARD
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9.1 PERFORMANCE MEASURES
9.2 NEW BUSINESS HOLD
9.3 SUPPLIER DEVELOPMENT PROGRAM
9.4 VA/VE AND COST REDUCTION
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
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Advanced Green Innovations, LLC
1. INTRODUCTION.
1.1 Purpose. The purpose of this AGI Supplier Quality Manual (the “Manual”) is to set forth
AGI's requirements to Suppliers (as defined below) who provide Goods, including bulk
materials, used in the manufacture and assembly of AGI products and services. This Manual
describes and defines the quality, commercial, production, supply and logistics requirements
AGI requires from its Suppliers and their supply chain. Compliance with the applicable terms and
conditions of this Manual is mandatory to ensure that Suppliers have the systems, processes
and procedures in place to meet AGI's requirements and expectations of AGI. This Manual will
be updated by AGI, in its sole discretion from time to time. If AGI modifies or amends the Manual,
AGI shall communicate to Supplier by placing a notification on the AGI Website and by sending
written electronic notification within 14 days of updated Manual release.
1.2 Scope. This document describes AGI's requirements for Suppliers who provide Goods,
including bulk materials, used in the manufacture and assembly of AGI products.
This Manual does not apply to the supply of capital equipment, tooling, indirect material, office
supplies, facility services and other infrastructure services.
1.3 Applicable Documents. The following documents and reference materials listed in this
section are applicable to the extent used, referenced or specified by AGI in any Contract
between Supplier and AGI
1.3.1 AGI Documents. It is the Supplier's responsibility to use and comply with the most
current, AGI approved version of the following documents, which are available to the
Supplier via AGI's website: http://www.agigreentech.com/pages/suppliers. The latest
copy of this Manual, other documents of interest to the Supplier and notifications will be
available at the above referenced AGI website. Permission to use and access to the AGI
Website may be revoked by AGI in its sole discretion with or without cause or notice to the
Supplier.
*AGI Engineering Specifications
*FM-85011 Supplier Deviation Request Form
*FM-85020 Supplier Specification Change Request Form
*GP-82001 Supplier Packaging Requirements Manual
*GP-82004 ASN Submission Procedure
*GP-82008 Drop Shipment Requirements
1.3.2 Industry Documents. Suppliers are required to utilize and comply with, as
applicable under the circumstances, all of the following:
· MIL-STD-1686
· ISO 9000
· ISO 9001
· ISO/TS 16949
· ISO/IEC 15504
Electrostatic Discharge Control Program for Protection of
Electrical and Electronic Parts
Quality Management Systems – Fundamentals and Vocabulary
Quality Management System Requirements – General
Quality Management System Requirements – Automotive
Information Technology Requirements Process assessment, also
known as SPICE (Software Process Improvement and Capability
Determination)
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
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Advanced Green Innovations, LLC
· APQP-2
· PPAP-4
· SPC-3
· MSA-4
· FMEA-4
· CQI-10
· CTFD-1
AIAG - Advanced Product Quality Planning & Control Plan Manual
AIAG - Production Part Approval Process Manual
AIAG - Statistical Process Control Manual
AIAG - Measurement System Analysis Manual
AIAG - Potential Failure Mode & Effects Analysis Manual
AIAG - Effective Problem Solving Guideline
AIAG - Core Tools Forms Disc (for 1 to 5 Users)
1.4
Terms, Definitions and Acronyms. The following terms, definitions and
acronyms that apply to this Manual include all of the following:
· AALA – American Automotive Labeling Act
· Active part – A part currently being supplied to AGI for production or service use. The
part remains active until AGI Purchasing issues a written confirmation stating that the
part is inactive.
· AGI – Advanced Green Innovations, LLC
· AGI Electronic communication mediums means communication via:
 AGI Supply Chain Portal http://www.mfgx.net/sv/mfgx/login.jsp
 AGI Supplier Quality Portal http://portal.mq1.com/AGI/suppliers/
 AGI Website http://www.agigreentech.com/pages/suppliers
· AIAG – Automotive Industry Action Group.
· ANOVA – Analysis of Variance, a statistical method used to analyze variable data from
multiple groups.
· APQP – Advanced Product Quality Planning and Control Plan, a general guideline from
the Automotive Industry Action Group (AIAG).
· BOL – Bill of Landing
· CAR – Corrective Action Report
· CoC – Certificate of Conformance
· Contract(s) – Means and includes: a) AGI's Production Purchase Order, b) supply
agreement and/or c) any other contract or other commercial transaction requiring the
Supplier to make, manufacture, assemble, ship and /or supply Goods or a service to AGI
in accordance with the terms, conditions and specifications expressly set forth therein.
· Control Plan – Written descriptions of the systems for controlling parts and processes.
· Cpk – The capability index to measure process stability
· Critical Characteristic – Fit/Function Characteristic and/or Safety Characteristics
identified in AGI drawings.
· CS – Controlled Shipping
· Customer – The organization or person that receives a product, as used in this Manual
it means any person, business, entity, and/or company that AGI (or its affiliates, partners,
suppliers, distributors and/or franchisees) renders services to or supplies products or
Goods to in accordance with any contract including AGI (or its affiliates, partners,
suppliers, distributors, franchisees) as a contracting party.
· DUNS – Data Universal Numbering System. A nine-digit numbering system which
uniquely identifies an individual business.
· FAI – First Article Inspection
· Fit/Function Characteristic – Product characteristic for which significant variation is
likely to affect fit, function, mounting, appearance, or the ability to process or build the
product (Goods), but is not related to safety or legal considerations. Identified on AGI
drawings with
· FMEA – Failure Mode & Effects Analysis
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
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Advanced Green Innovations, LLC
· Goods – means and includes any article, material, component, part, product, resource
and/or substance that is made, manufactured, assembled, or refined in accordance with
AGI Specifications and supplied to AGI pursuant to any executed Contract. The Goods
(ex: materials, products, parts, services) identified on a Purchase Order and described in
the Specifications. The term “Product” is synonymous and used interchangeably with
the word “Goods”.
· GR&R – Gage Repeatability & Reproducibility.
· MP&L – Materials Planning and Logistics
· NAFTA – North American Free Trade Agreement.
· NBH – New Business Hold
· NDA – non-disclosure agreement between the parties to a contract.
· Obsolete – Goods being superseded by a new part number or change in form, fit or
function.
· PFMEA – Process Failure Mode and Effect Analysis
· PPAP – Production Part Approval Process
· Process – A set of interrelated or interacting activities, methods, equipment, materials,
methods and environment which transforms inputs into outputs.
· PSW – Part Submission Warrant
· Purchase Order – A written offer by AGI (referred to as the "Buyer" or “AGI”) for the
purchase of the goods (the "Goods") and/or for the rendering of services (referred to as
“Services”) from the seller or Supplier (referred to as the “Seller”) that expressly states
the types, quantities and agreed prices for products or services and other legally binding
contractual terms and conditions.
· QMS – Quality Management System
· RMA – Return Material Authorization
· RPN – Risk Priority Number
· Safety Characteristic – Product characteristic for which significant variation is likely to
affect the product's safety or the product's compliance with government regulations.
Identified on drawings with regulations, fit, function, performance, reliability or customer
satisfaction.
· SOW – Statement of Work means a written statement, exhibit or attachment to an AGI
Contract that outlines, describes, details and defines the specific services,
Specifications, types, levels, standards, qualities, quantities, timelines, deadlines and
other characteristics relating to the production, manufacture, assembly and delivery of
Goods or services to AGI.
· SPC – Statistical Process Control
· Specification – specifications for the Goods and includes, but is not limited to,
attributes, characteristics, features, components, dimensions, measurements,
requirements, rates, appearance, apparatus, functions, materials, details and criteria
provided by Buyer to Seller in connection with or relating to the Goods.
· SQE – Supplier Quality Engineer
· Supplier – as used in this manual, the term Supplier refers to a provider of Goods or
services to AGI.
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
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Advanced Green Innovations, LLC
2. GENERAL REQUIREMENTS.
2.1 Quality Management System ISO Compliance. AGI production Suppliers' quality
management system shall be in complete compliance with the provisions of ISO 9001:2008
and ISO/TS 16949:2009.
2.2 Code of Conduct. Supplier shall comply with AGI's “Code of Conduct Policy” which is
located at the AGI Website.
2.3 Compliance with Contractual Requirements. The Supplier shall be responsible for
complying with all requirements and Specifications set forth in Contract. All documents,
specified in the Contract are required to be used at all levels of the supply chain.
2.4 Control of subcontractors. The Supplier, as the recipient of the AGI Contract, shall be
responsible for complete compliance with all requirements and Specifications, including
work or services performed by the Supplier's subcontractors. A fully executed NDA is
required for all potential subcontractors prior to any data being shared with them. Supplier
shall execute an NDA with its subcontractors with terms and conditions that are at least
equivalent to the terms and conditions expressly set forth in AGI's standard nondisclosure
agreement. When the Supplier uses subcontractors to perform work on Goods and/or
services scheduled for delivery to AGI, the Supplier shall include all AGI requirements and
Specifications, if applicable, on its subcontractors' contracts. AGI reserves the right to visit
all subcontractors' facilities for the purpose of verifying compliance to AGI requirements and
Specifications, and/or require that Supplier provide AGI with complete and executed copy of
its subcontractors' contract(s) within five (5) days of the date of receipt of AGI written
request.
2.4.1 AGI Designated Suppliers. Where specified or named in any Contract, the
Supplier shall purchase Goods and receive services from AGI designated Suppliers
specified or named in such Contract. However, the Supplier shall have the sole
responsibility for ensuring the Goods and services from such designated
subcontractors are in complete compliance with Contract requirements and
Specifications between AGI and Supplier.
2.5 AGI Supplier Quality Portal. In order to make two-way communication with Supplier
m o r e e ffi c i e n t , A G I h a s l a u n c h e d a w e b b a s e d S u p p l i e r Q u a l i t y p o r t a l
http://portal.mq1.com/AGI/suppliers/. Transmittal of technical or confidential information,
including designs, testing results, PPAP submission data, deviation requests, engineering
change requests shall be through this portal.
A Supplier user account and login shall be assigned to Supplier by AGI for access to the
portal. Supplier is responsible for maintaining confidentiality of its account(s') login and
password information.
Please contact your AGI Supplier Quality Engineer to obtain a user account and login for the
Supplier portal.
2.6 Supplier Quality Communication. Supplier is responsible for proactively
communicating to AGI any circumstances that may impact quality of Goods or services via
the AGI Supplier Quality Portal.
2.7 Supplier Deviation Request. Supplier shall not ship Goods or render services that
deviate or otherwise fail to comply whole or in part with the requirements or Specifications
set forth in any AGI Contract without prior written approval from AGI. If the
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
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Advanced Green Innovations, LLC
Goods or services fail to comply, Supplier shall petition AGI, a “Deviation Request” in
writing, to allow shipment of the Goods or rendering of the services under a written
nonconformance deviation. Supplier shall use AGI's Supplier Deviation Request Form (FM85011), unless otherwise directed.
If requested by AGI, the Supplier shall send samples of such nonconforming Goods to AGI
for evaluation. The cost of shipping, inspection, evaluation, analysis and testing of the
samples to determine the potential acceptability of such Goods shall be paid for solely by
the Supplier.
AGI approval of a deviation is specific to the Goods listed and specified in AGI's approval of
the Deviation Request and shall not be construed, deemed or interpreted by the Supplier as
a permanent engineering change and/or a waiver of any of AGI's requirements or
Specifications in future shipments. The Supplier shall begin work immediately on corrective
action. In all cases, the Supplier shall fully contain, isolate and segregate all Goods
suspected of being nonconforming. In addition, nonconforming Goods may be returned to
Supplier at the sole expense of Supplier, or Supplier may be required to sort any suspect
Goods already shipped to an AGI site or be charged back for the cost of sorting by AGI or
receiving facility. AGI shall have the right, but not the obligation, to issue a CAR to the
Supplier if Supplier fails to obtain the required written AGI approval before shipping. AGI
shall communicate approval or rejection of requested deviation via the Supplier Deviation
Request Form FM-85011.
2.7.1 Marking of Deviated Parts. Supplier shall identify and mark all boxes,
containers or other packaging which contains approved nonconforming parts with the
words “Deviation Included”. A copy of the AGI approved Supplier Deviation Request
Form shall be included inside each box, container or other packaging and CoC shall
include the approved deviation number.
2.8 Control and Release of AGI Furnished Documents. Documents and information
disclosed by AGI and that are deemed “Confidential Information” as defined in the NDA are
furnished solely for the purpose of conducting business with AGI. The Supplier is solely
responsible for maintaining the confidentiality of such confidential information and for
complying in full and at all times with terms and conditions set forth in the executed NDA
between Supplier and AGI.
2.9 Shelf Life.
2.9.1 With each delivery of Goods that have a limited or specified shelf life, the Supplier
shall furnish data that evidences and documents the following:
1) The cure or manufacture date;
2) Expiration date or shelf life;
3) Lot or batch number; and
4) Any safety measures, procedures or protocols that should be followed, special
handling or storage requirements.
2.9.2 Unless otherwise specified by Contract, for all shelf life limited Goods delivered to
AGI, the remaining shelf life shall be of a sufficient duration so as to not negatively
impact Goods sold to AGI, and must have a minimum of seventy five percent (75%)
remaining total shelf life upon delivery at AGI or AGI approved facility.
2.10 Supplier Facility Access. Supplier shall permit AGI to enter, have access to and
inspect Supplier's facilities and those of their subcontractors' for the purpose of evaluating
parts, processes, documents including, but not limited to FMEA, Control Plan, Instructions,
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
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Advanced Green Innovations, LLC
records, methodologies and systems used in manufacturing of AGI Goods to verify
conformance to AGI Contract requirements and Specifications. AGI may use independent
third-party auditors or consultants.
2.11 Record Retention. Supplier shall retain quality records and documentation for the
time period specified in Table 2-1, below, unless otherwise specified by AGI in writing.
TABLE 2-1: Minimum Document Retention Periods
Document Type
Examples
Minimum Retention Period
APQP and PPAP
Documentation
Technical specifications, drawings,
process flow charts, control plans,
FMEAs, manufacturing
instructions, etc.
The length of time that the part, or
family of parts, is Active, plus one
(1) calendar year, unless otherwise
specified by AGI in writing.
Quality
Performance
Records
Control charts, inspection and test
results, product audits, layout
inspection reports, functional
testing reports, etc.
The length of time that the part, or
family of parts, is Active, plus one
calendar year, unless otherwise
specified by AGI in writing.
Quality System
Records
Internal quality system audits,
management review records, etc.
Three (3) calendar years from
creation date.
Product Safety or
Regulatory
Related Records
FMVSS, Environmental,
Hazardous Materials, RoHS,
Dodd-Frank, REACH, etc.
A minimum of fifteen (15) years
from the date of manufacture.
2.12 DUNS Number. Each Supplier shall have a Dun & Bradstreet number (“D&B D-U-N-S
number”) for each manufacturing location. AGI will use the Supplier's DUNS number to track
quality to each specific manufacturing location. For information on verifying or obtaining a
D&B D-U-N-S number, visit the following website: www.dnb.com.
3. COMMERCIAL AND LOGISTICS REQUIREMENTS.
3.1 Product Supply Authorization. AGI Buyer is the only party authorized by AGI to
approve the supply of Goods or services. Such authorization shall only be effectuated via a
Purchase Order.
3.2 Tooling Identification & Ownership.
3.2.1 All tooling, equipment and related materials provided to Supplier for the purpose
of manufacturing Goods for AGI are the sole property of AGI and shall be marked and
identified with a serialized property tag with the words “Property of Advanced Green
Innovations, LLC”. Supplier shall request tags from the AGI Buyer. Supplier shall sign
or authorize AGI to sign on its behalf any documents deemed reasonably necessary by
AGI to be filed with federal, state or local officials to record AGI's title and ownership of
AGI's property. Supplier shall not sell, lend, rent, transfer or dispose of AGI's property.
3.2.2 If the marking required under Section 3.2.1, on the tool, equipment or materials is
not practical under the circumstances, an alternative identification of AGI Property shall
be made upon approval by AGI buyer and a corresponding record shall be maintained
by Supplier identifying that the tool, equipment or material is AGI
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
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Advanced Green Innovations, LLC
property. This record shall be maintained while the part is Active and until AGI
Purchasing gives Supplier written authorization to return or scrap tool, equipment or
material.
3.2.3 Written confirmation indicating Supplier possesses or otherwise has care,
custody or control of AGI property, including photographic evidence, shall be submitted
to AGI as requested from time to time.
3.2.4 Handling and storage of AGI property shall be made in a way that damage or
deterioration does not occur.
3.2.5 Supplier shall notify AGI Buyer in writing if tooling wears out, has deteriorated or
has been or is damaged.
3.3 First - In – First - Out - FIFO. The Supplier shall ensure that no Obsolete or expired
Goods are shipped to AGI. The Suppliers shall perform first in/first out (FIFO) inventory
management practices.
3.4 Contingency plans. The Supplier shall prepare contingency plans to ensure supply
continuity to AGI in the event of an emergency such as a natural disaster, utility
interruptions, labor shortages, key equipment failure, or other events that would otherwise
have an adverse effect on supply continuity. Suppliers shall review the applicable AGI
contract for terms, conditions and further guidance regarding force majeure events.
Supplier's contingency plans shall be reviewed annually to ensure that the contingencies
listed are still valid or are appropriate under the circumstances. Contingency plans are not to
be confused with internal Health and Safety plans. AGI has the right to request a copy of
Supplier's contingency plan for review in which case Supplier shall have thirty (30) days to
send plan to AGI.
4. ADVANCED PRODUCT QUALITY PLANNING.
The APQP process ensures the Supplier utilizes adequate planning to support the
development and launch of product. AGI Suppliers shall use and implement in full the
process and requirements stated in AIAG's APQP-2, Advanced Product Quality Planning &
Control Plan Manual.
4.1 Supplier Responsibilities. The Supplier shall:
4.1.1 Identify points of contact;
4.1.2 Develop, implement and execute an APQP Plan for successful product launch;
4.1.3 Organize and implement the cross-functional APQP team; and
4.1.4 Submit written APQP plan updates, pursuant to the schedule requested and
approved by AGI. This update is required to track and verify documentation of the
Supplier's progress throughout the APQP and launch processes.
4.2. AGI Responsibilities. AGI shall:
4.2.1 Identify and communicate the AGI project team members;
4.2.2 Assign the SQE who shall verify the completion of APQP activities with the
internal Project team and Supplier team; and
4.2.3 Define how the SOW is related to APQP activities and resolve conflicts between
the two.
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
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Advanced Green Innovations, LLC
5. PRE-PRODUCTION PRODUCT APPROVAL PROCESS.
The purpose of this section is to: a) define the requirements for pre-production product
qualification and approval b) confirm and verify that all AGI's design and Specification
requirements are complied with by the Supplier and c) confirm and verify that the
manufacturing processes have the capability and capacity to consistently and successfully
comply with all AGI requirements and Specifications.
5.1 Pre-Production Product.
production product:
This section outlines approval requirements for pre-
5.1.1 Definition of Pre-Production product. This section defines the two revision
levels used by AGI to identify pre-production product.
5.1.1.1 Experimental or Development Products (i.e.: X1, X2, X3 … revision
levels). These AGI drawing or specification revisions are for experimental and/or
developmental purposes. The design is based on early and/or partial specifications.
5.1.1.2 Design Validation Products (i.e.: Y1, Y2, Y3 … revision levels). These AGI
drawing or specification releases are intended for validation reflecting the product
for manufacture and final product release.
5.1.2 Requirements. Each shipment of Goods shall be accompanied with the following
documents, which AGI shall have the option, but not the obligation, to review in order to
confirm and verify that pre-production Goods meet the required quality and product
requirement and Specifications, the Supplier shall furnish, with each delivery of Goods,
all of the following documentation:
1) Material and performance test results;
2) Material certification(s)*;
3) Certificate of Conformance showing part number, revision, quantity;
4) An inspection layout report containing data results for 100% of all Safety
Characteristics identified on the drawing or specification for all parts in the
shipment.*;
5) An inspection layout report containing data results for either a quantity of 3, or
10% (whichever is greatest) of all Fit/Functional Characteristics identified on
the drawing or Specification for all parts in the shipment.*; and
6) A FAI, layout report of all dimensions and requirements on the drawing or
specification for the first shipment of a revision level. A delta FAI is required
when a new revision of the part number is released, for the features which
have been revised.*
NOTE: The Supplier may use an existing dimensional layout inspection report form.
* In the case of assemblies; data requirements are applicable to assembly per AGI
assembly drawing and to each of its components per applicable AGI component
drawings.
5.1.3 Gage R&R studies. AGI reserves the right to request GR&R studies for Critical
Characteristics identified in AGI drawings revision Y1 or above: If requested by AGI,
Supplier shall conduct and submit to AGI results from ANOVA GR&R studies to
demonstrate that the measurement system used to measure Critical Characteristic is
acceptable.
5.1.3.1 Supplier shall conduct GR&R studies per methods and practices set forth in
AIAG MSA-4 Manual;
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5.1.3.2 A GR&R result of under 10% is considered acceptable.
5.1.4 Prototype Marking. Suppliers are required to clearly mark each prototype
product and/or its packaging as indicated in the part's respective AGI approved drawing
as included and/or required in the applicable Contract.
6. PRODUCTION PRODUCT REQUIREMENTS.
6.1 Production Product. This section defines approval requirements for production intent
and production product
6.1.1 Revisions affected by this section.
6.1.1.1 Pre-launch Process Validation Products (i.e.: Z1, Z2, Z3 … revision
levels). These revisions represent “production intent” and the basis for production
validation, capacity readiness and launch of volume production.
6.1.1.2 Production Products (i.e.: A, B, C … revision levels – not including “X” “Y”
or “Z”). These drawing or specification releases are validated production parts for
use as salable Goods.
6.1.2 Requirements. For production Goods, the Supplier shall fully comply with all
applicable retention/submission requirements for a Level 3 submission PPAP as
specified by AIAG's PPAP Manual unless otherwise instructed in writing by AGI.
Product for PPAP shall be taken from a production run as agreed to between AGI and
Supplier.
6.1.3 AGI SPECIFIC REQUIREMENTS.
6.1.3.1 Run @ Rate. The purpose of a Run @ Rate is confirm and verify that the
Supplier's manufacturing process is capable of producing Goods that meet AGI's
quality requirements, at quoted tooling capacity, for a specified finite period of time.
Supplier shall fill out Run @ Rate form and submit completed form as part of the
PPAP submission package before AGI will approve PSW.
The Run @ Rate shall evidence that Supplier's production process can produce at
least one day's quantity of acceptable quality Goods in less than 24 hours to comply
with Supplier's Capacity Planning Volume (“CPV”). At a minimum, a demonstration
of production, over a continuous three (3) hour period of time, at the CPV production
rate is required.
6.1.3.2 ISO/IEC 15504 (SPICETM) Conformance. This requirement applies to
Suppliers and subcontractors that develop and supply electronic and software
systems to AGI. Suppliers shall provide written documentation that evidences they
are compliant to ISO/IEC 15504 (automotive SPICETM). Suppliers shall comply
with the appropriate process capability indicator level (AGI's default is level 3 unless
otherwise specified). Suppliers shall be self-certified to ISO/IEC 15504 (Automotive
SPICETM) Level 3; however, a Level 3 certification by an accredited 3rd party to
ISO/IEC 15504 will be acceptable. Documentation shall be submitted in the form of
a statement of conformance, or a copy of the third-party certification.
6.2 Launch Control Plan (LCP). Suppliers shall implement a Launch Control Plan
procedure for all new part launches. The LCP shall include additional product/process
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controls to ensure complete compliance to AGI requirements and Specifications and
additionally to verify and confirm the effectiveness of the controls and inspection methods
specified in Control Plan to be used during production of the applicable Goods. Additional
controls shall be implemented using and taking into account all known quality concerns, all
special characteristics of the part, critical processes and top risks identified in the FMEA.
Examples of additional controls include, but are not limited to, the following:






Increased sample size and/or frequency of process and product inspections;
Additional verification of error proofing devices;
Additional set-up verifications;
Increased preventative maintenance;
Increased process audits;
Increased verification of label accuracy and part identification.
LCP controls shall be implemented for at least two (2) months or ten (10) lots whichever is
longer. Any and all nonconformances found during LCP use shall be documented,
corrective actions implemented and verified, respective applicable documents updated and
if possible, additional error proofing implemented.
6.3 Process Control. This section defines the minimum requirements for Suppliers to
control their manufacturing processes related to the production of Goods for AGI.
6.3.1 Special Characteristics. Supplier shall provide written documentation that
evidences compliance to special characteristic requirements as stated in Table 6-1
below.
TABLE 6-1:
Special Characteristics
Pre-Production Requirement
Product with AGI drawing revision X or Y
Inspection Gage
Requirements
Characteristic Type
Fit/Function
Symbol on
AGI
Drawing
F
Critical
Safety
S
AGI Inspection and
Documentation
Requirement
AGI Documentation
Requirement
Submit dimensional
data for 10% of parts
or 3 parts whatever is
greater
Submit dimensional
data for 100% of parts
Production Requirement
Product with AGI drawing revision Z or A and above
(except X or Y revisions)
AGI Inspection Data
Requirement
Cpk > 1.67 min*
Identified in AGI and if
applicable in supplier drawings,
identified in FMEA and Control
Plan.
If Cpk is not met:
Notify AGI
100% inspection Corrective Action
ANOVA GR&R using
AGI parts performed
per AIAG MSA-4
Cpk > 1.67 min*
GRR Result < 10%
Significant
Supplier can use
their own internal
nomenclature
N/A
Supplier
can use
their own
internal
symbols
If Cpk is not met:
Notify AGI (For characteristics with
FMEA Severity Level 8, 9 or 10)
Identify in FMEA and
control plan
In Pre-Production:
required for revision Y
only
if requested by Identified in FMEA and Control
Application to Product
100% inspection Corrective Action
AGI
with AGI drawing
Plan
revision Y1 and above
Cpk > 1.67 min*
that is in APQP
“prototype” phase
If Cpk is not met:
Notify AGI
100% inspection Corrective Action
*
(1) For processes that demonstrate a Cpk > 1.67 for at least 12 months; Suppliers may request SPC
requirement reduced by submitting a Change Request to AGI per section 6.4 of this manual.
(2) Error proofing the process to control the characteristics can be used in lieu of SPC as long as AGI SQE
pre-approval is obtained.
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6.3.2 Error-Proofing. Supplier shall implement error-proofing methods as a form of
process control to prevent or detect nonconformances, including, but not limited to
repetitive functions, difficult operations prone to mistakes, or where the cost of error is
high. Supplier shall comply with AIAG's PFMEA manual practices to identify areas that
need action(s) implemented such as error proofing.
6.3.3 Work Instructions. Supplier shall document and provide written instructions, as
necessary, for all its employees having responsibilities for processes that impact AGI
requirements for Goods to be supplied to AGI. These instructions shall be current,
made accessible for use at the work station and written with enough detail to
successfully help applicable employee(s) perform function.
6.3.4 Statistical Process Control (SPC). Where specified in the Control Plan,
Supplier shall implement effective statistical process controls. Supplier shall comply
with Statistical Process Control (SPC) methods and practices set forth in the AIAG
SPC-3 Manual. Supplier shall implement the most appropriate statistical process
control methods to ensure the quality of the Goods meets AGI's specifications.
6.3.5 Equipment Maintenance. Supplier shall designate and identify in writing key
manufacturing and testing equipment and provide resources for machine/equipment
maintenance activities and implement an effective reactive, preventive and predictive
maintenance system. Equipment shall be identified in writing in the process flow chart.
6.3.6 Identification and Traceability. Supplier shall provide product identification and
traceability for the Goods, pursuant to and in accordance with the applicable federal
regulations, the AGI drawing, or Contract.
6.3.6.1 Identification. Supplier shall implement a system for control and
identification of Goods, which includes, but is not limited to the following: the AGI
part number and revision level shall be clearly identified and set forth on a) the
Goods, b) on the packaging according to the part drawing; c) as agreed upon in the
Production Purchase Order or Contract if not specified on the applicable AGI
drawing.
6.3.6.2 Serial Number Control. Supplier shall implement a system for control and
identification of a Product serial number. The serial number shall be clearly identified
and set forth on: a) the Goods, b) the packaging according to the part drawing or; c)
as agreed upon in the Production Purchase Order or Contract if not specified on the
applicable AGI drawing.
6.3.6.3 Lot Traceability. Supplier shall implement a lot traceability system.
Supplier shall ensure their lot traceability system maintains its integrity through all
the supply chain, including raw material, purchased components, and
subcontracted operations, if any. Supplier shall respond to any lot traceability inquiry
from AGI within twenty-four (24) hours after the date the Supplier is in receipt of the
AGI inquiry. Traceability details provided to AGI shall include all lot numbers and, if
applicable, all serial numbers affected.
6.3.7 Electro-Static Discharge (ESD) Control. Suppliers providing ESD sensitive
Goods to AGI shall, prior to manufacturing, document and implement an Electrostatic
Discharge (ESD) Control Program plan. Supplier shall clearly mark all ESD sensitive
Goods in accordance with the requirements in MIL-STD-1686.
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6.4 Change Notification and Approval. Supplier shall be responsible for controlling
changes and notifying AGI of all changes to the approved part design or approved
packaging. Supplier shall not ship any Goods to AGI that include any changes that have not
been approved in writing by AGI.
6.4.1 Change Control Process and Supplier Change Requests. Supplier shall
submit to AGI Buyer a Supplier Specification Change Request Form FM-85020 for
review and approval by AGI. AGI Quality shall notify Supplier as to which PPAP
elements shall be resubmitted for approval, AGI may also require submission of
samples representative of requested change for evaluation at AGI. Change notification
shall be submitted per AIAG Production Part Approval Process manual Section 3
“Customer Notification and Submission Requirements”. AGI shall have the right to
approve or reject the Change Request in its sole and unilateral discretion, with or
without cause. AGI Buyer shall evidence approval or rejection of requested change by
signing and submitting form FM-85020 back to Supplier.
6.4.2 End of Life Notification. Supplier shall submit a written Change Request
Notification to AGI Buyer at least twelve (12) months before the supply of Goods to AGI
will be impacted.
6.5 Document Control Process. The Supplier shall review and implement all written AGI
requirements and requirement changes in every applicable Supplier document. Supplier
shall send AGI Buyer an implementation plan and timeline within ten (10) business days of
receiving requirements or requirement changes.
6.6 Manufacturing Control Process. Supplier shall review, distribute and implement in a
controlled manner all AGI requirements, Specifications and changes in all items, including
fixtures, jigs, tooling, gauges, measurement systems, software, shop floor documents,
labels, packaging, processes and raw materials to ensure that they are applicable to the
revision being manufactured per AGI Contract and available to employees required to
comply with them. AGI requirements and Specifications shall be implemented at applicable
subcontractor sites. Supplier shall send AGI Buyer an implementation plan and timeline ten
(10) business days of receiving requirements or requirement changes.
6.7 Continuous Improvement. Supplier shall implement a process for continuous
improvement of their operations including but not limited to quality, delivery, purchase cost,
efficiency and technology.
6.8 Capacity. AGI Suppliers shall be able to handle a fifteen percent (15%) fluctuation in
weekly volume supply requirements. When Supplier is notified of forecast increases,
Supplier shall be responsible for completing an internal capacity audit that confirms that
Supplier is capable of meeting the increase in forecast demand. Supplier shall respond to
AGI in writing within fourteen (14) calendar days of receiving updated supply requirements
confirming that a) the new forecasted demand can be complied with or b) stating that there is
any issue that would prevent or prohibit Supplier from complying with the forecasted
demand along with a written plan to resolve the issue(s). In times of increased demand, AGI
may also ask Supplier to provide monthly or quarterly updates on capacity to confirm and
verify that Supplier has the capacity to meet the increased supply demand.
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7. PACKAGING, LABELING, DELIVERY, & RECORD RETENTION.
The Supplier shall comply with all applicable industry standards and practices and any AGI
requirements set forth in the relevant Contract related to preservation of Goods, packaging,
labeling, and shipping methods related to the Goods.
7.1 Preservation. Supplier shall use appropriate methods for preserving and segregating
Goods under their control to prevent expiration or decay due to internal storage or handling.
Supplier's Product storage methods and facilities shall not cause or contribute to damage,
injury or deterioration to the Products due to corrosion, temperature or other conditions
occurring during storage of the Product on the Supplier's premises. In order to detect
deterioration, the condition of product in stock shall be inspected and evaluated at
appropriate planned intervals.
7.2 Storage.
7.2.1 Storage Areas. Supplier's storage areas shall be reasonably identified in order
to limit the possibility of mixing Goods or shipping Goods or components prior to proper
release. Supplier is obligated to safely and securely store the Products in a manner
that prevents theft, injury or damage.
7.2.2 Hazardous Materials, Industrial Wastes and any Hazardous Wastes.
Supplier shall store hazardous items related to the manufacture of AGI's Goods in
designated storage areas or in controlled satellite accumulation points throughout the
plant and in accordance with all applicable local, state and federal rules, regulations,
codes, laws, ordinances and statutes.
7.3 Packaging. Supplier is required to comply with all of the packaging requirements
relating to the Goods as set forth in GP-82001 Supplier Packaging Requirements Manual.
7.4 Labeling. Supplier is required to comply with all of the labeling requirements relating to
the Goods as set forth in GP-82001 Supplier Packaging Requirements Manual.
7.4.1 Country of Origin Marking Requirements. Supplier shall be solely responsible
for ensuring that each foreign article, item, substance, part, component or material (or
its container/packaging) that is made or manufactured, in whole or in part, outside the
territorial boundaries of the United States of America, is marked in accordance with the
regulations of the United States of America. Supplier is required to comply with labeling
requirements and regulations of the American Automotive Labeling Act (AALA) and the
importing country as applicable under the circumstances.
7.5 Delivery. Supplier is required to notify the AGI MP&L department in writing, immediately,
of any delay in delivering Goods on the scheduled delivery date as set forth in the applicable
Contract. Supplier shall be responsible for all transport costs, fees, expenses and fines due
to delays, and shall coordinate a new/revised delivery date with MP&L department.
7.6 Drop Shipments. Suppliers who have been authorized by AGI in writing to drop ship
Goods directly to a non-AGI facility shall submit to AGI Quality engineer and receiving
facility, the same quality documentation and data required in Section 5.1.2 (pre-production)
or Section 7.7 (production), whichever is applicable under the circumstances. Supplier shall
also retain all quality documentation per Table 2-1. Additionally, Suppliers shall also submit
shipping documentation as specified in section 7.7.5.
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
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7.7 Required Documentation.
7.7.1 Pre-Production Product. Refer to Section 5.1.
7.7.2 Production Product. After the Supplier has obtained PPAP approval from AGI,
Supplier shall furnish a Certificate of Conformance with each shipment showing part
number(s), revision, lot or serial numbers and quantity of the Goods delivered to AGI.
7.7.3 Country of Origin Documentation. If AGI requires the Supplier to ship Goods to
international destinations, Supplier's invoice shall contain the required “Country of
Origin” indication clearly marked on the accompanying invoice along with a written
description and monetary value in U.S. dollars. Suppliers shall be responsible for the
accurate completion of customs documents and shall ensure all documents are given
to the carrier at time of shipment for proper clearance through customs. Any delays in
Customs and/or penalties for incomplete or inaccurate information required for
international shipment of Goods shall be paid for by and be the sole responsibility of the
Supplier.
To ensure compliance with applicable local, state and federal governments (and
agencies, departments and instrumentalities thereof), the U.S. Department of
Treasury, U.S. Customs, and International Customs, each Supplier shall provide a
Certificate of Origin representing all part numbers supplied to AGI to avoid any
penalties, fines, assessments, taxes and/or infractions resulting from violations of
applicable local, state and federal regulations. Suppliers shall forward their NAFTA
Certificate of Origin, annually, to the AGI Supply Chain department. Each Supplier
shall submit to AGI annually, on the appropriate forms, documentation which complies
with all applicable requirements of NAFTA.
7.7.4 Advanced Shipping Notification (ASN). Supplier is required to furnish to AGI a
written Advanced Shipping Notification upon tender of the Goods to a carrier by the
Supplier per GP-82004 ASN Submission Procedure.
7.7.5 Drop Shipment Documentation requirements.
following documentation is required:
For drop shipments, the
7.7.5.1 Documentation from shipping Supplier to AGI. Supplier is required to email
documentation per 7.7.4 to AGI at [email protected] The subject of the ASN
email shall include the non-AGI facility that is to receive the Goods on behalf of AGI, i.e.
“ASN-McMaster to XYZ Machine Shop”.
7.7.5.2 Documentation from shipping Supplier to receiving facility. Supplier is
required to copy receiving facility when sending ASN email to AGI and include a hard
copy of all documentation in accordance with 7.6 and 7.7.4 with each shipment.
7.7.5.3 Receiving facility requirements. The receiving facility shall comply with the
following with drop ship requirements per GP-82008 upon receipt of the Goods.
8. CORRECTIVE ACTIONS AND RELATED REQUIREMENTS.
8.1 Problem Solving Process. Supplier shall comply with the applicable problem solving
practices and methods expressly set forth in AIAG's CQI-10 Effective Problem Solving
Guideline.
8.2 Corrective Action Report. AGI has the right but not the obligation to submit a request
for Corrective Action Report (a “CAR”) to Supplier when nonconforming Goods are
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identified or other AGI written requirements or Specifications are not complied with. When a
written reply is requested by AGI, Supplier shall respond using a Corrective Action Report.
Unless otherwise requested by AGI, Supplier shall respond to a request for corrective action
in writing in accordance with the time frames stated in the Corrective Action Time line set
forth in Table 8-1.
When documenting the root cause, Supplier shall include detailed answers to the following
underlying reasons including but not limited to:
1) Why the specific nonconforming condition, material or incident occurred;
2) Why the nonconformity was not previously detected, remedied and/or corrected by
the Supplier's quality controls; and
3) Why the related process, from a systemic viewpoint, allowed the nonconformity (and
potentially others like it) to occur.
The Supplier shall utilize the following criteria to determine whether the underlying root
cause of the nonconformity has been identified:
1) It initiates and causes the event you are seeking to explain;
2) It is directly controllable; and
3) The elimination of that root cause will result in the elimination or reduction of the
problem.
TABLE 8-1: Corrective Action Time line
Required Action
Time line
The Supplier shall acknowledge receipt of notification of CAR
request and communicate in writing to AGI the immediate
containment actions to be taken with respect to the
nonconformity reported by AGI.
Written response from
Supplier same day
notification of
nonconformance from AGI.
The Supplier shall provide a written update of the containment
plan to protect AGI during the interim period until corrective action
has been implemented and corrected Goods are shipped. This
update shall include:
Written response from
Supplier within 24 hours of
notification of
nonconformance from AGI.

Confirmation that the Supplier has identified all Goods
affected by reported nonconformance in process, in stock, in
transit, and delivered by Supplier to AGI or AGI authorized
drop ship location, by lot or serial number, AGI Contract
number, and quantity.


Additional specific containment actions needed to be taken
by the Supplier and/or AGI.
The Supplier shall submit the completed Corrective Action Report
indicating the permanent actions taken, or that will take, to
prevent recurrence of the same problem or similar problems, and
the applicable effectivity dates.
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
Written response from
Supplier within 5 business
days of notification of
nonconformance from AGI.
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Supplier statements indicating that the corrective action taken is to alert or re-train the
employee, and/or increase inspection alone, are not acceptable corrective actions. Such
corrective actions shall be considered insufficient and do not address the underlying root
cause of why the Supplier's policies, instructions, processes, procedures, and/or systems
allowed the nonconformity to develop and occur and not be detected by existing quality
controls.
8.3 Supplier Containment. Until corrective action has been implemented and conforming
Goods are shipped by Supplier, Supplier shall provide written documentation with
subsequent shipments that affected Goods have been inspected for the identified
nonconformances and shall ensure that all such Goods are free from all nonconformities.
8.4 Controlled Shipping. Controlled Shipping (“CS”) Level I and II will be issued against
the Supplier when AGI has determined that the Supplier does not have the necessary
controls and systems implemented to prevent nonconforming Goods from being delivered
to AGI, its affiliates, and/or its Customers. If AGI places Supplier on CS status, Supplier shall
initiate a Corrective Action Report immediately per section 8.2 to address all
nonconformities and systemic issues that resulted in Supplier being placed in CS status.
8.4.1 Controlled Shipping, Level I – Inspection performed at Supplier's location by
Supplier employees. Controlled Shipping inspection process must be performed in a
controlled area of the Supplier's plant using written instructions. Inspection data
requested by AGI must be collected, inspected Goods shall be certified and data
provided to AGI in writing before shipment.
8.4.2 Controlled Shipping, Level II - Includes Level I requirements, with an added
inspection by an approved and independent 3rd party. Third party is selected by
Supplier and approved by AGI, and paid by the Supplier. In some instances AGI may
require that the third-party inspection be performed outside Supplier's facility.
Based on the severity of the incident and for repeated nonconformities, AGI may elect
to go directly to CSII.
The responsible Quality Engineer at AGI will review Supplier's written Corrective Action
Report and the AGI Vice President of Supply Chain shall authorize removal or renewal
of Controlled Shipping when appropriate.
After the corrective action plan has been implemented by Supplier, the Supplier shall
have a minimum period of thirty (30) calendar days during which Supplier is required to
submit to AGI written verification data showing that no additional nonconformities have
been found.
8.5 RMA Request. When AGI Purchasing department requests an RMA for nonconforming
or suspect Goods, Supplier shall respond to AGI within twenty-four (24) hours after the date
that Supplier receives the RMA request from AGI. If a response is not received by AGI within
twenty-four (24) hours, AGI may scrap the Goods and debit Supplier or ship the Goods back
to the Supplier “Freight Collect” and debit Supplier at AGI's sole and unilateral discretion.
8.6 Cost Recovery. Supplier cost recovery will be implemented by AGI when AGI
determines, in its sole and unilateral discretion, that Supplier is responsible, in whole or in
part, for quality and/or delivery nonconformances. Cost recovery process shall include, but
is not limited to, sorting, rework, repair and scrap costs incurred at AGI, its Customers or
suppliers. The cost recovery rate will depend on the nature of the specific operation and the
cost of recovery shall be negotiated between Supplier and AGI purchasing.
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
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9. SUPPLIER PERFORMANCE AND SUPPLIER SCORECARD.
AGI's Supplier performance evaluation process uses a number of factors, such as quality,
delivery, and responsiveness to develop an overall Supplier performance rating. This
Supplier performance rating serves as an objective measure to determine whether Supplier
has complied with and satisfied AGI contractual obligations and expectations.
AGI will generate a monthly Supplier scorecard based on performance metrics below. AGI
Purchasing will email scorecard to suppliers by the 15th day of each calendar month.
9.1 Performance Measures. Supplier's performance is measured using the five (5)
categories set forth below: Where applicable all metrics will be calculated on a rolling six
month basis.
1) Quality -- Rejected Parts or Nonconformance in parts per million (ppm).
2) Delivery -- On time deliveries, in percent.
3) Certification -- Current ISO 9001 and/or ISO/TS 16949 certification or compliance.
4) Responsiveness – Responsiveness to Corrective Action Report requests
5) Commercial Responsiveness – On time responses to commercial requests for
information and/or data.
9.1.1 Quality. This metric defines the rejected parts received at AGI and AGI
authorized drop ship locations and/or its affiliates and/or Customers using the following
formula referenced below. The definition of “rejected parts” is the total number of parts
rejected by above named locations or returned to Supplier for any valid quality reason
(including those caused by shipping and administrative errors):
Number of Parts Rejected
PPM = Number of Parts Received x 1,000,000
Platinum
0
TABLE 9-1: Quality PPM
Fully satisfies requirements set by AGI
Green
Yellow
< 25
< 62
Satisfactory
Systemic corrective action is encouraged
Red
> 62
Systemic corrective action is mandatory
9.1.2 Delivery. This metric defines the delivery performance rating using the following
formula: “On-Time” is based on the delivery date.
Number of Received on Time x 100
Delivery = Number of Parts Received
Based on AGI's current expectations, the following table describes the resulting actions
for varying performance levels:
Platinum
TABLE 9-1: Quality PPM
100% Fully satisfies requirements set by AGI
Green
Yellow
> 99% Satisfactory
< 98% Systemic corrective action is encouraged
Red
< 97% Systemic corrective action is mandatory
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9.1.3 Certification. This metric defines the certification level rating of Supplier using
the following criteria:
Platinum
0
TABLE 9-1: Quality PPM
Fully satisfies requirements set by AGI
Green
Yellow
< 25
< 62
Satisfactory
Systemic corrective action is encouraged
Red
> 62
Systemic corrective action is mandatory
9.1.4 Responsiveness. This metric defines the responsiveness rating of the Supplier
to CAR requests as required per Table 8-1 Corrective Action Timeline. AGI evaluation of
the Supplier's responsiveness uses the following criteria:
Platinum
0
TABLE 9-1: Quality PPM
Fully satisfies requirements set by AGI
Green
Yellow
< 25
< 62
Satisfactory
Systemic corrective action is encouraged
Red
> 62
Systemic corrective action is mandatory
9.1.5 Commercial Responsiveness. This metric defines the commercial
responsiveness rating of the Supplier as determined by AGI purchasing, quality,
engineering, materials planning & logistics, and finance. The commercial
responsiveness metric is a subjective rating using the following criteria:
Platinum
0
TABLE 9-1: Quality PPM
Fully satisfies requirements set by AGI
Green
Yellow
< 25
< 62
Satisfactory
Systemic corrective action is encouraged
Red
> 62
Systemic corrective action is mandatory
9.2 New Business Hold. Based on AGI's Supplier scorecard rating and Supplier's
performance under executed Contracts between the parties, AGI may notify Supplier that it
has been placed in New Business Hold status. A Supplier may be placed in NBH status for
quality or non-quality reasons.
9.2.1 A notification letter will be sent by AGI to Supplier indicating reason(s) for NBH
status and Supplier shall submit a CAR within ten (10) calendar days of receiving letter
addressing AGI's concerns referenced in the letter, once AGI approves CAR, Supplier
has twenty (20) calendar days from CAR approval to implement actions, submit
evidence of action implementation and report action completion back to AGI. If deemed
necessary, AGI will verify implementation at Supplier site before removing NBH Status.
9.2.2 If the Supplier has successfully implemented all actions in accordance with the
CAR, and AGI Vice President of Supply Chain approves NBH status exit, a notification
letter will be sent to Supplier indicating that Supplier has been removed from NBH
status.
9.2.3 A Supplier on NBH status will not be eligible to bid on new AGI business without
approval from AGI Vice President of Supply Chain. The Supplier scorecard will reflect
NBH status and Supplier may be asked to resubmit PPAP.
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
22
Advanced Green Innovations, LLC
9.2.4 If a Supplier is put on Controlled Shipping II, the Supplier will automatically be
placed on NBH.
9.3 Supplier Development Program.
9.3.1 AGI has the right but not the obligation to provide certain Suppliers with training
and guidance in the successful implementation of the appropriate quality tools to
develop and improve the Supplier's operations (a “Development Program”). The type,
nature and degree of AGI assistance in connection with Supplier Development
Program will vary depending on areas targeted for improvement.
9.3.2 Examples of improvements that might be targeted for development include but
are not limited to:



Process control improvement;
Quality system improvement; and
Product quality improvement
9.3.3 The Supplier Development Program may include one or more audit(s) by the AGI
SQE and other AGI representatives, if applicable.
9.4 VA/VE and Cost Reduction. Suppliers shall achieve cost reductions to support agreed
upon pricing targets on an annual basis. Cost reduction may affect sourcing decisions and
long-term Supplier relations with AGI. VA/VE activities are an important and effective
method for reducing costs by eliminating waste and reducing non-value added activities in
the manufacturing and delivery processes. Suppliers shall pursue VA/VE opportunities and
present such opportunities to AGI in writing for consideration and approval.
Cost saving opportunities include, but are not limited to:






Improved Payment Terms;
Volume Efficiency;
Simplifying the product or process;
Improved utilization of manpower;
Quality Improvement; and
Subcontractor Cost Reduction Programs.
This Manual may be amended or modified by AGI in its sole and unilateral discretion from time to
time. Supplier shall complete review of modifications within (10) ten business days after receipt of
the written notification from AGI and Supplier shall send AGI an implementation plan per section 6.5
of this Manual.
End of Supplier Quality Manual.
©2015, Advanced Green Innovations, LLC. (AGI). This document may not be copied, duplicated,
transmitted, posted or disclosed in whole or part without the written permission of AGI
GP-85031
Rev 1 (4/14/15)
7030 West Oakland Street, Suite 103 Chandler, AZ 85226 (P) 480-921-2755 (F) 480-921-3994
23
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