To Provide World Class Quality - Profitably

Quality Expectations:

The Access Business Group (ABG) Quality Assurance Division (QA) is committed in providing world class quality to our customers. Our Vision Statement is straightforward:

“To Provide World Class Quality - Profitably”

Each QA area is committed to increasing quality throughout the supply chain. We expect our valued suppliers to be committed and contribute to our quality vision. We want to partner with and develop suppliers who share our goal of providing world class quality.

Our expectation is that items shipped to ABG must meet all requirements listed in ABG product specifications, must be shipped on time, and must meet the applicable requirements described in this supplier manual. All suppliers should be proactive in the development and application of continuous improvement concepts. ABG expects all suppliers to actively drive quality improvements. The main emphasis should not be on the detection of nonconforming material, but rather on the prevention of nonconforming material.

QA Incoming Inspection:

Access Business Group (ABG) Quality Assurance (QA) utilizes Inspections and other verifications to ensure that components, materials, and products conform to ABG specifications, to facilitate quality improvement, and to aid in new product development. Inspections are performed as a result of the following:

• Incoming product or materials inspection
• In-process inspection
• Finished goods product inspection
• Audits
• Corrective actions
• Supplier assessments
• Validation and capability studies

Most raw materials, manufactured products, and non-qualified supplier components or products require an inspection. Items are sampled, inspected, and tested according to the appropriate procedures, specifications, test methods, or sampling plans. Certificates of analysis may be used in addition to or in lieu of sampling, testing and inspection, where qualified and approved by QA.

Certificate of Conformance / Analysis:

Certificate of Conformance / Analysis may be required for items purchased by Access Business Group. If certificates are required, the supplier shall submit the certificate of conformance / analysis with every shipment. ABG QA will confirm that the certificates comply with the agreed specifications.

Suppliers may fax, email, or attach certificates with the shipping documents. ABG prefers that suppliers email or fax these documents to the appropriate QA Department.

Click below for information related to the required information for Certificate of Conformance and Certificate of Analysis.

Non-Conforming Products and Materials:

The definition of discrepant or non-conforming material is any product received into Access Business Group that does not conform to the specifications or agreed standards.

• Products that do not meet specifications and must be reworked to be usable in our process are considered non-conforming material.

• Products that do not meet the specifications and cannot be used in our process are considered non-conforming material.

If a nonconforming product is found, ABG will notify the supplier by phone, fax, or email. A DMDO will be filled out. The supplier shall respond with an initial corrective action plan.

Defect Classification:

Non-Reportable (NR) — A defect that was noted upon examination but is of such size or consequence as to be insignificant to the end user.

Minor Defect (MI) — A condition, which testing experience or judgment indicators would not affect product function - not greatly alter unit appearance, but which is objectionable when, found in large quantities.

Major Defect (MA) — A condition in which testing experience or judgment indicates is detrimental to the salability of the finished products or any condition that renders the item unable to perform its intended function.

Critical Defect — A condition in which testing experience or judgment indicates is likely to result in a hazardous and/or injurious situation to the user; or make the product subject to government seizure.

Defective Material Disposition Order (DMDO):

A Defective Material Disposition Order is the formal document notification applied to components or products that do not conform to established specifications or standards.

ABG utilizes the DMDO system to control or quarantine nonconforming items, to provide a means of communicating the issue within ABG and to the supplier, and to ensure that the final agreed upon disposition is implemented. By measuring and tracking conformance quality history, QA personnel can identify trends, qualification candidates, and areas for improvement.

External DMDO:ABG purchased product does not meet current specifications/standards and ABG did not adversely affect the usability of the product before or after receipt. Steps in an External DMDO:

1.Product Non-conformance is found during receiving inspection and/or during manufacturing.

2.ABG will quarantine the non-conforming product. DMDO is created. Supplier is notified of the non-conformance. Supplier CAR is initiated. ABG Planning and Purchasing is notified of the non-conformance.

3.Supplier provides ABG with disposition (Scrap at Vendor’s Expense, Return to Vendor, or Rework).

4.DMDO is route to NTBU for disposition. If product is “Return to Vendor”, suppliers are required to provide freight information (such as carrier, carrier contact information, account number to bill the freight, etc.).

5.Once disposition has been made to the product, the DMDO is route to ABG Procurement for Charge Back input. Suppliers may be charged with a $200.00 DMDO Administration Fee.

6.DMDO is route to ABG QA for DMDO and Corrective Action closure.

Other Types of DMDOs:

1. OS&D DMDO (Over, Short and Damage):An OS&D is initiated by Receiving and Stores personnel whenever a shipment is received that is damaged or the actual quantity received does not match the supplier's and/or the carrier's shipping documents.

1. ADR DMDO (Arrival Defect Report) - If an inbound shipment is not in compliance with Access Business Group's Supplier Shipping Requirements, Receiving personnel will initiate an Arrival Defect Report.

ABG Terminology:

1. Rejected/NTBU’d (Not to Be Used): Product contains non-conformances at or above the Acceptable Quality Level (AQL), or is deemed severe enough to affect use (functionally or aesthetically). Shipments can be either totally rejected or partially rejected, depending on the shipment and the severity.

1. The Final Disposition of NTBU’d stock is classified as one of the following:

• Rework Vendor Expense (RVE) — A DMDO disposition notice prepared by ABG indicating that rejected product, raw material, or component will be reworked at ABG and the charges will be forwarded to the supplier for payment.

• Rework ABG Expense (RAE) — A DMDO disposition notice prepared by ABG indicating that rejected product, raw material, or component will be reworked at ABG and charged to ABG.

• Scrap Vendor Expense (SVE) — A DMDO disposition notice prepared by Amway/ABG indicating that rejected product, raw material, or component will be scrapped at ABG and charged back to the supplier. ABG requires the supplier to provide a Return Material Authorization (RMA) #.

• Scrap ABG Expense (SAE) — A DMDO disposition notice prepared by ABG indicating that rejected product, raw material, or component will be scrapped at Amway and charged to ABG.

• Return to Vendor (RTV) — A DMDO disposition notice prepared by ABG that rejected product, raw material, or component does not meet specifications and is going to be returned to the source. ABG requires the supplier to provide a Return Material Authorization (RMA) #.

• Release Under Deviation (RUD) — An ABG Quality disposition status for product that does not match specification or quality standards but is approved for use by QA “as-is” following consultation with areas of responsibility/expertise, i.e. R&D, Marketing, Purchasing, etc. RUDs, depending on the rationale, warrant an investigation that leads to correction or improvement of the process and/or revision of the specification. An “immediate” RUD can be executed by QA without going through a physical rejection step or a normal RUD may be the resulting disposition following a rejection. All RUDs should be supported by written rationale.

Corrective Action Report:

The Corrective Action process is used to identify and correct the root cause of one-time events or recurring non-conformances. The activity focuses on preventing the non-conformance from occurring again. Corrective action reports can positively impact productivity, reliability, and corporate reputation, while improving the ABG supplier relationship.

The steps involved in a corrective action report are as follows:

1. Initiate Investigation – review details of the issue, including quality history.
2. Determine Root Cause
3. Document Finding
4. Corrective Action – determine how the issue will be corrected and document implementation plan
5. Evaluations – monitor and review procedures, processes, or quality as needed to ensure long-term resolution of the problem. Perform follow up audit if necessary.

Suppliers are required to provide a Corrective Action Report (CAR) for all DMDO’s, explaining where and how the non-conformances occurred, and what will be done to correct and prevent such occurrences in the future.

When a Corrective Action Report is initiated to the supplier, the supplier has 48 hours to provide ABG with an initial response. The initial response may include short-term corrective actions, such as containment activities.

Final response is due to ABG 30 days after being initiated. ABG expects all CARs be submitted 100% on time with documentation supporting each action item.

Correct Action Report Requirements:

Example of ABG’s Corrective Action Form is attached. Suppliers may use any Corrective Action format that will address the required fields. Below is a description of what is required by ABG on a Corrective Action Report.

Corrective Action Summary – This field is for a brief description of the issue related to why a corrective action was assigned. This includes quantities and lot numbers affected, ABG Purchase Order Number (if applicable), part number,

Cause(s)– The description of a fundamental deficiency that results in a nonconformance.

Root Cause(s) – Section that designates what type of fundamental deficiency occurred. (Manpower, Materials, Methods, Machine or Environment)

Action(s) taken to correct the root causes and prevent recurrence – The description of action taken to eliminate the root cause(s) and symptom(s) of an existing undesirable deviation or nonconformity. The supplier shall verify that the actions performed are effective in eliminating the nonconformity.

Status – Description of what stage the corrective action has reached.

Due Date – Date assigned by ABG staff of when a corrective action response from the supplier is due.

Dept. Assigned to Action – Department that will be responsible for the completion of the corrective action.

Emp. Assigned to Action - Employee that will be responsible for the completion of the corrective action.

Engineering Changes / Deviations:

Suppliers (including sub-suppliers) shall not make changes of any nature, which would have an effect on part design, function, quality, durability, etc., without the approval of Access Business Group.

A deviation may be used when a specific quantity or product being shipped or used is not in compliance with the specified specification. A deviation will be agreed to only if there is no other available inventory and the function, performance, safety, or durability of the end item is not affected. To receive approval for a deviation, the deviation will state the maximum quantity or period for which the deviation shall apply and the reason for the deviation.

Supplier Quality Development:

SQD Vision: To build a foundation for world class quality through supply-based continuous improvement activities.

SQD Mission: To proactively drive supplier quality development to deliver quality materials and products on time and on target.

The Supplier Quality Development (SQD) program is a strategically focused approach, in alliance with Sourcing Strategy Team input, which leads to quality improvement strategies with key suppliers. SQD resources will monitor supplier quality performance and apply a variety of tools geared towards improvement.

The ultimate goal is to drive improved quality starting at the supplier, which drives continuous improvement and a lower total cost of ownership for all involved. The primary components of the SQD program include proactive supplier audits, meaningful corrective action / preventative action, Advance Quality Planning, best practice sharing, performance metric oversight, and many other applicable tools.

SQD Key Strategies:

Development: Partner with new and existing ABG Suppliers to drive continuous improvement activities in the suppliers’ manufacturing processes, quality systems, and customer services to achieve measurable improvement in quality.

Performance: Systematically identify opportunities to improve supplier performance and proactively develop/drive Supplier Performance Improvement Plans, to achieve measurable improvement in supplier product quality, on-time delivery, and total lowest cost.

Prevention: Proactively assessing supplier manufacturing and quality capabilities, minimizing potential risks, and ensuring the effective implementation of ABG Quality Expectations to achieve on-time, on-target launches and exceptional supplier quality. The main emphasis should not be on the detection of nonconforming material, but rather on the prevention of nonconforming material. These efforts interact with Sourcing Strategy Team objectives and utilize Advanced Quality Planning on new product initiatives.

Supplier Audits:

The intent of an on-site Supplier Audit is to review the management philosophies and practices, total quality system, address specific issues needing corrective action or to review technical and service capabilities of a potential supplier. In addition, Access Business Group (ABG) utilizes audits as a means to understand supplier capabilities and to drive supplier improvements as needed.

The on-site supplier audit is a key tool in the Supplier Quality Development process. The types of audits conducted include:

• New Supplier Assessment – A general overview of quality systems, as requested by Sourcing Strategy Teams or new Technology exploration.

• Process/Scheduled Audit – Scheduled audits with key suppliers identified by SQD Selection Criteria and SST input. Designed for review of Quality process and procedures using either a GMP or ISO style audits.

• Developmental Audit – Focused audits on areas for specific improvement. May address a particular corrective action and follow-up.
• Verification/Follow-Up Audit – Audit to address implementation of a corrective action to ensure compliance.

ABG expects suppliers to have all processes documented
and controlled such that product manufactured for ABG
will meet requirements 100% of the time.

Following an audit, ABG expects that all nonconforming items will result in effective corrective action as deemed appropriate by the ABG audit team. A follow up audit may be conducted to verify corrective action effectiveness.

In addition, suppliers may be requested by ABG QA to complete and submit a Supplier Self Assessment. This self assessment is used to help ABG become familiar with the supplier’s quality system, prior to an audit.

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