SUPPLIER QUALITY MANUAL - Lotus Cars · The purpose of the Lotus Supplier Quality Manual is to...

© LOTUS CARS LIMITED Potash Lane, Hethel, Norwich, Norfolk NR14 8EZ England Registered Office: Potash Lane, Hethel, Norwich, Norfolk NR14 8EZ England No. 606189 VAT Reg No. GB 105 9863 55

SUPPLIER QUALITY MANUAL

Approval:

N Leeming Head of Quality

I Snary Supplier Quality

Assurance Manager

Supplier Detail:

Revision Level: R2Supplier Name:

Print: Sign: Position: Date:


Section 0 of 26 A5‐A‐6511

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0.1 Copyright Notice

The contents of this manual and all associated processes, systems and documentation are

owned by Lotus Cars Limited and must be handled in strictest confidence by suppliers using

this manual.

© 2013 Lotus Cars Limited

Lotus Cars Limited all rights reserved owns the copyright for this manual and all content

within. No part of this manual may be copied, transmitted or shared in any way without

prior written permission of Lotus Cars Limited.



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0.2 Revision Record

Rev Date Issued Details of Change

R1 09‐09‐2013 First Issue ‐ Replaces Supplier Handbook

R2 24‐10‐2013 Second Issue. Updated in line with A3‐A‐6.148 LPAP R1 Part Approval Section 3.0 Text updated to bring in line

Important Note:

This Supplier Quality Manual supersedes the Lotus Supplier Handbook which is now obsolete

and should not be used for suppliers to Lotus Cars Limited.



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0.3 Table of Contents

0.1 Copyright Notice 2

0.2 Revision Record 3

0.3 Table of Contents 4

0.4 Standard Forms 5

1.0 Introduction 6

2.0 Supplier Assessment 7

2.1 Supplier Sourcing 7

2.2 Site Assessment 7

2.3 Surveillance Audit 8

3.0 Part Approval 9

3.1 Process Overview 9

3.2 Submission Requirements 11

3.3 Part Approval 12

4.0 Part Control 13

4.1 Key Characteristics 13

4.2 Batch Control and Traceability 14

4.3 Documentation 15

4.4 Supplier Request for Process Change (SRPC) 16

5.0 Non Conforming Product 17

5.1 Supplier Corrective Action Request 17

5.2 Stock Swap 19

5.3 Rejects 20

5.4 Supplier Request for Concession (SRC) 22

6.0 Materials Handling 23

7.0 Metrics and Reporting 24

7.1 Q‐Sheet 24

7.2 Visit Report 24

8.0 Glossary 25


Section 2: Supplier Assessment of 26 A5‐A‐6511

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0.4 Standard Forms

Doc Ref Description

A4‐A‐6512 Supplier Waiver

A4‐A‐6592 Supplier Audit Questionnaire

A3‐A‐6148 Lotus Part Approval Process (LPAP)

A4‐A‐614817.1 Final Part Approval

A4‐A‐6441 Supplier Request for Concession

A4‐A‐6444 Supplier Request for Process Change

A4‐A‐6361 Supplier Corrective Action Request

A3‐A‐6.21 Logistics Vendor Packaging Method

A4‐A‐6513 Q‐Sheet

A4‐A‐60133 Visit Report



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1.0 Introduction

Our objective is to procure the highest quality and cost effective components for assembly

into our vehicles delivered consistently on time. This will be achieved through open, honest

and clear communication with our suppliers and a philosophy of working in partnership to

address problems quickly and robustly to protect the end consumer.

The purpose of the Lotus Supplier Quality Manual is to document all of the requirements

and associated processes for the development, approval and supply of production materials

to Lotus Cars Limited. If the supplier or any of its sub‐suppliers require clarification on any

of the content within this manual or anticipate problems achieving its requirements they

should contact Supplier Quality Assurance for assistance.

A copy of this manual will be issued to each manufacturing site supplying parts to Lotus Cars

Limited. This copy shall then be controlled by the supplier’s Quality Department and

cascaded to ensure that all relevant business functions are trained and meet the

requirements herein.

The front cover sheet of this manual shall be completed by the receiving supplier and

returned to Supplier Quality Assurance for our records to ensure that the manual has been

received and cascaded within the supplier’s site.



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2.0 Supplier Assessment

2.1 Supplier Sourcing

Our supplier quality management philosophy is to select suppliers who are registered to the

following recognised quality standards:

ISO 9001:2008

TS16949: 2009

Where suppliers do not hold externally accredited quality management systems to these

international standards a Supplier Waiver A4‐A‐6513 will need to be submitted and

approved by Lotus Cars Limited prior to supply of production materials.

2.2 Site Assessment

During the supplier sourcing process it may be necessary for Supplier Quality Assurance to

visit the proposed manufacturing facility to conduct an audit (Supplier Audit Questionnaire

A4‐A‐6592). Items covered as part of this audit include:

Administration

Manufacturing

Inspection

Delivery

Follow‐up performance

The overall score from the audit will be reviewed by Supplier Quality Assurance to define the

supplier status.

If concerns are raised from the output of the audit then an action plan will be agreed with

the supplier in support of the sourcing process within 14 days from the original Site



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Assessment. Progress will be monitored against the plan and all corrective actions must be

completed prior to start of production material supply into Lotus Cars Limited.

Supplier Quality Assurance reserves the right to follow‐up the audit with additional site visits

as required to confirm corrective actions are complete and meet our requirements.

2.3 Surveillance Audit

Periodically Supplier Quality Assurance will either visit suppliers to undertake additional

audits or request suppliers carry out their own self‐assessment (Supplier Audit

Questionnaire A4‐A‐6592).

Depending on the surveillance audit result the supplier may be requested to develop

corrective action plans to resolve areas of concern. Supplier Quality Assurance reserves the

right to follow‐up the audit or self assessment with a site visit if required to confirm

corrective actions are complete and meet our requirements.


Section 3: Part Approval of 26 A5‐A‐6511

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3.0 Part Approval

3.1 Process Overview

Lotus Cars Limited operates its own bespoke system for developing parts and processes

within the supply chain to ensure that they consistently deliver our requirements: Lotus Part

Approval Process (LPAP).

The diagram below illustrates the generic timing of the 14 activities that make up the LPAP

process aligned with the Lotus Product Development System (LPDS) milestones for new

models:

Activity Start Finish Lotus Lead

Planning Phase CI CA SQA

Supplier Visits CD SOP SQA

LPAP Status Reporting CA SOP SQA

Quality History Review CD FA NPQ

Feasibility Review CD FA NPQ

Design FMEA CD FA NPQ

Process FMEA CA PPA SQA

Part Quality Requirements CA PPA NPQ

Tooling & Facilities CA SOP SQA

Process Control Chart FA PA SQA

Training Records FA PA SQA

Checking Fixtures FA PA SQA

Part Submission Sheet FA SOP NPQ

Sub-Supplier Approval PA LA SQA

Run @ Rate PA LA SQA

Appearance Approval PA SOP NPQ

Final Part Approval PA LA SQA

VP PPEP

CD FA PPA SOP LACACIPS PA

2 31 4

Fig 3.1.1: Lotus Parts Approval Process



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The following flow chart gives an overview of the LPAP submission and approval process:

SupplierLotus

Complete Final Part Approval

Complete LPAP activities as required

Review Final Part Approval

Agree corrective actions with supplier

No

Agree Supplier Category and Submission

Requirements

Parts OK Fit and Func?

All Elements OK?

Yes

Raise Interim Approval

Agree action plan to full approval

Raise Full Approval

No

Yes

Email

Fig 3.1.2: Process Flow for Part Approval

All aspects of this process and associated activities are documented within the Lotus Part

Approval Process (LPAP) Manual A3‐A‐6148 which is available from Supplier Quality

Assurance.



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3.2 Submission Requirements

The Lotus Part Approval Process applies to all external suppliers of bulk materials,

production or service parts. The specific activities required for each supplied part to Lotus

Cars Limited will depend upon change content and shall be agreed between the supplier and

the Supplier Quality Assurance representative during the planning phase.

In terms of submission data to support evidence of activity completion Lotus Cars Limited

operates different submission levels as follows:

Category A Lotus certification

Supplier must submit all of the LPAP documentation for full

review

Category B Self certification

Final Part Approval, ELV/RRR Data Recording Sheet, Part Quality

Requirements, Part Submission Sheets, Process Capacity Sheets

and Appearance Approval Report (where appropriate) are

required for submission

Category X Supplier uses alternative to LPAP

Supplier may use an alternative approval process if agreed in

advance with Supplier Quality Assurance. Final Part Approval,

ELV/RRR Data Recording Sheet, Part Quality Requirements and

Appearance Approval Report (where appropriate) are required

for submission

Suppliers will be advised by Supplier Quality Assurance which submission category they fall

into based on part technology, complexity and previous quality performance.



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3.3 Part Approval

Once all LPAP activities have been completed the Final Part Approval (A4‐A‐614817.1) form

should be completed and submitted together with required supporting documentation and

sample part(s) for review.

Supplier Quality Assurance will then review the data submission together with an

assessment of sample part(s) for physical appearance and vehicle fit and function.

If all elements of the assessment are passed then a Full Approval will be granted. The FPA

form (A4‐A‐614817.1) will be signed and a copy will be sent back to the supplier for their

records as authority to ship materials into Lotus Cars Limited.

Important Note: ELV/RRR Data must be supplied for all parts as part of the submission

paperwork to gain Full Approval.

Where issues are found that do not directly affect part fit/function an Interim approval may

be raised. The FPA form (A4‐A‐614817.1) will be signed and sent back to the supplier to

allow shipment of materials into Lotus Cars Limited pending correction of open items.

Where issues found do affect part fit and function or insufficient information has been

provided to make an approval Supplier Quality Assurance will contact the supplier direct to

agree corrective actions and timing to achieve Part Approval. In order to authorise shipment

of this material into Lotus Cars Limited a Supplier Request for Concession (A4‐A‐614817.1)

will be required documenting the agreed corrective action plan pending completion of the

updated approval documentation – refer to section 5.4.


Section 4: Part Control of 26 A5‐A‐6511

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4.0 Part Control

4.1 Key Characteristics

Key Characteristics are identified on Drawings, Technical Specifications and Part Quality

Requirements in line with the following:

Symbol Definition Description

Fit / Function

Item likely to affect ability to build, performance or

appearance which would lead to customer complaint.

Regulatory

Compliance

Item which would affect vehicle ability to meet market

specific legislation

Safety

Compliance

Item which could affect safe vehicle operation or part

assembly at Lotus

For all key characteristics defined adequate controls must be in place within the part

manufacturing process to ensure specifications are achieved. These requirements must be

cascaded within all documentation to include:

Drawings

Specifications

Part Quality Requirements

Process FMEA

Process Control Chart

Operator Instructions / Training documents



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4.2 Batch Control and Traceability

Parts with safety ( )or legislative ( ) key characteristics may be required for Batch

Control with full Traceability required between delivered product back to raw material /

manufacturing process and date at the supplier’s site.

Supplier Quality Assurance will advise Batch Control and Traceability requirements based on

the following definitions during the LPAP process:

Type Definition

A Each individual part identified with unique traceable serial number

B Batch traceable and marked on part within agreed batch size / time period

C Batch traceable and marked on packaging / delivery note with agreed batch

size/time period. To be used when not possible to mark parts.

Where the supplier has an alternative method of batch control / traceability this may be

used only if agreed in advanced with Supplier Quality Assurance.



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4.3 Documentation

Documents and records pertaining to the design and manufacture of parts supplied should

be controlled in line with the suppliers’ quality management system and ISO 9001:2008.

Retention of all such documentation in the form of hard copy, electronic or other media

shall be in line with the following table:

Record Type Example Retention Period

Transient / Live Documents ISO Audits

Corrective Action Reports

Created Date

+ 1 Year

Product Records Inspection / Test Results

Non Conformance Reports

Product Life*

+ 1 Year

Product Records – Safety

or Legislative related

Inspection / Test Results

Non Conformance Reports

Product Life*

+ 15 Years

Process Records Tooling and Fixtures

Process Controls

Product Life*

* Product Life is defined as the manufacturing lifespan of the vehicle(s) into which

the parts are fitted.

Where the supplier has alternative document control procedures these may be used

providing they exceed the Lotus requirements as detailed above and advanced approval

from Supplier Quality Assurance has been granted.



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4.4 Supplier Request for Process Change (SRPC)

When the supplier wishes to make a change to the process used for the manufacture of

parts supplied an SRPC form (A4‐A‐6444) is required to gain approval for the proposed

change in advance of its implementation. Changes requiring such approval include:

Manufacturing Process Change

New or relocation of Equipment / Facility

Change of sub‐supplier / components within a supplied assembly

Design changes (where supplier is design responsible)

The process for SRPC submission and approval is as per the flow diagram below:

SupplierLotus

Complete SRPC Form

Review SRPC

REJECTchange request.

No

Change to process is proposed

Change acceptable?

Yes

APPROVE change request

Confirm action plan with supplier

Implement Process Change

Email

Email

A4‐A‐6144

Fig 4.4.1: Supplier Request for Process Change


Section 5: Non Conforming Product of 26 A5‐A‐6511

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5.0 Non Conforming Product

5.1 Supplier Corrective Action Request

A Supplier Corrective Action Request (SCAR) will be raised by Supplier Quality Assurance

when a concern or quality issue is identified as supplier related and one or more of the

following criteria apply:

a) Concern investigation reveals risk of disruption to production

b) Concern involves a repeat issue previously communicated to the supplier.

c) Supplier has had similar concerns on other parts.

SCAR responses from suppliers should be received within a 24 hour period & include any

required containment actions.

Closure plans for SCARs should be agreed with Supplier Quality Assurance within 2 working

weeks of being raised. If a supplier requires additional time to collate permanent corrective

actions, they should request a time extension through their Supplier Quality Assurance

representative.



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The following process flow shows the process from concern identified at Lotus Cars Limited

to issue resolved at supplier:

SupplierLotus

SCAR RaisedInvestigate Concern

Implement Interim

Containment Action (ICA)

Review ICA

NoICA acceptable?

Yes

Implement Permanent

Corrective Action (PCA)

Contact Supplier to resolve

Review PCA

NoPCA acceptable?

Yes


Close SCAR

ICA req

uired

in 24 Hours

PCA req

uired

in 14 Days

Email

Email

Email

A4‐A‐6391

Fig 5.1.1: Supplier Corrective Action Request Process



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5.2 Stock Swap

Where non‐conforming parts are identified a stock swap process is available whereby

suppliers can replace this material with good parts within an agreed window with Supplier

Quality Assurance.

Such parts will not be considered as reject material and hence will not impact on a supplier’s

PPM (Parts per Million) score but will still require SCAR (Supplier Corrective Action Request)

completion. The following process illustrates how stock swaps are handled:

SupplierLotus

Non‐Conforming parts identified

Review New Parts

NoParts OK?

Yes


Raise SCAR

Maximum 5 Days

Email

Email

Raise Reject NoteStockSwap?

No

SupplyNew Parts

Yes

A4‐A‐6391

Fig 5.2.1: Stock Swap Process



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5.3 Rejects

When a reject note has been raised, details are emailed to the supplier, who then has 5

working days to investigate the details of the rejection and to either; accept, rework or

query liability. At the end of this 5 day window, materials will be scrapped if they have not

been requested for return by the supplier. If parts are being returned to the supplier

transportation costs will be cross‐charged and debited from the supplier’s account:

SupplierLotus

Reject Note Raised

Reject NoteClosed

Email

No

Hold Parts5 Days

PartsCollected?

Supplier Account Debited

(Incl Admin Fee)

Scrap Parts

Agree part collect / scrap

Yes

Fig 5.3. 1: Reject Part Process



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Important Note

From October 2013 the following may be cross‐charged to suppliers:

Administration charge for handling and processing reject notes

Inspection charges for undertaking time consuming batch / part reviews

Rework charges if non‐conforming parts are being reworked by Lotus Cars Limited

personnel

Consequential part costs if non‐conforming materials have been processed into

assembly or parts fitted to vehicles which need to be replaced

Warranty recovery costs may also be passed on to suppliers in some circumstances

Where applied, these charges will be debited from the suppliers account in addition to the

cost of the parts themselves.



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5.4 Supplier Request for Concession (SRC)

Where a supplier wishes to make a temporary change to the parts supplied a Supplier

Request for Concession (SRC) is required to gain approval for the proposed change in

advance of its implementation.

Changes requiring such approval include:

a) Material specification change

b) Cosmetic quality specification change

c) Dimensional specification change

The process for submission of the SRC form (A4‐A‐6441) and approval is as follows:

SupplierLotus

Supplier requires change / deviation

Email

No

Yes

Complete SRC Document

Review SRC

RequestOK?

Contact supplier to resolve

Approve SRCImplement Request

Email

A4‐A‐6441

Fig 5.4.1: Process for Supplier Request for Concession


Section 6: Material Handling of 26 A5‐A‐6511

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6.0 Materials Handling

In order to maintain the quality of finished goods during transit and storage suppliers should

refer to the Logistics Vendor Packaging Method (LVPM) policy (A3‐A‐6.21). This is used to

agree, develop and sign‐off the packaging method for all parts supplied into Lotus Cars

Limited. Copies of this policy and associated documentation for packaging approval can be

obtained from the suppliers’ Lotus logistics contact.


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7.0 Metrics and Reporting

7.1 Q‐Sheet

Supplier Quality Assurance will issue quality feedback to its suppliers via the Q‐Sheet A4‐A‐

6514 on a quarterly basis. This report contains key performance indicators (KPIs) covering

the following items:

Part Approval Status for parts supplied;

LPAP Status for new models;

SCARs – quantity and ageing profile;

PPM – reject rates for parts supplied;

Key issues and action items for both parties where appropriate;

The purpose of this report is to provide data for cascade through the supplier’s management

and organisation. This will then be used to drive a continuous improvement approach and

promote open and honest feedback between Lotus Cars Limited and the supplier.

7.2 Visit Report

When Supplier Quality Assurance visit the supplier to investigate a concern or follow‐up on a

previous activity a visit report (A4‐A‐60133) will be issued within 48 hours of the visit

completion. This report will include full details of the supplier team members seen and all

actions agreed from the meeting. Actions and status will be summarised with a RED‐

AMBER‐GREEN status and follow‐up will be conducted by Supplier Quality Assurance until all

items are completed and achieve a GREEN status.


Section 8: Glossary of 26 A5‐A‐6511

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8.0 Glossary

Acronym Definition Description

ELV/RRR End of Live / Material / Chemical data for all

component parts used within Lotus

products that is required for vehicle

type approval.

FPA Final Part Approval Form used to request approval at the

end of LPAP process.

LPAP Lotus Part Approval Process Method implemented 2013 to

replace APQP/PPAP for new part

maturation and approval.

LPDS Lotus Product Development System Project management and delivery

process for new models at Lotus Cars

Limited.

LVPM Logistics Vendor Packaging Method Packaging requirements for

production parts.

PPM Parts Per Million Measure of defects supplied against

total quantity of supplied.

PQR Part Quality Requirements Documented quality standards and

checking method for production

parts.

PSS Part Submission Sheet Document for dimensional /

functional measurement submission

as part of LPAP.

SCAR Supplier Corrective Action Request Report submitted to supplier for

feedback regarding quality issues

found with their parts.


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Acronym Definition Description

SQA Supplier Quality Assurance Department responsible for

managing supplier performance.

Part of Quality Department.

SQM Supplier Quality Manual Manual with all supplier related

processes.

SRC Supplier Request for Concession Form used to request deviation

against technical specification /

process / PQR.

SRPC Supplier Request for Process Control Form used to request change to

process for manufacture of parts.

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