TG KENTUCKY SUPPLIER QUALITY ASSURANCE MANUAL FOR PURCHASED PARTS AND RAW MATERIALS Bobby Spalding General Manager, Quality Assurance

Robert Phillips Manager I/E , Paint Doc.# 4100F-QAS-151

Bill Cropper Manager Rubber, functional Issue Date: 11/13/01 Revision Date: 11/1/13

CONTENTS Section 1. PURPOSE AND SCOPE

Section 2. DEFINITIONS

SECTION 3. DESIGNATION OF REPRESENTATIVE

SECTION 4. PREPARATION ACTIVITIES FOR MASS PRODUCTION (PPAP) 4-1. SUBMITTING QUALITY DOCUMENTS 4-2. AGREEMENT ON INSPECTION STANDARD 4-3. AGREEMENT ON BOUNDARY SAMPLE 4-4

PRE-EVALUATION OF PRODUCTION TRIAL PARTS AND PARTS DELIVERY

SECTION 5. MASS PRODUCTION QUALITY CONTROL 5-1. EVALUATION OF INITIAL MASS PRODUCTION PARTS 5-2. MASS PRODUCTION AND INSPECTION 5-3. CONTROL OF SAFETY COMPONENTS 5-4. REVISIONS OF INSPECTION STANDARD 5-5. ENGINEERING CHANGE 5-6

PROCESS CHANGE

5-7. FIRST-IN FIRST-OUT AND IDENTIFICATION OF PRODUCTION DATE

5-8. ACTION BY SUPPLIER WHEN DEFECTIVE PARTS ARE FOUND 5-9. TREATING OF DEFECTIVE PARTS AT TG 5-10. LOT CONTROL & TRACE ABILITY

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SECTION 6 SUPPLIER VALIDATION CRITERIA 6-1. PRODUCTION PROCESS SURVEY 6-2. SUPPLIER PERFORMANCE EVALUATION

SECTION 7.

ATTACHMENT SAMPLES

ATTACHMENT 1 - SUPPLIER REPRESENTATIVE INFORMATION ATTACHMENT 2 - APPLICATION FOR SPECIAL USE OF DEVIATION ATTACHMENT 3- NONC – Notice of Suspected Shipment of Non-conforming product ATTACHMENT 4- CHARGE BACK FORM ATTACHMENT 5- 5- P WORKSHEET ATTACHMENT 6- SUPPLIER EVALUATION RATING

ATTACHMENT 7- MONTHLY PPM / OTD REPORT ATTACHMENT 8- DEFECT MATRIX FOR SUPPLIED PRODUCT.

ATTACHMENT # 9- REVISION RECORD

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Section 1.

PURPOSE AND SCOPE

The intent of this manual is to explain fundamental quality requirements for Production Trial, Mass Production Parts, Raw materials, and minimum control practices and procedures between TG Kentucky, LLC. (Herein after referred to as TG / TGKY) and the Supplier. This manual will be reviewed at least annually or when ever there is a revision that needs to be implemented immediately.

***This manual becomes effective from the time when the Supplier starts any production preparation activities for Production Trial Parts***.

Definitions:

Regular

Abbreviation

Supplier Management Division

the SM Div.

The Quality Assurance Division to include Supplier quality Administration

the QA Div. / SQA

The Quality Control Department

the QC Dept

The Technical Division of the Business Unit in Charge

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the Tech. Div.

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Section 2. A.

DEFINITIONS

Pre Production Part A part made with proto type or initial production tooling and equipment. This sample may be used for evaluations of the part and assembly performance.

B.

Production Part This part is made off of production level tooling, in a production environment, by production members at the

C.

latest Engineering level, and has an approved Level III PPAP. Initial Part (Sample) Part from first production lot after a new design, engineering changes, and/or changes in the production

D.

process have been implemented. Engineering Change Any change made to the original design drawing; this will be given to supplier by means of Engineering

E.

Change Instruction Sheets. Process Change Are any of the following items and will require a Process Change Request. This request must be approved

by TGKY and/or the TGKY customer prior to the change being initiated. a. Setting-up, revision and relocation of production process. When new production processes are set up differently from what was initially approved. When production equipment and machinery are new or revised. When production dies, tools, jigs or other equipment are new or revised. When production equipment and machinery are moved. b.

When material and/or part suppliers (Sub suppliers) are changed.

c.

When production procedures and/or conditions of work and/or installation are changed outside the normal operating parameters of what was initially approved for mass production process. [Ex.] Temperature, Pressure, Electric power (Voltage, Current), Velocity, Density, etc. in Forging, Casting, Heat-Treatment, Welding, Cleaning, Painting, Assembly, Stamping, Plastic Molding, Sintering, or other process.

F.

d. When inspection process and/or methods are changed from what was initially approved. Process Flow Diagram A graphic representation of every step from receiving to shipment of the part. Each step has its own unique numerical identifier i.e. 1, 2, 3, 4 or 10, 20, 30 etc.

G.

Potential Failure Mode and Effects Analysis (PFMEA) All possible Failure Modes that could happen at Each step of the process and corrective action for it. (All customer complaints must be added to the PFMEA since it is a living document) See AIAG FMEA manual for instructions. Contact TGKY SQA for assistance.

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H.

Quality Control Plan The Quality Control Plan is a total manufacturing and quality program schedule that is designed to produce parts of good quality. This is also a living document and must be updated with any customer complaint that is received that is not already addressed. All failure modes identified on the PFMEA, that needs to be controlled, shall be on the control plan. It must also reflect all customers critical and identified special

I.

characteristics. It will consist of key activities, responsible department/person, and detailed schedules. Suppliers must develop this Quality Control Plan prior to starting any QA activities. Boundary Sample Is a product that does not meet design specifications and needs approval for use?

J.

Lot When parts are produced under a constant condition, a group of parts to be produced during one shift is regarded as a "complete lot". But when the conditions change during one shift, each group of parts produced under a constant condition is regarded as a "complete lot".

K.

Inspection Standards Inspection Standards specify the inspection requirements for parts. Inspection items, inspection criteria for each parts dimensions to assure quality of completed products and the frequency and method of inspection.

L.

Production Part Approved Process (PPAP) All suppliers are required to submit and have an approved Level III (PPAP). Review the most recent AIAG

.

PPAP manual for instructions and requirements. Contact TGKY SQA for assistance. 2 different PPAP’s issued by TGKY are; Interim PPAP Approval Is PPAP approval for the supplier to start shipping parts for mass production only. Tooling is not paid for with this PPAP Final PPAP Approval Is PPAP approval for the supplier once TGKY receives customer approval for the finished good and the part is in standard production. The supplier can request to get paid for any tooling or costs owed to them once they receive this approval.

M.

SORT Any activity that requires TGKY to stop supplier’s parts from going straight to production: This is to include, inspection, rework, containment, and rejection of supplier’s parts/material. A sort will continue until a clean point has been determined by the supplier. The first of the 3 certified shipments will be sorted 50% to verify the parts are good .If the shipments come in with out the certified tag for that defect, the sort will continue until a certified shipment arrives at TGKY. All costs associated with a sort are solely the responsibility of the supplier. The certified tag the supplier must use is at the end of the supplier manual.

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CONTAINMENT 3 SORT ACTIVITY; Is an offsite 3rd party containment. This will be initiated by TG Kentucky for Multiple and or continuous quality issues in a 6 month period. It may also be started for any repeat quality issue which is identified in a 12 month period. It will also be initiated if required by any TG Kentucky customer. All Containment 3 costs will be solely the responsibility of the supplier. TG Kentucky will notify the supplier when containment 3 activities need to be initiated. All information pertaining to the containment will be provide at that time N.

Clean Point (after permanent countermeasure has been verified) This is the point in which the supplier verifies that only good product is in the system and that all Non-conforming product has been reviewed and removed from the system.

O.

Parts per million: Each supplier to TG Kentucky has the goal of “0” PPM PPM is given to the supplier any time a non-conforming material and or a component has been found at TG Kentucky. The formula to determine PPM is; Parts rejected divided by parts received x 1,000,000

P.

Supplier Corrective Action Report (SCAR) can be any of the following reports; a) Quality Problem Report (QPR) b) Quality Problem Improvement (QPI) c) Quality Improvement Request (QIR) d) Field Quality Problem Report (FQPR) (Warranty claim) e) Supplier Corrective Action report (SCAR) f) Delivery Trouble Report (DTR) For On Time Delivery, Premium freight, and mixed Kanban issue’s

Q.

Customer Disruption;

Any point in which TGKY and / or a TGKY customer has a production interruption. This could be any situation from a line slow down to a total line shut down because of defective parts R.

Customer Special Status Notifications:

.

This is caused when TKY is placed on 3rd party sort at the customer because of a defect found. If it Is determined that the defect is a supplied product to TGKY. Those costs will be forwarded to the Supplier per the TGKY charge back form.

S. Certificate of Analysis (C of A) or Material specification sheet All C of A and / or Material specification sheets are required to be emailed to your responsible TGKY SQE, 24 hours prior to your shipment. These sheets will also be attached to each shipment to be verified by the TGKY receiving inspection department. If TGKY has to request these documents after your material is received, a $50.00 processing fee will be charged back to the supplier for each incident. Doc.#4100F-QAS-151

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Section 3.

DESIGNATION OF MANAGEMENT REPRESENTATIVE

The Supplier shall designate the person in charge of the management of quality control functions for all supplied parts and also designate a representative who will perform the work with the SQA, Quality Control and Quality Assurance Departments at TGKY. The Supplier shall inform the TGKY Purchasing Div. of any changes within 15 days after a change in representative.

1.

The Business Unit in charge:

2.

Address:

3.

Quality Dept.

4.

TEL:

5.

Facsimile:

6.

Email

7.

Cell Phone ( optional if not primary means of communication)

Insp. Sect.

*When the Supplier submits a contact name, use the Appendix A format for "SUPPLIER QUALITY ASSURANCE REPRESENTATIVE INFORMATION ".

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Section 4 PREPARATION ACTIVITIES FOR MASS PRODUCTION (Level III PPAP) 4-1. SUBMITTING QUALITY DOCUMENTS The Supplier must submit and have an approved Level III PPAP NLT 90 days prior to the TGKY SOP date. Other levels of PPAP will be authorized by TG Kentucky on a case by case basis. If the supplier determines that they can not meet the required timing for PPAP submission they must inform TGKY SQA as soon as determined. The supplier must provide supporting documentation explaining why the submission is late. The supplier will also provide a detailed contingency plan for PPAP submission and provide a weekly status update on the progress to TGKY SQA until it is complete. 4-2. PPAP APPROVALS. (Also see definitions in Section 2) Once the TGKY SQA receives a level 3 or designated level PPAP from the supplier and there are no issues with the documentation or the parts, the TGKY SQA will then issue an INTERIM PPAP APPROVAL to the supplier. This is approval only to begin shipping mass production parts to TGKY. After TGKY receives final approval from the TGKY customer, then TGKY SQA will issues FINAL PPAP APPROVAL to the supplier. This approval is for the supplier to get paid for any tooling or costs owed to them by TGKY. Timing for final approval can vary, but can take up to 45 days after customer SOP and in some cases longer.

Key Sequence of steps for Process Flow, PFMEA, and Control Plan a. The steps of all 3 documents should be the same. For example, #1 receiving inspection in process flow is #1 on FMEA and is #1 on the control plan. This format is continued for each step of the process through shipment of the part.

The PPAP package will be submitted, by the Supplier, to the TGKY SQA. Revisions and/or changes to the Quality documents will be made between the SQA and the Supplier, if required. b. CONTROL OF A PROCESS WHICH HAS BEEN OUTSOURCED 1. The Supplier shall include in their PPAP submission with the following documentation for any process, material or product that has been out sourced from their facility: Their sub suppliers’; Process Flow, PFMEA, and Control plan and suppliers approved PSW. 2. The supplier shall verify the correctness and functionality of those documents prior to submitting their PPAP package to TGKY Doc.#4100F-QAS-151

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c. Additional Documents Required see below 1-19: 1

Design Records (Print)

2

Engineering Change Documents

N/A

3

Customer Engineering approval

N/A

4

Design FMEA

5

Process Flow Diagrams

6

Process FMEA

7

Control Plan

8

Measurement System Analysis Studies

9

Dimensional Results

10

Material, (&) Performance test results

11

Initial process studies

12

Qualified Lab Documentation

13

Appearance Approval report (AAR)

14

Sample Product

15

Master Sample

N/A

RETAINED AT SUPPLIER

16

Checking Aids Records of Compliance w/ Cus Spec Req

N/A

RETAINED AT SUPPLIER

17 18 19

Must be TGKY print

If Design Responsible

If Applicable At least 5 pieces

Part Submission Warrant (PSW) Bulk material checklist (see 4.1 in manual)

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Must have SOC free evidence IMDS # must be on the PSW If applicable

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4–2.

AGREEMENT ON INSPECTION STANDARD a.

If required TGKY will ask the Supplier to submit a draft Inspection Standard to TGKY SQA as soon as a LOI or Blanket PO is received by the supplier. TGKY expects to have a draft within 30 days of the LOI or Blanket PO being issued.

b.

TGKY will review it and give approval for final Inspection Standard or if any changes / corrections are required. Once all corrections / changes have been approved, approval will be given to the supplier to submit the final Inspection Standard

4–3. a.

AGREEMENT ON BOUNDARY SAMPLES Boundary samples are to be prepared by the Supplier for items stated “as per the Boundary Sample" on the Inspection Standard, and submitted, clearly tagged to the TGKY SQA.

b.

Three sets of Boundary Samples must be prepared by the Supplier, one for the Supplier, one for the QA Dept.; the other for the Customer if required.

c.

Boundary samples submitted will be reviewed by the responsible quality engineer for approval. It is desired that the Supplier join the meeting with documentation to review the Boundary samples, so that early determination and/or approval of Boundary samples is done.

The Following documentation shall be provided with the boundary Samples. 

Why is a boundary sample required



What actions have been already accomplished to require a boundary sample



What is the internal reject percent if a boundary sample is not approved and what the reject percent will be if boundary sample is approved



What will the time period be for the Boundary sample

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4-4. EVALUATION OF PRE-PRODUCTION PARTS AND PARTS DELIVERY. I. Components a. Evaluation The Supplier will perform a 100% inspection of pre production parts and submit data with each shipment on 30 parts minimum. These parts will be randomly selected from all parts produced. If less than 30 parts are ran then 10% of all parts ran must be evaluated The data evaluation items and sample numbers are as follows: (1)

Evaluation items As per the Inspection Standard. When the Inspection Standard is not approved, all items specified by the drawing should

(2)

be evaluated. Sample number 300 pieces. Or 1 days production with a minimum of 125 different subgroups However, when the evaluation items are performance and/or reliability tests, use 3 pieces for sample size.

The Supplier must communicate the details of any nonconformity and its countermeasure to the TGKY SQA. The Supplier must deal with the Non-Conforming Parts according to the instruction of TGKY SQA. The Supplier must retain the evaluation reports for the length of time specified by TGKY.

b.

Identification of Production Trial Parts / ECI Parts Each part measured and/or inspected (exclude the sample for performance/ reliability tests) should be included with an identification tag as below: (For 3 shipments) All boxes should be marked to identify those parts as trial / ECI parts

Sample #1 1st Production Trial Part

This number must match the sample number of data sheet. 2nd, 3rd etc.

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II. Raw Materials a. Evaluation: Suppliers will submit a level 4 PAPP to TGKY SQA that includes the Certificate of Analysis and or a Material Certification and a Part Submission Warrant with approved IMDS #, to TGKY SQA, immediately after receiving your purchasing notification from TG North America. b. Raw Material Specification Voucher ( RMSV) TGKY Technical Engineering Group will initiate the RMSV. The RMSV will be sent to the supplier for verification of correctness and signature. The Supplier shall send the completed RMSV back to the Technical Engineering Department at TGKY for final disposition. c. Certificate of Analysis, Material Certification sheets and or Certificates of Compliance sheets will be emailed/faxed to the SQA at TGKY 24 hours prior to shipment for review and approval. A copy of the same document shall be attached to the shipment for verification purposes. The received material cannot be released to production if the verification documentation is absent from the shipment.

d. A Bulk Material Requirement Checklist, shall be maintained by the supplier if applicable III. SAFE LAUNCH ACTIVITIES; TG Kentucky has established the following criteria to ensure a safe and productive launch for new products. The following conditions require Safe Launch Activity requirements for each product / material provided to TG Kentucky. Suppliers required to abide by the requirements are; 1. All new products from existing suppliers. 2. All new suppliers to TG Kentucky 3. Any supplier with an annual PPM level of over 50 for the previous 12 months from date of the new product notification. 4. Any supplier who had a repeat quality problem in the previous 12 months from date of the new product notification. 5. Any Supplier who has quality issues during the pre production phase and has not closed them prior to SOP Safe Launch requirements are as follows; 1. Supplier shall start (2) 100% inspections of all TG Kentucky product (s), at their facility, for a period of 90 days from the date of their first production level shipment to TG Kentucky. Each shipment will be labeled with Certified Quality labels stating Inspector(s) name, date and lot#. One of these 100% inspections shall be performed off line prior to shipping. 2. TG Kentucky reserves the right to request support from the supplier to be located at TG Kentucky at any time when quality issues deem it necessary. Time frame for this support will be agreed upon between the supplier and the Quality Assurance department of TG Kentucky Doc.#4100F-QAS-151

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The purpose for the supplier member (s) at TG Kentucky are; ** Reviewing parts at receiving inspection. ** Evaluate all production concerns found at TG Kentucky ** Relay these concerns back to their manufacturing facility immediately to expedite root cause analysis and counter measure submissions back to TG Kentucky in a timely manner. 3. Supplier must revise product Control Plan to reflect all Safe Launch requirements and submit with their Level 3 PPAP. If Supplier is notified of the Safe Launch requirement after PPAP is submitted, the Control Plan shall be updated to reflect those requirements and submitted to TG Kentucky to be added to their PPAP package.

Termination of Safe Launch Activity Requirements; TG Kentucky will authorize the termination of the Safe Launch Requirements when; 1. The supplier fully supported the requirements during the first 90 day period 2. The supplier did not have any quality concerns during the first 90 day period. 3. The supplier had a quality issue(s) and has shown evidence that the problem has been corrected and had a minimum of 3 consecutive shipments with out the defect (s). If anytime during the 3 shipment validation phase a quality defect is identified the cycle starts all over and the supplier shall continue all Safe Launch activities until 3 shipments have been received with zero defects. If a new quality issue is identified during the 3 shipment validation phase, then that defect will also require a 3 shipment validation in addition to the existing defect(s). When the supplier has no outstanding quality issues and or countermeasures, and an agreement has been made between the Quality department and the SQA at TG Kentucky that the supplier has met all the requirements of the Safe launch activity, a letter of termination of Safe Launch Requirements will be sent to the supplier by email from the TG Kentucky SQA.

Any questions about your responsibilities for Safe Launch activities need to be directed to the TG Kentucky SQA.

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5. PRODUCTION PART QUALITY CONTROL 5-1 EVALUATION OF INITIAL PRODUCTION PARTS a. Evaluation Follow the same procedure as 4–4, (a). b. Submission Procedure for Evaluation Data c. Identification of Initial Mass Production Parts Follow the same procedure as 4-4, (c) The description contents on tag are as follows: Sample #1 Initial Mass Production Part 5-2

MASS PRODUCTION AND INSPECTION a. The Supplier must control processes based on the Quality Control Process Table, and inspect the parts according to the Inspection Standard in order to build in and assure product quality during the production process. b. The Supplier must submit sample data with each shipment as stated by the QE responsible for the part at TG Kentucky. c. Parts must be shipped and delivered in production lot order. FIFO is to be implemented. d. 100% On-Time Delivery is required of all TGKY Suppliers. e. Suppliers shall have a Level III PPAP submitted and approved by TGKY prior to shipping production level parts

5-3 CONTROL AND TRACEABILITY OF SAFETY COMPONENTS (1) Definition of safety components and safety characteristics. Safety components and safety characteristics are generally defined by the following: a. Components and quality characteristics, which have the possibility to become a direct or indirect cause for inappropriateness concerning safety (accidents resulting in injury or death, vehicle fire) when the car is actually being used. b. Components and quality characteristics which may lead to serious quality defects because of the deficiency of emission density of the exhaust gas and the damage caused by catalytic dissolution in the situation when the car is being used.

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(2) Indication of safety components and safety characteristics N

a. Indication mark The mark will be an inverted Delta N’. However, when the customer gives specified instruction on the indication mark, it is to be given priority. b Objects which need indication The following objects shall be given indication: (1) Procedures for process - - - MQC, inspection standard work instruction (2) Documents for process control- - - - Control chart, Check sheet (record) (3) The process into which safety characteristics are integrated, and inspected (Production Floor). c. Indicating color, position and size The above items are specified below. The indication color should be red. c. Supplier shall show that all critical items are traced and documentation retained.

Name 1 Procedures

Indicating position and color Title mark

2 Materials

one side is 15 mm long. Each line

MQC/control

of

plan

is 2mm wide. Place at the

upper left of each material. Characteristic mark

one side is 5 mm long. Each line of

is 1 mm wide. Place at the

Welding

applicable characteristic.

Process board

strength

one side is more than 150 mm long. Each line of

is more than 20 mm wide. Place boards at process.

(3) Retention of all documents related to any safety / critical item shall be retained for 15 years from the date of production of that raw material or component. This will include any document that was established to show capability performance, material and or performance test results, traceability of lots and materials for that product, dimensional verification paperwork, and any other document that the supplier deems necessary to maintain, to verify quality, inspections, and history of that material or component.

(4) Investigation and securing of process capability Doc.#4100F-QAS-151

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a. Confirmation of process capability in an initial mass production (1) The Supplier shall conduct an investigation of process capability and confirm the status of process preparation in mass production. When deficient characteristics are found in process capability, actions shall be taken for facilities, processes, etc. to make improvements. Criteria for process capability The MOST RECENT POINT indicates that the

ACTIONS ON THE PROCESS OUTPUT Based on Historical Process Capability (Cpk)

process:

Less than 1.33

Is in control

1.33- 1.67

Take appropriate countermeasure

Has gone out of control. All individuals in the sample are within specification.

Has gone out of control and one or more individuals in the sample are outside specification.

Greater than 1.67

Accept product Continue to reduce product variation

IDENTIFY AND CORRECT SPECIAL CAUSE Take appropriate countermeasure.

Take appropriate action.

Accept product. Continue to reduce product variation

IDENTIFY AND CORRECT SPECIAL CAUSE 100% inspect product produced since the last in-control sample

b. Periodic confirmation of process capability and improvement activity 1

Supplier shall verify monthly process capability in terms of safety characteristics and other necessary characteristics.

2

When deficient characteristics are shown in process capability, The Supplier shall organize a project team to implement improvement activity systematically to improve process capability.

(5) The Supplier shall specify where the results of processes cannot be fully verified by subsequent inspection and testing of the product and where processing deficiencies may become apparent only after the product is in use, such as a process which requires approval prior to operations in manufacturing quality chart and shall control these processes by implementing either of the following items:

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and is authorized by the personnel in charge of the concerned department (a qualified operator) shall perform the operations and record the results. b. Production conditions and work environment conditions: processes which require approval prior to operations, -the condition that directly affects quality shall be specified as the item to be monitored in Manufacturing Quality Chart, and shall be controlled with periodic monitoring.

(6) Personnel in charge of production shall maintain and control equipment used directly for production in processes that require approval prior to operations in distinction from general equipment, and shall record their performance based on the instruction specified in the procedure for “Equipment Control”.

(7) Personnel in charge of each department shall maintain appropriate records for qualified processes, equipment and operators. 5-4. REVISIONS OF INSPECTION STANDARD The QA Dept. of TGKY may revise the Inspection Standard in the following cases: a. When process capability does not meet specification, the Supplier may request specification changes through the SM Division to the Technical Division. The Technical Division may agree to the proposed specification change and issue Engineering Change Instruction Sheets.

b. When a process capability is well within the specification, the Supplier may submit proof with detailed data and request a change in sample size, inspection frequency etc. through the TGKY SQA, to the TGKY QA Dept. The TGKY QA Dept. must agree to the proposed change. However, any items, which are related to safety/critical characteristics in the Inspection Standard, shall not be shipped without inspection.

c. If requirements are added and/or changed due to the request of TG Kentucky., the Inspection Standard will be changed in agreement with the Supplier. d. When an engineering change related to the inspection specification occurs, the Supplier must submit a change to the Inspection Standard. 5-5.

ENGINEERING CHANGE

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a. Engineering changes are made by the TGKY Tech. Div. through the Engineering Change Instruction Sheet and drawing when needed and/or approved for Supplier application of design change with both the drawing and document.

b. When the TGKY Technical Div. authorizes an engineering change, the Supplier must submit the change implementation schedule, fixtures, and or drawing to TGKY Technical to ensure that proper re-work activities are accomplished. The Supplier shall also arrange the details in scheduling the change on parts at their location and be in accordance with paragraph 5-f below. c. A schedule change is done according to Section 4 of this manual.

d. Evaluation

Procedure 4-4, a

e. Submission Procedure of Evaluation Data

Procedure 4-4, b

f. Identification of Initial Engineering Change Parts Procedure 4-4, c The description contents on tag are as follow:

Sample #1 Design Change #E0-03

Number of Engineering Order (Design Change)

5-6.

b.

PROCESS CHANGE a. When the Supplier finds a change in his process necessary, written notice must be provided to the SQA three months before the change is made. The Supplier must not change his process without TGKY's approval. In case of an emergency process change being required and/or needed, the Supplier must immediately inform the TGKY SQA by telephone, and then written notice must be issued. At that time, the TGKY SQA will determine if resubmitting an updated PPAP will be required . The Process Change may need to be approved by a TG Kentucky Customer. This sometimes takes 3 to 4 months. The supplier needs to request this black form from your TGKY SQE. The notice must include the following items

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(1) (2) (3) (4) (5) (6)

Part Name Part Number Contents of the process change (both Previous and New) Quality characteristics affected by the change Schedule for the change QC implementation schedule for the change

[ ] Revision of Quality Control Process Table [ ] Preparation of production process [ ] Initial Sample inspection [ ] Performance / Reliability tests [ ] Confirmation (Study) of Process Capability c.. TG Kentucky will review the request and will issue to the Supplier approval or rejection. TGKY may request the following items for the approval: [ ] Process Survey [ ] Meeting prior to delivery [ ] Participation in Initial Sample inspection [ ] Sample with / data submitting [ ] Level 3 PPAP d. Evaluation Procedure 4-4, a e. Submission Procedure of Evaluation Data Procedure 4-4, b f.

Identification of Initial Process Change Parts Procedure 4-4, c The description contents on tag are as follows:

Sample #1 Process Change Approval #91006

5-7.

FIRST-IN, FIRST-OUT AND IDENTIFICATION OF PRODUCTION DATE

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The Supplier must use materials, components and parts in accordance with the "FIRST- IN,

FIRST-OUT" (FIFO) system. Also, the Supplier must identify the production date on the container or pallets. When the Supplier has a lot control system and verifies the relation between production lot and shipping lot, the Supplier must describe the shipping date on the container or pallets instead of the production date. FIFO is very important all the time, however, it is imperative during sort activities for non conforming material. If FIFO cannot be verified, then a “clean point” (see definition page) cannot be determined, so the sort cannot be stopped. 5-8.

ACTION BY SUPPLIER WHEN DEFECTIVE PARTS ARE FOUND a. When defective parts are found in the Supplier’s Process: The Supplier must immediately take necessary steps to stop defective parts delivery: (1) Hold the suspected lots and quarantine them. (2) Re-inspect and/or sort them. (3) Prepare to ship good parts and dispose of bad ones.

b. Then, the Supplier must take corrective actions; (1) Investigate the root cause of N/C. (2) Take countermeasures to prevent recurrence.

Nonconforming parts at supplier If the supplier suspects non-conforming parts have been shipped to TGKY or finds non-conforming parts within their finished goods inventory, the supplier is required to: A. Immediately email Notice of Suspected Shipment of Non-conforming Product (see attachment #3) to TGKY SQA and confirm receipt by telephone. B. The notice must include the following information: a. Part number and name b. Description of non-conformance with sketch c. Shipment dates and ID# ( e.g. FRS, Trailer, etc.) (Quantity) d. Rate of non-conformance e. Suspected root cause f.

What and when temporary countermeasures will be taken

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g. Part identification method Note: This notification is not intended to be in lieu of any mandatory reports to governmental agencies and must be received and acknowledged by TGKY SQA prior to shipment arriving at TG Kentucky. C. TGKY’s SQA will not issue a SCAR or PPM to the supplier for the issue found in which, the supplier has formally notified TGKY prior to product reaching the production line. The Supplier will still be required to report the cause of the nonconformance and the corrective action to prevent recurrence to TGKY SQA within 10 business days after original notification, using the countermeasure format already established at the supplier. NON-CONFORMING PARTS AT SUPPLIER

AT TGKY SQA

QC R/I



Discover non-conformity; suspect shipment to TGKY

SQA is notified by QC and or Production on a Non Conforming Product.



Immediately fax “Notice of...” to TGKY SQA and QC Rec. Insp. Confirm receipt by telephone





 

Prevent additional non-conforming parts from being manufactured or shipped to TGKY Support TGKY in replacing, reworking or sorting parts at TGKY.



Provide TGKY with a clean point at which time TGKY will receive certified product that is good.



Submit countermeasure within 10 business days of original notification.

SQA initiates Sort at TGKY and Issues SCAR to supplier. Supplier submits Counter measure within 10 working days from date of issue



SQA Confirms that nonconforming parts do not exist for next 3 shipments.



Review and confirm, close or reject countermeasure.

Move all suspect product to sort area and fill out Non Conforming Material report

Then, the Supplier must take the corrective actions; (1) Re-inspect all inventory (process and storage). Doc.#4100F-QAS-151

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(2) Prepare to ship good parts and dispose of bad ones. (3) Investigate the root causes of occurrence and shipment. (4) Take countermeasures to prevent defective parts occurrence and shipment. The Supplier must formally report the actions taken to the TGKY SQA within 10 business days. If permanent countermeasures have not yet been implemented, the Supplier must provide a report of details and a schedule for permanent countermeasures at this time.

5–9 TREATMENT OF DEFECTIVE PARTS AT TG KENTUCKY ( See attachment #4) a. If defective parts are found at TGKY, the TGKY SQA will issue a S.C.A.R. ( supplier corrective action request ) to the supplier for the defect found. b. As soon as the Supplier receives information from the SQA, the Supplier is responsible for the sorting of the following parts. (1) Parts in Supplier’s production process and inventory (2) Parts in transit to TGKY (3) Parts at TGKY (4) Parts already shipped to the TGKY customer The SQA and the Supplier will discuss and decide the method of corrective actions: (1) Returning, Sorting, Repairing, Replacing defective parts. (2) Disposition for the defective parts under the Purchasing Agreement. The Supplier will also be responsible for all costs charged to TG KY for the sorting of their parts at the customer location. The Supplier must reply by the specified date, stating the root cause of the defect and giving details of all corrective actions taken to prevent a recurrence in any future deliveries. c. Sorting A sort of all parts at TGKY, will be initiated immediately upon notification by the customer or TGKY member. All sort costs are the responsibility of the supplier. All suppliers can contact the TG Kentucky SQA for assistance if a 3rd party sort is required and the supplier Decides to use the TGKY approved sort company in house. d. Charge Back Charge back cost will be issued to the supplier when TGKY members have to conduct any inspections, sorting, containing or reworking any supplier products (see attachment 5). A standard Administrative cost of $100.00 will part of the charge back.

5-10 ADDITIONAL COSTS ASSOCIATED WITH SUPPLYING DEFECTIVE PRODUCTS TO TGKY. Doc.#4100F-QAS-151

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a. The supplier will be charged a base rate of $200.00 for every QPR issued to them. b. The supplier will be charged an additional $150.00 for every repeat issue a QPR has to be issued for in 1 calendar year from January to December. This means if the quality problem is a repeat in that year a charge of $350.00 will be issued starting upon the first repeat. If TGKY receives that same repeat yet again, then an additional $50.00 charge will be added to that rate each time the repeat issues is found at TGKY. EX. 1st QPR issued = $200.00 1st QPR issued for repeat = $350.00 2nd QPR issued for repeat = $400.00 3rd QPR issued for repeat = $450.00.

5-11 WARRANTY CLAIMS ON PURCHASED PRODUCES BY TGKY. Once a warranty claim has been received by TGKY from a customer, it will be reviewed and decision made as to who is the responsible party. If it is determined that it is a supplier issue the part will be returned to the supplier for investigation. The supplier will absorb 100% of the costs charged to TGKY on the warranty claim and any additional charges pertaining to the claim. A SCAR will be issued if the claim is found to be the supplier issue.

5–12 LOT CONTROL AND TRACEABILITY The supplier shall use “First – In & First – Out” on components, raw materials; products not completed during the process and indicate the manufacturing date (lot number) on the product or container.

Safety Part traceability requirements N

S

All materials and components that make a safety product shall be tracked by the supplier. Traceability starts at receiving and is tracked through each step of the process until part is received by TG Kentucky. Lot # should be kept to the smallest number possible to make it easier to capture all suspected parts quickly. Packaging issues must be evaluated also to make the final determination of what Doc.#4100F-QAS-151

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the Lot size can be.

A record shall be kept of all lot#, heat # and or serial numbers for each raw material and component. This can be done manually or on a media system as long as it can be presented when requested. A traceability flow matrix shall be developed to show how the suppliers traceability system works and how all critical data / information is tracked and maintained.

SECTION 6. SUPPLIER VALIDATION CRITERIA 6-1

PRODUCTION PROCESS SURVEY a. TGKY’s representatives, including employees of customers and of Toyoda Gosei Co., Ltd., TGKY’s parent company, may conduct, with prior notification; a production process survey of the Supplier. b. The Supplier must cooperate with TGKY so that the process survey can be conducted smoothly. The materials (Ex: QC Process Table = Control Plan etc.) for the process survey should be submitted to TGKY in advance, if requested. c. The Supplier must immediately comply with all action items pointed out in the survey. d. All suppliers should be at least ISO 9001:2000 and requested to be TS16949.

IF the supplier supplies a product for safety functional part it will be required that they are at least ISO 9001:2008 and with in 2 years receive their TS 16949 Certification. e. If the supplier is a small facility or has a very low amount of total sales going to the automotive industry, and can not afford the major cost for an ISO / TS audit and certification. It will be reviewed on a case by case basis as to what type and number of audits need to be conducted. This will be determined by past quality, delivery and TGNA evaluations. This does not apply to suppliers that are in the group mentioned in sub paragraph d above. f. If your certification has become revoked, suspended or placed on probation, you must immediately notify TG Kentucky SQA department of your status and corrective action to resolve that condition.

6-2. SUPPLIER PERFORMANCE EVALUATION (QUALITY, OTD, COST). Doc.#4100F-QAS-151

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a. Supplier performance is tracked on a monthly basis and will be given an evaluation of their performance annually. * Monthly Report This report will be sent to all suppliers that received PPM and or less than 100% OTD during any specified month Annual Evaluation  PPM = # of defects received / total received * 1,000,000.  SCAR’s issued / closed ( See Section #2 P)  Customer disruptions to include field failures. ( See Section #2 Q)  Special status customer notifications relating to quality and or delivery issues (See Section #2 R)  OTD to TGKY b. The overall rating for the annual evaluation will be determined by the sum of all points earned for each of the areas mentioned above. This will place you into one of 3 categories; Approved (50 ~60 points) Approved but needs improvement 30 ~ 49 points) Probationary ( 0 ~ 29 points) Note: cost is evaluated by TGNA Corporate. Supplier need to contact their representative at TGNA for cost evaluations.

Attachment 1 Doc.#4100F-QAS-151

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SUPPLIER QUALITY ASSURANCE REPRESENTATIVE INFORMATION

TO: General Manager, Purchasing Div. of TGKY

DATE: __________________________________

FROM: _________________________________

SUPPLIER: ______________________________

________________________________________

ADDRESS: ______________________________

________________________________________

________________________________________

________________________________________ WE HAVE DESIGNATED THE BELOW STATED TWO PEOPLE TO THE FOLLOWING POSITION A)

MANAGER OF Q. C. FUNCTIONS

B)

STAFF MEMBERS WHO WILL ACTUALLY WORK WITH THE TG QA, QC AND INSPECTION STAFF.

NAME IN TYPE

TITLE

A)

PHONE AND FAX

PHONE ( )

SUPPLIER Q.C.

FAX

REPRESENTATIVE

(

)

-

-

-

-

-

-

-

-

EMAIL:

B) SUPPLIER Q.C.

PHONE ( )

STAFF

FAX

EMAIL:

(

)

supp SUPPLIER Q.C. REPRESENTATIVE: _______________________________ (Signature) After hours and or Emergency Point of Contact:____________________ Phone #___________________

ATTACHMENT 2 APPLICATION FOR SPECIAL USE OF DEVIATION Doc.#4100F-QAS-151

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CONTACT TGKY SQE FOR THIS FORM

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ATTACHMENT 3- NOTICE OF SUSPECTED SHIPMENT ON NON-CONFORMING PRODUCT CONTACT TGKY SQE FOR THIS FORM

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ATTACHMENT 4

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ATTACHMENT 5 5-P WORK SHEET

CONTACT TGKY SQE FOR THIS FORM

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ATTACHMENT 6 ANNUAL SUPPLIER PERFORMANCE REPORT

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ATTACHMENT 7- MONTHLY PPM / OTD REPORT

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Attachment # 8

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Attachment #9 TGKY SUPPLIER QUALITY ASSURANCE MANUAL SECTION 8 Page 1 of 1

REVISION HISTORY

DATE 10/28/13 4100F-QAS-151

Date

Revision Detail

Revised by

3/23/2009

Annual Revision Multiple sections revised

T. Douglas

3/25/2010

Annual Revision Added John Filiatreau name to Cover sheet

T. Douglas

10/4/10

Changed Cover sheet Name to Mark McDonald

T. Douglas

3/23/2011

Annual Revision Added Keith Hayden to cover sheet

T. Douglas

7/24/12

Changed Cover sheet Name to Robert Phillips

T. Douglas

10/28/13

Revised Safe launch requirements and Added, Bobby Spalding , Bill Cropper to cover

T. Douglas

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