GP-01-7.

4-0007
Rev. 2

QUALITY ASSURANCE MEASURES FOR

PROCUREMENT OF PURCHASED PARTS
Uncontrolled copy if printed

1. INTRODUCTION

The procedure is to ensure for both Vibracoustic (VC) and suppliers that new and change projects
are carried out in trouble-free manner, on schedule and without any quality problems. Existing into
the automotive market along with attaining growth requires cost and continual improvements in the
area of quality and delivery along with rapid and flexible reaction times to requirements. Vibracoustic
has adopted a Zero Defect Strategy of which will enable customer satisfaction. This aim is only
attainable with the active co-operation of our suppliers. For this reason the existing specification was
compiled: “Quality assurance measures for procurement of purchased parts”

This procedure specification is handed over by purchasing in its valid form to the supplier and has to
be applied consequently by the supplier and VC for each project.

This Global Procedure is part of the framework contract with the supplier. Deviations from the defined
procedure have to be agreed in writing between VC and the supplier. The existing procedure
specification identifies the minimum requirements for the secure handling of new projects and series
production orders. In addition, the supplier is committed to employ suitable procedures and measures
which ensure that the work/product corresponds to the agreed requirements with regard to quality,
cost and target date.

2 10.12.14 Apholte/QM 5 Emphasis Characteristics added

1 11.12.13 QM/Höfle 23 Rules for finishing 8-D-Report

Department/
Rev. Date Page(s) Modification notes
Name

Approver Approver
Producer / Department Date Status*
Management System Board of Directors
J. Höfle / QM - - 26.07.2012 completed
G. Staab / QM - 10.12.2014 approved
H.J. Goslar 30.01.2015 approved
J. Law 29.01.2015 approved

L. Johansson 29.01.2015 approved

N. Schebesta 29.01.2015 approved

* This document is valid without physical signatures.

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TABLE OF CONTENTS
1. INTRODUCTION ............................................................................................................................... 1
2. PURPOSE ......................................................................................................................................... 4
3. SCOPE ............................................................................................................................................. 4

4. TERMS / DEFINITIONS / ABBREVIATIONS ......................................................................................... 4

4.1 Definitions .............................................................................................................................. 4

4.2 Abbreviations ......................................................................................................................... 6

5. PROCESS / METHOD / PROCEDURE ................................................................................................... 8

5.1 SQMS Supplier Quality Management System ............................................................................. 9
5.2 QM-system ............................................................................................................................. 9

5.3 Contract Review ..................................................................................................................... 9

5.4 Control of Documents ............................................................................................................10
5.5 Control of materials and packaging provided by VC ..................................................................10

5.6 Environmental Protection .......................................................................................................10

5.7 Audits ...................................................................................................................................10
5.8 Staff .....................................................................................................................................11

5.9 Test equipment .....................................................................................................................11

5.10 Qualification of sub-contractors ..............................................................................................11
5.11 Safety data sheets/ Processing instructions .............................................................................11

5.12 Advanced Product Quality Planning (APQP) .............................................................................11

5.12.1 Control plan ...................................................................................................................13
5.12.2 Process Flow Chart .........................................................................................................13
5.12.3 Process-FMEA ................................................................................................................14

5.13 Pre-Series / Production Trial ...................................................................................................14

5.14 Production Part Approval Process (PPAP) .................................................................................17
5.14.1 Requirements for Series production Release .....................................................................18

5.14.2 Production Parts Approval ...............................................................................................20

5.15 Series Production ...................................................................................................................20

5.15.1 Test records ...................................................................................................................20
5.15.2 Early Production Containment (EPC) ................................................................................21
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5.15.3 Requalification Test ........................................................................................................21

5.15.4 Zero Defect – continuous improvement process ...............................................................21

5.15.5 Labeling / Traceability .....................................................................................................22
5.15.6 Identification of containers, delivery notes and transport orders ........................................22

5.15.7 Packaging ......................................................................................................................22

5.15.8 Goods inwards inspection by VC ......................................................................................22
5.15.9 Deviations ......................................................................................................................23

5.15.10 Settlement of cost.......................................................................................................23

5.15.11 Permission for deviations .............................................................................................23
5.15.12 Quality performance/escalation process .......................................................................24
5.15.13 Subcontractor .............................................................................................................24

6. RESPONSIBILITIES ..........................................................................................................................25
7. APPENDIX / ENCLOSURES ................................................................................................................26

8. VALID SUPPORTING / REFERENCE DOCUMENTS ...............................................................................26

8.1 Valid Supporting Documents ...................................................................................................26

8.2 Additional Information............................................................................................................26
9. DOCUMENTATION ...........................................................................................................................26

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2. PURPOSE
In this procedure specification the Procurement and Quality Assurance of purchased parts of
production material for all VC companies is specified. Thereby we want to ensure that

- new products are realized on schedule and without any quality problems
- quality problems are identified and robust solutions implemented prior to series production
- quality capability of processes and flows are evidenced at series approval and during series
production

3. SCOPE
This GP is valid for all procurement processes of production material for all VC companies with
partnership production and expands determinations of purchasing contracts and purchasing
conditions. Exceptions to this procedure instruction must be agreed in writing. Standard products
(e.g. catalogue goods, standard parts, standard colours, lubricating materials etc.) are excluded.

4. TERMS / DEFINITIONS / ABBREVIATIONS

4.1 Definitions
SQMS
The Supplier Quality Management System describes the business process of supplier selection,
supplier evaluation, supplier development as well as actions for the protection of new projects and
series parts.
Initial Samples

Initial samples are parts/products which are produced with the planned equipment, procedures,
manufacturing staff, materials and semi-finished products produced exclusively for series production.
They serve as acceptance of production parts.
FMEA

Failure Mode and Effects Analysis

This method is described in VDA volume 4, part 2 resp. AIAG reference manual. OEM specific FMEA-
requirements (i.e. Ford – FMEA) have to be assumed by supplier.

Supplier

The term “supplier” basically refers to production facilities in this GP, not to trade organizations.
Therefore, an “Approval of Suppliers” always applies correspondingly to the audited production site
only, but not to the general trade organization.

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Sub-Contractor
The sub-contractor delivers to the supplier either products or labor which have an effect to the
products of VC. The supplier guarantees the sub-contractors quality.

Sub-
Supplier VC Customer
contractor

Functional critical purchased parts:

Functional critical purchased parts are parts, which have a high influence of the field-robustness later.
Functional critical purchased are parts whichever in case of a failure could cause a malfunction or a
safety risk. Particularly for this purchased parts must place a higher focus on the test schedule from
the supplier.
Production trials:
Production trials serve as verification of processes and products. Production trial products have to be
manufactured with operating supplies used for series production. If manufacturing is not possible
under series conditions, the status is to be communicated and its effect on series production has to
be assessed.
Preliminary Process Capability:

Preliminary process capability examinations are short term inspections in order to maintain early
information in respect to efficiency of a new or amended process. (see point 4.4).

Specific Characteristics
Significant and critical characteristics must be clearly designated in the drawings. Basically there is a
distinction of
- Significant characteristic (Fit & function) = SC
- Critical characteristics = CC*
- Emphasis Characteristic = EC
* safety relevant!

Significant / Emphasis characteristics (SC / EC) have to

be signed with a rounded rectangle: SC

EC

Critical characteristics (CC) have to be signed with a encircled

“A” additionally and such parts will be named as a safety part (A-part).
CC A
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For specific characteristics preliminary process capability has to be determined by the supplier when
manufacturing first samples. In series production this has to be monitored by SPC.
The above mentioned identifications for specific characteristics will be used in general for drawings
for supplied parts. Only in case of an explicit request of a customer other, customer specific
identifications for special characteristics will be used.

Safety critical characteristics comprise in case of deviations a risk for life and limb. Therefore they
must be 100% tested. The tests should be defined in consultation with VC.
Production Part Approval Process (PPAP)

The procedure for inspection of production parts contains initial sampling of product features (Initial
sample test report) and proof of a controlled production (Production control plan, evidence of process
capability, FMEA etc.). OEM specific requirements (PPAP acc. AIAG resp.. EMPB acc. VDA2) have to
be assumed by supplier.

4.2 Abbreviations
AIAG Automotive Industry Action Group
APQP Advanced Product Quality Planning
BA Business Area
BUM Business Unit Manager
CM Commodity Management
CSR Customer Specific Requirements
DV Design Verification
EMPB ErstMusterPrüfBericht
EPC Early Production Containment
GP Global Procedure
IMDS International Material Data System
IR Inspection Report
ISIR Initial Sample Inspection Report
MS Microsoft
MSA Measurement System Analysis
QMS Quality Management System
QM-Site Quality Manager Site
PPAP Production Part Approval Process
Ppku Ppk(upper specification limit)
Ppkl Ppk(lower specification limit)
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SDE Supplier Development Engineer

SPC Statistical Process Control
SOP Start of Production
SQA Supplier Quality Assurance
SQMS Supplier Quality Management System
VC Vibracoustic
VDA Verein der Deutschen Automobilindustrie

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5. PROCESS / METHOD / PROCEDURE

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5.1 SQMS Supplier Quality Management System

In order to select and develop our suppliers further as well as support them with new procedures
appropriate to the specific requirements of the automotive industry the SQMS = Supplier Quality
Management System has been defined.
The SQMS is fundamentally divided into 5 phases:
Phase 1 = Supplier assessment and approval of new suppliers
Phase 2 = Supplier Industrialization and APQP – purchased parts

Phase 3 = SQA - Serial production

Phase 4 = Supplier Rating

Phase 5 = Supplier Development

The procedure specification in hand specifies exclusively the APQP - purchased parts and the phase
series production.

5.2 QM-system
It is the suppliers duty as a requirement, to employ a certified QM-System appropriate to the
regulatory standards ISO 9001. A continual further development of the QM-System is necessary for
system elements TS 16949 specific to the automotive industry. These demands specific to the
automotive industry on error avoidance and the procedure for inspection of production parts are to
be fully implemented corresponding to the following specification for all VC products. The supplier
should also incorporate any relevant Customer Specific Requirements into its QMS system that refer
to the specific product or service.

5.3 Contract Review

The supplier is committed, both at the quotation stage as well as in the order phase, to check
documents placed at its disposal for completeness, correctness, freedom from contradiction,
adherence to the required quality target and production achievability (ability to manufacture,
adherence to target dates etc.). The supplier indicates to VC in writing where documents and facts
are unclear or which appear incorrect. This also applies to measuring procedures and methods.
When referring to other documents, the supplier has to provide those and take care that processing
is done according to current versions.

– Generally accessible guidelines/ standards (e.g. DIN, ISO, EN and ASTM-Norms) have to be
provided for corresponding positions.
– Guidelines/standards and documents of VC or its customers will be forwarded upon request to
the relevant purchasing area.
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– Customer specific requirements (CSR)

5.4 Control of Documents

The supplier has to produce, check and deliver on the current valid version. Documents from VC and
its customers are to be treated as confidential. The forwarding to a third party is permissible only
after consent in writing from the relevant purchasing department of VC. Documents are managed
within the distribution. Archiving periods as per OEM´s customer specific requirements (CSR). For
CSR´s refer to:
www.iatfglobaloversight.org

www.vda-qmc.de

5.5 Control of materials and packaging provided by VC

The supplier must undertake a goods inward inspection on materials and packaging delivered to him
for quantity, identification and visible damage. The consumption of delivered articles is to be recorded
on the delivery documents and notified to the responsible purchasing/logistic department if required.

5.6 Environmental Protection

The supplier has to ensure that all materials used in parts production correspond to the valid, legal
requirements for restricted, poisonous and hazardous materials. In addition regulations for
environmental protection have to be taken into account which relate to both the country of
manufacture and the customer.

5.7 Audits
The supplier must audit its QM-System at regular intervals for effectiveness and consequential usage
of the requirements described here. VC is entitled to carry out – if necessary with the customers -
audits at the supplier and at its sub-contractors – after appointments were made. The supplier has
to support VC in carrying out the audit and to give particular insight into the required procedures,
data and recordings for analysis of the Quality Management System, as well as, in doing so, not
touching particularly upon the supplier’s interests of secrecy being justified.

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5.8 Staff
The supplier has to demonstrate that all employees who work in the areas planning, production and
inspection are qualified for the respective activity.

5.9 Test equipment

The supplier must guarantee that suitable test equipment for carrying out the inspection is available
and through a test medium surveillance system this equipment is maintained in perfect condition at
any time. The suitability of inspection equipment, which is used for testing important characteristics,
is to be verified with evidence of efficiency (AIAG MSA Manual or VDA Manual 5).

5.10 Qualification of sub-contractors

VC may provide approved sub-contractors. The supplier himself is responsible for selecting suitable
sub-contractors. He must in any case evaluate the quality efficiency of his sub-contractors and
adequately integrate it into the APQP process. The production parts approval procedure (PPAP) is to
be fully applied at sub-contractors. The supplier must ensure that his sub-contractors employ an
appropriate QM-System (ISO 9001). In any case, the supplier in doing so is responsible for quality of
the whole work performance of the sub-contractor.

5.11 Safety data sheets/ Processing instructions

Where applicable and without being solicited, the supplier has to forward complete and up-to-date
safety data sheets and process instructions before supply of product.

5.12 Advanced Product Quality Planning (APQP)

The supplier has to utilize measures and procedures which ensure that the object of the contract
without any deviations in respect to quality, target dates or work volume are realized.
It is recommended is to use the AIAG/VDA procedure. Project Schedule
A complete time schedule is to be compiled for each project which regards to content, must at least
take into consideration the following items.

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Content:
1. Individual measures such as:
– production equipment and production tool planning,
– procurement of purchased ancillary items,
– compilation of Process-FMEA,
– compilation of a control plan for prototype, pre-series, series
– manufacturing of initial parts,
– manufacturing pre-series
– test scheduling pre-series, series
– Production parts approval process (PPAP).

2. Milestones such as:

– progress of tooling and production equipment

– production part release of sub-contractor ancillary parts
– approval of control plan by VC,
– completion design validation testing DV (prototypes)
– completion process verification tests PV (Series)
– date first off-tool-parts
– completion Run@Rate
– Production parts approval by VC,
– Availability of max. production capability (SOP)
3. Responsibilities

Responsible persons have to be fixed by name and contact data (phone, mobile, email)

4. Start and end date of individual activities

Project schedules should be structured corresponding to Appendix 1. Similarly other formats with
the same content will be accepted (e.g. MS-Project, etc.).

Project status report “Ancilliary parts”:

Once a month without solicitation, the supplier has to forward a current project status report “Ancillary
items” to the project manager VC* including tooling progress report by traffic-light evaluation.
*Name and Fax No. are stated in the status report for purchased items!

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5.12.1 Control plan

In cooperation with the SQA* of the Business Unit concerned (Production Unit), the required tests,
test equipment, testing intervals, tested volume and form of the records are defined for pre-series
and series production.

*Name and Fax No. are stated in the status report for purchased items!

For functional critical parts the amount and frequency of testing defined in the control plan has to be
agreed upon between the SQA, SDE, QM (site), the VC development and the supplier. A member of
the technical as well as quality department of the supplier should participate.
The Control plan has to reflect entire process chain of contracted part-no., including outsourced
processes. The Control plan of the subcontractors should be provided upon request by VC.

Control plan pre-series:

Suppliers should utilize Early Production Containment Plan (EPC).

Control plan - series:

The control plan - series contains all tests and process controls from goods inwards inspection of
ancillary parts from sub-contractors to the supply to VC as well as the scale of requalification tests.

Revision of the control plan:

The production control plan, which is approved by VC within the EMPB/PPAP procedure, is binding
for the entire life time of the product. Changes, which are relevant for method and scale of
inspections, have to be released by VC prior to implementation. In case of a loss of quality or product
risks and process risks not defined by the approval time, VC reserves the right to amend the QM
schedule corresponding to needs.

Form and content of control plan:

Content of control plans should be adopted according to the regulations of ISO/TS16949 latest
revision, or AIAG.

5.12.2 Process Flow Chart

A process flow chart has to be compiled for the whole manufacturing process. The process flow chart
must be sent to VC as part of PPAP package. The process flow chart has to reflect entire process
chain of contracted part-no, including outsourced processes.

Remark: The process number sequence has to be the same through all documents
(Control plan, FMEA)

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5.12.3 Process-FMEA
The failure mode and effects analysis has to be carried out before series production as a method of
error avoidance. In order to be able - if needed - to carry out appropriate corrective actions with no
considerable cost, the FMEA has to take place within the earliest possible time-frame.
PFMEA has to reflect entire process chain of contracted part-no, including outsourced processes.
Method and formal structure must be executed corresponding to VDA 4, Part 2. OEM specific FMEA-
requirements (i.e. AIAG FMEA manual, Ford – FMEA ranking system) have to be assumed by supplier.
A prerequisite for a production parts release (initial samples approval) is the supplier’s confirmation
that the required Process-FMEA has been carried out on the first sample test report. On request FMEA
can be reviewed by VC.

5.13 Pre-Series / Production Trial

A pre-series/production trial run should consist of at least 300 parts or two hour uninterrupted
production. In doing so the pre-series run is to manufacture under series production conditions (staff,
material, machine, tools etc.). Possible deviations from series production are to be given on the
evaluation sheet “Pre-series ancillary items”. The evaluation sheet “Pre-series ancillary items” is to be
forwarded to VC with the PPAP records. VC reserves the right to attend to the pre-series itself or to
send an external auditor. This will be done within the scope of a process audit.
Capability Studies pre-series (Ppk)
Before series production the capability of important features has to be proved by means of a pre-
series / production trial run (see topic 5.13) for the employed methods, processes and materials.
Dependent on the complexity and the risks connected with them, the recording of process capability
can be carried out by the supplier, or in the presence of a specialist official from VC at the supplier’s
premises. Proof of process capability throughout pre-series is an important pre-requisite; without it
is not possible to manufacture a durably defect-free product with an economically justifiable
expenditure.

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“Zero defects are only possible with controlled and quality-efficient processes.”

Start of production (SOP)

Process analysis Process analysis
before SOP after SOP

Short-term Prelimenary
process cability process capability Long-term process
examination examination capability
examination
Application to the evaluation:
• new equipment at the Application to the
manufacturer evaluation:
• new equipment after • the running series
installation in the defined production
process
• before finally approval
Process
Manu- Human
facturing machine
material
equip- method Permanent quality improvement
ment Environment

Time
Short-term process Prelimenary process Long-term
cability capability process cability

Minimum 50 parts or Minimum 125 parts or An appropriate period

process-oriented process-oriented under normal series
extent extent. The 125 parts conditions, in which is
Cm, Cmk should ideally be assured that all
done in 25 samples á influencing factors
5 parts spreaded over could become active.
the lot Indicative value:
Pp, Ppk. 20 production
days/lots
C,C

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Sample size:
At least 125 parts have to be withdrawn over the entire pre-series production lot and continually
tested. If the tools have more than one cavity, an equal distribution of all cavities must be assured.

125 samples = 25 subgroup of 5 parts. We recommend the following rule for sampling as preliminary
study

5 parts, skip 5 parts, 5 parts, skip 5 parts, etc.... If multi-cavities, we accept 125 samples for 1 feature
if cav. # randomly shared. If capability is not OK, than we accept the split of the cavities and that
supplier demonstrates capability of cavity per cavity. All distributions must be normal.

Capability has to be proved per each cavity (multi cavity tooling).

Records:
Individual values have to be recorded and may be viewed by VC upon request. Sample “Test records”.

Ppk = smallest of the values Ppku and Ppkl

Evaluation of process capability
In order to fulfill the demand for a “Zero Defect Objective”, a preliminary process capability of P pk
>1,67 for significant characteristics is required as a matter of priority.

Process meets requirements in pre-series. Process probably meets

Pp and Ppk > 1,67
requirements for series production.

It is possible that the process does not meet the requirements.

1,33 < Ppk < 1,67 Measures:

Survey process statistically to Cpk > 1,33
Optimize process to Cpk > 1,33
Process does not meet requirements

Ppk < 1,33 Measures:

Characteristics must be 100% inspected
Optimize proces to Cpk > 1,33

Recordings
The preliminary examinations of process capability are part of the production parts inspection
procedure as per AIAG – PPAP and VDA 2, and must be forwarded to VC as part of PPAP package.

Process capability-series (Cpk)

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Since the preliminary process capability is only determined on one lot (pre-series/production trials),
systematic influences between the individual lots (human, material, etc.) are not taken into
consideration. Preliminary process capability gives only a statement to the current situation therefore
process capability has to be constantly monitored and documented in running production.
Some customers might request higher preliminary and long term process capabilities. Information
about deviating capability requirements to the above mentioned standard requirements will be
communicated during the project.

5.14 Production Part Approval Process (PPAP)

Through the production parts approval procedure (PPAP) it should be proved whether or not the
product can be reliably manufactured within the defined properties. The approval process can be
carried out in two steps:
1. Step
The supplier produces the defined PPAP certificates and sends them to VC together with the first
samples.

2. Step
The production parts approval procedure (PPAP) is carried out at the supplier’s, in the presence of a
member of VC staff or an external agent. Depending on product and project risk the project team
defines whether the release is done in one or two steps.
For critical or safety critical purchased parts (cc = critical characteristics) the 2 step
approval is mandatory.
If the one-step procedure is performed, the series release is given after receiving correct and
complete PPAP reports and approving the dimensional and functional characteristics of the first
samples.

In case of an agreed two-step procedure supplier receives the approval after successful production
trial at site (Step 2) and approved PPAP according to step 1.

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The production parts approval process (PPAP) must be carried out by the supplier in the following
cases:
- with new sampling (repeated sampling),
- amendments to product design / material,
- changes to production procedure,
- transfers to other production locations,
- use of new tools and cavities
- use of new suppliers,
- with an interruption to production longer than 12 months.

VC is to be informed, in each and any of the given instances, before implementation of the change,
and always with written agreement from VC.

The range of the production parts approval procedure has to be agreed with the responsible SQA.
Should a necessary repeat inspection for production parts be caused by the supplier, VC reserves
the right to charge appropriate cost to that supplier.

5.14.1 Requirements for Series production Release

The submission or evidencing of the following measures and results are required for release of
production parts. There might be less requirements in case of re-PPAP defined by SQA/SDE:

Submission Result Provision

1. Part submission Warrant (PSW/VDA EMPB) Supplier

(All boxes checked; reason, signed)

2. Limited Approval VC

3. Process Flow Chart Supplier

4. Process FMEA (confirmation) Supplier

5. Control Plan Supplier

6. Early Production Containment Plan (EPC) Supplier

7. ISO/TS Certificate Supplier

8. Design records (Ballooned 2D drawing – latest level) Supplier

9. Dimensional Results (both supplier and VC evaluation) Supplier VC

10. IMDS Submission Supplier

11. Material Test Reports including suppliers approval Supplier

(PSW/EMPB cover sheet)

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12. Measurement system Analysis MSA (Gauge R&R) Supplier

13. Inititial Process Capability Studies for CC and SC Supplier

characteritics (Pp/Ppk). Cp and
Cpk results have to be forwarded latest 3 month after
SOP)
14. Product samples (1 per cavity number, marked, with Supplier
single measurements results, minimum 6 samples)
15. Product test results (Corrosion, torque, material setting, Supplier
durability, …) as defined in drawing.
16. Run at Rate (Assessment sheet and capacity analysis Supplier
sheet)
17. Bulk sheet (tools), Photographs of gages and assembly Supplier
equipment
18. Packaging instruction Supplier

19. Part History Supplier

20. Approved deviations from agreed specifications Supplier

21. Successful processing, assembly and end-use of product VC

at VC
22. Appearance Approval Report (if applicable) Supplier

23. If part is designed by supplier Supplier

- DVP test matrix (incl. status of all test)
- Design FMEA (sign-off)
24. Others (e.g. Archiving plan for safety parts, etc.) Supplier

25. Part Specific Emergency Plan Supplier

Notes:
to 1. In cases where the customer requires his own forms for supplier PPAPthe required forms have
to be used.
to 4. Test procedures/measuring devices must be included in the control plan.
to 8. Measurement results must be assigned to the individual parts
to 14. The testing of the function features is to be agreed between VC and the supplier (e.g. durability,
corrosion testing etc.).
PPAP documentation has to be sent to VC as a complete file in duplicate and together with the first
samples. In case of a Nexprise access. The delivery of initial samples with PPAP evidence must be
delivered separately of the series delivery! The delivery must be clearly be labeled as initial sample.

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ATTENTION: INITIAL SAMPLES!

Please, pass on to Supplier Quality Assurance!
Not at any time first samples may be packed together with series parts.

5.14.2 Production Parts Approval

No series parts may be supplied to VC before approval. Permission regarding deviations will be
granted should series deliveries be needed for reasons of timing (see Item 5.15.11).

5.15 Series Production

The supplier is committed to adhere to the underlying conditions of the production parts inspection
procedure, such as

- product design
- material
- sub-contractors
- production methods and equipment
- production location
during series production.
Changes must be reported!
Proposed changes must be notified in writing min. 3 month before implementation to VC and
approved by VC! The responsible supplier quality manager (SQA of receiving plant) decides in which
range the production parts approval procedure (PPAP) is to be employed.

5.15.1 Test records

The supplier keeps test records corresponding to agreed control plan series production. These test
recordings have to be assigned to individual production batches. Test records must be archived for
at least 5 years. Test records of safety parts (A-Parts) must be kept for a period of 15 years after
run off of the article. The supplier will be informed by VC about the character of the item. The
recordings can be perused at any time by VC.

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5.15.2 Early Production Containment (EPC)

Suppliers must utilize the Early Production Containment Plan for all pre-production requirements
and for the production ship quantity (default: 10 x daily production volumes) or duration specified
by EPC guideline, or until the production control plan is validated, whichever occurs later. The
specified production quantity or duration is to reflect the customer´s acceleration plan to full
production rate. Suppliers must follow VC EPC guidelines (OPI-01-7.4-0015).

5.15.3 Requalification Test

In order to determine deviation in characteristics and specifications, which are not examined during
current production, at least once per year a product and process requalification is to be performed.
This requalification must include a full layout of the print and functional tests, described on the print
with the exception of characteristics which were verified ongoing. For these characteristics an
analysis capability and cpk-value out of the records from the last year has to be performed. It has
to be defined in the production control plan including documentation of it. The test records are to
be made available to VC if requested.

5.15.4 Zero Defect – continuous improvement process

In order to minimize risks with quality and to avoid wastefulness (scrap, rework, test expenditure,
etc.), the supplier makes assessments on a regular basis and introduces measures for continual
improvement.

In order to be able, on VC’s part, to evaluate the requirement and success of these measures,
annual evaluation and rating of the supplier will be done by VC. Quality targets can be agreed with
the supplier in individual instances. The Zero Defect Target is valid.

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5.15.5 Labeling / Traceability

Suitable identification systems have to be applied. The test results of a part have to be traceable.
The batch no. and production date have to be noted on the delivery note.

During the production at the supplier a clear allocation of:

– VC reference no.
– Drawing index
– batch (first in - first out)
– test condition (checked, not checked)
– quality (good, poor)

must be available.

Attention: Supplies may only be carried out in batches!

5.15.6 Identification of containers, delivery notes and transport orders

The supplier is obliged to display each packaging (box, KLT) clearly identified with a correct material
tag, details defined in VC General Procedure (GP_01_7 4_0009)
Detailled requirements for Delivery notes and transport orders are also described in VC General
Procedure (GP_01_7 4_0009)

Label information rubber compounds:

– Batch-no/ Lot-No.
– Production date batch/ lot
– Expiration date

5.15.7 Packaging
Packaging of products in each individual case is to be agreed with VC and documented with the
PPAP records.

5.15.8 Goods inwards inspection by VC

It is known to the supplier that for reason of its quality assurance measures, for which the supplier
exclusively bears responsibility, no further goods inwards inspections are carried out at VC. VC only
implements an inspection for identification and transportation damage. An obligation by VC to
further tests is particularly excluded. Therefore, VC accepts no obligation of supplied products from
the supplier for prompt inspection and criticism.

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5.15.9 Deviations
Should parts at delivery or afterwards during production process be found faulty, then this can
lead to the return of the whole delivery. As soon as the supplier is aware of this he must make
sure that no further defective items are delivered. Stocks of finished parts have to be inspected
or replaced with inspected material and immediately effective remedial actions initiated.

The supplier obliges himself to inform VC immediately in the case of a delivery of faulty products
having been carried out already (self complaint). For the ensuring of efficiency of supplies, VC
reserves in case of a line stop the right to arrange directly inspection and rework, and to charge
any expences incurred by VC to the supplier if the supplier fails to respond to VC within 1 hour.
For each complaint the supplier will receive a notification (Inspection Report). Responses are
always to be done according to the 8D-Process principles.

The immediate measures taken must be notified to VC within 24 hours. The concluding report
must follow 10 days after receipt of the inspection report (see OPI-01-7.4-0002). Extra time is
possible when an evidence (e.g. defect sample part) is necessary for carrying out the root cause
analysis but is not available.

The risk analysis (FMEA), having the purpose of avoiding defects, is to be reviewed with respect
to the concern checked.

5.15.10 Settlement of cost

VC reserves the right to charge back verifiable complaint related cost from the supplier. To be
referenced to Li_01_7.4_0016.

5.15.11 Permission for deviations

For products which after completion of the respective tests do not fulfill agreed specifications the
supplier can, in exceptional circumstances under details of type and cause of the deviation, as well
as the quantity in question and the remedial action started by the supplier, apply for permission
for deviations (special approval) before delivery. VC can - when the quality of the final product is
not affected by this deviation grant such permission. Supply only takes place when VC has given
permission in writing for a deviation. The permission for deviations is limited exclusively to the
committed quantity or time period and does not apply as a quality concession for forthcoming
supplies. The product has to be delivered separately and specially labeled!

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5.15.12 Quality performance/escalation process

The quality performance of a supplier will be evaluated in two steps.
1. Ongoing, based on
- number of supplier concerns (complaint notifications)
- ppm (rolling over a defined number of months)

reported defective parts

ppm = × 1.000.000
reported supplied parts

2. Long term, based on

– Severity of fault
– Repeated fault
– PPAP performance
– Result of Process Audit
– Customer focus in case of complaint
– Professional, in time failure analysis and implementation of sustainable measures

Quality Escalation Process

In case of ongoing poor quality the following Escalation Scenario will be executed.

1. Level 1: 8d-Process
2. Level 2: Supplier Quality Development Meeting (including strategic action plan)
3. Level 3: Q-Support
4. Level 4: New Business Hold (NBH)

5.15.13 Subcontractor
For series deliveries it is only allowed to consider subcontractors, whose parts have been used for
PPAP to VC. The Subcontractor must submitt a PPAP to the supplier and the supplier has to
evaluate and release it before submitting the whole PPAP to VC. A change is only allowed after
submission of new sample parts to VC (see 5.14. PPAP). For the new sampling it is only allowed
to use approved subcontractors.

For a subcontractor change during serial production VC has to be informed in advance (see 5.14.
PPAP). The order to the subcontractor is only allowed after written agreement by VC. A delivery
to VC is only allowed after full approval of PPAP by VC. In the case of a supplier change for safety
critical purchased parts the 2-step method is mandatory.

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6. RESPONSIBILITIES

Project
Project Deve-
QM- QM- QM- Pur- Supp- Produc-
Task / Function Manage lop- SDE SQA MGM
Region BA Site cha- lier tion
ment ment
sing

Contractual agreement of
C R C A
the VC Global Procedure

Individual agreements
deviating to the VC-Global I A C C I R I C I
Procedure

Control of project status

A/R C C I I C I
report

Supplier APQP C I I C R/A C

run&rate at supplier C I C C A R C

PPAP approval A I I I C R C

Approval of changes C I A C R I I

Approval of deviation
R A C C C I C
requests

Quality Escalation meetings C I C C A R C C

Responsible: Process owner, responsible to carry out the business process (implementation,
execution)

Accountable: Approver, responsible for the result of the business process (objectives, design,
monitoring)

Consulted: Experts; two-way communication

Informed: Persons that need to be kept up-to-date; one-way communication

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7. APPENDIX / ENCLOSURES

No. Type of Document Title / Description Enclosure

1 List Definition of Special Characteristics LI-01-7.3-0049

2 Operational Process Early Production Containment OPI-01-7.4-0015

Instruction

8. VALID SUPPORTING / REFERENCE DOCUMENTS

8.1 Valid Supporting Documents

– General purchasing conditions of VC.
– Valid Scheduling Agreement with VC.
– GP-01-7.4-0009 “Logistical Requirements of Suppliers”
– GP-01_7 4_0003 “Supplier rating”
– GP_01_7 4_000? “Supplier Development”
– General framework agreement

8.2 Additional Information

– AIAG Manuals (latest version), PPAP, MSA, APQP, FMEA, SPC of the Big Three (GM, Ford,
Chrysler).
– VDA-Manual 4.1: Assurance of Quality for Series Use
– VDA-Manual 4.2: System-FMEA
– VDA-Manual 1: Guidance on Records
– VDA-Manual 2: Assurance of quality for deliveries in the automotive industry.
– ISO/TS 16949: Quality management systems. Special requirements in the application of ISO
9001:2000 for series and spare part production in the automotive industry

9. DOCUMENTATION
VC will keep this procedure on file. In case of a revision the latest edition will be kept for at least 3
years after revision.

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