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Lear Corporation

Global Supplier Quality Requirements


Manual

Updated January 2012

Printed Copy for Reference Only

Page 1
SECTION TABLE OF CONTENTS PAGE

1.0 INTRODUCTION ........................................................................................................................ 3


2.0 LEAR QUALITY POLICY ............................................................................................................ 4
3.0 LEAR MINORITY PROCUREMENT POLICY ............................................................................. 5
4.0 ENVIRONMENTAL, HEALTH & SAFETY POLICY .................................................................... 6
5.0 SCOPE....................................................................................................................................... 7
6.0 SUPPLIER COMMUNICATION TO LEAR .................................................................................. 8
7.0 EXTERNAL PRODUCTION SUPPLIER ELECTRONIC DATA INTERCHANGE
REQUIREMENTS (EDI) AND OTHER LOGISTIC REQUIREMENTS: ....................................... 8
8.0 REGISTRATION TO LEAR CORPORATE PURCHASING APPLICATIONS & SUPPLIER
TRACKING (eSRM).................................................................................................................... 9
9.0 SUPPLIER DIVERSITY REPORTING REQUIREMENTS TIER II ............................................ 9
10.0 CUSTOMS TRADE PARTNERSHIP AGAINST TERRORISM (C-TPAT).................................. 10
11.0 LEAR SUPPLIER CUSTOMS REQUIREMENTS ..................................................................... 10
12.0 SUPPLIER QUALITY REGISTRATION .................................................................................... 18
13.0 ENVIRONMENTAL REQUIREMENTS .................................................................................... 19
14.0 PRODUCT MATERIALS CONTENT RECYCLABILITY REPORTING (PMCRR-IMDS) ........... 20
15.0 REACH Registration, Evaluation, Authorization (and Restriction) of Chemicals ..................... 20
16.0 SUPPLIER QUALITY TRACKING SYSTEM (SQTS) ................................................................ 21
17.0 EXTERNAL PRODUCTION SUPPLIER PERFORMANCE ....................................................... 22
18.0 PRE-PRODUCTION and NEW PRODUCT LAUNCH REQUIREMENTS (APQP) ................... 23
19.0 LAUNCH READINESS MEASURES: ....................................................................................... 24
20.0 PRODUCTION PHASE / MANUFACTURING .......................................................................... 28
21.0 EXTERNAL PRODUCTION SUPPLIER CONTROLLED SHIPPING STATUS: ........................ 30
22.0 COST RECOVERY POLICY: ................................................................................................... 34
23.0 HELP ........................................................................................................................................ 35
24.0 CHANGE CONTROL 35

Page 2
1.0 INTRODUCTION

This Web Guide / manual has been developed to communicate the Lear Global Supplier
Quality requirements to all external production suppliers and provide a Lear common
process that includes all phases APQP, Launch and Current Supplier Quality.

Effective December 15, 2011 this release replaces all previous editions.

Purchasing Purchasing
Seating Systems Electrical / Electronics Systems

Jim Brackenbury Jennifer Moceri


Global Vice President Global Vice President

Regional Purchasing Regional Purchasing


Seating Systems Electrical/Electronics Systems

Guenter Kraus Steven Cooke


Vice President Director, North America
Europe and South Africa
Andy Doyle
Eric Schwarz Director, North America
Vice President, North America
Michael Schlenker
Jose Klein Director, Europe
Director, South America
George Doromal
Arvind Sharma Director, Asia
Director, China

Supplier Diversity - North America Global Environmental, Health & Safety

Derrick Mitchell Barbara Boroughf


Director Vice President

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2.0 LEAR QUALITY POLICY

Page 4
3.0 LEAR MINORITY PROCUREMENT POLICY

Page 5
4.0 ENVIRONMENTAL, HEALTH & SAFETY POLICY

Page 6
5.0 SCOPE

This Web Guide / manual applies to all Lear approved production part & material
suppliers globally. For purposes of this manual, Lear refers to Lear Corporation and
its affiliates and subsidiaries, who may issue purchase orders to suppliers.

Compliance to the requirements within this manual as well as to the Lear Corporation
Purchase Order Terms and Conditions is mandatory.

It is the suppliers responsibility to check at regular intervals for updates to this


manual at https://access2.lear.com (eSRM) or http://lear.covisint.com .

Subsequent Supplier Bulletins will continue to be published to


communicate all updates and changes.
New bulletins are communicated at time of log-in to the eSRM supplier web
page.
If for any reason, the web-site cannot be accessed, it is your responsibility to
contact your assigned Lear buyer for a copy.

This Global Supplier Quality Requirements Manual has been developed to describe and
define the requirements and expectations of Lear. It is intended to drive consistency in
Lears sourcing and procurement activities on a global basis. Our aim is to create a
favorable business environment for both Lear and our suppliers that strives for customer
satisfaction in an environment that supports continuously improving costs, quality,
efficiencies, productivity and ultimately, profits.

The value of the supply chain is fully recognized at Lear. Continuous improvement can
only be attained through effective communications, documentation of quality
expectations and the successful implementation of supportive action plans that support
long-term customer loyalty and satisfaction.

Globalization at Lear will be achieved through the penetration of existing and emerging
markets with breakthrough technology and extensive customer partnerships on a global
basis.

Lears leadership position is supported by a flexible, cross-functional, global


organization that responds quickly to customer and market requirements and that
successfully leverages our manufacturing, distribution and supply chain superiority.

Lear recognizes its external production supply base as an extension of its business and
the need for consistent material supply on a global basis.
Our Global External Production Supplier Network will help to create value in the supply
chain through continuous improvement, innovation, efficiency and the flexibility to
deliver and support the needs of our customers.

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6.0 SUPPLIER COMMUNICATION TO LEAR

Lears expectations are that all suppliers meet or exceed the following
requirements:

Supplier communication to Lear will be pro-active and will include notification of any
and all sub-contractor issues that could affect Lear and its affiliates or its customers.
All requests for authorization of any proposed material or process changes or moves
of production locations by a supplier or its sub-suppliers are submitted in advance
with regard to timing of all issues.
Early notification of any potential supply/capacity issues are communicated to your
Lear Buyer, including but not limited to potential labor stoppages.
Contingency Planning Strategies are in place for all manufacturing facilities that ship
to Lear and its affiliates.
Upon completion of a program, the supplier will ensure tooling is properly stored to
prevent damage and is readily available for service requirements.
Suppliers must acknowledge that achievement of ZERO DEFECTS and 100% on
time Delivery performance are fundamental objectives for Quality and must monitor
their performance as reported in both the Lear Supply Rating System (SRS) Monthly
Corporate & Common Scorecards and QNs issued in the Supplier Quality Tracking
System (SQTS).
All suppliers are expected to be compliant with the environmental directives of Lears
customers and applicable legal requirements including Product Material Content and
Recyclability Reporting (PMCRR-IMDS) and associated programs, including
REACH-Registration, Evaluation, Authorization (and Restriction) of Chemcials.

7.0 EXTERNAL PRODUCTION SUPPLIER ELECTRONIC DATA


INTERCHANGE REQUIREMENTS (EDI) AND OTHER LOGISTIC
REQUIREMENTS:

All external suppliers supplying production parts, assemblies, components and


production materials to Lear plants are required to have EDI capabilities.

For additional information on EDI and other logistics requirements, refer to Supplier
Material Delivery and Logistics Requirements at the Lear Website at
http://lear.covisint.com.

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8.0 REGISTRATION TO LEAR CORPORATE PURCHASING
APPLICATIONS & SUPPLIER TRACKING (eSRM)

All suppliers are required to register a supplier administrator for access to the Lear
eSRM applications at https://access2.lear.com (also known as eSRM).

Your Supplier Administrator is responsible for assigning user access IDs and passwords
for others in your company to access the Lear Purchasing applications, which include:

Online Quote System


Supplier Rating System (SRS)
Purchase Order Retrieval
ProFile Supplier (APQP)
Diversity Reporting (North America Only)
Supplier Quality Tracking System (SQTS)

To register a supplier administrator for your company, access http://lear.covisint.com.


Go to the Web Applications Tab and complete the form entitled Request Web
Application Access.

The Supplier Administrator Supplier User Enrollment Manual is available on


https://access2.lear.com and details the responsibilities of the administrator and
instructions for adding and deleting users to the applications.

9.0 SUPPLIER DIVERSITY REPORTING REQUIREMENTS TIER II

All Lear North American external production suppliers are required to purchase
products and services from Certified Minority Business Enterprises (CMBEs) in an
amount equal to five percent (5%) of the dollar amount of business they do with Lear
Corporation.

In June, 2005, Lear implemented the use of the M-Tier Diversity Reporting system, a
Ford Motor Company initiative. This reporting system replaced Lears previous Tier 2
reporting system through the Lear website. If you have any questions regarding Tier 2
diverse spend reporting, please contact Lear at supplierdiversity@lear.com.

Quarterly reporting of this information is a requirement and is handled through the


online application at www.m-tier.com . Information should be reported as a LEAR
PRIME.

CMBEs are those companies that are certified by the National Minority Supplier
Development Council or one of its affiliates.
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Additional reporting information and instruction is available on M-Tier by accessing
www.lear.com under Supplier Information and then Supplier Diversity.

10.0 CUSTOMS TRADE PARTNERSHIP AGAINST TERRORISM (C-TPAT)

As a member of C-TPAT, Lear is constantly striving to improve security within our


global supply chain, which will ensure timely delivery of shipments through expedited
clearance at U.S. border crossings and ports of entry.

Lear expects that all suppliers outside of the USA are expected to educate themselves
on the requirements of Customs and Border Protection (CBP-formerly U.S. Customs
Service).

Supplier Bulletin 56430-17 (available on eSRM under Quick References) provides


additional information on the program. You are required to complete and returned the
provided Acknowledgement Form.

11.0 LEAR SUPPLIER CUSTOMS REQUIREMENTS


To strengthen internal controls with respect to compliance with U.S. Customs and
Border Protection (U.S. Customs or CBP) laws and regulations, Lear has reviewed
all aspects of our import activity, and seek your full support of the below listed
requirements.

Further, as a member of the Customs-Trade Partnership Against Terrorism (C-TPAT)


initiative, Lear is constantly striving to improve security within our global supply chain,
which will ensure timely delivery of shipments through expedited clearance at U.S.
border crossings and ports of entry.

In accordance with our U.S. Customs obligation to exercise reasonable care 1,


Lears corporate policy is for all U.S. domestic operations, foreign related and
unrelated suppliers to comply with the import laws of U.S. Customs. As a supplier,
Lear directs you to be familiar with the relevant provisions of the law, regulations,
rulings, tariff schedules, and decisions applicable to our import operations.
Furthermore, Lear expects you to be familiar and comply with all purchase order terms
and conditions as well as any additional instructions provided by Lear personnel, such
as the ones set forth herein.

These requirements apply to all commercial and non-commercial goods that are
imported into the U.S. from both intercompany and third-party suppliers, including
finished products, raw materials, equipment, research components, product returns,
etc.

1
Section 509(a)(1)(A) of the Tariff Act of 1930, as amended by title VI of Public Law 103-182, commonly referred
to as the Customs Modernization Act.
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11.1 COMPLIANCE INSTRUCTIONS

11.1.1 Language

All commercial documentation must be in English, or must include an accurate


and complete translation of all required information.

11.1.2 Designate Point of Contact

Please designate one individual at your company to serve as a point of contact


for Lears Customs Compliance Department. This person should be
knowledgeable about the materials and components sourced by your
manufacturing company; products manufactured at your company; country of
origin determination; and the shipment of such products to Lear U.S. This
person should additionally be knowledgeable about transshipment rules (see
the below explanation). Finally, this person should have access to personnel at
your company in the accounting, procurement, shipping and receiving
departments to facilitate communication between Lear and the company for
customs purposes.

11.1.3 Invoice Content Requirements

As a supplier of merchandise to Lear, it is critical that your accounting and


shipping department personnel input accurate and complete information on
commercial documentation and shipping documentation. Lears Customs
Compliance Department relies on the accuracy of this information in order to be
compliant with U.S. Customs laws and regulations. Lear also maintains this
documentation in accordance with the requirements to maintain entry
documents as set forth in Customs (a)(1)(A) list 2.

Effective immediately, when preparing commercial documents for merchandise


to be sold and exported to Lear U.S., please confirm that your company
accurately completes the commercial invoice and packing lists, by inputting the
relevant information in each of the following fields.

Invoice Requirements
Date of shipment
Name and address of shipper
Name and address of consignee
Consignee IRS# - This is mandatory for all shipments arriving in the U.S.

Name and address of Sold To party


Detailed description of the product - A detailed description of the imported
merchandise, including the commercial name by which it is known, its grade
or quality, and the marks, number or symbols under which it is sold by the
seller or manufacturer; (To note, automotive parts is not acceptable)

2
19 U.S.C. 1509(a)(1)(A).
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Lear part numbers (if applicable)
Quantity The quantities imported in weights and measures
Unit price - The purchase price in the currency where the merchandise was
purchased. This amount is generally the basis for determining the
merchandises dutiable value;
Total price per line
Total invoice cost - Please note that all items require a value for Customs
purposes. Even if the shipment contains no-charge items, samples,
returnable containers, or returned goods, etc. there MUST be a value for
Customs. The invoice should be marked Value for Customs Purposes
Only.
Type of Currency
Lear Purchase Order number
Country of Origin - This is the country of manufacture, generally;
Terms of Sale (e.g., Ex-Works, Free-On-Board, Cost of Insurance &
Freight, etc.);
Name of the Customs broker responsible to clear the cargo
Assists - A statement of all goods or services the buyer furnished to the
manufacturer for producing the merchandise, the cost of which is not
included in the invoice price; and
Harmonized Tariff Code (If known, the appropriate eight-digit Harmonized
Tariff Schedule (HTS) classification).
Packing List
All information shown on commercial invoice (see above) except for value;
Gross and net weights of products; and
Total number of cartons shipped.

11.1.4 Valuation

The price input on the commercial invoice should reflect the price paid or
payable by Lear to your entity for the merchandise purchased. The price
actually paid or payable for the imported merchandise is the total payment,
excluding international freight, insurance, and other incidental costs that Lear
makes to you.

Assists: If you are aware that Lear recently provided your company with an
assist, then please contact Lears Corporate Customs Department to inform
us of the type of assist prior to shipment of merchandise to Lear U.S. This
information is necessary for Lear to determine how to report the value of the
assist to U.S. Customs. An assist is any item provided to you by Lear free of
charge or at a reduced cost, for use by your company in the production or sale
of merchandise to be sent to Lear U.S. Examples of assists are:

Materials, components, parts, and similar items incorporated in the imported


merchandise;
Tools, dies, molds, and similar items used in producing the imported
merchandise;
Merchandise consumed in producing the imported merchandise; and

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Engineering, development, artwork, design work, and plans and sketches
that are undertaken outside the United States and are necessary for the
production of the imported merchandise.

Additional Payments: If you know if Lear made any additional payments to your
company related to the importation of the merchandise to the United States,
please contact Lears Customs Department prior to shipment of merchandise to
the United States. Lear will need to determine if and how the value of such
payments should be reported to U.S. Customs. These types of payments
include, but are not limited to, payments for packing costs, selling commissions,
royalties or licensing fees; payments to reimburse your company for overhead
or tooling charges, nonrecurring engineering charges, research and
development reimbursement; and any other payment which relates in any way
to the manufacture of imported products.

Repairs / Alterations: If your company did not manufacture the merchandise to


be sent to the United States, but performed Repairs or Alterations only, then
please identify on the invoice to Lear the value of the foreign repair or
alteration.

Assembly: Alternatively, if your company assembled merchandise from goods


sourced in the United States, please identify which portion of the value of the
merchandise resulted from the advancements or improvements made by your
company.

11.1.5 Special Trade Preferences

It is Lear's policy not to qualify merchandise imported into the United States for
preferential tariff treatment under any special trade program unless Lear, with
the assistance of its foreign suppliers, determines that the merchandise
qualifies for the trade program. At the time of entry, Lear must possess the
requisite documentation to support such a claim.

a. Generalized System of Preferences (GSP)

If your company is located in a GSP country3 and you have determined, in accordance with
appropriate U.S. Customs Regulations, that the product manufactured in your company is
eligible for entry into the United States under the GSP program, then please complete the
following:

Statement on the Commercial Invoice. For items wholly grown, produced, or


manufactured in the GSP country, a statement to that effect must be on the
commercial invoice;

3
General Note 4(a) of the Harmonized Tariff Schedule of the U.S. lists each country, territory, and association of countries
that is eligible for GSP benefits (GSP country).
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GSP Declaration. For products not wholly from the GSP country, a GSP
Declaration should be obtained from the exporter or other party having
knowledge of the relevant facts. The GSP Declaration shall include all relevant
detailed information about the manufacture of the product; and

Evidence of Direct Shipment. Products must be intended for the United States
at the time of export and the product must be directly shipped to the United
States from the GSP country, unless a certain exception applies (e.g., free
trade zone in a GSP country). You must directly ship all product from your
company directly to the United States. Please provide Lear with documentation
(e.g., shipping papers or a statement on the commercial invoice) to confirm that
a direct shipment occurred.

b. North American Free Trade Agreement (NAFTA)

If your company maintains manufacturing locations in Canada or Mexico, and


you have determined, after reviewing the NAFTA Rules of Origin, that the
product manufactured by your company is eligible for entry into the United
States under the NAFTA, then please provide a NAFTA Certificate of Origin,
certifying that the product qualifies for NAFTA treatment and select the
appropriate Preference Criteria. Please sign and date the NAFTA Certificate of
Origin.

NAFTA Certificates should only be completed by someone with proper training


including knowledge of tariff classification, tariff shifts, bill of material analysis,
regional value calculations and automotive tracing requirements.

c. U.S. Goods Returned (HTSUS 9801)

This provision applies if your company returns U.S. origin goods to the United
States without advancing the goods in value or improving them in condition by
any process of manufacture or other means. If you have determined, with the
assistance of Lears Customs Compliance Department, that the U.S. origin
goods are eligible for entry into the United States under HTSUS 9801, then
please provide:

Statement on the Commercial Invoice. State that item was previously exported
from the United States and imported into your country, as supported by
commercial invoice documentation;

Foreign Shippers Declaration, and

Proof of U.S. Origin (Manufacturers Affidavit, U.S. Certificate of Origin or


NAFTA Certificate of Origin indicating the U.S. as the country of origin).

d. U.S. Goods Returned, Advanced and Improved Abroad (HTSUS 9802)

This provision applies if your company returns U.S. origin goods to the United
States after repairing / altering them or after using the U.S. origin goods for
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assembly purposes. If you have determined, with the assistance of Lears
Customs Compliance Department, that the U.S. goods are eligible for entry into
the United States under HTSUS 9802, then please provide:

In the case of U.S. goods assembled abroad:

Foreign Assemblers Declaration,

Proof of U.S. Origin (Manufacturers Affidavit, U.S. Certificate of Origin or


NAFTA Certificate of Origin indicating the U.S. as the country of origin), and

In the case of articles exported for repair and alteration (under HTSUS
9802.00.40 or 9802.00.50), it is Lears policy that the invoice clearly state the
value of the repair and the following documentation be provided at the time of
entry:

Declaration of the person who performed the repairs.

The above list of programs represents a number of the more frequent programs
under which Lear has obtained preferential tariff treatment. It is not intended to
be exhaustive of all the programs available to Lear and accordingly, if Lear is
seeking preferential tariff treatment under a program not listed above, Lear will
expect its foreign suppliers to provide the appropriate documentation to support
Lears claim for the preferential tariff treatment under the alternative program.

11.1.6 Country of Origin Determination

U.S. law requires that the correct country of origin is provided on the
commercial invoice and packing list. In certain cases, a certificate of origin,
manufacturers affidavit, or other declaration will need to be provided to Lear
with the necessary country of origin documentation for Lear to claim preferential
duty treatment under a special trade program (e.g., NAFTA, GSP, HTSUS 9801
or HTSUS 9802). The country of origin must also be used for marking
purposes, as described below.

For all products, the country of origin should be the country in which the product
was manufactured. If the product was not wholly produced or manufactured in
one country, the country of origin should be the country in which the most
recent substantial transformation took place, meaning the country in which the
product was transformed into a new and different article of commerce, such
that it gained a new name, character, or use. In determining whether a
substantial transformation occurred, consider: the degree and cost

of processing; the increased value of product after processing; the name


change after processing; and the new character or use after the processing.

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In the case of textiles, textile shipments require a notation on the documents
indicating the name and address of the company who performed the
processing that gave the product its country of origin.

11.1.7 Marking

Unless a specific exception4 applies for products manufactured by your


company (e.g., a marking exception applies to nuts, screws, staples, wires),
once the country of origin is determined, please ensure that all merchandise
shipped to Lear meets the marking requirements as set forth by the U.S.
Customs Regulations, which state that the marking must be: on the outermost
container immediate container (the innermost level of packaging); on the article
itself (where physically possible, unless an exception applies); conspicuous
(can be easily seen with normal handling); legible; indelible (resists fading);
permanent; and in English.

11.1.8 Trans-shipment

Lear requires all suppliers to notify Lear immediately if you contemplate


changing a production site for any products manufactured for sale or shipment
to Lear U.S. If a change is contemplated, contact the Manager of Lears
Customs Compliance Department to disclose the new production country and
the reason for the change. Written notice should be provided to the Manager of
Lears Customs Compliance Department when production sites change. This
policy exists to comply with special trade programs (e.g. GSP, NAFTA, etc.)
and to prevent transshipment of merchandise (from the country of origin to an
intermediary country prior to shipment to the destination country) as well as
avoidance of quotas, ADD / CVD, or any other trade related restrictions. To
validate this policy, Lears management may conduct on-site supplier
evaluations to assess that your company has implemented this policy and
supporting Lears corporate import policy.

11.1.9 Antidumping Duty / Countervailing Duty (ADD / CVD)

If you are aware that impending shipments of merchandise produced in your


company may be subject to ADD / CVD, please alert Lears Customs
Compliance Department upon identification of the issue.

11.1.10 Non-Production Shipments (Tooling / Machinery / Equipment)

Due to the high value of these shipments, special care should be taken when
moving tools, machinery and equipment across international borders. The
basic invoice requirements should be followed keeping in mind the following:

Confirm the shipping terms including who is responsible to clear the cargo
through Customs.

4
See J-list as provided in 19 C.F.R. 134.33, for marking exceptions.
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For shipments from a non-Lear location sent on our behalf, the shipper should
be listed as: Lear Corporation, c/o (the shipping location).
If the tooling or equipment is being sent only for alterations or repairs and will
be returned, please mark the invoice accordingly. Also note if the work is under
warranty.

For transfer of production equipment, values should be fair market values.

If no actual sale is taking place, the invoice must be marked: Value for
Customs Purposes Only

Tool/Machinery/Equipment moves from Canada to Mexico often require


additional coordination due to the multiple border crossings. It is always helpful
to advise Lears brokers in advance of the cargo arriving to ensure a smooth
Customs clearance.

Please note that Lear will not be the importer of record for any chemicals.

11.1.11 Miscellaneous

Training: Lears Customs Compliance Department will conduct training


sessions in the appropriate delivery format, as needed, to make you aware of
our import policies and procedures and to answer any questions from your
employees.

Employees: Please be aware that our import policy extends to employees of


our related and unrelated foreign suppliers. Please immediately instruct your
employees whose activities impact any of the areas described above to follow
this policy.

11.1.12 Ramifications

Please note that a Customer Satisfaction Quality Notification (QN) will be


issued against a vendor for each instance of non-compliance with the above
noted requirements.

Supplier Bulletin 56430-17 (available on eSRM under Quick References)


provides additional information on the C-TPAT program.

Thank you for taking proactive steps to immediately implement Lears


Corporate Customs Compliance Policy for foreign suppliers.

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12.0 SUPPLIER QUALITY REGISTRATION REQUIREMENTS AND 2nd
PARTY CUSTOMER APPROVAL GUIDELINES
Lear is certified to ISO/TS 16949:2009.

The Lear Quality Certification Requirements for all approved production


supplier manufacturing locations is 3rd party Certification to ISO/TS
16949:2009 or ISO 9001:2008

IMPORTANT NOTE:
Registration to ISO 9001:2008 is only acceptable for those suppliers that do not meet
the applicability requirements of ISO/TS 16949:2009 as described below or as an
interim step to achieving TS 16949 certification.

It is the suppliers responsibility to submit copies of their Quality and Environmental


certificates for each manufacturing location
Copies of their renewal certificates must be submitted on or before the expiration
date of the certificate
Customer Satisfaction QNs will be issued to suppliers with missing or expired
certificates
Information on all certificates must match the name and address on file in the
Lear system for the manufacturing location. See submission information below:

Applicability Requirements:

TS 16949:2009 applies to organizations that manufacture product that ends up in the


final vehicle assembly, including:

Production Materials
Production or Service Parts
Assemblies
Heat treating, Welding, Painting, Plating or other Finishing Services.

All Quality certificates, transition plans and Environmental Certificates (ISO


14001 or Responsible Care Management Systems, (RCMS) Technical Spec. RC
101.02) must be submitted via:

Email: suppliercertificates@lear.com

Fax: 001 248 493-5999

Failure to submit a valid timeline and transition plan or a copy of your renewal
certificate will have negative impact on your supplier monthly Scorecard and
potentially harm your relationship with Lear.

12.1 All approved Lear external production suppliers are required to establish

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documents and implement effective production, quality and management
systems compliant with the above outlined requirements, including all customer
specified requirements.

12.2 Lear reserves the right to verify a suppliers manufacturing location for site
compliance to these standards by performing site audits by a designated Lear
representative for those suppliers identified as having a high potential impact
on safety, fit, form function, quality and or Customer down-time.

The duration of the audit will conform to the full application of the Audit Day
requirements table of the Automotive Certification Scheme for ISO/TS
16949:2002.

12.3 Third party certification does not relieve the supplier of the full responsibility of
the quality of the product supplied.

12.4 Lear requires all approved external production suppliers to monitor:

12.4.1 Verification of sub-suppliers 3rd party certification includes obtaining a


copy of the valid registration certificate and receiving updates as
certificates expire.

12.4.2 Documented evidence of sub-supplier compliance must be available


for review upon request of Lear.

12.4.3 In the event that a sub-supplier provides a proprietary material, is


not registered and/or on-site verification is very impractical (limited
resources and/or location), exceptions must be documented and
approved by an authorized representative of Lear.

13.0 ENVIRONMENTAL REGISTRATION REQUIREMENTS:


All Lear suppliers are expected to work proactively with Lear to reduce the environmental
footprint of Lears products and comply with the environmental requirements of our
customers and those countries in which Lear operates.

Additionally, all Lear suppliers must have an effective environmental management


program in place and 3rd party registration to the International Environmental
Management Standard ISO 14001:2004 or Responsible Care Management System
(RCMS) Technical Specification RC101.02 .

The deadline for submission of the environmental certificates for each


supplier manufacturing location shipping to Lear was January 1, 2008.

After this date, Customer Satisfaction QNs will be issued to all current suppliers with
missing or expired environmental certificates.

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New suppliers to Lear and its affiliates have one year from the date they are added as an
approved supplier to meet these requirements.

14.0 PRODUCT MATERIALS CONTENT RECYCLABILITY REPORTING


(PMCRR-IMDS)
Product material content, recyclability, weight and other information is to be reported via
IMDS as specified below. Product containing substances of concern that are restricted
and/or prohibited must comply with current legal and customer requirements. Life cycle
assessment (LCA) data may also be required for specific programs.

All suppliers must provide evidence of product data submission acceptance by Lear with
every PPAP submission, or as requested. A copy of the print out or screen shot of the
Recipient Data from Lear IMDS Site 632 is considered to be the only valid evidence of
acceptable submission. The part numbers in the acceptance note must match the part
numbers submitted for PPAP or other approval. PPAP or other approvals will not be
granted for the parts not accompanying this documentation. Lear suppliers are
responsible for cascading this requirement and collecting data from their respective sub-
suppliers. Failure to do so will be reflected in the suppliers monthly scorecard
performance as measured in Customer Satisfaction.

All Lear suppliers must re-submit their part to Lear for re-approval per IMDS and
customer requirements.

15.0 REACH*1) Registration, Evaluation, Authorization (and Restriction)


of Chemicals
*1) Regulation EC 1907/2006 on Registration, Evaluation.

All Production, Non-Production Part/Material and Packaging Suppliers shipping


to a Lear facility location in any of the following EU Communities must comply
with REACH.

As a downstream user, Lear Corporation requires from its suppliers that all substances
(including substances in preparations) provided to Lear Corporation, and the uses of
those substances, to be registered, as per REACH regulation requirements.

Suppliers must provide a list to Lear Corporation of any raw material containing a
substance supplied to Lear Corporation that is not or will not be pre-registered. This list
must be provided to Reach@lear.com as soon as the information is available.

Lear Corporations EU entities will not accept direct shipments or drop shipments from
non-EU suppliers (i.e., Lear Corporation will not act as the importer for non-EU
suppliers) of substances (including substances in preparations). Non-EU suppliers to
Lear Corporation must either use EU-based distributors or appoint an Only

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representative in the EU.

Suppliers must perform IMDS material data reporting as it relates to substances of very
high concern as defined by REACH. (Reference Section 13.0 of this document on
Product Materials Content Recyclability Reporting PMCRR-IMDS).

More information can be found at: http://www.acea.be/reach and


http://ec.europa.eu/enterprise/reach/index_en.htm.

List of European Union (EU) Member Countries


(Current to May 15, 2008):

Austria Germany Poland


Belgium Greece Portugal
Bulgaria Hungary Romania
Cyprus Ireland Slovakia
Czech Republic Italy Slovenia
Denmark Latvia Spain
Estonia Lithuania Sweden
Finland Luxemburg The Netherlands (Holland)
France Malta United Kingdon, England, UK

Note:
1. Suppliers in Norway, Iceland and Liechtenstein will be considered as EU suppliers
once these countries have implemented REACH.

2. Suppliers in Switzerland, Russia, Turkey OR North Africa are NOT EU Suppliers.

16.0 SUPPLIER QUALITY TRACKING SYSTEM (SQTS)

SQTS is Lears Global Supplier Quality Tracking System for reporting and resolving
supplier quality, delivery, customer satisfaction and warranty issues. It is an online 8D
system that provides a standardized method of issuing Quality Notices (QNs) to all
suppliers.

Suppliers must respond to QNs by entering data in the system fields that follow a
disciplined problem-solving approach.

Data collected in the SQTS database is sent to the Lear Supplier Rating System (SRS)
which populates the Supplier Corporate and Common Vendor SRS Scorecards and
Metric Charts.

The number of rejects reported in a Quality QN is used in the calculation of a suppliers


RPPM that will be on each suppliers scorecard.

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For additional information and instructions on the SQTS System, download the
Supplier User Manual at https://access2.lear.com .

For those Lear facilities not currently using the SQTS system, suppliers should contact
the responsible Lear Quality Engineer or buyer for the correct procedure.

Requirements:

The suppliers System Administrator must enroll a minimum of two supplier contacts
(i.e. Quality and Logistics representative) with access to this system at each of their
locations that ship to Lear to respond to any QNs that are issued to the suppliers
manufacturing location.
When a QN is generated, the supplier must respond to the QN by the close of
business the following day this is referred to in the system as the initial response
and must include containment actions to protect Lear from receiving any further
defective parts (i.e. supplier must certify product). The supplier will continue to
receive email notifications if the 24 hour response is not submitted on time.
The supplier contacts should monitor their email notifications daily.
The supplier must provide permanent corrective action implementation and
verification of effectiveness.
The supplier may be issued a customer satisfaction QN by the Lear receiving plant
or quality group if they are delinquent in answering QNs in a timely manner or for
other repeated or chronic concerns in general.
Suppliers may risk being awarded new business / lose existing business if
adherence to SQTS is not followed.

17.0 EXTERNAL PRODUCTION SUPPLIER PERFORMANCE


To meet the ISO/TS 16949:2002 requirement of measuring supplier performance, the
Lear Supplier Rating System (SRS) Monthly Scorecard utilizes composite measures,
which cover various aspects of supplier performance.

It provides a monthly and year to date record of the suppliers quality, delivery, written
complaints, customer satisfaction and warranty ratings performance and scores.

These performance metrics also provide:

Recognition of exceptional supplier performance


Improved communication on performance issues
Objective data for use in supplier management and sourcing decisions
Opportunities for continuous improvement

The SRS Scorecards and the Supplier SRS User Manual which includes the scoring
criteria for each of the categories are available at https://access2.lear.com or by using
the following link: https://lear.covisint.com
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Requirements:

Supplier representatives at both the corporate and manufacturing level are required to
download their monthly corporate and common scorecard data each month. Any
discrepancies or disputes in data must be addressed to the individual Lear Plant
providing the data.

Scorecards are available for download on the 12th day of the following month.

Example: April 2008 scorecards were available on May 12, 2008

External Production Suppliers are required to submit the information / documentation


identified below, by written notification to the receiving Lear Plant(s) and to the
Corporate or Regional Purchasing Buyer:

17.1 All changes in suppliers Remit To information

17.2 Copies of all updated Third Party Quality Certification with expiration dates for
each manufacturing site that ships to Lear

17.3 Any changes in ownership of the supplier

17.4 Copies of Notification of Third Party Containment

18.0 PRE-PRODUCTION and NEW PRODUCT LAUNCH REQUIREMENTS


(APQP)

All approved external production suppliers involved in pre-production and new product
launches are required to formulate advanced quality plans to support the development
of new products and/or services, in accordance with the guidelines in the Advanced
Product Quality Planning and Control Plan (APQP) manual published by the
Automotive Industry Action Group (AIAG).

18.1 QUALITY MANAGEMENT SYSTEM (QMS) REQUIREMENTS:

Suppliers are required to:

18.1.1 Download the ProFile Suppler APQP User Guide and communicate the
requirements throughout your organization and manufacturing facilities.

18.1.2 Utilize the Lear ProFile System


ProFile is a web-based global project management software system
that includes a part tracking system, storage of basic part information
and Supplier APQP timing. If the Lear program is not on ProFile,
supplier must contact the Lear buyer to ascertain where to submit the
required timing and forms. ProFile can be accessed with the following
link: https://lear.covisint.com
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18.1.3 Complete an electronic version within ProFile of form GPM 6.1, F1
Supplier Risk Assessment for all assigned programs within 30 days of
actual date sourced.

18.1.4 Enter Supplier APQP timing for each program in ProFile.

18.1.5 All suppliers shipping heat treated parts are considered high risk
and are required to:

Submit a completed AIAG CQI-9 Special Process: Heat Treat System


Assessment Form as an attachment in the ProFile System to document
the status of all in-house heat treat processes, all out-sourced heat
treated parts and/or all out-sourced heat treat services for all purchased
and overseas components that are heat treated.

19.0 LAUNCH READINESS MEASURES:

The responsible Lear Quality Engineer monitors and manages selected suppliers from
new product release through the start of production. New product/process launch, tool
kick off approval and readiness measures are implemented to ensure that suppliers
are able to produce in accordance with all requirements of the Purchase Order and
customer requirements, i.e. Part Branding and Identification.

19.1 SUPPLIER RISK ASSESSMENT:

Purchasing, Quality and Program Management will conduct Supplier Risk


Assessments to determine those suppliers whose products are identified as High-
Risk suppliers and will be tracked by Lear. Criteria include, but are not limited to:

Product / process complexity New product / complexity for Lear


Product specifications to FMVSS Product Environmental Impact
or other applicable local statutory Supplier launch history
and regulatory requirements Mergers, Acquisitions or Affiliations
Past product / process concerns associated with a Supplier
Impact on final product New supplier production location
Past warranty concerns New supplier
New product / process for supplier

19.2 COMPONENT REVIEW MEETING (CRM):

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Component Review Meetings are held with selected suppliers to identify key
product/process characteristics that are to be statistically monitored to ensure
stability.

Suppliers are required to conduct CRMs with their own sub-suppliers and
highlight/identify customer specific requirements, i.e. part branding/identification.
With sufficient notice, Lear and/or the OEM may participate in sub-supplier reviews.
Supplier is to use OEM specific documentation when requested by the Lear Quality
Engineer.

19.3 SUPPLIER DOCUMENT / PROCESS REVIEW:

All external production suppliers are required to complete and return a Supplier
Document and Process Review sheet for each representative part number that
is scheduled to launch for the current year at the suppliers manufacturing
location.

It is the responsibility of the Lear Quality Engineer and the supplier to


identify each representative part number that will be supported by the
Supplier Document and Review sheets prior to PPAP submission.
It is the suppliers responsibility to obtain this information package from
https://lear.covisint.com under Purchasing Downloads and Web Guides,
Supplier Development Information and Forms. Specific OEM
documentation may be required and will be communicated to the supplier by
Lear Purchasing.
The cross-functional Lear Program Team identifies high risk suppliers and
Document and Process Reviews are conducted by the Lear Quality
Engineer.
It is a Lear requirement that the supplier will perform similar Document and
Process Review audits with their sub-suppliers and provide that information
to Lear upon request.
Lear Quality Engineering has the authority to request this information or
conduct an on site Document and Process Review audit at any time for
parts produced by a supplier or sub-supplier for Lear. When requested by
Lear, supplier shall permit reviews at suppliers or sub-suppliers site with
Lear and OEM.
All documentation will be provided to the responsible Lear Quality Engineer,
who is responsible for auditing the suppliers documentation and
manufacturing site as well as the suppliers progress in closing any open
issues.

The Supplier Document / Process review is utilized to demonstrate a suppliers


progress, compliance to and the continued improvement of their overall product
quality plan.

Compliance to the Process and Document Review does not relieve the supplier
of its responsibilities to comply with other specified A.I.A.G. requirements.

Page 25
The Supplier Document and Process Review package is available at
http://lear.covisint.com under Purchasing Downloads and Web Guides,
Supper Development Information & Forms, Production Trial Run and
Supplier Development and Process Review.

19.4 PRE-LAUNCH PRODUCTION TRIAL RUN:

All suppliers are required to perform a Run @ Rate prior to PPAP, to verify
that the suppliers actual production process is able to meet program
volumes at an acceptable quality level.
Lear Quality will coordinate the Run @ Rate with the supplier in accordance
with Lear Run at Rate Procedures. OEM specific documentation may be
required and will be communicated by Lear Purchasing. When requested
by Lear, Lear and/or the OEM may participate in the Run @ Rate at the
suppliers site.
The suppliers process must be able to produce 115% of the quoted volume
using production tools and equipment and within the actual manufacturing
site and process, unless otherwise specified in writing by Lear. Lear may
request repeated Run @ Rates if the suppliers process does not meet the
requirement.
In the event issues are uncovered during the Run @ Rate, supplier will
create an Open Issues list which will be tracked by the responsible Lear
Quality Engineer until closure.
It is the responsibility of the supplier to enter the completed Run @ Rate
documents and open issues list as an attachment in ProFile.
Suppliers are required to assure that Run @ Rate is conducted for all sub-
suppliers and provide supporting documentation to Lear upon request.
When requested by Lear, Lear and/or the OEM may participate in the Run
@ Rate at the sub-suppliers site.

19.5 LAUNCH SUPPORT:

During any program launch at a Lear production facility, selected suppliers may
be required to provide on-site representation. The suppliers launch support
representative(s) must be knowledgeable, capable and empowered to make
decisions. Coverage must be provided for all shifts.

Suppliers will be selected based on past quality performance and/or


complexity of components or assemblies being supplied. Suppliers will be
identified by the responsible Lear Quality Engineer.

Any component or assembly that is identified as a safety or critical item or


contains any special record retention requirements must have additional
inspection implemented prior to Lear receiving the component or assembly
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for launch. Each component or assembly shipment must be certified for 30
days or 6 shipments of defect free product, which ever is the longest period
of time. It is the responsibility of Lear Quality Engineer to approve part
certification plans.
Suppliers may be required to attend key event builds prior to production
launch. Suppliers will be identified by the responsible Lear Quality Engineer.

19.6 PRODUCTION PART APPROVAL:

19.6.1 Suppliers are not authorized to begin production or ship material to Lear
prior to obtaining full approval from the Lear receiving facility per the
requirements of the AIAG Production Part Approval Process (PPAP)
Manual, according to the latest revision level. Any deviation to this
requirement must be approved in advance and agreed by Lear in
writing.

19.6.2 All sample submissions are to be Level 3 unless otherwise


specified. Specific OEM documentation may be required and will be
communicated by Lear Purchasing.

19.6.3 Annual Layouts are required to verify continuing conformance on all


parts and components.

If the Lear Plant is required to submit PPAP to their customer, all


supplier PPAP documentation must be no more than one year old.

PMCRR-IMDS data must be updated per IMDS and customer


requirements.
All PPAPs over one year old are to be updated UPON WRITTEN
REQUEST from the Lear Plant.

19.6.4 PPAP samples shall serve as master samples. When cosmetic issues
arise that cannot be addressed by use of the master samples, the
supplier is responsible for establishing approved boundary samples with
Lear prior to shipping. All maximum condition samples require the
approval of the responsible Lear Quality Engineer.

19.6.5 All suppliers shipping heat treated parts are required to submit a
completed AIAG CQI-9 Special Process: Heat Treat System
Assessment Form as an attachment in the ProFile System to document
the status of all in-house heat treat processes, all out-sourced heat
treated parts and/or all, out-sourced heat treat services for all
purchased and overseas components that are heat treated. For
programs not on ProFile, supplier to send the completed form to the
responsible Lear Quality Engineer and the Lear buyer.

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20.0 PRODUCTION PHASE / MANUFACTURING
20.1 ALL PRODUCT / PROCESS CHANGES

Advance written approval from the receiving Lear facilities and Purchasing is
required for all changes to a suppliers product/process.
Supplier should request the appropriate documentation from Lear
Purchasing and submit any change request at least 3 months prior to
implementation.
Samples may be required for review and to evaluate potential impact on
Lears manufacturing processes.
PPAP approval is required unless specifically waived in writing.
Raw material changes must have completed validation testing and IMDS
submission
Refer to Section 3.1 of the AIAG PPAP 4th Edition for Examples of
Changes Requiring Notification

20.2 PRODUCTION LOCATION CHANGES

External Production Suppliers must obtain advance approval for ALL


production Location changes from both Lear Purchasing and ALL receiving
Lear facilities as required in the most current edition of the AIAG, Production
Part Approval Process (PPAP) under Customer Notification & Submission
Requirements.

Suppliers are to submit a completed Request for Written Approval for Global
External Production Suppliers to Change/Move Production Location form to
their Lear Corporate buyer and the Lear receiving plant(s) to obtain approval
for a production location change. Copies of the Request for Written Approval
for Global External Production Suppliers to Change/Move Production Location
are available at http://lear.covisint.com under Supplier Downloads Supplier
Notification of Production Location Change / Move. Supplier may contact the
Lear buyer for a copy.

Input from Lear Purchasing, Lear Program Management (for customer specific
requirements) and the receiving Lear plant(s) is required for obtaining approval
for the supplier location change.

The Tool Move Plan must include the requirements of a production bank to
ensure Lears Production and Service requirements are not affected.
Additionally, all shared tooling must be called out and identified in the Tool
Move Plan.

The following forms must be completed and submitted to Lear Purchasing for
approval Copies are available at http://lear.covisint.com under Supplier
Downloads, Supplier Development Tool Move.

Page 28
GPM 6.7 Attachment A Lear Supplier Tool Move Request
GPM 6.7 Attachment B Bank Build Matrix
GPM 6.7 Attachment C Supplier Move Checklist
GPM 6.7 Attachment D Site Assessment Checklist
GPM 6.7 Attachment E Tool Transfer Checklist
GPM 6.7 Attachment F New Supplier Kick-off Checklist
GPM 6.7 Attachment G Commercial Issues Checklist

PPAP submission (Level 3 unless otherwise directed by the receiving plant) and
approval from the Lear receiving plant is required prior to the shipment of
production material from the new location. An Exit PPAP from the prior facility is
also required and must be submitted and approved by the Lear plant.

20.3 PPAP SUBMISSIONS OVER 1 YEAR OLD


Whenever Lear is required to submit PPAP to their customer, all external
production Supplier PPAP documentation must be no more than one year old.

At that time, all PPAPs over one year old are to be updated upon request by
the receiving Lear Manufacturing location, regardless of the suppliers
business relationship (i.e. customer directed) with Lears customer.

20.4 EXTERNAL PRODUCTION SUPPLIER EXTENDED SHUTDOWN/START-UP


AUDIT (SESSA):

Lear Purchasing, Quality and ALL receiving Lear facilities must be notified in
writing prior to a suppliers extended production shutdown and must submit a
completed SESSA audit that covers all products at each of their manufacturing
locations that ship to Lear.

The complete audit(s) are submitted to the Lear Buyer and the responsible Lear
Quality Engineer with a copy to the Supplier Development Mailbox at
supplierdevelopment@lear.com and the Quality contact at each Lear receiving
plant. The subject line of the email should read: Company Name: SESSA
Audit Response

Copies of the External Supplier Notification of Extended Shutdown/Start-Up


Audit document can be downloaded from http://lear.covisint.com under
Purchasing Downloads and Web Guides, Supplier Development Information &
Forms, Supplier Extended Shut Down Startup Audit Requirements.
Examples of Extended Shutdown/Start-up periods include Customer change-
over, unscheduled preventative maintenance for Tooling, Machinery,
extended Holiday closings, or the anticipation of a work stoppage due to
Union Contract Negotiations.
SESSA audits submitted for Union facilities that manufacture and ship
product to a Lear facility must be submitted six (6) months prior to the actual
Union contract expiration date.
All questions that are answered as NO require an action plan and the action
plan must in place prior to the shutdown period to insure compliance.
Page 29
20.5 SUB-CONTRACTOR DEVELOPMENT

With the increasing demands of Lears customers for higher quality at a lower
cost, the entire supply chain is responsible for increasing quality and contribution
to a lower overall cost.

By developing and improving sub-contractors, Lears external production


suppliers could obtain substantial savings to themselves and ultimately, to Lear.

It is Lears expectation that all approved Lear external production suppliers work
closely with their supply base to insure that the quality level of received product
meets our requirements and expectations.

The primary area of focus is in the communication and documentation of


customer.

Requirements, which is achieved through APQP (Advanced Product Quality


Planning) and should include:
Risk Assessments
Component Review Meetings
Supplier Audits
Document & Process Reviews
Run @ Rate procedures

Through the APQP process, the subcontractor is informed of customer


requirements and expectations and develops the process foundation.

Lear conducts Incoming Quality (IQ) meetings at the Lear production facility and
division levels. Top problem suppliers are required to attend and present
containment / corrective actions and are identified based on the following:
Performance History of Repetitive Quality Issues
Responsiveness to Concerns
Severity of Issues
Warranty Issues

21.0 EXTERNAL PRODUCTION SUPPLIER CONTROLLED SHIPPING


STATUS:

The Lear Production facility or Lear Management issues a Quality Notice (QN) in
the Lear Supplier Quality Tracking System (SQTS) or in the Supplier Rating
System.

The Lear facility initiates the written documentation to notify a supplier of


Controlled Shipping Status, Level 1 or Level 2 as identified below:

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21.1 CONTROLLED SHIPPING LEVEL 1

CS Level 1 requires the supplier to implement extraordinary inspection of


product to contain a specific failure.
Containment actions must verify that requirements are met and approved by
the Lear production facility or the responsible Lear Quality Engineer.

21.2 CONTROLLED SHIPPING LEVEL 2

CS Level 2 requires the supplier to provide an independent third party to


inspect product separated from normal production process (unless otherwise
specified by Lear) prior to release for shipment to the Lear production facility.
CS Level 2 is initiated if the supplier fails to contain non-conforming product
within their own facility. Regardless of introduction of CS Level 2, the
additional inspection for CS Level 1 will stay in place.

The Lear Production facility, the responsible Lear Quality Engineer and the
supplier must agree on the documentation required, content and duration of
containment.

Items to be inspected can include:

PFMEA
Historic failure modes during launch
Prototype phase quality issues (either internally at supplier or at the
customer)
Late engineering changes

Federal Motor Vehicle Safety Standards (FMVSS) Requirements, Safety


Related Issues or Local Regulations
Potential high-impact customer issues

21.3 DETERMINATION OF CS LEVEL 1 STATUS

CS 1 is required when extraordinary inspections have to be implemented due to


failures which have been detected by Lear, or major discrepancies which have
been identified during a process audit conducted by Lear.

The supplier must verify that the actions taken meet all Lear requirements.
Inspections and methods must be approved by the receiving Lear production
facility. All containment actions must be documented according to Lears
requirements.

Page 31
The supplier is required to:

a) Immediately establish a containment process at its location. Containment can


be placed in line after final inspection or may be located off line in a separate
area.
b) Ensure understanding of the nonconformance.
c) Return confirmation reply as required.
d) Purge pipeline of suspect material.
e) Commence the sort activities and display the results in a public and visible
location.
f) Track clean point of non-conforming material, e.g. material in transit, storage,
at a Lear production facility etc.
g) Provide proper layout and instruction documents, space and tooling.
h) Notify all additional Lear facilities or customer facilities that receive the same
part, informing them of the nonconformance and provide containment
activities as required.
i) Parts, material and containers are to be marked, as agreed with Lear
production facility, to identify parts certified for production.
j) Perform corrective actions including all steps of the 8D process.
k) Review corrective actions for effectiveness and take further actions if required
to eliminate issue long term.
l) Conduct a daily management meeting at the sort location.
m) Report results and findings to the Lear receiving plant(s) on a daily basis.
n) Meet defined exit criteria.

21.4 ADDITIONAL SUPPLER INFORMATION CS LEVEL 1

The supplier is notified in writing of the containment status by the Lear


production facility. The Supplier must confirm CS Level 1 Status within 24 hours
and include supplier contact information and detailed action plan.

If the receiving Lear Plant has implemented the SQTS System, all
related documentation will be contained within the Quality Notice (QN).

The supplier must provide the following information:

a) Supplier Name, SRS Common Vendor number, Location and Supplier


Contact Information
b) Program, Customer
c) Number of non-conformances
d) Date CS 1 status initiated
e) List of all defined exit criteria

This information must be included in the Suppliers Containment Summary to


provide cross communication between the Lear plants with common suppliers
and for use in future sourcing activities.

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21.5 EXIT CRITERIA FOR CS LEVEL 1

The Exit Criteria is based on long term actions and results and must be agreed
by the receiving Lear production facility. The Lear production facility will inform
the supplier in writing of release from containment through the closure of the QN
in the SQTS system or other applicable system in use at the receiving facility.

21.6 DETERMINATION OF CS LEVEL 2 STATUS

CS Level 2 requires the supplier to inspect all suspect parts in an area separate
from their normal production process (unless otherwise specified by Lear) prior
to shipment to Lear by an independent third party inspection source. The third
party inspection source and contact details must be included in the initial
response and be approved by the responsible Lear Quality Engineer. CS Level
2 may be initiated if:

a) The supplier has failed to contain non-conforming products in Launch


Containment and/or CS Level 1 status
b) There is Safety related, FMVSS or Local Regulation issues
c) There is a risk in the field with the Customer

The supplier must verify that all actions taken meet all Lear requirements.
Inspections and methods must be approved by the receiving Lear production
facility. All containment actions must be documented according to Lears
requirements.

In addition to maintaining the requirements of CS Level 1 activities, the supplier


is immediately required to:

1) Contact a third party inspection source for the controlled shipping inspection.

2) Issue a purchase order to the controlled shipping third party inspection source
within 24 hours of receiving the CS Level 2 QN or letter and forward a copy of
the purchase order for 3rd party inspection services to the Lear Plant.

3) Provide adequate trained resources to continue with CS Level 1 inspections.

4) If requested by Lear, the supplier must submit corrective action plans to


its Quality Registrar for review and/or assessment and authorize its
registrar to submit the review and/or assessment findings to the
customer.

21.7 EXIT CRITERIA FOR CS LEVEL 2

The Exit Criteria is based on long-term corrective actions and results by


the supplier and must be approved by the Lear production facility. The
suppliers release from containment is given in writing by the Lear

Page 33
production facility and is co-authored with Lear Platform Quality and
Supplier Development.

The Lear Plant SQE/Quality Manager can replace CS Level 2 with CS


Level 1 if the long-term solution lead-time is too long and the reliability of
supplier performing CS Level 1 is acceptable.

Failure to meet exit criteria for CS Level 2 may result in new business
hold status (NBH).

22.0 COST RECOVERY POLICY:

External Production Suppliers are liable for all costs incurred by Lear per the Lear
Purchase Order Terms and Conditions, and includes but are not limited to the
following:

EXTERNAL PRODUCTION SUPPLIERS Charges to external


production suppliers will be based on local rates of the affected Lear
manufacturing location but will not exceed $75.00 (US) or 75.00 (Euro)
per hour, as applicable in the region. Supplier may contact the Lear buyer
for the rate in the specific Lear location. Refer to the guidelines below
regarding applicable chargebacks to external suppliers.
ADMINISTRATIVE CHARGE - Each Quality Notice (QN) has an
administrative charge of 2 hours minimum covering the collection of data
and documentation of the quality incident/spill.
OTHER CHARGES - the following types of charges will be calculated on
the actual time incurred for the associated action:

EXAMPLES OF COSTS THAT CAN BE CHARGED BACK TO THE SUPPLIER:


- Rework / Repair (Supplier Fault) - Premium Freight Costs including Air Charter, if required
- Overtime to Avoid Production Interruption - Disposition of Scrap (Supplier Fault)
- Production Downtime for Lear and End Customer - Sorting of Suspect Material In-House, at Customer
Location or Third Party Warehouse and Contractor Costs
- On-Line Containment - Tear-Down (Minor, Major or Complete) and Outside
Lab Testing
- Customer Returns including hourly charges, - Receiving Inspection, Material Handling and Freight
transportation on on-site inspections. associated with Scrap and Replacement Material
- Delays in Customer PPAP or other approvals based upon submission of the necessary data to Lear IMDS
Site 632 in a timely and accurate manner or caused by the presence of substances of concern.

Page 34
23.0 HELP

Expired or Missing Supplier Quality & Environmental Certificates: send


new certificates to: Suppliercertificates@lear.com. Please include your
supplier vendor number in the "Subject Line" of your email or fax paper
copies to (248) 493-5999.
To access the Supplier SRS scorecards at https://access2.lear.com,
contact your Supplier System Administrator for a user ID and password.
No Supplier System Administrator? Sign on to lear.covisint.com to
register an administrator for your corporate office.
Supplier SRS Issues - contact the Lear plant originating the QN
Supplier Issues with SQTS - contact: suppliersqts@lear.com
Lears public supplier website: https://lear.covisint.com

24.0 CHANGE CONTROL:

Date of Change Change Description


- Purchasing Leaders
January 2012 - Revised Quality, Minority and Environmental, Health
and Safety Policies
- Section 11.1.7 Marking revised to reflect updated
customs requirements

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