Flow Solutions Group SUPPLIER QUALITY MANUAL - Flowservevms.flowserve.com/vms/images/Docs/Supplier_Quality... · FLOWSERVE VISION STATEMENT ... CONTROL PLAN ... Flow Solutions Group

No. Q7-10Flow Solutions Group Supplier Quality Manual

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Revision Approved By:See page 4

Revision Date:2010-03-17

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Flow Solutions GroupSUPPLIERQUALITYMANUAL


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TABLE OF CONTENTS

MANAGEMENT MESSAGE............................................................................................................................ 5

QUALITY POLICY……………………………………………………………………………………………….……………...6

GENERAL INFORMATION

PURPOSE AND SCOPE...................................................................................................................................... 7RESPONSIBILITY .............................................................................................................................................. 7EXPECTATIONS................................................................................................................................................. 7

DISTRIBUTION AND REVISION CONTROL

DISTRIBUTION .................................................................................................................................................. 8REVISION............................................................................................................................................................ 8

OPERATING PHILOSOPHY AND GENERAL BUSINESS PRACTICE

FLOWSERVE VISION STATEMENT ............................................................................................................... 9FLOWSERVE CORE COMPETENCIES............................................................................................................ 9FLOWSERVE BUSINESS SYSTEM ................................................................................................................ 10DOING BUSINESS WITH FLOWSERVE........................................................................................................ 10

SUPPLIER CODE OF BUSINESS CONDUCT

COMPLIANCE MONITORING........................................................................................................................ 11APPLICATION TO SUBCONTRACTORS ...................................................................................................... 12CONDUCT VIOLATION .................................................................................................................................. 12

SUPPLIER EXPECTATIONSQUALITY SYSTEM …………………………………………………………………………………………………........................13VENDOR MANAGEMENT SYSTEM ............................................................................................................. 13ADVANCED PRODUCT QUALITY PLANNING........................................................................................... 13PROCESS CHANGE CONTROL...................................................................................................................... 14PROCESS MONITORING AND OPERATOR INSTRUCTIONS ................................................................... 14ASSOCIATE TRAINING .................................................................................................................................. 14PRODUCT CHANGES...................................................................................................................................... 14REWORK........................................................................................................................................................... 15MEASURING AND TEST EQUIPMENT......................................................................................................... 15MATERIAL IDENTIFICATION / CONTROL ................................................................................................. 15LOT TRACEABILITY....................................................................................................................................... 15QUALITY RECORDS ....................................................................................................................................... 15DRAWING AND CHANGE CONTROL..........................................................................................................16CORRECTIVE AND PREVENTIVE ACTION ................................................................................................ 16OUTGOING PRODUCT.................................................................................................................................... 16INTERNAL AUDITS......................................................................................................................................... 16PREVENTIVE MAINTENANCE...................................................................................................................... 16BREAKDOWN MAINTENANCE....................................................................................................................16BUSINESS CHANGES...................................................................................................................................... 17


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SUPPLIER ASSESSMENT AND QUALIFICATION

INITIAL SUPPLIER PROFILE......................................................................................................................... 17SUPPLIER VALIDATION................................................................................................................................ 18ON-SITE ASSESSMENT .................................................................................................................................. 19ASSESSMENT RESULTS / FOLLOW-UP....................................................................................................... 19APPROVALS..................................................................................................................................................... 19LONG TERM AGREEMENT (LTA) ................................................................................................................ 19INSPECTION STATUS.....................................................................................................................................20

APPROVING PARTS FOR PRODUCTION

FIRST PIECE INSPECTION (FPI)....................................................................................................................20PRODUCTION PART APPROVAL PROCESS (PPAP) .................................................................................. 21MANUFACTURING PROCESS REVIEW....................................................................................................... 21ADVANCED PRODUCT QUALITY PLANNING (APQP)............................................................................. 21PROCESS FAILURE MODE EFFECTS ANALYSIS (PFMEA)...................................................................... 21PROCESS FLOW DIAGRAM........................................................................................................................... 22CONTROL PLAN.............................................................................................................................................. 22PROCESS CAPABILITY .................................................................................................................................. 22

SUPPLIER QUALITY AND DEVELOPMENT ...................................................................................... 22/23

TOTAL SUPPLIER PERFORMANCE ......................................................................................................... 23

SUPPLIER NON-CONFORMING MATERIAL AND CLOSED LOOP CORRECTIVE ACTION

TOP FOCUS………………………………………………………………………………………………………………………. .23SUPLIER SELF REPORTING……………………………………………………………………………………………….24NONCONFORMING MATERIAL ..........................................................…………….. .. ……. …. …….. 24/25WARRANTY AND SERVICES………………………………………………………………….…………….25SUPPLIER CLOSED LOOP CORRECTIVE ACTION ....................................................................................25SUPPLIER CORRECTIVE ACTION REQUEST (SCAR) ...............................................................................25

PACKAGING REQUIREMENTS

PACKING SLIPS...............................................................................................................................................26CERTIFICATIONS AND TEST REPORTS...................................................................................................... 27PACKAGING AND IDENTIFICATION LABELS...................................................................................... 27/28SUPPLIER’S RESPONSIBILITY................................................................................................................. 28/29TRANSPORTATION......................................................................................................................................... 29COMMUNICATION ......................................................................................................................................... 29

COST OF POOR QUALITY

RECEIVING PROCESS.....................................................................................................................................30IN-PROCESS FALLOUT .................................................................................................................................. 30CUSTOMER ISSUES ........................................................................................................................................ 30

Addendum 1Seal Quality Record Requirements

QA clauses 1 through 19……………………………………………………………………………………………............. 31-34


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Supplier Quality Manual Approvals

Title Signature Approval DateVice President FSG Supply

Chain, CIP and QualityBob Hendricks June 23, 2010

WW Director of CommodityManagement & Sourcing

Parag DeorasJune 28, 2010


Serge IrelandJune 23, 2010


Patrick NolanJune 23, 2010

Director Supply Chain Indiaand Middle EastDeepak Baliga

June 24, 2010

Director Supply Chain ChinaYe Lu June 25, 2010

WW Director of SupplierDevelopmentSteve Polczer

June 23, 2010

WW Director CIP and QualityRick Lane June 23, 2010


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Management Message

The global Pump and Seal markets are increasingly sophisticated and setting highstandards on Quality, Cost, Delivery, and Service. As a premier OEM within this market,the Flowserve Flow Solutions Group (FSG) will set the standard in meeting ourcustomer’s requirements. A robust, capable, and adaptable supply base that understandsthese requirements and works in partnership with Flowserve to continually meet andstrive to exceed our customer’s expectations, is key to our continued success.

The Flow Solutions Group will focus on organizational, process, and systems capabilityto continually improve and stay abreast of ever changing market needs. Several notableareas of focus include:

1. Global deployment of experienced commercial and technical supply chainprofessionals.

2. Integrated local, regional, and global commodity sourcing strategies.3. Deployment of structured supplier management tools, processes, and systems.4. Sourcing excellence aimed at cycle time reduction and total cost reduction

initiatives.

The Flow Solutions Group’s Supply Chain team is now integrated between its localmanufacturing sites, regions, and global operations. In leveraging these resources, theteam will collectively set and manage sourcing strategies, qualify suppliersmanufacturing capabilities and quality systems, and work to continually develop a robustand best in class supply base.

To assist our suppliers in establishing and maintaining Best in Class quality, cost,delivery, service, and technological capability, Flowserve’s Supply Chain professionalswill work with you as needed to identify and deploy the necessary resources, tools, andprocesses required to be successful. Our supplier development personnel are available toconduct on-site surveys, audits, expediting, value engineering, Lean/Sigma, QualityProduct Engineering, etc as appropriate.

We recognize that the Flow Solutions Group cannot succeed without its Supply-Base.Your dedication to quality, cost, delivery, service, and technological leadership is key toour partnership. In embracing this Supplier Quality Manual, you are taking an importantstep towards demonstrating your commitment to our collective success. Please take notethere are individual requirements identified to our Pump or Seal operations within thismanual.


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Quality Policy

The Flow Solutions Group defines quality as providing the Customer with the product orservice that was contracted, in a manner that meets and or exceeds the Customer’s needs,and in accordance with all applicable technical and legal standards.

The principles set out below comprise Flowserve’s quality policy:

1. Flowserve is committed to continuous improvement of quality in all of its operatingunits.

2. Flowserve works to achieve quality by: Clearly defining corporate policies, work procedures, and objectives. Regularly monitoring and evaluating quality. Recognizing the importance of feedback from customers. Continuously improving Internal and External Processes

3. In accordance with Flowserve’s Quality Manual, quality performance is monitoredand evaluated through Flowserve’s Quality Management System.

4. The quality management system operates independently of particular individuals. Itis a stand-alone system that uses data to develop judgments that are unaffected bycorporate policies and management actions.

5. The policies, procedures, and processes that comprise Flowserve’s qualitymanagement system receive regular review and periodic audit to ensure theircontinual improvement and effectiveness.

6. Responsibility for quality lies with management and with each individual,department, and division within the organization.

7. Staff development in the concepts and practices of quality is necessary.

8. All individuals and teams charged with responsibility within the quality managementsystem are held accountable.

9. The Director of Global Quality and Continuous Improvement Process (CIP) has fullauthority and final responsibility for ensuring that all activities conform to theFlowserve Quality Management System.


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General Information

Purpose and ScopeThe purpose of the Supplier Quality Manual is to communicate to our strategic suppliersthe core set of tools, processes and systems that are to be used in the design, developmentand manufacture of parts and products supplied to Flowserve.

Flowserve believes that by clearly communicating expectations and working closely withour strategic supplier partners to continuously improve processes, part designs, anddelivery methods, there will be a mutual contribution to enhance future competitivenessand success.

ResponsibilityIt is the responsibility of the supplier to understand and ensure compliance with thismanual and the quality policies, procedures and work instructions of Flowserve.

The World Wide Directors of Supply Chain, Quality, CIP and Supplier Development areresponsible for maintaining this document and leading the Flowserve supplierdevelopment initiatives.

The Flowserve Groups and Divisions serve a variety of industries and business segmentsand as such, may have different and unique quality requirements specific to a marketsegment. However, the processes and tools presented in this manual represent the coreexpectations and requirements of Flowserve. Any differences seen across theorganization should be minimal and will be driven by customer and/or market specificrequirements.

ExpectationsRequirements for suppliers will be found in the accompanying documents relevant to thecommodity.


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Distribution and Revision Control

DistributionThe Supplier Quality Manual is stored electronically and is password protected. TheSupplier Quality Manual can only be modified by a designee of the Supply ChainOrganization or the Director of World Wide Quality and Continuous ImprovementProcess (CIP).

RevisionThis manual is continually under review to identify opportunities for improvement.Flowserve identifies and controls documents required by the quality system according tothe Control of Documents Procedure. It ensures that documents:

a) are reviewed and approved for adequacy prior to use;b) are updated, reviewed, and approved for re-issue as necessary;c) are identified with their current revision status and the revisions made;d) are available at point of use;e) are legible, readily identifiable, and retrievable;f) of external origin are identified and the distribution is managed;g) that are obsolete are prevented from unintended use and are suitably identified if

they are retained for any purpose.Suppliers are encouraged to contact Flowserve with suggestions for improvement to theSupplier Quality Manual. Suppliers are responsible for ensuring they have the mostcurrent revision of the Flowserve’s Supplier Quality Manual.


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Operating Philosophy and General Business Practice

Flowserve Vision StatementTo have a fully integrated supplier quality management and development system: with asupply base who is performing at a world class level, meeting or exceeding Flowservestandards and metrics continually driving improvement in quality, delivery and cost.

Flowserve Core Competencies

COMPETENCEUnderstands Flowserve's business and the competitive landscape; anticipates industrychanges and provides thought leadership in competing in the new environment. Addsvalue in all activities; seen as a trusted advisor inside/outside the company.

COMMITMENTA promise is a promise; Reliable execution in any market condition; Pushes the envelopeto raise the bar on performance

CONFIDENCETakes productive risks; Acts with self-confidence to challenge the status quo and thinks"outside the box" to develop innovative ideas that expand the value-creation capacity ofthe enterprise; Demonstrates managerial courage.

CHARACTERLives the Flowserve Code of Conduct: Acts to create a positive climate that encouragesothers to do what is right.

COLLABORATIONProductively leads or contributes to teams by delivering results and value, brings the rightresources and people together regardless of location, and then empowers people to act.

CREATIVITYDisplays a continuous desire to grow and expand the knowledge of self and others,quickly incorporates new learning, and continually scans the environment for the "newand better." Fosters the professional development of others, provides accurateperformance feedback and learning opportunities, and "exports" leaders to other areas ofFlowserve.


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Flowserve Business SystemThe Flowserve business model establishes a common set of management tools andmeasures that are equally applicable across our divisions. The Flowserve businesssystem encompasses the following elements:

Core values, philosophy and goals Planning Execution Assessment Management tool kit

Doing Business with FlowserveFlowserve wants to partner with suppliers who deliver the best quality, value, and serviceat the most competitive cost. In partnership with Flowserve, our suppliers deliverinnovative products, focus on continuous operational improvement, and rapidly andeffectively drive change through their organizations. Together we will address all aspectsof cost reduction, waste elimination, and improvement in efficiency in the ever-changingglobal supply environment.

Supplier Code of Business Conduct Requirements

Environment / Health and SafetyFlowserve suppliers are expected to:• Comply with all local and country environmental, health and safety laws andregulations.• Provide workers with a safe and healthy work environment, and manage theiroperations to minimize negative impact to the environment and community.• Establish and maintain a management system or program that encourages continualimprovement in environmental, health and safety performance.Labor / Human ResourcesChild Labor: Suppliers must only employ workers who meet the applicable minimumlegal age requirement. Suppliers are also expected to comply with all other applicablechild labor laws.Forced Labor: Suppliers should not use any prison, indentured or forced labor.Wages and Hours: Suppliers’ plants must set working hours, wages and overtime pay incompliance with all applicable laws. Workers should be paid at least the minimum legalwage or a wage that meets local industry standards, whichever is greater.Discrimination: Suppliers are expected to employ workers on the basis of their ability todo the job, not on the basis of their personal characteristics or beliefs (including race,color, gender, nationality, religion, age, disability, maternity or marital status).Freedom of Association: Suppliers’ workers should be free to join associations of theirown choosing and have the freedom of collective bargaining where the local law conferssuch rights.


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Human RightsSuppliers must support and respect the protection of internationally proclaimed humanrights and ensure that they are not involved in human rights abuses. Suppliers should notengage in or support the use of corporal punishment or mental or physical coercion.Transportation / LogisticsFlowserve suppliers must comply with all local, country and international laws andregulations governing the transportation of goods and materials including the import andexport thereof.RegulatoryFlowserve suppliers are expected to maintain strict compliance with all applicable lawsregarding:• Anti-corruption and anti-bribery, including in all cases the United States ForeignCorrupt Practices Act, the Organization for Economic Cooperation and DevelopmentConvention on Combating Bribery of Foreign Public Officials in International BusinessTransactions;• Political contributions and payments;Supplier Code of Business Conduct• Prohibiting discrimination;• Privacy, data and information security;• Import and export controls, including U.S. anti-boycott laws;• Trade and anti-trust.Intellectual PropertyIt is the responsibility of each Flowserve supplier to preserve the security, integrity andproprietary nature of all Flowserve confidential information in accordance withapplicable laws and contractual obligations.EthicsThe Flowserve Code of Business Conduct sets forth the ethical and legal standards ofbusiness conduct expected from all Flowserve employees, as well as anyone else actingon behalf of Flowserve. As a supplier to Flowserve, it is essential that a supplier’semployees are made aware of the contents of the Flowserve Code of Business Conductand the expectations for work and business behavior. A current version of the FlowserveCode of Business Conduct is available at www.flowserve.com.

Compliance Monitoring

Flowserve, its customers, and any applicable regulatory agencies have the right of accessto supplier’s facilities for the purpose of evaluating supplier’s conformance to all contractrequirements and all relevant records at all times. When applicable, the accessrequirement shall be made available by the supplier to the supplier’s sub-tier sources.

Goods purchased by Flowserve may be incorporated into Flowserve products or shippedunincorporated. Flowserve may also export these goods. Supplier has to provide allinformation according all government regulations.

http://www.flowserve.com/


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Seal Specific:

In order to comply with US Export Regulations, Flowserve must know the HarmonizedTrade Schedule B Number (HTS Number) and Export Compliance Coordination Number(ECCN) for goods not purchased to a Flowserve manufacturing drawing. The supplier ofgoods not purchased to a Flowserve manufacturing drawing shall communicate the HTSNumber and ECCN with the appropriate Flowserve buyer or the Flowserve ExportCompliance Coordinator in a mutually acceptable manner

Application to SubcontractorsThe conduct requirements also apply to any sub-contractor(s) to the supplier, with thesupplier maintaining full responsibility for compliance by any such sub-contractor(s).Flowserve reserves the right to qualify and approve subcontractors whose product issupplied or becomes a part of a product supplied to Flowserve.

The supplier shall maintain qualifications for sub-contractors and the products purchasedthrough them. It is the responsibility of the supplier to ensure and control the quality ofall raw material and components that are purchased for use in the manufacture ofproducts for Flowserve. Changes in raw materials or subcontractors used in productprovided to Flowserve must be submitted in writing and require approval from Flowserveprior to start of production. Flowserve reserves the right to visit subcontractor facilitiesto validate compliance to specifications or perform on-site verifications. Suppliers arerequired to notify Flowserve in writing a minimum of 90-days in advance of impendingobsolescence of products or components.

Conduct ViolationNon-compliance with the Flowserve conduct requirements will result in a SupplierCorrective Action Request being issued to the supplier. Failure to provide a correctiveaction plan to remedy the non-compliance within the specified period of time, andverifiable results after implementation may result in termination of the businessrelationship. This may include, but is not limited to, ending the business relationship,suspending placement of future orders and cancellation of existing orders and return ofinventory / Flowserve owned equipment.


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Supplier Expectations

Quality SystemUnless otherwise specified, all strategic suppliers to Flowserve must be compliant to aquality system, such as ISO-9000/9001, AS-9100, TS16949, or a Flowserve divisionspecified quality system. The goal is for all suppliers to have fundamentally soundsystems that provide for continuous improvement, emphasizing defect prevention, andwaste reduction in the supply chain.

Any change in approval/certification status of a third party registration by an accreditedregistrar must be communicated to Flowserve in writing. The notification must be madein writing to the Corporate Supply Chain group. Or, in case of Distant Countries to theLocal Flowserve Business Unit.

Vendor Management System (VMS)Suppliers will be expected to access and fully utilize, the Flowserve VMS whilemaintaining accurate updated records. Supplier will be capable to complete all requestspertaining to:

Supplier registration/profile-includes general information/capability correlated bycommodity

Supplier to complete Quality system survey form when requestedObjective of VMS will be to create a relationship between our suppliers and participatingoperations. In order to enhance this relationship, the tools identified below will berequired upon completion within the VMS. Flowserve will identify the timing required.

Supplier Products offered Supplier price matrix when requested Supplier open capacity (Updated monthly) when requested Supplier Quality and Delivery Self Reporting APQP/PPAP planning

Advanced Product Quality Planning (APQP)Advanced Product Quality planning is necessary for effective defect prevention, processoptimization, and continuous operational improvement. APQP may be required duringall phases of product and process development and throughout the product lifecycle.Suppliers will be requested to potentially lead, facilitate, and update all pertinentinformationKey focus shall be placed on:

New Supplier(s) New part introduction to existing supplier(s) Supplier with expanded capability for new part introductions Projects and components indentified as high risk

Process Change ControlFlowserve recognizes that a continuous improvement philosophy encourages changes andprocess improvements. However, to ensure against any unforeseen impact to Flowserveor its customers, all Flowserve Suppliers shall provide the appropriate Flowserve buyer


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written notice prior toany significant change in the manufacturing of product supplied toFlowserve within 30 days. In addition, written notice shall be given before relocating anyproduction, inspection or processing facilities; or transferring work between differentfacilities; or making any other changes which may affect product quality, reliability, orintegrity. Such changes are subject to approval/disapproval by Flowserve.

Furthermore, prior to start of production, Flowserve must approve these process changecontrol submissions. These changes include those that impact form, fit, function,equipment, and tooling, measuring equipment / method, test procedures or location ofmanufacture of the product supplied to Flowserve. The form of communication may bethe Part Submissions Warrant (PSW) form and identification of first run product orsamples..Process Monitoring and Operator InstructionsThe suppler shall maintain appropriate process procedures / work instructions thatprovide documentation of process and inspection steps that can be clearly understood bythe operator.

Procedures shall be updated to reflect changes in processes, equipment, inspectionmethods, and customer requirements. Changes shall be managed through the supplierschange control procedures.

Associate TrainingThe Supplier will ensure that Operators are fully trained for the work they have beenassigned to complete. Additionally, the Supplier is responsible for maintaining aTraining Matrix that shows the Associates and the tasks they are trained to work on.Regular updates, Monitoring, Training Frequency, and Training Effectiveness shall bemonitored.

Product ChangesThe supplier shall have an engineering change control process. It shall include controlsin place to ensure that Flowserve in advance of start of production approves anyengineering changes that affect form, fit, or function of the product in writing. Thesechanges include changes to the part number, material, engineering change levels, andmanufacturing location.

ReworkThe supplier shall develop, implement, and maintain policies and procedures for allrework, repair, and the use of any reprocessed materials. When rework is required as aninterim measure, the supplier shall include or reference the following in the appropriaterework documentation, instruction sheets, procedures etc.Prior to repair, FLOWSERVE approval must be received for the following:

Written work instructions Special working environments Characteristics and tolerances to be met Written rework inspection / test instructions


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Measuring and test EquipmentThe supplier shall maintain adequate tooling, fixtures, gauges, measuring, and testequipment for process control. Equipment used for verifying quality attributes, mustwhere practical, be designed to provide actual data. A system shall be in place to ensurethe integrity of all such test equipment, with clearly defined calibration/verificationintervals and methods. All procedures are to be documented, and provide evidence oftraceability to national / international standards and compliance to ISO 9001-2008,section 7.6 .guidelines for all Pump operations and ISO 10012:2003 REGARDING ALL SEALOPERATIONS.

Material Identification / ControlThe supplier shall provide a system for identification and control of all materials. It isexpected that materials will be processed on a FIFO (First In – First Out) basis. Thecontrol of materials shall apply to purchased, in-process, finished goods, time sensitive,customer supplied, FPI / PPAP (First Piece Inspection / Production Part ApprovalProcess) and non-conforming materials. The system shall provide for segregation andidentification of non-conforming materials to prevent unauthorized / accidental use orshipment. Individual FSG operations will require various ID and controls. FSGoperations will detail and communicate any individual requirements. It is supplierresponsibility to understand and comply with operational requirements.

Lot TraceabilityWhere applicable, the supplier shall establish a lot traceability system such that they canprovide Flowserve with and objective evidence trail of material used to produce productsfor delivery to Flowserve e.g. Material number, Heat number etc.Supplier shall maintain material traceability to Flowserve’s part number and purchaseorder number. Supplier shall maintain material certifications for a minimum of five yearsand provide Flowserve with certifications upon request. At times unique Aerospacerecord retention times will be specified on the purchase order, and may require permanentstorage.

Quality RecordsThe supplier must retain quality system records, including quality planning, processguidelines, test instructions, calibration verification results, destructive/non destructivetesting and other records as applicable to ensure compliance with the quality system for aperiod of 5 years.

Drawing and Change ControlThe supplier must ensure that all drawings, procedures, and work instructions arecontrolled and represent the most current revision of the document. This includesensuring the most current engineering drawings and specifications are available at themanufacturing operations. The system must include provisions for managing changesimposed by Flowserve, such that only the latest revision of product is delivered toFlowserve unless previously agreed to in writing. Specific Seal record requirementsidentified within addendum 1 at end of SQM.


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Corrective and Preventive ActionThe supplier shall have a functioning system for closed loop corrective and preventiveaction to identify and eliminate the causes of non-conformities or potential non-conformities. An effective Corrective Action process shall be included in this system.

Outgoing ProductThe suppliers quality system must contain sufficient controls to ensure that the productsshipped to Flowserve conform to all chemical, material mechanical properties,physical (internal and external integrity), dimensional, and visual requirements.Where applicable, each shipment must contain a Certificate of Compliance (C of C),Material Test Report (MTR) or other objective evidence of compliance as specified bythe engineering drawing or purchase order. The supplier shall comply with all Flowservepackaging and labeling standards/guidelines. When packaging criteria are notspecifically defined, the supplier shall ensure material is adequately packaged to preventdamage or deterioration from handling or while in transit. All products shall be marked inaccordance with Flowserve drawing(s) or as specified within the purchase order. Contactthe appropriate Flowserve buyer if no requirements are listed on either. It is the supplier’sresponsibility to identify operational requirements and comply accordingly.

Internal AuditsEvidence of regularly scheduled and conducted internal compliance audits shall beavailable for inspection by Flowserve. Audits are to be designed to demonstrateadherence to internal procedures and customer requirements, preferably in accordancewith latest version of ISO standard.

Preventative MaintenanceThe supplier shall identify critical machinery, fixtures, and tooling and develop a PMschedule for the regular review and routine maintenance of these items to ensure theintegrity and operability of the equipment. Any requirement for replacement oradjustment shall be documented and supported by evidence of the equipment’s return tomanufacturer original specifications.

Breakdown MaintenanceThe Supplier is responsible to keep a minimum requirement for Key Critical MaintenanceComponents in stock, to ensure that stoppages do not occur. The Supplier is responsibleto inform Flowserve of what the longest lead-time items are, for components not held instock.

Business ChangesAny significant changes in business climate such as acquisitions, divestitures, and currentor pending litigation, HSE violations or any activity that may change the financialviability of the suppliers’ organization must be communicated to Flowserve CorporateSupply Chain in a timely manner.


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Supplier Assessment and Qualification

It is the intent of the Flowserve Quality and Sourcing functions to follow a consistentprocess for supplier assessment and qualification. While there may be minor differencesamong the divisions, each supplier selection and sourcing process adequately evaluatesand identifies potential partners for Flowserve.

These processes are designed to ensure, through supplier assessment and qualificationactivities, that all Flowserve strategic suppliers are capable of meeting quality, delivery,cost and continuous improvement objectives.

The supplier assessment and qualification process for strategic, core and suppliersdesignated as supplier development will include the registration and completion withinthe Flowserve Vendor Management System. A general description of utilization belowincludes:

Initial supplier profile. Supplier assessment Supplier qualifications and capabilities All new and designated problematic suppliers shall submit the minimum

requirements assessment specific to their commodity. This assesses the supplier’sinternal process controls. Upon evaluation, it may be determined to applycorrective actions, development or enhancements to a supplier process.

The Flowserve selection process is focused on finding partners, dedicated to superiorperformance and desirous of a long-term mutually beneficial relationship. Onceapproved by one Flowserve division, other divisions may choose to use a supplierwithout further qualification. The Vendor Management system will enable an approvedvendor list for all FSG Business Units.

Initial Supplier Registration and ProfileSuppliers will be requested to register within the VMS and complete all instructedsections. A supplier survey may accompany the registration and include questions toassess various supplier systems, capabilities, products and capacity.

Supplier Validation- On Site visitA Flowserve Quality or Sourcing representative may perform the assessment validationat supplier site.The Supplier’s profile registration may focus on information from the following keycategories;

General company profile Supplier financial information Product information Customer /market information Supplier capabilities Supplier Minimum acceptance requirements


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Health, safety and environmental compliance Workforce make-up E-Business strategy and customer service

The Supplier Survey focuses on information from the following key categories: Quality system Design and specification control Procurement systems and control Inspection and metrology Material management In-process control and SPC Material control, storage & finished product Corrective action system Contract review Control of records Training Internal quality audits

Other criteria used to evaluate suppliers: Position in industry Capacity Competitiveness Responsibility for engineering, development and testing Warranty commitment Full service capabilities Progressive culture with continuous improvement philosophy Responsiveness to requests for quotes and technical assistance Effective problem resolution Proactive approach to defect prevention and continuous improvement Logistics in relation to plant Global presence-geographic positioning for future

After receipt of all pertinent information, a review will be held to determine the nextsteps. Based on the recommendation of the review team, there may be a need to follow-up with the potential supplier or gather additional information. If recommended by thereview team, the assessment and qualification process will continue.

On-Site AssessmentA site visit may be conducted to further validate or evaluate a suppliers operating andquality systems. Flowserve personnel, to determine the effectiveness of the systemsdescribed in the supplier survey, will conduct the on-site assessment. The evaluation willbe conducted to ensure the supplier can consistently meet Flowserve’s product, quality,and service expectations. If required by Flowserve’s customers, or as the result ofmarginal supplier ratings, an annual on-site quality assessment may be performed. At thediscretion of the team, a third quality system registration such as ISO9000 may be


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recognized in lieu of an on-site visit. It is required that Flowserve be notified in writingwithin five working days of any change in third party registration status.

Assessment Results / Follow-upThe team conducting the assessment will in most cases provide feedback to the potentialsupplier on the results of the initial profile and on-site visits within 15 days. If the teamidentifies specific deficiencies that it feels must be corrected prior to proceeding, a formalSupplier Corrective Action Request (SCAR) will be provided to the potential supplier.The team may recommend the supplier be put on conditional approval status pendingsuccessful implementation of measures to correct the noted deficiencies.

ApprovalsFlowserve will recognize two different levels of approval for strategic suppliers.

Full Approval Conditional Approval:

1. Subject to specific corrective actions defined in a SCAR2. New supplier probation.

Flowserve may choose to contract with a supplier on conditional approval status;however, it is expected that any follow-on visits, corrective action steps or otherdeficiencies will be remedied within a reasonable, agreed upon time frame.At Flowserve’s discretion, a supplier may be moved from Approved to ConditionallyApproved status pending resolution of open SCAR, poor performance rating or failure tomaintain an effective quality system.Flowserve may chose to contract with a probationary supplier until all samples are fullapproved. Upon sample approval; Supplier will be removed from probationary to FullApproval.Flowserve shall maintain a list of suppliers and their approval status. Approved suppliersand a file of supporting documentation shall also be maintained.

Long Term Agreement (LTA)It is the intent of the Flowserve sourcing organization to have an LTA with all approvedstrategic suppliers. This agreement is supplemental to the requirements defined hereinand shall serve as a document to further define the roles, responsibilities and therelationship between the parties. The LTA will include, but not limited to; informationon duration, pricing, penalties, warranty, payment terms, continuous improvementtargets, capacity bookings and delivery.

Inspection Status and Test StatusThe inspection and test status of product shall be documented though allphases/operations of the process being conducted, which indicate the conformance ornonconformance of the item being produced. Documented procedures/work instructionsand or quality plans describing the methods to be followed are required. Examples wouldinclude work orders, manufacturing routers, non conforming material reports, hold tags,etc. These documents would indicate compliance or non compliance with the requiredtests or inspection requirements identified on the document. The purpose is to ensure thatonly product that meets all requirements is provided to Flowserve. The only exception is


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non conforming product that is accepted by Flowserve in writing via a non conformingmaterial report.

Approving Parts for Production

Once business is awarded, the part or component being sourced must be approved for theproduction by the contracting Flowserve facility. Parts/components may be approved byone of the following methods:

First Piece Inspection (FPI)As required, products shipped to Flowserve for the first time (potentially at times, onepiece out of the first shipment) must be accompanied by a first piece inspection (FPI)report showing variable data results on critical dimensions and applicable parameters asdefined by the Flowserve division.Supplier shall perform first piece inspection on one piece out of the first shipment. TheFPI documentation is to be included with the first shipment and identified as “First PieceInspection Data”. FPI data will consist of the following:

A. A report indicating the actual dimension for each characteristic on thedrawing, compliance to all non-dimensional drawing requirements such aspart marking, material etc.

B. The part or piece used for FPI will be tagged identifying it as the itemmeasured to obtain the actual dimensions.

All FPI documentation is to be dated and signed by the individual(s) performing the FPI.

Once suppliers have established themselves with Flowserve, at the discretion of the localQuality authority, a product or products from an approved supplier MAY be put onDock-to-Stock status. This status exempts the supplier product/ parts from the receivinginspection process at the Flowserve facility. All parts, regardless of establishment status,are expected to meet all Flowserve quality requirements at all times and are at any timesubject to random inspection, 100 % complete inspection, verification upon receipt orwork in process. Dock-to-Stock status may be revoked at any time for any reason by thelocal Quality authority. ALL FSG operations will define receiving inspection status tosupplier. Suppliers will be expected to comply with identified inspection criteria.

Production Part Approval Process (PPAP)When required by the Flowserve facility, the supplier must provide production partapproval via the PPAP submission process. The Flowserve Quality Engineer ordesignate will identify the appropriate PPAP submission selections for the part orcomponent being sourced. Further assistance may be provided by site engineeringdepartments.A part of the PPAP process requires that all dimensions for a part be checked and verifiedprior to full production and receipt of parts at a Flowserve facility unless otherwisestated. All dimensions, (except reference dimensions), characteristics, and specifications


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as noted on the design record are to be listed in the appropriate report. Blanket statementsof conformance are not acceptable.It is the suppliers’ responsibility to ensure compliance with all material, dimensional, andperformance requirements as specified in the Flowserve documentation. If a supplier isunable to meet any of these requirements, the Flowserve facility Quality Engineer ordesignate must be contacted for determination of corrective action prior to submission ofsamples.The initial production sample must be submitted from production tooling meeting allapplicable purchase orders, drawing requirements, and engineering specifications. PPAPsamples must be run under actual production conditions. PPAP action plans andassociated documents shall be submitted to the Flowserve Quality Engineer or designate,along with the production samples as required.If production parts will be produced from more than one cavity, mould, tool, die, orpattern, a complete dimensional valuation is required on parts from each cavity, mould,etc. As stipulated by individual Flowserve facilities, PPAP’s may be required for partsfrom sub-suppliers.

Manufacturing Process ReviewA manufacturing process review for new suppliers, or current suppliers offering newproducts, may be conducted prior to the FPI or production part approval process.Appropriate personnel from Flowserve, may conduct a review of Flowserve supplieddocuments or drawings and specifications submitted with supplier quotations. Suchreviews may be conducted to ensure full understanding of all drawing/specificationrequirements.

It is expected that the supplier will review all purchase orders, drawings, andspecifications for clarity and understanding to ensure the final product produced willcomply with all requirements. It is suggested that the supplier develop a rough processflow diagram at the time of review to ensure all processes are being considered. Allissues or concerns should be resolved prior to FPI or PPAP submittal.

Advanced Product Quality Planning (APQP)Advanced Product Quality Planning (APQP) is a structured method of defining andestablishing the steps necessary to assure that a product meets customer expectationsduring the product development and launch phase. As required by the individualFlowserve facility, some of the key elements of APQP as defined below may be includedin qualification and initial submittal requirements.

Process Failure Mode Effects Analysis (PFMEA)A PFMEA is a disciplined review and analysis of a new/revised process and is conductedto anticipate, resolve, or monitor potential process problems. A PFMEA should beconducted during product quality planning prior to production. A PFMEA is a livingdocument and should be reviewed and updated as new failure modes are discovered. Thesupplier is responsible to define modes within the supplier’s facility that could possiblyaffect the end product.


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Process Flow DiagramA Process Flow Diagram showing the flow of material may be required as defined by theindividual Flowserve facility. A graphical description using standard symbols shall beused to describe the operation, delay, inspection, transportation, storage, and operatoractivities.

Quality Control PlanA Quality Control Plan showing Process Steps may be required, as defined by theindividual Flowserve facility. The control plan will describe dimensional measurements,material, and functional tests that occur before, during and after production.

Process CapabilityProcess Capability studies may be required, as defined by the individual Flowservefacility. For control of product features or special characteristics that require a greaterdegree of certainty and confidence with respect to capability and process control, bothshort term and long term process capability may be required. These characteristics shallbe noted on product drawings or specifications. Designated special characteristicsrequire demonstrated evidence of conformance at launch (PPAP) and over time.

Supplier Quality and Development

Supplier development is a process used by Flowserve to work closely with suppliers andassists them in driving continuous improvement efforts. Key objectives along withdeliverable end goals include:

Risk Mitigation Ensure objective decisions are taken for supplier selection and qualification Manufacturing Process Review Supplier capabilities are aligned with component designs and specifications Drive supplier development so as to align with Flowserve requirements Flowserve objectives are met in terms of Cost, Delivery and Quality

Development projects and training efforts will be led by qualified Flowserve personnel.Flowserve uses a variety of Continuous Improvement Process (CIP) tools to empower acontinuous improvement culture with our suppliers..Management commitment and involvement from both Flowserve and the supplier is vitalto the success of any development project.

Flowserve may choose suppliers for development activities at its discretion. Somecriteria that may be used for identifying development opportunities include but are notlimited to the following:

Strategic growth suppliers Critical part suppliers Risk revenue partners Performance issue suppliers


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Suppliers must have a willingness to change and improve and should show evidence ofinternal continuous improvement efforts. Suppliers must have adequate capability andsystems such as approved quality system, material scheduling and cost tracking.

Once a supplier has been selected a cross-functional team from both Flowserve and thesupplier will be formed to conduct a base line assessment and gather data. As required,the supplier may be trained on necessary techniques for operational and processimprovement such as Lean and Six Sigma tools.

The team will develop and implement the improvement plan with the supplier. Onceagreed upon and understood by all, the designated Flowserve resource will serve as theproject manager working with the supplier to ensure implementation and completion. Apost completion audit should be performed to verify project success

Total Supplier Performance

Total Supplier performance measurement is an integral part of the Flowserve suppliermanagement system. Data on supplier quality, delivery, and timely response tocorrective action requests is obtained from the Flowserve business system and used todevelop key performance metrics. Reports will be generated on a monthly basis or asnecessary and supplied to strategic suppliers. The report is used to communicate supplierperformance data for delivery and quality issues.

Supplier Non-Conforming Material and Closed Loop Corrective Action

Top Focus ProgramFlowserve’s Top Focus program is designed to re-focus selected suppliers and Flowserveplants by addressing tactical and systemic root cause(s) that have led to deterioration inquality and delivery to our plants. An integral part of this process includes performing adetailed analysis of Organization, Culture, Manufacturing, and Quality system supportstructure.The Top Focus program is a data driven process that requires immediate, significant,measurable and sustainable improvements in quality and delivery. Ultimate successwill be based on open, honest and lasting partnership for both organizations to succeedwhile reaching the goals and objectives required by Flowserve to support our Globalcustomer base. Top focus program is enabled within our VMS environment.

Supplier self reporting of quality and delivery within Flowserve VendorManagement System (VMS)Flowserve will request all alliance/agreement and Top Focus suppliers to participate inthe self reporting of delivery and quality performance. The intent is to utilize supplierdata, while enhancing the individual performance levels. Implementation of requiredcorrective actions and control plans will drive to sustain these levels.


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Non Conforming MaterialUnder no circumstances can non conforming material be shipped to Flowserveunless approved as follows: (Independent divisional and operational requirementsmay apply. Suppliers will need to comply with processes and procedures asidentified by operations)

Where appropriate, a Non-Conforming Report (NCR) shall be issued to suppliers whennon-conforming material is found at incoming inspection, on Flowserve’s productionfloor or at its customer’s facility.

Flowserve may submit a request to the supplier for return authorization in the eventdiscrepant material is found. Any discrepant material returned to the supplier will be atthe supplier’s expense. In the situation that Flowserve has critical customer deliveryrequirements and at its sole discretion determines it is most expeditious to sort, rework, orrepair the discrepant material, it may do so without prior authorization. Costs incurred byFlowserve for such sort, rework, repair, or return activities shall be the responsibility ofthe supplier.

Upon receipt of an NCR by the supplier, the supplier shall complete within one businessday, the following actions:

Inspect all suspect material produced to ensure that no additional products will beshipped with the discrepancies present. This may include inspection of productalready in transit, at Flowserve or at a Flowserve customer location.

Quarantine any discrepant material. Ensure that all affected personnel/locations are apprised of the issue. Implement immediate corrective action to eliminate the discrepancy.

Any supplier liability for sort, rework, repair, scrap, freight, customer charges, etc. shallbe detailed on the MRN / RMA (Material Return Number / Return MaterialAuthorization).

Seal nonconforming productI n addition to the above, product found to be nonconforming by the supplier may besubmitted to Flowserve for MRB review/disposition. Submittal must be made in writingto the Flowserve Buyer.

If it is discovered after shipment that nonconforming product(s) have been delivered toFlowserve, the Supplier shall notify the Flowserve Buyer within twenty-four (24) hoursof the initial discovery. The supplier shall provide formal notification (Disclosure Letter)within five (5) days of the initial notification.The Disclosure letter shall include the following information:a. Complete description of the nonconforming condition(s).b. The affected quantity of products (including serial numbers when applicable) and datesdelivered to Flowserve.


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c. Potential effect of the nonconformance on the performance, reliability, safety and/orusability of the product(s).d. Recommendations for Flowserve action including a recommendation for thedisposition of products that Flowserve may have already delivered to its customers.e. Immediate action taken by Supplier to contain the nonconforming products.f. Root cause analysis of the nonconforming condition.g. Root cause corrective action plan and schedule.h. The plan and schedule for verifying the effectiveness of the corrective action.

Warranty and ServiceUpon failure of Flowserve product at customer location:

The supplier shall acknowledge the receipt of service request within 48 hours ofthe initial service request, resulting from the supplier part failure or non-operationincluding a detailed action plan. If the part cannot be restored to normal operation,a trained service representative from the supplier shall visit the installation siteand make all necessary repairs and adjustments within a period of 3 business daysof the initial service request

Adjustments and repairs made by the user (customer) at the supplier's request, andnormal specified maintenance performed by Flowserve or user (customer) shallnot affect the warranty.

Supplier Closed Loop Corrective ActionAll Flowserve Strategic Suppliers must establish and maintain documented proceduresfor closed loop preventative and corrective action systems. The system must containRoot Cause Corrective Action (RCCA) measures to ensure identification and eliminationof the source of the problem.Any preventative or corrective action taken to eliminate the causes of actual or potentialnon-conformities shall be appropriate to the magnitude of problems and risksencountered. All changes implemented shall be documented in sufficient detail toprovide an audit trail.

Supplier Corrective Action Request (SCAR)The supplier shall complete the corrective action as follows:

Containment action implemented to ensure additional quality escapes do not getshipped to Flowserve or recurring delivery problems are corrected. Short-termaction should be submitted to Flowserve within two business days of issue ofcorrective action request.

Root cause established: find the true underlying cause(s) and/or reason for thediscrepancy.

Submit SCAR request to Flowserve with RCCA and implementation plan within10 business days or as specified on the SCAR request.

Implemented corrective action: long term action taken to ensure that the problemwill not recur.

Verification: objective evidence that the problem has been solved and submittal offinal SCAR form to Flowserve.


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Test and Validation Plan: Test the corrective action plan(s) internally, andvalidate that the desired results can be achieved

Packaging Requirements

Packing SlipsPacking slips shall accompany every shipment and shall be attached to the shipment suchthat they are readily identifiable and arrive intact.

Packing slips shall include the following information:Supplier Information Supplier name and address (ship point) Supplier code (I.D.) number, vendor number Packing slip number Date shipped Carrier name

Shipping Information: Ship To: Flowserve plant address Gross, tare, and net (material) weight Shipped via (routing as instructed by Flowserve Purchase Order) Freight terms (FOB point, collect/prepaid) Excess transportation charge, to be included whenever movement of

material deviates in any way from the normal supplier routing instructions.

Packaging Information Number of unit loads: pallets-containers-cartons, etc. Pieces per unit load Unit of measure – if other than pieces per unit load

Part or Material Information: Flowserve Purchase Order number and line number Batch/Lot or Heat Number Manufacturing Date Code Quantity shipped Flowserve part number (listed in sequential order) Flowserve part description If product is shipped to an individual, include their name on an alternative

line.


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Certifications and Test Reports

As defined by the purchase order, engineering drawing, specification or otherrequirement, certificates of compliance, material test reports, or other reports shall beincluded with each shipment. A MSDS sheet for chemicals and materials as required byOSHA or as otherwise required in Flowserve specifications must accompany eachshipment of material. These documents should be either appropriately packaged orlabeled to avoid damage in transit and to be readily identifiable as important documentsor send to the appropriate contact person by e-mail.

Packaging and Identification Labels

Generally, selection of packaging will depend upon the specific part or material, themethod of transportation and handling. Package size, strength, and type, shall be selectedto provide protection and to fit the mode of transportation, applicable carrier regulations,and distance of transit. All packages shall be labeled to comply with DOT and OSHAmarking guidelines.

In finalizing the packaging design, the following cost factors should be considered: Handling labor Handling equipment Transportation cost (optimum cube utilization) Floor space Ability to recycle, ease of disposal or reusability

Flowserve has the option of reviewing all supplier- packaging designs and rejecting thosedesigns, which are not compatible or adequate to Flowserve receiving systems. Suppliersshould review their packaging on an ongoing basis in order to improve delivered partquality, part presentation, and reduce costs.

There may not be more than one part number packaged in any container unlessspecifically directed by Flowserve.

All expendable containers should be loaded to cubic capacity to maintain load density,package integrity, and obtain optimum freight rates.

All containers should have a manufacture’s certificate with bursting or puncture testvisible on the assembled container along with appropriate handling designations such as“Glass” or “Fragile” where appropriate.All containers must have bar code labels with pertinent information. The labels must beplaced on adjoining corners of the box. Label must contain at a minimum the followinginformation:

Flowserve part number Supplier’s part number Flowserve PO number and line number


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Product date with associated lot (production run) number Raw materials shall always include heat number

All identification labels must be easily distinguishable from other labeling and printedwith type font sized for ease or readability. Hand-written labels are not acceptable.Labels must be placed on packaging so as not to conceal other pertinent labeling oridentification.

The acceptable closure for corrugated packages is adhesive carton sealing tape or fiberreinforced paper tape.

Seal parts as defined below:

Metallic raw material (bar, tube and flat stock, castings, forgings) shall be permanentlymarked with the heat lot number. A certified material test report (CMTR) indicatingmaterial specification, material type, heat lot, chemical composition, mechanicalproperties and the specific country of origin is required with each product shipment.

Seal Faces - skin-pack boards shall allow a 2” minimum (more if height of productexceeds 2.5”) between products placed in straight, evenly spaced rows, and shall containone part code per board.

When skin packaging all material type seal faces other than carbon, skin pack face,lapped face down on cardboard.

When skin packaging carbon faces, skin pack face, lapped face down on cardboard witha foam circle or micro foam cut to size between the cardboard and seal face lappedsurface to prevent sliding and/or scratches. Be sure that the foam used does not leach outany material that will stain the seal face.

Supplier’s Responsibility

Suppliers are responsible for the accurate and timely shipment of required product,supported with accurate billing information per established routing as directed byFlowserve.

Supplier schedules shall be maintained to support Flowserve schedules and requirements,unless other arrangements have been previously made with the contracting Flowservematerials department.

All rejected material is expected to be replaced and available at Flowserve within 24hours of notification to Supplier. In situations where ’24-hour’ replacement is notavailable, Flowserve and the Supplier, will establish a mutually agreeable time forreplacement. This shall be worked out within 24-hours notice of the need for thereplacement part. Suppliers will ensure material is shipped to schedule during theirdowntime.


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All suppliers are required to maintain an appropriate level of Safety Stock for StandardProducts where appropriate. Safety Stock is required to avoid any potential shortages dueto production fluctuations and/or rejected material.

Excess transportation charges are the supplier’s responsibility when supplier delivery tothe “agreed to delivery date” is past due.

Over shipments are not acceptable unless previously agreed to in writing. Suppliers areresponsible for any return freight carrier charges, and/or plant costs as a result of an overshipment.

Any shortages, problems, or concerns shall be immediately communicated to the supplierdesignated Flowserve contact.

It is the responsibility of each supplier to ensure that all shipments are in predeterminedstandard pack quantities at all times.

Capacity problems and any other extenuating circumstances requiring extendeddowntime that will prohibit the supplier to ship to schedule shall be immediatelycommunicated to the supplier designated Flowserve contact.

Transportation

Suppliers shall use transportation methods and carriers in compliance with purchase ordershipping instruction(s) provided by Flowserve.All Suppliers will take necessary action to avoid premium transportation shipments.Supplier will obtain authorization from the supplier designated Flowserve contactwhenever movement of material is by other than the normal mode of transportation, i.e.:expedite, different carrier than listed on purchase order.Disputes regarding premium freight must be submitted in writing to the supplierdesignated Flowserve contact within 90 days or the dispute will not be honored.

Communication

Communication regarding any and all information that may affect the timely delivery ofmaterial to support Flowserve daily production is mandatory.Flowserve requires daytime contact names and phone numbers and after hour emergencycontact names and phone numbers. Any changes within your organization shall becommunicated immediately with a replacement name and number. These contacts willbe knowledgeable and qualified in the area of: material follow-up, including systems,shipping and traffic, engineering changes, and purchase orders.

It will be the responsibility of the supplier to maintain and communicate any address,telephone, fax, and pager number listing changes of their personnel. This informationmust be communicated to the supplier designated Flowserve contact.


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Cost of Poor Quality

All costs incurred by Flowserve that are associated with the failure of the supplier to meetFlowserve quality requirements may be charged back to the responsible supplier. Thesupplier will comply with the supplier cost of poor quality policy as communicated bysupply chain.

Listed below are typical events or examples that can be associated with COPQ from asupplier:

Receiving Process Sorting Rework Line Disruption Premium Freight Cost of increased inspection Late delivery Excess inventory Misidentified parts Shipping documentation errors

In-Process Fallout Downtime Overtime Line speed reduction Additional manpower Line changes due to material availability Equipment breakage Associated material loss Outside processing required Rework-labor, tooling, and fixtures

Customer Issues Rework at Flowserve customer premises, travel, manpower Replacement of material at Flowserve customer Premium freight to Flowserve customer Reimbursement of all charges from Flowserve customer Cost of internal containment actions Added inspection, certification Warranty cost


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Addendum 1 Seal Quality record requirements:

Specific Purchase Order RequirementsProduct supplied to Flowserve shall comply with the below QA clauses only if the clauseis SPECIFICALY listed on the purchase order. All elastomeric or other shelf-lifeitems shall comply with QA clause 12 regardless of inclusion on a specific purchaseorder.

QA CLAUSE 1 - CERTIFIED MATERIAL TEST REPORTCertified Material Test Report (CMTR) indicating the material type, specificationnumber, and heat lot number, chemical, mechanical and physical properties is requiredwith product shipment.

QA CLAUSE 2 – CERTIFICATION OF INSPECTIONA Certification of Inspection, indicating that the product being supplied has beeninspected and is in compliance with all applicable drawings, specifications andcontractual requirements, is required with each lot. Objective evidence to support thiscertification will be made available to Flowserve for review upon request.

QA CLAUSE 3 – CHEMICAL ANALYSISChemical analysis of base material and certificate of inspection of plating material andthickness if applicable shall be furnished with product.

QA CLAUSE 4 – MERCURY FREEThe material shall be certified mercury free. A written statement that all products and/orservices provided have not come in contact with or have been exposed to mercurybearing instruments or equipment, or mercury in any other form.

QA CLAUSE 5 – CERTIFICATE OF CONFORMANCE

Supplier shall provide a Certificate of Conformance indicating that all supplies and/orservices comply with all requirements of the purchase order. Specific requirements suchas a test specification, heat treat specification, etc. shall be stated as such on theCertificate of Conformance. The Certificate of Conformance shall contain the partnumber, revision, Flowserve purchase order number, quantity and shipper number as aminimum.

QA CLAUSE 6 – HYDROSTATIC TEST or AIR TEST CERTIFCATION

A certificate of test shall be supplied with each product shipment. This certificate shallinclude, as a minimum, the name and location of the organization performing the test, acomplete description of the test performed (test parameters, applicable specification(s)and revision, actual results, etc.), quantity tested, part number and revision, personperforming the test, and shall be signed by an authorized company representative.


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QA CLAUSE 7 – SPRING RATE/LOAD TEST REPORT

A certificate of test shall be supplied with each product shipment. This certificate shallinclude, as a minimum, the name and location of the organization performing the test, acomplete description of the test performed (test parameters, applicable specification(s)and revision, actual results, etc.), quantity tested, part number and revision, personperforming the test, and shall be signed by an authorized company representative.

QA CLAUSE 8 – 100% INSPECTION

Supplier shall perform 100% inspection of all characteristics on all line items on thepurchase order. Documentation of the 100% inspection results (actual values) shallaccompany each shipment and be identified as 100% inspection records.

QA CLAUSE 9 – FIRST ARTICLE INSPECTIONSupplier shall perform First Article Inspection on one piece out of the first shipment. TheFirst Article documentation is to be included with the first shipment and identified as“First Article Inspection Data”. FAI data will consist of the following:

A report indicating the actual dimension for each characteristic on thedrawing, compliance to all non-dimensional drawing requirements such aspart marking, material etc.A. The part or piece used for First Article Inspection will be tagged

identifying it as the item measured to obtain the actual dimensions.B. All First Article Inspection documentation is to be dated and signed by

the individual performing the First Article Inspect

QA CLAUSE 10 – CARBON CONTENT OR CARBON EQUIVALENT (CE)

Supplier shall furnish a certification stating the carbon content or carbon equivalence(CE) of the purchased product.

QA CLAUSE 11 – SOURCE INSPECTIONProduct shall be subject to inspection by a Flowserve representative at Supplier’s facilityprior to shipment. Supplier shall furnish, at no cost, the necessary equipment to theFlowserve representative to perform source inspection.

QA CLAUSE 12 – AGE SENSITIVE MATERIALElastomeric and other shelf-life items shall meet the requirements of SAE ARP 5316. O-ring seals shall be inspected per MIL-STD-413. Parts are to be packaged and labeledwith the following information: cure date, batch number, Flowserve part code andFlowserve’s purchase order number. Manufacturer’s compound shall be identified on thepacking list and ‘bulk’ container; not on the package of individually bagged product.


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QA CLAUSE 13 – PURCHASE ORDER TECHNICAL/QUALITY ASSURANCEREQUIREMENTS FOR OUTSIDE CALIBRATION SOURCES

All calibrations and/or tests must be performed in accordance with the supplier’sapproved quality system and must conform to nationally recognized standards for thecalibration or tests being performed (ISO/IEC 17025, ANSI/NCSL Z540-1-1994, MIL-STD-45662A, ISO 9000 etc.). The certificate of calibration, as a minimum, must containthe following:

1. NIST traceability number of the standards used to perform thecalibration.

2. Serial Number of the measuring device being calibrated.3. Environmental conditions at the time of calibration.4. Signature and date calibration was performed.5. Identification of the laboratory equipment/standards used to perform

the calibration.6. As-found calibration data when calibrated items are found to be out-

of-tolerance7. As-left calibration data.

The supplier shall notify Flowserve of any non-conformances or recallconditions that may affect any supplied calibrated M&TE.

QA CLAUSE 14 – AEROSPACE RECORD RETENTION TIMESThe supplier shall retain all required records as objective evidence of conformance topurchase order requirements, including supplier’s records and certifications of theinspections and tests performed in the course of procurement, manufacturing, testing,processing, inspecting, packaging and shipping for a minimum of the length of timespecified below after completion of the order. Such records shall be made available to theBuyer upon request.

A. 11 yearsB. 25 YearsC. Permanent

QA CLAUSE 15 –NONDESTRUCTIVE TEST REPORTSThe supplier shall furnish a certified test report for all nondestructive testing (NDT)performed. The report shall include, as a minimum, the name and location of theorganization performing the test, test name/description, test specification and revision,acceptance criteria document number and revision, quantity, quantity inspected andinspection results, date, purchase order number, part number and revision,qualified/certified inspector’s identification, and shall be signed by an authorizedcompany representative.

QA CLAUSE 16 –HEAT TREAT CERTIFICATIONThe supplier shall furnish a heat treat certification for all heat treat services performed.The certification shall include, as a minimum, the name and location of the organizationperforming the heat treatment, the heat treat specification and revision level, part number


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and revision level, purchase order number, quantity, date, hardness requirement andactual measured values, quantity checked, other test results as applicable, and shall besigned by an authorized company representative.

QA CLAUSE 17 –SPECIAL PROCESS CERTIFICATIONThe supplier shall furnish a certification/test report for all special processes performed.The certification/test report shall include, as a minimum, the name and location of theorganization performing the special process, a complete description of the special processperformed (process name, applicable specification(s) and revision, type, class, grade,etc.), quantity, part number and revision, any inspection/test results as applicable(thickness, visual inspection, etc.), a statement that the

QA CLAUSE 18 – FINAL INSPECTION REPORTPrior to delivery to Flowserve, the supplier shall perform final inspection on all productsand document the results on a Final Inspection Report (FIR). The format of the FIR isoptional; however, it shall show the actual inspection results obtained versus the drawingor specification requirements. The supplier shall maintain the completed FIR as part ofthe supplier’s records. The FIR will be made available to Flowserve upon request.

QA CLAUSE 19 – TRACEABILITY REQUIREMENTSThe supplier shall establish and maintain traceability of all detail and or subassemblycomponents delivered on this contract. Data which provides traceability of eachcomponent to the raw material from which it was made, including all processing, testingand inspection operations performed during manufacturing operations shall bemaintained. The lot traceability number shall be noted on the certificate of conformanceprovided with each delivered lot. If more than one manufacturing lot is delivered, partswill be segregated by lot and identified accordingly to assure lot traceability ismaintained.