management system work instruction - johnson

Document No. : SQ Handbook

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This document is the property of Johnson Electric and information herein contained is confidential, unauthorised reproduction or other use thereof, whether directly or indirectly, in whole or in part, is strictly

prohibited.

Management System Procedure (MSP)

Document Title:

Supplier Handbook - Quality Requirement (Americas)

Revision History:

Revision

Descr ip t ion of Change(s )

Ef fect i ve Date

A Initial release 2014-05-01

B Added: Section 4 – v – added Premium Fright notification. Section “8 - iv - a” is updated including CQI-23 Special Process: Molding System Assessment. Description of applicable Cost recovery charges is defined. Supplier Performance Rating is updated Annual part validation is eliminated and replaced with Part Validation definition

2016-02-22

C Major updates on Supplier Quality Handbook to minimize risks and align this to IATF 16949:2016.

2016-09-25

D Updated Sections: 2-ii / 3-ii-c / 5-i-e / 5-ii / 5-iv / 8-i / 8-v-b / 8-vi-b

2018-01-10

Prepared by

Title

Date

Concurred by

Title

Date

Ezra Reyes Manager, Supplier Quality

2018-01-09

Approved by

Title

Date

Approved by

Title

Date

Shannon Badger

Quality and Reliability Senior Manager

2018-01-10

Heather Sullivan

Head of Supply Chain Services

2018-01-10


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Dear Valued Supplier,

The scope of this handbook addresses direct supplied components/materials/services (hereafter referred

to as ‘part’) being used in Johnson Electric (hereby refer as ‘JE’) products or finished goods. As a qualified

supplier of JE Americas for the part, compliance to the following Supply Chain and Quality standards and

guidelines is required.

1. JE Supplier Quality Goals

i) In order to meet the changing needs of our Customers, JE strives to continuously improve current

processes to make supply chain more efficient. The general goals and objectives are:

a. Zero defects

b. Supplier Corrective Action Report(SCAR) response time:

Containment Action (D-3) Response - 24 hours

Root cause analysis and identification (D4) - 7 calendar days

Selection of Permanent Corrective Action (D-5) - 14 calendar days

8D Closure - 30 calendar days

c. Continuous improvement initiatives with the target of process capability meeting or

exceeding Ppk/Cpk of 2.0 for critical parts and identified special characteristics.

ii) The Supplier shall be certified at a minimum of ISO9001:2008 and to ISO9001:2015 by September

14th of 2018; for those suppliers that provide parts for JE APG (automotive products), ISO9001

certification is acceptable (unless otherwise specified by the end customer); however, as part of JE

supplier quality management system development, JE suppliers shall demonstrate conformity to

TS16949: 2009 or IATF16949: 2016 after September 14th of 2018 Certification to other quality

management system and/or standards shall be required according to related requirements (when

applicable).

a. Supplier shall maintain all applicable certifications and inform JE in the event of a change to

the certification body, major audit finding, or loss or suspension of certification.

Supplier shall be responsible to provide a copy of the latest certificate.

iii) In the event other standards are noted in JE drawings and/or Purchase Order (PO), the supplier is

responsible for maintaining and meeting the most recent revisions available (i.e. IPC-A-610 for

printed circuit boards acceptance, AEC-Q200 for automotive passive electronic component).

2. Law & Regulations

i) Safety regulations

a. JE purchased parts might require certification by International Safety Standards, such as UL

Certified, CSA Certified, ISO Certified, SAE Certified, DIN Certified, 3C (China Compulsory

Certified), etc.

b. In the event that a safety certification is required, the supplier shall be fully compliant and

crossed referenced with the JE PO and/or drawings.


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ii) Environmental management regulations/Hazardous Substance Free (HSF)

a. Supplier shall assure that the supplied part is compliant with European Union (EU) WEEE

(Waste from Electrical and Electronic Equipment), RoHS 3 (Restriction of Hazardous

Substances Annex III) (also known as EU Commission Directive 2015/863), ELV (End of

Life Vehicles Directive) and REACH (Registration, Evaluation, Authorization, Restriction of

Chemicals)..

b. Supplier shall submit the following documents for part qualification in conjunction with section 3:

Supplier Self-Declaration Letter (HSF compliance declarations)

Supplier Self-Declaration Letter (REACH SVHC)

IMDS

RoHS 3 Third Party Laboratory Test Report

Material Safety Data Sheet (MSDS) – as applicable.

iii) JE specific product requirement

a. The use of Silicone oil (CAS number 63148-62-9) is prohibited in the processing of all parts

supplied to JE.

This prohibition includes direct material (raw material) and/or indirect material (process

material (machine oil, mould releasing agent) used in manufacturing the part unless with JE

written approval.

iv) Responsible sourcing

a. JE expects all suppliers to source responsibly including:

No sourcing from unknown or unauthorized distributor(s) to avoid counterfeit components

(refer to JE COUNTERFEIT PARTS PREVENTION POLICY).

No sourcing from JE or JE Customer’s banned sources.

v) Supplier social responsibility

a. JE expects all supplier to adhere to social responsibility including:

No sourcing for conflict minerals per EICC-GeSI and/or Frank-Dodd Law. Annual declaration

using the latest EICC-GeSI Conflict Mineral Reporting Template is expected.

Other responsibilities whenever applicable.

vi) Other regulations

a. JE expect all suppliers to adhere to local and government, trade, and environmental laws

wherever applicable.

b. Compliance to other regulations per JE PO, component drawings or contract is required.

vii) Contingency Plans

The supplier shall prepare contingency plans to satisfy JE requirements in the event of an

emergency such as utility interruptions, labor shortages, strike, equipment failures, shortages of

material due to a sub-supplier issue, etc.

If the supplier knows in advance that JE, of any of its sites, will be affected on a production

interruption, the supplier shall notify JE’s Planner, Buyer and SQE at least in the next 24 hours; if

possible before the interruption. The immediate action shall be communicated assuring supply of

product.


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The supplier is required to advise JE of the recovery plan and work towards minimizing its effect on

the JE site.

viii) Failure to adhere to any above law and/or regulations may result in disqualification from JE Supply

Chain Services (SCS) Approved Supplier List.

3. Qualification and Approval

i) Supplier Qualification

a. JE SCS shall assess potential supplier to become an approved and qualified supplier.

b. Supplier shall work with JE SCS to complete the Supplier Assessment Questionnaire (SAQ) and

Non-Disclosure Agreement (NDA).

c. On-site audit shall be arranged if potential supplier fulfils all initial requirements and

assessments. On site audits for New supplier qualification may include:

Potential Supplier Audit (PSA) based on VDA 6.3

Supplier Hazardous Substance Process Management (HSPM) based on QC080000 and

ISO14001

Component Feasibility Study (CFS) based on JE Supplier Quality’s discretion.

d. Qualification shall be based on the manufacturing location/site or the entity location of the

supplier.

Change of manufacturing or entity location shall be approved by JE and an on-site

requalification audit may be conducted at JE discretion. (Refer to the Change Management

clause for details).

e. Supplier shall obtain a green score for PSA to be qualified as a supplier. Supplier may be

conditionally accepted if PSA score is yellow; a supplier does not qualify as an approved

supplier if PSA score is red.

f. JE SCS holds the rights to disqualify a supplier from the Approved Supplier List based on

quality, delivery, service and response performance and any other related reasons (refer to

Supplier Performance rating (SPR) section).

ii) Part Qualification

a. Early Supplier Involvement (ESI) & component feasibility study (CFS-design review).

Supplier shall participate, upon request, with JE in component ESI and component

feasibility study activities during the Request for Quotation (RFQ) process.

Supplier shall work on a Supplier-APQP when project is granted.

b. Supplier Sample Evaluation Report (Supplier SER)

To evaluate the supplier’s ability/capability in suppling parts compliant to the JE part

drawing and requirements prior to mass production; supplier is required to submit (When

requested):

Physical samples

Completed SER submission checklist with related documentations

Remarks: JE Sample Evaluation Center (SEC) will not process sample evaluation if the

above mentioned document packet is not complete.


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c. Production Part Approval Process (PPAP)

To ensure customer specific requirements compliance, the Production Part Approval

Process (PPAP) is established and to confirm the supplier’s ability to produce high quality

parts that meet or exceed print requirements.

PPAP is required prior mass production and for:

- New part awarded

- Engineering change(s)

- Tooling: transfer, replacement, refurbishment, or added

- Tooling to be use was inactive for more than one year

- Sub-supplier or material source change

- Change in part processing

- Parts produced at a new or additional location

PPAP shall be taken from a significant production run. This significant production run shall

be from 1 hour to 8 hours of production and with the specific production quantity of 300

consecutive parts; unless otherwise specified by JE authorized representative.

PPAP submissions to Johnson Electric are to be made in accordance with the AIAG

guidelines contained in the AIAG PPAP manual.

On-site PPAP audit and qualification shall be arranged under JE Supplier Quality’s

discretion.

Supplier shall have prepared a level three PPAP as default per AIAG manual requirements; the

documents and data to be submitted are:

Design records

This requirement may be satisfied by attaching the “ballooned” design record.

Engineering change documents (if applicable)

The supplier shall provide authorized change documents for those changes not

yet recorded in the design record, but incorporated in the product, part or

tooling, such as ECNs, Specification changes, Supplier change requests, Sub-

assembly drawings, Life or reliability testing requirements, Customer

engineering approval (when supplied part is customer directed).

Design FMEA (if applicable)

This is required when supplier is designed responsible. If DFMEA cannot be

provided, a list of process steps showing the RPN numbers and actions shall be

provided for RPNs > 100.

Process flow diagram

Step by Step designation of the process flow required to produce the referenced

product which meets all customer requirements; this shall be linked to PFMEA

and Control Plan process steps.

Traditional block diagram is preferred.

This shall cover all steps from Receiving to Shipping

Process FMEA

The PFMEA should be completed using a cross-functional team.


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For each Process Input, determine the ways in which the Process Step can go

wrong (these are Failure Modes)

For each Failure Mode associated with the inputs, determine Effects on the

outputs

Mark special characteristics (product and process)

Identify potential Causes of each Failure Mode

List the Current Controls for each Cause

Assign Severity, Occurrence and Detection ratings after creating a ratings key

appropriate for your project (Refer to AIAG PFMEA manual for ratings).

Calculate RPN

Determine Recommended Actions to reduce high risks (RPN>100)

Take appropriate Actions and Document

Control Plan

Use process flow diagram and PFMEA to build the control plan; keep them

aligned

Controls should be effective.

Ensure that the control plan is in your document control system

Control Plan shall address:

All testing requirements - dimensional, material, and performance

All product and process characteristics at every step throughout the

process

The control method should be based on an effective analysis of the process

Control plans should reference specifications, toolings, etc.

Control Plan shall include the Safe launch plan (GP-12).

Dimensional results

Results shall include samples from each tool cavity, manufacturing line, etc.

Data points should come from PPAP samples included with PPAP submission

5 samples (per tool cavity, manufacturing line, etc.) shall be the minimum

quantity to be measured.

Not-OK results shall be addressed immediately.

Records of material/performance test result (Material certification)

Shall include:

The name of the laboratory that conducted the test

The type of test that was conducted

The number, date, and specification to which the part was tested

The actual test results

Measurement system analysis (MSA)

The supplier shall have applicable Measurement System Analysis studies such

as Gage R&R (GR&R); this is for all gages, measurement and test equipment;

especially all those declared in the Control Plan.

GR&R is acceptable when is <10%; when GR&R is between 10% and 20%, this

must be discussed with JE Supplier Quality representative to determine

acceptability and further actions to be taken prior to PPAP submission. If GR&R

is >20%, this is rejected and corrective actions shall be performed prior PPAP

submission.


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Initial process studies

The purpose of this requirement is to determine if the production process is

likely to produce product that will meet Johnson Electric’s requirements, as well

to understand the process variation, not just to achieve a specific index value.

Enough initial data is needed in order to plot a control chart, therefore a 100

random individual samples are needed to calculate Cpk / Ppk.

When not enough data points are available (<100 samples), or there are

unknown sources of variation, contact your JE Supplier Quality representative to

develop a suitable plan.

The minimum Cpk/Ppk acceptable is 1.67 for Special, Key and critical

characteristics. Supplier shall develop Corrective actions if Cpk<1.67.

When no special characteristics are identified in the drawing, Johnson Electric

reserves the right to require the demonstration of initial process capability on

other characteristics.

When an unstable process is identified, the supplier shall identify, evaluate and

eliminate the special cause of variation prior PPAP submission; the supplier

shall notify JE Supplier Quality representative and submit a containment plan

corrective action plan prior submission.

Keep in mind that the measurement equipment to be used for the studies have

to be with a higher reading accuracy that what is called out in the specification.

Qualified laboratory documentation

Whenever an external laboratory is used to perform measurements, testing,

calibration of used equipment and/or third party, documentation showing that

the hired company is qualified for the type of measurement or test conducted.

The qualified laboratory that will be performing the initial studies, measurements

or testing shall have a laboratory scope; this is also submitted.

Bulk material checklist (for bulk material only)

Please refer to AIAG PPAP Manual Appendix F for reference.

Run at Rate (R@R) results

Supplier shall monitor and measure the line capacity.

R@R report must be submitted in PPAP.

Use GP-9 Run at Rate worksheet for Run at Rate declaration.

Master sample (if applicable)

The supplier shall retain a master sample for each production line, cavity die,

mould, tool, etc.

At least 3 samples from the PPAP production run (representative of this), shall

be submitted along with the documentation.

Checking aids

Checking aids can include: fixtures, variable and attribute gages, models,

templates, Mylar and/or inspection instructions specific to the product being

submitted.

Chemical composition/IMDS/HSF declaration

Part Chemical composition shall be submitted into the IMDS system.

Hazardous Substance Free declaration is a must to be included in the PPAP

package.


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RoHS 3, REACH, ELV and WEEE compliance and self-declaration are a must.

Self-declaration letter addressing the compliance to this Suppler Quality

Handbook and JE’s specific requirements.

Conflict minerals per EICC-GeSI and/or Frank-Dodd Law self-declaration.

Use the latest EICC-GeSI Conflict Mineral Reporting Template; this can be

found in the following website:

http://www.responsiblemineralsinitiative.org/conflict-minerals-reporting-template/

Detailed Packaging information

Container dimensions

Skid array and dimensions

Explanation on how the material is array inside the container (tray, layers, bulk,

quantity per box, etc).

Copy of the label to be use

Packaging instructions

Packaging test results per the International Safe Transit Association (ISTA);

refer to www.ista.org for test procedures.

Part Submission Warrant (PSW)

PSW shall be completely filled out.

Part weight, Rate, Mould/cavity/production process fields shall be filled with the

proper information, “N/A” is not acceptable.

NOTE 1: Other PPAP level submission is per JE Supplier Quality representative discretion.

NOTE 2: There may be other customer specific requirements that must be met and included in the

PPAP package; this will be communicated by JE’s representative.

d. Production Launch Containment

At the launch of a new product, process, location change or other type of changes, an early

production containment plan (safe launch plan) must be submitted to JE Supplier Quality

for review.

At a minimum, the plan should consist of an enhanced Control Plan showing additional

inspections and frequencies, a planned time frame (typically 6 lots or 90 days of

production) for the enhanced control, a method to identifying parts under enhanced control

and a proposal for the conditions under which enhanced control will end. Prior to

completion of enhanced control, the supplier shall send data acquired during enhance

control to JE Supplier Quality for review and determination if the supplier may exit the

containment plan.

Containers and skids shipped during this Safe Launch plan period shall be labelled with a

yellow placard stating the part number, Manufacturing date and the legend “Safe Launch

inspected”

4. Delivery

i) Supplier Outgoing Quality Control

a. Supplier shall assure the part meets JE’s PO, drawings, and specifications prior to deliver to JE

unless with JE written approval/agreement.

http://www.responsiblemineralsinitiative.org/conflict-minerals-reporting-template/

http://www.ista.org/


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b. Supplier needs to provide the Certificate of Conformance (CoC) and/or Certificate of Acceptance

(CoA) for every delivery lot. CoC and/or CoA shall include the following information:

Supplier Name

JE Part Number

Production LOT Date / LOT Number (#)

PO Number (#)

Inspection detail (Specification, AQL, Measurement Results, Acceptance Status, Inspection

date, Inspector name/Signature…. etc.)

Statement of “ESDC067 Conformance” (if applicable)

Supplier Outgoing Quality Control items shall not be less than incoming inspection items in

JE.

c. Supplier shall attach a hard copy of CoC/CoA to the shipment and keep a soft copy ready and

accessible for upon request.

d. The supplier shall inform Johnson Electric regarding deviations from the average weekly First

Pass Yield (FPY) of more than 10% for a given supplied part within two working days of the

deviation, or in a mutually defined time frame. The supplier shall provide information regarding

past and current FPY upon request.

e. Written approval/deviation shall be obtained from JE Supplier Quality Representative prior to

shipping of non-conforming part.

Special labelling and / or packaging instructions shall be coordinated prior to shipment of

the non-conforming part to assure traceability of the material.

ii) Special Shelf Life and Preservation

a. Supplier shall provide a system for the identification and traceability control of those items that

degrade with time.

b. Acceptance of material at JE incoming with shelf life requirement shall be minimally 2/3 of the

life. (Example, shelf life of 12 months, JE will not accept if the material is less than 8 months

shelf life left.)

iii) Packaging and Labelling

a. Only approved packaging shall be used to avoid damage to the part during transit and storage.

Proper electro-static discharge (ESD) packaging (tray, ESD PE bag, etc) is to be used for

ESD sensitive components such as PCBA, electronics components, etc.

A moisture barrier bag (with proper sealing) is to be used for components such as carbon

brushes, etc.

Special packaging (temperature and humidity controlled) and storage is to be used for

components such as adhesive/glue, epoxy powder, etc.

Adequate support and protection on carton and pallet (if applicable).

b. Product shipped under deviation for any reasons will be clearly labelled to ensure traceability of

deviated delivery/supplied part. The label will contain, at a minimum, the following information:

JE Part Number

Drawing revision status

LOT date/number

Quantity


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Any special remark such as new revision, after containment (sorting), special handling or

storage (if applicable).

For better reference or special instructions, please contact your JE site representative.

iv) Supplier shall comply with all trade compliance regulations including (but not limited) the availability of

trade compliance documents.

v) Kanban and direct-to-production initiatives

a. Supplier is expected to participate in any supply chain initiative of Kanban or direct-to-

production by supporting related quality documentation and evidence requirements.

vi) Premium Freight: Suppliers shall notify JE Purchasing Commodity Manager and Supplier Quality

Engineering, within 24 hours, if Premium Freight is use to meet on-time deliveries.

5. Incident Management & Performance Monitoring

i) Quality Incident Management

a. A part Non-conformance report can originate from the following:

Sample qualification (Design Verification/DV, Production Verification/PV, SER & PPAP)

non-conformance

JE Incoming Quality Control (IQC)

JE production line

Customer complaint

b. A 5W2H Report will be issued to Supplier Quality by the party identifying the non-conforming

part (SEC, IQC, Quality Department, etc.). Supplier Quality shall follow-up the non-conformance

with the supplier with a Non-Conformance report (NCR). The supplier shall respond with an

8D/Supplier Corrective Action Report (SCAR) within the timeline defined in Section 1-i-b of this

document.

c. 8D/SCAR shall contain the following information:

Detailed description of root causes (Occurrence, Non-Detection and System) for failure

using suitable PDCA tools like 5-Why, Fault Tree Analysis (FTA) or Fishbone Diagram

(Ishikawa diagram).

Containment Plan shall include parts at the supplier, in-transit to JE, in the JE warehouse

and JE’s Customer’s sites.

Short-term corrective/improvement action(s)

Long-term preventive/improvement action(s) & lesson learned/look-across

Verification and validation of action(s)

Supplier shall use Johnson Electric’s 8D form.

d. Controlled shipment

Controlled shipment shall be imposed on the supplier at JE Supplier Quality’s discretion

(especially re-occurrence of non-conformance).

Controlled shipment level 1 (CSL1) is conducted by supplier personnel and is a 100%

inspection of material/part prior to shipment of the material. Duration of the controlled

shipment activity will be based on inspection results and performance at the JE

manufacturing site.


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If the executed controlled shipment by supplier (CSL1) is not effective, Controlled Shipment

Level 2 (CSL2) inspection by 3rd party will be imposed by JE Supplier Quality. The costs

for 3rd party control are the supplier’s responsibility.

JE reserves the right on assessing and auditing the 3rd party inspection area; supplier is

fully responsible for the control of the 3rd party inspection working environment (i.e. ESD

area and personnel properly grounded if electronics are being inspected, proper light and

equipment in place to assess microscopic conditions, etc).

e. Cost of quality & recovery

In the event confirmed non-conforming supplier parts reach JE or its Customers, JE SCS

shall notify and work with the supplier to remedy the situation including prompt analysis,

containment and follow-up actions.

Supplier shall be responsible for all associated costs including but not limited to sorting

costs, premium freight, travel expenses, Customer fines, downtime, special equipment

purchases, incidental charges, etc.

Supplier Non-Conformance Chargebacks process starts when Johnson Electric incurs a

financial impact due to supplier non-conforming material or supply disruption. This process

is designed to provide guidelines on identifying, documenting, and recovering financial

impact incurred as a result of supplier non-conforming material or supply disruption.

Financial impact may include the cost of investigation, sort, rework, testing activities,

downtime, overtime, expediting, etc. (refer to table 1).

NOTE: This process is intended to help drive supply base improvements and hold suppliers

accountable for poor quality and delivery performance. It is not intended to be punitive or

generate profits.

The items listed in the table below provide a summary of common potential costs associated with supplier non-

conforming material or supply disruption. This list is not considered inclusive of all potential costs.

During Receiving During the Manufacturing

Process When Parts Are at a Customer

No Certification

Sorting

Rework

Premium freight

Premium costs paid to support production

Tooling, fixtures and materials for inspection and/or rework

Downtime

Overtime

Line speed reduction

Additional manpower

Additional inspections and/or testing

Rework/Repair

Time lost due to model change caused by material unavailability

Equipment breakage

Scrap costs

Rework/Sort by JE at customer premises

Rework/Sort by Third Party paid by JE

Replacement of material at customer

Premium Freight

Tooling, fixtures and materials for inspection and/or rework

Facility/Warehouse Storage Costs

Charges from customer (administrative fees)

Internal containment to prevent quality issues at customer (Quarantine, added inspections, certification of product, etc.)

Warranty claims or recalls

TABLE 1


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The following are the standard charges that will be applied when a Cost recovery event occurs:

Description Chargeback Explanation

Labor $40.00 USD/hour per person JE USA $10.00 USD/hour per person JE Mexico

$40.00 USD/hour per person applicable to labor within Johnson Electric United States. $10.00 USD/hour per person applicable to labor within Johnson Electric Mexico.

Scrap Quantity x piece price Scrap associated with final assemblies, subassemblies and components.

Customer Cost Recovery

Amount charged to JE by the customer

Charges imposed by the customer to Johnson Electric due to the disruption generated by the supplier issue.

Equipment / Tools Amount defined in the invoice

Equipment or tools bought to make a rework, to sort or test specifically related to the supplier quality issue.

Premium Freight According to the carrier charges

Freight cost incurred inbound (from supplier to JE site) or outbound (from JE site to customer) due to the supplier quality nonconformance.

Travel Expenses Airfare Car rental Fuel expense Hotel room charges

Travel expenses from Johnson Electric staff to the supplier site or to the customer facility to attend or asses the supplier quality nonconformance.

Administration Fee $500.00 USD standard fee A $500.00 USD administrative fee is assessed to each NCR. This applies to any supplier responsible quality or delivery issue that results in a reject or non-conformance report (NCR) generated. The administrative fee will not apply to informative reports to the supplier.

ii) Periodic on-site audit at supplier:

a. A periodic process audit will be done accordingly based on a yearly risk assessment performed:

General process audit is based on JE VDA6.3 Process Audit Checklist.

Specific commodity benchmarking audit based on JE Commodity Benchmarking Checklist.

Specific customer audit checklist as needed.

b. The level of a risk is calculated using a risk assessment matrix and ranks the risks base on

criticality from 0 to 2.

The following elements are considered to calculate the overall risk level as follows:

Type of commodity value:

Hardware is defined as a low risk commodity and is ranked with 0.

Raw Material (such as resin, copper, steel, etc.) is defined as medium risk and

assigned with a value of 1.

Electrical/Electronics commodities are considered high risk and it is ranked as 2.

High 2

Medium 1

Low 0

Risk level Rank

Electric/Electronic

Raw / Custom

Hardware

Commodity

Value


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For SPR Rating, Quality, Delivery and Responsiveness are considered:

When the supplier meets the SPR element, the risk is low and is ranked as 0.

When it is not met, but there is an improvement plan, the risk is medium and is

ranked as 1.

When the supplier doesn’t meet the requirements and there is no improvement plan

is considered to be high risk, therefore is ranked as 2.

Field Failures are considered the cases when a customer complain happens (0 Km /

Warranty) and the issue is related to a supplied component to JE:

When there are no incidents reported, the risk is low and is ranked as 0.

When the incident is considered to be minimum or with no major impact, this is

considers as medium risk with a rank of 1.

If the risk is considered be a major customer impact, this will be considered as high

risk with rank assigned as 2.

Control Level definition considers those items related to new product launch, suppliers that

have been under Control Shipping status, product that will impact user safety and product

functionality. The risk evaluation is shown in the following table:

c. After the risk assessment is done, the overall score is calculated summing all elements ranking.

The overall score will define the frequency of audits according to the following matrix:

d. Audit notice with an agenda will be given not less than two weeks in advance of the audit date.

The Supplier shall acknowledge the audit and agenda and prepare as necessary for the activity.

e. At Supplier Quality’s discretion, self-assessment audits may be conducted in-lieu of an on-site

audit.

Quality Delivery Reponsiveness

Below - No Plan Below - No Plan Below - No Plan

Below - Plan Below - Plan Below - Plan

Meets Meets Meets

SPR Rating

0 KM Warranty

Issue - High Risk Issue - High Risk

Issue - Low Risk Issue - Low Risk

No Issues No Issues

Field Failure Risk

New Supplier New Part # New Process New Material New Technology SafetyCSL 1/2

(Past 1 yr)Function

Yes-Commodity 2 Yes-Commodity 2 Yes-Commodity 2 Yes-Commodity 2 Yes-Commodity 2 High Impact CSL-2 High Impact

Yes-Commodity 0/1 Yes-Commodity 0/1 Yes-Commodity 0/1 Yes-Commodity 0/1 Yes-Commodity 0/1 Low Impact CSL-1 Low Impact

No No No No No No Impact None No Impact

CLD Risk Assessment

0 to 10 Self Assessment (Specific VDA 6.3 Process) and upon request.

10 to 20 On-Site Once / 3 years (Except for Electronics)

20 to 28 On-Site Annual Evaluation


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f. Supplier shall respond to the findings report within 14 business days of the audit or as agreed

between JE SQE and the supplier.

Scoring less than pass score would trigger supplier re-qualification process and/or could result in

disqualification.

iii) On-demand audits

a. Based on the severity of a non-conforming parts incident (Customer quality incident, line

stoppage, repeat defect), on-demand audits shall be requested by Supplier Quality to verify the

details on-site at supplier.

b. Audit will be based on corrective action (8D) methodology (including containment action review,

root cause replication, corrective actions and preventive actions in place), control plan adequacy

and adherence and/or process audit checklist per VDA6.3.

c. Audit notice with and agenda shall be provided not less than two working days in advance of the

audit. The Supplier shall acknowledge the audit and agenda and prepare as necessary.

d. Supplier shall respond on the audit findings within 1 week or as agreed upon between JE SQE

and the supplier.

iv) Supplier Performance Rating (SPR)

a. SPR process is to rate suppliers quarterly based on the following elements:

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Resp

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30.0% 20.0%

50.0% 50.0% 100.0% 25.0% 75.0% 100.0%

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ases

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ill 8

D C

ycle

Tim

e T

arg

ets

40.0%

Qualit

y I

ncid

ents

On T

ime D

eliv

ery

Co

mp

eti

tiven

ess

Paym

ent

Term

s

Qu

ali

ty

Supplie

r P

PM

10.0%


Revision : D

Page： 15 of 20

b. Overall SPR minimum score is 51%. Failure to meet the minimum score may result in New

Business On-hold (NBOH) or even disqualification from Approved Supplier List.

c. The following is the criteria considered to calculate the Supplier Performance accordingly for

each category:

Category SPR Sub-Category Criteria Points

Qu

ality

Q1: PPM 0-10 ppm

10

Metric: Parts Per Million Defective (PPM) in the reporting quarter PPM = quantity of confirmed defective parts / total received parts x 1,000,000 PPM is based on quantity rejected from any source (receiving, line, customer, warranty) Example: Supplier rejects = 100 pcs; Supplier Receipts = 300,000 pcs; PPM = 100/300,000 x 1,000,000 = 333 PPM Points = 4

11-50 ppm 8

51-100 ppm 6

101-500 ppm 4

501-1000 ppm 2

>1000 ppm

0

Q2: Quality Incidents 0 Issues 10

Metric: Quantity of supplier quality incidents based on number of incidents reported Customer Impact = customer shipment affected; customer received defect which is supplier caused. IF a supplier has any customer impacted issue, the supplier's score is reduced by 2 points for every customer impacted issue. Score cannot be less than zero. Example: Supplier has 2 issues (none are Customer Impact). Points = 6 Example: Supplier has 3 Issues (1 is a Customer Impact) Points = 2 Example: Supplier has 2 issues (both are Customer impact) Points = 2

1 Issue 8

2 Issues 6

3 Issues 4

4 Issues 2

>= 5 Issues 0


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Category SPR Sub-Category Criteria Points

Deliv

ery

D1: On Time Delivery (OTD) 100% 10

Metric: On Time Delivery % (based on Deliveries Required) On time delivery = Total Deliveries Required - late or early occurrences / Total Deliveries Required x 100% Example: Supplier sends in 38 Total Deliveries with 1 late: On time delivery = 38 - 1 / 38 x 100% = 97.4% Points = 4

99% 8

98% 6

97% 4

96% 2

=< 95 % 0

Category Points

10

9

8

7

6

5

0

SPR Sub-Category Criteria

C

o

m

p

e

t

i

t

i

v

e

n

e

s

s

C1: Payment Terms

Based on Days payable

120 Days payable

90 Days payable

60 Days payable

Below 30 Days

30 Days payable

45 Days payable

Cash advance payment

Category Points

10

9

8

7

6

5

4

3

2

1

0

> .75% - 1%


C

o

m

p

e

t

i

t

i

v

e

n

e

s

s

> 3.0%

> 2% - 3%

> 1.75% - 2%

> .5% - 0.75%

> .25% - 0.5%

> 0% - .25%

0% or Increase

Percent of cost savings/increase based

on annual spend

> 1.5% to 1.75%

> 1.25% - 1.5%

> 1% - 1.25%


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Category Points

10

8

5

2

0


R

e

s

p

o

n

s

e

All responses met on time, or no

responses required

2 of 3 responses met on time (or

70% of the time responses are met)

1 of 3 responses met on time

(Considering supplier is usually late

on their responses during the

evaluated quarter)

No 8D, report or response provided

or

Any open SCAR carried from

previous quarter

90% of the time Supplier meets the

target dates

R1: Fullfill Corrective Action cycle

time targets: D3= 24 hours, D5=7 days

and D8=30 days

d. In a quarterly basis, those suppliers that were scored below 51% (Red-D) will be receiving

via e-mail their SPR score.

NOTE1: Suppliers with 2 consecutive Quarters with RED Ratings will be required to submit a

Quality Improvement Plan (QIP). This plan will be monitored by Commodity Manager and SQE.

NOTE2: Any 3 Quarters with RED Ratings will place the Supplier on NBOH until the Quality

Improvement plan has been implemented and signed off by Commodity Manager and SQE.

NOTE3: Supplier shall submit a QIP within 15 calendar days after RED score is provided. If

QIP is not presented in such period, Supplier will be placed in NBOH status. If no QIP is

provided within a 1 month period, the supplier will be phased-out.

NOTE4: After QIP is submitted, the supplier shall close all QIP activities within 4 months.

Failure to meet the timeline will result in a decision to remove business.

*The escalation process may vary in cases of single-sourced commodities or customer directed suppliers.

v) New Business On-hold (NBOH)

a. Considerations for placing a supplier on NBOH include, but not limited to:

Failed SPR

Failure to submit Quality Improvement Plan (QIP) when requested.

Failure to close QIP activities, as identified in section 5-iv-d of this Handbook.

Frequent and/or repeat quality incidents/non-conformances.

Supplier caused problems impacting JE customers or impacting JE’s production line (down

time).

High ppm levels.

Implementing any change without JE written approval.

Lack of supplier responsiveness (corrective action reports, requests for information, RFQs,

etc.).

Unjustified price increases, payment term adjustment requests, etc.


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Frequent and/or repeated delivery problems (ahead of time or late, incorrect shipping,

billing documents, etc.).

6. Change management

i) All supplier changes (5M&1E) shall be reviewed and approved in a controlled manner to mitigate

delivery and/or quality risk.

ii) Suppliers are required to inform JE in advance of any planned / pending changes (see below) by

completing and submitting the Supplier Change Request/Review Form. The supplier shall provide

sufficient supporting documentation and/or samples with the change request form.

iii) JE SCS shall review the request and determine qualification requirements (process, manufacturing

site, part, etc.).

iv) Change requests are to be submitted with sufficient lead time for JE review and approval. Note that

the change(s) shall NOT be carried out until JE has officially provided written approval for the

change.

a. Change of raw material supplier

b. Change of manufacturing location

c. Change of packaging

d. Change of equipment/ fixture/ tooling

e. Change of production process

f. Change of Product Design

g. Change of reliability specification & safety

h. Other changes deemed to be reviewed

v) In the event an emergency change is required (supplier or sub-supplier shutdown, natural disasters,

irreparable damage to tooling/equipment or any other critical condition that may interrupt supply or

affect party quality), the Supplier shall notify JE SCS immediately for disposition.

7. Sub-supplier Management

i) JE suppliers are required to ensure that their sub-suppliers are capable of providing cogent

support and are capable of meeting JE’s quality systems and part quality requirements.

a. Suppliers shall select sub-suppliers certified at least to ISO 9001 (latest revision). The sub-

suppliers should have a target to develop their quality management system towards ISO/TS

16949 (IATF16949 after September 14th, 2018) or other relevant industry quality management

system certified by an accredited third party certification body.

b. Suppliers shall monitor their sub-suppliers including (but not limited to) quality performance

rating and periodic on-site audit and retain all the records for JE Supplier Quality review upon

request.

ii) Suppliers shall note that JE Supplier Quality reserves the right to visit the sub-suppliers:

a. trader who distributing another manufacturers’ part/component

b. sub-supplier supplying JE critical components

c. serious quality incident occurred

d. other situation deemed necessary by JE Supplier Quality.


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iii) Sub-suppliers who supply automotive products shall be familiar and skilful with automotive core-

tools including APQP, FMEA, MSA, SPC, PPAP as mentioned in AIAG manual.

iv) Sub-suppliers shall comply with JE customer special requirements.

8. Other requirements

i) Record

a. JE APG suppliers shall keep their production records for the entire life cycle of the product, plus

(+) 15 years. This shall be available to Johnson Electric upon request.

b. JE IPG and Medtech suppliers shall keep their production records for the entire life cycle of the

product +10 years.

ii) Warranty Returns (Automotive products)

a. Supplier shall designate a team conforming on a Warranty Champion, Quality Representative,

Manufacturing and/or Design Engineer and SQE as a minimum.

b. Supplier must implement a Warranty process complaint to CQI-14.

c. As part of Continuous improvement process, supplier shall analyze the warranty part returned and

provide analysis report in a period of 15 calendar days, identifying Root cause of the symptom.

d. Report shall be submitted in an 8D form including a 3L5W identifying the real Root cause of the

reported issue.

e. Supplier shall look across on other product processes in order implement same corrective actions

with the goal to prevent future quality problems in the field.

NOTE: DFMEA (If applicable), PFMEA and Control Plan shall be updated accordingly

iii) Special characteristics

a. JE drawings designate special characteristics by use of various symbols and Ppk and Cpk

requirement may be specified.

b. These special characteristics must be cascaded from JE drawings to supplier’s drawing and

sub-drawings and must be controlled and demonstrated in PFMEA’s and Control Plans at both

supplier and sub-supplier.

c. Statistical process control (SPC) is required on special characteristics where variable data is

collected and analysed. On-going production must demonstrate capability of a minimum of 1.67

(Cpk) in the long term by analysing a minimum collected data of 125 data points or 25 sub-

groups of 5 data points; unless drawing specifies a different requirement.

iv) Measurement Systems Analysis (MSA)

a. Gauge studies (GR&R) are required for all gauges used for inspection of part for JE.

b. This requirement extends to attribute gauges such as go/no-go pins, pass-fail tests and visual

inspection processes.

c. Variable data gauges, an ANOVA GR&R is required.

Under 10% errors– acceptable

10-20% errors- may or may not be acceptable; under JE Supplier Quality’s disposition.

Over 20% errors– not acceptable, corrective action(s) needed.


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v) AIAG/Special process (CQI) requirement

a. JE requires all suppliers and sub-suppliers of special processes to comply with the following:

heat-treating : CQI-9 (Special Process: Heat Treat System Assessment)

plating : CQI-11 (Special Process: Plating System Assessment)

coating : CQI-12 (Special Process: Coating System Assessment)

welding : CQI-15 (Special Process: Welding System Assessment)

soldering : CQI-17(Special Process: Soldering Process Assessment)

Moulding : CQI-23 (Special Process: Moulding System Assessment)

Casting: CQI-27 (Special Process: Casting System Assessment)

b. Annual assessments (as required) shall be conducted either on-site at supplier by JE Supplier

Quality or through supplier self-assessment (depending on JE SQE and Q&R discretion).

c. Any JE specific requirement or JE-customer’s specific requirement such as FMVSS

(Flammability test, annual testing of resin, conflict minerals report in applicable cases etc. must

be supplied as and when requested by JE supplier quality team.

vi) Product validation

a. Periodic Product validation is required by JE for all suppliers unless otherwise agreed by JE in

writing. The validation is composed of:

PSW

Ballooned print

A full outline check (all drawing spec/notes are inspected) of 1 pc per process stream

(cavity).

Capability verification for special characteristics (30pcs, histogram, x-r chart, Cpk

calculations).

b. Submission period is based on criticality level based on the risk assessment done as

established on section 5-ii:

vii) If applicable, other requirements per JE PO, part drawings/requirements or contract shall be

adhered and complied to.

Should you have any questions or concerns, please feel free to contact Johnson Electric Supply Chain

Services Americas representatives.

Johnson Electric Supplier Standard Terms and Conditions are incorporated and form a part of this

Supplier Quality Handbook.

0 to 10 Self Assessment (Specific VDA 6.3 Process) and upon request.

10 to 20 On-Site Once / 3 years (Except for Electronics)

20 to 28 On-Site Annual Evaluation

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