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SUPPLIED PARTS QUALITY ASSURANCE

PURPOSE To define the needed Quality standard requirements for supply of any production parts type, either work contracted and full supplied. In any case, O.G. reserve the right to request compliance with any further specific Customer requirement to their suppliers. REFERENCE Quality Management Manual chpt. 7.4 - HeadquarterQuality Procedure ACQ 07 (O.G. internal use only) ISO/TS 16949:2002 chpt. 7.4

REV. LEVEL 0 1 2 3 4 5 6 7 8 9 10

DATE 22.01.96 17.06.97 05.03.98 24.06.98 10.12.00 15.02.02 28.02.07 12.04.07 15.04.08 25.11.08 18.02.09

MODIFICATIONS ISSUED BY M. Cettolin L. Tosetti L. Tosetti L. Tosetti L. Tosetti L. Tosetti L.Tosetti L. Tosetti F. Treichler I.Cilia I.Cilia

DESCRIPTION

procedure issued 4.3.1 - 4.9 - 4.10 - 4.11 - 4.12 introduced Box for signature of procedure responsible Mgt. introduced on coverpage par. 4.1.2 modified par. 4.1.7 introduced Released as Work Instruction chap. 3 4 8 12 14 15 modified chap. 6 7 9 10 11 introduced IMDS and Run @ Rate activities introduced ; flowcharts removed Engineering Specifications QF 2009-2010 removed Modify of evaluation criteria Modified chapter 3 Par.s A03-A06-A07-A25 and chapter 8.2 changed Responsible Management Purchasing M. Benedetto

Last revision level Date

Issued Suppliers Quality Assurance I.Cilia

10 18.02.09 FOR SUPPLIERS ONLY: please send back this page signed as acceptance of the Work Instruction DATE COMPANY STAMP - SIGNATURE

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List of the main activities (A01) Engineering documentation: verification of: drawings updated revision level, engineering specifications and standards both by O.G. and final Customer (that are reported on drawings and related with the manufacturing operation to be provided) and O.G. Work Instructions as mentioned on the purchase order. The above mentioned engineering documentation, if not available, shall be required to the Purchasing Dpt. which has released the order. Provisioning of both national and international Standards (i.e. UNIASTM-DIN etc.) is under suppliers responsibility. Feasibility analysis: to be already provided at the offer stage, with information to O.G. in case of problems about material availability, manufacturing process feasibility due to engineering issues, lack of available capacity, eventual difficulties to maintain product characteristics. If analysis involves the need to forward an ENGINEERING CHANGE REQUEST (form no. 463), this shall be sent to Purchasing Dpt. which will address it to the involved Departments (Production Engineering Dpt. or Product Development Dpt.) and send it back to supplier According to its result, supplier can proceed with offer analysis. Temporary facilities or production and control facilities: ramp-up chart is required for planning and documentation of activities related to design and manufacturing of fixtures and specific gages. Design FMEA: (for suppliers of owned design products only). Design validation test results to be included into this activity. Process FMEA : according to the purchase order required PPAP level, to be carried out for category of parts, or for specific processes if specials (i.e. foundries, heat treatments, steelworks, etc.) or according to O.G. request for specific products. The manual Linee guida per lapplicazione della FMEA ANFIA Service shall be taken as reference for the indices of severity, occurrence, detection. AQM Advance Quality Meeting : Activity to be carried out on O.G. request, supplier shall provide the following documentation during the above meeting : Eventual improvements of drawings Manufacturing cycle and sequence Control plan (temporary) Foreseen temporary/serial production facilities for manufacturing and inspection (documented with drawings, photos, etc.) Ramp-up chart about activities progress if fixtures and specific gages are not the serial production ones Machinery Specific tooling First release of Process FMEA Manufacturing cycle and sequence: first release to be presented at the eventual AQM; following updates shall be retained by the supplier. Specific flowchart shall be submitted alongwith PPAP documentation if required by O.G. (ref. to D380 form)

(A02)

(A03)

(A04)

(A05)

(A06)

(A07)

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(A08)

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Control Plan: a temporary release (prepared according to form no. 369 or similar according to the ISO/TS 16949 requirements) shall be carried out for the first production batch and shall be presented at the eventual AQM; it shall be updated according to preliminary process capability studies carried out on the first produced batch. Control Plan shall report

all foreseen process inspections (set-up approvals, inspections, production self-controls, final inspections, etc)

incoming

Identification of safety and control characteristics, by using the specific symbols of the drawings inspection frequencies, that can be changed according to the process capability Used measurement equipment for each measurement Cp Cpk processing where required, with data record sheet

reaction plan, in case of nonconforming measurements Control plan changes subsequent to PPAP approval shall be retained at supplier site and promptly shared with O.G. if required. (A09) Measurement systems capability study MSA (Measurement System Analysis): to be provided for all measurement equipment dedicated to safety and control characteristic inspections and for specific measurement equipment (measurement stations), according to the orders required PPAP level or to specific O.G. requirement. Periodical calibration for all measurement equipment to be provided (for all PPAP levels). Subcontracted supplies: foreseen subcontractors list shall be submitted alongwith PPAP documentation. Evaluations, incoming material inspections, control plans and any documentation concerning subcontractors shall be shared with O.G. if required. Purchasing of steel shall only be carried out from steelworks approved by O.G. according to O.G. Q.F. 1001 Engineering Specification or from ones approved by the final Customer. Personnel training : training courses for personnel dedicated to special processes/inspections (i.e. electronic crack detection, welding etc.) shall be documented. Support plan to new employees shall be available (and documented). Preventive maintenance: machinery/plants maintenance plan shall be available. and fixtures preventive

(A10)

(A11)

(A12) (A13)

Production Part Approval Process (PPAP): required documentation shall always be submitted according to the PPAP level reported on the purchase order (refer to item 2 for levels table - use the PART SUBMISSION WARRANT (PSW) - form no.150 or similar according to ISO/TS 16949 requirements) Terms of PPAP delivery In case of deliveries to I.T.T. for Preliminary Heat Treatment, unless otherwise specified on the purchase order.

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Delivery of initial samples with related documentation shall be provided to final addressee plant (indicated on the form 380 PPAP ACTIVITIES enclosed to the order), before or alongwith the delivery of first batch to I.T.T. Specific packaging shall be used for initial samples delivery (cardboard box, single container etc.) with very clear labels stating: INITIAL SAMPLES All documentation required by the assigned PPAP shall be attached to the container. Alternatively, documentation delivery can be provided through email to the Quality Control Manager of the addressee plant with indication of initial samples transport document number. Transport documents shall indicate the presence of one PRODUCTION STARTUP SAMPLE part In case of deliveries to other Oerlikon Grazianos Supplier Initial samples shall be delivered to the final addressee Plant (indicated on the form 380 PPAP ACTIVITIES) before delivery of the first production batch; delivery alongwith the first batch to the addressee O.G. supplier is allowed but under full responsibility of the same supplier All documentation required by the assigned PPAP shall be attached to the container. Alternatively, documentation delivery can be provided through email to the Quality Control Manager of the addressee plant with indication of initial samples transport document number. Transport documents shall indicate the presence of No.__ PRODUCTION STARTUP SAMPLE pieces Containers shall report label with very clear indication: INITIAL SAMPLES. In case of deliveries to Oerlikon Graziano Plants Delivery of initial samples is allowed before or together with the first production batch (under full responsibility of the supplier) Use of specific container (separated from the batch) All documentation required by the assigned PPAP shall be attached to the container. Alternatively, documentation delivery can be provided through email to the Quality Control Manager of the addressee plant with indication of initial samples transport document number. Transport documents shall indicate the presence of No.__ PRODUCTION STARTUP SAMPLE pieces Containers shall report label with very clear indication: INITIAL SAMPLES. In case of non-prime contractor foundries which fixtures have directly been committed by Oerlikon Graziano Copy of D380 PPAP ACTIVITIES shall be delivered to the foundry by the prime contractor supplier Unless otherwise specified, delivery of sample part shall be provided to the prime contractor supplier PPAP documentation shall be delivered to the prime contractor supplier and a copy to the final addressee O.G. plant PPAP approval (and related authorization to fixtures payout) shall be issued by the O.G. Quality Control Dpt. only after conformity verification

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about documentation and dimensional characteristics of the finished part delivered by the prime contractor supplier REMARK: eventual nonconformity of finished part sampling, due to machining operations, does not compromise the casting approval (if the same is within specification and fully documented)

(A14)

PPAP approval: approval is given without any nonconformities and with completeness of all required documentation only. PPAP result (positive, pending or negative) is communicated through the form 380 PPAP ACTIVITIES, sent by e-mail (PART SUBMISSION WARRANT form 150 or similar used by supplier is sent back under specific request of the same). The non-approval, due to dimensional, material or heat treatment nonconformities, involves rejection or acceptance under deviation of delivered parts and re-submission of PPAP for the detected nonconformities. The PPAP non-approval involves:

Stoppage of production fixtures and inspection gauges agreed payout Suppliers duty to request a deviation for delivery of parts without PPAP O.G.s

approval, for the time needed to complete the missing or nonconforming activities right to debit the needed supplemental inspections due to PPAP missed approval

REMARK: missed PPAP delivery or prolongation of PPAP approval does not relieve supplier from its responsibility to respect the agreed delivery dates and from charges that missed respect of the same involve (line stoppage, premium freights, additional management, etc.) (A15) Process capability: to be carried out for important process parameters and/or safety and control (critical) characteristics. preliminary (Ppk), to be carried out over 30 pieces of the first production batch (and of pre-launch stage if required by O.G.) on-going (Cpk) to be carried out regularly during mass production Ppk >= 1,67

capable process to be regularly monitored acceptable process; start with mass production 1,33 < Ppk < 1,67 verifying that Cpk > 1,33 is maintained uncapable process; apply a temporary 100% Ppk or Cpk < 1,33 inspections and implement a corrective action plan In any case, Cpk shall always be >= 1,33 If the above mentioned requirements couldn't have to be respected, product conformity shall anyway be ensured through 100% inspection." Above mentioned values may change according to different requirements of O.G.s final Customer (A16) Machine set-up : inspections on all characteristics involved in the process shall be carried out and recorded. In case of continuative productions where set-ups are not performed, periodical verifications of process re-qualification shall be provided and their frequency reported on the control plan. Changes to drawings/engineering documentation: PPAP for characteristics involved by the change shall be submitted. Control plan and FMEA shall be updated (if needed). About activities to be carried out refer to the PPAP level (D380) issued on the starting purchasing order.

(A17)

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Terms of PPAP delivery are the same set in par. (A13) with the only following change to transport documents indication : No__SAMPLE pcs.- REV.LEVEL YY

(A18)

Changes to manufacturing process or subcontractor: prompt information to the O.G. Quality Control Dpt. of the addressee plant shall be provided. This will define if the PPAP shall be submitted and the relevant level (PPAP level of the starting purchasing order). Control plan, manufacturing cycle, eventual flowchart and FMEA shall be updated. Deviation (use the DEVIATION REQUEST FROM SUPPLIER - form no. 126 or similar): supplier shall never send nonconforming parts without prior deviation request, batch shall always be identified (both on packaging and on transport documents) through the number of given deviation and O.G.s approved deviation request form shall always be enclosed. Deviation request shall be sent to: 1. both Purchasing Dpt and Plant Quality Control Dpt. of O.G.s delivery plant in case of 1st batch of production for new entry parts 2. both Plant Logistic Dpt. and Plant Quality Control Dpt. of O.G.s delivery plant in case of following batches (mass production) If the deviation request will have to be extended to a Drawing change request, the lower section of the form no. 126 shall be filled up and sent as above specified. The Plant Quality Control Dpt. will manage the reply to the Supplier with the acceptance or the reject of the concession request. If the change is approved, the first batch shall anyway be delivered under deviation.

(A19)

(A20)

Nonconformities: according to the inspection report specific requirement, the CORRECTIVE ACTION REPORT - 8D (form no. 317 or similar) shall be submitted with indication of failure causes, immediate actions taken and foreseen long term actions. Following to the inspection report request, PPAP about the nonconforming characteristics shall be submitted (PPAP level of the starting purchasing order) along with the first subsequent batch. Terms of PPAP delivery are the same set in par. A13 with the only following change to transport documents indication : No__SAMPLE pcs. Remark: in case of nonconformities requiring sorting operations and/or rework at O.G. plants, supplier shall be immediately available. Missing availability may involve rejection and/or rework by O.G. personnel or by external company, with costs fully charged to the same supplier (even without prior notification of costs).

(A21)

Traceability: traceability of material and batches by marking (where possible) of heat/cast reference letter and week or month/year of manufacturing (ref. item 7 Identification and Traceability) shall always be ensured according to the drawing specifications. Unless otherwise specified, for all steel parts and for cast iron and aluminium safety parts, different castings shall always be separately packaged with indication of cast code on packages and on transport documents.

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(A22)

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Packaging and preservation: supplier shall always submit the intended use packaging to O.G., regardless it is specific or generic (only indication of the type shall be given to the reference O.G.s Purchasing office) Preservation from corrosion shall be ensured for three months at least starting from the incoming in the O.G. Plant. Remark : in case of temporary unavailability of specific packaging, authorization to delivery with different ones shall be requested to plant Logistic Dpt.; the same shall anyway ensure preservation from damages and product traceability. Contamination: products directly delivered to O.G. assembly lines shall have a contamination level suitable with the drawing specification. If no specific requirements are available on drawings or orders, refer to O.G. Engineering Specification Q.F. 2011. Continual improvement: supplier shall identify opportunities for quality, service level, costs and technology improvement through data record methods like:

(A23)

(A24)


(A25)

Cp Cpk PPM analysis FMEA updating etc.

Certification of batches: for production parts, with exceptions of steel supply, experimental parts, prototypes and pre-launch parts, all O.G. suppliers are under self-certification.

Unless otherwise specified, according to the product criticality, delivery shall not come with certification documents but with CONFORMITY STATEMENT (form 112 or similar) only. All documentation certifying product conformity (material certificates, treatments, integrity, dimensional, etc.) shall be available and immediately sent under O.G. request. This rule does not apply if defects occur (see par. A20). Remark : according to the result of quarterly analyses, O.G. has the right to ask supplier for certification of all deliveries, based on the following criteria: Involved part number has exceeded 4 times the PPM target (see par.12 PPM TARGETS) and is therefore ranked as # (hash sign). Notification of # ranked part numbers will occur every month through the QUALITY SITUATION letter. Involved part number, despite it is not # ranked, has caused problem at final O.G. Customer site and affects conformity of supplies Certification of all deliveries is active until the part number ranking improves to higher grades, that is no more # ranked. DEACTIVATION OF DELIVERIES CERTIFICATION PROCEDURE IS NOT SUPPLIER COMPETENCE, BUT SHALL BE NOTIFIED BY O.G. TO THE SAME. Certification shall be provided over a quantity of pieces which number is related to the delivery size, for all characteristics, as detailed on the below

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table. Certification paperworks shall clearly indicate the # rank of the part number. Delivery size Until 10 From 11 to 50 From 51 to From 101 to Over 250 100 250 Safety or critical 1 2 5 10 15 chars ( see #) Chars with 1 2 4 8 10 tolerance until 0.1 (see #) Chars with 1 1 2 5 5 tolerance until 0.25 (see #) Form errors 1 2 2 5 5 Secondary importance 1 1 2 2 chars Soundness 1 1 1 2 2
(for castings, 1 per batch) (for castings, 1 per batch) (for castings, 1 per batch) (for castings, 1 per batch) (for castings, 1 per batch)

(#) Cp-Cpk analysis of production batch required, where possible (characteristics able to be monitored during production process) For some specific cases, O.G. has the right to require size numbers higher than the table ones, up to a 100% inspection O.G. has the right not to provide material incoming inspections, but to reject material in case of nonconformity or missing documentation (certification).

(A26)

Production stoppage: after production stoppage for twelve or more months, supplier shall submit PPAP documentation only, without sample parts (use the PART SUBMISSION WARRANT - form no. 150 or similar according to ISO/TS 16949 requirements). This item is not applicable for single annual supplies. Material incoming inspection: when subcontractors are used, specific incoming inspection procedures shall be prepared and provided inspections shall be documented. Such documentation shall be available for O.G. verification during surveillance visits or process audits. Direct delivery of rough parts, castings, forged parts, steel, from a O.G. supplier to a work contractor, involves for the same the verification of presence and conformity (according to O.G. or final Customer Engineering Specification) of material certification enclosed to batches, correct execution of sandblasting, painting operations, absence of oxidation, slags etc. During manufacturing process, absence of cracks and blow holes shall be checked. Control Plan shall report all of these inspections.

(A27)

(A28)

I.M.D.S. (International Material Data System): whenever required by D380, material composition shall be input in the web site www.mdsystem.com Failure in accomplish this item will involve the PPAP non-approval.

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Run@Rate (Production capacity analysis): O.G. reserve the right to know the supplier production capacity, this involves the information to O.G. of cycle time. Whenever required, O.G. send by e-mail the D496 A-B-C form Run@Rate analysis to the supplier which shall fill the B module of the form up and shall send it back to O.G. If necessary, O.G. will provide the Run@rate study at supplier site by using the C module of D496 form.

A30)

APQP (Advanced Product Quality Planning): whenever required by O.G., supplier shall prepare a gantt for activities planning, maintain it updated and make it immediately available under request.

(A31)

Management and inspection of steel heats: all suppliers managing steel, work contractors or full product suppliers, shall follow the below items that are also represented into a flowchart. 1) Purchase by O.G. and work contracted forging Steelwork - Shall send material certificates by e-mail to O.G. Purchasing Dpt. and, alongwith the certificated steel, to the Forger facility. O.G. Purchasing - Will send material certificates by e-mail to the O.G. laboratory of the final addressee plant Work contracted forging supplier - Shall verify presence and approval status of involved heat on the O.G. portal. - Not available, shall send material certificate and a heat blank with indication of material, steelwork and heat number by e-mail to O.G. laboratory of the final addressee plant (indicated on the D380 form enclosed to the order) - Positive, will proceed with forging without sending certificate and heat blank - Negative, shall not forge, shall contact O.G. Purchasing about terms of material rejection to steelwork Under deviation, shall not forge, shall request deviation for the parts to be forged to O.G. laboratory of the final addressee plant

Analysis not verified, shall immediately send heat blank with indication of material, steelwork and heat number by e-mail to O.G. laboratory of the final addressee plant (indicated on the D380 form enclosed to the order), will start forging but shall not deliver material until the O.G. portal will be updated with result of verification O.G. Laboratory - Will provide verification of steelwork certificate and heat blank and input result on the O.G. portal 2) Full supply of forger or of the complete supply Steelwork - Shall send material certificates, alongwith the certificated steel, to the forger. Forging supplier - Shall verify presence and approval status of involved heat on the O.G. portal. D394r2 9 of 21

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Not available, shall send material certificate and a heat blank with indication of material, steelwork and heat number by e-mail to O.G. laboratory of the final addressee plant (indicated on the D380 form enclosed to the order) - Positive, will proceed with forging without sending certificate and heat blank - Negative, shall not forge, shall reject material to steelwork - Under deviation, shall not forge, shall request deviation for the parts to be forged to O.G. laboratory of the final addressee plant - Analysis not verified, shall immediately send heat blank with indication of material, steelwork and heat number by e-mail to O.G. laboratory of the final addressee plant (indicated on the D380 form enclosed to the order), will start forging but shall not deliver material until the O.G. portal will be updated with result of verification O.G. Laboratory - Will provide verification of steelwork certificate and heat blank and input result on the O.G. portal 3) Full supply of turned parts Steelwork - Shall send material certificates by e-mail to the prime contractor turning supplier, and, alongwith the certificated steel, to the Forger facility. Full supply turning supplier - Shall send material certificates by e-mail to the O.G. laboratory of the final addressee plant Subcontracted forging supplier - Shall verify presence and approval status of involved heat on the O.G. portal. - Not available, shall send material certificate and a heat blank with indication of material, steelwork and heat number by e-mail to O.G. laboratory of the final addressee plant (indicated on the D380 form enclosed to the order) - Positive, will proceed with forging without sending certificate and heat blank - Negative, shall not forge, shall contact the prime contractor turning supplier about terms of material rejection to steelwork - Under deviation, shall not forge, shall ask prime contractor turning supplier to request deviation for the parts to be forged to O.G. laboratory of the final addressee plant Analysis not verified, shall immediately send heat blank with indication of material, steelwork and heat number by e-mail to O.G. laboratory of the final addressee plant (indicated on the D380 form enclosed to the order), will start forging but shall not deliver material until the O.G. portal will be updated with result of verification - In case of the Forger is not included into the O.G. Vendor Rating list and, consequently, is not allowed to access to the O.G. portal, the activity shall be carried out by the prime contractor turning supplier. O.G. Laboratory - Will provide verification of steelwork certificate and heat blank and input result on the O.G. portal 4) Steel purchase from Reseller. Same rules of the three previous item, according to the type of supply. -

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Certificates and material certificates


STEELWORK

Certificates and certificates and material


GT (Purchasing) Steel purchase

Certificates and material

material Certificates and material


TURNING SUPPLIER Full supply RESELLER

FORGING SUPPLIER Full supply

FORGING SUPPLIER Work contract

FORGING SUPPLIER (turn.supp.subcontractor)

Certificates and material

GT (Purchasing) Steel purchase

Delivery of steelwork original certificate to GT laboratory of final addressee plant

GT LABORATORY certificates verification CV Plant = ITT BA Plant = BA PT Plant = PT CE Plant = CE

.
At steel arrival, delivery of heat blank to GT laboratory of GT final addresee plant

GT WEB PORTAL List of verified heats. Every forging supplier shall verify heat approval before proceed with forging

GT LABORATORY certificates verification Imp. CV = ITT Imp. BA = ITT Imp. PT = PT Imp. CE = CE

Legend of heats result and supplier behavior: Verify availability of heat to be used on the O.G. portal before forging. If these 3 items are missing, this means that certificate never Heat No. - steelwork - material came to a O.G. - Do not forge and immediately send certificate. Result: Positive - Both certificate and blank are OK - OK to forge Do not forge, steel rejection Negative - one out of two verifications failed Under deviation - material useable for some part numbers only- Forger communicate which part number has to be forged and ask for deviation. Immediately send Analysis not verified - positive result for certificate, blank not verified blank and proceed with forging, do not deliver the forged pieces.

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REMARK: THE ABOVE MENTIONED ARE BASE ACTIVITIES, EVENTUAL STANDARDS OR PARTICULAR NEEDS OF O.G. FINAL CUSTOMERS WILL BE NOTICED TO SUPPLIER AND COULD PARTIALLY OR FULLY REPLACE THE SAME. 2 Approval levels (PPAP) required by Oerlikon Graziano

The below activities shall be performed by the supplier with submission of documentation according to the assigned PPAP level (identified in the order). YES
Activities to be performed which documentation shall be submitted to O.G. and copy retained at the supplier site. If internal know-how preservation reason exists, some documentation (i.e. FMEA, control plans) may not be delivered to O.G., supplier shall specify it on the PPAP and shall make such documentation available during O.G. visits or for meetings organization at O.G. Activities to be performed which documentation shall be retained at the supplier site and immediately submitted to O.G. under specific request, or handdelivered in case of level 5 PPAP approval (at supplier site) Activities to be performed under O.G.s specific request which documentation shall be submitted to O.G. and copy retained by supplier.

AF

RC

Activities

Lev 1

Lev 2
YES YES RC RC RC YES YES RC AF YES YES YES RC YES AF

Lev 3
YES YES RC YES RC YES YES YES YES YES YES YES RC YES AF

Lev 4
YES YES

Lev 5
AF AF AF AF AF AF AF AF AF AF AF AF RC AF AF

Bubbled drawing (drawing/table with numbered items linked to the inspection report ones) Documentation of engineering changes not yet YES reported on the drawing (if any) Design FMEA (only for owned design suppliers) Process FMEA RC Flowchart Dimensional results report (documentation) AF Material, treatments, tests certification AF Preliminary process capability studies (Ppk) RC Measurement System Analysis studies (MSA) RC Control Plan AF Part Submission Warrant (PSW) RC Certified sample pieces RC Reference master samples (to be retained by the Supplier) List of used Subcontractors (if any) YES Result of Subcontractors initial sample reports AF

YES AF RC RC YES YES YES RC YES AF

Remark: The above mentioned table requirements shall be considered as indicative; form d380 PPAP ACTIVITIES, enclosed to the order, shall be taken as reference. O.G. can require activities and documentation not mentioned in the above table.

criteria for PPAP level assignment:


It is used when PPAP submission is not required, for Preliminary Heat Treatment (isothermal annealing only), phosphating, tumbling, steel purchase, purchase from final Customer, standardized components for spare parts, standardized components and interoperational stages for prototypes/experimental parts, some term-type orders

Level 0

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Level 1 Level 2 Level 3 Level 4

SUPPLIED PARTS QUALITY ASSURANCE


It is used for open and close-type orders, , prototypes/experimental parts, catalog-purchased parts, bar shearing, plastic parts with poor design value, surface coatings of Chromium, Zinc and painting It is used in case of production startup of open-type orders when it does not belong to one of the other 5 levels It is used for production startup of automotive open-type orders or according to O.G. strategy, for O.G. and customers design new products It is used for some term-type orders, castings machining, finished-state parts, and spare part orders. For castings experimental parts/prototypes, machining of castings, finished parts. For the following open-type order items: Small parts Standardized components according to drawing Plate blanked parts Forged parts, electro-upset parts, heat treatments, etc. Secondary-employed parts, also for automotive sector Parts according to O.G. drawing that dimensionally change from catalog parts spot orders for grinding operations, where the whole documentation is provided by O.G. (manufacturing cycle, self-control sheet, specific measurement equipment etc.) It is only used when O.G. intend to provide approval at the supplier site or in case of Customer-proposed supplier that has already achieved approval from the same.

Level 5

Prototypes Experimental parts Pre-launch parts Prototypes, experimental parts, and in some cases pre-launch parts manufactured with temporary tooling are not handled with PPAP level (it will always be at zero) For these parts, certification documents are always required and may change according to the type of product and if the involved batch is the first ordered one or it is a relaunch. Alongwith the purchase order or advanced order note, O.G. Purchasing send the doc. D.553 to supplier, that includes : Product identification data Identification of full supply or work contract First batch or re-launch Type of required certification and quantity of parts to be certified O.G. addressee plant Reference Dept./person for documentation delivery Document D.553 should always follow the batch and the certification paperworks, and should be filled in the appropriate column (to certify the paperworks presence). O.G. reserve the chance not to inspect incoming material, and to reject nonconforming material or incomplete/missing documentation. In any case, approval to prototype/experimental/pre-launch parts is not valid for serial production. For serial production, PPAP documentation will always be required according to the PPAP level demanded on the purchase order. REMARK: Eventual orders for prototype/experimental parts manufactured with serial production tooling, unless otherwise agreed with O.G. Purchasing or S.Q.A. Depts through the delivery of D.380 PPAP ACTIVITIES, shall be fully considered as prototypes or experimental parts and shall follow the rules stated by this paragraph.

Parts addressed to Spare Part Warehouse

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When supplied parts have to be addressed to Spare Part Warehouse (according to specific requirement of the purchase order), certification of the first batch shall be according to level 4 PPAP, with exceptions of forged parts and standardized components. For the subsequent batches, supplier shall ensure:

compliance of the part with purchase order and/or drawing requirements through release of a conformity statement part identification on every single package including part number (drawing no.) engineering change level quantity of the parts into the package appropriate packaging for product preservation during transport and storage (preserved from damages) preservation from corrosion for at least three months

Safety Parts Safety Characteristics Safety Product is defined as the component, subgroup or group which failure or defective functionality may cause harm to people. Safety Characteristic is defined as every drawing or standard requirements, directly connected to the safety of the complete product, which may cause harm to people.

5.1 Identification In case of O.G. design, safety components and related characteristics are identified by the symbol

placed on the related drawings. In case of Customer design, the same symbol is placed on the supply drawings with reference to the involved characteristics. 5.2 Safety Parts/Characteristics documentation management All suppliers engineering documentation (drawings, engineering Specifications, specific Standards, etc) and process/control documentation (manufacturing cycles, instructions, control plans, data recording documentation etc.) shall report identification of the Safety Characteristics through the symbol or the symbol S.

All engineering and process/inspection documentation shall be stored into a safe and protected location and easily accessible for consultation, storage period shall not be lower than 10 years or, in any case, according to specific O.G. requirements.

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5.3 Traceability Traceability shall be ensured by parts marking (ref. to chap. 7) and shall be correlated with inspection documentation. 5.4 Inspections Indication of Safety Characteristics on the drawings, shall involve a process control performed through: Initial machine capability studies or: Preliminary process capability studies On-going process control regularly performed during current mass production or 100% process inspection in case of not capable process. 6 Control (critical) Characteristics Control (critical) Characteristics are dimensions, notes and prescription including pernicious features resulting from design and process FMEA, after-sales problems, process-generated problems, design criticality. Those may be differently indicated, according to O.G. or Customer drawings. 6.1 Identification Control Characteristics are identified on both component and assembly O.G. drawings, by the symbol :

6.2 Control (critical) Characteristics management All suppliers engineering documentation (drawings, engineering Specifications, specific Standards, etc) and process/control documentation (manufacturing cycles, instructions, control plans, data recording documentation etc.) shall report identification of the Control (critical) Characteristic through the symbol 6.3 Inspections Indication of Control (critical) Characteristic on the drawings, shall involve a process control performed through: Initial machine capability studies or: Preliminary process capability studies

or the symbol C.

On-going process control regularly performed during current mass production or 100% process inspection in case of non capable process.

Identification and Traceability Identification and traceability shall be ensured by marking.

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7.1 Marking systems Directly obtained during product transformation through pattern, die or shell (for castings or forged parts) By punching by microdot punching by chemical etching by acid etching by ink or permanent paint

Note: unless otherwise specified on the drawing, type of marking shall be agreed with O.G. Design or Engineering Dpt. or Quality Control Dpt.. 7.2 Marking location Marking location is indicated on the drawing, otherwise it shall be agreed with O.G. Quality Control Dpt.. In any case, location shall not compromise part engineering characteristics and readability (even after further machining operations). 7.3 Marking content According to drawing requirements, marking shall inlcude GRAZIANO Trasmissionis logo, according to following dimensions and shape.

No. No. No. No. No. No. No. No. No. No. No. No.

Mark type 54 40 28 22 16 12 10 8 6 3,2 2,4 2

h (mm.)
54 40 28 22 16 12 10 8 6 3,2 2,4 2

E (mm.)
9,8 7,2 5 4 3 2 1,8 1,5 1 0,5 0,5 0,3

l (mm.)
135 100 70 55 40 30 25 20 15 8 6 5

Note: E dimension shall be considered for relief markings only.

Steel heat reference letter Heat letter, obtained by forging. Its purpose is to univocally identify the material, origin and supplying steelwork .

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Forging supplier is responsible for heat management, either for work contracted and full supplied material; heat management shall be provided for every part by assigning a progressive alphabetic letter, at every heat change. The letters to be used shall be: A - B - C - D - F - H - I - L - M - N - O - P - R - S - T - U - V - Z. Some letters are for reserve, ( X - Y - W - K ) to be used in particular situations only (closed or spot batches). If a same part number is assigned to two suppliers, O.G. Purchasing divide the letters to be used into two groups and inform involved suppliers and I.T.T. Quality Control Dpt. about which group shall be used (i.e. first supplier will use the letters from A to M and the second from N to Z). Eventual different marking systems shall always be agreed with O.G. Date/manufacturing batch identification Marking of manufacturing batch can be made Monthly, by marking month and year according to the CODE LIST FOR MONTH-YEAR MANUFACTURING MARKING (form no. 135), in order to univocally identify the manufacturing batch which a piece belongs to. Weekly. It is made by three digits, the first two indicate the manufacturing week and the third one stands for the manufacturing year. I.e. : 427 stands for the 42nd week of 1997. Remark: in case of big volumes production, O.G. reserve the chance to require closer traceability systems, daily, by workshift or by individual progressive marking part number code if required on the drawing any additional data requested by the Customer Control of correct identification shall be part of the standard manufacturing process control and shall be reported on the control plans. 8 Nonconformities Nonconformities detected at O.G. are noticed to supplier through the form no. 163 INSPECTION REPORT. Such reports are available on the O.G.s web portal and supplier is informed about their release by e-mail. Reasons for reports release can be: Permanent reject Reject to be recovered Acceptance under deviation Acceptance with additional time operations Sorting request Inspection note O.G. also reserve the right to charge supplier with costs resulting from management of defective material supplied by the same.

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8.1 Rejected parts declared by Work contractors Rejected parts declared by Work contractors shall not be not returned to O.G. but directly scrapped by the Supplier which shall prepare a LIST OF REJECTED PARTS FROM WORK CONTRACTORS (form no. 282) every month (it shall be forwarded within and not later than the 10th of the following month); list shall be addressed to the O.G. plant Quality Control Dpt. and in this case no inspection report is released but O.G. will update the work plans of the involved parts through the IT system and will settle the cost of defective semifinished parts with supplier.

8.2 Rejection of forged parts / castings detected by Work contractors If work contractor detect rejects due to wrong forging operation with quantity of more than 10 pieces, or 2 pieces about castings, such rejects shall be delivered to Quality Control Dpt. of the addressee plant, with indication Forging/Casting rejects on the delivery document. The Quality Control Dpt. will release an inspection report to the forging/castings supplier. If the amount of rejected parts is less than 10 parts (forged parts) or less than 2 parts (castings), work contractor shall place the monthly rejected parts into a specific container shall forward a monthly LIST OF REJECTED PARTS FROM WORK CONTRACTORS (form no. 282) to the Quality Control Dpt. of the addressee plant, within and not later than the 10th of the following month. If O.G. will not require return of involved parts within four months from release of inspection report, Supplier is authorized for scrapping. Within the 15th of the month where reject list has been received, the Quality Control Dpt. will release inspection report to the forger/casting supplier with information about the name of work contractor retaining the rejected parts. If the forger/casting suppliers require return of rejected parts, the Quality Control Dpt. will inform the involved Work contractor. Remark: missing retrieve of rejected parts within a four-month period will cause the switch of reject to Work contractor. Both O.G. Purchasing and Supplier Quality Assurance have the authority to verify application the above mentioned rules in case of visit to the Work contractor.

8.3 Corrective actions request Corrective actions request occurs through the inspection report for some types of rejection. Supplier shall strictly forward the corrective actions within the date reported on the inspection report, by using the 8D REPORT (form no. 317). 9 Government, Safety and Environmental Regulations All purchased material used for product manufacturing shall comply to current government and safety regulation about forbidden, toxic and hazardous material. D394r2 18 of 21

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Its management shall be in compliance with environmental and safety regulations applicable to the country of manufacturing and sale. 10 Audit Evaluations at supplier sites O.G. reserve the right to organize (with prior agreement) visits to Suppliers plants and eventually to their subcontractors plants with following purposes: Review of PPAP documentation thereon retained Verification of O.G.s specifications/instructions application and Control Plans validity and respect Evaluation of manufacturing and control processes (process audit) Verification of activities progression status before production process startup Verification of corrective actions effectiveness in case of occurred serious non conformities To provide audits on Quality System or require third party Certifications Evaluation of the Environmental System Management To perform Run@Rate studies (production capacity verification) 11 Quality level of supply O.G. carries out the monitoring of supply according to 3 criteria such as: PPM Scraps (permanent and recoverable parts out of the total delivered parts), PPM/Target ratio. I.A.D. (Defect Reliability Index): total of secondary-type nonconformities out of the quantity of delivdered parts, without considering scraps. I.A.S. (Defective Reports Reliability Index): quantity of batches that caused the release of a defective report, out of the total delivered batches (BEM), including batches that caused a claim from O.G.s Customers. 12 Information to Supplier about supply trend The SUPPLY STATUS (form no. 162), is always accessible and available on the O.G. web portal at the section supplier quality status; this is monthly updated and includes: PPM TARGETS For each market category, O.G. assigns on annual basis (with decreasing trend) a PPM scraps target (sum of permanent and recoverable scraps) that will be used to define the Deliveries Quality Level. GLOBAL QUALITY EVALUATION It is defined as the minimum score between the Certifications and evaluations level and the Deliveries Quality Level, calculated on the 12 months rolling, and leads to 1 of the following 5 levels: o Level A1 PARTNER o Level A APPROVED o Level B ACCEPTED o Level C CONDITIONED o Level # - NON ADEQUATE CERTIFICATIONS AND EVALUATIONS LEVEL resulting in 5 possible levels: o Level A1 BEST o Level A GOOD o Level B ACCEPTABLE o Level C LOW o Level # - NOT ACCEPTABLE The level is calculated basing on the following parameters: o Third-party Certifications or, if not available, VOG (Oerlikon Graziano Evaluation) o AVF (Supplier Self Evaluation) 19 of 21

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Admission/Evaluation visit (including Environmental evaluation) Process Audits (if available)

DELIVERIES QUALITY LEVEL resulting in 5 possible levels o Level A1 EXCELLENT RELIABILITY o Level A HIGH RELIABILITY o Level B FAIR RELIABILITY o Level C LOW RELIABILITY o Level # - NOT RELIABLE The level is calculated basing on the following parameters: o PPM scraps (permanent + recoverable) PPM/Target ratio- The PPM target is outlined on the Supply Status form and depends on the market category. o I.A.D. (Defect Reliability Index), does not consider scraps. o I.A.S. (Defective Reports Reliability Index), includes claims from O.G.s Customers. The Deliveries Quality Level is calculated for the following timeframes: o Past 12 months rolling (also used for calculation of Global Quality Level) o Current year o Each quarter of the current year REMARK: in case of a quality level lower than A on the quarter, the Supplier is requested to issue a corrective actions plan that allows target restore.

If no improvement of supply trend occurs, eventual activities related to new assignments to the involved supplier will be stopped. Eventual prolongation of negative trend will cause the shifting of current assignments to other suppliers. 13 Reference documentation form no. form no. form no. form no. form no. form no. form no. form no. form no. form no. form no. form no. form no. 112 126 135 150 162 163 282 317 369 468/380 463 496 553 CONFORMITY STATEMENT DEVIATION REQUEST FROM SUPPLIER CODE LIST FOR MONTH-YEAR MANUFACTURING MARKING PART SUBMISSION WARRANT SUPPLY STATUS INSPECTION REPORT LIST OF REJECTED PARTS FROM WORK CONTRACTORS 8-D CORRECTIVE ACTIONS REPORT CONTROL PLAN NEW PURCHASING ORDER SUPPLY ASSIGN/CHANGE PROPOSAL PPAP ACTIVITIES ENGINEERING CHANGE REQUEST FROM SUPPLIER RUN@RATE ANALYSIS BATCH CERTIFICATION FOR PROTOTYPE/EXPERIMENTAL/PRE-LAUNCH PARTS

Supplier is not obliged to use the above listed documentation; alternate formats may be used as long as they contain the same information, as a minimum.

14 Reference O.G.s Engineering Specifications and Work Instructions Q.F.1001 Q.F.2002 Q.F.2003 D394r2 ENGINEERING SPEC. ENGINEERING SPEC. ENGINEERING SPEC. BILLETS AND ROUNDS STEEL, AT NATURAL ROLLING STATUS ELECTRIC ARC AND GAS WELDED JOINTS ROUGH MATERIAL IRON CASTINGS

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ENGINEERING SPEC. ENGINEERING SPEC. ENGINEERING SPEC. ENGINEERING SPEC. ENGINEERING SPEC. WORK INSTRUCTION LIGHT ALLOY CASTINGS - ALUMINIUM PARTS CLEANLINESS ELECTROPLATED ZINC COATING FOR FERROUS PARTS INSPECTION OF LIP SEAL WORKING SURFACE THROUGH STRAND TEST DETECTION OF EXAVALENT CHROMIUM ON ZINC-PLATED FERROUS PARTS HEAT TREATMENT SPECIFICATIONS FOR ISOTHERMAL ANNEALING OF FORGED PARTS

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