SECTION 3.1 NON-CONFORMANCE HANDLING

***** MASS PRODUCTION *****

PURPOSE:To ensure that countermeasures, containment and rework are implemented for non-conforming parts / components.

TIMING:From Supplier Quality Confirmation Stage (SQCS) through the life of the part.

REQUIREMENT:

  1. Non-conformance discovered by supplier

a)If the supplier finds actual or potential outflow of non-conforming product, the supplier is required to submit a Notice of Suspected Shipment of Nonconforming Product to REYES Quality and confirm receipt by telephone. The form must be completed in its entirety before submittal, reference Table 3.1-1: Non-Conforming Parts Communication Flow for Suppliers.

b)A Quality Problem Report (QPR) will not be issued if the supplier initiates and leads all activity to contain and control the non-conforming product at REYES prior to being found on the line or installed on the vehicle or unit assembly.

c)The supplier must report the non-conformance cause and corrective action to prevent recurrence to REYES Quality within 15 days by utilizing the Countermeasure Reply Form. The form must be completed in its entirety and address both the why made and why shipped factors and include approval signatures from the Quality Control and Production Engineering Departments.

  1. Non-conformance discovered by REYES

a)The supplier will be notified of all non-conforming product discovered at REYES. The supplier may be notified using a Quality Problem Report (QPR) according to the issuance criteria indicated in Table 3.1-2: QPR Ranking and Issuance Criteria. The supplier would then be provided advanced notification and / or an advance copy of the QPR, reference Table 3.1-3: Non-conforming Parts at REYES for details.

b)QPR issuance and response will be included in mass production supplier quality performance indicators.

c)QPR issuance will be ranked by severity and non-conformance type delta “Ý” ranked QPRs must have the highest level of supplier management attention. Urgent response and verification of recurrence prevention must be addressed by the supplier’s upper management, reference TABLE 3.1-2: QPR Ranking and Issuance Criteria.

d)Upon receipt of the advance QPR notice, the supplier must immediately contain and correct all non-conforming products at REYES, in transit and at the supplier facility. The supplier is fully responsible to provide the necessary direction, equipment and manpower necessary to contain and correct all non-conforming products. The supplier must respond to the REYES request or direction to initiate a sort, reference Summary of Supplier PPM Application Standard for additional information.

e)The supplier must provide a written response within 24 hours by completing the Temporary Countermeasure Plan section and faxing it to REYES Quality. The plan must include:

1)Sorting results

2)Temporary countermeasure details

3)Plan implementation date

4)Ship date, shipment ID #, (e.g. FRS, order #, manifest #, etc.) and identification method for temporary countermeasure parts

f)The supplier must identify each container of temporary countermeasure parts with a securely attached 5”x 7” yellow Certified Stock Tag located near the standard REYES KANBAN indicating date of part certification and the QPR tracking number and non-conformance description. This temporary identification labeling must be applied to all containers until the permanent countermeasure is implemented.

g)The supplier must submit to REYES Quality a Countermeasure Reply Form as soon as available, but no later than the due date indicated on the QPR. The Countermeasure Reply Form must be completed in its entirety, address both the why made and why shipped factors and include approval signatures from the QC and Production Engineering Departments.

h)The supplier must respond to the QPR by the due date even if the permanent countermeasure has not yet been determined. In this instance the supplier is expected to provide a summary of activities, schedule of completion and a follow-up date. Resubmission of the Countermeasure Reply Form is required upon completion of countermeasure.

i)If the permanent countermeasure requires a process change that meets PCR requirements (reference SQM Section 3.4), the supplier should attach a PCR to the reply form and indicate on the reply form PCR submission implementation timing. The supplier must allow 30 days prior to countermeasure parts delivery if a PCR is needed, unless otherwise negotiated with REYES Quality.

j)The supplier must identify the first shipment of permanent countermeasured parts with a securely attached 5”x 7” green Certified Stock Tag located near the REYES KANBAN indicating the related QPR #, non-conformance description and ship date of countermeasured parts.

k)The supplier is responsible for removal of all yellow and green temporary identification labels on returnable containers before reuse at supplier facility.

l)In cases where QPR issuance criteria is not met by incident of non-conforming parts, a Quality Tuning Request (QTR) may be issued by REYES Quality notifying the supplier of an emerging or sporadic quality issue. The supplier is expected to investigate and initiate action to improve or correct the identified non-conformance. If directed on the QTR the supplier must respond to REYES Quality by the due date.

  1. Sort, rework, special inspection support

a)The supplier, at its cost and as directed by REYES Quality, must rework nonconforming parts, replace the non-conforming parts with new parts or perform any other additional work necessary to bring the nonconforming parts into full compliance with all REYES requirements. If replacement parts are being sent, then REYES PC must be notified prior to delivery. All non-conforming containment activities must be coordinated with and approved by REYES Quality.

b)REYES, at their discretion, may rework or sort any non-conforming products to prevent interruption of the production line. In this case, the supplier may be charged for the rework or sort activity.

c)Proposed rework instructions must be reviewed, approved and signed-off by REYES Quality in advance of initiation.

d)The supplier must insure conforming parts are available without interruption to planned REYES production requirements.

e)The supplier must place priority to containment of non-conforming product at their location and simultaneously support REYES on site containment and recovery.

f)The supplier may elect to utilize a REYES approved flexible work force to supplement REYES’s on site containment and recovery activities.

g)If utilization of a flexible work force is elected, the supplier is responsible for the flexible work force. This includes their training, management and approval of their sort / rework method and the quality of the resulting part.

h)A supplier representative or designate must be available at all times when a flexible work force is on site at REYES. This supplier representative is responsible to supervise and assure completion of directed activity.

i)All sort and rework activity must be recorded and approved by the supplier representative. Recorded data must include quantity sorted, OK / NG results, number reworked, etc. This data must be provided to REYES Quality on a shift by shift basis on the format required by REYES.

j)The supplier must continue containment activities until certified countermeasured product is available and REYES Quality has concurred that the containment activity has been effective and can be discontinued.

Note: This is normally after 3 clean shipments have been received and verified at REYES.

FLOW CHART(s):

Table 3.1-1: Non-Conforming Parts Discovered by Supplier

SUPPLIER / REYES QUALITY

Table 3.1-2: QPR Ranking and Issuance Criteria

RANK / CATEGORY / CRITERIA
S / Delta or MVSS characteristics
(e.g. Ñ, Ð, Ä, Â, À) / 1 or more non-conformances
A / Essential product function characteristics / 1 or more non-conformances
B / All other characteristics not specified above except appearance and machining
(e.g. function, performance, abnormal noise, wrong, missing, etc.) / Based on REYES Internal Standard
C / Appearance related characteristics
C / Machining Process (Casting or Forging) / 3 times PPM Target
(3 part minimum / shift)

Table 3.1-3: Non-conforming Parts at REYES

SUPPLIER / REYES QUALITY
Revision 1 / Reyes Automotive Group
San Antonio, TX / Section 3.1
March 2006 / Page 1 of 5