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Sample Letter for Penalty to Supplier Late Delivery document sample
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Supplier
Expectation
Manual
Curtis Maruyasu America, Inc.
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MANUAL OVERVIEW
The following Manual represents Curtis-Maruyasu America‘s expectations of suppliers
providing products and services to any of our facilities. This manual is to be used as reference to
introduce you to Curtis-Maruyasu‘s operating requirements.
Curtis-Maruyasu America is a tier one supplier of automotive components to automobile
manufacturers in North America. The foundation of our manufacturing system centers on the ―3
C‘s‖ - Customer First, Communication, and Cooperation. Our system is strengthened by
operating within three primary cornerstones that allow us to produce the highest quality product
at the lowest possible prices.
The CMA Supplier Performance Manual includes general information about Purchasing
procedures and Guidelines, Quality Assurance, Materials Dept. Delivery Performance
Requirements, and Accounting Practices and Terms. The manual also includes all forms needed
to be in Compliance with CMA Procedures.
The purpose of the manual (replaced ‗this meeting‘) is to re-identify CMA/Supplier
commitments, Foster and improve the relationship, and to develop cooperation between CMA
and our Suppliers to continuously meet and exceed Customer needs.
Our customers are Automotive OEMs. Therefore, the investment made by the end
consumer is one of the largest that they will make. They demand a high quality, reliable product
at a competitive price. Curtis-Maruyasu‘s expectations of our suppliers are no less.
Supplier Survey
After review of initial cost competitiveness, Curtis-Maruyasu America, Inc. will conduct
a survey at the supplier‘s facility (ies). The purpose of the survey(s) is to confirm the supplier‘s
capability to meet the needs of Curtis-Maruyasu America, Inc.
We request full cooperation in survey activities. The survey(s) typically involve a
general meeting, a plant tour, and a review of the Curtis-Maruyasu America supplier survey
forms. Curtis-Maruyasu America will provide a copy of this form(s) to you prior to our
visitation. Specific areas of the survey forms should be completed prior to our visit to your
company for the actual survey activities. Please review a sample of the CMA Supplier Surveys
from various departments. CMA representatives may include, but are not limited to, members of
the Quality, Materials, and Purchasing Departments. Please note that a potential supplier must
achieve a score of 3.0 or higher to be awarded business with CMA.
If your company is a current supplier of CMA, a re-audit may be necessary if you fall below
guidelines listed on the SER (Supplier Expectation Report). (SEE SER SECTION for details),
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Purchasing
The Purchasing Department of Curtis-Maruyasu America has high expectations of our
suppliers. We view the addition of suppliers as an addition to our company - similar to the
employment of a new associate. We fully expect the supplier to provide competitive pricing,
superior quality and service, and effective communications.
All instructions contained within this document, or others that may follow, are to be
adhered to as specified within the documents. Any exceptions must be noted in writing with all
quotation submissions, or within 30 days from receipt of any purchase order. Failure to make
exceptions as noted will be viewed as complete acceptance of the terms of the agreements
between our companies.
The following items must be considered in all quotation submissions to Curtis-Maruyasu
America:
A. Request For Quotations
1. Curtis Maruyasu America‘s (CMA) payment terms are 28th Prox unless
otherwise noted or agreed upon by CMA and will be noted as such on the
Purchase Order. All receipts from the 1st of the month until the last working
day of the month (3:00 pm) will be paid on the 28th of the following month.
Tooling payments are net 30 upon final PPAP Lev.3 approval from CMA and
the customer.
2. CMA Terms and Conditions will be applicable for all purchases. The Terms
and Conditions are located inside this manual for more information.
3. The quote submission to CMA must be inclusive of all specifications,
dimensional and toleranceing, packaging requirements, any information
contained in the cover letter(s) or other corresponding documentation within
the RFQ package, and any other requirements included in the request for
quotation package.
4. The drawing (and related information) reflects the condition in which the part
is to be received at CMA. Any packaging that is required to maintain this
condition during shipment and storage of the product must be incorporated
into your quotation submission.
5. Any questions concerning the drawing(s) and/or related information should be
addressed and resolved prior to quotation submissions to CMA. However,
you still should provide the quote within the time requested on the quotation
request.
6. All tooling quoted should include all maintenance, repair, etc. necessary for
your company to keep the tooling in a usable and productive condition
throughout the life of the program, and for subsequent service requirements.
We require an additional 15 years after the life of the program.
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7. CMA reserves the right to request no more than three separate one day
production volume (appr) trials of the tooling (based on CMA average one
day production volumes) based on GP 9 requirements. This is to be used as
confirmations of the tooling capabilities. CMA will request 2 days of material
as standard for internal trials CMA will not be charged for anything other than
the production price of the parts produced during the trials as quoted at the
time of the purchase order issuance for tooling and PPAP Lev. 3 sample
requests. Your tooling costs should reflect any costs associated with these
three production volume trial runs. Any unacceptable trials (i.e. defective
products produced, tool breakage, etc.) will not be counted towards the three
separate tooling trials.
8. All lead times quoted should be accurate at the time of the quotation
submission and throughout the quotation validity dates.
9. Quotations must be submitted no later than the date requested by CMA. If
you are unable to meet this date, you should contact CMA in advance of the
due date indicated on the RFQ form(s). Failure to notify CMA of a late
submission may result in CMA‘s assumption that your company is issuing a
―No Quote‖ and supplier evaluations and selections may be made without
consideration of your company‘s submission.
10. Certified Minority Suppliers (African American, Asian American, Native
American, Hispanic America, etc.) should notify Curtis-Maruyasu America of
their certified status with the quotation submission. A copy of your certificate
should be provided at that time.
All quotes for production material must include a 3-year cost reduction plan.
B. Purchase Order Issuance/Acceptance
Should your company be selected as the source, Curtis-Maruyasu America,
Inc. has the following additional expectations:
1. Any item(s) which your company intends to bill CMA for, must and
without any exception, have a purchase order number issued by an
authorized CMA purchasing associate. Any shipments made without an
approved purchase order number may not be considered billable to CMA.
This information should be communicated throughout all associates in your
company that will have this type of communication with CMA.
2. CMA Terms and Conditions are valid on all purchase orders. As previously
stated, your company will have 30 days to issue any exceptions to those
Terms and Conditions.
3. The ―Due Date‖ indicated on the purchase order is the date that the item(s) is
due for receipt at the appropriate CMA facility. Failure to meet this in house
due date will be viewed as past due. Your company will be responsible for
premium freight costs for all past due items. CMA expects 100% on time
delivery of all subcontractors.
4. Cost details must be provided if requested in writing by CMA (i.e. material
cost, processing costs, overhead costs, SGA&P, outside processing costs, etc).
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Failure to provide these details as requested may invalidate any purchase
order at no penalty to CMA and/or withhold tooling payment(s). It is critical
that your company understand that this information will not be used or
disclosed in any way outside of our company. We refuse to provide you with
any related information on other CMA suppliers as well. If providing this
cost detail to CMA is unacceptable to your company, please indicate this
in your quote submission. Selection preference will be given to those
companies that provide this information.
5. Capacity confirmation will be required for all production components. CMA
will provide a form to your company upon completion of initial sample
submission from the production tooling. Your company should complete this
form and return to the appropriate CMA associate. Additional on-site
confirmation of run times, capacity calculation, etc. may be requested by
CMA.
6. CMA reserves the right to schedule 3 separate production trials of the tooling
purchased as described previously plus the 2 days after PPAP approval.
7. Any tooling purchased by and paid for by CMA will remain the property of
CMA, although it will be stored, used to make production/service
requirements, and maintained by your company. Your company will use this
tooling for sole purpose of CMA‘s production requirements for the duration of
the component‘s life (usually 4 to 8 years), unless notified in writing by an
authorized CMA representative. Your company will be responsible for the
proper storage, maintenance, and handling of this tooling. This includes
affixing the CMA asset tag.
8. The tooling must be kept at your facility for a period no less than 15 years
after the expiration of the production requirements in order to provide Service
Part Requirements (should they be needed). The tooling is to be kept in a
usable and production condition throughout the production requirements, as
well as the service parts period (15 years).
9. Upon approval of the PPAP Lev. 3 samples by CMA QA, and subsequent
tooling trials, CMA will issue a blanket purchase order for our production
release requirements. Pricing will be honored by the supplier as quoted for
the expected duration of the blanket purchase order. CMA will issue blanket
purchase orders annually. The supplier should make all necessary
arrangements with their suppliers for long term commitments for raw
materials, processing, etc. based upon CMA‘s commitments for long term
agreements. As long term agreements allow your company the security of
making capital improvements, CMA expects the supplier to provide good
faith cost reductions throughout the life of the program via VA/VE ideas,
improved manufacturing methods, etc. Annual price reductions will be
requested during the first quarter of the fiscal year, (7/1-6/30), to be in affect
7/1 of the following year. Parts are market tested on a regular basis to ensure
CMA is receiving the most globally competitive price.
10. All orders are for the exact quantities (except as noted as an ―estimated
quantity‖ in the cases of blanket orders). Any variances (i.e. +/- 10%) must be
identified at the time the order is placed with your company. Unless agreed
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upon in advance by CMA, over shipments will be returned at your
company‟s expense. Under shipments will remain open until the total order
quantity is received. Under shipments will be considered late deliveries and
handled as indicated in area 5.I.
11. All production releases to blanket purchase orders are to be completed in the
quantity and to be received no later than the due date as required by the
release notice. CMA‘s Materials department will issue the appropriate
releases to your company.
12. All correspondence related to an order must have the purchase order number
listed (i.e. all packing slips, invoices, etc.) and the ship to names. Failure to
provide this information as requested will result in payment processing delays.
13. You should provide a copy of your company‘s Workman‘s Compensation and
Liability Insurance every year. Suppliers will not be allowed access to our
facilities for any work related activities without this document or other prior
arrangements with Curtis-Maruyasu America.
Certificate of Insurance
CMA must be listed as an additional insured on your certificate of
insurance.
To better define, a certificate of insurance is a document providing evidence that certain general
types of insurance coverage and limits have been purchased by the party that is required to
furnish the certificate.
Please make sure CMA has up to date certificates on file. See the additional information below
for requirements for all suppliers:
At all times during the term of the contract, and as otherwise noted, the supplier/contractor shall
maintain the following types of insurance coverage and limits:
Curtis Maruyasu America, Inc. requires that all suppliers/contractors provide a certificate of
insurance before shipping, or providing a service on CMA property.
LIABILITY INSURANCE REQUIREMENTS:
*Employers Liability provides protection to workers for injuries or
(Workers Compensation) death arising out of ad in the course of
employment. Coverage and limits as by
statute in the State jurisdiction.
*Employers Liability $1,000,000.00 each accident
$1,000,000.00 aggregate by disease
$1,000,000.00 each employee by disease
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For suppliers that may send sorters to CMA, if the sorter is an employee of
the direct supplier, no additional documentation is required. If the sorter is
an employee of a temporary agency, please provide the certificate of
insurance from the temporary agency prior to the sorter beginning to work.
Suppliers can contact CMA directly for information regarding approved
temporary agencies for possible use.
*Commercial General $1,000,000.00 each occurrence
Liability $1,000,000.00 general aggregate
$1,000,000.00 products/completed
operations aggregate
Such Insurance shall include the interest of Curtis Maruyasu America as additional insured.
It is further understood that any insurance maintained by owner is excess and noncontributory.
Products and completed operations shall be maintained for a minimum of 2-5 years after
completion of project.
In no event will the additional insured be responsible for premium payments, deductible, self-
insured retention or claims reporting provisions.
*Automobile Liability Generally involves two basic types of coverage: (1)
liability insurance—coverage for losses caused by
injuries to persons and legal liability imposed on the
insured for such injury or for damage to property of
others; and (2) physical damage insurance—
coverage for losses caused by damage to or loss of
insured automobile. $1,000,000.00 combined single limit
(bodily injury and property damage)
Other important definitions:
Umbrella Liability – A policy that is written over various primary liability
policies to provide excess limits when the limits of the underlying policies are
exhausted. $1,000,000.00 each occurrence (minimum) $1,000,000.000
aggregate.
Additional Insured—A person or organization not automatically included as an
insured under an insurance policy but for whom the Named Insured desires or is
required to provide a certain degree of protection under its liability policies.
Insurance Requirements for Outside Contractors/Vendors
Independent contractors must obtain their own insurance, (general, automobile,
employers‘ liability, and workers compensation policies.)
In the event Curtis Maruyasu America is named as a party in a lawsuit arising out of
an incident, the contractor and its insurance should protect CMA. CMA should be
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named as the additional insured on all liability policies. All involved CMA
companies should be included as Additional Insured‘s.
Request Indemnification Agreement and Certificate of Insurance evidencing required
limits of liability.
Any contractors must continue products/completed operations coverage for 2-5 years
after completion of project.
All suppliers/contractors should provide certificates on an annual basis at time of its
insurance renewal.
Curtis Maruyasu America, Inc. is interested in the maintenance of this insurance and it is agreed
that this insurance will not be canceled, materially changed or not renewed without at least thirty
(30) day advance written notice by Certified Mail Return Receipt.
For questions or concerns regarding this policy, please contact a Curtis Maruyasu America, Inc.
representative to discuss. Please fax your certificate of insurance to (270) 692-1303.
14. Suppliers will be reviewed regularly based upon their quality, service,
and cost reduction activities. Your company will be responsible to
make formal annual presentations to our company detailing activities as
to how your company will make improvements in each of these areas.
There will be a required Annual Price Review at CMA where each of
these items is to be discussed in detail. Your company will be
responsible to make arrangements for this annual meeting prior to
December of each fiscal year, (7/1-6/30). Suppliers are required to visit
CMA a minimum of twice per year to discuss any current/potential
questions or concerns.
C. QS9000/ISO Certification
Suppliers are expected to notify CMA when recertification is needed and to
communicate certification status. Upon receipt of a new certificate, please fax to (270)
692-1303.
The CMA Purchasing Department requires full cooperation from all our suppliers. We
will maintain a professional working relationship with our suppliers. We view the supplier as a
real member of our company and a significant contributor to the success of our growth, and
thereby the growth of our relationship. We view regular contacts between our companies
essential to our ongoing business interests.
Quality Assurance
A. Upon receipt of your tooling purchase order, the CMA Quality department will
contact you to arrange a meeting to review part function, test methods, performance
specifications, PPAP Lev. 3 submissions, and a discuss any other related matters.
This will be considered the supplier‘s ability to review all functional, dimensional,
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and mechanical requirements. The issuance of the tooling fabrication authorization
within the supplier‘s organization will indicate formal acceptance of the purchase
order, the corresponding terms, and the component requirements.
B. PPAP Lev. 3 samples and data are to be submitted to the CMA Quality department on
or before the agreed upon date specified on the tooling purchase order. CMA views
PPAP Lev. 3 as production ready parts. They are not ―first hits‖ or prototypes. The
PPAP Lev. 3 samples must be manufactured exactly as you would in a normal
production manner with no deviations unless approved in writing by CMA QA.
C. PPAP Lev. 3 samples will be reviewed by the CMA Quality department. The
supplier will be notified in writing of approval, corrections needed, or rejections. The
supplier will be issued a date to make corrections and re-submit. This date must be
met in order to meet CMA‘s sample submission requirements to our customer.
Corrections in tooling to make production ready parts and associated costs are the
responsibility of the supplier.
D. Upon PPAP Lev. 3 approval, and prior to start of production (SOP), CMA may elect
to visit your facility to view a production run (as described above in tooling capability
confirmation), changeover, and/or tooling set up activities. CMA will contact your
company to confirm a date suitable for this type of visit.
E. Certifications are required for all lots. This will be a case-by-case basis and will be at
the discretion of the CMA Quality department. Certifications may include secondary
operation confirmations (i.e. plating, brazing, heat treating, etc), material
certifications (mechanical, chemistry, etc), and/or dimensional confirmations.
F. Prior to SOP, CMA Quality will request Inspection Standards, a process flow
document, a Manufacturing Control Chart or Control Plan, and a PFMEA. This
indicates how parts will be checked and the frequency in order to assure shipment of
quality product to CMA. The supplier is responsible to submit all documents for each
part number to the CMA Quality department for review and approval at the time of
PPAP Lev. 3 submission. Please contact a CMA QC department representative for
the documents and format information for submission to CMA.
G. In the event defective product is found at CMA, the supplier will be notified by a
CMA Quality associate. Formal paperwork, such as a Quality Problem Report
(QPR), or a Quality Improvement Report (QIR) may be issued to the supplier. The
supplier is required to review the information, complete the requested information
(i.e. problem correction and countermeasures, etc.). It will be the supplier‘s
responsibility to address the problem immediately, conduct an investigation as the
root cause, suggest and implement effective countermeasures, and return the
appropriate paperwork to the CMA Quality department.
H. The supplier may incur and will be responsible for the following costs associated with
defective parts found at CMA:
1. Rework and/or sorting charges
a. The supplier is expected to provide necessary man power and
supervision to conduct all related sort and rework activity should
this activity need to take place at the CMA facility.
b. In the event this is not feasible due to the limited supply of
material and the turnaround time for replacement parts, CMA may
begin the sorting/rework activities. These services will be billed at
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our current rate (as of 15 Apr 04) of $50.00 per man hour during
normal working hours, and $75.00 per man hour for any overtime
hours required to sort/rework.
c. If the problem is a consistent recurring problem, or a level
indicative of immediate attention, CMA may make formal request
for immediate supplier actions (including but not limited to
immediate supplier representation at our facility, sorting/rework of
remaining product at your company, and arrangements for
additional materials to be provided to CMA).
2. Original and return freight charges.
3. All expedited cost for replacement, including any secondary operation costs,
freight costs (including but not limited to air freight, charter servicing, next
day carriers, etc.).
4. Cost for the part and any components that have been fabricated to an
unrecoverable condition (i.e. assemblies, work in process, etc.). The cost
charged to the supplier for defective assemblies will not exceed the selling
price of the item to CMA‘s customer.
5. The supplier has the ability to discuss these charges with CMA prior to
sorting, rework, or scrapping of components/assemblies occurs. However,
once the supplier is notified of the condition, the supplier must make
arrangements within 24 hours to review or audit of any of CMA activities to
maintain our production requirements via the sorting/reworking activities.
6. Downtime charges. All downtime caused by a defective product shipped to
CMA will incur downtime charges at our current downtime or overtime rates
for time required to recover our inventory levels (as of 15 Apr 04 those rates
are $50.00 per man hour and $75.00 per man hour for any overtime required
to recover our inventory levels, i.e. work in process, finished goods).
7. Any downtime charges incurred by CMA‟s customers that are caused by
a CMA supplier problem will be the responsibility of the supplier
entirely. This includes all cost relating to warranty issues determined to be
caused by supplied product. CMA‘s customers have different policies and
charges related to downtime. CMA will bill the supplier no more than the
amount charged against CMA.
8. Upon completion of any sorting/rework/downtime activities, CMA will issue
a debit to your company.
9. An administrative fee of $500.00 per defect occurrence will be charged.
I. The supplier is responsible for developing product boundary samples. All boundary
samples must be reviewed and approved by the CMA Quality department.
J. The supplier is responsible for submitting a Process Change Request (PCR) for any
changes within or to the process incorporated in the manufacturing process. Again,
the exact process used in the PPAP Lev. 3 submission is considered the
manufacturing process. Therefore, any and all changes from this process require
a PCR submission and approval by CMA prior to implementation.
K. The supplier is responsible for submitting a Supplier Change Request (SCR) for any
supplier changes to your processing and components. This is necessary to ensure the
quality and integrity of the products, and a number of tests may be required to be
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submitted. Approval must be issued by the CMA Quality department before any
supplier change is allowed.
L. All subcontractors as a fundamental quality system requirement are expected to reach
a goal of compliance to section 1 of QS9000.
Production Control / Materials
A. The supplier will be responsible for submitting packaging proposals to the CMA
Materials department. CMA‘s preference is to use returnable containers. Our
preference for quantity per container is 10% of one day‘s volume. All containers
must have a standard package quantity.
B. The supplier is responsible to assure packaging will maintain product quality through
receipt at CMA.
C. Depending on the supplier‘s location, the supplier will be requested to ship using one
of our following shipping schedules:
1. Daily
2. Multiple shipments per week
3. One shipment per week
4. CMA Milk Run - CMA pick up, generally twice per week
D. Service suppliers will be allowed no more than one week turnaround time from the
date they receive product from CMA for secondary operations (i.e. plating, brazing,
grinding, etc.).
E. Suppliers will be requested to submit an Advance Shipping Notice (ASN). This is
necessary to confirm shipment quantities and dates. Any shipping deviation,
whether quantity, delay, etc. must be communicated and approved by the CMA
Materials department.
F. All supplier shipping quantities will be verified by a CMA associate. Supplier
payment will be based on the verified count by the CMA associate and deemed to be
the actual quantity received.
G. Signatures by CMA associates for receipts will not be considered final ―proof of
delivery‖. The signature for transportation bill of lading, UPS logs, etc. is only
considered verification of receipt of a container(s). It will not be considered
confirmation or verification of the contents or condition of the goods received.
The supplier will be notified if there are any discrepancies in the count verification by
CMA associates as compared to the packing slip. If no packing slip is included with
the shipment, the CMA count will be considered valid and no notification to the
supplier will be required.
H. Supplier must submit a packing list with each shipment. Corresponding purchase
order number along with the line number must be included on all related paperwork.
I. The supplier will be responsible for all expedited freight due to defective material,
late shipments, and/or replacement parts which may be required from Japan. Failure
to deliver the proper volume (i.e. under shipments, etc.) will be considered late, and
all additional freight, including expedited freight will be the supplier‘s responsibility.
J. Under normal conditions, CMA will issue regular forecasts for product or services
from your company. This forecast may be in a 3/5 format - 3 weeks of ―firm‖
forecasts, and 5 additional weeks for forecasted volumes. The ―firm‖ forecast may
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change slightly due to customer demand changes, and the 5 week forecast will change
as customer demands warrant. Any significant changes will be discussed with the
supplier and appropriate schedules developed based upon this discussion.
The CMA Materials department is responsible for the delivery of supplied parts to our
manufacturing departments, as well as shipments to our customers. Therefore, it is imperative
that the suppliers meet the delivery schedules - on time and in the quantity requested. Our
Materials department staff will work with supplier to maintain appropriate inventory levels at
CMA. The supplier is expected to maintain regular and appropriate communications with the
CMA Material department related to meeting delivery requirements.
Accounting
A. All payments will be made upon the terms as indicated on the CMA purchase order to
your company.
B. All packing lists and invoices must have the corresponding purchase order listed
along with the line numbers identified. Any packing slips or invoices that do not
identify the CMA purchase order number and line number will be held for further
disposition and payment will be delayed.
C. CMA purchase orders with multiple part numbers may be billed on one invoice.
However, any part numbers on other CMA purchase order numbers must be on a
separate invoice. In other words, only one purchase order number per invoice.
D. Payments will be issued on the actual quantities received - which may not correspond
exactly to the packing list quantity shipped or qty billed.
E. All receipts and invoices received at CMA after 3:00 pm on the last business day of
the month will be considered received in the following month.
F. Due to limited resource availability, CMA will not send any checks via overnight
mail services, special courier, etc.
CMA‘s Accounting department is very similar to CMA‘s other departments, in that, the
supplier is expected to invoice using proper purchase order numbers& line numbers, invoices are
issued on time, and invoice quantities are correct. It is the supplier‘s responsibility to assure that
all invoices are prompt and accurate in order to receive on time payments.
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Environmental Management System
Curtis-Maruyasu America, Inc. (CMA) uses ISO 14001:2004 as our standard for the
Environmental Management System. We are concerned with any significant environmental
aspect that could become a significant impact. CMA reserves the right to deny products or
services that may constitute a significant environmental impact that is not consistent with our
environmental policy.
General
Curtis-Maruyasu‘s customers are automotive OEM‘s. Their expectations are extremely
high. The investment made by the end consumer is one of the largest that they will make. They
demand a high quality reliable product at a competitive price. Curtis-Maruyasu‘s expectations
of our suppliers are no less. We expect the highest quality, competitive pricing, and excellent
service, along with an ongoing concern for significant improvement in each of these areas.
In return, CMA will attempt to develop and maintain long term, cooperative relationships
with our suppliers. We strive to achieve the goal of creating a mutually beneficial business
atmosphere. It is from this foundation of mutual trust and respect that all parties will prosper in
the long term. Thank you for your assistance in helping us to achieve our objectives.
Approvals:
_____________________ ______________________ ____________________
_____________________ ______________________ ____________________
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PURCHASING DEPARTMENT SUPPLIER EXPECTATIONS
PURCHASING OVERVIEW:
At CMA, we strive to build partnerships with our supplier base. We do this by working with
only the best suppliers for quality, delivery, and globally competitive pricing. We believe that
regular contact between our companies is essential to our ongoing business interests. Risk
management is an important factor for not only CMA, but for our suppliers as well. It is CMA‘s
expectation that each supplier fills out the Risk Management Survey and return to the Purchasing
Department.
We view you as a member of our company and a significant contributor to the success of our
growth, and thereby the growth of our business relationship. We value you as suppliers. Just as
CMA must strive to meet the objectives of our customer, we ask that strive to meet CMA‘s
objectives.
We ask that you review the manual carefully and submit all required forms. In the event that you
have a question concerning any item in this manual, you may contact the CMA Purchasing
department at curtis@www.curtismaruyasu.com.
GENERAL RULES FOR CONTRACTORS/SUPPLIERS ON SITE AT CMA:
Do not enter any door at CMA except the front office door. You must check in with
the receptionist and wait for the CMA employee you are here to meet with to arrive.
Do not, for any reason, cross the yellow tape into the production areas.
Do not sit at break tables or desks for any reason. Meetings will be held in
conference rooms.
Do not disturb team members on the floor for any reason.
Do not touch parts, equipment, etc in the production area unless instructed to do so by
CMA.
Do not wander through the buildings. If you need assistance, there are phones in each
break area. You can dial ―0‖ and reach the receptionist. You will be assisted with
what you need.
COST DETAIL:
All cost detail must be provided with your quotation. Example of cost breakdown would
include, but is not limited to the following:
MATERIAL TYPE AND SPECIFICATION
FINISH
PACKAGING
MANUFACTURING COST
GROSS PROFIT
SG&A
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TOOLING REQUIREMENTS:
Any tooling purchased by CMA will remain the property of CMA. This tooling is to be used
explicitly for the manufacture of CMA components.
If there inquiries about using this tooling from another customer,
please refer them to CMA.
Tooling payments are made upon PPAP approval.
CMA‘s customers require tooling retention of no less than 15 years for service after the life of
the program (Life of Program + 15 years).
This tooling must be kept at suppliers‘ facility
Tooling is to be maintained in usable and production ready condition throughout the production
requirement as well as life of service.
ISSUANCE AND ACCEPTANCE OF BLANKET PURCHASE ORDER:
Should your company be selected as the source, CMA has the following expectations:
Any items which your company intends to bill CMA for must and without exception have a valid
Purchase Order number issued only by an authorized CMA buyer (blanket), or material ordering
personnel (releases).
Upon approval of the Level III PPAP and subsequent trials, CMA will issue a blanket purchase
order for our annual production requirements. Pricing will be honored by the supplier as quoted
for the expected duration of the blanket purchase order. CMA will issue Blanket Purchase orders
annually. The supplier should make all the necessary arrangements with their suppliers for long
term commitments for raw materials, processing, etc. based on CMA‘s commitments for long
term agreements. CMA expects the supplier to provide good faith cost reductions throughout
the life of the program via VA/VE ideas, manufacturing improvements, etc. (SEE APR
SECTION)
Blanket PO‘s are valid throughout CMA‘S fiscal year (July 1 ~ June 30)
We ask that you review the blanket, sign and return the acknowledgement and acceptance form
to the Purchasing dept. (SEE BLANKET ACCEPTANCE FORM)
Blanket PO‘s are ESTIMATED QUANTITIES ONLY. Releases to this blanket will be for exact
orders. Unless agreed upon in advance by CMA, over shipments will be returned at your
company‘s expense. Under shipments will remain open until the total order is received. (SEE
MATERIAL ORDERING SECTION FOR FURTHER DETAILS)
Production releases from the blanket will be issued by the CMA Materials Dept, and all should
be received at CMA by the due date on the release.
All correspondence related to an order must have the purchase order number listed:
PACKING SLIPS
INVOICES
ETC.
Failure to provide this information as requested will result in payment processing delays.
15
SUPPLIER RESPONSIBILITY FOR CUSTOMER STOPPAGE:
In the event that a supplier causes production stoppage for CMA or any CMA customer due to
defective components, delay of shipping, etc., the following debits will be assessed to the
supplier in their entirety:
All cost relating to production down time at CMA, production down time at
CMA‘s customer, warranty issues, etc. determined to be caused by supplier.
CMA‘s customers have different policies and charges related to down time.
CMA will bill the supplier no more than the amount charged against CMA.
An administrative fee of no less than $500.00 per occurrence
CMA downtime charges will be billed at $100.00 per man hour for regular time
and $150.00 per hour for any overtime required to recover our inventory levels.
This fee includes, but is not limited to, sorting, rework, and any sorting or travel
charges at CMA‘s customer that affect CMA production during the course of
manufacturing processes.
ANNUAL PRICE REVIEW (APR):
Suppliers are reviewed regularly for competitiveness, Quality, Service and Cost reduction
activities. This is the criterion that appears on your Supplier Expectation Report. (SER)
To support CMA in our cost reduction activities we ask suppliers to participate in Annual Price
Review (APR). Letters are sent to all suppliers during August with the expectation that APR
will be finalized prior to December 31.
In today‘s economy, we realize it can be difficult to cut costs. We are all competing with the
global market as well. However, APR is an expected requirement from our customer. It is also
an expectation of you. If the market condition is in a negative trend, we must all look within our
companies to determine where operating costs can be improved upon. These increases should be
negated without passing them on to CMA. The main point is that WE MUST REMAIN
COMPETETIVE!!! Cost improvements are not limited to material decreases. Manufacturing
improvements made in your facilities can be used to reduce your day to day costs.
Market testing will be done on all components on a regular basis to ensure CMA is receiving the
most globally competitive pricing.
SUPPLIER EXPECTATION REPORT (SER):
CMA uses a rating scale of 1 (best) – 4 (worst) to evaluate suppliers on a monthly basis. CMA
sends this report to each supplier with their individual rating for quality (PPM), delivery (PPS),
and price competitiveness (APR) for that time period.
The ratings scales for each department are as follows:
QUALITY – PPM (PARTS PER MILLION)
PPM of 0 = 1
PPM of 1 – 10 = 2
PPM of 11 – 30 = 3
PPM of >31 = 4
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DELIVERY – PPS (POINTS PER SHIPMENT)
PPS of 0.0 – 2.5 = 1
PPS of 2.6 – 5.0 = 2
PPS of 5.1 – 7.5 = 3
PPS > 7.5 = 4
ANNUAL PRICE REVIEW (APR)
APR of 2.5% - 3% = 1
APR of 2.49% - 2% = 2
APR of 1.99% - 1% = 3
APR < 1% = 4
These ratings relate to the scale below:
1.0– 1.5 = Supplier meets expectations. Candidate to receive a supplier
award during annual meeting if rating is maintained for four (4)
consecutive quarters during fiscal year. (July 1 – June 30)
1.6 – 2.0 = upon 2 consecutive months with rating the supplier is required
to schedule a visit to CMA to discuss potential problem areas with the
appropriate department. Some improvement is required.
2.1 – 2.9 = Supplier is required to visit CMA. This rating may require re-
auditing the supplier‟s facility. Problem areas need to be counter
measured prior to the next SER report issued by CMA. Immediate
improvement is required. NOTE: CMA will evaluate the severity of the
problem to determine if further immediate action against the supplier is
required up to and including termination of contract.
3.0 – 3.5 = Supplier re-audit is mandatory upon 2 consecutive months
with this rating. Corrective action is required within 5 working days.
Probationary period of 6 months will be enforced. Upon completion of
probationary period, all countermeasures must be in place and proven
effective by the supplier. Supplier will be re-evaluated for compliance.
Parts may be market tested. NOTE: CMA will evaluate the severity of
the problem to determine if further immediate action against the supplier
is required up to and including termination of contract.
> 3.5 = Supplier of 12 month period or less OR a current supplier that
does not meet expectation. Parts WILL be market tested. Supplier will
be placed on a de-source list. At the end of quarterly review, if
countermeasures are not proven effective, the supplier will be de-sourced
upon approval of an alternate supplier.
SUPPLIER CHANGE REQUEST (SCR):
The supplier is responsible for submitting a SUPPLIER CHANGE REQUEST (SCR) FOR
ANY CHANGES TO YOUR PROCESSING AND COMPONENTS. This is necessary to
ensure the quality and integrity of the products, and a number of tests may be required for
submission. Under NO circumstances may CMA‟s supplier change to a supplier, or change
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their process without CMA written consent and approval. SCR forms must arrive via
email to the attention of the Purchasing Manager with full written descriptions for the
reason for change request. Upon approval by CMA, notification will be sent to the supplier
by the Purchasing department.
FORMS TO BE COMPLIANT WITH CMA:
Listed below are several forms each supplier must return (signed by official officer of supplier‘s
company) to CMA Purchasing department. Failure to do so may result in loss of contract for
next fiscal year.
CMA TERMS AND CONDITIONS
BLANKET ACCEPTANCE FORM
SUPPLIER EXPECTATION MANUAL ACKNOWLEDGEMENT
CONFIDENTIALITY AGREEMENT
W-9 FORM
LIST / PICTURES OF ANY/ALL CMA OWNED TOOLING
CAPACITY STUDY FOR ALL CMA COMPONENTS
PACKAGING PROPOSAL
SUPPLIER SURVEY (RISK MANAGEMENT)
UP TO DATE QUALITY CERTIFICATION
UP TO DAT INSURANCE CERTIFICATE.
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CURTIS-MARUYASU AMERICA, INC.
665 Metts Drive, Lebanon, Kentucky 40033-1909 270/692-2109
15805 North 475 East, Santa Claus, Indiana 47579 812/544-2021
PURCHASE ORDER TERMS AND CONDITIONS
1. ACCEPTANCE: The manufacture, sale, shipment and delivery of goods will be subject only to
and governed exclusively by the terms and conditions set forth herein. THE ACCEPTANCE OF
ANY OFFER MADE BY BUYER IS EXPRESSLY LIMITED TO THE TERMS AND CONDITIONS
CONTAINED HEREIN. Seller has read and understands these terms and conditions which are
expressly incorporated into Buyer’s order. Seller’s written acknowledgment of this order,
commencement of any work or service, or delivery of any goods shall constitute Seller’s
unconditional acceptance of these terms and conditions only. ANY ACCEPTANCE BY BUYER
OF AN OFFER MADE BY SELLER IS MADE EXPRESSLY CONDITIONAL UPON THE
SELLER’S ASSET TO THESE TERMS AND CONDITIONS. Any additional or differing terms and
conditions contained on any documents prepared or submitted by seller, including but not limited
to any quote, acknowledgment, receipt or other document are unacceptable to Buyer, are
expressly rejected by Buyer, and shall not become a part of this order. Any modifications to this
order shall be made only in accordance with Section 40.
2. SHIPPING, BILLING AND FLSA CERTIFICATION: Seller agrees: (a) to properly pack mark and
ship goods in accordance with the requirements of Buyer and involved carriers in a manner to
secure lowest transportation cost, (b) to route shipments in accordance with instructions from
Buyer’s Traffic Department; (c) to make up no charge for handling, packaging, storage,
transportation or drayage of goods unless otherwise stated in this order; (d) to provide with each
shipment packing slips with Buyer’s order number marked thereon; (e) to properly mark each
package with this order number, the factory, plant and dock number, and where multiple
packages comprise a single shipment, to consecutively number each package,; and (f) to
promptly forward the original bill of lading or other shipping receipt for each shipment in
accordance with Buyer’s instructions. Seller will include on bills of lading or other shipping
receipts correct classification identification of the goods shipped in accordance with Buyer’s
instructions and carrier’s requirements. The marks on each package and identification of the
goods on packing slips, bills of lading and invoices shall be sufficient to enable Buyer to easily
identify the goods purchased. Seller further agrees; (a) to promptly render, after delivery of goods
or performances of services, correct and complete invoices to Buyer, and (b) to accept payment
by check or at Buyer’s discretion, other cash equivalent (including electronic transfer of funds).
Seller’s invoice must include a certification that all goods were produced in compliance with the
applicable requirements of sections 6, 7, and 12 of the Fair Labor Standards Act, as amended
and of regulations and orders of the United States Department of Labor issued in connection
therewith. The payment date is set forth on the face side of this order, or if not stated, shall be on
th
the 25 day of the month following Buyer’s receipt of a proper invoice (except as may otherwise
be agreed upon by Buyer and Seller in connection with a program providing for electronic funds
transfer). Time for payment shall not begin until correct and complete invoices are received, and
Seller’s cash discount privileges to Buyer shall be extended until such time as payment is due.
Buyer may withhold payment pending receipt of evidence, in such form and detail as Buyer may
direct, of the absence of any liens, encumbrances and claims on the goods or services under this
order.
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3. COUNTRY OF ORIGIN INFORMATION: Upon request, Seller agrees to provide Buyer with
documentation which establishes the country of origin of the goods, including where applicable,
affidavits of manufacture, NAFTA certificates of origin or other documentation that Buyer may
reasonably require.
4. DELIVERY SCHEDULES: Unless otherwise stated on the face of the order, goods are sold
“Delivered Duty Paid” (as defined in Incoterms 2000) to Buyers designated facility, and Seller will
bear all risk and costs of delivering the goods, including shipping and insurance charges, duties,
taxes and other charges. Title to and risk of loss for the goods will pass to Buyer upon delivery.
Deliveries shall be made both in quantities and at times specified in Buyer’s schedules. Buyer
shall not be required to make payments for goods delivered to Buyer which are in excess of
quantities specified in Buyer’s delivery schedules. If any goods are delivered in advance of
schedule, Buyer may retain such goods and invoice Seller for any resulting handling and storage
costs. Buyer will not process invoices for goods shipped in advance of schedule until the
scheduled delivery date. Buyer may change the rate of scheduled shipments or direct temporary
suspension of scheduled shipments, neither of which shall entitle Seller to a modification of the
price for goods or services covered by this order. For orders of goods where quantities and/or
delivery schedules are not specified, Seller shall deliver goods in such quantities and time as
Buyer may direct in subsequent releases. TIME IS OF THE ESSENCE IN SELLER’S
PERFORMANCE OF THIS ORDER. 100% ON-TIME DELIVERY IS REQUIRED. If Seller fails to
deliver any shipment in accordance with the schedule or any release, Buyer may, at its option,
cancel the shipment, accept partial or delayed delivery, and /or purchase substitute goods, and
Seller will reimburse Buyer for its incremental costs in procuring any substitute goods and for any
costs or losses Buyer incurs due to such delivery failure.
5. PREMIUM SHIPMENTS: If Seller’s acts or omissions result in Seller’s failure to meet Buyer’s
delivery requirements and Buyer requires a more expeditious method of transportation for the
goods than the transportation method originally specified by Buyer, Seller shall, at Buyer’s option,
(i.) promptly reimburse Buyer the difference in cost between the more expeditious method and
the original method, (ii) allow Buyer to reduce its payment of Seller’s invoice by such difference or
(iii) ship the goods as expeditiously as possible at Seller’s expense and invoice Buyer for the
amount which Buyer would have paid for normal shipment.
6. CHANGES: Buyer reserves the right at any time to direct changes, or cause Seller to make
changes to drawings and specifications of the goods or to otherwise change the scope of the
work covered by this order, including work with respect to such matters as inspection, testing or
quality control, and Seller agrees to promptly make such changes; any difference in price or time
for performance resulting from such changes shall be equitably adjusted by Buyer and after
receipt of documentation in such form and detail as Buyer may direct. Any changes to this order
shall be made in accordance with Section 40.
7. INSPECTION: Seller agrees that Buyer shall have the right to enter Seller’s facility at reasonable
time to inspect the facility, goods, materials and any property of Buyer, covered by this order.
Buyer’s inspection of the goods whether during manufacture, prior to delivery or within a
reasonable time after delivery, shall not constitute acceptance of any work-in-process or finished
goods.
8. NONCONFORMING GOODS: To the extent Buyer rejects goods as nonconforming, the
quantities under this order will automatically be reduced unless Buyer otherwise notifies Seller.
Seller will not replace quantities so reduced without a new order or schedule from Buyer.
Nonconforming goods will be held by Buyer for disposition in accordance with Seller’s instructions
at Seller’s risk. Seller’s failure to provide written instructions within ten (10) days, or such shorter
period as may be commercially reasonable under the circumstances, after notice of
nonconformity shall entitle Buyer, at Buyer’s option, to charge Seller for storage and handling, or
to dispose of the goods, without liability to Seller. Payment for nonconforming goods shall not
20
constitute an acceptance thereof, limit or impair Buyer’s right to assert any legal or equitable
remedy or relieve Seller’s responsibility for latent defects. Buyer’s count or weight will be final
and conclusive for all shipments.
9. FORCE MAJEURE: Any delay or failure of either party to perform its obligations hereunder shall
be excused if, and to the extent that it is caused by an event or occurrence beyond the
reasonable control of the party and without its fault or negligence, such as, by way of example
and not by way of limitation, acts of God, actions by any governmental authority (whether valid or
invalid), fires, floods, windstorms, explosions, riots, natural disasters, wars, sabotage, labor
problems (including lockouts, strikes and slowdowns), inability to obtain power, material, labor,
equipment or transportation, or court injunction or order; provided that a written notice of such
delay (including the anticipated duration of the delay) shall be given by the affected party to the
other party within ten (10) days. During the period of such delay or failure to perform by Seller,
Buyer, at its option, may purchase from other sources and reduce its schedules to Seller by such
quantities, without liability to Seller, or have Seller provide the goods from other sources in
quantities and at times requested by Buyer and at the price set forth in this order. If requested by
the Buyer, Seller shall, within ten (10) days of such request, provide adequate assurances that
the delay shall not exceed thirty (30) days. If the delay lasts more than thirty (30) days or Seller
does not provide adequate assurance that the delay will cease within (30) days, Buyer may
immediately cancel the order without liability.
10. WARRANTY: Seller expressly warrants to Buyer and Buyer’s customers and end users that all
goods and services covered by this order will be new, and that Seller will have good title to them
and will deliver them to Buyer free and clear of all liens, restrictions, and encumbrances. Seller
further warrants that all goods or services covered by this order will (i.) conform to the
specifications, drawings, samples, or descriptions furnished by Buyer, (ii.) be free from defects in
design, material and workmanship, (iii.) be merchantable, (iv.) be free from any actual or
claimed patent, copyright, or trademark infringement, and (v.) if applicable, be in conformity with
the Federal Motor Vehicle Safety Standards issued pursuant to the National Traffic and Motor
Vehicle Safety Act of 1966 as amended. In addition, Seller acknowledges that Seller knows of
Buyer’s intended use and expressly warrants that all goods covered by this order will be fit and
sufficient for the particular purposes intended by Buyer. The warranty term will be coterminous
with the warranty extended to Buyer’s customers by Buyer. These warranties are in addition to
any warranties implied by law or otherwise made by Seller and will survive acceptance and
payment by Buyer.
11. INGREDIENTS, DISCLOUSRE AND SPECIAL WARNINGS AND INSTRUCTIONS: If requested
by Buyer, Seller shall promptly furnish to Buyer in such form and detail as Buyer may direct; (a) a
list of ingredients in the goods purchased hereunder; (b) the amount of one or more ingredients;
and (c) information concerning any changes in or additions to such ingredients. Prior to and with
the shipment of the goods purchased hereunder, Seller agrees to furnish to Buyer sufficient
warning and notice in writing (including appropriate labels on goods, containers and packing) of
any hazardous material which is an ingredient or a part of any of the goods, together with such
special handling instructions as may be necessary to advise carriers, Buyer, and their respective
employees’ of how to exercise that measure of care and precaution which will best prevent bodily
injury or property damage in the handling, transportation, processing, use or disposal of goods,
containers and packing shipped to Buyer. Seller warrants that it will properly classify, describe,
package, mark, label and provide any necessary Material Safety Data Sheets for the goods and
will pack and ship them in compliance with all applicable hazardous materials laws, regulations,
ordinances and orders.
12. INSOLVENCY: Buyer may immediately cancel this order without liability to Seller in the event of
the happening of any of the following or any other comparable event; (a) insolvency of the Seller;
(b) filing of a voluntary petition in bankruptcy by Seller; (c) filing of any involuntary petition in
bankruptcy against Seller; (d) appointment of a receiver or trustee for Seller; (e) execution of an
assignment for the benefit of creditors by Seller, provided that such petition appointment, or
21
assignment is not vacated or nullified within fifteen (15) days of such event or (f) Seller fails or
refuses to furnish buyer promptly with such information and assurances as Buyer may request
from time to time about Seller’s financial and operating conditions and ability to supply goods and
services under this order.
13. ALLOCATION: If Seller is unable, at any time, to supply the entire quantity of goods ordered by
Buyer, Seller will meet all of Buyer’s requirements before making any allocation among its other
customers under Section 2-615 of the Uniform Commercial Code of the equivalent.
14. PRICE WARRANTY: Seller warrants that the prices for the goods sold to Buyer hereunder are
no less favorable that Seller currently extends to any other customer for the same or similar
goods or services in similar quantities. Seller warrants that prices shown on this order are
complete, and that no additional charges of any type will be added without Buyers express written
consent.
15. CANCELLATION FOR BREACH: Buyer reserves the right to cancel all or any part of this
order, without liability to Seller, if Seller; (a) repudiates or breaches any of the terms
of this order, including Seller’s warranties; (b) fails to perform services or deliver the goods
as specified by Buyer, or(c) fails to make progress so as to endanger timely and proper
completion of services or delivery of goods; and does not correct such failure or breach
within ten (10) days (or such shorter period of time, if commercially reasonable under the
circumstances) after receipt of written notice from Buyer specifying such failure or breach.
16. TERMINATION: In addition to any other rights of Buyer to cancel or terminate this order, Buyer
may at its option immediately terminate for convenience all or any part of this order, at any time
and for any reason, by giving written notice to Seller. Upon such termination, Buyer shall pay to
Seller the following amounts without duplication; (a) the order price for all goods or services which
have been completed in accordance with this order and not previously paid for; and (b) the actual
costs of work-in-progress and raw materials incurred by Seller in furnishing the goods or services
under this order to the extent such costs are reasonable in amount and are properly allocable or
apportionable under generally accepted accounting principles to the terminated portion of this
order, less, however, the reasonable value or cost (whichever is higher) or on goods or materials
used or sold by Seller’s written consent, and the cost of any damaged or destroyed goods or
material. Buyer will make no payments for finished goods, work-in-progress or raw materials
fabricated or procured by Seller in amounts in excess of those authorized in delivery releases or
for any undelivered goods which are in Seller’s standard stock which are readily marketable.
Payments made under this Section shall not exceed the aggregate price payable by Buyer for
finished goods which would be produced by Seller under delivery or release schedules
outstanding at the date of termination. Except as provided in this Section. Buyer shall not be
liable for and shall not be required to make payments to Seller, directly or on account of claims by
Seller’s subcontractors, for loss of anticipated profit, unabsorbed overhead, interest on claims,
product development and engineering costs, facilities and equipment rearrangement costs or
rental, unamortized depreciation costs, and general and administrative burden charges from
termination of this order. Within (60) days from the effective date of termination, Seller shall
submit a comprehensive termination claim to Buyer, with sufficient supporting data to permit
Buyer’s audit and shall thereafter promptly furnish such supplemental and supporting information
as Buyer shall request. Buyer, or its agents, shall have the right to audit or examine all books,
records, facilities, work, material, inventories, and other items relating to any termination claim of
Seller. Failure to submit such termination claim in accordance with the provisions of Section 16
shall be deemed a waiver by Seller of any payment required hereunder.
17. INTELLECTUAL PROPERTY: Seller agrees; (a) to defend, hold harmless and indemnify Buyer,
its successors and customers against all claims demands, losses, suits, damages, liability and
expenses (including reasonable attorney fees) arising out of any suit, claim of action for actual or
alleged direct or contributory infringement of, or inducement to infringe any United States or
foreign patent, trademark, copyright or mask work right by reason of the manufacture, use or sale
of the goods or services ordered, including infringement arising out of compliance with
22
specifications furnished by Buyer, or for actual or alleged misuse or misappropriation of a trade
secret resulting directly or indirectly from Seller’s actions; (b) to waive any claim against Buyer
under the Uniform Commercial Code or otherwise, including any hold harmless or similar claim, in
any way related to a claim asserted against Seller or Buyer for patent, trademark, copyright or
mask work right infringement or the like, including claims arising out of compliance with
specifications furnished by Buyer; and (c) to grant to Buyer a worldwide, nonexclusive, royalty-
free, irrevocable license to repair and have repaired, to reconstruct and have reconstructed the
goods ordered hereunder. Seller assigns to Buyer all right, title and interest in and to all
trademarks, copyrights, works of authorship (which shall be deemed works-made-for-hire) and
mask work rights in any material created for Buyer under this order.
18. TECHNICAL INFORMATION DISCLOSED TO BUYER: Seller agrees not to assert any claim
with respect to any technical information which Seller shall have disclosed or may hereafter
disclose to Buyer in connection with the goods or services covered by this order.
19. CONFIDENTIAL INFORMATION: Except as necessary to perform this order, as required by law
and with prior written notice to Buyer, or with Buyer’s prior written consent, Seller will at all times,
keep confidential all information, drawings, specifications, and data of any kind or nature
furnished by Buyer (whether in writing, electronically, orally, or visually) or derived or developed
by Seller therefrom in the course of performing this order. Seller will not divulge such confidential
information, use it for its own benefit or for the benefit of any other party, or copy it or permit
copies to be made. These confidentiality obligations will not apply to information lawfully known
by Seller at the time of disclosure by Buyer or obtained by Seller from a third party lawfully
entitled to disclose it, or to information that is or becomes public knowledge other than through
disclosure by Seller. Seller will not publish or advertise the existence of nature of this order
without Buyer’s prior written consent. These obligations will survive the expiration or cancellation
of this order.
20. INDEMNIFICATION: If Seller performs any work on Buyer’s premises or utilizes the property of
Buyer, whether on or off Buyer’s premises, Seller shall indemnify and hold Buyer harmless from
and against any liability claims, demands or expenses (including reasonable attorney fees) for
damages to the property of or injuries (including death) to Buyer, it’s employees or any other
person arising from or in connection with Seller’s performance of work or use of Buyer’s property
except for such liability, claim, or demand arising out of the sole negligence of Buyer.
21. INSURANCE: Seller shall maintain at its own expense, insurance coverage in amounts not less
than the following; (a) Worker’s Compensation – Statutory Limits for the state or states in which
this order is to be performed (or evidence of authority to self-insure): (b) Employer’s Liability -
$250,000; (c) Comprehensive General Liability (including Products/Completed Operations and
Blanket Contractual Liability) - $1,000,000 per person, $1,000,000 per occurrence Personal
Injury, and $1,000,000 per occurrence Property Damage, or $1,000,000 per occurrence Personal
Injury and Property Damage combined single limit: and (d) Automobile Liability (including owned,
non-owned and hired vehicles) - $1,000,000 per person, $1,000,000 per occurrence Personal
Injury, and $1,000,000 per occurrence Property Damage, or $1,000,000 per occurrence Personal
Injury and Property Damage combined single limit. Such policies shall name Buyer as an
additional insured thereunder and shall contain endorsements stating that the policies are primary
and not excessively over or contributory with any other valid, applicable, and collectible insurance
in force for Buyer. Such policies will further provide that Buyer shall receive thirty (30) days prior
written notification from the insurer of any termination or reduction in the amount or scope of
coverage. Buyer may require Seller to furnish evidence of the foregoing insurance but failure to
comply with these insurance requirements will not relieve Seller of its liability and obligations
under this clause. Seller’s purchase of appropriate insurance coverage or the furnishing of
certificates of insurance shall not release Seller of its obligations or liabilities under this order. In
the event of Seller’s breach of this provision, Buyer shall have the right to cancel the undelivered
portion of any goods or services covered by this order and shall not be required to make further
payments except for conforming goods delivered or services rendered prior to cancellation.
23
22. TOOLS: Unless otherwise agreed to by Buyer in writing, Seller at its own expense shall purchase,
furnish, keep in good condition, and replace when necessary all tools, jigs, dies, gauges, fixtures,
molds and patterns (“Tools”) necessary for the production of the goods. Seller shall insure the
Tools with full fire and extended coverage insurance for the replacement value thereof. Seller
grants Buyer an irrevocable option to take possession of and title to the Tools that are special for
the production of goods upon payment to Seller of the book value thereof less any amounts which
Buyer has previously paid to Seller for the cost of such Tools provided, however, that this option
shall not to apply such Tools that are used to produce goods that are the standard stock of
Seller’s or if a substantial quantity of like goods are being sold by Seller to others.
23. BAILED PROPERTY: All supplies, materials, tools, jigs, dies, gauges, fixtures, molds, patterns,
equipment and other items furnished by Buyer, either directly or indirectly, to Seller to perform
this order, or for which Seller has been reimbursed by Buyer, shall be and remain the property of
Buyer, or Buyer’s customer, as the case may be. Seller shall bear the risk of loss of and damage
to Buyer’s property. Buyer’s property shall at all times be properly housed and maintained by
Seller, shall not be used by Seller for any purpose other than the performance of this order, shall
be deemed to be personal property; shall be conspicuously marked “Property of CMA” by Seller,
shall be commingled with the property of Seller or with that of a third person; and shall not be
moved from Seller’s premises without a Buyer’s prior written approval. Upon the request of Buyer,
such property shall be immediately released to Buyer or delivered to Buyer by Seller, either (i)
F.O.B. transport equipment at Seller’s plant, properly packed and marked in accordance with the
requirements of the carrier selected by Buyer to transport such property, or (ii) to any location
designated by Buyer, in which event Buyer shall pay to Seller the reasonable cost of delivering
such property to such location. Buyer shall have the right to enter onto Seller’s premises at all
reasonable times to inspect such property and Seller’s records with respect thereto.
24. REMEDIES: The rights and remedies reserved to Buyer in this order shall be cumulative and
additional to all other or further remedies provided in law or equity.
25. TRADE CREDITS, COUNTRY OF ORIGIN: All trade credits, export credits, customs drawbacks,
tax and fee rebates and the like relating to this order will belong to Buyer, including rights
developed by substitution and rights which may be acquired from Seller’s suppliers which Seller
can transfer to Buyer. Seller agrees to inform Buyer of the existence of any such rights and upon
request to supply such documents as may be required to obtain such drawback. Seller will
cooperate with Buyer in obtaining these benefits and credits. Seller will furnish buyer and its
designees with such documentation establishing the country of origin and value of the goods as
Buyer may request, including, as applicable, affidavits of manufacture and NAFTA certificates of
origin.
26. SETOFF: In addition to any right of setoff provided by law, all amounts due Seller shall be
considered net of indebtedness of Seller to Buyer and its subsidiaries; and Buyer may deduct any
amounts due or to become due from Seller to Buyer and its subsidiaries from any sums due or to
become due from Buyer to Seller.
27. ADVERTISING: Seller shall not, without first obtaining the written consent of Buyer, in any
manner advertise or publish the fact that Seller has contracted to furnish Buyer the goods or
services herein ordered, or use any trademarks or trade names of Buyer in Seller’s advertising or
promotional materials. In the event of Seller’s breach of this provision, Buyer shall have the right
to cancel the undelivered portion of any goods or services covered by this order and shall not be
required to make further payments except for conforming goods delivered or services rendered
prior to cancellation.
28. GOVERNMENT COMPLIANCE, QUALITY: Seller agrees to comply with all federal state and
local laws. Executive Orders, rules, regulations and ordinances which may be applicable to
Seller’s performance of its obligations under this order. Seller will be certified to ISO-9001 and
24
compliant with TS16949. Quality System Requirements and any other quality standards and
procedures furnished by Buyer.
29. TAXES: Seller shall be solely responsible for and shall pay, or reimburse Buyer for all taxes,
duties, import deposits, assessments, and other governmental charges however designated,
which are now or hereafter imposed under or by any governmental authority or agency that are
(a.) associated with the performance by Seller of its obligations hereunder, (b.) associated with
the payment of any amount by Buyer to Seller pursuant to this Agreement, or (c.) based on the
goods, Tools or their storage or use, including but not limited to value added taxes, taxes on
business assets, excise taxes and property taxes.
30. EQUAL OPPORTUNITY AND AFFIRMATIVE ACTION: This order incorporates by reference; (a)
all provisions of 41 C.F.R. 60-14 as amended, pertaining to the equal opportunity clause in
government contracts; (b) all provisions of 41 C.F.R. 60-250 as amended, pertaining to
affirmative action for disabled veterans of the Vietnam Era; and (c) all provisions of 41 C.F.R. 60-
741, as amended, pertaining to affirmative action for handicapped workers. Seller certifies that it
is in compliance with all applicable provisions of 41 C.F.R. 60-1, including but not limited to: (a)
developing and presently having in full force and effect a written affirmative action compliance
program for each of its establishments as required by 41 C.F.R. 60-1.40. as amended; (b) filing
EEO-1 Reports as required by C.F.R. 60-1.7, as amended; and (c) neither maintaining
segregated facilities nor permitting its employees to perform services at segregated facilities as
prohibited by 41 C.F.R. 60-1.8, as amended. Buyer request that Seller adopt and implement a
policy to extend employment opportunities to qualified applicants and employees on an equal
basis regardless of an individuals age, race, color, sex, religion, or national origin.
31. NO IMPLIED WAIVER: The failure of either party at any time to require performance by the other
party of any provision of this order shall in no way affect the right to require such performance at
any time thereafter, nor shall the waiver of either party of a breach of any provision of this order
constitute a waiver of any succeeding breach of the same or any other provision.
32. GENERAL INDEMNIFICATION: Seller shall at all times indemnify and hold harmless the Buyer
and its shareholders, directors, officers, employees, agents, affiliates, and their personal
representatives, heirs, successors, and assigns, and each of them from and against any and all
claims, liabilities, losses, demands, penalties, fines, suits, judgments, settlements, damages,
costs, and expenses, (including without limitation reasonable attorneys’ fees) incurred by Buyer
or any such person or entity, arising out of or related to (i.) any act or omission of Seller in
connection with the duties hereunder or (ii.) the failure, breach or default by Seller of any of the
representations, warranties, covenants, or other agreement of Seller contained in this order
(including without limitation, Seller’s warranties hereunder), or (iii.) Seller’s negligent or willful acts
or omissions in performing this order. The terms of this Section 32 shall survive the expiration or
termination of this order.
33. NON-ASSIGNMENT: Seller may not assign or delegate its obligations under this order without
Buyer’s prior written consent.
34. RELATIONSHIP OF PARTIES: Seller and Buyer are independent contracting parties and
nothing in this order shall make either party the agent or legal representative of the other for any
purpose whatsoever, nor does it grant either party any authority to assume or to create any
obligation on behalf of or in the name of the other.
35. GOVERNING LAW: This order is will be interpreted and enforced under the laws of the
Commonwealth of Kentucky, US, (including without limitation, the provisions of the Uniform
Commercial Code as adopted by Kentucky) without recourse to the conflict of laws provisions
thereof, and the parties agree that any action or proceeding arising out of or in connection with
this order will be brought exclusively in a state of federal court in the Commonwealth of Kentucky.
25
In no event will the provisions of the U.N. Convention on the International Sale of Goods apply to
this order.
36. SEVERABILITY: If any terms of this order is invalid or unenforceable under any statute,
regulations, ordinances, executive order or other rule of law, such terms shall be deemed
reformed or deleted, but only to the extent necessary to comply with such statute, regulation,
ordinance, order or rule, and the remaining provisions of this order shall remain in full force and
effect.
37. CONSENT TO JURISDICTION: Each of the parties consents and voluntarily submits to personal
jurisdiction in the Commonwealth of Kentucky and in the courts in such state located in Marion
County and the United States District Court for the Eastern District of Kentucky in any proceeding
arising out of or relating to this order, and agrees that all claims raised in such proceeding may be
heard and determined in such court.
38. FORUM SELECTION: Any action to endorse any provision of this order shall be instituted
exclusively in the United States District Court for the Eastern District of Kentucky or, if such Court
does not have jurisdiction to adjudicate such action. In the courts of the Commonwealth of
Kentucky located in Marion County. The parties irrevocably and unconditionally waive and shall
not plead, to the fullest extent permitted by law, any objection that they may now or hereafter
have to the jurisdiction of such courts over the parties, the laying of venue or the convenience of
the forum of any action related to this Order that is brought in the United States District Court for
the Eastern District of Kentucky or in the Courts of the Commonwealth of Kentucky located in
Marion County. The provisions of this Section 38 shall not be applicable to any dispute,
controversy or claim by the Buyer against Seller arising out of or related to any dispute,
controversy or claim made against Buyer by a third party, including without limitation an end user
of the products.
39. DISPUTE RESOLUTION: The parties will attempt to resolve any dispute involving the
interpretation, performance or non-performance, or enforceability of the order by prompt good
faith negotiations and, if such negotiations fail, will consider alternate dispute resolution
procedures before resorting to litigation.
40. ENTIRE AGREEMENT: This order, together with the attachments, exhibits, or supplements,
specifically referenced in this order, constitutes the entire agreement between Seller and Buyer
with respect to the matter contained herein and supersedes all prior oral and written
representations and agreements. This order may only be modified by a purchase order
amendment/alteration issued by Buyer.
______________________________
Curtis Maruyasu Rep.
______________________________
Supplier Acknowledgement
2777796.2 doc.
26
Supplier SEM Acknowledgement Form
I hereby acknowledge the reception of the Curtis
Maruyasu America Expectation Manual. Return of this
signed document confirms both acknowledgement of
and agreement to this manual.
Company Name: _________________________________
X_____________________________
Dated____________________________
Authorized Signature
X_____________________________
Title
X_____________________________
Name (Typed or Printed)
27
CURTIS MARUYASU AMERICA, INC. CONFIDENTIALITY/NON-DISCLOSURE AGREEMENT
This document represents an agreement of confidentiality between Curtis Maruyasu
America Inc. (CMA) and all subcontractors, suppliers, and vendors.
The undersigned agrees that any information provided by CMA in the interest of
acquiring a quotation to begin or resume business will be used solely for said purpose.
The undersigned further agrees to hold all confidential or proprietary information or trade
secrets in trust and confidence and agrees that it shall be used only for the contemplated
purpose, shall not be used for any other purpose or disclosed to any third party.
Upon demand by CMA, all information, including written notes, shall be returned.
The disclosed information shall not be disclosed to any employee, consultant or third
party unless said party agrees to execute and be bound by the terms of this agreement.
It is understood that the Undersigned shall have no obligation with respect to any
information known by the Undersigned or as may be generally known within the industry
prior to date of this agreement, or that shall become common knowledge within the
industry thereafter.
X_____________________________ Dated____________________________
Authorized Signature
X_____________________________
Title
X_____________________________
Name (Typed or Printed)
28
Risk Management
In the Current economic environment – with performance and stability being so heavily
impacted by increasing fuel and raw material costs, it is the responsibility of serious business
partners to be continuously analyzing their performance in the market, and their ability to
respond to change. A Key measurable of performance and ability to respond is the stability and
financial health of our suppliers.
The CMA Risk Management Assessment program has been put in place to help CMA and our
business partners review and analyze our relationships and the business risk they potentially
represent.
The program takes Key performance Indicators, submitted from our business partners in
response to a CMA Survey, and puts them into a Matrix for Risk Assessment. A Risk ‗Score‘ is
obtained, which tells CMA if any of the performance measures are below industry standard. All
suppliers who have below the acceptable Risk Score are monitored in these performance areas
for a specified period of time. Further corrective action is then determined based on response
and recovery effectiveness.
CMA requires that all suppliers participate in this program, and requests cooperation in the
timely gathering of data for the assessment. The survey will be sent out on an annual basis so
that all data is kept up to date and accurately reflects the supplier‘s status. Between surveys, it is
the responsibility of all suppliers to keep CMA informed of any and all major company changes
including, but not limited to, the following: Change of ownership, change of upper management,
change in guiding principles and or focal product lines, loss of QS9000 certification, loss of
Sales dollars or any unprofitable periods of operation, Workforce organization change, and any
or other business factor that could impact your company‘s ability to respond to Customer
requirements and delivery needs.
The survey format and further guidelines follow.
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ACCOUNTING
ACCOUNTING OVERVIEW
A. All payments will be made upon the terms as indicated on the CMA purchase order to
your company.
B. All packing lists and invoices must have the corresponding purchase order listed
along with the line numbers identified. Any packing slips or invoices that do not
identify the CMA purchase order number and line number will be held for further
disposition and payment will be delayed.
C. CMA purchase orders with multiple part numbers may be billed on one invoice.
However, any part numbers on other CMA purchase order numbers must be on a
separate invoice. In other words, only one purchase order number per invoice.
D. Payments will be issued on the actual quantities received - which may not correspond
exactly to the packing list quantity shipped or qty billed.
E. All receipts and invoices received at CMA after 3:00 pm on the last business day of
the month will be considered received in the following month.
F. Due to limited resource availability, CMA will not send any checks via overnight
mail services, special courier, etc.
CMA‘s Accounting department is very similar to CMA‘s other departments, in that, the supplier
is expected to invoice using proper purchase order numbers and line numbers, invoices are
issued on time, and invoice quantities are correct. It is the supplier‘s responsibility to assure that
all invoices are prompt and accurate in order to receive on time payments.
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MATERIALS DEPARTMENT SUPPLIER EXPECTATIONS
MATERIALS OVERVIEW:
CMA is a tier one automotive supplier to Toyota Motor Mfg. and other major auto makers.
Customer Satisfaction is our guiding principle in day to day business conduct, and we take
serious and permanent measures to insure that Customer expectations are exceeded. With
this goal in mind, we expect the help and cooperation of all CMA suppliers. CMA
suppliers must be committed to excellence in delivery performance, customer service, and
the maintenance of exceptional quality.
GENERAL MATERIAL ORDERING PRACTICES:
Releases to our suppliers are generated based on our current inventory, required minimum
inventory levels, lead time, freight lead time, and orders from our Customers for finished
goods. CMA‟s delivery performance guidelines are in place to ensure a continuous supply
of goods and a controlled inventory environment.
DELIVERY PERFORMANCE
It is CMA‟s expectation that all Suppliers maintain 0 Points Per Shipment for each
quarter. Please refer to Appendix A – Supplier Performance Report for reference.
I. The Delivery portion of the performance rating consists of 4 categories.
a. 100% Delivery On-Time – All shipments arrive at CMA by the date that
they are due, in the quantity that was ordered. Any part number that is
late, early, or incomplete will cause the entire shipment to be non-
compliant. For each occurrence of non-compliance the supplier will be
issued 5 points. If the supplier has 4 shipments per month, the potential
in this category is 20 on-time points.
b. 100% Material Confirmation – Every other week, or at the agreed upon
frequency, all suppliers receive an updated release via EDI or email.
Upon receipt of this release, a confirming email should be sent to the
Material Ordering Clerk – confirming that the supplier not only received
the order, but also can ship all of the required quantities. Each
occurrence of non-compliance will cause the supplier to be issued 5
points. All suppliers receive 2 releases per month (regardless of 5 week
months), so the potential in this category is 10 Material Confirmation
points.
c. 100% Complete Shipment – All shipments must be shipped complete.
Any short shipped quantities are considered non-compliant. Each
occurrence of non-compliance will cause the supplier to be issued 5
points. The number of shipments per week is unique to each supplier.
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For each shipment that is short-shipped, the supplier will receive 5 points.
The potential in this category is the number of shipments times 5 points.
Category A also is reflected in category C.
d. 100% DAR Form – See Appendix B - All suppliers have the opportunity
to avoid delivery performance points for short-shipment or not on-time
delivery, if they give the proper notification to the Materials Dept. on the
DAR form. For all occurrences of late or incomplete shipment for which
the supplier fills in the DAR form, they will not be issued points if and
only if CMA inventories can support the late or short shipment.
Conversely, if the DAR form is not submitted, and any short or late
shipments occur, the supplier will be issued points for every occurrence.
Points will be immediately assessed for early shipments, and early
shipments are not subject to the DAR notification allowance. The
potential in this category is the number of shipments times 5 points.
e. Advance Shipping Notice – it is the responsibility of All suppliers, if you
are not EDI Capable (if you are an EDI partner with CMA, each
shipment should be accompanied by an 856- ASN) to send an Email copy
of your packing slip as your ASN. This email should be sent to
rtirey@curtismaruyasu.com and/or kjohnson@curtismaruyasu.com.
f. A Delivery Performance Dispute form can be submitted for all months
that the Supplier‟s PPS is greater than zero. The dispute must be
received by CMA Materials by the 15th of the 2nd month after the quarter
disputed. For example, if you receive your 3rd quarter, FY09 delivery
performance on April 20th, then your company has until May 15th to
submit your dispute with all documentation. Documentation presenting
proof must be submitted along with the form. *Please note that
signatures by CMA associates for receipts will not be considered final
“proof of delivery”. The signature for transportation bill of lading, UPS
logs, etc. is only considered verification of receipt of a container(s). It will
not be considered confirmation or verification of the contents or
condition of the goods received. Proof of delivery can be submitted for
dispute, but to accept or reject the „proof,‟ is at the discretion of the
Materials Dept.
g. In addition to the delivery performance aspect of a Material shortage,
please note that this is also considered a Quality issue. In instances of
short-shipment, in which no DAR is approved, CMA will issue a Delivery
Problem Report. Much like a Quality Problem Report, the form is
formal notification to the supplier explaining the affected part number
and problem. (See Appendix C) It requests immediate temporary
countermeasures, and subsequent permanent countermeasures. Please
note that the instructions and requirements for this form are directly on
the form, and so will not be covered in this forum.
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h. Supplier Delivery Performance is entered into Our Corporate Supplier
Performance data base, along with the Quality Performance and
Purchasing performance data. Based on a sliding scale (see back of
Materials Section In your manual for full explanation and points system),
performance scores are assessed each quarter.
i. CMA expects all suppliers to show continuous improvement. Problem
suppliers will go through several progressive steps if no improvement is
made:
i. Quarterly Corp. Rating of 1.0 to 1.5 – Supplier is meeting
expectations. Candidate for Supplier Performance award – Must
maintain rating four (4) consecutive quarters during fiscal year to
receive the award.
ii. Quarterly Corp. Rating of 1.6 to 2.0 – Supplier in-house visit is
required to discuss potential problem areas and brainstorm
improvement activities. Some improvement is required.
iii. Quarterly Corp. Rating of 2.1 to 2.9 - Supplier in-house visit
required. May require re-audit of supplier facility. Problem areas
need to be counter-measured before next SER report issuance by
CMA. Immediate improvement required. Note: CMA will evaluate
the severity of the problem to determine if further immediate
action against supplier is required up to and including termination
of contract.
iv. Quarterly Corp. Rating of 3.0 to 3.5 - Supplier re-audit
mandatory. Corrective action required immediately from supplier.
(5 working days) Probationary period of 6 months will be
enforced. Upon completion of 6 month period, all
countermeasures must be in place and proven effective by
supplier. Supplier will be re-evaluated for compliance. Parts may
be market tested. Note: CMA will evaluate the severity of the
problem to determine if further immediate action against supplier
is required up to and including termination of contract.
v. Quarterly Corp. Rating of 3.6 to 4.0 - Supplier will have 1 quarter
to comply. Parts will be market tested. Supplier will be placed on
de-source list. At the end of quarterly review, if countermeasures
are not proven to be effective, supplier will be de-sourced upon
approval of alternate supplier.
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CRITICAL PARTS SHORTAGE
In the event that a supplier experiences a Critical raw material shortage, extensive machine
problems (without immediate repair plans or full proof fix), or transportation issue that
will affect that supplier‟s ability to meet releases or required supplements, CMA has
developed the following guidelines for communication. This information must be received
and/or updated daily until the material shortage is fully resolved. Material Ordering, as
soon as a Critical Parts shortage is identified, must be able to communicate internally to
CMA Upper Mgmt a full explanation of the situation, and the expected recovery date.
Under no circumstances is it acceptable to allow a Production Stoppage due to a Critical
Parts Shortage:
I. The Nature of the shortage
II. All current inventories on hand and in transit
III. Counter Measure Plan: i.e. – repair tool, expedite raw material, work
weekend, etc.
IV. Schedule of planned recovery, to include planned date for CMA inventories
to be caught up.
V. Schedule of Daily shipments (or of agreed upon ship frequency) and
quantities per each
VI. Daily conference call to report out on status of countermeasure – verify
action items completed, did the scheduled shipment go as planned. Are there
any updates to action plan for upcoming activities?
SERVICE (BRAZE, PLATE, OR OTHER) SUPPLIERS
I. General Information about CMA shipment verification –
a. Upon receipt of service supplier shipments, CMA materials will verify all
counts by part number via weigh count.
b. Weigh tickets are generated for each part number, and these are verified
against the packing slip. Discrepancy reports will be faxed to the supplier for
correction.
c. Copies of the discrepancy reports will be faxed to the Accounting group for
correct payment. CMA will make payment based on our weigh count
information.
d. Service suppliers will be allowed no more than one week turnaround time
from the date they receive product from CMA for secondary operations.
II. Inventory Verification Requirements
a. All service suppliers must provide detailed inventories each Friday.
b. Any inventory discrepancies, (CMA‟s log of supplier inventory vs. actual
supplier inventory) must be immediately reconciled with CMA. This
reconciliation will be based on detailed inventory supporting documentation
provided by the supplier.
34
c. If the discrepancy is deemed the supplier‟s responsibility, then the supplier
will be debited for the value of the „lost‟ material.
PACKAGING
I. General Guidelines – for all suppliers
a. Returnable – All material must be shipped to CMA in returnable containers.
(See Appendix F)
b. Cardboard – must be pre-approved for all shipments, and should only be
considered for emergency and prototype goods. No Direct material suppliers
are approved by CMA to ship in Cardboard. This is in compliance with our
Green Policy and reflects our commitment to generate less waste.
II. Returnable pre-approval
a. Upon the award of CMA business, all suppliers must submit packaging
proposals for all part numbers. (See Appendix D) This packaging proposal
must be signed by the Material Ordering Mgr. and the Safety Mgr. before
any shipments are sent in to CMA. Please do not ship without this pre-
approval of your packaging.
b. Upon submission and CMA approval of the container proposal, CMA will
then purchase containers and have the containers shipped to the supplier
location. The Container Pipeline is filled based on two weeks of continuous
in transit – two weeks of material/goods at the supplier facility – 3.5 weeks of
material at CMA. So there should be at least 7-8 weeks of containers in the
pipeline at all times, and more if lead times are greater than one week for
freight. All subsequent shipments must be in returnable containers.
c. If your packaging or production dept is running short or low on CMA
containers – it is the responsibility of your company to contact CMA at least
2.5 weeks prior to your normal milk run pickup in order to communicate this
shortage. No short shipments of direct material will be acceptable due to a
returnable container shortage.
III. Shipment Security
a. All skids must be stretch wrapped for safe shipment. No steel banding is
allowed. The supplier is responsible to assure packaging will maintain
product quality through receipt at CMA.
35
GENERAL SHIPMENT REQUIREMENTS
I. CMA offers two alternatives for shipment, both dependent on supplier location
and size of load:
a. CMA Milk run – CMA pick up, generally once per week. This is the
preferred option, and the most cost effective. CMA reserves the right to
schedule all production suppliers on the appropriate millrun service.
b. Daily shipments – This option is preferred for those local suppliers that have
their own delivery truck or cost effective option.
II. Miscellaneous – Important
a. The supplier must submit a packing list with each shipment, in English. The
Corresponding purchase order number must be included on this packing slip and
all related paperwork.
b. The supplier is required to tag every box with a bar-coded label that clearly meets
CMA specifications and includes all required information.
c. The supplier will be responsible for all expedited freight due to defective material,
late or short shipments, and/or replacement parts due to Quality concerns.
d. EDI Capability – Effective FY09 for all CMA suppliers – it is a requirement that
we be able to communicate via EDI. Please notify the CMA Materials Dept.
immediately if you are not EDI-capable. If you are capable, please notify CMA
materials and CMA Information Systems group, as we want to get you set up to
receive CMA Releases immediately. If you are not EDI-capable, this could affect
our ability to continue our business relationship. It is imperative that you call
Purchasing and/or Materials to discuss.
Process FMEA, Control Plan, & Process Flow
1. PURPOSE:
To provide a method for creating and completing the required PPAP documentation.
2. SCOPE:
This instruction applies to all purchased components to be used in part production.
3. DEFINITIONS:
PSW Parts Submission Warrant
AIAG Automotive Industry Action Group
FMEA Failure Mode Effects Analysis
4. RELEVANT DOCUMENTS:
4.1 Reference documents:
4.2 Attached documents:
36
5. CONTENT
The supplier will be required to create and issue a PROCESS FMEA,
CONTROL PLAN, and PROCESS FLOW CHART to the responsible
CMA Quality representative for each purchased component.
The supplier may use any format to create the PROCESS FMEA,
CONTROL PLAN, and PROCESS FLOW CHART as long as it
includes the minimum requirements set forth by AIAG and a CMA sign-
off approval. Signatory approval is not required as long as it is
submitted as apart of PPAP. The signed PSW is adequate.
The supplier will be responsible for updating and resubmitting the
PROCESS FMEA, CONTROL PLAN, and PROCESS FLOW CHART
to the responsible CMA Quality representative whenever the part or
process is changed (i.e. Engineering Change Notification, Process
Change, or etc.)
CMA recommends, but does not require, the use of a Risk Priority
Number target of 50 for a normal PROCESS FMEA item to be
countermeasured and a Risk Priority Number of 25 for all safety items
(Severity of nine or higher.)
The supplier will issue the finalized PROCESS FMEA, CONTROL
PLAN, and PROCESS FLOW CHART with the initial PPAP
submission. The supplier will update and resubmit the PROCESS
FMEA, CONTROL PLAN, and PROCESS FLOW CHART with each
PPAP submission as required by the responsible CMA Quality
representative.
Control of Nonconforming Product
1. PURPOSE:
The purpose of this procedure is to define the method for dispositioning, returning,
adding to the PPM and disputing nonconforming product supplied by vendors.
2. SCOPE:
This procedure applies to all materials and components used in mass production at CMA
purchased from suppliers.
3. DEFINITIONS:
Nonconforming Product - materials and components that do not conform to CMA and
OEM customer requirements or specifications.
QA – CMA‟s Quality Assurance Department
4. RELEVANT DOCUMENTS:
37
4.1 Reference documents:
4.2 Attached documents:
- Supplier Reject Return Request
- Quality Problem Report (QPR)
5. CONTENT
5.1 Nonconforming product furnished by suppliers may be identified
during the following activities at CMA, receiving inspection, in-process
manufacturing and analyzing customer returns.
5.2 All suspect product is tagged with a HOLD TAG by the quality
department and then is quarantined to the quality control hold area
until dispositioned by the assigned Quality designee.
5.3 In determining the appropriate disposition, the Quality Representative
may consult with other internal departments (i.e. Purchasing &
Materials and the supplier‟s Quality Department. The following
disposition options are available:
5.3.1 Acceptable: product is determined to be within specifications and are
returned to production for use. These parts do not count toward a
supplier‟s PPM.
5.3.2 Use as is: product is determined not to be within specifications but
deemed useable in production w/out any rework. The OEM
customer must give its approval for use prior to assigning this
disposition. These parts count toward a supplier‟s PPM.
5.3.3 Sort/rework: product may be sorted or reworked by either CMA or the
supplier depending upon the urgency of production needs. If CMA
performs the sort or rework, a record is kept of the man-hours used and
the supplier is debited accordingly (see the vendor debit policy). If any
good parts are found or nonconforming parts are reworked to an
acceptable status, they are returned to the production inventory. All
parts reworked (either by CMA or the supplier) count towards the
supplier‟s PPM.
5.3.4 Return/scrap: the nonconforming parts or the entire affected lot may be
returned to the vendor or scrapped at CMA. CMA‟s Quality Assurance
department (QA) seeks authorization from the supplier to return or
scrap the parts by faxing the Supplier Reject Return Request. If the
supplier does not respond to QA within forty-eight hours, CMA reserves
the right to scrap the parts at the suppliers‟ cost. See Vendor Debit
Policy. All returned or scrapped parts count towards a supplier‟s PPM.
38
Engineeering Change
ENGINEERING CHANGE
5.3.5 The supplier may request to have samples of defective product that was
sorted, reworked or scrapped sent back to them to aid in root cause and
corrective action analysis. The supplier must provide CMA QA with a
UPS or Federal Express account number to bill the shipping cost.
5.3.6 After disposition, the balance of NCR form is completed and filed in the
respective part‟s history folder. CMA Receiving Inspection then issues a
Quality Problem Report to the supplier to document the root cause and
corrective action. The supplier must utilize a disciplined problem solving
method (e.g. fishbone diagram, 5 why analysis, fault tree analysis, etc.) to
determine the root cause. The QPR must be sent back to the supplier‟s
assigned Quality Representative within forty eight hours listing the short-
term corrective actions. Long term corrective actions must be received
within 30 days of notification.
Disputing Returned Nonconforming Product
5.3.7 In the event the supplier wishes to dispute its responsibility for product
returned as nonconforming, the following steps must be taken:
5.3.8 The supplier must submit a report to the pertinent Quality
Representative within five business days following the receipt of the
product in question. The report must contain at minimum the following
information, the part number(s) and quantity of the product in question,
the date the questioned parts were received, a copy of the completed
QPR, and justification details of why the returned product is not the
supplier‟s responsibility (this should include all process controls that
would prevent defects of this type from being shipped to CMA).
5.3.9 The CMA Quality Representative will review the report and respond to
the supplier within 5 business days with a decision. If the CMA Quality
Representative determines the supplier is not responsible for the returns,
the parts will be deducted from the supplier‟s monthly PPM in which
they were counted. If the CMA Quality Representative determines the
supplier is responsible for the returns, there will be no adjustment to the
PPM.
Should the supplier not be satisfied with the CMA Quality
Representative‟s decision, the supplier may present the issue within 5
business days to the CMA Quality Manager. This decision is final.
39
Engineering Change
ENGINEERING CHANGE
Page ( / )
To:
Part Number: Supplier:
Part Name: Contact:
Attn: Model: Shipment Date:
ENGINEERING ENGINEERING IMPLEMENTATION SUPPLIER REMARKS/
CHANGE CHANGE PLANNED ACTUAL INITIAL QUALITY COMMENTS
NUMBER CONTENT MODIFICATION PART MODIFICATION PART SHIP DATE SIGN OFF CONCERNING
COMPLETE PRODUCTION COMPLETE PRODUCTION TO CMA & DATE RESULTS
(original) (copy)
Route: CMA Quality (submit with each trial shipment)
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1. PURPOSE:
To provide CMA a method for reviewing and approving supplier gage design and fixture.
2. SCOPE:
This procedure applies to all gages purchased by CMA for the use of checking
purchased components and finished goods at the supplier.
3. DEFINITIONS:
4. RELEVANT DOCUMENTS:
4.1 Reference documents:
4.2 Attached documents:
GAGE APPROVAL REQUEST
5. CONTENT:
The supplier will complete the GAGE APPROVAL REQUEST form for each
gage design.
The supplier will issue the GAGE APPROVAL REQUEST form to the
responsible CMA Quality representative for review prior to starting the gage
build.
The responsible CMA Quality Program representative will review the gage
design drawing with the concerned departments and make a decision on
approval.
The responsible CMA Program representative will return the GAGE
APPROVAL REQUEST to the supplier.
If approved the supplier may initiate the building of the gage. If not approved
the supplier will redesign the gauge and resubmit the GAGE APPROVAL
REQUEST to for review.
The supplier must re-issue the GAGE APPROVAL REQUEST form to the
responsible CMA Quality representative for further review after the gage is
completed.
The responsible CMA Quality representative will review the completed gage
package with the concerned departments and make a decision on approval.
The package must include gage certification, gage R&R,
maintenance/calibration schedule and a photo (this is not necessary if the gage
is presented instead.)
The responsible CMA Quality representative will return the GAGE
APPROVAL REQUEST form to the supplier.
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The supplier will need to make modifications according to the comments of the
responsible CMA representative if the GAGE APPROVAL REQUEST is
rejected.
The supplier will need to re-submit the GAGE APPROVAL REQUEST
package to CMA for approval after the modifications are complete.
The GAGE APPROVAL REQUEST will be filled out in the following format:
1. SUPPLIER NAME: The name of the supplying company.
2. SUPPLIER CONTACT: The name of the supplier representative responsible
for the design and build of gages.
3. PART NUMBER: The customer part number (CMA or Customer or both.)
4. PART NAME: The description of the part.
5. PHONE: The direct telephone number for the supplier representative
responsible for the design and build of gages.
6. FAX: The fax number for the supplier representative responsible for the design
and build of gages.
7. COPY OF DRAWING ATTACHED: A copy of the proposed gage drawing
(concept drawings are acceptable.)
8. EST. BUILD COMPLETION DATE: The proposed completion date of the
gage.
9. EST. COST: The estimated cost of designing and building the gage.
10. DESIGN COMPANY: The company that is responsible for the design of the
gage.
11. CMA APPROVES DESIGN (S) SUBMITTED: The indication for approval
of the proposed gage design by the responsible CMA Quality representative.
12. CMA DOES NOT APPROVE THE CURRENT DESIGN DUE TO THE
FOLLOWING REASONS: The indication for not approving the proposed
design and the reasons for rejection by the responsible CMA Quality
representative.
13. CMA SIGN & DATE: The approval signatures with date of the concerned
departments at CMA.
14. CALIBRATION COMPANY: The company or person responsible for
calibration of the gage.
15. CALIBRATION CERTIFICATION DATA: The certification data for the
gage.
16. GAGE R&R STUDY OF CRITICAL CHARACTERISTICS: The gage
repeatability & reproducibility study for the gage.
17. MAINTENANCE/CALIBRATION SCHEDULE: The schedule for
preventative maintenance of the gage as well as the calibration according to
National Standards.
18. PHOTO: A picture of the completed gage indicating datum locations and
measuring points.
19. SUPPLIER SIGN & DATE: The signature and date of the supplying company
representatives responsible for the design, building and purchasing of the gage.
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20. CMA APPROVES THE GAGE AS DESIGNED AND BUILT: The
indication from the responsible CMA Quality representative that the gage is
approved as designed and built.
21. CMA DOES NOT APPROVE THE GAGE FOR THE FOLLOWING
REASONS: The indication from the responsible CMA Quality representative
that the gage is not approved as designed and built for the indicated reasons.
22. CMA SIGN & DATE: The approval signatures with date of the concerned
departments at.
SUPPLIER PART INSPECTION
STANDARD
1. PURPOSE:
To enable the supplier to supply a document consisting of part critical characteristics, their
acceptance criteria and the method and frequency by which the part must be monitored and
controlled by the supplier.
2. SCOPE:
Timing begins at the initial request by the CMA QA Designee and continues throughout the
life of the part.
3. DEFINITIONS:
4. RELEVENT DOCUMENTS:
4.1 Reference documents:
4.2 Attached documents:
5. CONTENT:
Type A: CMA Issued Part Inspection Standard (CMA developed & issued)
An Inspection Standard Request Cover Sheet and Inspection Standard draft will be
issued to the supplier for review and approval.
Note 1: CMA QA Dept. retains the original document.
Note 2: A request to fabricate checking fixtures may be included.
After any revisions have been made to a CMA issued Inspection Standard, the
supplier must:
a. Acknowledge the receipt.
b. Specify an implementation date.
c. Return the signed originals to CMA QA Dept.
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Type B: Approval Part Inspection Standard ( Supplier developed & CMA approval)
The supplier will receive an Inspection Standard Request Cover Sheet from the CMA
QA Dept. that requires them to develop the part Inspection Standard per the Parts
Master Schedule and the Supplier Parts Master Plan.
Note: A request for specific quality requirements and/or to fabricate checking fixtures
may be included.
The supplier may be requested to modify the Inspection Standard draft, but once
approved, the original will be returned to the supplier and a copy retained by the
CMA QA Dept.
The Part Inspection Standard (I/S) cannot conflict with the drawing specification, but
is intended to clarify and enhance quality assurance related requirements.
The part inspection standard, at a minimum, must define the following items:
a. Datum Structure
b. Dimension and Tolerance
c. Performance
d. Weight
e. Material
f. Appearance
g. Function
h. Color
i. Special Inspection Items
j. Identification Method
Notes: The supplier must meet the drawing or inspection standard tolerance,
whichever is tighter. The tolerance must be considered in process design.
These items are critical part characteristics that must be controlled to satisfy special
inspection or governmental regulation requirements (these are designated by
customer -specific symbols on the drawing ).
The Inspection Standard must consider and include inspection related criteria on the
MQC / Control Plan, PFMEA studies, etc., and the identified frequency of inspection
must be developed from process capability studies and results.
The approved Inspection Standard criteria, subject to revision, must be consistently
complied with for the life of the part without exception.
Requirements on the drawing not stated on the part Inspection Standard must be re-
validated annually at a minimum.
Suppliers with MVSS parts are required to maintain critical performance data based
on the testing requirements outlined in the part Inspection Standard.
The supplier must initiate revisions for all Engineering Change Instructions ( ECI)
issued by CMA.
The supplier must submit an Inspection Standard Change Request form for all
revision requests to the Inspection Standard after negotiating initial approval.
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Note: The original Inspection Standard must not be marked on, prior to approval.
Attach a separate paper, copy, etc. to indicate any proposed changes.
In the case of an Approval Inspection Standard, the CMA QA Dept. may request a
change to the Inspection Standard by submitting an Inspection Standard Change
Request form to the supplier.
Flowcharts for Supplier Part Inspection Standard
Inspection Standard Flowchart by CMA
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VENDOR DEBIT WORKSHEET
VENDOR NAME:
CONTACT:
NAME TITLE PHONE
DATE(S)
OF OCCURRENCE:
DATE OF
RMA/QPR ISSUED: ISSUE:
PRODUCT ID#: QUANTITY:
DEBIT CALCULATION
The following costs are to be used in calculating the debit amount
Appropriate documentation must be attached
Premium Freight $
Rejected/Scrapped Inventory $
Labor/Overhead/Overtime $
Repair Cost-Labor/Material $
CMA Production Interruption $
Technical Support -
Eng./Quality $
Customer Costs: $
Returned
Stock $
Other
(specify) $
Administrative Fee $ 500.00
TOTAL $ 500.00
ACCOUNTING
INITIATOR PURCHASING APPROVAL (Action)
Name: Name: Name:
Title: Title: Title:
Signature: Signature: Signature:
Date Date
Date: Date: Recvd: Processed:
REMARKS:
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