supplier requirements manual – north america · acument employees must know and comply with all...

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Supplier Requirements Manual –

North America

Acument Global Technologies – North America Supplier Quality Manual

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Acument Global Technologies NA Quality Policy


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Table of Contents

SECTION 1 - RELATIONSHIPS WITH OTHER PARTIES 7

1.0 - General 7

1.1 - Standards of Business Conduct 7

1.2 - Conflicts of Interest 7

1.3 - Gifts and entertainment 7

1.4 - Environmental protection, health, & Safety 7

1.5 - C-TPAT Compliance or certification: 8

SECTION 2 - GENERAL 9

2.0 - General 9

2.1 - Exceptions 9

2.2 - Additional Requirements 9

2.3 - Required References 9

2.4 - Approved Certification Bodies 11

SECTION 3 - SUPPLIER/CUSTOMER PARTNERSHIP AGREEMENT 12

3.1 - Acument Global Technologies Commitment 12

3.2 - Expectations of Suppliers 13

3.3 - Acument Global Technologies’ Rights 14

3.4 - Standard Supplier Charge-back Guidelines: 14

3.5 - Containment 15

3.6 - Supplier Questionnaire 16

SECTION 4 - SUPPLIER PERFORMANCE MEASURABLES AND EXPECTATIONS 17

4.1 - Supplier Performance Expectations 17

4.2 - Annual Supplier Rationalization: 17

SECTION 5 - QUALITY SYSTEM REQUIREMENTS 19

5.0 - General 19

Acument Global Technologies – North America Supplier Quality Manual – Table of Contents

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5.1 - Documentation Requirements 19

5.2 - Management Responsibility 20

5.3 - Quality System 20

SECTION 6 - HUMAN RESOURCES 20

SECTION 7 - DESIGN AND DEVELOPMENT VALIDATION 20

7.0 - Production Part Approval Process (PPAP) 20

7.1 - Purchasing 21

7.2 - Production and Service Provision 23

7.3 - Control of Inspection, Measuring, and Test Equipment 30

7.4 - Monitoring and Measurement of Product 31

SECTION 8 - CONTINUAL IMPROVEMENT 33

8.0 - General 33

8.1 - Continual Improvement Plan 33

8.2 - Cost Reduction 33

SECTION 9 - METAL AND PLASTICS PARTS-ADDITIONAL REQUIREMENTS 34

9.1 - Raw Material Certifications 34

9.2 - Material Certification Verification Testing 34

9.3 - Regrind (Plastic Parts Only) 34

9.4 - Tooling 34

9.5 - Processing Aids 34

SECTION 10 - CHEMICALS-ADDITIONAL REQUIREMENTS 35

10.1 - Parts 35

10.2 - Acument Specifications 35

10.3 - Certificates of Analysis 35

10.4 - Sample Retention 35

10.5 - Shipping Containers 35

10.6 - Changes in Processes and/or Materials 35

Acument Global Technologies – North America Supplier Quality Manual – Table of Contents

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10.7 - Campaigning/Cleaning 35

SECTION 11 - SUPPLIER NONCONFORMANCE COMMUNICATIONS 36

11.0 - Notification of Nonconformance 36

11.1 - Corrective Action 36

SECTION 12 - MODELS, TOOLS, GAUGES, AND TURNKEY EQUIPMENT 37

12.0 - Overview 37

12.1 - Design and Development Capabilities 37

12.2 - Computer Aided Design and Engineering Resources 38

12.3 - Program Management 38

12.4 - Design and Build 38

SECTION 13 - SUPPLIER SURVEY/AUDITS, PERFORMANCE AND THE APPROVED SUPPLIER LIST 40

13.0 - General 40

13.1 - Audit Standards 41

13.2 - Audit Results 41

13.3 - Supplier Performance 41

SECTION 14 - DISTRIBUTION 41

14.0 - Distribution 41

SECTION 15 - GLOSSARY 41

SECTION 16 - PURCHASING TERMS AND CONDITIONS 43

SECTION 17 - APPENDIX A: REACTION PLAN TO MOST COMMON ISSUES 50


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Section 1 - RELATIONSHIPS WITH OTHER PARTIES 1.0 - GENERAL

Throughout this Supplier Requirements Manual, the term Acument is understood to mean Acument Global Technologies and their affiliate companies.

This Supplier Requirements Manual applies to all external direct suppliers, including customer designated suppliers, to Acument Global Technologies-North American business unit.

1.1 - STANDARDS OF BUSINESS CONDUCT As Acument employees, we are expected to carry out the company’s business with honesty,

integrity and high ethical standards, and in compliance with the laws and regulations of the countries in which we conduct business. These standards must govern our conduct when making decisions which affect Acument.

1.2 - CONFLICTS OF INTEREST Acument respects the right of all employees to engage in personal activities outside of work.

However, each of us has the responsibility to avoid activities which conflict or appear to conflict with our job responsibilities or the interests of Acument. Any employee activity which may involve a conflict of interest or even the appearance of a conflict of interest must first be approved by the employee’s direct supervisor with the assistance of the employee’s ethics/compliance officer or Acument legal counsel.

The following are examples of conflicts of interest:

• Engaging in employment or any other activity that interferes with our ability to devote the required time and attention to our job responsibilities at Acument.

• Holding a significant financial interest in a current or prospective customer, supplier or competitor of Acument, or serving as an employee, consultant or director of that business.

• Directing Acument business to a supplier owned or managed by a relative.

• Using confidential company information or improperly using company assets for personal benefit or the benefit of others.

1.3 - GIFTS AND ENTERTAINMENT Unless properly approved, Acument employees should not give or receive business gifts of more

than nominal value, since such gifts can affect or might appear intended to affect the judgment of the person receiving the gift. Where laws or business unit policy do not provide otherwise, gifts having a value of U.S. $25 or less are permitted. The giving or receiving of gifts of a value in excess of U.S. $25 requires the approval of the employee’s direct supervisor with the assistance of the employee’s ethics/compliance officer or Acument legal counsel. Any gifts which are not permitted or have not been approved should be declined or turned over to the company.

The giving or receiving of reasonable and customary meals and entertainment in the normal course of business is permitted in instances where laws or business unit policy do not provide otherwise. Lavish meals or inappropriate entertainment should always be avoided.

Acument employees must know and comply with all applicable restrictions on providing meals, entertainment, gifts or gratuities to employees or agents of any government. Questions about gifts or entertainment should be resolved by the employee’s direct supervisor with the assistance of the employee’s ethics/compliance officer or Acument legal counsel.

1.4 - ENVIRONMENTAL PROTECTION, HEALTH, & SAFETY We are committed to being an environmentally responsible company and to providing a safe and

healthful workplace for all employees, visiting suppliers and stakeholders.


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We comply with all applicable environmental, health and safety (EHS) laws and regulations in every county in which Acument does business. Where there are no environmental, health and safety laws, or where the legal requirements do not adequately protect the environment or workplace, Acument Global Technologies takes appropriate action. Environmental, health and safety managers and Company legal counsel are available to provide information on applicable laws and regulations.

1.5 - C-TPAT COMPLIANCE OR CERTIFICATION: C-TPAT is a joint initiative of U.S. Customs and Border Protection and the trade community that

was established in 2002 (and revised in 2005) to reduce the threat of terrorism by means of protecting the integrity of cargo imported into, further processed or warehoused in, and/or exported from the United States. As part of the global supply chain for a variety of industries, Acument communicates with its supply chain business partners to determine whether each partner meets the C-TPAT security criteria. All suppliers to Acument are required to adhere to C-TPAT requirements in accordance with the criteria identified on http://www.cbp.gov, for importers.

http://www.cbp.gov/


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Section 2 - GENERAL 2.0 - GENERAL

Throughout this Supplier Requirements Manual, the term Acument is understood to mean Acument Global Technologies and their affiliate companies.

All suppliers shall conform to the latest issue of the appropriate standards as follows:

• Component Parts and Fasteners - ISO/TS-16949

• Acument Customer-Specified Materials – ISO/TS-16949

• Chemical and Raw Materials - ISO 9001 and/or ISO/TS-16949

• Other Direct Suppliers - ISO 9001

• Aerospace specific AS 9100 & NADCAP registration

• Commercial – ISO 9001

• Calibration and Laboratory Services – ISO 17025*

• Other Industry Specific Standards as applicable, and/or as contractually obligated

2.1 - EXCEPTIONS Conformance with these requirements may only be waived by Acument purchase order, Acument

purchase contract, or in writing from an Acument Purchasing representative, with concurrence of the Acument North American Quality Director.

*Original equipment manufacturers may be utilized as calibration suppliers to calibrate equipment that they originally manufactured, regardless of their ISO 17025 accreditation status.

2.2 - ADDITIONAL REQUIREMENTS Sections 4 through 8 present requirements that are in addition to ISO/TS 16949, ISO 9001 and AS

9100. Unless the requirements are waived in accordance with Section 1.1 or otherwise noted, these requirements apply to all external direct suppliers.

2.3 - REQUIRED REFERENCES For suppliers that meet the applicability requirements of TS16949, The Automotive Industry Action

Group (AIAG) has published several manuals that standardize procedures, reporting formats, and technical nomenclature which are required by Daimler Chrysler, Ford, General Motors and other subscribing customers.

It is necessary to obtain current editions of each of these manuals to fully comply with the requirements of ISO/TS16949 and Acument’s expectations of its suppliers. Copies of these publications can be ordered from AIAG at (248) 358-3003 or via website at http://www.aiag.org/Index.cfm

• Quality Management System Requirements (ISO/TS 16949:2002)

• Production Part Approval Process (PPAP)

• Fundamental Statistical Process Control Reference Manual (SPC)

• Measurement Systems Analysis Reference Manual (Gage R & R studies)

• Advanced Product Quality Planning and Control Plan Reference Manual (APQP)

• Potential Failure Mode and Effects Analysis Reference Manual (FMEA)

• CQI-9 Special Process: Heat Treat Assessment (Heat Treat suppliers)

• CQI-11 Special Process: Plating System Assessment (Plating suppliers – Required after Sept. 1, 2007)

http://www.aiag.org/Index.cfm


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• CQI-12 Special Process: Coating Systerm Assessment (Coating suppliers – Required after Sept. 1, 2007)

For suppliers that meet the applicability requirements of AS9100, the International Aerospace

Quality Group (IAQG) has published several manuals that standardize procedures, reporting formats, and technical nomenclature which are required by Boeing, Lockheed, Honeywell, and other subscribing customers.

It is necessary to obtain current editions of each of these manuals to fully comply with the requirements of AS9100 and Acument’s expectations of its suppliers. Copies of these publications can be ordered from IAQG via their websites as follows

• Quality Management Systems Aerospace Requirements (AS9100B) http://www.iaqg.sae.org

• Aerospace First Article Inspection Requirements (AS9102) http://www.iaqg.sae.org

• Quality Management Systems – Guideline for Configuration Management (AS 10007-- Available from http://webstore.ansi.org)

• NADCAP Heat Treat Audit AC7113-2*

• NADCAP Non-Destructive Testing AC7113-3*

• NADCAP Chemical Processing AC7113-4*

• NADCAP Material Testing AC7113-5*

*Must be Third Party Certified. AC7113 Standards may be obtained via the NADCAP website (for NADCAP members) or by requesting a copy from Acument NA Corporate Quality

http://www.iaqg.sae.org/

http://www.iaqg.sae.org/

http://webstore.ansi.org/RecordDetail.aspx?sku=ISO%2010007:2003


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Customer Specific Requirements In addition to the manuals listed above, Suppliers are required to obtain and comply with the

following standards/specifications, as applicable:

• Acument Material Specification - AGT-2282 (Steel suppliers)

• Acument Heat Treating Specifications - AGT-097 & AGT-106 (Suppliers of Heat-treated products or services)

• OEM / Prime customer specific manuals and specifications as they apply to the suppliers end item customer base

• Acument Tool and Check Fixture Specifications Exceptions to these requirements shall be documented in Acument Global Technologies North

American Purchase orders on a case by case basis.

2.4 - APPROVED CERTIFICATION BODIES Acument requires third party accreditation by certifying bodies that maintain ANAB and/or IAOB

accreditation. Aerospace suppliers who provide secondary processed products or processing (i.e. heat treating,

NDT, plating/coating, material testing) are required to be NADCAP registered. Aerospace raw material suppliers must be DFAR compliant.


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Section 3 - SUPPLIER/CUSTOMER PARTNERSHIP AGREEMENT Acument Global Technologies (AGT) realizes that only by developing partnerships with our

suppliers will we be able to achieve the goal of exceeding the expectations of our internal and external customers. In an effort to establish a basis for these partnerships, Acument has established the following guidelines for conduct with our suppliers.

3.1 - ACUMENT GLOBAL TECHNOLOGIES COMMITMENT

Acument is committed to: • providing clear communication of our expectations including:

quality system requirements,

material specifications,

technical requirements,

delivery expectations,

cost reduction goals,

minority sourcing goals,

quality improvement goals, and

customer service expectations.

• evaluating and selection of new suppliers based on their ability to meet our expectations,

• providing feedback to suppliers on their performance to those expectations,

• establishing relationships with suppliers who meet and exceed expectations, and

• acting in an open and ethical manner, treating each supplier with the trust that a partner expects and deserves.


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3.2 - EXPECTATIONS OF SUPPLIERS Acument expects our suppliers to:

• • Meet and/or exceed Acument expectations,

• • React with concern when Acument expectations are not met, by taking immediate steps to resolve deficiencies and by implementing corrective and preventive actions to prevent recurrence within 10 days of occurrence (unless otherwise agreed-upon by Acument).

• • Embrace the concept of never ending, continual improvement and zero (0) non-conformances in all aspects of Acument expectations,

• • Show a willingness to establish relationships with Acument,

• • Act in an open and ethical manner, treating Acument with the trust that a partner expects and deserves,

• • Strive for prevention in place of detection when developing products and processes,

• • Support cost reductions similar to those required by OEM’s,

• • Support lean manufacturing,

• • Support APQP &/or First Article Inspection (FAI), (NP & SI) process, and Customer Delight Strategy,

• • Support Problem Solving process to identify root cause and fix issues with permanent solutions,

• • Achieve and Maintain Applicable Industry standards as mentioned in Section 2.0

• • Be EDI capable,

• • Be ASN capable (if required),

• • Provide Master Pallet Labels, as required (Purchased Parts Only),

• • Strive for 0 PPM,

• • Maintain “Pay on consumption” inventory reduction program (JIT, consignment, etc.),

• • Accept supply chain / Extended Enterprise responsibilities,

• • Be engineering and design responsible, co-locate if required,

• • Support Product Development Team’s (PDT’s) and launches,

• • Target price consistent with our agreements,

• • Meet or exceed our customer agreements for Year-Over-Year Improved Economics

• • Maintain a culture of continual improvement and Lean thinking

• • Consider our recommendation to set up an environmental, health and safety management system based on ISO 14001


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3.3 - ACUMENT GLOBAL TECHNOLOGIES’ RIGHTS Acument reserves the right, in conjunction with or through its suppliers, to:

• • review subcontractor’s documentation required by this Global Supplier Quality Manual, other Acument requirements or TS 16949, AS9100 (or other applicable industry standard)

• • have access to the subcontractor’s premises or working area so that the supplier and Acument can verify that the subcontractor is conforming to specified requirements

Acument reserves the right to de-source suppliers holding active certifications that do not meet

minimal contractual requirements.

3.4 - STANDARD SUPPLIER CHARGE-BACK GUIDELINES: Errors in workmanship or discrepancies in delivery may result in a charge-back to the supplier. The

actual charge to the supplier is determined by the costs incurred by Acument resulting from the discrepancy. Charge-backs are typically transacted as a debit against open invoices. The following is a summary of the charges typically accessed in North America. Additional charges may be assessed based on actual costs incurred on behalf of the supplied product.

A $150.00 administration, cost recovery charge may be issued in the event of the following receiving discrepancies:

• • Incorrect ASN

• • Packing slip discrepancies or no packing slip submitted with the shipment

• • AIAG bar code (or equivalent) label errors or no bar code label affixed to shipping container(s)

• • Incorrectly labeled containers – label vs. actual container content

• • Material shipped in a matter other than FIFO

• • Missing Skid Tag Sign-offs (as required)

A $250.00 administration, cost recovery charge may be issued with each notification of non-conforming product. In addition to the $150.00 and the $250.00 administrative charges, the charges listed below may also apply.

• • Any and all Acument customer charges incurred as a result of our suppliers’ non-conforming product.

• • A $50.00 per man-hour charge on behalf of Acument for time spent sorting and/or re-working our suppliers’ product.

• • Any and all line stoppages based on both man-hour & machine idle time. (Charges will be determined through our Accounting Department based on our customer’s charges).

• • A $100.00 charge for all incomplete, incorrect or otherwise discrepant PPAP submissions.

• • A $250.00 administrative fee + negotiated rate for 3rd party inspection service.


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Debits for charges incurred will be made in the currency specified on the Purchase Order, and shall equal the above amounts in US currency.

Appeal Process: Supplier may appeal the debit/charge-back within (30) days in writing to the affected Acument plant Quality Manager and Plant Manager, detailing reason for appeal and rationale to support it. At the discretion of the plant manager, the Acument Buyer and SQA engineer may also be involved in the investigation, assessment and final disposition of the appeal findings. A final appeal may be submitted to the Acument Supply Chain Director and Quality Director.

3.5 - CONTAINMENT In the event that a supplied product or service does not meet the minimum quality requirements for

acceptability, Acument may reject or sort the product at the supplier’s cost. Suppliers are expected to immediately contain all suspect product upon notification of a quality issue, and to ensure that Acument’s production needs for inventory are met, by replacing, sorting, or reworking suspect or defective products as needed. Suppliers are required to notify Acument immediately upon discovery that suspect product has been shipped.

At Acument’s discretion and with the express written approval from Acument’s customer(s), Acument may choose to use supplier’s suspect or nonconforming material if there is determined to be no deleterious effect on product quality. Acument’s supplier is required to correct the defect for subsequent shipments regardless of the decision to accept suspect or nonconforming product by Acument.

In addition, Acument may place the supplier on Level I or Level II Containment as described below:

Level I containment is defined as additional controls implemented at the supplier’s location upon Acument’s request, for a minimum of 30 days unless otherwise agreed in writing by authorized Acument personnel. The supplier quality contact will initiate containment activities by sending a LEVEL I letter to the supplier’s Quality and Plant Managers. The letter will detail the specific nonconformance and required supplier’s actions, including inspection and or exit criteria. The supplier will be responsible to reply to the Acument facility’s Quality Manager or designate with their implemented containment plan within 24 hours of the LEVEL I notification.

At any time Acument may place a supplier on immediate LEVEL I containment if the severity of the issue is deemed appropriate.

LEVEL II Containment: If a supplier implements a corrective action for a quality issue, and this corrective action is not effective or the issue re-occurs, the supplier may be placed on LEVEL II containment. In addition, A supplier who is on LEVEL I containment will be elevated to LEVEL II containment status if previous containment actions are proven unsatisfactory or an Acument facility is placed on containment by an Acument customer due to a product or service provided by a supplier. Level II containment shall be performed by an objective, trained 3rd party source approved by Acument. This containment is in addition to Level I containment activity already in place. “Supplier assumes all costs.” Any supplier on a Level I or II containment may not be considered for any new business until the supplier successfully resolves the situation to the satisfaction of Acument.


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3.6 - SUPPLIER QUESTIONNAIRE New suppliers shall complete the Supplier Questionnaire or when a major change takes place. The

supplier shall return the completed questionnaire to the requestor from the Acument Supply Chain, Purchasing or Quality group.

Major change is defined as:

• acquiring additional companies,

• an addition/deletion of capabilities,

• change of ownership,

• expansion of new facilities,

• change in product mix,

• change in equipment used to process Acument components, etc.


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Section 4 - SUPPLIER PERFORMANCE MEASURABLES AND EXPECTATIONS

As part of our continual improvement efforts, Acument will track the following direct supplier performance measurables and work with key suppliers to improve them.

4.1 - SUPPLIER PERFORMANCE EXPECTATIONS

Quality Performance Parts per million (ppm) non-conforming Zero PPM Customer Disruptions (including Field Returns) Zero Rejections Incidents of Premium Freight (Supplier Responsible) Zero Incidents Level I or Level II Containment Notifications Zero Notifications Final Response Time to Requests for Corrective Action By Assigned Due Date (10 days

default)

Delivery Performance On-Time Delivery 100% On-Time

Individual Acument Manufacturing and Distribution facilities will monitor their direct suppliers and

report supplier performance metrics on a monthly basis. Acument Corporate will report on supplier performance metrics quarterly.

4.2 - ANNUAL SUPPLIER RATIONALIZATION:

Performance Final Response Time to Requests for Corrective Action

By Assigned Due Date (10 days default)

Percent First-Time, On-Time PPAP Acceptance 100%

Assessment Cost Annual Reductions Technology / Leadership with continual improvement objectives Leading Edge of

Technology Minority / Disadvantaged Business Content

Quality System Assessment Audit Rating or Self-Assessment Score Passing Score Certifications achieved / maintained (ISO, TS, AS, etc.)

Must achieve or maintain required certifications / registrations

Acument Global Technologies is committed to continually improving our supply base and is

requiring that all suppliers of component parts and secondary processors be registered to the applicable industry standard(s) (See Section 2.0). All suppliers of laboratory and/or calibration


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services are required to be certified to ISO 17025 (except original equipment manufacturers – see Clause 2.1). Suppliers are required to provide a copy of their current registration to Acument Supplier Quality. If a supplier is not currently certified, the supplier is required to provide a date when their facility will be registered. Exceptions to this rule can only be negotiated with an Acument purchasing representative. All Acument plants are ISO/TS16949, ISO 9000 or AS 9100 registered.

Acument may publish new goals for these objectives at our discretion. Suppliers demonstrating their ability to meet and exceed these goals on an ongoing basis will be recommended for preferred supplier status. Suppliers with preferred status will be given the opportunity to participate for long term, division-wide agreements.

All direct suppliers, including customer designated suppliers, are required to meet these requirements.

Acument reserves the right to contact a supplier’s registrar if the supplier does not resolve quality problems in a timely manner.


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Section 5 - QUALITY SYSTEM REQUIREMENTS 5.0 - GENERAL

ISO/TS16949 defines the fundamental quality system expectations of Chrysler, Ford, General Motors, truck manufacturers and other subscribing companies for suppliers of production, service parts and materials.

The goal for ISO/TS16949 is the development of fundamental quality systems that provide for continual improvement, emphasizing defect prevention, reduction of variation and waste in the supply chain.

AS9100 defines the fundamental quality system expectations of Boeing, Lockheed, Honeywell, and other subscribing companies for suppliers of production, service parts and materials.

The goal for AS9100 is the development of fundamental quality systems that provide for continual improvement, emphasizing defect prevention, reduction of variation and waste in the supply chain.

Acument Global Technologies expects that all suppliers of production materials and services establish, document and implement effective quality systems based on ISO/TS16949, AS 9100 for the aerospace sector, or other applicable industry standard.

These requirements include the requirements of ISO 9001 and industry specific requirements. Additional Acument requirements are noted below. Acument reserves the right to add requirements for purchased materials, purchased services, or suppliers. Acument may waive parts of these requirements at its own discretion. Waived requirements will be documented in purchase orders, contracts, or documents issued by a product development team.

5.1 - DOCUMENTATION REQUIREMENTS • FMEA’s

• Process Flow Diagrams

• Other Advanced Quality Planning documentation

• Design documentation, including prints

• Raw material and final product specifications

• Material Safety Data Sheets (MSDS)

• Bills of materials (including all components)

• Packaging documentation

5.1.1. Changes in Documents: All changes in documentation shall receive the same level of authorization

as the originals. Records shall be maintained of all changes. Written notes of a temporary change to documentation are acceptable, provided they are made according to established procedures and have an established time limit after which they are no longer effective. These changes shall be signed and dated by the same level of authorization as the originals.


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5.2 - MANAGEMENT RESPONSIBILITY In addition to the requirements of applicable industry standards, each supplier shall maintain an

organization chart that shows personnel who are responsible for each element of the quality management system and their lines of authority and responsibility. This document and the Quality Policy shall be available for Acument review.

5.3 - QUALITY SYSTEM The supplier’s Quality Manual (policies and procedures) shall be available for Acument review.

Section 6 - HUMAN RESOURCES Automotive supplier shall demonstrate compliance to AIAG Quality System Supplemental

Requirements for training and competency evaluation. Aerospace suppliers shall demonstrate compliance to the AS9100 requirements for training and competency evaluation.

In order for each supplier to understand Acument Global Technologies philosophy, it is highly recommended that the following classes be taken:

• APQP Level I & II (Automotive Suppliers)

• FAI (Aerospace Suppliers)

• GD&T

• Lean Manufacturing

• Problem Solving

• PPAP

• FMEA

• MSA and SPC

Section 7 - DESIGN AND DEVELOPMENT VALIDATION 7.0 - PRODUCTION PART APPROVAL PROCESS (PPAP)

All suppliers of raw materials and components that are used in the manufacture of Acument automotive products are required to submit PPAP packages to the applicable Acument SQE and receive PPAP approval prior to beginning shipments.

With the exception of chemical suppliers, automotive suppliers shall comply with the current version of the Production Part Approval Process Requirements Manual published by AIAG. The Product Development Team may modify these requirements or other designated Acument representative. The default level for all submissions is Level 3. Any specific item(s) that does not meet specification must be clearly defined on PSW with an action plan.

• Aerospace suppliers shall comply with the requirements of Aerospace First Article Inspection Requirements (AS9102)

7.0.1 Chemicals Chemical vendors are approved through Acument according to the Materials Approval Procedure

developed, issued, and coordinated by Acument. For new programs, the supplier’s representative should coordinate with Acument Purchasing for the program. For existing programs, the supplier’s representative should coordinate with Acument Purchasing and technical management at the Acument manufacturing facility affected.


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7.0.2 Changes in Materials, Equipment or Processes Materials are approved for a specific part number, engineering change level, manufacturing location

(including specific manufacturing line within a given site), raw material (including subcontractor’s manufacturing location), production process, and production process environment. All changes require notification to and approval by Acument. In the case of chemicals, any change also requires approval from Acument. Changes may require notifying the Acument customer, resubmission to the customer, and customer re-approval.

• Raw material suppliers to Acument Aerospace facilities must be DFAR compliant.

7.0.3 Run @ Rate / PSO Supplier shall notify their Acument SQE representative in advance for Run @ Rate / PSO timing

schedule as applicable.

7.0.4 Annual Validation of PPAP It is recommended that automotive suppliers perform annual validation per ISO/TS16949

requirements.

7.0.5 Packaging Approval A signed, approved copy of the Packaging Specifications sheet must be included in each PPAP

submission (if required).

7.1 - PURCHASING 7.1.1 Purchase Order / Contract Compliance

The supplier must comply with all requirements as stated in the purchase order contract documents, including Acument’s standard Purchasing Terms and Conditions, which govern every Acument purchase order contract.

7.1.2 Regulatory Conformity - Safety and Housekeeping The following are in addition to the “Government Safety and Environmental Regulations”

requirements of applicable industry standards (Automotive – ISO/TS 16949, clause 7.4.1.1) The supplier shall:

• Include in the safety program an emergency plan covering accidents, spills, fire and explosion

• Identify a representative who has authority to coordinate safety activities and to investigate and resolve safety problems

• Conduct routine safety inspections of the facility on a predetermined basis


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7.1.3 Subcontractor Development In addition to the requirements of TS-16949, AS 9100 or ISO 9001 Clause 7.4.1.2, suppliers shall

comply with the following: Suppliers shall:

• Establish and maintain a subcontractor surveillance and performance rating system.

• Establish and maintain an “Approved Supplier” list; including criteria for inclusion on or exclusion from this list.

• Review subcontractor pre-production approval (PPAP or FAI as applicable) documents to insure specified requirements will be met.

• Evaluate all subcontracted products or services to determine the amount of inspection, surveillance, and audits of subcontractor’s facilities required.

• Conduct such inspection, surveillance, and audits at a defined frequency.

• Evaluate the disposition of all reported non-conformances.

• Ensure corrective actions for all reported nonconformance are completed and verified.

• Not change sub-contractors unless approved in writing by applicable Acument division.

7.1.4 Receiving Inspection and Testing The supplier shall identify and segregate nonconforming materials to prevent unauthorized use. When nonconforming products are received the supplier shall initiate corrective action with the

subcontractor. The supplier shall ensure purchased materials are labeled for use in a first in, first out (FIFO)

manner. The supplier shall clearly identify “approved material”. Suppliers are required to provide certified test reports with actual product data and statement of

conformity, signed by authorized supplier management, with each shipment. All products or secondary processes must be accompanied by certified test results with actual data (No Pass/Fail). Acument does not accept delivery of shipments without the accompanying required documents in legible condition.

Upon request, suppliers shall provide statistical records, process control documents, and/or inspection data for supplied products and services (secondary processes.)

Acument shall periodically validate test reports for raw material. Acument may perform on-site inspections, verifications of product conformity, and/or audits at the supplier’s premises.

Verification by Acument does not absolve the supplier of responsibility for their product / process quality or internal verification / validation.


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7.2 - PRODUCTION AND SERVICE PROVISION 7.2.1 Work Instructions

In addition to the requirements applicable industry standards (ISO 9000, TS 16949, or AS9100) suppliers shall include or reference the following in the appropriate documentation (instruction sheets, route sheets, SPC procedures etc):

sequence of operations

special working environments

work methods

characteristics and tolerances to be met

At a minimum, process procedures shall include detailed instructions of process functions that can be clearly understood by the operator. Any document revision level shall be identified on the procedure. Each process procedure/instruction shall be dated and signed by the authorized approver.

Procedures shall be updated to reflect changes in processes, equipment, and customer requirements. These updates shall indicate a revision level, revision date, and authorized approval.

Suppliers shall develop, implement and maintain policies and procedures for all rework, repair and the use of reprocessed material.

7.2.2 Preventive Maintenance The following requirements are in addition to those in applicable industry standards (ISO 9000,

TS 16949, or AS9100) The supplier shall maintain a record for each tool, fixture or piece of equipment indicating the

following:

• The maintenance schedule

• Description of the equipment

• Identification number of the equipment

• Location of the equipment

• Maintenance procedures

• Acceptance criteria

• Action taken when results are unsatisfactory

• Re-qualification of repaired equipment to manufacturer’s recommended frequencies

The supplier shall maintain objective evidence that regularly scheduled maintenance has been performed and shall maintain this evidence for a minimum of three (3) years after completion of the program or transfer of tooling.


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7.2.3 Product Identification and Traceability In addition to the requirements of applicable industry standards (ISO 9000, TS 16949, or AS9100)

suppliers shall comply with the following: • This identification shall provide traceability through retained documentation to the specific lot or

batch of each raw material used in its manufacture; individual parts or products shall have a unique identification. Aerospace suppliers shall maintain the identification of the configuration of the product in order to identify any differences between the actual configuration and the agreed configuration.

Aerospace suppliers shall provide for identification throughout the product life. In addition, aerospace suppliers shall have a system to identify and trace all products from the same batch of raw material or from the same manufacturing batch, as well as the destination (delivery, scrap) of all products from the same batch.

Suppliers of assembled products must have a system to identify the lot or batch of each component in the assembly, as well as a lot or batch number for the finished assembly. The individual lot or batch numbers of components used must be traceable via the finished assembly lot or batch number.

If stamps, electronic signatures, or passwords are used to identify acceptable quality products,

suppliers shall establish and document the controls for these media. • Whenever inspection is performed, a raw material lot is changed or production of a new lot or

batch of product/parts is started, the raw materials used and their lot numbers shall be recorded on appropriate in-process documents.

• For large or key plastic components the manufacturing date and shift shall be recorded on the core side of each part. This shall be done in such a manner that this identification is clearly visible after total assembly of all subcomponents and before installation into the vehicle.


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7.2.3.1 SPECIAL REQUIREMENTS FOR SECONDARY PROCESSORS (PLATE, PATCH, HEAT TREAT, SORT, ETC.):

Upon successful completion of the required processing, the supplier must use a fine point permanent marker to circle and place an “X” on their supplier code on the Acument Container Tag (Pan Ticket) signifying that the product has completed the process step.

In instances where multiple operations occur at the same supplier, each supplier code shall be marked when the respective process step has been completed.

In the event of a nonconformance, the supplier follows the “Reaction Plan to Most Common Issues” in Annex A.

Confirmation Area

Properly Marked Container Tag (Colors Not Required)


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7.2.4 Control of Customer Supplied Product The supplier shall ensure that all Acument-owned or Acument Customer-owned property used or

stored in the supplier’s facilities are safeguarded. The supplier shall maintain confidentiality on these items. The supplier shall permanently mark all such property so that the ownership is clearly visible. Customer property can include intellectual property such as data used for design, production, or inspection.

7.2.5 Preservation of Product – Packaging Requirements In addition to the requirements of TS-16949 Section 7.5.5, suppliers shall comply with the following: 7.2.5.1 Packaging Design Intent Acument requires that packaging design protects components adequately against surface and or

structural damage. Acument plants must receive material and components in the same production quality condition as it left the Suppliers’ facility, regardless of the method of transportation. The design intent is to maximize density while allowing ease of use at Acument plants. Each pack design is to consider the material handling and storage environments it will encounter during transportation and use.

Returnable packaging is the preferred method when cost-justified and acceptable. Use expendable packaging as a back up for returnables, or as a primary packaging when returnables are not cost-justified. Acument may require that Suppliers complete a “Packaging Specifications” sheet for each product supplied, for review by Acument’s Packaging support. An internal plant sign-off sheet must have all necessary approval signatures. Supplier may consider receipt of approved copy as an authorization to proceed. Suppliers may be required to provide special handling for sensitive products and/or hazardous materials. Suppliers should confirm these requirements prior to quote.

Suppliers are to review and evaluate packaging on an ongoing basis. Acument’s objective is to keep packaging costs in line with all strategic goals and to meet those obligations. Suppliers should strive to improve packaging on an ongoing basis.

7.2.5.2 Identification Labels All packaging systems must be labeled as described in SHIPPING AND PARTS IDENTIFICATION

LABEL STANDARD, AIAG (or equivalent). When more than one container is used for a given batch or lot of product, containers shall be sequentially numbered in the order filled. Place labels on two adjacent sides of containers to facilitate reading. Returnable packaging systems require Kennedy label holders. The affected Acument plant must approve “pockets” or “holders.” Flexalloy has requirements beyond the standard packaging and suppliers to Flexalloy should confirm these requirements prior to quote. All containers of purchased parts MUST have a properly formatted Master Pallet Label.

For shipments to Acument plants, proper labels must be on all packaging. Suppliers are responsible for all labeling issues relating to packaging. Traceability and accuracy are the standards by which Acument measures Suppliers. All labels must include:

• • date packed/filled

• • lot/batch number

• • product name and Acument part number

• • quantity of material contained

• • engineering change level for parts and components

• • supplier’s name and address

In addition, any hazardous materials must be clearly labeled as such.


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7.2.5.3 Packaging Design - Suppliers are responsible for the design of their packaging. Acument can assist in recommending packaging design and development resources. Suppliers are to assume all responsibilities for design, testing and performance of their packaging. Any deviations from the following criteria must have prior authorization from those Acument facilities supplied:

A cost-effective design must provide the required level of part protection.

weight of a manually handled individual carton is not to exceed 35-lb (15.9 Kg).

handling equipment

freight cost & cube trailer

container should hold between (1) and (8) hours of Acument’s daily volume

floor space

packaging dunnage to be recyclable

pack designs should follow established “best practice” designs

7.2.5.4 Returnable Containers and Dunnage - Acument encourages returnable packaging systems where cost-justified. Returnable packaging systems are reviewed and approved by the supplied Acument facilities before implementation.

Acument will standardize returnable packaging systems when possible. Standardized returnable packaging systems will follow AIAG RETURNABLE CONTAINERS AND PACKAGING SYSTEMS (RC 1- RC 8 or equivalent). The two main containers or pallet footprints are 4-way

48”X 45” /1219 mm X 1143 mm 32” X 30” / 812 mm X 762 mm

All totes or small containers should build off these footprints. Use unique containers only when product characteristics dictate. Containers shall be modular to the shipping pallet and shall not over hang the pallet.

Acument works with Suppliers to determine required quantities of containers. Determining factors include production schedules, quantities, shipping location(s) and product characteristics.

As required, suppliers shall:

• submit samples to a National Safe Transit Association Certified-testing laboratory for testing to NSTA procedures

• Provide results to the Acument receiving plant for acceptance review

• When appropriate, subject the packages to an ASTM vibration sweep to resonating frequencies

• Ensure the package can adequately perform at all expected seasonal and environmental conditions

• Identify packaging trials through transit as “Packaging Trials” (The appropriate contact and their phone number must be visible.)

The supplier shall determine other packaging requirements by consulting with the Product

Development Team or other designated Acument representative.


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7.2.5.5 Packaging Restrictions When flanged tubes are stapled to pallets, die tear-off tabs at the staple positions on the bottom of

the container must be provided. This will adequately secure the container to the pallet and enable the removal of the container for recycling.

7.2.5.6 Chemical Compatibility The compatibility of chemicals (raw materials, intermediates, and final products) with containers

including, but not limited to reaction vessels, blending tanks, storage tanks and shipping containers shall be demonstrated.

For chemicals, samples shall be taken from the shipping container and tested to verify they meet all applicable specifications. The environment (temperature, moisture level, atmosphere, etc.) of chemicals in shipping containers shall be controlled as appropriate to protect from environmental degradation.

7.2.5.7 Expendable Containers Containers are to have a removable lid that does not require cutting to open. Containers must have

stitched or glued manufacturer’s joints with outside tab construction or proven equivalent performance. Taped joints are prohibited. All containers and multi-wall tubes must have a box maker’s certificate with bursting or puncture test visible on the assembled container.

7.2.5.8 Load Shipments Corrugated material used in shipping containers must have minimum test strength to adequately

withstand the test of warehousing and transportation. Less than 275-pound, (125 Kg), test strength requires written approval from the Product Development Team’s Packaging support.

Maximum height:

• 33”/837 mm for 3 high

• 50”/1269 mm for 2 high

Designed packages shall consider using the full width of trailers. Trailers are 48 or 53 feet / 15 or 16 meters long and 94” / 3 meters wide with a height from 102 to 110 inches/ 3 meters, the inside length is 570” / 14 meters.

7.2.5.9 Load Securement Banding is one method of unitizing a pallet load, (2 bands lengthwise/2 bands crosswise).

Acceptable stretch films are:

• LLDPE (linear low-density polyethylene)

• LDPE (low-density polyethylene)

• EVA (Ethyl vinyl acetate 12% min)

Stretch film should have a 50% film overlap up to the top of the load with a 3”/ 76 mm excess at the top. Properly secure the pallet load by extending the film 3”/ 76 mm below the top of the pallet.

7.2.5.10 Sealant and Closures Adequately seal closures to prevent failure during handling. Closures may be stamped, glued, or

taped to ensure positioning remains satisfactory during transit. Cover products that must be clean or protected from plant and or transportation environments.


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7.2.5.11 Pallet Size and Construction Select pallet sizes for a 48’/15 m or 53’ /16 m trailers and to allow loading two wide. Maximum

weight requirement is 2800 lb. / 1270 kg preferred expendable pallet sizes are:

• 48”X 45” /1219 mm X 1143 mm for components and stamped metal components

• 32” X 30” / 812 mm X 762 mm for fasteners and very small components

• 54” X 48” / 1372 mm X 1219mm

• 57” X 48” / 1447mm X 1219mm for larger components and subassemblies

• 63” X 48” / 1599mm X 1219mm

• Flexalloy requirements = 36x36, 30x30

• Australia requirements include = 1160mm x 1160mm x 150mm, 1200mm x800mm x150mm

Pallets are to have three (3) runners 1½” / 13 mm thick by 3 ½”/89 mm wide. Notch openings are to be 9”/228 mm wide and no closer than 6” /152 mm from the ends of the runner. Notches are to have a depth of 1 ¾” /44 mm and center runners are to be parallel and equal in distance between the outside stringers. All runner/stringers should have openings measuring 27” /685 mm on center.

Use nails 2¼”/57 mm long to fasten the slats to the stringers stagger six (6) nails. Staples are not acceptable. The minimum stringer width is 3½”/89 mm for primary entry.

Make notched stringers and slats of disposable pallets from a minimum of standard grade spruce, hemlock or hardwood. They must be free of defects such as splits, large knots and dry rot that will reduce their strength. The minimum cross-sectional dimensions of the slats and stringers:

• Deck boards (STD) - ½” X 5 ½” / 13 mm X 140 mm wide

• Deck boards (HD) - 11/16” X 5½” / 17 mm X 140 mm wide (for heavy pallet loads)

• Stringers - 1½” X 3½” / 38 mm X 89 mm

7.2.5.12 Standard Small Parts Containers Standard small parts are any nuts, bolts, screws, washers, small fasteners or similar dense

materials. Ship all standard small parts in ¼ keg style containers. Recommended designs:

• full telescopic

• regular slotted

• returnable (reference AIAG)

Dimensions are nominally 9” X 9” X 4 to 6½” (23 cm X 23 cm X 10 to 16.5 cm). The standard fastener pallet is to be nominal 32” (81 cm) long and 30” (75 cm) wide. Maximum load height is not to exceed the minimum pallet base dimension.

7.2.5.13 Returnable Container and Racks Acument’s commitment is to eliminate expendable packaging. In order to justify and obtain

returnable packaging, Acument requires the following items: the package cost per part, the quantity of parts in the package and separate weights of the wood and corrugated material.


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7.2.5.14 Supplier Responsibilities Suppliers shall maintain returnable container inventory levels, site coordination and performance

integrity necessary. The supplier shall develop and implement as well as maintain procedures to clean returnable containers and to verify the cleanliness of these containers. Suppliers may not use Acument owned returnable containers for uses other than those previously agreed to by Acument. In addition, suppliers are required to protect Acument returnable containers from theft or damage beyond normal wear and tear.

Suppliers shall load products into containers and containers into transportation equipment in a manner that maintains the conditions of the product using only clean, undamaged containers. Acument will charge the Suppliers the labor costs for cleaning containers before use.

Each Suppliers name, container number and tare weight must be clearly visible on two opposite surfaces of a returnable container in normal, 1½”/ 38 mm contrasting letters.

Suppliers shall maintain a sufficient supply of suitable expendable packaging.

• premium shipments

• production run ahead programs

• container outages

• Service order

7.2.6 Preservation of Product – Delivery The number of containers and their manufacturing date shall be noted on all invoices and bills of

lading. Materials shall be shipped to Acument on a first in, first out (FIFO) basis. Aerospace suppliers shall also include provisions for preservation of product as follows:

• Cleaning

• Prevention, detection, and removal of foreign objects,

• Special handling for sensitive products,

• Marking and labeling including safety warnings,

• Shelf life control and stock rotation,

• Special handling for hazardous materials.

7.3 - CONTROL OF INSPECTION, MEASURING, AND TEST EQUIPMENT In addition to applicable industry standard requirements, suppliers shall identify all jigs and check

fixtures with the proper engineering change level and date of change.

7.3.1 Measurement System Analysis All jigs, fixtures, tooling masters, templates, patterns, models, etc., shall be statistically qualified

(tool proved) before release to production. Periodically and when changes occur such items shall be re-qualified to ensure the capability of producing the required results. The extent and frequency of re-qualification shall be defined.

The repeatability and reproducibility of all gauging/fixtures used to evaluate products for Acument shall be determined in accordance with the current version of the AIAG Measurement Systems Analysis Reference Manual. When the gage R&R exceeds 20% of the tolerance, the supplier shall initiate proactive corrective action in conjunction with the appropriate Acument contact.

No gage exhibiting a gage R&R exceeding 20% of tolerance may be used without the expressed written consent of the appropriate Acument contact.


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7.3.2 Knowledge of Statistical Concepts Where Acument requires the use of Statistical Process Control (SPC), generally on Critical / Safety

and Special characteristics in each control plan, appropriate control charts must be used. Control charts must demonstrate statistical control / stability before process capability (Cp and Cpk) can be determined.. Reaction to out of control conditions must be documented on the control charts.

Acument encourages our suppliers to utilize advanced statistical methods, such as regression analysis and design of experiments to optimize process variation.

Acument requires ongoing submission of SPC data to each consuming Acument plant from each supplier.

7.3.4 Internal Quality Audits Supplier shall show compliance to ISO/TS 16949, ISO 9001 or AS 9100 Quality/Management

System Requirements, and if applicable, Customer Specific Requirements for Internal Quality Audits.

Aerospace suppliers shall use NADCAP AC7113 checklists appropriate for their process to perform internal audits.

7.3.4.1 Monitoring and Measurement of Manufacturing Processes – Process Verification

Suppliers shall monitor and measure all processes affecting product quality.

7.4 - MONITORING AND MEASUREMENT OF PRODUCT 7.4.1 In-process Inspection and Testing

Suppliers shall perfom in-process inspections as defined by applicable industry standards, customer specific requirements, and as determined during advanced quality planning (control plans). Work in-process products must be inspected at each process step to verify their adequacy for use at subsequent operations. Records of these inspections must be retained for a minimum of 50 years.

In the event that it is determined that subsequent processes will eliminate or correct a nonconformity found in-process, the nonconforming product must be clearly labeled as “Special Process” with a description of the nonconformity. The original area of nonconformity must be re-inspected to verify the elimination of the nonconformity during final inspection. Records of this re-inspection must be retained for a minimum of 50 years.

7.4.2 Final Inspection and Testing The supplier shall provide a certificate of analysis or compliance, as required by Acument, each

time a specified product or service is delivered to Acument. To ensure continuing conformance to all Acument requirements, a complete annual validation

layout is required (See section 12.4.3 for further definition of annual layout requirements). The supplier shall perform design validation/production verification at least once per model year on all new and carryover products. Exceptions to either or both of these requirements require written concurrence from the appropriate Acument representative.

Supplier shall ensure that engineering specifications are correct and acceptance limits are identified in advance (Cpk ≥1.67).


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7.4.3 Handling of Nonconforming or Suspect Products Suppliers shall immediately quarantine any and all suspect / nonconforming product upon its

discovery, to prevent its shipment to Acument or Acument’s customers. In the event that any suspect / nonconforming product has been shipped, suppliers shall immediately notify Acument and applicable regulatory agencies. Notification shall include a clear description of the nonconformity, which includes as necessary parts affected, customer and/or organization part numbers, quantity, and date(s) delivered. Parties requiring notification of nonconforming product may also include suppliers, internal organizations, customers, distributors, and regulatory authorities.

Any rework or applicable re-processing must be pre-approved by Acument and/or Acument’s customer. All reworked / reprocessed product must be verified to meet all requirements before shipment to Acument or Acument’s customer. All such verifications must be approved by authorized personnel with responsibility for disposition of nonconforming product.

Aerospace suppliers shall conspicuously, permanently mark or positively control all product s dispositioned as scrap until the product is physically rendered unusable.

7.4.4 Appearance Items Section 7.4.3 applies to suppliers of colored parts or components and to suppliers of paints,

coatings, pigments, dyes, tints, master batches and other colorants used in products which have Appearance Criteria:

7.4.4.1 Color Masters Only Acument or Acument customer approved color masters may be used to develop color

formulations or to determine the acceptance of colored materials. The supplier shall have dual sets of color masters whenever possible. A Control Standard shall be

used for verification of Working Standards and therefore stored in a manner to maintain color integrity. The Working Standards shall be maintained and calibrated regularly to the Control Standard. Suppliers shall develop, implement and maintain procedures for control, preservation and distribution of color masters.

7.4.4.2 Personnel All personnel who make any color related acceptance decisions shall be tested upon assignment

and at least annually thereafter for color blindness and color perception according to industry accepted standards. They also shall be trained in the care and handling of the standards. Records of the tests and training shall be maintained for Acument review.

7.4.4.3 Use of Colorants Suppliers shall maintain a log for colorants issued from storage, spectrophotometer and gloss

readings, date, approval signature, visual comments, etc. All colorants shall be checked for metamerism.

Detailed application procedures for paint and resin mixing, application, etc., shall be posted and followed.

7.4.4.5 Color Measurement and Evaluation Visual evaluation of color shall be made using a Macbeth light booth with a neutral gray surround.

Evaluation must be made under three illuminates; Normal Daylight, Fluorescent and Horizon to ensure against spectral metamerism.

Color measurements shall be made using a spectrophotometer according to SAE J1545 and a gloss meter unless specifically waived by Acument in advance.

Spectrophotometer must be calibrated annually unless waived in writing by Acument personnel. Color master must be compared and documented to Acument plants on an annual basis.


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Section 8 - CONTINUAL IMPROVEMENT 8.0 - GENERAL

Suppliers shall comply with the applicable industry standard requirements. In addition, suppliers shall also comply with the following:

8.1 - CONTINUAL IMPROVEMENT PLAN Suppliers shall develop an annual continual improvement plan, approved by upper management,

which establishes improvement goals, implementation dates and responsible personnel.

8.2 - COST REDUCTION Suppliers shall have a system to identify, record, and monitor costs on a regular basis for all

products manufactured and or purchased, as well as for all services provided and/or purchased. This system shall include, but not be limited to:

• • manufacturing costs

• • quality costs

• • delivery costs

• • purchasing costs

• • overhead costs These costs shall be reported using a suitable base, such as cost-per-unit produced or cost as a

percentage of total sales, etc. Suppliers shall be able to document purchasing, manufacturing and overhead costs in an Acument standard format per the RFQ Piece Price Worksheet for components.

In determining quality costs, suppliers shall quantify internal and external failure costs. Suppliers should address each of these individually in cost reduction plans.

Suppliers are expected to reduce costs annually to offset all economics and OEM reduction programs.

Acument will work pro-actively with its supply base to support cost reduction implementation, but expects suppliers to take the initiative in establishing projects that will generate savings.

Suppliers will be expected to participate in formal cost reduction reviews as required by Acument.


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Section 9 - METAL AND PLASTICS PARTS-ADDITIONAL REQUIREMENTS

All suppliers of metal and plastic parts to Acument shall comply with the following items.

9.1 - RAW MATERIAL CERTIFICATIONS The supplier shall receive and evaluate raw material certifications showing actual test results for

materials used prior to use of each material. If material blending (glass, etc.) is performed by a subcontractor, the certifications for all virgin materials shall be maintained on file by the supplier for Acument review. Where there is a customer approved subcontractor list, the supplier must provide documentation for compliance.

9.2 - MATERIAL CERTIFICATION VERIFICATION TESTING Such testing shall be performed by a qualified test laboratory at a frequency specified in the

Acument approved Control Plan. In the absence of a written agreement this testing shall be performed every six months. Test results shall be maintained on file for Acument review.

9.3 - REGRIND (PLASTIC PARTS ONLY) Unless otherwise specified, regrind shall not exceed 10%. A policy/procedure outlining control of

regrind shall be established and included in the Quality Manual. Documentation of all blending, by lot, shall be kept on file for Acument review.

All samples prepared for PPAP shall be molded using the highest percentage of regrind allowed per specification in order to ensure that all physical properties shall be met under the most adverse conditions. The level of regrind shall be stated on PPAP documentation.

9.4 - TOOLING Any time a tool is removed from production the last piece de-molded shall be checked for hole

diameters, hole depths, internal hole defects (air traps, etc.), boss heights, dimensional requirements, etc. This part shall be labeled “Last Piece Check”, dated and stored for reference. Last Piece Checks may be discarded after subsequent runs of the part produces a new Last Piece Check sample.

Procedures shall be developed and implemented for tool inspection, tool repair and prior to the tool’s return to production. Documented procedures and records shall be maintained for Acument review.

Any time a tool is returned to production a “First Piece” check, which shall include a check of hole diameters, hole depths, internal hole defects (air traps, etc.), boss heights and a dimensional check, etc., shall be performed. These results shall be kept on file for Acument review. First Piece Check samples may be discarded after subsequent runs of the part produce a new First Piece Check, but records of inspections must be maintained for the life or the part plus one year.

All holes and bosses shall be individually identified in the injection tool where size and space permit. Tooling shall allow for incorporation of a date stamp where size and space permit. All plastic parts

shall be marked with a recycle code meeting SAE J1344 standards, where feasible.

9.5 - PROCESSING AIDS There shall be no oil, lubricant, mold release or other contaminant on product shipped to Acument,

unless Acument or its customer specifies the presence of such material in engineering drawings, specifications, etc. In such cases the supplier shall obtain approval in writing from Acument prior to product shipment. The same requirement applies to the following scenarios:

• • when it is required by the supplier’s manufacturing process and cannot be entirely removed prior to shipment of the product

• • when it is indirectly required in order to meet Acument’s or its customers requirements (for example, salt spray resistance)


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Section 10 - CHEMICALS-ADDITIONAL REQUIREMENTS All chemical material suppliers to Acument must address the following items. Certain requirements

may conflict with those of other sections. If conflict occurs for chemical material suppliers, this section of the manual shall take precedence over all other sections.

10.1 - PARTS The term “parts”, as used throughout these requirements, shall be understood to include any

product, whether a physical part or chemical.

10.2 - ACUMENT SPECIFICATIONS Specifications shall be written by Acument and distributed to suppliers. Each supplier shall have a

documented system for receipt, handling and dissemination of these specifications within the supplier’s organization.

10.3 - CERTIFICATES OF ANALYSIS Certificates of Analysis must accompany every shipment to Acument. The results on the certificate

shall be actual test results for the lot being shipped or for a sample taken from the shipping container. The certificate shall specify the sample origin (lot or container). The Certificate shall show the results of testing to each item marked with an asterisk (*) on the Acument Specification. Items marked with a chevron (>) shall be tested at the frequency specified in the specification. The pound sign (#) signifies a deviation from the specification. The tilde sign (~) is a special control characteristic defined in the material specification. All other items shall be tested and reported on the certificate annually (at a minimum) and shall represent the first shipment of a calendar year. Results of all testing shall be maintained by the supplier for the current year plus two years to follow.

From time to time chemical suppliers shall be expected to participate in certification verification testing coordinated by Acument Purchasing. On a random annual basis retained samples taken from shipping containers received at Acument may be returned to the supplier for complete testing of all properties on the Certificate of Analysis. The results are then reported to Acument for comparison to the original Certificate of Analysis. Any discrepancies are communicated to the supplier for resolution.

10.4 - SAMPLE RETENTION Laboratory samples used to determine the test results shown on the Certificates shall be retained

and stored in an environment that shall minimize damage, loss and or environmental deterioration. These samples shall be retained for not less than one year after shipment of the product to Acument, unless otherwise agreed to by Acument.

10.5 - SHIPPING CONTAINERS Each shipping container shall be identified with the lot number and shall be traceable to a Certificate

of Analysis. The sequential numbering of shipping containers (Section 4.15) shall apply only to shipping containers of 55 gallons US (or metric equivalent) or less in capacity.

10.6 - CHANGES IN PROCESSES AND/OR MATERIALS Any changes in processes, materials and or source of materials require resubmission and re-

approval of the product in accordance with Section 5.0 of these requirements.

10.7 - CAMPAIGNING/CLEANING Production shall be scheduled to campaign materials and or clean equipment to prevent cross-

contamination.


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Section 11 - SUPPLIER NONCONFORMANCE COMMUNICATIONS 11.0 - NOTIFICATION OF NONCONFORMANCE

Suppliers shall receive a notification from the issuing Acument facility whenever a nonconformance is found in an Acument facility or an Acument customer reports a nonconformance. Notifications may be written in one of several different formats, depending on which Acument facility issues the report. All notifications of nonconformance will meet the following:

Acument requests the suppliers’ authorization number prior to the commencement of disposition: sort, rework, repairs that are the supplier’s expense and return to the supplier. However, Acument reserves the right to proceed without supplier’s prior approval in order to protect customer build requirements, to prevent an Acument production line shutdown, or to disposition the material due to lack of space. This authorization number/code will be listed on the notification of nonconformance to the supplier.

The supplier shall comply with the following corrective actions:

• Inspect all suspect material produced to ensure that no additional products will be shipped with the discrepancies present. This may include inspection of product in route, at the Acument plant or at the customer location

• Post copies of the notification of nonconformance report at the appropriate in-plant locations

• Implement immediate corrective action to eliminate the discrepancy (See Section 11.1 for corrective action requirements.)

Supplier liability for sort, rework/repair, scrap, freight, customer charges, Acument administrative charges, etc., are detailed in the notification of nonconformance.

11.1 - CORRECTIVE ACTION REQUIREMENTS Corrective Action forms vary by Acument plant; contact the Acument receiving plant for appropriate

forms. The supplier shall perform and document Corrective Actions as follows:

• Immediately contain and correct the problem: record short-term-corrective action and containment such as material sorted, material reworked, material reprocessed, etc. (To be submitted to the Acument plant within 24 hours) and include authorization number to sort, rework or repair at Acument plant. Actions must include documentation of how the supplier is going to protect Acument and Acument’s customer while a permanent solution is being developed.

• Root cause determination: in-depth analysis of the reported problem shall be conducted to determine the true underlying cause(s) and or reason for the discrepancy

• Document planned corrective actions, including investigations into proposed solutions.

• Irreversible corrective action: long-term action taken to ensure that the problem cannot recur. Some items that may be included are mistake-proofing operations or systems that make it impossible to do the job wrong; training; process changes; tool changes; smart devices added to equipment to prevent discrepancies, etc. Document completion dates for all phases of corrective action implementation.

• Preventive Action: Document how lessons learned will be applied to other similar processes to prevent similar issues in the future.

• Verification: objective evidence that the problem has been solved, including statistical capability studies where applicable. Document methods used to verify effectiveness of corrective action, evidence verified, dates and approvals of verification.

• Certification: a dated signature of a responsible supplier management representative who attests to the accuracy of all statements made on the form.


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Suppliers shall ensure that Acument plant has confirmed in writing that issue is resolved. Suppliers may not close corrective actions without Acument approval.

The completed corrective action is due at the Acument plant within 10 days of notice, unless otherwise agreed upon by Acument. If actions are incomplete by the due date, the supplier shall submit the action plan and the incomplete corrective action with dates for completion to the Acument facility. These shall be updated and presented weekly until closure.

When requested, the supplier shall provide on-site support personnel at Acument and or its customer’s facilities.

Section 12 - MODELS, TOOLS, GAUGES, AND TURNKEY EQUIPMENT 12.0 - OVERVIEW

This section presents the Acument expectations and requirements in the area of models, tools, gauges and turnkey equipment. These are in addition to the expectations and requirements presented elsewhere in this manual. Reflecting a commitment to continual improvement of technology, Acument plans emphasize an increased reliance on supplier technical expertise. Acument suppliers and their technological capabilities in design, development as well as the building of models, tools, gauges and turnkey equipment are critical to achieving continual improvement.

This section describes the expectations and requirements in four major areas:

• • design and development capabilities

• • computer-aided design and engineering resources

• • program management

• • build capabilities

12.1 - DESIGN AND DEVELOPMENT CAPABILITIES Suppliers are expected to have the technical and personnel resources to support all phases of

design, development and manufacture of models, tools, gauges and turnkey equipment. Suppliers shall design and manufacture their products and issue periodic progress reports. Design verification and validation shall be performed as agreed in the purchase agreement.

12.1.1 Design Schedule Review and Involvement Suppliers shall demonstrate the ability to participate in early design activities, from concept through

prototype and production. They shall have the ability to provide the necessary information and data to Acument.

Design schedule review and approval data, including provisions for written Acument approval, shall be planned. This shall typically include Acument review and approval at 10%, 60%, and 100% of design completion.


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12.1.2 Supplier Capability Suppliers shall dedicate appropriate resources and facilities to support the design and development

processes. Suppliers should be capable of conducting or participating in:

• utilization of such studies as geometric dimensioning and tolerancing (GD&T)

• quality function deployment (QFD)

• design of experiments (DOE)

• industrial ergonomics

• design failure mode and effects analysis

• identification and documentation of key characteristics based on:

• material function

• design intent

• other factors that could cause non-conformances with product safety requirements or noncompliance with government regulations or could adversely affect how customer requirements are met performance/cost/risk trade-off studies

12.2 - COMPUTER AIDED DESIGN AND ENGINEERING RESOURCES Suppliers are expected to have CAD/CAE capability, experienced personnel and appropriate

facilities to perform design and analysis on models, tools, gauges and turnkey equipment. If CAD/CAE is subcontracted, the supplier shall provide leadership.

12.3 - PROGRAM MANAGEMENT Suppliers shall use a multi-disciplinary approach for decision making and a documented program

tracking system which includes key events and “target versus actual” timing. Suppliers shall identify people involved in decision making by name, title or responsibility and telephone numbers. Designated individuals are required for evaluating quality, reliability, health, safety, environmental issues, product service and cost reduction. Suppliers shall maintain a manufacturing and construction flow chart covering the entire project from purchase of raw materials through finished product customer approval. The flow chart must also depict all operations, inspection design and build reviews, tests, checks, prove-outs, etc., along with milestone dates. All significant / critical / dimensional characteristics and tolerance will be approved by Acument along with desired Pp and Ppk data.

12.4 - DESIGN AND BUILD Suppliers shall provide appropriate resources and facilities for the design and fabrication of models,

tools, gauges or turnkey equipment. Tool design personnel must comprehend the key characteristics of the parts and processes involved. If any design or fabrication work is subcontracted, there shall be a method of tracking and follow-up to ensure timely completion of work.

12.4.1 Specifications Acument suppliers shall obtain all applicable standards and specifications prior to quotation. Upon

acceptance of purchase agreement, suppliers shall be responsible for meeting all applicable industry standard and specification requirements.


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12.4.2 Changes and Authorization Any and all changes proposed to quality plans by a supplier or Acument shall be documented in

writing and resubmitted to Acument Supply Chain prior to implementation. Suppliers shall not proceed with any part of the proposed changes prior to receiving written authorization from Acument Supply Chain.

12.4.3 Dimensional Layouts Suppliers shall have appropriate resources and facilities to perform full dimensional layout of

models, tools, gauges and turnkey equipment, both in body coordinates and by utilizing the part design dimensioning system. When a supplier is not capable of conducting these layouts, an Acument approved subcontractor shall be used to support these activities. An appropriate system for tracking and follow-up shall be established and approved by Acument prior to start of fabrication to ensure timely completion.

12.4.4 Tooling Management Suppliers shall establish a system to ensure effective management and utilization of tooling

systems. Suppliers shall develop and submit for approval a design and build plan detailing, at a minimum, the following:

• Name and telephone numbers of supplier contacts including identification of responsibilities

• Appropriate repair facilities and resources

• Effective storage methods for all models, tooling aids, master mandrels, masters, etc., including how, where and type of environment

• Inspection points and data to be analyzed throughout the build phase including:

• critical areas identified by Acument and/or the supplier,

• all areas which may affect any end-item control characteristic as defined by Acument and or its customers

• The basis for finished product acceptance

12.4.4.1 For tools, gauges, fixtures, and turnkey equipment: • Review date by Acument to ensure all Acument, customer, applicable national and state or

provincial safety and ergonomic requirements are met

• Provisions for supplying Acument with a recommended preventive/predictive maintenance plan

• Provisions for training Acument or other personnel including details of training duration and location

• Proposed packaging and shipping methods of the finished product to Acument including shipping instructions and customs clearance when applicable

• Statement of responsibility for installation in an Acument or Acument customer facility, including a detailed installation plan and statistical prove-out

• Methods for statistical capability and conformance prove-out prior to shipment including:

sample size,

statistical data work-up,

basis of qualification for all areas which may affect any end item control characteristic, and

Acument approval


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12.4.4.2 For tools and turnkey equipment: • Formats such as sketches, prints and diagrams showing the location of valves, electrical

lines, plumbing lines and connections as well as other peripheral equipment.

• For all multiple tools, peripheral equipment location shall be consistent between units.

• All sketches, prints, wiring diagrams, schematics, etc., shall require Acument approval prior to build.

12.4.4.3 For models, tools, gauges, and fixtures: A method to establish gauge repeatability and reproducibility (including GD&T based tolerances),

including provisions for Acument approval. The preferred method is that of Measurement Systems Analysis Reference Manual (AIAG). Suppliers may use any statistically valid method provided it is approved by Acument in writing. Total GR&R shall not exceed 20% of tolerance at any checkpoint.

12.4.4.4 For shelf tools: A method for ensuring surface nickel is consistent and meets Acument specifications.

12.4.4.5 For models: A cubing method proposal including identification of responsibilities and key dates which allows for

Acument sign-off at the cubing review.

Section 13 - SUPPLIER SURVEY/AUDITS, PERFORMANCE AND THE APPROVED SUPPLIER LIST

13.0 - GENERAL Acument evaluates and selects new suppliers, and evaluates current suppliers, on their ability to

meet its requirements. This selection / evaluation process takes place in a cross-functional team environment led by the Acument Supply Chain function. Acument Supply Chain maintains the Approved Supplier List. Criteria used to determine eligibility for this list is as follows:

• All new suppliers are required to successfully complete an Acument Supplier Questionnaire before being approved.

• Suppliers who are registered to TS-16949, ISO 9001, AS-9100 or who have been audited by an Acument customer may, at the discretion of Acument, have the initial on-site audit waived.

• Aerospace specialty suppliers must be NADCAP accredited.

• On-site audits of suppliers are conducted at a frequency determined by Acument Purchasing, SQE and/or Acument quality. In some cases, suppliers who have successfully completed a third party audit (including Acument customers) will not be audited by Acument.

• Acument shall audit aerospace suppliers on a random sampling basis, to applicable requirements.


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13.1 - AUDIT STANDARDS All audits shall be performed using the requirements of the applicable industry standard and this

manual.

13.2 - AUDIT RESULTS At the end of an audit the supplier shall receive written report summarizing the findings and

explaining any corrective action that may be required. The lead auditor will distribute an audit report within Acument. The supplier shall receive a copy of this report. A corrective action plan is to be submitted within 30 days of the audit. Suppliers not achieving the minimum 80% required for approval will be developed toward that goal and will be re-evaluated periodically to monitor progress. Suppliers achieving less than 70% audit score shall be recommended for quote hold status until a satisfactory rating is attained.

13.3 - SUPPLIER PERFORMANCE Suppliers that fall below Acument expectations identified in section 3 will be notified. Such

notification may require that corrective action is sent to Acument SQE with copies to the Acument buyer. Failure to comply with a request for corrective action will result in a second notification requiring documentation be presented at Acument location. Failure to comply with second notification will result in supplier being placed on quote hold and/or probation. Failure to comply with the second notification may result in the supplier being resourced.

Section 14 -

Section 15 -

DISTRIBUTION 14.0 - DISTRIBUTION

This manual is written under the direction of Acument Supply Chain and Acument Quality. Acument Supply Chain, Acument Quality and/or purchasing personnel, issues controlled copies of the manual. Acument Supply Chain issues one electronically controlled copy to each supplier location.

Manufacturing facilities and suppliers may make uncontrolled copies for internal use only. However, such uncontrolled copies will not be updated. It is recommended that each supplier contact the appropriate Acument Supply Chain representative to obtain at least one controlled copy for each facility that supplies products or services to Acument.

GLOSSARY The following definitions apply:

Batch - (volume or lot) an identifiable collection of products, or quantity of material, of a single type, grade, class, size or composition produced in the same facility under continuous controlled conditions for a period not to exceed 8 continuous hours.

Calibration - comparing two instruments, measuring devices or standards, one of which is of known accuracy. To detect, correlate, report or eliminate by adjustment any variation in accuracy of the instrument or measuring device of unknown accuracy. All calibration instruments used by Acument suppliers must be traceable to NIST.

Campaign - to schedule production of compatible chemicals in a manner so that vessel cleaning is not required and residual chemicals in the vessel do not effect performance of the chemical being produced.

Characteristic - any distinct property or attribute of a product, process or service that can be described or measured to determine conformance and nonconformance to specified requirements.


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Configuration – interrelated functional and physical characteristics defined in product configuration information (ISO 10007:2003. clause 3.3)

Disposition - an action to determine how a nonconformance is to be resolved.

Evaluation - an appraisal to determine if production processes and quality assurance programs are capable of producing a quality product or providing a quality service and generating evidence that supports decisions of acceptability.

FAI – First Article Inspection – aerospace pre-production verification and validation process

Inspection - the examination, measurement, and testing of characteristics of processes, products or services to determine acceptability and the recording of resulting data.

Machine/Tool Potential Study - a preliminary assessment of the ability of a machine and its tooling (only) to produce parts to specifications consistently.

Major Process Change - a change of equipment (e.g., a change of injection molds from one press to another at the same or different location), a change to any material formulation or processing aid that has not been previously sampled and approved, a change in process (e.g., manual trim to machine trim), a change in packaging (e.g., expendable to returnable dunnage) or a change in inspection procedures (e.g., attribute inspection to variable or frequency, etc.))

NADCAP – North American Defense Contractors Administration Program – Aerospace accreditation body

Nonconformance - a deficiency in characteristic, documentation or procedure which renders the quality of a product or service unacceptable or indeterminate. Examples of non-conformances are: physical defects, test failures, inadequate documentation, and deviations from prescribed processing or from any other part of the program.

PPAP - Production Part Approval Process (Section 5)

Procedure - a document that specifies, as applicable, the purpose and scope of an activity; what shall be done and by whom, when, where and how it shall be done, what materials, equipment and documentation shall be used and how it shall be controlled.

Product Development Team - an Acument cross-functional team charged with bringing a new program from award of business through volume production.

Surveillance - the continuing evaluation, analysis and verification of a supplier’s records, methods, procedures, products and services to assure that requirements are met.

Verification - independently reviewing, inspecting, examining, measuring, testing, checking, witnessing, monitoring or otherwise establishing and documenting that products, processes, services and documents conform to specified requirements.

All required Acument Global Technologies forms may be obtained by contacting your Acument Global Technologies Supplier Quality representative.


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Section 16 - PURCHASING TERMS AND CONDITIONS

1. PARTIES. Acument Global Technologies, Inc., its affiliates and subsidiaries may make purchases under these terms and conditions and the purchasing business unit is referred to herein as “Buyer." The supplier of Goods or services under this contract of sale is referred to herein as “Seller” 2. APPLICABLE TERMS. The following terms and conditions, together with the applicable Purchase Order and any schedule, exhibit or attachment referenced therein or herein shall constitute the contract of sale between the parties (the “Agreement”). Acceptance of this Agreement by acknowledgment, shipment of all or a portion of the Goods or other performance by Seller shall be unqualified, unconditional and subject to and expressly limited to the terms and conditions of this Agreement. All previous offers by Seller are hereby rejected. Buyer shall not be bound by terms additional to or different from those in this Agreement that may appear in Seller's quotations or bids, acknowledgments, invoices or in any other communications from Seller unless such terms are expressly agreed to in a separate writing signed by Buyer. Any acceptance of any portion of this Agreement shall be deemed an acceptance by Seller of all of these terms as written, without alteration. 3. PRICES; PAYMENT TERMS. Seller represents that the price charged to Buyer for Goods is at least as low as the price charged by Seller to other buyers of a class similar to Buyer under conditions similar to those specified in the Purchase Order and that such prices comply with applicable government laws and regulations in effect at time of quotation, sale or delivery. Seller agrees that any price reduction regarding any Goods that is implemented prior to shipment or rendering of such Goods, will be applied to all Purchase Orders for shipments of Goods following such price reduction. Unless otherwise specified thereon, prices quoted on any Purchase Order or Purchase Order Revision include any and all charges for the Goods ordered (including but not limited to, any charges for boxing, packing, crating, cartage, taxes or other added charges). Invoices shall be paid in accordance with the terms stated in the Agreement and due dates for payment of invoices shall be computed from the date of receipt of both the Goods and invoices by Buyer. 4. DELIVERY; TITLE, RISK OF LOSS. Seller shall deliver Goods which are in accordance with the specifications provided by Buyer and Seller is not authorized to unilaterally deviate from Buyer’s specifications without written approval from Buyer. Time is of the essence for each Purchase Order and deliveries shall be made both in quantities and at times specified by Buyer; failure to do so shall constitute a breach of this Agreement. Seller shall deliver all Goods free and clear of all liens and encumbrances. If requested by Buyer, Seller agrees to furnish to Buyer, as a condition precedent to final payment, a complete release of all liens, together with a certificate by Seller that the release contains the signatures of all those who performed services or furnished materials under this Agreement. With each delivery Seller shall submit a packing list in duplicate. Title and risk of loss and damage to material purchased by Buyer under this Agreement shall vest in Buyer when the material has been delivered at the DDP (Incoterms 2000) point specified in Buyer's Purchase Order, unless Buyer and Seller execute a consignment agreement pursuant to which Seller shall maintain title to the Goods following delivery to Buyer’s facility until removed from consignment by Buyer, at which time, Buyer shall assume title and risk of loss. Further, title to Goods purchased by buyer under this Agreement may immediately vest in Buyer at any point where Buyer tenders to Seller both (1) payment for the Goods and (2) written notice of Buyer’s desire to take title to the Goods. If this Agreement or a Purchase Order issued pursuant to this Agreement calls for additional services including, but not limited to, unloading, installation, or testing, to be performed after delivery, Seller shall retain title (unless Buyer has paid the invoice) and risk of loss and damage to the material until the additional services have been performed. Notwithstanding the foregoing sentence, if Seller is expressly authorized in writing to invoice Buyer for material upon shipment or prior to the performance of additional services, title to such material shall vest in Buyer upon payment of the invoice, but risk of loss and damage shall not pass to Buyer until completion of the additional services by Seller. 5. PACKING; TRACEABILITY. All correspondence must include the Purchase Order number, Release/Line number and Vendor Identification number. All shipments must include packing slips indicating contents, part number or description, Purchase Order number, Release/Line number and Vendor Identification number. When multiple packages comprise a single shipment, the package containing the packing slip must be marked, “Packing Slip Inside.” Any transportation charges paid by Seller, to which Seller is entitled to reimbursement, shall be added to Seller’s invoice as a separate item and the receipted freight bill shall be attached thereto. All returnable containers for which Buyer is to be invoiced shall be invoiced by Seller and full credit rendered to Buyer upon return, at Seller’s expense. If Goods are shipped in returnable containers, Buyer shall take title only to the usable portion of such Goods and Seller shall retain title to any residue remaining in such containers. Buyer shall have no obligation to clean or otherwise restore returnable containers. Seller warrants that Seller’s system of


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production and packaging shall be such as will permit traceability of each lot of Goods, and shall include bar coding if so requested by Buyer. Seller warrants that the packaging of the Goods ordered herein shall be in compliance with all laws relating to packaging of such Goods and shall be adequate for the transit of the Goods undamaged so long as the integrity of the container is maintained.

6. PREMIUM SHIPMENTS. If, for any reason, Seller is unable to meet Buyer's delivery requirements Seller shall immediately notify Buyer of its expected duration of the delay and the reasons for such delay. Neither such notification nor an acknowledgment by Buyer shall constitute a waiver of the applicable delivery schedule or any of Buyer’s rights under this Agreement. If Buyer requires a more expeditious method of transportation for the Goods other than the transportation method originally specified by Buyer because of Seller's failure or inability to meet the specified delivery schedule, Seller shall, at Buyer's option, (a) promptly reimburse Buyer the difference in cost which may be incurred by Buyer between the more expeditious method and the original method, (b) allow Buyer to reduce its payment of Seller's invoices by such difference, or (c) ship the Goods as expeditiously as possible at Seller's expense and invoice Buyer for the amount which Buyer would have paid for normal shipment. Seller shall also be liable for any direct and/or consequential damages incurred by Buyer resulting from any delay caused by Seller. Premium freight must be so noted on shipping documents. 7. DEFAULT; CANCELLATION. Buyer may, in Buyer’s sole discretion, elect to cancel this Agreement or any part thereof at no cost to Buyer in the event of Seller’s Default as hereinafter described. Sellers Default shall include, without limitation: (a) Seller’s failure to comply with the specifications, delivery requirements or terms and conditions of this Agreement; (b) Seller’s failure to deliver Goods ordered herein in accordance with the delivery and timing requirement or in accordance with Buyer’s specifications; or (c) Seller’s threatened or actual refusal to deliver Goods for any reason (“Seller’s Default”). In the event of Seller’s Default under (b) above, the parties acknowledge and agree that such default by Seller will cause Buyer irreparable harm and Buyer shall be entitled to any and all legal and equitable rights and remedies available to it against Seller to remedy such default, including, without limitation, injunctive relief prohibiting Seller from refusing to deliver the Goods. If Seller has actually refused to deliver Goods as set forth in (b) above, the parties stipulate that it will be difficult to ascertain the amount of damages resulting from such default and that Seller will pay to Buyer $50,000.00 per day as liquidated damages for each day that Seller refuses to deliver the Goods. The parties agree that this sum represents a reasonable estimate of damages and does not constitute a penalty. In case of ambiguity in the specifications, drawings or other requirements of the Agreement, before proceeding, it is Seller’s obligation to seek clarification from Buyer, whose written interpretation shall be final. Buyer’s right to cancel hereunder shall be in addition to all other rights and remedies available to Buyer under this Agreement or otherwise and Buyer shall have no obligation for payment to Seller for work in progress or otherwise incomplete Goods. . 8. TERMINATION FOR CONVENIENCE. Buyer, in addition to all other rights and remedies it may have under this Agreement or otherwise, shall have the right to terminate this Agreement or any Purchase Order, in whole or in part, without cause, upon notice in writing to Seller. Seller shall thereupon, as directed, cease work and deliver to Buyer all completed and partially completed Goods or materials and work in process, and Buyer shall pay Seller the following, which in no event shall exceed the total price provided for herein: (a) the applicable price provided in the Purchase Order for all Goods which have been completed prior to termination and which are accepted by Buyer, or (b) to the extent commercially reasonable, the actual expenditures on the uncompleted portion of the Purchase Order, including cancellation charges paid by the Seller on account of commercially reasonable commitments made under the terminated Purchase Order. Seller warrants that it will take all steps reasonably calculated to mitigate and minimize the cost to Buyer of such termination. 9. PROPRIETARY RIGHTS; INFRINGEMENT. Seller undertakes and agrees to indemnify, hold harmless and, if requested by Buyer, defend, at Seller's own expense all suits, actions or proceedings brought against Buyer, its affiliates and subsidiaries or any of Buyer's directors, officers, employees, agents, dealers, customers, or the users of any of the Goods purchased under this Agreement for actual or alleged infringement of any intellectual property right including, but not limited to, copyright, trademark, trade secret, United States or foreign letters patent or other proprietary rights of any third party on account of the use or sale of any such Good alone or in combination with other Goods or materials and Seller expressly waives any claim against Buyer that such infringement arose out of compliance with Buyer’s or its customers’ specifications and Seller further agrees to pay and discharge any and all judgments or decrees which may be rendered in any such suit, action or proceeding against any indemnified party. 10. WARRANTY. Seller warrants to Buyer and Buyer’s customers that Goods furnished pursuant to this Agreement will be new, merchantable, free from defects in design (unless manufactured to a design furnished through Buyer). Material, warning requirements and workmanship and will conform to and perform in accordance with the Buyer’s specifications for such Goods and all other agreed upon specifications, drawings and


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samples. Seller further agrees that it shall be solely liable for all claims of a defect (or alleged defect) in material, merchantability, workmanship, warning requirements and design (unless manufactured to a design furnished through Buyer) of the Good, and from failure to meet any such specifications. These warranties extend to the future performance of the Goods. Seller also warrants to Buyer and its customers that services will be performed in a first class, workmanlike manner. In addition, if Goods furnished contain one or more Sellers' warranties, Seller hereby assigns such warranties to Buyer and its customers. All warranties shall survive inspection, acceptance and payment and shall continue, at a minimum, for the longer of thirty-six (36) months or such period as Buyer has warranted such Goods, or other items of which the Goods are a component, to its customer. Goods or services not meeting the warranties will be, at Buyer's option and without limitation of Buyer’s other rights and remedies under this Agreement or otherwise, returned for or subject to refund, repaired, replaced or reperformed by Seller at no cost to Buyer or its customers and with transportation costs and risk of loss and damage in transit borne by Seller. Repaired and replacement Goods shall be warranted as set forth above in this clause. 11. QUALITY ASSURANCE. If Seller supplies Goods for use in production under ISO9000, AS9100, VDA 6.1, TS16949 or any other quality assurance system specified by Buyer or its customers, Seller shall comply with such quality system standard for such Goods covered by any Purchase Order. Seller agrees to permit Buyer or its customers to review Seller’s procedures, practices, processes and related documents to determine such acceptability. This requirement is in addition to any special quality assurance provisions which may be incorporated elsewhere in this Agreement. All Quality records by Seller shall be kept complete and available to Buyer or its customers during the term of this Agreement and for such longer period and in such manner as may be specified by Buyer or required by law 12. INSPECTION, REJECTION OF GOODS. All Goods furnished hereunder and all records to be furnished therewith shall be subject to inspection at destination, notwithstanding any previous inspection, and Seller shall be given notice of any defects other than latent defects within a reasonable time after receipt of the Goods. Buyer may reject or require the prompt correction, in place or otherwise, of any Goods which are defective in material, workmanship, design (unless manufactured to a design furnished through Buyer) or which otherwise fail to meet the requirements of the applicable Purchase Order. Buyer may, in addition to any rights it may have by law, prepare for return shipment and return the Goods to Seller or require Seller to remove them, and the expense of any such action, including, transportation both ways, if any, shall be borne by Seller. If Seller fails promptly to remove such Goods or to proceed promptly to replace or correct them, Buyer may replace or correct such Goods at the expense of Seller, including any excess cost. Payment for any or all of the Goods or services supplied hereunder shall not constitute acceptance by Buyer. Nothing in this paragraph shall in any way limit Buyer’s rights under the paragraphs hereof entitled “Warranty” or “Indemnification”. 13. INDEMNIFICATION. Seller hereby agrees to indemnify, hold harmless and, if requested by Buyer, to defend Buyer and its affiliates and subsidiaries or any of Buyer's directors, officers, employees, agents, dealers, customers, or the users of any of the Goods purchased under the Agreement against and from any and all claims, costs, losses, liabilities and damages (including expenses relating to defense, such as attorney's fees and expenses) arising from a defect or an alleged defect (including, without limitation, failure to warn) in the Goods or other breach of this Agreement, whether such liability arises as a matter of contract (e.g., warranty, repair, replacement, downtime of a customer’s assembly line, recall, etc.) or tort (injury to property or person), including, without limitation, all liability for incidental, consequential or special damages. Buyer may, at its option, tender the defense of any claim of liability against Buyer to Seller, in which case Seller shall have the right to settle any such claim provided such settlement is at Seller's expense and involves no action or forbearance by Buyer. Buyer retains the right to defend such claim itself, but subject to indemnification by Seller. Buyer and Seller agree to cooperate reasonably in any such defense. 14. RIGHT OF INSPECTION. Buyer shall have the right from time to time to send to Seller’s manufacturing facilities its personnel for performing tests upon the material or Goods covered by any Purchase Order to ascertain that specified quality standards are being maintained. Buyer’s personnel shall have the privilege of visiting all places within the various facilities where raw materials, components or equipment are stored or where manufacturing is being accomplished incident to fulfilling any Purchase Order. Buyer’s personnel shall also have the privilege of using Seller’s test equipment for the purpose of performing necessary tests. 15. SUPPLEMENTARY INFORMATION. Any specifications, drawings, notes, instructions, engineering notices, technical data, or terms and conditions of Buyer’s customer referred to in the Agreement shall be deemed to be incorporated herein by reference as if fully set forth. In case of any discrepancies or questions, refer to Buyer’s purchasing department for decision or instruction or for interpretation. 16. PROPRIETARY PROPERTY OF BUYER. All specifications, blueprints, technical documents, instructions, molds, models, casts, formulas, sketches, drawings, manufacturing processes, know-how, software


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and software protocols, electronic commerce system information, inventory management system information, and other business information supplied to Seller under this Agreement or prepared for Buyer under this Agreement shall be proprietary to Buyer (“Buyer’s Proprietary Property”) and shall remain the sole property of Buyer, except that exclusive designs developed by Seller prior to the placement of a Purchase Order shall remain the property of Seller. Buyer’s Proprietary Property shall be confidential, shall not be used by Seller, its agents, representatives or employees for any purpose except in connection with the work to be done by Seller for Buyer under this Agreement, and shall not be used disclosed or made available to any other third party by Seller or its agents, representative or employees. By its acceptance of this Agreement, Seller agrees to take all necessary precautions against theft, destruction, damage, loss, unauthorized duplication or wrongful distribution, or unauthorized use of Buyer’s Proprietary Property. Unless otherwise agreed to by Buyer in writing Buyer’s Proprietary Property shall be returned to Buyer upon completion of production or processing or earlier, upon Buyer’s demand. 17. INFORMATION DISCLOSED TO BUYER. Unless specifically provided in this Agreement or expressly agreed to in writing by Buyer, no information or knowledge heretofore or hereafter disclosed to Buyer, in the performance of or in connection with this Agreement, shall be deemed to be confidential or proprietary, and any such information or knowledge shall be free from any restrictions (other than a claim for patent infringement) as part of the consideration for this Purchase Order. 18. WAIVER. The failure of either party at any time to enforce any right or remedy available to it under this Agreement or otherwise with respect to any breach or failure by the other party shall not be construed to be a waiver of such right or remedy with respect to any other breach or failure by the other party. 19. PROPERTY FURNISHED BY BUYER. Except as specified below, all patterns, dies, molds, tools, models, jigs, core boxes, piece parts, samples, materials, drawings, specifications, test reports, technical material, advertising material, and any other personal property furnished to Seller by Buyer, or specifically paid for by Buyer for use in performance of a Purchase Order, shall be and remain the property of Buyer, shall be subject to disposition according to Buyer's Instruction and shall be used only in filling orders from Buyer. Any such property furnished by Buyer to Seller shall be appropriately maintained by Seller in order to preserve the condition of such property to the greatest extent possible, reasonable wear and tear excepted. Any waste materials or byproducts generated by or resulting from operations on, use of, or processing of materials furnished to Seller by Buyer, or materials specifically paid for by Buyer for use in performance of a Purchase Order, shall be and remain the property of Seller and shall not be subject to disposition to Buyer's instruction, unless Buyer has specifically requested, in writing, return of such waste materials or byproducts, which in such case will be the property of Buyer. 20. INSURANCE. Seller agrees that it will maintain primary, worldwide (when appropriate) insurance in an amount not less than $1 million per occurrence, combined single limit for death, bodily injury and property damage against all liability arising out of the manufacture, sale and use of Goods sold by Buyer, regardless of the date of the occurrence creating such liability. Buyer shall be named as an additional insured under a broad form vendors endorsement to such policy. Seller will provide Buyer with a certificate of such insurance. At least seven (7) days prior to the start of work on Buyer's premises, Seller shall submit copies of certificates of insurance and policies from insurance companies acceptable to Buyer, for the following types of coverage and minimum limits: (1) Worker's Compensation and Occupational Disease Insurance, and U.S. Longshoremen & Harbor Workers' Compensation Insurance (where required), in statutory limits in accordance with applicable local and federal laws. (2) Employer’s Liability Insurance in a minimum limit per person of $1,000,000. (3) Automobile Liability Insurance with a minimum Combined Single Limit of $ 1,000,000 covering all owned, non-owned and hired vehicles used by Seller in the performance of services hereunder. (4) Commercial General Liability Insurance for Bodily Injury and Property Damage covering premises, operations, contractual liability, products, completed operations, and personal injury (false arrest, false imprisonment, malicious prosecution, defamation of character, libel, or slander) in minimum limits of $ 1,000,000 General Aggregate, $1,000,000 Products - Completed/Operations Aggregate, and $1,000,000 Each Occurrence. All certificates of policies furnished must include provisions that no material change or cancellation of the policy will be made without thirty (30) days prior written notice to Buyer. It is Seller's responsibility to determine the adequacy of any subcontractors' insurance and indemnification obligations 21. WORK ON BUYER’S PREMISES. In addition to other terms contained herein, if this Purchase Order requires Seller to perform any services upon property (real or personal) owned or controlled by Buyer, the following shall apply:

(a) Seller agrees to furnish to Buyer, as a condition precedent to final payment, a complete release of all liens, together with a certificate by Seller that the release contains the signatures of all those who performed services or furnished materials under this Purchase Order.


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(b) Seller agrees to indemnify, defend and hold harmless Buyer, and its directors, officers, employees and agents, from and against any and all claims and demands (including costs, litigation expenses and counsel fees incurred in connection therewith) arising out of injury to, or death of, any person whatsoever or injury or damage to property of any kind by whomsoever owned, or the environment, arising out of the performance by Seller, Seller's subcontractors or Seller's agents of any work which is the subject of the Purchase Order.

22. U.S. FASTENER QUALITY ACT; TREAD ACT. In the event that the U.S. Fastener Quality Act (FQA) or the Transportation Recall Enhancement, Accountably, and Documentation (TREAD ACT) applies to any Goods furnished under this Agreement, Seller shall comply with all requirements of the FQA and TREAD ACT and applicable regulations, including without limitation, regulations pertaining to manufacturer’s insignia, manufacturer's record of conformance, and record keeping. Seller represents and agrees that all fasteners furnished under this order which are covered by the FQA will have been manufactured in accordance with the FQA. Seller agrees to furnish to Buyer (or Buyer’s customers if requested by Buyer) a manufacturer's record of conformance as necessary in support of compliance with the FQA and the TREAD ACT. Seller agrees that any such record (or copies thereof) may be furnished by Buyer to its customers or other parties requiring such documents. 23. COMPLIANCE WITH LAWS. Seller represents that the Goods covered by this Agreement, together with their containers and other packaging, have been manufactured in accordance with the requirements of all applicable federal, state, local and foreign laws, ordinances, regulations and codes (“laws and regulations”) and safety constraints on restricted, toxic and hazardous materials, as well as environmental, electrical, and electromagnetic considerations applicable to the country of manufacture and sale. Seller further agrees to furnish Buyer, upon request, a certificate attesting to such compliance in such form as Buyer may require. Seller and all persons furnished by Seller shall comply at their own expense with all such applicable laws and regulations from which liability may accrue to Buyer for any violation thereof by Seller, and including the identification and procurement of required permits, certificates, licenses, insurance, approvals and inspections in performance under this Agreement. Seller agrees to indemnify, defend (at Buyer's request) and save harmless Buyer, its affiliates, its and their customers and each of their officers, directors and employees from and against any losses, damages, claims, demands, suits, liabilities, fines, penalties and expenses (including reasonable attorney's fees) that arise out of or result from any failure to do so. 24. NAFTA; CERTIFICATION OF ORIGIN; DUTY DRAWBACK. With respect to all Goods delivered from any point within the NAFTA territory (Canada, Mexico and the United States of America), Seller shall provide, with its invoice, a North American Free Trade Agreement Certificate of Origin on U. S. Customs Form 434 or the corresponding Canadian or Mexican form. Seller agrees to transfer to Buyer all customs duty and import drawback rights, if any (including rights developed by substitution and rights which may be acquired from Seller’s suppliers), related to the Goods and which Seller can transfer to Buyer. Seller agrees to inform Buyer promptly of any such rights and to supply all documents which Buyer may request or which may be required to enable Buyer to obtain such customs duty and import drawback rights. Seller shall indemnify and hold harmless Buyer, its subsidiaries and affiliates, its and their customers and each of their officers, directors and employees from and against any losses, damages, claims, demands, suits, liabilities, fines, penalties and expenses (including reasonable attorney's fees) that arise out of Seller’s non-compliance with U.S. or foreign customs laws or regulations. 25. EQUAL OPPORTUNITY. This Agreement shall be deemed to include, to the extent applicable hereto: (a) the Equal Employment Opportunity Clause referred to in Executive Order 11246, as amended, (b) all provisions of 41 CFR 60-250, as amended, pertaining to Affirmative Action for Disabled Veterans and Veterans of the Vietnam Era where the value of Goods or services furnished hereunder exceeds $10,000, (c) all provisions of 41 CFR 60-741, as amended, pertaining to Affirmative Action for Handicapped Workers where the value of the Goods and services furnished hereunder exceeds $2,500, and (d) similar applicable requirements of any state or local law. 26. CHANGES. Buyer may at any time, by written order, make changes or additions within the general scope of this Agreement. If any such change causes any increase or decrease in the cost of, or the time required for, performance of this Agreement, Seller shall notify Buyer in writing, and an appropriate equitable adjustment will be made in the price or time of performance, or both, by written modification of this Agreement. Any claims by Seller for upward adjustment of price or time requirements must be asserted within (30) days after Seller’s receipt of notice of the change from Buyer. Nothing herein shall excuse Seller from proceeding with the Agreement as changed.


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27. PUBLICITY, PROMOTION OR ADVERTISING. Seller shall not, without Buyer’s prior written consent, issue any news release, advertisement, publicity or promotional material regarding this Agreement, including denial or confirmation thereof. 28. INSOLVENCY. If Seller ceases to conduct its operations in the normal course of business, including inability to meet its obligations as they mature, or if any proceeding under the bankruptcy or insolvency laws is brought against Seller or commenced by Seller on its own behalf, or if a receiver for Seller is appointed or applied for, or if an assignment for the benefit of creditors is made by Seller, Buyer may terminate this Agreement without liability, except for deliveries previously made or for Goods covered by this Agreement then completed and subsequently delivered in accordance with the terms of this Agreement. 29. DRAFTS. Drafts against Buyer will not be honored and C.O.D. shipments will not be accepted unless expressly agreed to in writing by Buyer. 30. GOVERNING LAW. The contract resulting from this Agreement is to be construed according to the laws of the state of the United States from which this Agreement issues, as shown by the address of Buyer printed on the face of this Agreement. The parties agree that any controversy arising under this Agreement shall be determined by the courts of said state, and Seller hereby submits and consents to the jurisdiction of said courts.


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Revision History

Date Revision Description 09/30/2002 1 Released 05/27/2005 2 Multiple Updates 12/01/2006 3 Multiple Updates 01/24/2007 4 Multiple Updates 02/14/2007 5 Added Acument Terms and Conditions page 02/15/2007 6 Clarified in first sentence in 7.1.1 per legal advice. Added: “Including

Acument’s standard purchasing terms and conditions, which govern every Acument purchase order contract.”

02/23/2007 7 Attached acknowledgement of receipt letter 02/26/2007 8 Removed acknowledgement letter & Updated signature page 07/17/2007 9 Added skid tag sign off requirement, clarified calibration supplier

requirements, reformatted, updated approvals 10/03/2007 10 Multiple updates to include aerospace supplier requirements


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Section 17 - APPENDIX A: REACTION PLAN TO MOST COMMON ISSUES

If this happens: Supplier’s Reaction is: Acument Location’s Reaction is:

Acument Distribution Center’s Reaction is:

Controls &n Metrics

No Initials on Previous Routing Code

Next upstream processor quarantines product, notifies Mfg Location, and awaits instructions. I

If instructions are not received within 24 hrs, product is returned to Mfg Location

Investigate part/lot combination to determine if routing step was missed, or if processor failed to sign off.

If routing was missed, instruct supplier to return parts to Mfg. plant.

If supplier failed to sign off, Mfg plant documents & emails verification to supplier with copy to appropriate Distribution Center (if applicable.)

If verification has not been received, quarantine parts and notify Mfg Location.

When verification is received via email from Mfg location, attach a copy of email to incoming specification documentation.

If verification is not received within 24 hrs, parts are returned to Acument Mfg. Location.

Distribution Centers and Acument Mfg Locations collect data to measure incidents of No Initials:

1.) Total Containers Received / Day

2.) Processing Completed, but Labels Not Signed

3.) Labels Not Signed due to Missed Routing

Data published weekly to Acument Quality, Supplier Quality, & Acument Purchasing.

Data to be supplied in the form of one I-chart that summarizes all 3 metrics.

Container Tag Missing

Next upstream processor quarantines product, notifies Mfg Location, and awaits instructions. I


Investigate part/lot combination to determine if routing step was missed

If routing was missed, instruct supplier to return parts to Mfg. plant.

Otherwise, Mfg plant documents & emails verification to supplier with copy to appropriate Distribution Center.

If verification has not been received, quarantine parts and notify Mfg Location.

When verification is received via email from Mfg location, attach a copy of email to incoming specification documentation.

If verification is not received within 24 hrs, parts are returned to Acument Mfg. Location.

Distribution Centers and Acument Mfg Locations collect data to measure incidents of No Initials:

1.) Total Containers Received / Day

2.) Number of Container Labels Re-Created / Day

Data published weekly to Acument Quality, Supplier Quality, & Acument Purchasing.

Data to be supplied in the form of one I-chart that summarizes all 3 metrics.

Number of Tubs Increases during Processing

OR

Product is re-packaged in cartons or boxes after processing

1) Initial all tags and includes with shipment .

2) Label each container with “New Container Created in Processing by (Name of supplier)” label, and initials as required.

3) Identify all new tub numbers on shipping documents.

I Verify part / lot routing:

Verify number of original containers & number of new containers.

Reconciles processing sign-off.

Receives material by normal incoming process.

No data requirements.

Include in Layered Process Audits.


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Sorting is Added, or is not included in normal routing

Sort supplier had writes their supplier code and follows AGT-X-75 Sign Off Work Instruction.

Upon addition of sort to routing, notify appropriate Distribution Center via email.

Verify part / lot routing. Attach email notification from mfg plant to incoming specification documentation.



Parts are routed to a different sort supplier

Sort supplier had writes their supplier code and follows AGT-X-75 Sign Off Work Instruction.

Upon re-routing sort to different supplier, notify appropriate Distribution Center via email.




Parts are sent to wrong supplier

Quarantine parts, Notify Mfg Plant & await instructions.


If written authorization to proceed is provided, hand write supplier code and follow AGT-X-75.

Arrange for parts to be shipped to correct supplier.

OR

Provide instructions and authorization to proceed to the supplier who received the product. Send copy to appropriate Distribution Center via email.




Special processing is required (e.g., deburr, strip, etc.)

If instructions have been received from Mfg location, process according to instructions.

Hand write supplier code and follow AGT-X-75.

Otherwise, quarantine parts, Notify Mfg Location, & await instructions.


Provide instructions and authorization to proceed to the supplier who received the product. Send copy to appropriate Distribution Center via email.


