Supply Quality Manual

Version 1.0 JAN 2001 SUPPLIER QUALITY MANUAL OTIS Elevator : Supplier Quality Manual Version 1.0 JAN 2001 Table of Contents QUICKSTART ............................................................................................................................... 1 Section 1.0 Purpose........................................................................................................................ 2 Section 2.0 Supplier Quality Policy............................................................................................... 2 Section 3.0 Scope ........................................................................................................................... 2 Section 4.0 Quality Philosophy...................................................................................................... 2 Section 5.0 Expectations................................................................................................................ 2 Section 6.0 Proper Relationships With Suppliers......................................................................... 3 Section 7.0 Communications......................................................................................................... 3 Section 8.0 Supplier Selection ....................................................................................................... 3 Section 9.0 General Requirements................................................................................................ 3 9.1 Q+ Certification Process...................................................................................................... 4 9.2 Part Design.......................................................................................................................... 4 9.3 Process Design..................................................................................................................... 4 9.4 Approval Process for Production Parts ............................................................................... 4 Section 10.0 Specific Requirements.............................................................................................. 5 10.1 Control Plan .................................................................................................................... 5 10.2 Process Capability Requirements .................................................................................... 6 10.2.1 Process Measurements ......................................................................................................................................... 6 10.2.2 Process Capability for Attribute measurements............................................................................................... 6 10.3 Non-Conformance/Corrective Action Requests ............................................................... 6 10.4 Supplier Deviation Request ............................................................................................. 7 10.4.1 Product Deviation Requests.................................................................................................................................... 7 10.4.2 Process Deviation Requests .................................................................................................................................... 7 10.5 Failure Mode Effects Analysis ......................................................................................... 7 10.6 Reliability and Maintainability Test Results .................................................................... 7 10.7 Sub-Tier Bill of Materials ................................................................................................ 8 10.8 Measurement and Inspection Analysis ............................................................................. 8 Section 11.0 Configuration Control .............................................................................................. 8 Section 12.0 Warranty Requirements............................................................................................ 8 Section 13.0 Continuous Improvement ......................................................................................... 8 Section 14.0 Performance Metrics ................................................................................................ 8 Appendix A: Definitions and Abbreviations ................................................................................. 8 Appendix B: Reference Materials ................................................................................................. 9 Appendix C: Attachments............................................................................................................ 10 Version 1.0 JAN 2001 Page 1 QUICKSTART New Production: Otis will provide a Part Qualification Check Sheet (Section 9.4) which will detail the specific requirements for each part made. On-Going Production: Ongoing requirements are detailed in Sections 11.0 through 14.0 and on the contract. Warranty issues: Section 10.3 and 12.0 apply. OTIS Elevator : Supplier Quality Manual Version 1.0 JAN 2001 Page 2 Section 1.0 Purpose This manual is intended to communicate the general philosophy, and the initial and on-going requirements, which a supplier to Otis must comply in order to reduce the total cost of components and services supplied to the corporation and to facilitate continuous improvement. Section 2.0 Supplier Quality Policy It is the policy of Otis to maintain world leadership in the elevator/escalator industry by improving the overall quality, reliability, and total cost of components and services provided by suppliers around the world. Section 3.0 Scope This Supplier Quality Manual applies to all suppliers who provide material to Otis. Suppliers with programs established with one industry (e.g. QS 9000) may substitute their own forms and formats and may deviate from this supply manual upon written agreement by Otis. Individual Otis plants may have additional local requirements and each plant or purchasing site will establish its own specific processes for carrying out these requirements. If conflicts exist between the requirements presented in this manual and individual Otis plan requirements, the more stringent requirements will apply. Section 4.0 Quality Philosophy Otis Elevator Company was formed in the 1850s. A critical component of our leadership is the world-class quality of the products and services that we provide to our customers. As a supplier, you play an integral role in helping us set the benchmark for world-class quality year after year. The development and manufacture of any product in today’s market requires an effective documented quality system which identifies, coordinates, and controls all key activities necessary to produce a quality product. The system should be based on the philosophy of collaboration and continuous improvement, emphasizing defect prevention and the reduction of variation and waste in the supply chain. In order to meet our customers’ rising expectations in terms of cost, quality, and delivery, it is imperative that the machines and processes used in the manufacture of our products have the ability to satisfy the required tolerances and specifications when properly maintained and controlled. Machines and processes that can be controlled through the use of statistical methods and mistake proofing methods are crucial to achieving our goals for low cost, highest quality and best delivery. Note that it is never acceptable to knowingly pass a defect to the next stage of the production process. A defect is anything that does not meet specifications. Therefore, continuous improvement in both products and processes by suppliers to Otis is critical for us to maintain the world-leadership position in our marketplaces. Achieving conformance to requirements by inspection, sorting, scrap, and rework is neither cost effective nor does it result in optimum quality levels. We expect our suppliers to continuously strive for improvements in the products and services that they supply to Otis. This permits us to reduce progressively, the controls and checking of the products of our suppliers. In order to assess our suppliers’ ability to meet these requirements the Q+ Certification process will be utilized. The overall goal of the certification process is to improve the overall quality, reliability, and total cost of products and services supplied to Otis. Section 5.0 Expectations The foundation for any positive supplier-customer relationship starts with clear communication and an understanding of the customer’s expectations. Accordingly, Otis expects the following from our suppliers: 1. Purchased products and services that comply with established specifications: § Engineering specifications that apply to the product or service § Material specifications that apply to the product or service § Drawings that apply to a specific product or service § Industry standards not explicitly called out in specifications § Products and services must meet 100% of all requirements 2. Suppliers are required to review and know all Otis requirements related to the product or service they are providing. Suppliers are expected to contact Otis when they do not understand a requirement or are not clear on the use of their product within the Otis product assembly. 3. Suppliers must be able to demonstrate: § Compliance with design requirements § Compliance with process control and capability requirements § Full compliance with all documented requirements 4. Suppliers are required to comply with and develop improvement plans based on the Q+ certification requirements. 5. Suppliers must maintain adequate controls over their suppliers of raw materials and components to ensure the integrity of the product or service provided. It is expected that suppliers will deploy, and be able to demonstrate this deployment, to their supply chain, expectations and controls similar in rigor to those presented here. 6. Suppliers are required to have a quality system in place that addresses design, drawing control, qualification, and pre-production activities, as well as on-going production. OTIS Elevator : Supplier Quality Manual Version 1.0 JAN 2001 Page 3 7. Suppliers are required to maintain process and product/service documentation. Change control systems must react to changes in a timely and accurate fashion. 8. Suppliers are expected to assist Otis in problem resolution activities related to their products and services. This requirement includes advising Otis on the proper use of their product and service, and investigating problems involving interactions with other components in the Otis system. The suppliers are expected to have the expertise and resources to perform effective root causes analysis. 9. Suppliers will follow the prescribed procedures prior to any changes to their product or process. In all cases, written approval by Otis is required prior to implementing any change. 10. Suppliers should notify Otis of any and all situations that may negatively impact the supplied product’s quality, reliability and safety; Otis design and/or production; or any other matter described in this manual. Section 6.0 Proper Relationships With Suppliers It is the policy of Otis to award contracts for all equipment, suppliers and services on the basis of merit. Suppliers will be treated with fairness and integrity and without discrimination. To do so, all employees in any organization having contact with suppliers or potential suppliers must maintain the highest standards of ethics and business practices. The UTC Statement of Policy Governing Conflicts of Interest guides employees who deal with suppliers or potential suppliers. We understand that giving business gifts is commonplace and can represent merely a desire to build goodwill. Otis, however, has very restrictive policies governing receipt of business gifts by employees who have direct purchasing responsibilities. Purchasing decisions must not be influenced by a conflict of interest and must not be tainted even by the appearance of a conflict of interest. Employees who have direct purchasing responsibilities, including employees in the purchasing department, supplier quality function, and any other individual having a role in supplier selection and appraisal, may accept only (a) beverages, light snacks and business meals served during business meetings held at the facilities of suppliers; (b) business meals when in travel status; (c) promotional or advertising items having a truly nominal value; and (d) any other business gift or thing of value if reported to and approved in writing by the Business Practices/Compliance Officer of Otis. We ask that our suppliers be cognizant of this policy, and refrain from placing Otis employees in situations that may lead to violation of this policy. References: Business Gifts from Suppliers, UTC Ethics Brochure, 10/96; The Giving and Receiving of Business Gifts , UTC Ethics Brochure, 10/96 Section 7.0 Communications While the processes in this manual attempt to reduce the number of individuals a supplier must work with, the need for speedy and efficient resolution of issues may require some direct communications. In some cases a Supplier Contact Sheet may be required. In general the following contact points should be used. Primary Contact: The Supplier’s Contract Manager/Buyer is the primary contact for all matters regarding Otis purchasing. Product Part Quality: For issues regarding the Part Qualification Check Sheet (PQCS) contact the name provided on the PQCS directly. Warranty/Field Returns: Contact the name provided with a field return directly. Supplier Quality and Development Ombudsman: The “last resort” source for resolution of Supplier Quality and Development issues is the Otis Supplier Quality and Development Ombudsman. Section 8.0 Supplier Selection Ability, capacity, integrity, financial status, geographical locations, performance, reliability, quality of product, delivery and overall customer-supplier relations are factors which govern the evaluation of all sources prior to soliciting their quotation and during the tenure of the purchase contract. We must be assured that new suppliers will be able to produce an improved product, reduce costs or offer other competitive advantages. Section 9.0 General Requirements The following sections identify and explain the initial and on-going quality requirements for suppliers to Otis. The particular circumstances surrounding the procurement of a given part will be used by Otis to determine what specific requirements are applicable. Circumstances that are considered include, but are not limited to: § New Part or design § New supplier § New plant or manufacturing location of an existing supplier § Change in fit, form or function Requirements will also vary for standard production parts and non-standard parts. Standard parts are those with a production volume of 200 parts or more a year. The specific requirements for a particular part will be communicated to the supplier via the Part Qualification Check Sheet. The Part Qualification Check Sheet will be prepared by Otis and provided to the supplier early on in the procurement process. Suppliers should review the check sheet and insure that all specific requirements are understood, and then sign and return the check sheet to Otis. This check sheet will specify which sections of the manual apply to a specific part. This manual contains a sample Part Qualification Check Sheet (PQCS). In order to both standardize and simplify our requirements, the Automotive Industry Action Group manuals listed as references support this supplier quality OTIS Elevator : Supplier Quality Manual Version 1.0 JAN 2001 Page 4 manual. Please contact your Otis representative if you are unable to obtain these references. Figure 1 is a flow diagram of the process. Figure 2 serves as a guideline for the schedule of the completion of the required documents. 9.1 Q+ Certification Process Purpose: The UTC Q+ Process Kit is intended to assist the supplier in reaching world-class quality goals through the never-ending process of continuous improvement. Both the Self Assessment and Survey criteria are intended to assess a supplier’s quality system and process control capability, and are not absolute descriptions of what is required to assure quality in products and services. The Self-Assessment and Survey help the supplier identify strengths and weaknesses and areas for improvement. The supplier develops an improvement plan based on the results of the Self-Assessment and Survey, thus improving the overall quality, reliability, and total cost of components supplied to Otis. By assessing its quality system and developing improvement plans, the supplier can vastly improve its quality to Otis as well as to other important customers. Q+ Self- Assessment: The Self-Assessment includes 12 items, requiring the supplier to address specific areas in each of the quality system and process control categories found in the survey. The Self-Assessment is completed by the supplier independently and evaluated by Otis to determine the supplier’s readiness for a site survey. These criteria generally follow the ISO 9000 criteria and add specific requirements to ensure effective process controls and quality results. Q+ Survey: The survey consists of various criteria items in 12-quality system and process control categories. From time to time Otis will revise this survey to incorporate new quality system requirements. An Otis survey team performs an on-site evaluation of the supplier and from available evidence and observations, assesses the supplier’s compliance at one of four levels for each of the items. The survey is intended to provide a fair appraisal of the supplier’s quality system, process controls, and commitment to quality at the time of the survey. Q+ Certification: Suppliers that become certified by Otis are viewed as Q+ Certified suppliers. This means that they provide dependable products and services and have the lowest total costs. Certified suppliers have the capability of shipping directly from their plant or distribution center to the Otis production line, without incoming inspection. 100% on-time deliveries of perfect parts are required in these circumstances. Certified suppliers will also be given first preference for new designs and re-sourcing activities. “Preference” in this context does not mean guaranteed business opportunities. § To become a candidate for Q+ Certification Preferred Supplier Agreement, a supplier must achieve Level-3 compliance or better on all 24 survey items. Reference: UTC Q+ Process Kit 9.2 Part Design IPD Teams : From time to time suppliers may be called upon to assist Otis in new product design through participation on Integrated Product Development Teams. In these cases Otis will provide further information as to the duties of these team members. DFMEA: Design potential Failure Mode and Effects Analysis is normally required as part of the Otis Integrated Product Development process. See section 10. Design reviews: Design Reviews requiring Otis approval are required for new product designs. Reference: AIAG Manual on FMEA 9.3 Process Design PFMEA: Process potential Failure Mode and Effects Analysis are normally required as part of the Otis Integrated Product Development process. See section 10. Reference: AIAG Manual on FMEA 9.4 Approval Process for Production Parts The Approval Process for Production Parts will be used to determine if the supplier properly understands all Otis requirements and the process has the potential to produce product meeting these requirements during actual production runs. The Approval Process for Production Parts must be produced using