Supplier Quality Manual - Otto

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3.2 Purchase Order Terms and Conditions:3.2.1 Purchase orders issued by OTTO will be conveyed either by phone, fax, email and/or hard copy.OTTO’s current purchasing terms and conditions which should be considered part of any orderconveyed per above by OTTO’s purchasing department or designated representative are statedin paragraph 5.5.1 Appendix A.3.3 Procurements Aids3.3.1 OTTO’s ePortal is available to all suppliers at the discretion of the Purchasing Manager. It is aweb based snap shot of each part purchased by OTTO which has demand and is updated everyweekday. It gives suppliers insight on the status and statistics related to their parts. In additionto scheduled shipments, planned or forecasted demand is shown which is expected to assistsuppliers in planning production. Further statistical data includes part number, description,current revision level, previous year’s usage, year to date usage, and lead time.3.3.2 Once access is given to ePortal(ref.5.4.1) it is recommended that Supplier signs on at least onceper week. All suppliers are encouraged to use ePortal, but those that show an on-time deliveryof under 95% are strongly encouraged to use ePortal. Failure to do so may result in lowering ofReport Card score.3.3.3 OTTO is constantly working at ways to share information with suppliers about quality andcontinuous improvement. Suppliers can view OTTO’s various certifications and documentation,including this SQM at www.ottoexcellence.com.3.4 Supplier Monitoring and Performance Rating3.4.1 The intent of the Supplier Quality Performance rating system to reward those suppliers whoperform well and identify those who have improvement needs.3.4.2 A supplier of component parts is rated based on five ratings: delivery, quality to lot percentage,quality to quantity percentage, responsiveness and cost reduction initiatives (ref.5.3.1PUB9000 – Material Department – Vendor Performance Report).3.4.2.1 Delivery performance is based on a supplier supplying component parts on aspecified due date. For each lot received a two-day grace period is included. If a lotis received two days after the specified due date, the lot is not considered late. Asupplier’s delivery performance for period of time is based on all lots received ontime divided by all lots received.3.4.2.2 Responsiveness performance is based on vendor’s reaction to all issues and is left todiscretion of the appropriate buyer.3.4.2.3 Cost reduction performance is based on initiatives offered to OTTO and is left to thediscretion of the appropriate buyer.3.4.2.4 Quality performance is based on a supplier supplying parts to OTTO specifications.Any non-conforming lots are documented on the discrepant material report.3.4.3 The rating percentages in the supplier performance report will be used to monitor supplierperformance based on the following criteria:3.4.3.1 Green supplier: a supplier with a rating of 90% or better is a “green” supplier. Alltypes of purchases, both new and existing may be placed with a green supplier.3.4.3.2 Yellow supplier: a supplier with a rating between 80% and 89% is a “yellow”supplier. Yellow suppliers are required to provide corrective action within 30 daysthat details a plan to improve respective scores within 6 months and/or 5 lots toimprove their rating to green status. If not improved within designated time frame,they may not be qualified for new business, subject to the needs of OTTO.3 of 26
3.4.3.3 Red supplier: a supplier with a rating less than 80% is a “red” supplier. Redsuppliers are required to provide corrective action within 30 days that details a planto improve respective scores within 6 months and/or 5 lots to improve their rating toyellow or above. If not improved within the designated time frame, they may not bequalified for new business and existing business will be resourced. Any A, B, and Csupplier with a red classification will be notified by the Materials group.3.4.4 Yellow suppliers will be notified by “Yellow Supplier Notice” (ref.5.3.2 4PU000008 and RedSupplier will be notified by “Red Supplier Notice” (ref 5.3.3 4PU000009 and Green Supplierwill be notified by “Green Supplier Notice” (ref.5.3.4 4PU000010)Section 4: Supplier Quality System Requirements4.1 Manufacturing Requirements4.1.1 In order to ensure manufacturing control, the supplier shall establish and document processspecifications for all aspects of the manufacturing operation based on requirements as stated inparagraph 1.3.1.4.1.2 The supplier shall have procedures for the positive identification and control of all components,including raw materials, used during manufacturing, processing, and delivery so that in the eventof a recall, traceability to raw materials and processing can be ascertained.4.1.3 The supplier shall establish procedures for the verification, storage, maintenance, and accountingof OTTO owned material, products, tools, and equipment provided to the supplier for use inproducing product for OTTO.4.1.4 Any items that are lost, damaged, or unusable, shall immediately be reported to the OTTOapplicable Buyer.4.2 Quality Requirements4.2.1 The supplier is responsible for ensuring that all items regardless if made by the supplier or asubcontractor, meet the OTTO requirements for form, fit, function and acceptance criteria.4.2.2 Inspection standards for evaluation of the manufactured product based on drawing andengineering specifications shall be established and documented.4.2.3 Acceptable Quality Levels (AQL’s) must be set by the supplier to ensure acceptable productquality levels are maintained.4.2.4 The supplier shall have established procedure for product appearance requirements. Producedproduct should be free of contamination, discoloration, peeling or blistered plating, colorvariation, nicks, scratches or scuff marks, uneven paint mask line, color contamination, coldshot, flash, weld or knit line, texture variation.4.2.5 Visual inspection shall be performed with normal or corrected to 20/20 vision. Magnificationwill not be employed. Unless otherwise specified, lighting for the determination of cosmeticflaws will be Cool White fluorescent with an intensity of approximately 4 seconds at a distanceof approximately 18 inches. Manual rotation of the parts, to change the reflection or viewingangle is allowed. If applicable, visual standards can be used with prior OTTO Qualitydepartment approval.4.2.5.1 By OTTO request “Golden Samples” will be created on those items which need aphysical example to further aide in future lot inspection.4.3 Production Part Approval Process4.3.1 When required OTTO will request level 3 PPAP as the default for all submissions in accordancewith AIAG, unless otherwise specified.4.3.2 Production Part Approval Process (PPAP) defines generic requirements for production partapproval. The purpose of PPAP is to determine if all OTTO engineering design record andspecification requirements are properly understood by the supplier and that the process has the4 of 26
Page 1 and 2: Supplier Quality ManualDocument 2QA
Page 3 and 4: Table of ContentsSection 1:Section
Page 5: 2.3.2 OTTO seeks suppliers with who
Page 9 and 10: Table 1ProcessNew Supplier/ToolingN
Page 11 and 12: Table 3ResultsGRR < 10%10% < GRR <
Page 13 and 14: 4.7 Calibration4.7.1 All OTTO suppl
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Page 19 and 20: 5.2 Blank Forms5.2.1 Discrepant Mat
Page 21 and 22: 5.2.3 Part Submission Warrant18 of
Page 23 and 24: 5.3.2 Yellow Supplier Notice20 of 2
Page 25 and 26: 5.3.4 Green Supplier Notice22 of 26
Page 27 and 28: 5.5 APPENDIX5.5.1 APPENDIX A - Purc
Page 29: 5.5.2 APPENDIX B - Acronyms and The

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