SUPPLIERS MANUAL

SUPPLIERS

MANUAL

Rua Jesse Almeida 412 – Vale Grande – Aguada de Cima | 3750-066 Águeda, Portugal

Tlf. +351 234 660 370 | Fax. +351 234 660 372

www.veneporte.pt

MANUAL DO FORNECEDOR Revisão: 00

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FOREWARD

The increasing global competition for leadership requires that companies reinvent and

innovate every day, molding themselves to the new market demands.

Our mission is to produce quality products that meet the needs and expectations of our

customers, at competitive prices and accomplishing the standard requirements, such as

providing maximum satisfaction to employees and shareholders and contribute to the

social and economic development.

We know the vital importance of IM Veneporte´s suppliers on achieving these goals.

Therefore, we are addressing this manual as a means of conveying the mutual

commitment to achieve the proposed zero-defect on products/services goal, as well as

some methodologies that we may believe that are pertinent to adopt in the course of the

supply activities.

Should any questions arise from the content of this Manual, please do not hesitate to

contact us.

Sílvio Abrantes Carlos Morgado

(Purchasing Director) (Quality Manager)


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INDEX

1 – PURPOSE .......................................................................................................... 4

2 – APPLICATION ................................................................................................... 4

3 – SUPPLIERS REQUIREMENTS ......................................................................... 4

3.1 – SAFETY AND ENVIRONMENT ....................................................................... 4

3.2 – QUALITY ......................................................................................................... 5

4 – SELECTION AND APPROVAL OF SUPPLIERS ............................................... 5

4.1 – SUPPLIER SELECTION CRITERIA ................................................................ 5

4.2 – SUPPLIER APPROVAL .................................................................................. 6

5 – PRODUCTION PART APPROVAL PROCESS .................................................. 6

6 – DATA ENTERING AT IMDS – INTERNATIONAL MATERIAL DATA SYSTEM 7

7 – SUPPLIER ASSESSMENT ................................................................................ 7

7.1 – EVALUATION OF SUPPLIES ......................................................................... 7

7.2 – GLOBAL SUPPLIER PERFORMANCE ..................................................... 10

7.3 – FOLLOW-UP OF SUPPLIERS ................................................................... 10

7.3.1 – DEADLINE FOR CLASSIFICATION LEVEL RECOVERY ....................... 11

8 – CUSTOMER VISITS......................................................................................... 11

9 – SUPPLIERS DEFINED BY CUSTOMER ......................................................... 11

10 – SYSTEM, PROCESS AND PRODUCT AUDITS ............................................ 11

11 – LAY-OUT INSPECTION ................................................................................. 12

12 – PROCESS AND PRODUCT CHANGES ........................................................ 12

13 – APPROVAL OF DEVIATIONS / WORKS ...................................................... 12

14 – NON-COMPLIANCE TREATMENT ............................................................... 13

14.1 – COST RECOVERY ................................................................................. 13

15 – SUPPLIER DEVELOPMENT ......................................................................... 13

15.1 – SUPPLIER AUDITS ................................................................................. 14

16 – CONTACTS ................................................................................................... 15


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1 – PURPOSE

The purpose of this document is to establish a system for selection, assessment and

monitoring of suppliers and subcontractors.

With this system, it must be ensured the regularity of suppliers with respect to meet

IM Veneporte’s technical, quality, safety, commercial and logistical requirements as well

as corporate social and environmental responsibility.

2 – APPLICATION

The system described in this manual applies to all IM Veneporte’s suppliers and

subcontractors, namely:

• Suppliers of component/raw material which are incorporated in IM Veneporte’s

products;

• Suppliers of product-related services;

• Equipment gauging service suppliers.

For the sake of simplification, we shall hereinafter designate suppliers and

subcontractors as suppliers.

3 – SUPPLIERS REQUIREMENTS

3.1 – SAFETY AND ENVIRONMENT

It is recommended that the supplier effectively and efficiently fights to improve the

environmental situation, based on the international environmental management standard

(ISO14001), as well as having implemented an effective safety system, aiming the

continuous search for the eradication of accidents. In order to achieve this objective, it is

desirable to have a system implemented in accordance with the current international

standard (ISO 45001).


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3.2 – QUALITY

IM Veneporte expects from its suppliers the implementation and application of a

Quality Management System, at least, according to the requirements of ISO9001.

The requirements respecting the Quality System for the supply of products and

services are the following:

Supply Requisitos

Raw material/Components

Suppliers of product-related services

IATF16949 or ISO 9001 (at least)

ISO14001 and ISO 45001 (desirable)

Equipment Gauging Calibration ISO IEC 17025

Other services -

It is the supplier’s responsibility to certify their quality systems in accordance with the

above mentioned requirements, as well as to keep the certificates up to date at the IM

Veneporte Purchase Department.

4 – SELECTION AND APPROVAL OF SUPPLIERS

4.1 – SUPPLIER SELECTION CRITERIA

New supplier selection is based on the following criteria:

- Price;

- Product quality assurance;

- Performance in terms of production capacity and lead time;

- ISO 9001 certification;

- Preferably IATF 16949 certified;

- Preferably 14001 and ISO 45001 certified;

- Strategic geographic location/proximity.


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4.2 – SUPPLIER APPROVAL

The process of homologation of a new supplier, whether for a new product or an

existing one, comprises the following stages:

1 - Definition of the range of potential suppliers;

2 - Inquiries with potential suppliers;

4 - Risk analysis of the supplier(s) who have been pre-selected as potential (mod.A04)

3 - Evaluation of the inquiries and all the data and information collected;

The evaluation of the selected potential supplier(s) will be carried out by a tripartite

team (Technical, Quality and Purchase), according to the selection criteria and that will

determine the supplier to be approved.

The approved supplier, if he does not comply with the requirements of section 3 of

this document, will be asked to submit the mod. Q25- Final questionnaire to suppliers.

5 – PRODUCTION PART APPROVAL PROCESS

In the case of IATF 16949 Certified Suppliers, for the supply of raw material /

components and services, initial samples (PPAP approval) or equivalent may be

requested.

The supplier must submit the samples for PPAP approval with all relevant documents,

defined in the document "Mod.Q90 - Checklist for Initial Samples", which it will be asked

for.

Samples should be sent to IM Veneporte Quality Department, identified as "Initial

Samples". Upon receipt, samples are analyzed and evaluated according to the defined

criteria, to verify their compliance. Later, the final decision on approval will be

communicated to the supplier.

In the case of suppliers being certified 9001, the request for samples and

documentation to be sent will be defined on a case-by-case basis.

All suppliers shall ensure that the products and services provided are in accordance

with the legal and regulatory requirements of the country of origin, the country of

destination and the country of destination identified by IM Veneporte’s customers for its

products.


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6 – DATA ENTERING AT IMDS – INTERNATIONAL MATERIAL

DATA SYSTEM

Within its supply chain, IM Veneporte intends its suppliers to register the chemical

elements and their quantitative data in the portal www.mdsystem.com.

Data must be submitted to IM Veneporte approval at ID80906.

NOTE: PPAP approval is subject to submission of IMDS for Companies IATF 16949.

7 – SUPPLIER ASSESSMENT

7.1 – EVALUATION OF SUPPLIES

Suppliers are evaluated in order to check the compliance of the supplies, on the basis

of Commercial, Logistics and Quality requirements.

The Global Suppliers Performance (PGF) is calculated based on those requirements.

PGF = (0.50 x PQ) + (0.30 x PL) + (0.1 x CS) + (0.1 x PGA)

PQ - Quality Performance; PL – Logistics Performance; CS - QMS Certification; PGA

- Compliance with Supply General Prescriptions;

PQ – Quality Performance

PQ = 0, if the product is rejected

PQ = 50, if the product is approved but under certain condition

PQ = 100, if the product is approved

PL – Logistics Performance

PL = (0,60 x PE) + (0,40 x QE)

PE = 0, if delivery delayed > 7 days


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PE= 25, if delivery delayed >3 and <= 7days

PE = 50, if delivery delays <=3 days

PE = 100, if delivery made within the defined deadline

QE = 0, if quantity delivered <50% of the requested quantity

QE = 50, if quantity delivered >=50% and <100% of the

requested quantity

QE = 100, if quantity delivered is equal to the requested quantity

CS – Certification

Certification CS

100 95 90 75

IATF16949 X

ISO14001 X

ISO45001 X

ISO9001 X X X

PGA – Compliance with Supply General Prescriptions

PGA = (0,2 x CMP) + (0,3 x RNC) + (0,2 x PD) + (0,3 x CF)

Being:

CMP – Sending of certificates of raw material / inspection reports;

RNC – Reply to non-compliance within the established deadlines;

PD – Sending of Derogation Request;

CF – Product / Services provided according Supply Conditions


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CMP = 0, if the product / service is not supplied with a certificate /

inspection document

CMP = 100, if the product / service is supplied with a certificate, in the

case of raw materials certificate 3.1 according to EN10204 standard, in

the case of thermal or surface treatments, the inspection report, or if not

applicable.

RNC=0, if the product / service is considered of maximum severity, and

the NCR – Non Compliance Report – with containment measures within

a maximum of 2 working days, is not received.

RNC=25, if the failure is considered of medium severity, e.g. if it´s

necessary to rework products or modify fabrication processes to ensure

production, and is not received the NCR within specified time limits

(containment measures – 2 working days; Corrective and Preventive

actions – 10 working days)

RNC=75, if the non-compliance is considered of minimum severity,

e.g., whose product is usable without consequences for production, and

is not received the NCR within specified time limits;

RNC=100, if the non-compliance is considered minor / major / medium

severity, and the RNC is sent properly completed on Schedule, or if not

applicable.

PD = 0, if the product / service is provided not according the

specifications and without derogation request;

PD = 100, if the product / service is provided not according the

specifications, but submitted under a derogation request (with time limit

and quantity described), or if not applicable.

CF = 0, if the product / service is provided in disagreement with supply

conditions;

CF = 100, if the product / service is provided in accordance with the

supply conditions.

Remark: In case of Customer Complaints or internal non-compliances, after having

analyzed the causes, if it proves that the root cause was the raw material / components

or services provided by the Supplier, these will be penalized in the month of receipt of

the complaint.


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In this case, the supplier will be penalized in 11 points in its overall performance.

7.2 – GLOBAL SUPPLIER PERFORMANCE

The overall performance of suppliers is calculated based on the assumptions

mentioned in the previous point.

Suppliers are ranked according to the following table:

PGF Classification

90 to 100 A Excellent

85 to 89.9 B Good

75 to 84.9 C Regular

below 74.9 D Inadequate

Buying to a supplier considered inadequate can only happen exceptionally, if there

isn´t an approved alternative supplier.

7.3 – FOLLOW-UP OF SUPPLIERS

Monthly, the PGF is analyzed by IM Veneporte Quality and Purchasing Department.

The monthly assessment will allow the follow-up of the performance of the suppliers,

and is send according to the following criteria:

Every six months, if the supplier has been rated Level A for the past 6 months;

Monthly, 15 days after the end of the previous month, if the supplier has

dropped down a level (to B / C / D) form the previous assessment. In this

case, the supplier must submit an action plan so its performance can improve.

When a supplier´s PGF is lower than 85 points for a period of 2 consecutive months,

IM Veneporte reserves itself in the right of starting a Supplier Development Process, in

accordance to the point 15 of this manual.


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7.3.1 – DEADLINE FOR CLASSIFICATION LEVEL RECOVERY

In this point, we intend to define the deadline and lead time the supplier must

respect in order to recover its level of performance as follows:

- 10 working days for presenting the action plan after dropping level;

- The 2 next monthly assessments to recover its initial performance level (A).

In the case that no action plan is received within the stipulated deadline, the

situation will be reported to IM Veneporte Quality Director, so that it can be sent a

warning to the supplier. If this warning is not enough to persuade the supplier to

present an action plan, the situation will be reported to IM Veneporte’s administration

who will then decide what will be the measures to adopt towards this supplier.

8 – CUSTOMER VISITS

Suppliers must authorize any visit on its premises of IM Veneporte’s workers or

customers as long as indicated and informed by IM Veneporte. If any doubts arise

regarding the product/service supplied, due to the assessment results, high complexity

of the process or any other reasons, 2nd party audits must also be authorized by the

supplier.

9 – SUPPLIERS DEFINED BY CUSTOMER

Suppliers defined by IM Veneporte’s customers must be seen, assessed and

followed-up as a normal supplier, being only excluded towards the QMS of the selection

and approval process.

10 – SYSTEM, PROCESS AND PRODUCT AUDITS

In the case of System audits, suppliers, in particular, ISO 9001 certification, must

establish a regular audit plan that should cover the requirements 9001 as well as the

"Minimum Quality Management System Requirements for the Automotive Industry" -

Mod.Q 103.


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Process audits shall be performed in accordance with VDA 6.3 or equivalent

approved by IM Veneporte.

Product audits shall be performed in accordance with VDA 6.5 or equivalent

approved by IM Veneporte.

11 – LAY-OUT INSPECTION

Component suppliers, in particular, IATF 16949 certification, must perform a layout

inspection in accordance with the standard every two years, covering all specifications

defined in the product design, whether dimensional, trial and/or testing. The records, if

requested, must be sent to IM Veneporte.

For the ISO 9001 certified suppliers, the required tests and their frequency will be

indicated on a case-by-case basis.

12 – PROCESS AND PRODUCT CHANGES

Any changes in process / product / supplier of raw material should not be performed

without the prior analysis of the need for submission of samples / documentation for new

PPAP approval.

13 – APPROVAL OF DEVIATIONS / WORKS

The supply of products with deviations from the specifications will only be accepted upon

formal Derogation Request. The request must include the following information:

Quantity envolved:

Period of supply;

The causes of the problem and actions to be taken to avoid recurrences;

Additional control measures.

The same procedure will be applied in the occurrence of unanticipated rework on the

originally approved process, and if it´s identified the risk of causing any damage at the

application in the final product.


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14 – NON-COMPLIANCE TREATMENT

In the event that a non-compliance is detected in the receipt of material, in

production or in the Customer, the Quality Department requests the supplier, through the

document "Mod. Q49 – Non-compliance Report", to identify the cause(s) of the

occurrence and formally communicate the preventive / corrective actions that preclude

the recurrence of non-compliance.

The supplier must respond within two working days, describing the preventive

actions implemented.

The Supplier will also have a period of ten business days to send the permanent

corrective actions, with the respective deadlines for each action and the people

responsible for each task.

After implementing the defined actions, the supplier must document with objective

evidence that the problem has been contained. This evidence will allow verifying the

implemented actions, and later analyze the effectiveness on the actions.

If it deems it necessary, IM Veneporte reserves the right to opt for a verification

of the actions implemented in the facilities of the suppliers.

14.1 – COST RECOVERY

In addition to a fixed management cost of the RNC (Non-Compliance Report) in

the amount of 150 Euros, all the costs associated with the non-conforming product, such

as sorting costs, line stops, product and component rework or recall will be allocated to

the supplier.

15 – SUPPLIER DEVELOPMENT

IM Veneporte should require its suppliers to develop, implement and improve its

quality management system in order to obtain IATF certification.

Unless specified by the customer another way, the process should be as follows:

1) 2nd party audit to define and ensure an approximation to ISO 9001 compliance

plus the "Minimum Requirements of the Automotive Quality Management System”


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according to "Supplier Audit Checklist "(Model Q103), based on the document" Minimum

Automotive Quality Management System Requirements for Sub-Tier Suppliers ";

2) ISO 9001 certification through 3rd party audit;

3) ISO 9001 certification in accordance with the "Minimum Requirements of the

Automotive Quality Management System" for sub-tier suppliers, through 2nd party audits;

4) 2nd party IATF 16949 Audit;

5) IATF 16949 Certification through 3rd party audit.

This Supplier Development process is defined and monitored by IM Veneporte’s

Quality and Purchase Department and may include:

- Visits;

- 2nd party audits (Quality Management System or Manufacturing Process);

- Manufacturing processes validation;

- Allocation of personnel, in the supplier, representative for quality assurance;

- Development of action plans and improvement needed to solve problems or

obtain improvements.

The final result of this process, as mentioned, is the supplier obtaining the IATF 16949

certification. If IM Veneporte observes a lack of interest on the part of the supplier in

making this journey, there will be a proposal towards Top Management to select an

alternative supplier whenever it is possible.

15.1 – SUPPLIER AUDITS

Supplier Audits are conducted by IM Veneporte to its suppliers and will be

implemented taking into account the following table as well as the following criteria:

5 3 1

Special Processes YES YES YES

Risk Analysis RED YELLOW GREEN

Supplies

Assessment

C

B

A


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Criteria that define a mandatory audit:

1 - When the supplier presents two of the criteria shown in column 5, an audit is

planned

2 - In the case of presenting the three criteria shown in column 3, an audit is planned

In addition to these criteria, there is one that overlaps these, which has to do with

travel costs. The final decision will be made by IM Veneporte’s administration.

16 – CONTACTS

NAME POSITION EMAIL

Sílvio Abrantes Purchasing Director [email protected]

Carlos Morgado Quality Manager [email protected]

mailto:[email protected]

Documents

SUPPLIERS MANUAL