Global Supplier Management Manual (MN–11.4-01) Copyright © Futuris Automotive Interiors Holdings Ltd All Rights Reserved This document must not be reproduced, transmitted, adapted, distributed, sold, modified or published in any way, or any of the material used except with the prior written consent of Futuris Automotive Interiors Holdings (Australia) Pty Ltd. For more information about this document please contact: Futuris Automotive Interiors Holdings (Australia) Pty Ltd 80 Turner Street, Port Melbourne, Victoria, 3207 Australia T +61 3 9644 4222 F +61 3 9645 3292 E supplier@futurisgroup.com Table of Contents 1. Company profile ........................................................................................................................................................... 4 1.1 Introduction ........................................................................................................................................................... 4 1.2 The Futuris Purpose .............................................................................................................................................. 4 1.3 The Futuris Vision ................................................................................................................................................. 4 1.4 The Futuris Core Values ........................................................................................................................................ 4 2. Global supplier management manual .......................................................................................................................... 5 2.1 Goal ....................................................................................................................................................................... 5 2.2 Approach and Applicability ................................................................................................................................... 5 2.3 Supplier’s Acceptance ........................................................................................................................................... 5 3. Quality .......................................................................................................................................................................... 6 3.1 Quality Certification .............................................................................................................................................. 6 3.2 References ............................................................................................................................................................ 6 3.4 Production Part Approval Process (PPAP) ............................................................................................................ 7 3.4.1 General Requirements .................................................................................................................................... 7 3.4.2 Documentation Requirements ....................................................................................................................... 7 3.4.3 Futuris specific requirements ..................................................................................................................... 8 3.4.4 PPAP approval status ..................................................................................................................................... 9 3.4.5 Subsequent PPAP Submissions ...................................................................................................................... 9 3.4.6 Material reporting.......................................................................................................................................... 9 3.4.7 Control of Critical and Significant Characteristics ........................................................................................ 10 3.5 Manufacturing Feasibility ................................................................................................................................... 11 3.5.1 Purpose ........................................................................................................................................................ 11 3.5.2 Scope, Method and Requirements .............................................................................................................. 11 3.6 Deviation ............................................................................................................................................................. 11 3.7 Traceability ......................................................................................................................................................... 11 3.8 Control of sub-suppliers and out-sourcing the current manufacturing processes ............................................. 12 3.9 Control of Futuris supplied / funded equipment / tooling / fixtures.................................................................. 12 3.10 Notification and control of non-conforming products ....................................................................................... 12 3.11 Additional Product Verification Requirements ................................................................................................... 13 3.12 Record Retention Requirements ...................................................................................................................... 13 4. Delivery ....................................................................................................................................................................... 15 4.1 Capacity Verification ........................................................................................................................................... 15 4.1.1 Purpose ........................................................................................................................................................ 15 4.1.2 Scope ............................................................................................................................................................ 15 4.1.4 Method ........................................................................................................................................................ 15 4.2 Handling, Storage and Packaging........................................................................................................................ 16 4.3 Labelling Standards ............................................................................................................................................. 16 4.3.1 General Requirements ................................................................................................................................. 16 4.3.2 Break-point / Special labelling of shipments ............................................................................................... 16 5. Supplier assessment and monitoring ......................................................................................................................... 18 5.1 Supplier Audits .................................................................................................................................................... 18 5.2 Supplier Performance ......................................................................................................................................... 18 6. Commercial.................................................................................................................................................................. 18 6.1 Recovery of “Cost of Quality – COQ” .................................................................................................................. 18 6.2 Order authorisation ........................................................................................................................................... 19 7. Support ....................................................................................................................................................................... 20 7.1 Product development / Readiness Stage review: ............................................................................................... 20 7.2 Initial Point of contact......................................................................................................................................... 20 7.3 Ongoing Communication Requirements ............................................................................................................ 20 7.4 Monitoring and Improvement of Manufacturing Performance ......................................................................... 20 Appendix - Refer to website : http:\\www.futurisgroup.com Global Supplier Management Manual: MN–11.4-01 1. Company profile 1.1 Introduction The management of Futuris Automotive Interiors (Australia) Pty Ltd and its related entities (“Futuris” or “the Customer”) recognises the “Global Supplier Management Process” as a vital link in our continual improvement efforts to be competitive in any automotive market. Futuris believes that working together with our suppliers will result in continual improvements in both quality and productivity, resulting in Futuris procuring the right product, of the right quality at the right price. Futuris recognises the rich source of manufacturing experience, technical ability, and development ingenuity that resides with our suppliers and as such welcomes constructive suggestions and actively encourages their early participation in product and service design and development. 1.2 The Futuris Purpose Delivering innovative solutions. 1.3 The Futuris Vision Through flexibility, agility and partnership models, we will be a leading global innovator of quality design and manufacturing solutions. 1.4 The Futuris Core Values With integrity and teamwork we do what it takes to deliver the best results Each of us demonstrates leadership in our roles We strive for continuous business improvement We are all responsible for providing a safe, clean and fair working environment We promote the opportunity and environment for people to be the best they can be We have practical plans for success MN-11.4-01 Copyright © Futuris All Rights Reserved Version no: 4.0 8th October 2015 [Document is uncontrolled when this manual is printed ] Page [ 4 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 2. Global supplier management manual 2.1 Goal This manual describes the fundamental requirements for all organisations who supply products to Futuris sites (“Suppliers”). These requirements are intended to ensure all Suppliers are capable of satisfying or exceeding the needs of internal and external customers of Futuris relative to: 2.2 Quality Productivity Cost Service Technology; and Continual improvement Approach and Applicability The “Global Supplier Management Manual”, “Letter of Nomination”, “General Terms and Conditions” and reference documents listed in section 3.2, define the fundamental quality system requirements for all Suppliers supplying products to Futuris. All Suppliers shall demonstrate an effective quality system that satisfies the requirements specified in this manual. This manual constitutes the Customer Specific Requirements for Futuris as defined in ISO/TS16949. Where Suppliers are providing sub components which are used in assemblies delivered to a particular OEM, the Customer Specific Requirements of that OEM shall also be understood and met. Examples of these are: GM Customer Specifics – ISO/TS16949 Ford Motor Company Customer Specific Requirements – for use with ISO/TS16949 Toyota 6-S Manual Tesla -Refer to Tesla portal: https://suppliers.teslamotors.com/ Any additional requirements shall be communicated to the supplier through appropriate approved business documents as required. Note: (a) No verbal or unsigned agreements shall supersede the requirements stated in this manual. (b) This manual may be updated f r o m t i m e t o t i m e without prior notice. For t h e latest revision of the manual, please refer to “Global Supplier Management Manual” at www.futurisgroup.com. We recommend suppliers to visit the website and verify the latest revision of this manual as required. 2.3 Supplier’s Acceptance The Supplier can accept that they are bound by the terms of this manual by forwarding a signed copy of t h e “Letter of Nomination (LON) Form”, or by delivering products to Futuris. If desired, the Supplier may list all the exclusions/mark up details in the form. The relevant Futuris Legal/Compliance officer, Purchasing and/or Supplier Development Manager shall review and sanction the exclusion to that Supplier. A copy of the approved LON form shall be returned to Supplier. MN-11.4-01 Copyright © Futuris All Rights Reserved Version no: 4.0 8th October 2015 [Document is uncontrolled when this manual is printed ] Page [ 5 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 3. Quality 3.1 Quality Certification Futuris will restrict the sourcing and purchasing of all direct products to those Suppliers that meet or exceed the following requirements. ISO / TS 16949 : 2009 [Development plan to be communicated] AS/ NZS ISO 9001 : 2008 If required, a Supplier shall raise a Supplier Deviation Request [available from www.futurisgroup.com] to obtain a waiver for the above quality system requirements for specific parts, materials, projects or sites. Additional certification may be requested based on customer, application of the product, legal or regulatory or specific national requirements. The Supplier shall be responsible to comply with quality and environmental certifications and labour law requirements for respective countries in which their manufacturing facilities are based. In the event of a Suppliers’ quality system certification status change (this may include renewal, suspension, probation, expiration and termination), the Supplier shall notify the change to the relevant Supply Quality Development Engineer – SQD within five (5) working days. 3.2 References The following documents are integral to Futuris requirements and Suppliers shall comply with these requirements. Automotive Industry Action Group [AIAG] core tools’ reference manuals: (a) (b) (c) (d) (e) Advance Product Quality Planning [APQP] Failure Mode and Effect Analysis [FMEA] Production Part Approval Process [PPAP] Statistical Process Control [SPC] Measurement System Analysis [MSA] Relevant Customers’ specific requirements but not limited to: (a) (b) (c) (d) GM Customer specific requirements manual [www.gmsupplypower.com] FORD Customer specific requirements [www.portal.covisint.com] Chery Automobile Company Limited Tesla Customer specific requirements - [https://suppliers.teslamotors.com] Note: The Supplier is responsible to refer to the latest editions of above documents from the AIAG. 3.3 Quality Planning This is an essential part to foster continuous improvement, defect prevention and process optimisation. It is required during all phases of product and process development starting from development of product to its production launch. The Supplier shall adhere to APQP guidelines and capture all elements of APQP process to ensure effective product quality planning. Refer to Supplier APQP Tracking Sheet The Supplier shall maintain a timing chart that adequately reflects the timing of the APQP Project elements and provide a copy to Futuris Product Engineer or SQD on request. MN-11.4-01 Copyright © Futuris All Rights Reserved Version no: 4.0 8th October 2015 [Document is uncontrolled when this manual is printed ] Page [ 6 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 Suppliers shall ensure that there are adequate resources and skilled people in place to perform project management activities especially those inherent in the APQP process (including but not restricted to DFMEA, PFMEA, SPC, PCP, DVP&R, Project Management, PPAP and MSA). 3.4 Production Part Approval Process (PPAP) 3.4.1 General Requirements The Supplier shall: (a) (b) (c) (d) (e) (f) Submit “Prototype & Pre-production level” PPAP submission for parts which could be used for engineering or process validation samples by Futuris as part of the Customer’s specific requirements. Minimum documents requirements for each submission are specified on the “Supplier APQP Tracking Sheet”. Submit and notify the PPAP submission in line with Futuris specific requirements [as detailed in section 3.4.3] in addition to the standard requirements listed within the PPAP manual released by AIAG. Submit PPAP to “Level–3” for all changes (refer to AIAG - PPAP reference manual, section 2.0), unless otherwise approved by Product Engineer in writing with the signed Supplier APQP Tracking Sheet, which describes intended documents to be submitted. Submit results and samples obtained from unique production process, duplicate assembly line or work cell, each position of multiple cavity die, mould, tool or pattern. Maintain all applicable PPAP quality records for each part and irrespective of submission level. These shall be readily available on request. Not ship production intended parts or materials prior to PPAP approval or approved “Supplier Deviation Request” from the Product Engineer. 3.4.2 Documentation Requirements The Supplier shall: (a) (b) (c) (d) Ensure all submitted documents were reviewed and related tests were performed within six (6) months prior to submittal. Identify each document as a minimum with part no. revision level, cavity no., machine no., tool no. and assembly line no. as required. Unless otherwise agreed by SQD Engineer, retain all submission documents together with completed APQP tracking sheet at the front. An electronic copy of the complete PPAP along with all attachments shall be submitted to Futuris – SQD Engineer via. PPAP E-mail addresses provided below or as advised by SQD Engineer, for example: FuturisPPAPHolden@futurisautomotive.com FuturisPPAPFord@Futurisautomotive.com FuturisPPAPToyota@Futurisautomotive.com FuturisPPAPWuxi@futurisgroup.com FuturisPPAPRayong@futurisgroup.com FuturisPPAPNewark@futurisgroup.com FuturisPPAPCampbellfield@futurisgroup.com FuturisPPAPEdinburghpark@futurisgroup.com FuturisPPAPPortmelbourne@futurisgroup.com MN-11.4-01 Copyright © Futuris All Rights Reserved Version no: 4.0 8th October 2015 [Document is uncontrolled when this manual is printed ] Page [ 7 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 3.4.3 Futuris specific requirements Retention / Submission requirements table PPAP Submission level Futuris Specific/ Additional PPAP requirements 1 2 3 4 5 APQP timing plan listing all elements of project with R R S R S target completion dates Manufacturing feasibility sign – off [SR-2-037 : S S S S S Available from www.futurisgroup.com Capacity Verification Status Report [SR-2-082 : S S S S S Available www.futurisgroup.com Pack and ship data form with sample label [SR-3-085 : R R S R S Available www.futurisgroup.com Approved Part Submission Warrant – PSW for Sub- R R S R S supplied parts Ballooned print R S S S S Rework procedures R S S S S PPAP recovery sheet [Where applicable] R R S S S Pre-launch control plan [Refer Section 3.12] R R S R S Control characteristics matrix / List [SR-2-013 : R R S S S Available from www.futurisgroup.com Tooling Progress Report R R S R S “6” PPAP samples per unique production process to R S S S S be submitted a l o n g w i t h P P A submission. (This includes but not limited for each cavity of tool, mould etc.) NOTE : Unless otherwise communicated by Product Engineer in writing. R : The Supplier shall retain at appropriate location and readily available on customer’s request. S : The Supplier shall submit to designated customer along with PSW and retain a copy of records and documents at appropriate locations. The Supplier shall: (a) (b) (c) Note: Include “ballooned print” which assigns sequential numbers to all dimensions, notes and other requirements. The sequential numbers to be consistent with submitted documented test plan, where engineering specifications require “product validation testing”. This should be in line with DVP and R guidelines. It can be obtained on request from the Product Engineer. Include all rework, reclaim or salvage procedures with PPAP submission, which are required to produce intended quality parts. These processes need to be uniquely identified in process flow and supporting documents to be prepared (PFMEA, PCP and necessary SOPs and visual aids). Raise Supplier Deviation Request [Available at www.futurisgroup.com] for any addition or deletion rework procedures, once the PPAP is approved. No changes shall occur to supplier’s production process, parts or purchased parts without written approval from the Product Engineer. MN-11.4-01 Copyright © Futuris All Rights Reserved Version no: 4.0 8th October 2015 [Document is uncontrolled when this manual is printed ] Page [ 8 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 3.4.4 PPAP approval status One of the following statuses shall be assigned to the Part Submission Warrant by the SQD Engineer and communicated to the Supplier via the Supplier APQP Tracking Sheet, which would highlight the improvements required in PPAP submission. Approval Status Potential reason Actions need to be taken by supplier Approved Parts are fully approved and conform to all Futuris requirements Parts are functional. However, PPAP submission does not comply with all Futuris requirements. Issue breakpoint with next delivery with PPAP no and drawing revision. Limited Rejected parts submitted do not conform to Futuris requirements Pending Parts are yet to be submitted for evaluation to Futuris by the supplier. 3.4.5 (a) Issue breakpoint with next delivery with PPAP no & drawing revision. (b) Submit PPAP recovery Action plan within 3 working days. (c) Re-submit PPAP before Limited Approval expires to Futuris. Ê (a) Submit PPAP recovery Action plan within 3 working days. (b) Re-submit PPAP as specified in PPAP recovery sheet. Subsequent PPAP Submissions On an annual basis the Supplier will be required to re-validate PPAP and retain documentation as evidence. These documents to be available for Supplier audits or as required. (a) (b) (c) (d) (e) (f) Part submission warrant approved by Supplier’s Quality Manager. Full dimensional report [all dimensions unless authorised otherwise]. Confirmation of conformity of bulk material to the design specification in writing. Table of significant characteristics Nominated Supplier responsible test results Updated documentation of DFMEA, PFMEA, PCP including all changes associated with internal or external quality concerns [i.e. 8Ds] (g) VA/VE opportunities and status of implementation 3.4.6 Material reporting Declaration of the type and weight of all material composition of components and assemblies in International Material Data System (IMDS) prior to PSW approval is a mandatory Futuris requirement. IMDS is maintained by EDS Operations Service GmbH, Germany. This information is required to support compliance to the End of Life Vehicle (ELV) Directive, now endorsed by the automotive OEMs worldwide. Material Data Sheet (MDS) should be forwarded to Futuris Product Engineer via. the IMDS for approval at the first opportunity when the material content/s and weight composition is established. Futuris’ ID # is dependent on location and a search should be conducted within IMDS to find the correct Futuris manufacturing location. As part of the APQP process suppliers must submit MDS in IMDS submission and obtain Futuris approval. PSW ‘Material reporting’ section to be completed entering IMDS Material ID no. for the subject part. To register for IMDS and review details of training available please visit www.mdsystem.com MN-11.4-01 Copyright © Futuris All Rights Reserved Version no: 4.0 8th October 2015 [Document is uncontrolled when this manual is printed ] Page [ 9 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 3.4.7 Control of Critical and Significant Characteristics Depending on customer and the age of the design there are a variety of symbols used on drawings to identify any special characteristics of the feature of the part. The Supplier shall perform following actions based on the respective symbols/characteristics and project stage. Symbols Interpretation CC This is termed as “CRITICAL” Characteristic, which would affect corporate and/or legal compliance of assembly to regulatory safety standards, ADR, ECE and FMVSS. YC AR C Prototype / Pre–launch phase (a) Special launch control plan (b) Order quantities ≤ 50 pieces then 100% parts are inspected (c) Order quantities > 50 pieces then Variable data PpK ≥2.0 (d) Attribute data, 100% inspected. (e) Measurement/capabili ty reports supplied to Futuris. (f) Heat treatment test results are supplied with test samples to Futuris for each batch. (g) Pre shipment check sheet with all supporting documents to PQE. Copy of approved preshipment check sheet [SR-3089: Available at www.futurisgroup.com] with delivery docket prior to delivery of shipment to Futuris or Futuris designated location. Version no: 4.0 8 t h O c t o b e r 2 0 1 5 MN-11.4-01 Copyright © Futuris All Rights Reserved Page [ 10 ] of [ 22 ] Start of Production or Ongoing Production (a) Process capability for short run/Initial PPAP submission shall be PpK > 2.0 (b) Process capability for Normal/Standard Production shall be CpK > 1.67. OR (c) Ensure adequate process and controls are in place to assign Occurrence rating ≤ 2 as per PFMEA guidelines. [As per AIAG guidelines] and (d) Ensure adequate poka yoke and/or automatic detection is in place to reflect the assigned detection rating ≤ 2 as per PFMEA guidelines. (e) Variable data SPC charts with control limits on hourly basis. (f) Supply Monthly capability study reports to Futuris. (g) Pre shipment check sheet with all supporting documents to PQE. (h) Copy of approved pre shipment check sheet [SR-3089: Available at www.futurisgroup.com with delivery docket prior to delivery of shipment to Futuris or Futuris designated location. [ document is uncontrolled when this manual is printed ] Global Supplier Management Manual: MN–11.4-01 This is termed as “SIGNIFICANT” Characteristic, which would affect fit and/or function of product. SC YS A S No Symbol 3.5 SAME AS ABOVE EXCEPT SAME AS ABOVE EXCEPT Order quantities > 50 pieces Variable data ≥ 1.67 PpK Non-designated characteristics Features may impact on Fit or function of product. (a) Process capability for Short run/Initial PPAP submission shall be PpK > 1.67 (b) Process capability for Normal/Standard Production shall be CpK > 1.33. OR (c) Ensure adequate process and controls are in place to reflect the assigned Occurrence rating ≤ 3 as per PFMEA guidelines; and (d) Ensure adequate poka yoke and/or automatic detection is in place to reflect the assigned detection rating ≤ 3 as per PFMEA guidelines. (e) Variable data SPC charts with control limits as specified in control plan. Supplier is responsible to ensure that drawing requirements are met. Manufacturing Feasibility 3.5.1 Purpose To provide commitment to Futuris by the Supplier that the proposed part’s design, tooling design and status and recommended process shall produce parts in line with Futuris quality requirements and at a consistent rate. 3.5.2 Scope, Method and Requirements The Supplier shall conduct a feasibility analysis, and update and forward a Manufacturing Feasibility Assessment Form [SR-2-037: available from www.futurisgroup.com] for submission of initial design level for each part. No issue identified in the “status” column means that the Supplier has reviewed all aspects of manufacturing capability and the Supplier can meet ALL requirements for the program/part. Customer design ownership does not preclude the Supplier’s obligation to assess the design’s feasibility and recommend design or process changes. Note: 3.6 Failure by supplier to identify or document the manufacturing feasibility concerns/recommendations during the project stage or supplier selection may lead to legal or economic obligation, once the program is awarded. Deviation The Supplier shall raise a Supplier Deviation Request [available from www.futurisgroup.com] with supporting documents to Product Engineer or SQD Engineer” when supplied parts or materials do not meet the approved PPAP status or deviate from the approved PPAP. The Supplier shall break-point the shipment of deviated parts or materials with identification of the deviation no. on the “Break point Label”. 3.7 Traceability In general terms, traceability implies product marking and recording inspection of sufficient detail to permit the recovery of the history of any specific batch of product or part as required. Version no: 4.0 8 t h O c t o b e r 2 0 1 5 MN-11.4-01 Copyright © Futuris All Rights Reserved Page [ 11 ] of [ 22 ] [ document is uncontrolled when this manual is printed ] Global Supplier Management Manual: MN–11.4-01 The Supplier shall identify each part with production date and all production parts must be traceable to the shift, cavity, work cell and production line unless otherwise approved by Product Engineer or SQD Engineer in writing. 3.8 Control of sub-suppliers and out-sourcing the current manufacturing processes The Supplier shall not move the manufacture of Futuris parts from their premises to that of a subcontractor without the prior written approval of Futuris – SQD Engineer. A Supplier will require PPAP approval, prior to the start of production from the subcontractor. The Supplier shall not move their supply of subcontract components from the PPAP supplier without the prior written approval of Futuris - SQD Engineer. This is applicable to all parts including black box items where Suppliers are responsible for their design. Where a Supplier must use a component or material from a sub-Supplier designated by Futuris, then the Supplier shall be responsible for the management of every aspect of that sourcing and supply apart from the actual selection of the Supplier. This includes but is not limited to part quality, price, delivery, warranty, traceability, record keeping, continuous improvement etc. 3.9 Control of Futuris supplied / funded equipment / tooling / fixtures The Supplier has total responsibility for assessing, maintaining and adequate storage of all equipment/tooling/fixtures supplied/funded by Futuris and/or its customers. This includes but is not limited to, Tooling, Jigs and Fixtures, Packaging and Inspection Gauges. If the equipment is supplied by Futuris, then the Supplier is responsible for assessing the condition of the equipment and confirming the equipment is capable of producing in line with Futuris requirements. The Supplier shall have a system to monitor and control the equipment against deterioration and provide feedback to Futuris in the event of loss or damage. All such equipment shall be identified with a minimum of: (a) Equipment ID (b) Owner of the equipment (c) Description of part produced This information shall be provided by Purchasing. Tooling and Equipment owned by OEMs must comply with the OEMs tool marking requirements (eg. GM Holden VTAM). Any modifications/disposal to the equipment must be formally agreed by Futuris Purchasing prior to commencing the change. If the modifications have any effect on the parts produced the modification can only be commenced on receipt of an approved ERN number from Futuris Purchasing. Any resulting loss to Futuris will be payable by the Supplier. 3.10 Notification and control of non-conforming products The Supplier shall, (a) (b) (c) (d) Notify SQD Engineer / SQA Officer or Plant Quality Engineer as soon as it is discovered or suspected that the shipment of non-conforming material has been despatched to a Futuris site. Determine and implement appropriate actions to cull the suspect material at Futuris sites for non-conformances notified by supplier or requested by customer. Provide necessary and adequate resources to cull and/or rework the non-conforming parts at the respective Futuris manufacturing site. Identify the next (conforming) shipment clearly with Break point label as described in Section 4.3.2. Futuris uses a web based 8D tracking system in Quickbase for some sites, where the relevant plant will raise an 8D against the supplier for Quality Issues. In this case the supplier representative will receive Version no: 4.0 8 t h O c t o b e r 2 0 1 5 MN-11.4-01 Copyright © Futuris All Rights Reserved Page [ 12 ] of [ 22 ] [ document is uncontrolled when this manual is printed ] Global Supplier Management Manual: MN–11.4-01 an email notification and the supplier should respond to the 8D directly in Quickbase. SUPPLIER SHALL UPDATE and SUBMIT “8D REPORT” UP TO “3D” STATUS “5D” STATUS “6D” STATUS” “8D” STATUS (i.e. WITH EFFECTIVENESS OF CONTAINMENT ACTION.) (i.e. WITH ROOT CAUSE IDENTIFICATION and CORRECTIVE ACTIONS’ PLAN) Within 24 hours Within 3 working days (i.e. WITH IMPLEMENTATION STATUS OF CORRECTIVE and PREVENTIVE ACTIONS) Within 14 working days (i.e. VERIFY THE EFFECTIVENESS OF CORRECTIVE and PREVENTIVE ACTIONS and CONGRATULATE TEAM.) Within 30 working days Note: (a) All of the above actions are to be agreed and organised in concurrence with the Futuris SQA Officer/SQD Engineer / Plant Quality. (b) Where t h e “8D submission guideline” cannot be achieved because of the complexity of the corrective actions (eg design changes), the Supplier needs to seek agreement in writing from the respective Futuris SQA Officer/SQD Engineer / Plant Quality. In this scenario, it may not affect the Supplier’s performance rating. 3.11 Additional Product Verification Requirements The Supplier shall: (a) (b) (c) 3.12 Implement the "Additional Product Verification" as per the following matrix unless otherwise authorised by Futuris Product Engineer / SQD Engineer in writing. [Matrix: indicates the events when a Supplier shall be placed on "Additional Product Verification and criteria to be satisfied by the Supplier as a part of "Additional Product Verification"]. (a) Organize and supervise all necessary resources to undertake “Additional Product Verification”. Be responsible for all expenses incurred for "Additional Product Verification". Remain on "Additional Product Verification" until all corrective actions are completed and exit criteria are satisfied. Formal communication shall be forwarded by Futuris – Product Engineer / SQD Engineer to exit from the "Additional Product Verification". Record Retention Requirements The required retention period of records depends on the type of record that is being collected. As a minimum requirement retention periods are as follows: (a) (b) (c) (d) (e) (f) (g) (h) Machine records shall be kept for the life of the machine. Equipment/Instrument records shall be kept for the life of the equipment/instrument. Documents for internal use which do not impact of Product quality shall be kept for 1 year. Documents for internal use which impact Product Quality shall be kept for minimum of 7 years. Financial records are to be kept for a minimum of 7 years. Records of Management meetings shall be kept for a minimum of 3 years. Records of Plant Operation meetings shall be kept for a minimum of 1 Year. Other records which are not defined above, to be control as per the individual organisation’s procedure. Version no: 4.0 8 t h O c t o b e r 2 0 1 5 MN-11.4-01 Copyright © Futuris All Rights Reserved Page [ 13 ] of [ 22 ] [ document is uncontrolled when this manual is printed ] Global Supplier Management Manual: MN–11.4-01 Criteria's to be satisfied by supplier during "Additional Product Verification" a b c d e f g h i j k l m n o Notification to "Top management" of supplier by Futuris SQD Engineer. Futuris – SQD Engineer Implemented "ON SITE".by Supplier Implemented "ON-SITE" by recommended Third party contractor Implemented "OFF-SITE" by recommended Third party contractor "Process layout" approved by Futuris and implemented by Supplier All Limit samples are authorised by Futuris and displayed at the process Control Plan approved by Futuris and displayed (It includes what, how, who, when and frequency of check) Process Instructions are approved and displayed (It includes clear description with clear photos) All inspectors are identified and trained. Training matrix to be updated and displayed Check sheet updated and maintained. (It includes all check points, recent 8Ds, and lessons learnt from previous projects) Each part to be uniquely identified for “Additional Product Verification” Daily feedback on status with minimum (First Time OK rate, Trend on defect, CAR status for any repetitive concerns) to Futuris SQD / SQA Escalation process is defined and Corrective Action Report raised for each repetitive occurrences Notified to "Third party registration agency" "Parts for New New or current Significant Project" with level parts with and/or repetitive existing supplier new supplier quality concerns YES YES YES As notified Futuris - SQD YES YES As notified by As notified by Futuris - SQD Futuris - SQD As notified As notified by by Futuris Futuris - SQD SQD As notified Futuris - SQD by by YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES Not Applicable Not Applicable As notified by Futuris SQD Exit criteria : 1. Start of Regular Production + 20 working YES days of no quality concern observed at receiving manufacturing site. 2. For Variable data- to demonstrate "Cpk of 1.67" for the duration of "20 working YES days" at receiving manufacturing site. 3. For Attribute data - to provide evidence of "100% OK parts" for the duration YES of 20 working days at receiving manufacturing site. YES Not Applicable YES YES YES YES p Notified to "Third party registration agency" Not Applicable Not Applicable As notified by Futuris SQD q Audited by "Futuris – SQD / SQA” to witness the evidence which satisfies the exit criteria. YES YES YES r Audited by "Third party registration agency" Not Applicable to witness the evidence which satisfies the exit criteria. Not Applicable As notified by Futuris SQD Version no: 4.0 8 t h O c t o b e r 2 0 1 5 MN-11.4-01 Copyright © Futuris All Rights Reserved Page [ 14 ] of [ 22 ] [ document is uncontrolled when this manual is printed ] Global Supplier Management Manual: MN–11.4-01 4. Delivery 4.1 Capacity Verification 4.1.1 Purpose To provide confidence to Futuris that the Supplier’s manufacturing process shall produce the product which will meet or exceed Futuris quality requirements and quoted capacity consistently. 4.1.2 Scope To consider the overall capacity of Suppliers, including, worst case scenarios which may have been experienced, lessons learnt or potential concerns during production. 4.1.3 General Requirements The Supplier shall perform “Capacity Verification” by conducting “Run at Rate Study” at any time during the program as requested by Futuris. This may include, but is not limited to, the following: (a) New projects with current supplier or new supplier [Supplier to perform capacity verification at “Low Volume and High Volume production”] (b) Repetitive delivery concerns from the Supplier. (c) Current projects with potential increase in volume or change in product mix. (d) Evaluation of new equipment or work cell. (e) Relocation or rearrangement of equipment, work cell or manufacturing line. (f) Change in Overall Capacity utilisation at the Supplier’s end. (g) Change in supply chain. 4.1.4 Method Capacity Verification shall be performed by the Supplier at the actual manufacturing site; with tooling, gauging, processes, instructions, material and operators which will be utilised for regular production during a significant production run. The Supplier shall ensure that all production processes; duplicate work cells or lines; each cavity of die, mould, tool or pattern to be utilised as a part of Capacity Verification. The verification production run quantity and product mix shall be approved by the Futuris – SQD Engineer. However, the following default levels shall be followed. EVENTS / STAGES New part, supplier or project; repetitive delivery concerns Current project, minor relocation, delivery concerns or annual capacity verification DEFAULT SIGNIFICANT PRODUCTION RUN QUANTITY AT OPTIMUM PRODUCT RATE One day of the Futuris peak daily production requirement to be defined by PE Including 120% of normal production capacity for all other parts sharing the same process One hour of production on each shift OR 300 parts on each shift, whichever is higher The Supplier shall use parts from significant production run, to assess process capability for SC / CC characteristics and other quality requirements specified on drawing In line with AIAG Statistical Process Control Reference manual. The default type of “Run @ Rate study” is “Supplier Monitored”. However, the Supplier shall confirm in writing with Futuris - SQD Engineer prior to performing the Run @ Rate. Tooling or Machine capacity utilisation for any process step that shows more than 80 % utilisation to be reviewed and a detailed action plan is to be submitted to Futuris SQD Engineer. This shall ensure that any process is capable of meeting a potential increase in demand in a timely manner. Version no: 4.0 8 t h O c t o b e r 2 0 1 5 MN-11.4-01 Copyright © Futuris All Rights Reserved Page [ 15 ] of [ 22 ] [ document is uncontrolled when this manual is printed ] Global Supplier Management Manual: MN–11.4-01 The Supplier shall perform Run @ Rate in line with Run @ Rate study report [available from www.futurisgroup.com]. However, the Futuris specific requirements are to be followed as stated above. The Supplier shall raise internal 8Ds for major non-conformances, observed during Run @ Rate and ensure effective closure of 8Ds. The Futuris – SQD Engineer or delegate shall review the status of Run @ Rate with supporting documents and assign the status of “Pass”, “Fail” or “Limited”. He/She may choose to participate during another Run @ Rate study with the Supplier. 4.2 Handling, Storage and Packaging The Supplier shall: (i) (j) (k) (l) Submit packaging details for approval with the Production Part Packaging and Shipping Data Form [available from www.futurisgroup.com] Ensure that parts are handled, identified and stored adequately to prevent any damage or loss of traceability during all stages of manufacturing process. Package each part in separate container or on pallet, unless otherwise approved in writing by Futuris Product Engineer. Ensure that all returnable packaging is free from old identification labels, grease, debris, and foreign material or damaged. Failure to comply would lead to a rejection of the material. Note: (a) (b) 4.3 Supplier shall not change packaging material, size or type during any stages of product realization, without prior approval from Futuris – Product Engineer in writing. Futuris shall review use of returnable packaging on a case by case basis. Labelling Standards 4.3.1 General Requirements The Supplier shall ensure that all shipments are labelled as per AIAG standards and Futuris specific requirements stated below reference to MN004 Logistics and Packaging Manual. The Supplies shall communicate the formation of “bar code label” to Futuris – Product Engineer and seek for written approval prior to its implementation. Each box, pallet or container must (at the very least) be labelled with the following information in one “Shipping label”: (a) (b) (c) (d) (e) (f) Futuris Part no. and description Quantity Unique supplier’s batch code Date code No. of boxes in a batch Engineering change level (Indicated as the last alpha Character in the part number field) [PART NO: available from www.futurisgroup.com]. (g) Supplier Code, Name and Address 4.3.2 Break-point / Special labelling of shipments The Supplier shall issue the break-point label [available from www.futurisgroup.com] on each box, pallet or container as follows: Version no: 4.0 8th October 2015 MN-11.4-01 Copyright © Futuris All Rights Reserved [ document is uncontrolled when this manual is printed ] Page [ 16 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 EVENTS / REASONS (a) Change in engineering Change level. (b) Confirmation of a quality discrepancy. (c) Approved deviation (d) Change in PPAP approval status BREAK DURATION POINT MINIMUM INFORMATION ON BREAK POINT LABELS Unless otherwise stated, consecutively for next 3 deliveries to Futuris (a) Status of Controlled For all deliveries until Shipping the project/ (b) Status of Various controlled shipping status changed. stages of project. [Proto type, pilot or Pre-production] (a) (b) (c) (d) Part description Part No, Reason for breakpoint, Respective Supplier Quality contact, (e) Break-point date, (f) Engineering change level, (g) PPAP or Deviation/approval number Project stage description or controlled shipping number and effective date, where applicable. ADVANCE BREAKPOINT NOTIFICATION To Futuris – Supplier Quality Assurance, at least ONE working day prior to shipment of parts with sample break point label and planned shipping date by email. Futuris Australia utilizes standard email addresses for Breakpoint Notifications. These are obtained for each site, example FuturisPPAPEdinburghPark@futurisgroup.com for Futuris’ Edinburgh Park site. Version no: 4.0 8th October 2015 MN-11.4-01 Copyright © Futuris All Rights Reserved [ document is uncontrolled when this manual is printed ] Page [ 17 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 5. Supplier assessment and monitoring 5.1 Supplier Audits Futuris may perform a formal assessment, quality system or process audit as required with prior notice. The type, frequency and scope of audit will depend on the following aspects: (a) (b) (c) (d) (e) (f) Selection of new supplier Supplier’s past performance Significance of project Severity of quality or delivery concern In case of recent mergers, acquisitions, affiliations etc. Supplier Impact Rating H,M,L refer to section 7.4 Supplier may be required to complete self- assessment of their quality system or manufacturing processes during various stages of supplier selection and product development. Futuris shall verify the correctness and effectiveness of above audit forms as required. 5.2 Supplier Performance Supplier’s performance will be monitored on a regular basis and the following aspects may be communicated by Futuris to the supplier on a monthly basis: a) Part quality performance b) Delivery performance c) Responsiveness to concerns, Corrective Actions, 8D’s d) PPAP performance; and e) Quality system certification. Note: An example of Monthly performance report [available from www.futurisgroup.com] In general, if a supplier achieves “C” rating and shows no improvement they will be placed on New Business Hold. A revised Supplier Scorecard System is currently being developed in Quickbase to allow the supplier to access their Performance rating and details of issues on line. This will be progressively rolled out across the Futuris sites starting with the Futuris Australia plants 6. Commercial 6.1 Recovery of “Cost of Quality – COQ” Any and all “Cost Of Quality – COQ” incurred by Futuris, that is associated with the failure of supplier to meet Futuris quality/delivery requirements shall be recovered from the respective Supplier. Following are examples associated with “Cost of Quality” at various stages but not limited to: AT RECEIVING AT OUR MANUFACTURING SITE Sorting Down time or overtime Line disruption Line speed reduction Premium Freight Additional manpower (supervision etc) Line changes due to material availability Inspection/Rework labour and tooling Excess inventory Incorrect identification of parts Version no: 4.0 8th October 2015 MN-11.4-01 Copyright © Futuris All Rights Reserved CUSTOMER’S MANUFACTURING SITE Rework at customer premises, travel, labour Replacement of material at customer Premium freight Cost of warranty and product recall Cost of internal containment actions and confirmations [ document is uncontrolled when this manual is printed ] Page [ 18 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 Shipping documentation errors Late delivery Premium product cost paid to support production Rejection costs of part, sub-assy or assembly Equipment breakage Premium product cost paid to support production Premium product cost paid to support production Penalty cost for late response In addition to above events the cost of administration may be recovered from the Supplier. The Supplier shall be responsible to provide trained personnel, adequate instructions and supervision to manage the containment actions at the respective Futuris plant and/or in the supply chain. Where a Supplier is unable to provide their own or arrange labour within a reasonable timeframe at the required Futuris site, the Supplier shall appoint a suitable “Third Party Contractor”. Details of preferred “Third Party Contractors” can be obtained from the Futuris SQA Officer / Plant Quality. The inclusion of any company on this list does not mean that they are endorsed by Futuris, whether generally or in the area of work nominated. Futuris accepts no responsibility whatsoever for any representations, expressed or implied, made by these third party contractors or for the quality of their supply Note: (a) The Futuris – SQA Officer shall forward Goods Return Notice. (b) “Cost Of Quality – COQ” shall be recovered from any invoices which have not yet been paid after 3 working days of notification. (c) The Supplier shall ensure that any concerns related to COQ are to be resolved within 3 working days of notification by Futuris - Plant Quality / SQA Officer. (d) The Supplier is unable to outsource responsibility or liability in relation to the supply. 6.2 Order authorisation Suppliers are authorised to produce finished goods covering up to 2 weeks of the scheduled requirement in advance of the despatch date and order a further 2 months of raw material unless otherwise authorised in writing by Futuris – Purchasing. THIS IS DESCRIBED IN THE LETTER OF NOMINATION AND VARIES FROM SUPPLIER TO SUPPLIER. THE SUPPLIER IMPOSES THE LEAD TIME USUALLY. ORDERS MUST SUPPLY THE LON. Note: Wherever a Supplier believes that the order authorisation is inadequate for continuity of supply then it is the Supplier’s responsibility to agree an alternative arrangement with Futuris purchasing in advance. Version no: 4.0 8th October 2015 MN-11.4-01 Copyright © Futuris All Rights Reserved [ document is uncontrolled when this manual is printed ] Page [ 19 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 7. Support 7.1 Product development / Readiness Stage review: Suppliers shall provide necessary documents and resources to support effective management of product development stages with Futuris representatives in line with the Futuris stage gate process. High impact Suppliers shall be expected to be part of the project launch team and present the status to the review panel at Futuris as required. Note: The Supplier is to contact Purchasing for a copy of the presentation template and guidelines. 7.2 7.3 Initial Point of contact Subject Contact Person Commercial Production Part Approval Process Production part quality issues Deviation pre-production Deviation production Delivery Issues Purchasing SQD Engineer SQA Officer/Plant Quality SQD Engineer SQA Officer/Plant Quality Delivery site – Material representative Planning & Logistics Ongoing Communication Requirements Suppliers shall ensure prompt communication/notification to Futuris in the following situations: Note: (a) When there are mergers, acquisitions or affiliations associated with the Supplier’s organisation. (b) Threat to supply and part quality. (c) (d) (e) (f) (g) (h) Upcoming Industrial Relations initiatives (e.g. Enterprise Bargaining Agreement) Threatened industrial action Stocks are lower than agreed finished stock levels. Major management changes. Change in quality system certification’s status. Possible quality spills by Supplier, Note: (a) The Supplier shall provide a plan and/or raise an 8D internally to handle above situations, if specifically requested by Futuris -SQD Engineer. (b) The Supplier shall copy communication in relation to any of the above situations to the respective Purchasing / SQD Engineer. 7.4 Monitoring and Improvement of Manufacturing Performance Suppliers shall: (a) Continually monitor and improve their manufacturing process performance utilising the latest lean manufacturing tools like ANDON, Direct Run, KANBAN, Work place organisation, Total Productive Maintenance and Planned Maintenance, standardisation, Poke yoke or Error proofing etc. (b) As a minimum Monitor and display the Key Performance Indicators listed in [SR-3-087: available from www.futurisgroup.com] for Futuris related products. It may be reviewed routinely by Futuris supplier quality contacts, preferably in the same format. This requirement is mandatory for all “HIGH” impact suppliers. Version no: 4.0 8th October 2015 MN-11.4-01 Copyright © Futuris All Rights Reserved [ document is uncontrolled when this manual is printed ] Page [ 20 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 Note: The Following matrix illustrates how Supplier’s impact is evaluated. Contact PE or SCE for confirmation. Impact rating scheme If Overseas and >10 Part Numbers If direct Safety Parts If > 25 part Numbers If Value is Greater than 5% of Total Spend If indirect Safety parts If Value is 1- 5% of Total Spend If More Than 10 part Numbers All Others High impact High Impact High impact High impact Medium Impact Medium impact Medium Impact Low Impact Direct safety = Airbags, OCS, STPS, Seat Belts, Latches, recliners, tracks Indirect safety = Frames or frame part or welded parts, Foam, suspension mats, motors, fasteners. Version no: 4.0 8th October 2015 MN-11.4-01 Copyright © Futuris All Rights Reserved [ document is uncontrolled when this manual is printed ] Page [ 21 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 8. Abbreviations 8D 8 Disciplines – One of the Problem solving methods AIAG Automotive Industry Action Group APQP Advance Product Quality Planning AUD Australian Dollar CC Critical Characteristic CoQ Cost Of Quality CpK Process Capability Index DFMEA Design Failure Mode & Effect Analysis DVP and R Design Validation Plan & Report FMEA Failure Modes & Effect Analysis GSMM Global Supplier Management Manual MSA Measurement System Analysis PCP Process Control Plan PFMEA Process Failure Mode & Effect Analysis PPAP Product Part Approval Process PpK Process Performance Index PE Product Engineer PSW Part Submission Warrant R@R Run at Rate SC Significant Characteristic SDR Supplier Deviation Request SOP Standardized Operation Process SPC Statistical Process Control SQD Supplier Quality Development Engineer VA/VE Value Analysis / Value Engineering Version no: 4.0 8th October 2015 MN-11.4-01 Copyright © Futuris All Rights Reserved [ document is uncontrolled when this manual is printed ] Page [ 22 ] of [ 22 ] Global Supplier Management Manual: MN–11.4-01 Revision History 8th October 2015 Date Update section 2.3 to specify LON as means of acceptance to the GSMM requirements 4.0 Grant Pinkus Peter Williams Revision / Change description Version Prepared / Revised By Globa l Appr oval Version no: 4.0 8th October 2015 MN-11.4-01 Copyright © Futuris All Rights Reserved N/A Local Appro val [ document is uncontrolled when this manual is printed ] Page [ 23 ] of [ 22 ]