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					LORD Corporation

                                                                                                        Vic Venettozzi
                                                                                            Director, Global Sourcing
                                                                                                   LORD Corporation
                                                                                                      111 LORD Drive
                                                                                                       Cary, NC 27511
                                                                                          PH: 919-468-5979 Ext. 6376
                                                                                                Cellular: 919-302-2455
                                                                                    eMail: vic.venettozzi@LORD.com

DA: May 16, 2008
TO: LORD Direct Component & Raw Material Suppliers
SU: OPEN LETTER – Root Cause Analysis & Corrective Action for Non-Conformances

Dear Valued Supplier:

It has long been a requirement of LORD Corporation that our suppliers perform thorough root cause analysis, and
implement effective corrective actions for non-conformances related per LORD Standard Quality Clause ‘S’ (Form
460). In an effort to improve the quality of products received and to eliminate recurring nonconformance’s, LORD
Corporation is now requiring all suppliers to submit to LORD evidence of their Root Causes and Corrective Actions
for all nonconformance’s.

In the event of a nonconformance, you will receive a notification of the discrepancy via a LORD Discrepancy Report.
An initial response concerning containment activities is required within twenty-four (24) hours. Please be certain to
include (i) containment of your inventory as well as (ii) containment of any product that may be in-transit to
LORD. Please provide a Returned Good Authorization (RMA) number if parts are to be returned to you.

A full response with known root cause(s) and permanent corrective action is required within twenty (20) calendar
days. Utilizing tools such as 5-Why Analysis, Cause-and-Effect Diagrams (fishbone analysis), Brainstorming
techniques, Process Run Charts, and Pareto Diagrams, you must identify the root cause of the problem and further
diagnose why your Quality System permitted the nonconformance to remain undetected prior to shipment to LORD.
Please use LORD's SCAR (Supplier Corrective Action Request, Form 1402-1) Form located on our supplier webpage
(www.LORD.com/suppliers) in the "Forms" section. Or, you may use your own form as long as it is an equivalent 8D-
style corrective action form. Note; it is strongly recommended that whenever possible, the result of your root cause
analysis and corrective action plan be presented in person at the LORD location issuing the notification.

In the event you feel that the nonconformance is unwarranted or otherwise caused by a failure within LORD's quality
system, please contact your LORD Sourcing representative immediately and submit a LORD "Change of Charge
Request" (Form 0601-26) Form which is also available on the supplier webpage. Please refer to the Notification
Number identified at the top of the Discrepancy Report in your correspondence to LORD regarding the
nonconformance.

LORD Sourcing, Supplier Quality Engineering and location Materials Management professionals utilize an escalation
process to highlight delays or failures within our supply base related to completion of the SCAR Form. After a SCAR
due date has lapsed for more than twenty-four (24) hours, the issue escalates to the Sourcing Agent responsible for
the purchase category. After three days, SCAR delinquencies escalate to the Sourcing Manager. At five days, failure
to complete the SCAR escalates to the Director level for resolution.

If performance remains problematic, restriction from participation in new product development or additional business
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opportunities can result. Further, additional cost for 3 party inspection of component or material lots to ensure
supply continuity can result. Any such cost will be automatically debited to the supplier until confidence is regained in
the supplier’s ability to perform effective Root Cause Analysis and implementation of suitable Corrective Action.

Of all our supplier management programs, completion of the SCAR or 8D process is a top priority. Although supplier
quality performance has improved steadily since 2005, achieving top performance requires expert adherence to this
important process. Your immediate attention to the content of this Open Letter is appreciated. As always, write or
call with questions or need for clarification.

Regards,



Vic Venettozzi

				
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