Supplier Quality Manual:

Purpose

Paulstra CRC, in an effort to provide information to our suppliers relative to the need for developing a quality system that will  support the production and delivery  of quality components and raw materials utilized in our products, has published this manual to aid our supply base in their efforts toward developing, producing and providing quality components and raw materials. The basis of this Supplier Quality Manual is the latest ISO/TS 16949 Quality Management Systems Manual.

Scope

All suppliers are required to achieve compliance to either ISO-9001 or TS-16949.  A Copy of this 3rd party certification by must be sent to the Paulstra Purchasing Supplier Quality Engineer (SQE).  If a supplier has not achieved full certification to either ISO9001 or TS16949, they must show the SQE a documented system meeting the intent of these standards.  Paulstra CRC reserves the right to request copies of compliance audits and the corrective action plans for review.

Suppliers are required to utilize this document as the standard for developing their own internal systems and it is against this standard that all suppliers will be assessed.

Supplier certifications will be tracked by the SQE using Form P-310A.

Procedure

Quality Manufacturing System Requirements

Drawings and Specifications
It is the supplier's responsibility to ensure that copies of all applicable drawings and specifications are available and are fully understood by those persons in the supplier's organization directly responsible for assuring compliance with the stated requirements.  If copies are not in the supplier's possession, or when clarification and/or interpretation is required, it is the supplier's responsibility to obtain the necessary information through Paulstra CRC’s Purchasing Department.

Design and Process Change Control
Suppliers must have written authorization from the Paulstra CRC Purchasing Department Buyer prior to incorporating any changes into their product or processes on any part furnished to Paulstra CRC.  Shipments incorporating such changes shall not be made until authorized by the Paulstra CRC Purchasing Department SQE.  Suppliers are required to maintain control records documenting the effectivity dates and/or serial numbers of all engineering and process changes.  The control system must ensure removal of obsolete product and information from all points of use and provide for identification and disposition of affected product. The suppliers change control records are to be available for review by Paulstra CRC representatives.

Lot Control
Suppliers are required to have lot identification control procedures in place to identify product from receipt of raw material through their internal processes on to shipment of finished product. In addition; where applicable, Paulstra requires all new components to have a means of lot identification designed into the part (method & style to be determined by the supplier & approved by Paulstra at the Pre-Source Meeting).

Certification to Federal Regulations
If the product provided is affected by regulations such as the Federal Motor Vehicle Safety Standards published under Public Law, the supplier is required to certify compliance of the product with such standards prior to initial production shipments and as required thereafter.  The written certification, with supporting test data, shall be directed to the Quality Assurance Department Quality Manager, Paulstra CRC, and is in addition to original compliance documentation.

Suppliers are responsible for insuring that all materials and processes used in the manufacturing and sale of products to Paulstra CRC are in compliance with all Federal, State & Local requirements regarding environmental, toxic and hazardous waste, mechanical, electrical and electromagnetic devices. This applies in the country of manufacture and sale.

Qualification of Personnel
The supplier's system shall provide for the qualification of personnel performing critical inspection and production operations. Operator training records are to be made available upon request by Paulstra representatives.

Measurement and Test Equipment
The supplier shall provide for inspection and test facilities and equipment for measurement of their product's conformance to specifications.  All measuring and test equipment, including production tools and fixtures used as a medium of inspection, shall be checked prior to use, or at established intervals, to assure continued accuracy.  Calibration shall be in accordance with recognized measurement standards.  Control records are to be maintained, listing location, date, and results of last inspection and date of next scheduled inspection.  These records shall be available for review by Paulstra CRC representatives.

Inspection and Test Control Procedure
During the course of procurement and production, the supplier's inspection and testing, including periodic layout and laboratory testing must be documented; and the frequency must be adequate to assure continuous control in consistently providing products that conform to specifications.

Sampling Inspection
The capability of a process must be proved before in-process or lot sampling is used in lieu of 100% inspection as the basis for final acceptance of product.  Acceptance of product by any sampling plan does not relieve the supplier of the responsibility that each part meets specifications.

Product Protection, Preservation and Labeling Requirements.
Paulstra is committed to achieving optimal material flow throughout the supply chain.  In terms of packaging, this includes selecting containers that minimize inventory levels, packaging waste, and non-value added motions for our direct line operators.  It is with this goal in mind that Paulstra has established packaging guidelines to assist suppliers in selecting packaging for product shipped to Paulstra or its customers.

It is the supplier’s responsibility to ensure product quality to Paulstra and/or its customer’s point of use.  When applicable, the packaging system shall also include storage provisions for product subject to limited shelf life.

Suppliers are required to establish contact with the Paulstra CRC Project Team Leader as early in the program as possible in order to discuss their respective parts packaging requirements, which must be determined and agreed upon as part of the PPAP (reference Form P-119A).  Any exceptions to this requirement must be in written form from the Project Team Leader.  Failure to do so can result in rejection of the shipment, issuance of an MCN, or repackaging of the product at the supplier’s expense.  In the event that returnable packaging is not used, the non-returnable container shall not exceed 2,000 pounds gross weight and 42” wide x 48” deep x 35” high. 

The container selected must have a 4-way entry skid. It is the supplier’s responsibility to have adequate back up packaging available if returnable containers are not available.  These back up containers must maintain the standard pack quantity and must not exceed the dimensions of the returnable.

Whenever Paulstra returnable containers are to be used, they are to be used solely for finished goods. Use of these containers for WIP (work in process) will be viewed as a violation of the standard and will result in the issuance of a Material Complaint Notice. Each container must have a barcode label compliant with Paulstra Supplier Label Identification Standards (Procedure P 300).  In the case of a pallet containing multiple small containers, each individual container is to have its own barcode label while the pallet must have a Master Label attached.  Shipment of multiple part numbers on the same skid, or in the same box, is strictly forbidden. 

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PPAP Requirements

Paulstra CRC requires its suppliers to submit PPAP and representative production samples (commercial products will be treated as an exception) to the Paulstra SQE.  This initial PPAP and sample submission is to be filed in accordance AIAG PPAP Level 3 submission requirements along with Paulstra specific requirements requested by the Paulstra SQE.  The Supplier is required, in addition to the initial PPAP, to maintain an annual validation of their product throughout the active production life of the product. The Annual Validation shall be due on the anniversary of the initial PPAP and shall include the following: dimensional, physical test results, and material certifications.  Failure to maintain the required documentation will result in the issuance of an MCN.  Annual PPAP must be readily available upon Paulstra request.

Conditions Requiring PPAP Approval
Samples produced from production tooling shall be submitted to the Paulstra CRC Purchasing Department SQE at 460 Fuller Ave, NE, Grand Rapids MI 49503 for PPAP Approval, in accordance with the methodology of Section II of the PPAP Manual.

Sample Inspection and Test
Sample product inspection and testing shall be completed per the PPAP Procedure in accordance to the blueprint and the designated specifications and documented on the Paulstra Pre-source Agreement.  In the event that a supplier is incapable of performing said testing and / or dimensional verification in-house, suppliers and / or sub-suppliers are responsible for having these services performed by an accredited (ISO/IEC 17025) outside source. A copy of the lab’s accreditation certificate must be included in the PPAP submission package.

Samples Required: Quantity and Type
The number of samples required and the date of the delivery will be established in the Paulstra Pre-source Agreement – Form P-310E.   (See Form P-310B – ECO Notice for Suppliers – for PPAP due date and quantity required).  Any costs for PPAP samples or the Annual Validation Process shall be included in the quoted production piece price.

Dimensional and Appearance Sample
The Supplier will provide a minimum six piece sample which must include samples from each cavity, station, or fixture intended for production and which have been measured for the dimensional reports. These parts will be identified along with the PPAP Report. The Blueprint and the Dimensional Report must be numbered with respect to each item.

Laboratory Samples
The supplier must be able to provide prepared sections, x-ray films of castings, forgings, or weldments, and test data from certified labs for heat-treated or plated parts used to prove product integrity and compliance with the customer specification. Layout samples are to be individually labeled, tagged or marked to identify them with associated reports.

S.P.C. Requirements
Significant characteristics will be determined at the time of the Paulstra Pre-source Agreement and will consist of two types:

A notation requires capability analysis generated from 100 pcs. selected from a minimum 300 pc. lot, proven capable to an initial CpK >  1.67.  Capability to > 1.33 CpK must be maintained throughout the life of the product.

Anotation requires either a part specific or certified generic (pin, plug, etc.) attribute gage.

Gage R & R studies, both variable and attribute, are required for all inspection gages identified in the control plan and used for part acceptance.  In addition, a copy of the gage drawing and certification/layout for part specific attribute gages must be included in the PPAP package.

All significant characteristics must be noted in the supplier's control plan.

Reports
An AIAG compliant PPAP Report Form is to be used by the supplier to report their inspection and test results, reporting actual measurements found (including all Basic and Reference dimensions).  All measurements must be reported in metric values.  The report must identify any results showing non-conformance to specification and be signed by a responsible supplier representative.  All out of tolerance conditions must be noted on the PSW.

Sample Identification and Shipping Instruction
The sample parts and reports are to be packaged in non-returnable corrugated containers (not Paulstra returnable containers)and shipped to Paulstra CRC Purchasing Department at 460 Fuller Ave., Grand Rapids, MI  49503.  The container is to be clearly marked "PPAP Sample" and labeled with supplier's name, Paulstra CRC part number, drawing revision letter, and purchase order number on all 4 sides of the container. No additional product is to be shipped prior to PPAP approval without written request from the Paulstra Purchasing Department Buyer.

PPAP Approval Process
The Supplier will be notified of the acceptance or non-acceptance of the PPAP submittal by the Paulstra CRC Purchasing Department SQE. The Status may be Approved, Provisional, or Rejected. Anything other than an approved PPAP will require a new submission upon correction of the product.  (For Print corrections only, a new Warrant will be required).

Payment for Tooling
Paulstra CRC requires all suppliers to provide the capitol equipment needed to produce, prototype, test, and manufacture components. Paulstra shall only pay for special tooling that comes in direct contact with the product being produced and whose life is limited to the production and service life of the component.

Tooling invoices will be paid only after Paulstra CRC Product Engineering Project Team Leader, and the Purchasing Departments SQE approve supplier's PPAP submission and tooling prints have been received.  Electronic copies of the tooling and gage prints must be submitted to the Paulstra Purchasing Department SQE at time of PPAP.

Compliance with Requirements
Unless otherwise specified in the purchase order, the supplier is required to comply fully with all initial sample requirements defined in the PPAP Procedure Level 3 submission and any additional information requested by the Customer.  Permission to deviate may only be granted in writing, through the Purchasing Department SQE.

Part Certification
Beginning at initial PPAP run and continuing on for a period of time defined by Paulstra at the time of the Paulstra Award Letter (Form P-310C), suppliers are required to implement and maintain an extraordinary launch process on their product.  The intent of this process is to ensure that no defective product enters into Paulstra’s system.  Suppliers are to maintain detailed inspection records and have them available for review upon request.  Any defective product found during this containment period requires a documented corrective action.  At the end of the required containment period, the supplier must have available for review all records relating to this activity.  Upon review of these records, Paulstra SQE will either accept the data and release the product from the containment requirement or will extend the containment period.

It is the intent that product received at Paulstra will not be inspected on a routine basis.

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Non-Conformance to Specifications

Supplier Actions Required
When a non-conformance is detected, the supplier must determine the extent of the problem and take prompt action or correct the condition and prevent the shipment of all non-conforming material. The Supplier must immediately notify the Paulstra Purchasing Department SQE of any suspected quality problems in shipments already released, and the corrective action being taken to eliminate the condition in future shipments.  If the problem cannot be corrected immediately, shipments must be held, pending specific instructions (or deviation authority) from the Purchasing Department SQE at Paulstra CRC.

Communication Procedures

Notification by Supplier or Defective Product
A supplier’s communication notifying Paulstra CRC of non-conforming conditions, or requesting disposition or deviation approval, shall be directed through the Purchasing Department SQE to the Quality Assurance Department Quality Manager for the receiving Paulstra CRC location.  Contacts by telephone must be confirmed promptly by letter or e-mail.  The material involved must be retained by the supplier, pending receipt of specific instructions from the Paulstra CRC Purchasing Department SQE.

Identify the Paulstra CRC part number and quantity of materials involved.
Provide lot or batch number or other material or product identification for traceability purposes.
Describe the discrepancy, cause, and the planned corrective action.
Describe the requested or proposed disposition along with authorization numbers if applicable.
Provide the date that certified product will be delivered to Paulstra.

Raw product identified as defective by the Supplier, and replaced with certified product before it is needed, will not be counted against the Suppliers’ PPM rating.

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Paulstra CRC Rejection of Product
If product is rejected for use at a receiving Paulstra CRC location, that plants’ Quality Manager / SQE will notify the suppliers’ Quality Department by telephone and/or email.  The Paulstra Quality Manager / SQE will be responsible to issue a Material Complaint Notice to the Supplier.  The Supplier must respond within 24 hours with their immediate containment plan.

The Supplier must also initiate containment action for all suspect material in their facility upon receipt of notification of a rejection and provide for identified certified shipments until the resolution is complete.

Paulstra CRC will initiate the containment in its facilities of all product affected by the defect.  Suppliers will be provided a list of Paulstra approved inspection companies along with a list of all components or finished product affected by the quality issue by the Quality Manager / SQE.  In cases of product return, suppliers are responsible to coordinate with the Paulstra Planning and Logistics team Supply Chain Manager to coordinate the activity. 

Any expenses incurred (scrap parts, customer and Paulstra plant charges, expedited freight, etc.) as a result of a supplier quality issue will be the responsibility of the supplier and will be added to a minimum administrative charge of $750.00 per occurrence.  In the event that inspection needs to be performed by the using Paulstra facility in order to maintain production or meet customer shipments, Paulstra will sort, utilizing Paulstra personnel at the rate of $50/hour.

The Paulstra Quality Manager and / or SQE will notify the supplier at the end of the containment period with the final amount of defective product found.  The Supplier is to provide disposition, either scrap at Paulstra or return to the Supplier, and any applicable authorization numbers.  Only product that is in a raw, unprocessed state may be returned to the Supplier.

The supplier must respond within 15 days with a defined, permanent corrective action.

Repeat quality issues resulting from the supplier’s failure to implement robust error-proofing methods into their processes will result in the supplier being placed on Level 2 third party containment.  When notified by the Paulstra SQE that they are being placed on Level 2 containment, the supplier is to contract the services of a certified inspection company.  The supplier is to provide the Paulstra SQE with contact information from the chosen 3rd party. 

A kickoff meeting is required to review the requirements of the containment activity and determine the exit criteria.  Exit criteria at a minimum must include incorporation of error-proofing or detection into the process, validation (both initial and ongoing), update of all applicable documentation (work instructions, control plan, PFMEA, etc.), and records of inspection using the revised process.  Upon review of the appropriate documentation, the Paulstra SQE will then issue a letter ending the containment activity.  Suppliers will be responsible for all costs involved in this activity.

Late/Missed Deliveries
Any supplier responsible missed or late shipments will be addressed utilizing the above MCN process.  All costs incurred will be passed on to the supplier along with a $750.00 administration fee via the MCN debit process.

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Advanced Product Quality Planning (APQP)

Paulstra CRC and its suppliers are required to commit to and to utilize the Advanced Product Quality Planning practices outlined in the AIAG Advanced Product Quality Planning Manual (including use of the AIAG A1 through A8 APQP Checklists at a minimum).  Suppliers are expected to participate in APQP activities at Paulstra CRC when requested by Paulstra CRC. It is further expected where possible that the supplier request their subcontractors to utilize the APQP process in an effort to support their own development activities.

Paulstra CRC may request at any time during the development stage to review the supplier’s APQP process and documentation. Other items may be requested through the Paulstra CRC Purchasing Department SQE should it be deemed necessary by the Development Team at Paulstra CRC.

Paulstra may identify selected suppliers and/or components as being “High Impact”. As “high impact”, a supplier will be subjected to a more intensified review of their processes and documentation than would non-high impact suppliers.  At a minimum, “high impact” suppliers’ performance will be reviewed quarterly by the Paulstra Vice President of Purchasing & Supply Chain and the SQE to determine if their performance warrants a meeting at Paulstra with the supplier’s management team.   Continued poor performance could result in the supplier being removed from the bid list.

• The supplier is new to Paulstra.
• The product or supplier will utilize technology that is not part of the supplier’s standard process/product line.
• The supplier has experienced quality on similar parts or is experiencing poor delivery performance.
• The product supplied to Paulstra is deemed extremely critical to the form, fit, and function of the finished product.
• The product supplied to Paulstra will be “pass-through.”

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System Survey Evaluation

Paulstra CRC, at its discretion will perform periodic system reviews to evaluate the supplier’s performance to quality assurance specifications defined in this manual. Part of this review will be an Annual Self-Assessment by the supplier utilizing the Paulstra Supplier Assessment (Form 320A – See WI 320).

The Paulstra CRC Purchasing Representative Buyer or SQE is Responsible for Initiating the Survey

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New Supplier
Suppliers to Paulstra must submit to the SQE and maintain current ISO-TS 16949 or ISO 9000:2000 or ISO 9000:2005 certification.  New suppliers may be surveyed by Paulstra CRC representatives of the Purchasing Department, Engineering and Quality Assurance Department prior to placements of orders for significant quantities of production or service material, or for any tooling which may be involved.

Method of Supplier Survey & Evaluation
A representative from the Paulstra Quality Department may conduct an audit of the supplier’s quality system utilizing the Paulstra Supplier Assessment (Form 320A – See WI 320).

Suppliers will also be required to respond to several informational documents (see Form P-310F) These reports will be used to determine the engineering, manufacturing capabilities of the potential supplier. The Purchasing Buyer will conduct a new supplier review meeting along with the Paulstra Quality Manager or SQE and the Engineering Project Team Leader to review the selection criteria. The Purchasing Buyer will have the final approval of who will be introduced into Paulstra’s supply base.

Current Suppliers
Surveys to establish capability of current suppliers may be initiated by the Buyer prior to placement of new business, depending on current quality performance reports; or when a new order is for product that differs significantly from the material or product previously purchased from the supplier.

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Quarterly Vendor Evaluation Report

Paulstra Supplier Rating System – Based on 100 points – Quality, Delivery, and Responsiveness. Supplier (vendor) safety must be reported to Paulstra SQE on a quarterly basis.

Delivery - 50 Points
On-Time Delivery x 50 = Total Delivery Points

Quality

VA/VE – 5 bonus points for implemented VA/VE within past 12 months

Safety – Lost time incidents / total number of employees (salary and hourly)

Examples of Supplier Rating System

Rating Requirements and Actions

Failure to achieve an aggregate score of 70 or greater in three consecutive quarters will result in the supplier being placed on the no-quote list by the Buyer.  The supplier must then achieve and an aggregate score of 75 or greater in the following quarter to be reinstated to the quote list by the Buyer.

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Prototype Supplier Requirements

Prototype suppliers are not required to be ISO-9001 or TS-16949 compliant. Parts are to be supplied as agreed to per Form 302A – Prototype RFQ.

Part Identification

Prototype parts must be identified with part number and revision level. Deviation of this requirement must be specifically requested and approved by the engineering Project Team Leader using Form P-310D.

Material Certification

Material analysis or certification must be maintained and available upon request.

Dimensional Verification

Full dimensional layouts of hard parts are required. Full dimensional layout of tooling is required for soft parts. Deviation of this requirement must be specifically requested and approved by engineering Project Team Leader using Form P-310D.

Control of Inventory

Excess inventory beyond the order quantity must be clearly identified (per 3.7.1). The Paulstra engineering Project Team Leader should be involved in disposition of parts.

Coating 

Record Retention

Completed copies of Form P-310A – Supplier Certification Status will be retained in S:\GR\Data\Operations\Quality\Supplier Quality Certificates and maintained by the SQE.

Completed copies of Form P-310B – ECO Notice for Sub-Suppliers will be retained in the Purchasing Department part files by the Buyer for the life of the part + service + 1 year.

Completed copies of Form P-310C – Paulstra Award Letter will be retained in the Purchasing Department part files by the Buyer for the life of the part + service + 1 year

Completed copies of Form P-310D – Prototype Deviation From RFQ Requirements will be retained Engineering Program Binder by the Project Team Leader for for the life of the part + service + 1 year..

Completed copies of Form P-310E – Paulstra Supplier Pre-Production Review will be retained in the Purchasing Department part files by the Buyer for the life of the part + service + 1 year.

Completed copies of Form P-310F – General Manufacturing Information Sheet will be retained in S:\GR\Data\Supply Chain\20## Negotiation Documents by the Buyer for the life of the part + service + 1 year.

Completed copies of Form 320A – Supplier Assessment Survey will be retained according to the record retention requirements of WI 320.

Distribution

Paulstra Intranet Access
www.paulstra-purchasing.com
HSE Policies and Procedures Binder – Grand Rapids
HSE Policies and Procedures Binder – Cadillac

Attachments

Form P-310A – Supplier Certification Status
Form P-310B – ECO Notice for Sub-Suppliers
Form P-310C – Paulstra Award Letter
Form P-310D – Prototype Deviation From RFQ Requirements
Form P-310E – Paulstra Supplier Pre-Production Review
Form P-310F – General Manufacturing Information Sheet
Form 320A – Supplier Assessment Survey

Procedure Revisions

APPROVED BY:____________________

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