General Standards for Suppliers
Formed Fiber Technologies, Inc.
PO Box 1300
Auburn, ME 04211-1300
Phone (207) 784.1118
Fax (207) 784.1137
www.formedfiber.com
Last revised 8 February 2008
FFT
Operating Policy Statement:
At Formed Fiber Technologies, everyone, in every function, is involved, empowered and committed to Customer Satisfaction, Continuous Operational Improvement, and Environmental Stewardship, using systematic approaches and processes.
Scope and Objective
The intent of this manual is to give FFT's suppliers a general overview of requirements for conducting business with FFT. FFT includes: Formed Fiber Technologies, Auburn, Maine; Formed Fiber Technologies, Sidney, Ohio; and Color-Fi, Sumter, South Carolina. This manual is not intended to be a binding business agreement. In all cases, Purchase Orders, PPAPs, Supplier Agreements, Contracts and any other business agreements shall prevail.
Table of Contents
Basic Supplier Requirements
- All Suppliers must be third-party registered to the latest issues of either ISO/TS or other appropriate standard based on their supplier classification:
- Direct ship suppliers - TS 16949
- Primary component suppliers - TS 16949 or ISO 9001:2000
- Primary Material Suppliers - TS 16949 or ISO 9001:2000
- Laboratory or Calibration Services - ISO 17025
- Brokers and distributors shall supply a letter stating they are a non-manufacturer
- All Suppliers MUST comply with requirements in Section 4.2 of this document pertaining to Chemical Content Declaration.
- All Suppliers MUST comply with FFT's request to enter part component data into the IMDS data system: http://www.mdsystem.com/.
** Note: Any deviation from these requirements requires approval by FFT's Customer.
- Supplier PPM performance goal is Zero
- Supplier delivery performance shall be 100% on time
- Supplier shall support the APQP process
- Supplier shall notify FFT of any customer special status notifications related to quality or delivery issues
- Supplier shall provide competitive market pricing
- Supplier shall be able to provide evidence of Continuous Improvement, including Lean Manufacturing, Kaizen or Six Sigma initiatives
- Suppliers shall respond to requests for corrective action: initial response within 24 hours and a final response within 14 days
- Suppliers shall comply to requests to audit suppliers' financial documents for tooling and piece price
- Suppliers shall maintain manufacturing and material records for three (3) years and supply same on request.
1.0 Sourcing
1.1 RFQ
FFT officially notifies a supplier to quote when a Request for Quotation is sent. See appendix for example of RFQ form. To be considered for business, the supplier must complete breakdown attachments. Reference the FFT- RFQ number on all attached paperwork. Note: FFT's Buyers can waive this requirement.
1.2 Accounting Practices / Payment Terms
The items listed below are guidelines only. For actual payment terms, refer to the Purchase Order or the actual Contract.
1.2.1 Purchase Order
- FFT awards business via a Purchase Order that clearly describes the product in terms of
- Type, class, grade or other identifying factor
- Description and means of identification
- Requirements for approval
- Requirements for 100% on time delivery
- Payment terms are as specified on the Purchase Order or actual contract unless otherwise agreed upon.
- All material, parts and/or tooling must be received through our Receiving Department and must have a proper packing slip firmly attached to the outside of the container as described in the Shipping/ Materials Manage section of this manual. The packing slip must reference the appropriate Purchase Order number and Part /Tool number and have the appropriate signature(s) from the FFT Receiving Department to serve as proof of delivery to ensure payment.
- Each invoice must reference FFT Part/Tool number and Purchase Order number exactly as it appears on Purchase Orders, or the invoices will be returned to the appropriate supplier, delaying payment.
1.3 Payment Disputes
FFT has a ninety (90) day dispute policy regarding issues or problems, past due invoices and/or short payments. All notifications shall be in writing and followed up by a telephone call within seven (7) days of submission to our Accounts Payable Department.
Any and all issues brought to FFT's attention after the ninety (90) day dispute period has expired will not be honored.
1.4 Obsolescence
FFT extends an offer of compensation to all suppliers for all product produced to the limit of fabrication and material authorizations extended but not consumed as of the completion of the original equipment assembly build schedule. This guarantee applies only to all discount materials. All claims are to be sent to your Formed Fiber Technologies Buyer.
- All claims for obsolescence compensation must be submitted to FFT within 14 days of product discontinuation.
- Claims must be submitted in writing. Contact your FFT buyer to confirm information required.
- A copy of your release schedule, which establishes your high points, and verification of your final accumulation shipped to FFT must accompany your claim.
- Claims for raw or work-in-process-material must include the usage per part sold to FFT, and supporting documentation for the price per unit claimed.
- All claim material will be audited and must be held in storage until an FFT representative verifies its existence and the claim is settled.
- Claim settlement monies are paid once FFT receives funds from its Customer.
- Claims received after 14 days of product discontinuation will be returned, and FFT will not accept responsibility for the claimed amount.
1.5 Service Parts
Service part requirements vary greatly across FFT Customers. The FFT Buyer will notify and define the service requirements to suppliers.
2.0 Approved Suppliers List
FFT selects its suppliers based on their ability to meet our requirements. The selection process is performed by the Supply Chain Director, through the Purchasing Department. The FFT Purchasing Department maintains the Approved Supplier List. The following are factors that may be used in determining whether or not to add a supplier to the Approved Supplier List:
- Certification
- Directed by FFT Customer
- Successful New Supplier Assessment
- Supplier Profile Questionnaire
- Capacity
- Competitiveness
- Technology - IMDS compliant
- Support Capabilities
- Risk Assessment
- Location
2.1 Supplier Profile
All suppliers are required to complete a Supplier Evaluation Form. See Appendix for sample form. Suppliers are required to submit an updated form to FFT when major changes take place.
2.2 Quality System Certification
Suppliers required to have a quality system certification must forward a copy of their certification to FFT Purchasing Department. Suppliers are required to keep updated certifications on file with FFT Purchasing Department.
2.3 New Supplier Assessment
During the review process, the FFT Purchasing Department will decide which potential suppliers will require a Supplier Assessment Audit.
2.4 Specific Requirements
Each potential supplier's review is unique; therefore, the FFT Purchasing Department will communicate to the Supplier the specific requirements needed for that supplier to be placed on the Approved Supplier List.
2.5 Maintaining Approved Supplier List Status
Suppliers currently on the Approved Supplier List remain in good standing by:
- Maintain high levels of quality
- Continuous high level delivery performance
- Rapid responses to FFT inquiries for information
- Maintain competitive with price and quality within the supplier community.
Suppliers not meeting expectations are in jeopardy of being de-sourced. See Supplier Problem Communication for further details.
3.0 APQP
3.1 General APQP Requirements
FFT follows the Five Phases of the product quality planning cycle, and the methodology outlined in the AIAG APQP Manual.
3.2 Customer Specific APQP Requirements
FFT Customers may cascade their requirements down to our suppliers. FFT Purchasing and Quality Departments will communicate these requirements to the supplier, and the supplier will add the requirements to the project timeline. NOTE: Customer requirements for FFT's suppliers may not always be known at the time of business award.
4.0 PPAP
4.1 General PPAP Requirements
The purpose of the supplier production part/material approval is to determine if all customer engineering design records and specification requirements are properly understood by the supplier and that the process has the potential to produce product meeting those requirements during an actual production run at the quoted production rate. Suppliers must comply with the requirements identified in the AIAG PPAP Manual current edition.
Additionally, suppliers must notify FFT and submit for Part Approval prior to the first production shipment in the situations identified in Table 3.1 and Table 3.3 of the AIAG PPAP Manual 4th Edition, unless FFT has specifically waived this requirement for the subject part/material. FFT requires early notification and consent prior to any part of material changes. If FFT waives a formal submission, the supplier must review all items in the PPAP file and update them as necessary to reflect the current process.
4.2 Chemical Content Declaration
Suppliers must supply MSDS for all materials. Suppliers must be registered users of IMDS or provide all data required for IMDS system to Formed Fiber Technologies prior to PPAP. In addition they must provide certification of compliance to:
- FMVSS30
- GMW3059 Restricted and Reportable Substances for Parts
- TSZ0001G Control Rules for Substances of Concern
- M0301 Substance Use Restrictions
- Ford's RSMS Restricted Substances Management Standard
- Other applicable OEM Standards as requested by FFT
4.3 Annual PPAP's
FFT requires annual PPAPs from suppliers whose parts / materials are used in an end customer component where that end customer requires a form of annual PPAP. The supplier is required to submit the same level of PPAP as the original PPAP within one year from the approval date of the original PPAP.
4.4 New Product Containment
FFT requires that for a defined quantity or number of shipments, suppliers shipping a new product put in place an enhanced inspection process. The requirement is similar to GM's GP 12 requirements. The enhanced inspection plan is to be submitted with the PPAP. FFT Purchasing Department will communicate PPAP requirements to the supplier on the Purchase Order. The plan will be reviewed and approved as part of the PPAP process. Note: FFT's end customer may require the use of their containment process. In such cases, FFT's Purchasing Department will notify the supplier of the requirement.
4.5 Run@Rates / Capacity Declaration
The purpose of Run@Rate is to verify that the supplier's actual manufacturing process, while operating under normal conditions, is capable of producing product as documented on the Request for Quotation and PPAP. FFT does not perform Ran@Rate on all products, but will identify key components, material and/or suppliers where Run@Rate confirmation is needed. If a particular product is identified for Run@Rate, then Corporate Supplier Quality will note this on the Statement of PPAP Requirements. The Run@Rate form (GM 1960) will be used unless an FFT customer requires use of another form. Suppliers that are not required to perform Run@Rate will be required to provide Supplier Capacity Statement as a requirement for PPAP approval.
NOTE: FFT may elect to perform Run@Rate on a current product due to quality or delivery concerns. In such cases, the supplier will be notified in writing by FFT.
5.0 Shipping / Materials Management
5.1 Delivery
It is a FFT requirement that all suppliers provide 100% on time delivery using the FIFO system.
5.2 Packaging
Packaging is to be identified during the APQP process, and supplier will submit their packaging instructions which must identify, as necessary, the container, pack count, orientation of parts, and number of layers for PPAP. All suppliers using returnable packaging must have an expendable packaging back up plan submitted at PPAP.
5.3 EDI / Releases
EDI requirements/method of releases will be determined during the APQP process. Note: Direct-ship supplier EDI requirements are determined by FFT's Customers.
5.4 Freight Transportation
Freight terms and requirements are defined on the Purchase Order.
5.5 Shipping Windows
Shipping windows are determined by Formed Fiber Technologies and will be defined during the APQP process. NOTE: Direct-ship supplier shipping windows are determined by FFT's customer.
5.6 Identification Labels
Labeling requirements will be defined during the APQP process as the requirements may differ between Formed Fiber Technologies Plant(s) and end customer.
6.0 Supplier Performance
Supplier performance is tracked semi-annually on supplier scorecards. Suppliers are rated on 6 categories and given an overall rating based on these scores:
- Cost Competitiveness
- IMDS Compliant
- On-Time Delivery
- Quality of Delivered Product
- PPM
- Debit Memos Issued for Non-Conforming Events
7.0 Supplier Quality Control
7.1 Supplier Product Quality Expectations
Formed Fiber Technologies Approved Suppliers must be able to demonstrate the existence of a Quality Control System that encompasses receipt, inspection, verification, storage and shipment of all parts supplied to FFT.
7.2 Corrective Action Requests
Formed Fiber Technologies communicates issues to suppliers using the 8D, 5 Why or similar problem solving format. The 8D request is emailed or faxed to the supplier. The supplier has 24 hours to make an initial response, and the supplier has 14 business days to implement corrective and preventive action.
7.2.1 8 D Response
Suppliers may use their own corrective action forms, but the supplier's response to each 8D must address the following items:
- Immediate Containment Action, including: product at the supplier, product in transit, product at FFT locations and product at FFT's customer location
- Identification and verification of Root Cause and Escape Point
- Identification of Permanent Corrective Action(s)
- Implementation and validation of Permanent Corrective Action(s)
- Prevention of recurrence
- FFT requires suppliers to implement immediate containment action as part of the response to an 8D request.
7.2.2 Charge-backs
Suppliers will be charged back for all expenses incurred by FFT as a result of delivery or quality problems attributed to that supplier. Charge-backs are typically transacted as a debit against open invoices.
7.2.2.1 Charge-back Guidelines
7.2.2.2 Administration Fees
A $150 (one hundred fifty dollars) per hour charge administration fee will be charged for clerical activities performed by FFT personnel.
7.2.2.3 Sorting and / or Re-working
A $100 (one hundred dollars) per hour charge on behalf of FFT personnel spent sorting and/or re-working supplier product is to be charged to the supplier. If FFT uses temporary or contracted services to sort and/or re-work supplier product, then the fee charged by the service will be charged back to the supplier. NOTE: Suppliers sorting and/or re-working at an FFT location using their own services will be charged back for administration time spent by FFT personnel related to the sort.
7.2.2.4 Downtime
Any and all line stoppages based on both man hour and machine idle time will be determined through FFT's accounting department.
7.3 Audits
FFT may elect to perform audits at the supplier's site. FFT will notify the supplier of an audit and provide the supplier a copy of the audit to be performed. NOTE: FFT's Customers may request an audit to be performed at a supplier using their audit format. The Customer may elect to attend the audit.
7.4 Notification
Suppliers shall notify FFT Purchasing Department Head, in writing, within 5 (five) working days, when a Customer changes the status of a site serving any FFT facility to any of the following:
- General Motors "New Business Hold - Quality"
- Ford Q-1 Revocation
- Chrysler "Needs Improvement"
Appendix - Sample Forms
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