supplier manual - the bing group has been sold 500 - supplier manual.pdf · bing metals group...

L
SUPPLIER MANUA
BING METALS GROUP

Supplier Manual PC-500 (Nov-2006) 1 of 40


INTRODUCTION

This document defines policies and processes used by Bing Metals Group for working partnerships with our suppliers. Our objective is to increase business efficiency improvement in all aspects of the supply chain through joint planning and action to continuously improve our service to OEM customers and consequently achieve sustained profitable growth for Bing Metals Group and our suppliers.


SUPPLY MANUAL EXPECTATIONS

SUPPLIER ACKNOWLEDGEMENT FORM

The Bing Metals Group Supply Manual describes in detail the policies and procedures used by Bing Metals Group for working partnerships with our suppliers. I understand that I should consult the Purchasing Department regarding any questions not answered in this manual.

Since the information, policies and procedures described herein are subject to change, I acknowledge that revisions to the manual may occur. All such changes will be communicated and forwarded to me through official notification, and I understand that revised information may supersede, modify or eliminate existing policies.

I acknowledge receipt of this manual and I understand and agree that it is my responsibility to read and comply with the policies and procedures contained herein along with any revisions made to them.

The appropriate Supplier personnel must sign this page and it must be returned to Bing Metals Group. The signed and dated copy must be returned within two weeks of receipt.

Failure to return this acknowledgement in a timely fashion may have a negative impact on your Supplier Rating and may affect future business growth with Bing Metals Group

Please have the appropriate personnel sign this page and return the original to the issuing BMG Purchasing Contact.

Supplier Company Name: ______________________________________

Department Name Signature Title Date

Manufacturing / Ops

Quality

Engineering

Sales

Finance

_______________________________________ _______________________________________

SIGNATURE TITLE

_______________________________________ _______________________________________

BING METALS GROUP DATE

• The supplier is responsible to ensure that they are working from the latest revision level of the manual


SUPPLY MANUAL

TABLE OF CONTENTS

SECTION Page(s)

1 - Quality Standards ………. 6 - 17

2 – Supplier Performance Assessment ………. 18 – 25

3 - Supply Standards ………. 26 – 33

4 – Continual Improvement ………. 34

5 - Cost Control ………. 35

6 – Standard Trading Terms ………. 36 – 37

7 - Ethical Trading ………. 38 - 39

8 - Supplier Recognition ………. 40


SECTION 1 QUALITY STANDARDS

TABLE OF CONTENTS – Section 1 Quality Standards

1.0 INTRODUCTION……………………………………………………………………………….…………..……….6

1.1 SCOPE 1.2 PURPOSE 1.3 GENERAL 1.4 SUPPORTING DOCUMENTS

2.0 SUPPLIER APPROVAL AND MANUFACTURING PLANNING…………………………………………..……7

2.1 SUPPLIER APPROVAL 2.2 PLANNING FOR PRODUCT AND SERVICE QUALITY 2.3 SPECIAL CHARACTERISTICS 2.4 PRE-AWARD MEETING 2.5 ENGINEERING PROTOTYPE SAMPLE SUBMISSION 2.6 MANUFACTURING PROCESS REVIEW 2.7 PRODUCTION PART APPROVAL PROCESS 2.8 VERIFICATION REVIEWS OF PURCHASED PRODUCT 2.9 DIMENSIONAL RESULTS 2.10 ANNUAL VALIDATION

3.0 MANUFACTURING CONTROL……………………………………………………………………………………10

3.1 DIES, PATTERNS, MOLDS, SPECIAL TOOLING AND RETURNABLE PACKAGING 3.2 DEFECTIVE MATERIAL NOTIFICATION/NON-CONFORMING SERVICE 3.3 CONTAINMENT STATUS 3.4 INCOMING QUALITY MEETINGS 3.5 DEVIATIONS FOR NONCONFORMING MATERIAL 3.6 CERTIFICATES OF CONFORMANCE/CAPABILITY DATA SUMMARY 3.7 PRODUCT IDENTIFICATION AND PACKAGING 3.8 SUB-SUPPLIER CONTROL

4.0 APPENDICES………..…………………………………………………………………………….……………….13

APPENDIX A SUPPORTING DOCUMENTS APPENDIX B SUPPLIER PRE-AWARD MEETING CHECKLIST APPENDIX C BING METALS GROUPVISION SYSTEM CONTROL CHARACTERISTICS APPENDIX D ACRONYMS APPENDIX E DEFINITIONS


1.0 Introduction 1.1 Scope The details stipulated within this manual are intended as the minimum mandatory requirements for “approved” production goods and service suppliers to Bing Metals Group, its subsidiaries and affiliates, irrespective of their global location. Bing Metals Group focus includes a commitment from suppliers of production parts and services, chosen to provide timely, valued goods and services. Win/win relationships strengthened by success remain a cornerstone in meeting changing customer expectations. 1.2 Purpose The purpose of this document is to communicate Bing Metals Group requirements for the structure of fundamental quality management systems of those companies that supply goods and product/process related services to Bing Metals Group. Bing Metals Group requires that suppliers: a) Acknowledge that achievement of ZERO DEFECTS is a fundamental objective for quality.

b) Acknowledge that achievement of ZERO INDICES is a fundamental objective for delivery. c) Manage facilities, processes, quality systems and personnel to consistently and cost effectively

produce products and furnish services that meet the needs of Bing Metals Group and its customers. Utilize performance metrics to track progress and establish actions.

d) Develop and implement Advanced Product Quality Planning practices and procedures in accordance

with the requirements of ISO 9000, TS 16949 and ISO 14000 including the Advanced Product Quality Planning and Control Plan reference manuals, in order to assure that all Bing Metals Group requirements are met. Status of progress will be tracked by supplier on APQP Status Report (1927-5).

e) Provide objective evidence that all supplied products and services satisfies all Production Part

Approval Process requirements including acceptable process capabilities for all Special/Control Characteristics that have been established.

f) Utilize appropriate statistical techniques for on-going process control and improvement (as established

in the Automotive Industry Action Group’s “Fundamental Statistical Process Control” reference manual).

g) Be committed to continual process improvement by emphasising reduction of part-to-part variation

and the elimination of all wastes. h) Conduct its operations in conformance with, or exceeding, all applicable environmental laws and

regulations of the jurisdictions in which the supplier does business and other requirements to which the supplier subscribes.

i) Meet the requirements of Bing Metals Group user plant with regard to the use, control and supply of

returnable packaging.


1.3 General Bing Metals Group supplier quality system requirements are based upon the latest edition of ISO9000 / TS16949 Quality System Requirements. Bing Metals Group requirements are an integral and legally binding aspect of the Purchase Order. Although this does not alter or reduce any other requirements of the contract, it is intended to provide a concise understanding of Bing Metals Group expectations.

This document supersedes all previous Supplier Manuals released from Bing Metals Group facilities.

1.4 Supporting Documents It is the responsibility of Bing Metals Group suppliers, both present and potential, to obtain and maintain the current issue of all the ISO 9000 or TS 16949 related documents (see appendix A).

If you have comments or questions regarding Bing Metals Group Supplier Manual, please submit via the appropriate Supplier Development Engineer.

2.0 Supplier Approval and Manufacturing Planning 2.1 Supplier Approval Present and potential suppliers to Bing Metals Group shall be able to demonstrate, with objective evidence that they have implemented and maintained a quality management system that conforms to the requirements detailed in ISO 9000 / TS16949. New supplier locations shall be ISO 9000 or TS16949, registered prior to shipment of product. Where required by Bing Metals Group customers, additional registration requirements may be added, at the direction of Bing Metals Group Purchasing, as defined in Appendix D (e.g., MMOG, VDA, EAQF, AVSQ, and TS-16949). Bing Metals Group requires third party certification to ISO/TS16949. The results of Automotive (OEM) quality system evaluations shall be reviewed and may be accepted, in conjunction with a third party certification timing plan, as an interim approval at the discretion of the Launch Team and Procurement. Exceptions to the above requirements will be determined during the initial procurement meetings. Non-third party certified suppliers must be audited by BMG Personnel prior to the acceptance of a customer nominated and/or approved source before a Purchase Order is issued.

The self-audit utilizing Bing Metals Group Quality System Audit shall be performed and submitted by a new supplier. A quality system audit by BMG personnel may be required prior to the acceptance of a customer nominated and/or approved source before a Purchase Order is issued.

This BMG audit is an on-site evaluation conducted by BMG representative(s). The audit is structured to evaluate the supplier’s systems conformance to Bing Metals Group requirements. The audit may also contain additional requirements as specified by the Launch Team.


2.2 Planning for Product and Service Quality

The Advanced Quality Planning process utilized is intended to identify for the Launch Team:

a) All potential and real risks that affect product integrity b) All opportunities to incorporate mistake-proofing techniques (poke-yoke) in accordance with a Zero

Defect policy. Minimum required statistical indices for all product significant characteristics will be 1.67 Cpk, 2.00 Ppk. Any deviation to this requirement, together with attribute feature control, must be concurred and documented at the Pre-Award Meeting by the Launch Team.

Documentation providing evidence of process capability shall be made available to Bing Metals Group representatives upon request.

Existing product and service-designated features which have been established prior to January 1996 will be expected to attain a 100% conformance level with a corrective action plan to achieve a process capability greater than 1.33 Cpk. A Supplier Risk Assessment (Appendix B) shall be completed on new components. Individual action plans for Medium and High Risk Suppliers shall be developed based on risk scoring. Actions for individual suppliers shall be tracked through the APQP Status Report with program tracking on the APQP Tracking Report (1927-5). 2.3 Special Characteristics Bing Metals Group shall agree to identify special characteristics utilizing Customer directed symbols. Where applicable, Bing Metals Group suppliers are expected to make themselves aware of the OEM “marking” requirements. If product supplied is used for a Ford program and requires heat treatment, a satisfactory completed W-HTX Ford Heat Treatment Survey or equivalent (signed by Ford) must be submitted. This includes sub-supplied components. 2.4 Pre-Award Meeting A Pre-Award Meeting for present and potential suppliers offering new products or services shall be required prior to Purchase Order issuance (unless formally deviated by the Launch Team based upon historical evidence of successful adherence to Pre-Award requirements). Technical, quality, manufacturing, engineering, purchasing, delivery, and business issues shall be reviewed during this meeting to provide the supplier with a thorough understanding of Bing Metals Group requirements. (Reference Appendix B checklist) 2.5 Engineering Pre-Production Sample Submission Engineering Pre-Production parts with documentation of specification conformance shall be submitted by the supplier for engineering validation testing to the stipulated BMG. In conjunction with a standard AIAG B-10 label with the part number and revision an additional 3”X5” label shall be identified with


white background and Red lettering as ‘Non-Conforming’. Each sample/lot of pre production material must be accompanied by a completed dimensional results report, material test results report, and performance test results report as described in 1826-1 GP-11. Specific instructions, in addition to these stated requirements, will be agreed and documented via the Pre-Award Meeting issued by Procurement as part of the Purchase Order.

2.6 Manufacturing Process review At the discretion of Bing Metals Group Launch Team (based upon risk assessment), a systematic and sequential review of a supplier’s manufacturing process may be conducted at the supplier’s facility prior to PPAP submission. Bing Metals Group customer may be part of this review. This review is typically known as Process Sign-Off, Run-at-Rate, etc. The format to be utilized for the review may be a customer accepted process (e.g., Chrysler’s “PSO”) or Bing Metals Group “Part/Process” audit format as determined by the Launch Team. This review, if required, will be completed as part of the quality planning and manufacturing processes for new and/or significantly changed products.

2.7 Production Part Approval Process All production part sample submissions shall be in accordance with the requirements stipulated by the Launch Team and/or the AIAG PPAP manual. The Launch Team shall stipulate for all user plants the documentation and approvals that suppliers will be required to submit. In the absence of any specific instructions, the supplier shall default to a level 3 PPAP submission.

Any shipment of production product without first obtaining either a signed, approved PPAP part submission warrant (PSW) or an approved engineering deviation (concession), shall classify the shipment as defective product. NOTE: In situations that involve product/components designated as safety/critical, no deviations/concessions shall be permitted on features that affect the functionality/reliability of the product without the appropriate validation and customer approvals. 2.8 Verification Reviews of Purchased Product The supplier shall allow both Bing Metals Group and its customers to verify, at the supplier’s premise(s), the product and subcontracted product(s) conform to specified requirements. Prior to conducting such verification reviews, the responsible BMG contact shall specify both the arrangements and method of performing the reviews.

2.9 Dimensional Results A complete layout inspection is required on at least six (6) parts from each cavity based on a 300 pieces production run unless otherwise specified. This inspection is to be performed using direct measuring devices to determine if all dimensional characteristics as agreed by Bing Metals Group Quality/Engineer measure within allowable tolerances as detailed on the part drawing. 2.10 Annual Validation Annual Validations shall be completed by the supplier to a level 4 PSW (Part Submission Warrant) and submitted as verification unless otherwise directed by the issuing BMG facility. Records will be maintained at Supplier location and can be requested by Bing Metals Group at any time. Information will be provided within twenty-four (24) hours.


3.0 Manufacturing Control 3.1 Dies, Patterns, Molds, Special Tooling and Returnable Packaging The supplier shall establish preventive/predictive maintenance procedures on all tooling. Evidence of procedure execution shall be made available upon request. All tooling shall be permanently marked so that the ownership of each item is visually apparent. This will include at a minimum customer/owner name and part number Preventive/predictive maintenance schedules and tool history records shall be documented and available for review. When applicable, the Launch Team shall instruct the supplier as to the relevant design and build standards that have to be adhered to. When stipulated by Bing Metals Group user plant, the supplier shall be responsible for establishing a system to ensure that product is transported in a manner that prevents damage or deterioration. 3.2 Defective Material Report /Non-Conforming Service A Defective Material Report (DMR) is issued when a BMG user plant receives material or service that fails to conform to applicable quality and delivery specifications. Within 24 hours of receipt of the DMR, the supplier is required to submit a formal, interim corrective action plan to Bing Metals Group user plant. At a minimum, this action plan shall identify the problem, the immediate containment actions that have been instituted and the potential root cause(s) of the problem. A completed corrective action plan (e.g. 8-D) listing root cause, corrective actions, verification of corrective action, and system prevention actions must be submitted within 15 days or as indicated in the DMR notice. The user plant Quality Department will provide specific requirements if different from those above. Costs associated with shipping, handling, processing, reworking, inspecting, and replacing defective material, including the costs of value-added operations prior to discovery of the defect shall be charged to, and paid by, the supplier. Any appeals for costs must be made within 5 business days. An administrative fee of up to $125.00 USD will be charged for all DMR’s issued. Other charges-The following types of charges will be calculated at $50.00 per hour, on the actual time incurred for the associated action, in addition to the items listed below: • Rework/ Repair Supplier Fault • Premium Freight Costs including Air

charter if required. • Overtime to avoid production interruption

• Disposition of supplier fault scrap

• Production down time for BMG and its end customer

• Sorting of suspect material costs

• On-line containment • Tear-down (minor, major and complete) and outside lab testing.

• Customer returns including hourly • Receiving Inspection, material handling


charges, transportation and on-site inspection services

and freight associated with scrap and replacement material.

Costs incurred shall be communicated to the supplier electronically. Note: If an RMA is not issued within 48 hours of notification, Bing Metals Group user plant shall, (at their discretion), dispose of or return the non-conforming material at the expense of the supplier.

3.3 Containment Status Suppliers who are notified that they have been placed on “containment status”, due to receipt of Non-Conforming material, continued poor performance and/or failure to achieve goals and objectives, will be at the following levels: 3.3.1 GP-12: Required for new production start-up and engineering changes to contain any

failure mode due to the learning curve of new start-ups. 3.3.2 CS-1: Required when the supplier must implement extraordinary inspection of product to

contain a specific failure. Containment actions must verify that requirements are met and be approved by Bing Metals Group issuing facility.

3.3.3 CS-2: Requires an independent third party to inspect product prior to release for shipment to Bing Metals Group issuing facility. CS-2 containment is initiated once the supplier fails to contain non-conforming product within the supplier’s facility.

a) Establish and communicate the manner in which they will ensure that Bing Metals Group is provided with only quality-assured product.

b) Communicate the manner in which product shall be identified as quality-assured both by container and individual product.

c) In circumstances that prevent the supplier from supporting Bing Metals Group production with quality-assured product in an expedient and efficient manner, the supplier shall notify Bing Metals Group user plant of the approved third party inspection body that has been nominated to represent the supplier.

d) Provide on-site support, in conjunction with Bing Metals Group personnel, to Bing Metals Group Customers in the event that the containment activities implemented by the supplier prove ineffective.

e) Accept all charges associated with the action instigated by Bing Metals Group to protect its production in the absence of quality-assured product, to include 3rd Party Containment activities as warranted.

3.4 Supplier Review Meetings Suppliers who do not meet Bing Metals Group performance expectations may be selected to attend a Supplier Review Meeting. Supplier review Meetings are plant-lead meetings designed to drive suppliers to identify the systemic/management issues that need to be addressed in order to put effective closure to an issue(s). The basis upon which a supplier may be invited to a Supplier Review Meeting include, but are not limited to, unsatisfactory: a) PPM Performance b) Delivery Performance c) DMR Analysis & Response d) Problem Solving Performance e) PPAP Performance


f) Response & Service

3.5 Deviations for Non-Conforming Material It is the policy of Bing Metals Group not to accept product that does not meet the requirements of the applicable drawings and specifications. Requests for concessions on non-conforming product shall be submitted to Bing Metals Group user plant for review by a cross functional authority and to obtain Customer approval, as required, prior to shipment. Any such requests shall be accompanied by a thorough explanation of the root cause for the non-conformance, the actions taken to eliminate these root causes and to prevent reoccurrence, and the date of quality assured product availability together with confirmation of its traceability and the manner of identification.

NOTE: See Production Part Approval Process for clarification regarding safety-related items. 3.6 Certificates of Conformance/Capability Data Summary A signed certificate of conformance, certificate of analysis, and/or capability data summary may be required by Bing Metals Group for each shipment of specified components or materials. The certificate of analysis must contain the actual results of physical testing and/or measurements specified by the contract. SPC data requirements must cover special/control characteristics, at minimum. The Launch Team and SQA representative will give specific guidance. 3.7 Product Identification and Packaging Each container, rack, box, or pallet of material shipped to Bing Metals Group shall be identified as instructed by Bing Metals Group user plant or any unique requirements as specified in the Pre-Award Meeting, by the Launch Team. Identification shall permit traceability back to specific supplier manufacturing and inspection records. Safety related identification criteria shall conform, at minimum, to all legal, and/or Customer requirements. No exceptions to this requirement shall be permitted unless acknowledged in writing by the Launch Team at the Pre-Award Meeting and subsequently approved in writing by Purchasing. In order to ensure that the supplier’s products are transported in a manner that prevents damage or deterioration, suppliers are responsible for maintaining written instructions detailing proper packaging, storage, and shipping of its products that conform to Bing Metals Group user plant's requirements.

3.8 Sub-Supplier Control Each BMG supplier is also responsible for the control and continuous improvement efforts of its suppliers. Sub-suppliers that furnish production goods and services must implement and document appropriate controls. On a periodic basis, the supplier shall review sub-supplier controls, quality management systems, and improvement plans.

Bing Metals Group suppliers shall require their sub-suppliers to conform to the requirements specified herein. For the purpose of sub-supplier development, ISO 9000, TS-16949, ISO 14001, AVSQ, EAQF, or VDA6, as applicable, are acceptable systems.


Bing Metals Group reserves the right to visit sub-suppliers in conjunction and agreement with the supplier. Appendix A - Supporting Documents

The following publications are available from the Automotive Industry Action Group (AIAG). These documents contain information that is mandatory for suppliers to Bing Metals Group: • Quality System Requirements ISO9000 / TS16949 • Production Part Approval Process (PPAP) • Advanced Product Quality Planning and Control Plan (APQP) Reference Manual • Potential Failure Modes and Effects Analysis (FMEA) Reference Manual • Measurement Systems Analysis (MSA) Reference Manual • Fundamental Statistical Process Control (SPC) Reference Manual

Appendix B SUPPLIER PRE-AWARD MEETING CHECKLIST Supplier: Date:

Component(s)

Checklist of items for Discussion Part Specific Requirements Production Part Approval Process (PPAP)

MATERIAL FLOW Manufacturing Location Capacity Release System Electronic Data Interchange (EDI) requirements Transportation Packaging Coatings & Rust Prevention Requirements Material Safety Data Sheets Service Requirements / Delivery

ENGINEERING/KEY CHARACTERISTICS Supporting Documents (Attachments) QCC Sheets and Symbology Material and Process Specifications Tolerancing, GD&T and Part I.D. Change Request Procedure Warranty / Product Liability Divisional / Plant specific Design & Build Standards

QUALITY Preproduction Quality / PIST / PIPC Quality Planning Requirements Capability / SPC Requirements Rating System Known Problems Cost Recovery Mechanism Return Material Policy Corrective Action System (DMN) Responsiveness to Problems Record Retention Manufacturing Process Review (PSO, Run @Rate, etc.)

TOOLING Tool Ownership / Identification Part Processing Gage Requirements Preventive Maintenance Program

REQUIREMENTS FOR PART APPROVAL Part Submission Warrant (PSW) Appearance Approval Report (AAR) Design Records Engineering Change Documents Dimensional Results Material, Performance and Durability Test Results Process Flow Diagram Process Failure Mode and Effects Analysis (Process FMEA) Design Failure Mode and Effects Analysis (Design FMEA) Control Plan Initial Process Studies Quality Indices Size of Process Study Lot _______________ Measurement system analysis Qualified Laboratory Documentation (ISO/QS/TS,

IMDS/3059) Checking Aids / fixtures Sample Product

Sample Size _________ Submission Level _____ Master Sample Run @ Rate Requirements

PPAP RESUBMISSION CRITERIA Engineering change to design records, specifications or

materials Use of optional construction or material New or Modified Tools, Dies, Moulds, Patterns Refurbishment or rearrangement of existing tooling or

equipment Tooling or equipment transfer from a different location Subcontractor change for parts, materials, services Production resumes after tooling has been inactive for one

year Any change in process or method of manufacture Change in Test / Inspection Method Following a BMG request to suspend shipment due to a

quality concern Annual Validation Requirements

Describe:

Supplier Attendees Bing Metals Group Attendees

Comments:



Appendix C Bing Metals Group Control Characteristics-Shall be customer specific per AIAG current edition

A control characteristic is either a Safety Related Characteristic (CC) or a (SC) Major Characteristic of any component which requires particular attention on the part of the manufacturer to ensure conformance to specification. Control characteristics are designated by the accepted design control authority through: • The application of special symbols on engineering drawings; • Materials and process specifications; • Appearance on a control characteristics list; • Characteristics deemed major due to the supplier's manufacturing process; All control characteristics must be addressed in the supplier’s quality planning process and documentation i.e. Control Plans, operator instructions, FMEA’s, etc. Definitions of control characteristics and their Bing Metals Group symbols are as follows: Major Characteristic-Shall be customer specific per AIAG current edition A dimensional, material, process performance specification or standard which, if violated, may cause a failure or malfunction resulting in: • A major repair • An inability to manufacture or assemble the product properly • A significant customer complaint Safety Related Characteristic-Shall be customer specific per AIAG current edition A dimensional, material, process performance specification or standard which, if violated, may cause a failure or malfunction resulting in: • An unreasonable risk of personal injury or death, or • A condition of non-compliance with any federal, state or local law, rule or regulation any part,

component, assembly or system which contains one or more Safety Related Characteristics.


Appendix D ACRONYM MEANING A2LA American Association for Laboratory Accreditation AIAG Automotive Industry Action Group APQP Advanced Product Quality Planning AVSQ ANFIA Valutazione Sistemi Qualita (Italy) DMN Defective Material Notice DMR Defective Material Report EAQF Evaluation Aptitude Qualite Fournisseur (France) FMEA Failure Mode and Effects Analysis GD&T Geometric Dimensioning and Tolerancing I.D. Identification ISO International Organization for Standardization MMOG Materials Management Operating Guideline OEM Original Equipment Manufacturer PIPC Percent of Critical or Significant Characteristics with Cpk indexes greater than or

equal to 1.33 for the production phase (Ford Motor Co.) PIST Percent of Inspection Points which Satisfy the Tolerances indicated on the design

drawing (Ford Motor Co.) PPAP Production Part Approval Process PSO Process Sign-Off (DaimlerChrysler) PSW Part Submission Warrant (form CFG-1001) QCC Quality Control Characteristics QSA Quality System Assessment SPC Statistical Process Control SRM Supplier Review Meeting SQA Supplier Quality Assurance SQAM Supplier Quality Assurance Manual (Toyota) USD United States Dollar VDA Verband der Automobilindustrie (Germany) IMDS International Material Data System


Appendix E

Definitions Cpk: This is the capability index that accounts for process centering. Ppk: This is the performance index that accounts for process centering. Part/Process Audit: an audit performed by Supplier Development that focuses prBMGrily on a specific process at the supplier location. Pre-Award Meeting: a meeting conducted with the supplier and a cross functional BMG team (prior to contract award) that is designed to determine a supplier’s capability to satisfy Bing Metals Group’s requirements in the areas of Tooling, Quality, PPAP, Engineering, Drawings, etc. Launch Team: a core, cross-functional team comprised of BMG personnel from the following functional areas: Product Engineering, Manufacturing Engineering, Quality Engineering, Sales & Marketing, and Project Management (where applicable), with intermittent facilitating support from other functional areas such as Purchasing, IT, Logistics, Finance, etc. The Launch Team’s prBMGry purpose is to manage/coordinate activities associated with new product development/launch, major/significant engineering changes, product and/or process changes, and product transfers in order to ensure that all of Bing Metals Group and/or its’ Customer’s requirements are properly planned, communicated, executed and met. Supplier Review Meeting: SRM’s are plant-lead meetings designed to drive suppliers to identify the systemic/management issues that need to be addressed in order to put effective closure to an issue(s). Supplier Management Representatives present systemic resolutions for issues in a formal presentation with supplier management commitment.


SECTION 2

SUPPLIER PERFORMANCE ASSESSMENT

Introduction The purpose of this section is to provide a clear statement of Bing Metals Group commitment to pursuing a common approach to supplier assessment.

Foreword

In order to meet the continuing demands of our customers for world-class performance in quality, cost and

delivery, it is essential that we develop a strong supply base with an ability to match these demands.

The purpose of the Supplier Assessment Policy is to provide a means of objectively assessing this ability to

identify opportunities or improvement and by giving continuous feedback via performance measures.

The policy includes several areas, which are intended to assess overall effectiveness rather than concentrating

solely on quality systems. We see this as essential in developing a supply base with the overall strength to meet

future predicted demands.



Scoring Details

Details of the scores available and frequency of assessment are as follows:

Item Score Available Frequency (A) QUALITY (A1) (P)arts (P)er (M)illion 85 Points Monthly (6 mo. Rolling.) PPM 85 Points (A2) Corrective Action Response 15 Points Monthly (6 mo. Rolling.) (A2a) Repeat Issues 2 points (A2b) Submitted On Time 2 points (A2c) First Time Approval 2 points (A2d) Customer Issues 9 points TOTAL 100 Points (B) DELIVERY

Delivery Supplier Expedites

80 points 20 points

Monthly

TOTAL 100 Points (C) PURCHASING (C1) Sourcing Criteria 40 Points Monthly (C1a) Warranty Participation 10 Points (C1b) (P)roduction (P)art (A)pproval (P)rocess Submitted On Time 5 points (6 mo. Accum.) First Time Approval 15 points (6 mo. Accum.) (C1c) Financial Net 60 Terms 5 Points RFQ’s On Time 5 Points (C2) Productivity Improvement 60 Points Monthly (C2a) Cost Downs 50 Points (C2b) VAVE Proposals 10 Points (C2c) Bonus Opportunity See Table TOTAL 100 Points The Supplier Performance Report is divided into three (3) individual sections. Each section has a total of 100 points. Each section will receive a color code (see below) and appropriate actions must be taken accordingly. Color Code Score Actions Submit Actions to Gold 96 – 100 None Green 80 – 95 None Yellow 70 – 79 Corrective Action Plan Quality – Supplier Development Engineer

Delivery – Supplier Development EngineerPurchasing – Commodity Manager

Red Below 70 Corrective Action Plan

Quality – Supplier Development Engineer Delivery – Supplier Development EngineerPurchasing – Commodity Manager



The Supplier Performance Scores will be maintained on a monthly basis, but some categories will utilize six (6) month accumulation data. Section Scores will be multiplied by the Contribution Percent (%) for each section (Quality – 0.5, Delivery – 0.3, and Purchasing – 0.2) and the resulting contribution score from all sections will be added together and expressed as a total score. The monthly scores will receive a color code (see below) and appropriate actions must be taken accordingly.

Color Code Score Actions Submit Actions to Gold 96 – 100 None Green 80 – 95 None Yellow 70 – 79 Corrective Action Plan Supplier Development Engineer Red Below 70 Corrective Action Plan Supplier Development Engineer

The monthly scores will be averaged over the year and this Year-to-Date (YTD) average will be used to classify as follows: Certified Supplier (Gold): 96% to 100% Preferred Supplier (Green): 80 to 95 % Approved Supplier (Yellow): 70% to 79% (Must have Corrective Action Plan) Probationary Supplier (Red): less than 70 %( Corrective Action Plan/Supplier Step Down Process)

The Supplier Step Down Process shall begin after three (3) consecutive months of YTD average being probationary. The first two (2) months of the year will be reviewed with the last two (2) months of the previous year to determine Supplier Step Down Process. The number of consecutive months will be placed next to the YTD total. Suppliers who are on the Step Down process will receive Supplier Step Down with criteria and targets for tracking progress. The supplier shall also establish and submit system corrective actions on the Supplier Activity Report. This form will be maintained and submitted to track progress. Supplier shall remain on Step Down until targets are met and released by Supplier Development Engineer.

The information generated for individual suppliers may be used on a divisional basis in order to assist in comparing performance and making sourcing decisions. Where appropriate the score may be interpolated to reflect the status at the time of the audit. On-Site Assessment Guidelines Gold / Green – No Action Yellow – Corrective Action Plans required for concerns causing poor performance. Red – When any supplier YTD average falls into the red category for three (3) consecutive months as outlined above, the supplier will be required to participate in Bing Metals Group Step Down Process. If the Supplier is unable to demonstrate satisfactory improvement over the three (3) month step down process, Supplier Development may require an on-site assessment.


SUPPLIER PERFORMANCE ASSESSMENT (A) QUALITY

Bing Metals Group shall measure the Quality performance of each supplier. This will include Parts per Million (PPM) and Corrective Action Response. The Quality performance measurable will be worth 100 points with a 50% contribution score to the over-all rating.

(A1) Parts Per Million (PPM): 85 Points

The PPM rating formula is as follows: PPM Calculation: PPM = Quantity of Rejects divided by Quantity Received multiplied by 1 million. A Commodity Complexity Factor will be determined for each commodity and the PPM (6 mo. Accum.) will be multiplied by this factor to give “PPM for scoring”. This complexity factor will be determined annually based on commodity performance. The rating scale may change based upon the receiving facilities criteria. See the plant specific Quality Manager or Purchaser for your Commodity specific rating. Points are determined using the following chart as a baseline:

85 0 – 60 PPM Excellent 84 61 – 100 PPM Acceptable 83 101 – 150 PPM 82 151 – 200 PPM 81 201 – 250 PPM 80 251 – 300 PPM 78 301 – 350 PPM Needs Improvement 76 351 – 400 PPM 74 401 – 450 PPM 72 451 – 500 PPM 70 501 – 600 PPM 68 601 – 700 PPM 66 701 – 800 PPM 64 801 – 900 PPM 62 901 – 1,000 PPM 60 1,001 – 1,200 PPM 56 1,201 – 1,400 PPM 52 1,401 – 1,600 PPM 48 1,601 – 1,800 PPM 44 1,801 – 2,000 PPM 40 2,001 – 2,500 PPM 36 2,501 – 3,000 PPM 32 3,001 – 3,500 PPM 28 3,501 – 4,000 PPM 24 4,001 – 5,000 PPM 20 5,001 – 6,000 PPM 16 6,001 – 7,000 PPM 12 7,001 – 8,000 PPM 8 8,001 – 9,000 PPM 4 9,001 – 10,000 PPM

PPM Rating

0 Above 10,000 PPM



(A2) Corrective Action Response: 15 Points A2a Repeat Issues: 2 Points

The Supplier can receive up to two (2) points if they do not have any repeat issues during the period. The supplier will loose one (1) point for the first two repeat issues during the period and two (2) points for the third repeat issue during the period.

A2b Submitted On Time: 2 Points The Supplier will receive two (2) points for corrective actions received on time for the period. The supplier will receive points based on the following: 90% to 100% on time: 2 points 70% to 90% on time: 1 point Less than 70% on time: No Points

A2c First Time Approval: 2 Points The Supplier will receive two (2) points for the first time approval of corrective actions received during the period. The supplier will receive points based on the following: 90% to 100% approved first time: 2 points 70% to 90% approved first time: 1 point Less than 70% approved first time: No Points

A2d Customer Issue(s): 9 Points The Supplier will receive nine (9) points if no supplier related issues caused a customer concern(s)

in the last six (6) months. The Supplier will receive seven (7) points if no supplier related issues caused a customer concern(s) in the last five (5) months. The Supplier will receive five (5) points if no supplier related issues caused a customer concern(s) in the last four (4) months. The Supplier will receive three (3) points if no supplier related issues caused a customer concern(s) in the last three (3) months. The Supplier will receive one (1) point if no supplier related issues caused a customer concern(s) in the last two (2) months. The Supplier will receive zero (0) points if supplier related issues caused a customer concern(s) in the last month.

NOTE: If supplier related issues caused a customer concern(s) in the last six (6) months, then SPC data / certifications must be included with each lot received for products affected (for DMR’s reported). Customer Issues score will be marked green if acceptable, and red if not acceptable (less than 9 points).



(B) Delivery: 100 Points

Bing Metals Group shall measure the delivery performance of each supplier. The delivery performance measurable will be worth 80 points with a 30% contribution score to the over-all rating. The delivery rating formula consists of two portions as follows: The delivery performance measurable Supplier Expedites will be worth 20 points with a 30% contribution score to the over-all rating. The delivery rating formula consists of two portions as follows:

Delivery Completion Percentage

Number of parts missed shipping (daily), accumulated throughout the month, divided by the number of parts received for the month. This produces the percentage late or missed shipments. The percentage of missed shipments is subtracted from 100 to determine the percentage on time shipments.

Delivery Penalties

*10-point penalty (per occurrence) shall be assessed for BMG Manufacturing or Service downtime due to supplier failure. *3 point penalty (per occurrence) shall be assessed for BMG Manufacturing or Service line shortages due to supplier failure.

*2 point penalty per delivery shall be assessed for Shipping Document discrepancies or non- conformances.

*2 point penalty (per occurrence) shall be assessed for shipping product in unconfirmed or non-conforming packaging.

*1 point penalty may be assessed for unauthorized over shipment based upon the shipping release.

*1 point penalty may be assessed for deliveries outside of the Supplier’s specified delivery window.

*1 point penalty may be assessed for failure to report a delivery shortage. Delivery penalties will be multiplied by 3.3 and subtracted from Delivery points.

Example delivery rating: Formula = (Delivery points available) – Penalties (times 3.3)


SUPPLIER PERFORMANCE ASSESSMENT (C) PURCHASING

Bing Metals Group shall measure the Purchasing performance of each supplier. This will include Sourcing Criteria and Productivity Improvement. The Purchasing performance measurable will be worth 100 points with a 20% contribution score to the over-all rating.

(C1) Sourcing Criteria: 40 Points

C1a Warranty Participation: 10 Points Supplier has signed a warranty participation contract: 10 points Supplier participates anyway in warranty: 5 points

C1b Production Part Approval Process: 20 Points

On Time Submission: The supplier will receive ten (10) points if all the PPAP Packages were submitted on time during the period (last 6 months). The supplier will receive seven (7) points if all the PPAP Packages were submitted on time during the last four (4) months. The supplier will receive four (4) points if all the PPAP Packages were submitted on time during the last two (2) months. The supplier will receive two (2) points if all the PPAP Packages were submitted on time during the last month. First Time Approval: The supplier will receive ten (10) points if all the PPAP Packages were approved the first time (not interim or rejected) during the period (last 6 months). The supplier will receive seven (7) points if all the PPAP Packages were approved the first time (not interim or rejected) during the period (last 4 months). The supplier will receive four (4) points if all the PPAP Packages were approved the first time (not interim or rejected) during the period (last 2 months). The supplier will receive two (2) points if all the PPAP Packages were approved the first time (not interim or rejected) during the period (last month).

C1c Financial Terms: 10 Points

The supplier will receive five (5) points if Net 60 terms are contracted. The supplier will receive five (5) points if all requests for quotes (RFQ’s) have been received on time during the period.

(C2) Productivity Improvement (see table on C2 below): 60 Points

C2a Cost Downs: 50 Points The supplier can receive up to fifty (50) points for meeting our annual cost down expectations, referred to as productivity.

C2b TS16949: 10 Points

The supplier can receive up to ten (10) points for TS16949 implementation and registration: TS16949 Registration: 10 Points TS16949 Plan for Registration: 5 Points No Registration or Plan: No Points

C2c Bonus Opportunities

The supplier may receive additional points as a result of meeting additional local and global cost down initiatives.


SUPPLIER PERFORMANCE ASSESSMENT C2 Table Rating Description

Cost Down Rating 50 100% of cost down requirements 45 90% of cost down requirements 40 80% of cost down requirements 35 70% of cost down requirements 30 60% of cost down requirements 25 50% of cost down requirements 20 40% of cost down requirements 15 30% of cost down requirements 10 20% of cost down requirements 5 10% of cost down requirements 0 No commitment of cost down

Bonus Opportunities 10 For each extra 1% of cost savings above target


SECTION 3

SUPPLY STANDARDS The following guidelines define the requirements for delivery of product into Bing Metals Group manufacturing facilities. Suppliers must receive written agreement from Bing Metals Group to deviate from any policies or procedures shown in these standards. Suppliers shall establish systems to support the delivery of products on a Just-In-Time basis. The supplier is expected to contribute to continuous improvement, enhancement, and integration with Bing Metals Group systems. 1. Shipping/Forecast Requirements Bing Metals Group shall supply a schedule of requirements of anticipated future usage for all product on the supplier’s blanket purchase order. These requirements will be furnished on a weekly basis to the prBMGry delivery contact for the supplier. The Release/forecast will contain the following information: • Bing Metals Group part number and description • Last Receipt Date and Quantity • Cum Received as of Last Receipt • Cumulative requirements for the next 24 weeks Suppliers must be compliant with EDI. This document will be transmitted electronically. The Supplier Schedule/Material Release is authorization to purchase components and ship product to Bing Metals Group on the date of the release quantity. Fab and raw authorizations are provided on this document. It is the supplier’s responsibility to confirm receipt of the shipping release. If the release is not received, the supplier should contact Bing Metals Group Material Control contact. The receipt of an updated shipping release will supercede all previous releases. Suppliers must always ship to the latest release. See your plant specific Materials/Purchasing contact for the release format. Suppliers must meet the cumulative required quantity by the date listed on the release.

SUPPLY STANDARDS

SUPPLIER SCHEDULE / MATERIAL RELEASE



SUPPLY STANDARDS 2. Capacity and Safety Stock Maintenance Bing Metals Group requires that all suppliers verify their available capacity against ongoing requirements. Capacity concerns must be addressed through Bing Metals Group Purchasing and Materials groups. Suppliers are expected to develop and maintain their own buffer levels to protect Bing Metals Group from unforeseen circumstances. Specific safety stock programs may be instituted for high risk suppliers as needed.

3. Delivery of Goods

3.1 Delivery Windows and Schedules Bing Metals Group requires that all suppliers ship within their specified delivery windows. Delivery windows are identified on the Shipping Release. If a supplier is unable to deliver within their window Bing Metals Group material control should be notified. To change your delivery window, release date, or frequency you must receive written authorization from Bing Metals Group Material Control. Failure to comply will result in a DMR/BQA and charge backs for line down time, expediting, and premium freight. 3.2 Delivery paperwork Suppliers must provide packing lists for each delivery to Bing Metals Group. Each packing list should contain the following information at minimum: a) Packing slip number b) Supplier name and ID number c) Supplier PO # d) Bing Metals Group part number, description and revision level e) Number of standard packs shipped for each item f) Quantity of parts shipped for each item g) Total number of pallets for delivery The packing slip number must not be repeated within a period of one year. Information such as item number, description, and unit of measure must match with the shipping release. A separate packing list number is required for each PO number. Copies of the packing list are to be supplied by the delivering carrier and attached to the material.


3.3 Transportation and freight It is BMG policy that all standard freight charges are not included in the piece price shown on the purchase order. Suppliers shall conform to logistic instructions that support Bing Metals Group delivery schedule requirements. Premium freight that has been determined to be BMG responsibility must be coded so by BMG Material Control. BMG Material Control will provide a freight authority number to the supplier for reimbursement of premium freight expense. The corresponding invoice for the freight expense must reference the packing slip number for the delivery and the freight authority number. Bing Metals Group will not pay any freight invoice that does not have a corresponding freight authority number. 3.4 Shipping Discrepancies Discrepancies with deliveries will be communicated to the supplier via the NCM DEL form within 24 hours of receipt. Suppliers will be notified for all deviations in Part Number and Total Quantity between the stock and the delivery paperwork. Suppliers should adjust their invoices to reflect the new information for the delivery.

3.5 Early Warning for Shortages Bing Metals Group requires that the supplier notifies their Materials contact in the event that a schedule cannot be met. The ASN does not serve as this notification, separate written notification is required. It is expected that the supplier supply the following information in the communication: a) Why are you behind schedule? b) What is your survival shipping plan in the short term (next 24 hours)? c) What is your plan to catch back the past dues? d) What is your plan to rebuild your internal buffer stocks? 3.6 Labeling and identification: Incoming materials are to be identified by the supplier with an identification label. Hand written information is not acceptable. Hazardous materials are to be packaged and identified in conformance with Government regulations. The following are the requirements for labeling and identification of containers shipped to Bing Metals Group: a) All labels shall comply with Bing Metals Group Supplier Packaging Standards. b) Methods to facilitate attachment and removal of labels shall be considered in the container design. Flat

surfaces, holding pockets and other attachment techniques should be established. c) Labels shall be located in a manner that promotes easy identification. Suppliers are required to use AIAG B-

10. d) Bing Metals Group requires that all incoming material be identified with the supplier manufacture date in

the MM/DD/YY format and shall include this in the bar code. This information will be used for lot traceability.

e) Shipments of new level products or sample materials must be identified as such (reference section 2.5) Failure to follow labeling and identification instructions may result in a DMR.


3.7 Packaging and Container Management a) All packaging shall comply to Bing Metals Group Supplier Packaging Standards b) Deviations from the packaging standards must be submitted to and approved by a cross-functional team

consisting of Materials, Quality, and Manufacturing. c) The supplier is encouraged to utilize returnable containers wherever possible. d) Standard returns of empty containers shall be established and agreed to by Bing Metals Group Materials and

the supplier. e) The Supplier is responsible to manage the fleet size of returnable containers. f) Should the supplier require the use of an alternate pack due to a shortage of containers, the supplier must

obtain the approval of Bing Metals Group prior to use. Requests for reimbursement shall follow the RFQ process.

3.8 Line Shortage and Downtime In the event that the supplier failure shall result in a line shortage or downtime for Bing Metals Group Manufacturing operations the supplier shall be assessed all associated costs. A Line Shortage is defined as any supplier caused failure that prevents the Manufacturing operation from completing the schedule. Certified Line Downtime is defined as any supplier caused failure that stops the Manufacturing operations. 3.9 Obsolescence

Business practices When a production part is discontinued the supplier may have a valid obsolescence claim against Bing Metals Group. To receive compensation for obsolete goods the supplier must submit an Obsolescence Claim Form (attached) for approval.

Only materials used in the production of specific end assembly parts should be identified on the claim form. Under no circumstances is a claim to include separate charges for tooling, handling, warehousing, freight or disposal costs. If such charges result from the termination of a production part, they must be submitted to the appropriate Bing Metals Group Buyer for disposition.

Submission guidelines A) Claims allowed

1) Only end item parts cancelled by Bing Metals Group 2) Only material that has not been shipped to Bing Metals Group plant locations 3) Only claims in excess of $200 will be accepted for processing 4) Only parts, which meet Bing Metals Group quality specifications, are claBMGble.

Parts must not be damaged or defective.

B) Claim document Only one production end item and its related components and/or raw materials per claim document.


C) Time limit

The Claim must be submitted within one month from the final release date. A claim that is returned for error correction must be resubmitted within 10 days from its return.

D) Authorization Claim quantities must be within Bing Metals Group release authorization by Bing Metals Group. The supplier must provide adequate documentation to support the release authorization levels.


Bing Metals Group Supplier Obsolescence Claim Form

Claim Information: Supplier Name _________________________ Supplier # ______________________ Part Number _________________________ Rev Level ______________________ Description ________________________________________________________________ ________________________________________________________________ Release Date _________________________ Release ID ______________________ Authorization: Fab Authorization ________ Cum Shipped ________ Net Fab Auth. ________ Raw Authorization ________ Cum Shipped ________ Net Raw Auth. ________ Claim Remarks ________________________________________________________________ ________________________________________________________________ Supplier Claim Contact: Supplier Name __________________________ Street Address ________________________________________________________________ City __________________________ State __________ Zip __________ Contact Name __________________________ Phone __________________________ Email _____________________________


Note: Submit all completed claim forms to Bing Metals Group Materials Dept.

Bing Metals Group Supplier Obsolescence Claim Form

Claim Information: Supplier Name _________________________ Supplier # ______________________ Part Number _________________________ Rev Level ______________________ Line Information: Part # _________________________ Quantity ______________________ Description _________________________ Unit Cost ______________________ Unit Usage _________________________ Total Cost ______________________ Part # _________________________ Quantity ______________________ Description _________________________ Unit Cost ______________________ Unit Usage _________________________ Total Cost ______________________ Part # _________________________ Quantity ______________________ Description _________________________ Unit Cost ______________________ Unit Usage _________________________ Total Cost ______________________ Part # _________________________ Quantity ______________________ Description _________________________ Unit Cost ______________________ Unit Usage _________________________ Total Cost ______________________ Total Claim Cost ________________


Bing Metals Group Non- Conformance Material Delivery

Date ___________________ Supplier Name ___________________________________ Supplier Contact _________________ Customer Contact ________________ Packing Slip # _____________ Carrier __________________________ Packing Slip Date___________ Part Number_____________________ Packing Slip Qty ___________ Qty Received ____________________ Part Number_____________________ Packing Slip Qty __________ Qty Received ____________________ Part Number____________________ Packing Slip Qty ___________ Qty Received ____________________ Part Number_____________________ Packing Slip Qty ___________ Qty Received ____________________ Part Number_____________________ Packing Slip Qty __________ Qty Received ____________________ Part Number_____________________ Packing Slip Qty ___________ Qty Received ____________________ Part Number_____________________ Packing Slip Qty ___________ Qty Received ____________________ Shortage(s) is (are) due __________________ Overage(s) will be reflected in next schedule release. Bar Code labels B-10 format Non- conforming_______ Correct labels are due on next scheduled shipment. Missing_______________ Labels are to be on each carton on next shipment. Comments


SECTION 4

CONTINUAL IMPROVEMENT

Overview In order to manage Bing Metals Group launch program there must be a mechanism to monitor the improvements in the product and processes from the initial build to final build. This mechanism must begin when parts are first submitted to Bing Metals Group and continue until the components are fully approved for production. The mechanism that will be used by Bing Metals Group will be the DMR (Defective Material Report) followed by the Product Change Notice (PCN) once the product is released for production. Objective Throughout the Build Program numerous components and processes may not achieve the necessary levels of quality or productivity. These components that fall short of Bing Metals Group expectation will need to be managed appropriately to insure that corrections are implemented prior to the next Phase in the Build Program. The Concern Report (CR) will be used to track each correction and insure its implementation prior to the next build. IMPORTANT ADDENDUM: ALL DEFICIENCIES MUST BE IDENTIFIED BY THE USE OF A CONCERN REPORT. NO CHANGES IN COST, TOOLING, MATERIAL, LABOR, ETC. WILL BE AUTHORIZED UNTIL A CR NUMBER HAS BEEN ISSUED TO TRACK THE DEFICIENCY. Please contact either the Purchasing or Supplier Development Engineer assigned to the appropriate program for information.


SECTION 5

COST CONTROL It is imperative to the future viability of Bing Metals Group business that all elements of excess cost are removed from purchase prices at all stages of product life (from design concept through to part balance out). Bing Metals Group cost management systems have been developed with this objective in mind. The intent of our policies and procedures are to accelerate the budgetary process and to realize early gains in product and cost improvements, as well as identifying concern components by comparing projections with quoted costs. Cost requirements The cost management program begins with the specification level drawing release to provide a benchmark from the program life through job one (launch) and on to balance-out. The following actions are necessary to initiate the program: A. The Production RFQ (Request For Quotation) should be completed and submitted to Bing Metals

Group within one week of release of specification level drawings. B. VA/VE (value analysis/value engineering) documentation should be completed, detailing

opportunities, which will result in cost or process improvements. C. Upon release of final level drawings a detailed Parts Price Breakdown Form is to be completed

identifying specific cost detail, and any variation between the initial quotation and final drawing release.

D. Starting with design reviews, each and every change made to improve the component / process is to be

documented via an updated Purchase Price Information Form as it occurs. This will become valuable history in eliminating cost problems during all production stages.

E. Bing Metals Group reserves the right to review all documents pertaining to Bing Metals Group

purchased or owned tooling, including sub-supplier invoices and purchase orders.


SECTION 6

STANDARD TRADING TERMS 1.0 Purchase price

1.1 All standard terms and conditions can be obtained from your Purchasing contact. 1.2 Price quotations used to agree subsequent purchase price must include all materials and control

of these will be the supplier’s responsibility. 1.3 Any material or component supplied by Bing Metals Group as part of the total cost will be

charged to the supplier (within a process, which defines material flow and acceptable scrap allowance). No material or components will be supplied “free issue” unless special circumstances are required.

1.4 Transactions will be in the currency of Bing Metals Group receiving facility, unless otherwise

agreed. 1.5 All purchase prices are to be FOB BMG plant with all transportation and any import duties

being Supplier’s responsibility unless otherwise agreed.

1.6 Payment terms are net 60 days. Any negotiated reductions in these terms are to be compensated with an agreed prompt payment discount.

1.7 Purchase prices are to be firm for at least 12 months from the date of the initial production

shipment. 1.8 Bing Metals Group will consider Long Term Agreements with preferred suppliers, subject to

outstanding performance in the Quality, Supply and Technical areas of the relationship. These agreements may be for a fixed time or open ended and will define:

• Target costing including annual cost downs • Open book pricing • Equitable pricing structure (agreed supplier profit margins) • Financial health of the supplier • Annual evaluation of the relationship covering operational and financial aspects • Transparency of any annual cost down obligation to the vehicle OEM to the supplier’s price • Warranty agreement.


STANDARD TRADING TERMS

1.9 Any specialized packaging (i.e. returnable) will be purchased by the supplier and amortized over an agreed period.

1.10 Suppliers operating any BMG owned tooling will agree to standards within the purchase order (specific to the component produced) to cover:

• Preventive maintenance and ongoing servicing • Insurance • Tool failure contingency planning • Authorization process for any design modifications

1.11 Suppliers will agree to the required documentation for invoicing which may vary from time to time (but as a minimum will include: part number, purchase order number and release document reference). 1.12 As required, the supplier shall participate in the development of electronic data transfer.

2.0 Technical support

2.1 All specifications are the property of Bing Metals Group. 2.2 All shipments must conform to Bing Metals Group engineering requirements, specifications

including drawings and material process requirements, and standards. 2.3 All Suppliers should offer technical benefits to Bing Metals Group, which will include:

• Exclusivity of design/product/process • Technical support in product benefit • Product testing and validation resources to fast track/eliminate the need for Bing Metals Group

or OEM validation.


SECTION 7

ETHICAL TRADING

Bing Metals Group operates a strict ethical code in all dealings with customers and suppliers. It is aimed at ensuring that our business relationships are conducted with the highest integrity and within a system in which values are constant. Our policy for conducting business relationships with suppliers supports this code with the definition of standards of corporate conduct as follows: Gifts and favors The solicitation of any gift or favor, or any form of preferential treatment either directly or indirectly, by or on behalf of Bing Metals Group employee or any relative or friend from any supplier seeking to do business with Bing Metals Group is absolutely prohibited. Social amenities Business connected social contact can be in the best interest of Bing Metals Group and the supplier when properly conducted on a limited basis. Our employees will make every effort to ensure that there is not the slightest reason for a third party to view this relationship as improper. Other guidelines The acceptance of price concessions not available to all Bing Metals Group personnel or to members of the public generally is prohibited. Employees may not borrow money from a supplier, other than on normal terms from a qualified lending institution.


SECTION 8

SUPPLIER RECOGNITION PROGRAM (SRP)

The purpose of this section is to provide a clear understanding of the tools utilized by Bing Metals Group to recognize the elite suppliers that demonstrate the highest level of performance. In order to meet the continuing demands of our customers for world-class performance in quality, cost and delivery, it is essential that we develop a strong supply base with an ability to match these demands. The purpose of the Supplier Recognition Program is to provide a means of rewarding suppliers who surpass the agreed upon objectives and measures. A supplier may be considered for entry into the Supplier Recognition Program due to various factors including: 1. Quality performance 2. Delivery performance 3. Commercial performance 4. New technology / innovations for the supplier or Bing Metals Group