Supplier Manual

Table of Contents

Revision 20, 12/19/2011

Section	Revision	Date
1. General Requirements	3	1/2/03
1.1 Holiday Gift Giving	2	01/04/10
1.2 Working Conditions expectations	1	7/14/10
2. Purchasing
2.1 Managing Change	3	1/2/03
2.2 Supplier Performance	7	7/14/10
2.3 Pay on Receipt	1	2/17/03
3. Quality
3.0 NSK Americas Quality Policy	1	2/22/10
3.1 General Quality Requirements	10	12/19/11
3.2 APQP Requirements	5	7/14/10
3.3 PPAP Requirements	8	12/19/11
3.4 Lot Traceability	4	5/6/03
3.5 Discrepant Part and Corrective Action	4	3/21/05
3.6 Quality Assessments	4	8/10/06
3.7 Quality Key Person Report	1	2/17/03
3.8 Inspection Data Submission	2	5/3/04
3.9 Safe Launch Plan Requirements	1	3/9/10
4. Lean Manufacturing	4	1/04/10
5. Production Control
5.1 Delivery Performance	4	1/04/10
5.2 Inventory Management	4	1/04/10
5.3 Obsolescence Management	5	1/04/10
5.4 Ramp-up Schedule	4	1/04/10
6. Material Control
6.1 Material Handling, Packaging, Labeling, Preservation, and Delivery	4	7/14/10
6.2 Sample Labeling	1	2/17/03
6.3 Barcode Label, Pack and Ship Requirements	5	3/16/04
7. Transportation
7.1 Performance Expectations	3	1/2/03
7.2 Performance Results	3	1/2/03
7.3 Premium Freight	3	1/2/03
7.4 Routing Choices	3	1/2/03
8. ISO 14001
8.1 Environmental Requirements	4	02/22/10
9. Prototype Requirements	2	8/10/06

Appendices
Appendix A. (Restricted Materials)	5	01/04/10
Appendix B. (Forms)	3	07/14/10
Appendix C-1. (EDI Specifications 830)	4	11/23/03
Appendix C-2. (EDI Specifications 856)	4	11/23/03
Appendix D (Terms and Conditions)	3	4/14/11
Supplier Manual Revision Log	17	12/19/11

Notice

NSK STEERING SYSTEMS AMERICA, Inc's Supplier Manual is provided on-line in an electronic format only. This manual is the property of NSK STEERING SYSTEMS AMERICA, Inc. While all suppliers have on-line access to this manual, downloaded or printed copies must be kept in a secured and controlled manner. Copies of sections or individual pages are permitted for training or informational use, but must be controlled to ensure that the most current version is in place.

SECTION 1 - GENERAL REQUIREMENTS

PURPOSE: The requirements of this manual cover the continuing quality assurance and performance required of the supplier on or for all parts, materials, and services ordered from the supplier by NSK Steering Systems America, Inc. (also referred to as NSSA throughout this document).

SCOPE: These requirements apply to the suppliers of all parts, materials, and services ordered by NSSA, unless otherwise specified by NSSA. No other actions or agreements relieve the supplier of the responsibility to provide parts, materials, and services that are in conformance with NSSA’s purchase order or requirements.

EXPLANATION: The requirements in this manual are part of the purchase agreement between the supplier and NSSA and are supplemental to any other purchase terms or conditions. These requirements are intended to help assure the parts, materials, and services meet the specifications established by NSSA’s purchase orders, engineering drawings, quality requirements and standards, government regulations, and/ or other agreements between NSSA and the supplier.

SUPPLIER RESPONSIBILITIES: The supplier is responsible for being familiar with and conforming to the requirements contained in this manual and all other documents referenced herein.

SECTION 1.1 – HOLIDAY GIFT GIVING

In order to keep within our business ethics guidelines and to prevent uncomfortable situations which may occur from receiving gifts; NSK STEERING SYSTEMS AMERICA, Inc. (NSSA) requests that NSSA business partners and suppliers refrain from sending any gifts throughout the year and during the holiday seasons, regardless of their value. If you would like to send your best wishes to NSSA or our team members, sending a card would be most appropriate.

SECTION 1.2 – WORKING CONDITIONS EXPECTATIONS

PURPOSE: To convey NSSA commitment to our supply base that our employees and your employees are afforded responsible working conditions and are treated with dignity and respect.

SCOPE: These guidelines apply to all NSSA employees and the NSSA supply base as well as their suppliers.

EXPLANATION: NSSA suppliers must abide by the tenets of respectful treatment of all employees. These items include the following of local labor laws as it applies to child labor and forced labor. Harassment and discrimination of employees cannot be tolerated and workers should be able to communicate openly with management regarding their work conditions without fear of reprisal. Workers should have a safe work environment that meets or exceeds applicable standards for occupational safety and health. Working hours and compensation and benefits should also comply with local laws.

SUPPLIER RESPONSIBILITIES: All suppliers are responsible for being familiar with their local labor laws and comply accordingly.

SECTION 2.1 – MANAGING CHANGE

PURPOSE: To properly evaluate, decline or approve through cross-functional teams, subcontractor’s proposals to change specifications and/or modify approved manufacturing processes.

SCOPE: Applies to all subcontractors currently supplying PPAP approved production parts/assemblies to NSSA.

EXPLANATION: To ensure that there is a process to monitor a subcontractor’s request for a change and the cross-functional review resulting in approval and/or denial.

SUPPLIER RESPONSIBILITIES: All proposed changes that affect design, specifications, approved manufacturing processes, controlled documents and/or the quality of a part or assembly shall be submitted using the "Change Request Record" (CRR). The CRR form should be submitted to the NSSA’s buyer responsible for your account. Written approval from NSK Steering Systems America Inc. is required PRIOR to implementing any proposed change.

When applicable, subcontractors are required to obtain production part approval (PPAP) prior to the first production shipment of the proposed change.

NSSA’s subcontractors are also responsible for managing changes made by their subcontractors or sub-tier sources within their supply chain. The approval process is through the use of the CRR.

SECTION 2.2 – SUPPLIER PERFORMANCE

PURPOSE: To evaluate supplier performance based on data obtained from different disciplines with NSSA and to provide feedback to suppliers on their performance.

SCOPE: It applies to all suppliers of level 1 commodity and services.

EXPLANATION: Supplier overall performance is evaluated monthly by combining information from multiple disciplines within the NSSA organization. Overall performance is assessed based on performance indicators in Quality, Delivery, and Purchasing. The goal of a supplier is to have a perfect score of “100”.

Overall supplier performance results will be controlled and distributed to each supplier by NSSA Purchasing department as minimum quarterly.

Based on results and trends, selected suppliers may be put into corrective action. Corrective actions may range from the supplier being called in to present their corrective actions to NSSA management, up to probation and removal from NSSA’s approved supplier list.

1. Supplier quality performance score is calculated based on sort time, issuance of QPR’s (Quality Problem Reports) and is evaluated from several metrics:

· Sort time and cost associated

· Number of QPRs being issued, weighted by rank (A, B, C).

· Repeat issues, for which corrective actions have previously been implemented, will carry negative points.

· QPR response time:

o Initial response to each QPR must be submitted in writing on the QPR or 8D format and must confirm at a minimum - containment actions – see section 3.5 – Discrepant Product and Corrective Action. Generally, initial response is expected in 1 business day after QPR issuance. The due date is listed in the QPR form under “Response Due” – if initial response is not received by the date indicated, performance points will be lost.

o Closure response to each QPR; similar to above, the target closure date is listed in the QPR form under “Closure Due”. In case more time is required to close the issue, supplier is expected to communicate in writing to the SQA representative for time extension to avoid a negative score.

· In addition to A, B, and C ranked QPRs, a “Request for Information” (RFI) may be issued. These are typically issued for unverified non-conformances, negative trends, etc. RFIs carry no penalty, but points will be subtracted from the supplier’s score if response and closure expectations are not met. Upon review of further information, an RFI can be elevated to a QPR.

2. Supplier PPM performance score is tracked monthly and calculated based on returned product, scrapped, and/or reworked at NSSA whether via NSSA line reject or any performed sort activities.

3. Supplier delivery / Production control performance score is tracked monthly and calculated based on several metrics:

· On time delivery

· Over / Under shipment

· ASN Utilization

· Packaging

· Labeling

4. Supplier Purchasing / Commercial performance score is tracked monthly by NSSA purchasing department and calculated based on several metrics:

· Risk Management – Financial, Labor and Geographic location.

· Service – Engineering capability, APQP support / deliverable and timely response to RFQ and requested documentation.

· Cost Reduction initiatives and deliverables.

SUPPLIER RESPONSIBILITIES:

Review and response to QPR: Suppliers are responsible for reviewing and providing timely and appropriate responses to QPRs. QPRs are sent via e-mail by the Supplier Quality Assurance (SQA) department. Failures to provide an appropriate written response by the date indicated on the QPR will have negative impact on supplier performance scorecard.

Notification of Suspect Product: If a supplier suspects possible non-conformances in product that has already been shipped, immediate notification must be made to the NSSA SQA and Production Control representatives. If such notification is made, suspect product that can be returned to the supplier or otherwise dispositioned before required for production will not be included in scorecard calculations. In the event product has reached production or must be used for production, the supplier will be responsible for all costs incurred for the non-conformance (ref. section 3.5, items 7 and 8 under “Supplier Responsibilities”). A QPR will be issued and parts will be included in PPM calculations. However, proactive action by the supplier will be given a positive consideration in reviews to determine corrective action needs.

Product returned to supplier: If suspect product is returned to supplier for evaluation, including sort / rework, all returned parts will be included in Quality calculations. However, if the supplier sorts the product and reports an actual count of non-conforming product to the SQA representative within 30 days, the PPM will be adjusted accordingly.

Corrective action: Supplier performance is reviewed monthly. Suppliers may be placed into a high focus program if their performance fails to meet the NSSA expectations. The following table provides guidelines for identifying suppliers that may need performance improvement, and the type of actions, which can be implemented to drive improvement.

SUPPLIER CORRECTIVE ACTION

METRIC

(General Guidelines)

ACTIONS

(Examples are, but not limited to)

Excessively low quality performance score for past month or months.
Chronic repeat problems
Continuous sorts and reworks.
Poor response and/or problem closure record (both timeliness and strength of responses)
“A” rank event with late or inadequate response.
Other identified negative trends (negative trends in PPM, delivery performance, etc)
Chronic failure to contain and/or implement corrective action.
Chronic failure to support sort and rework needs.

Suppliers may be requested to make presentations on root cause, corrective action, and improvement initiatives to NSSA management.
Containment of all suspect materials.
On-site visit to supplier by SQA representative to address systemic issues and review processes and verify corrective actions for specific issues.
Improvement action plans
Possible probation (Hold on any new awards / business)
Possible removal from approved NSSA supplier list.

SECTION 2.3 – PAY ON RECEIPT PROGRAM

Purpose: To automate and accelerate the supplier payment for product shipped.

Scope: Applies to all suppliers of level 1 commodities.

Explanation: In order to streamline our business processes, NSSA has implemented a "Pay on Receipt Program" for our production suppliers. The supplier will generate an ASN, either over SupplyWeb.nskssa.com or via EDI. The Shipper Number on the ASN will automatically become the Invoice Number that NSSA will process payment against. Payments are processed every week per the suppliers’ payment terms. Payment Status can be viewed over SupplyWeb.nskssa.com at any time.

Supplier Responsibilities: The supplier issues an ASN and assigns one “Shipper” number which will be the same as one invoice number so each invoice is paid directly for each shipment. Suppliers will not have to print and mail an invoice to NSSA.

SECTION 3.0 – NSK AMERICA’S QUALITY POLICY

SECTION 3.1 - GENERAL QUALITY REQUIREMENTS

PURPOSE: To define general NSSA quality requirements

SCOPE: Applies to all suppliers of Level 1 commodities (see Purchasing Section Commodity definitions).

EXPLANATION: Subcontractors are responsible for the quality of the products and services supplied to NSSA.

NSSA defines quality as providing products and services that meet or exceed customer expectations at a cost that represents value. Suppliers are expected to meet engineering requirements and strive to continuously improve products and services by reducing variation and optimizing performance to target values.

The following AIAG standards are to be considered as extensions of NSSA Supplier Manual:

· PPAP ~ Production Part Approval Process

· APQP ~ Advanced Product Quality Planning

· FMEA ~ Failure Mode and Effects Analysis

· MSA ~ Measurement Systems Analysis

· SPC ~ Fundamentals of Statistical Process Control

Suppliers are responsible for obtaining and maintaining current editions of these documents. They may be obtained from: The Automotive Industry Action Group (AIAG)

26200 Lahser Road – Suite 200

Southfield, MI 48034

Phone: 810 358-3253

The following are NSSA’s General quality requirements. These are required from all NSSA suppliers of Level 1 commodities. Other sections of this manual provide additional detail for many of these requirements.

Quality System Requirements: TS 16949:2002 and/or ISO 9001:2000 defines the quality system requirements for purchased product, materials, and services. Suppliers are responsible for developing and implementing a quality management system. Registration to ISO 9001:2000 is required, although registration to TS 16949 is encouraged and preferred. NSSA also reserves the right to also perform its own Supplier Quality Assessment regardless of level of quality certification.
NSSA Supplier Quality Assessment. All suppliers are subject, at NSSA’s discretion, to an on-site quality assessment to the NSSA Supplier Quality Assessment. This document is not intended to duplicate a TS 16949:2002 or ISO 9001:2000 audit, but is intended to identify a good fit between the supplier’s quality system and NSSA’s needs. An on-site assessment will be conducted with all new suppliers. In addition, at NSSA’s discretion, follow-up assessments may be conducted on selected suppliers who are identified as having a high impact to quality and/ or if required by NSSA’s customer(s).
Advanced Product Quality Planning (APQP). All program development (design, processes, inspection, testing, etc.) shall follow the AIAG standard for Advanced Product Quality Planning (APQP). NSSA specific requirements regarding APQP can be found in section 3.2.
Change Requests. All proposed temporary and permanent changes that affect design, specifications, approved manufacturing processes, controlled documents, and/ or the quality of a part or assembly shall be submitted using the "Change Request Record" (CRR). See NSSA specific requirements for CRR submissions in section 2.1 of this manual.
Corrective Action. NSSA will initiate corrective action requests for a product nonconformance(s). When a nonconformance is identified as having a high impact to quality, an 8-Discipline Report (8D) will be initiated. See NSSA specific requirements for corrective actions in section 3.5 of this manual.
Discrepant Product. It is the suppliers’ responsibility to sort, scrap, or rework all discrepant products. See NSSA specific requirements for discrepant product in section 3.5.
Lot Traceability. Suppliers shall be responsible for maintaining lot traceability. See NSSA specific requirements for lot traceability in section 3.4 of this manual.
Material and Process Specifications. Raw material and components must conform to requirements identified on product prints. NSSA material standards may be referenced on the Purchase Order. NSSA must approve any deviation from these specifications, in writing, prior to implementation of the change. Production shipments incorporating the change cannot begin until PPAP approval is obtained.
Engineering Specifications (ES) Test Performance. (This section applies when a supplier has responsibility for ES testing.) The goal of ES testing is to confirm the design intent of the product has been met. If there is an ES failure, a supplier should stop production shipments immediately. The Supplier shall immediately notify NSSA’s Quality Representative of the test failure and identify any suspect lots shipped. After the root cause(s) of the ES test failure is determined, corrected, and verified, the supplier may resume shipments.
Material Safety Data Sheet(s) (MSDS). Suppliers are required to identify restricted, hazardous, and otherwise regulated materials and warrant the supplied materials comply with all applicable regulations. A material Safety Data Sheet (MSDS) that complies with applicable law for all restricted, toxic, and hazardous materials must be submitted for NSSA’s review and approval prior to shipment of product (including samples or product to support PPAP submission requirements).
Material Sources. NSSA must approve all material sources and any change to an approved material source. The supplier should identify all material sources during the quotation process or feasibility review. If a supplier wants to use material from a different or additional material source after the product has satisfied PPAP requirements, approval for the alternate material source must be obtained through the Managing Change Procedure (CRR) prior to implementation of the change.
Melt Source Material Certifications. When material certifications are required by contract, a copy of the melt source’s material certification should be included with the shipment. If material is purchased from a distributor, converter, or processor, the melt source should be listed on the material certifications.

Submission of Inspection Data. NSSA requires suppliers to be responsible for the quality of the components and/or services they supply. Data supporting that components and services meet specifications must be collected and maintained for each lot of material produced for NSSA. Data must be available on request. NSSA will determine specific characteristics for which data must be available. For features requiring ongoing SPC, statistical data may be required. If any characteristic is found to be out of specification, the supplier is to immediately contact their NSSA SQA representative. Non-conforming components can only be accepted if a temporary deviation has been approved via NSSA's "Managing Change" procedure (ref. section 2.1 Managing Change).
Production Part Approval Process (PPAP). Production part approval for all production and service commodities, including bulk materials, shall conform to the procedures defined in the Automotive Industry Action Group’s (AIAG) PPAP manual. A level 3 submission will be required, unless otherwise requesting in writing by the NSSA Quality Representative.
Process Audits and Process Sign-Offs. A Process Audit and Process Sign-Off (PSO) may be required on selected components and/or suppliers with a high impact to quality. In cases where a Process Audit is required, successful completion of the Process Sign-Off (PSO) will be considered a requirement for PPAP. Additional information regarding Process Audits and PSOs can be found in the PPAP Requirements, section 3.3.
Pass Through Characteristics. The Supplier is responsible for verifying the quality of pass-through characteristics. Verification of pass through characteristics must be included as part of the Control Plan. See additional requirements for pass-through characteristics in section 3.7.
Customer Specific Requirements. Suppliers are required to meet NSSA customer specific requirements including those contained in this supplier manual or those communicated to NSSA by its customer.
Process Capability Requirements. For critical and significant process characteristics (S, SR, F, or HI), an initial process capability showing Ppk greater than 1.67 is required at PPAP. For critical characteristics (S and SR), SPC techniques shall be utilized during production, with a Cpk of 1.33 or greater maintained throughout the life of the program. For significant characteristics (F and HI), inspection at an appropriate frequency shall be detailed in the quality plan. NSSA reserves the right to request inspection data for any characteristic at any time.

NOTE: Conformance to capability requirements shall be satisfied by material certifications with each lot of material for the following properties:

· Mechanical properties of coil steel,

· Teflon coating thickness for Teflon-coated steel.

Special Characteristic	Definition	PPAP Requirement	Production Requirement
S	Safety	Ppk > 1.67	SPC Cpk > 1.33 Or 100% in-line inspection
SR	Safety Regulated	Ppk > 1.67	SPC Cpk > 1.33 Or 100% in-line inspection
HI	High Impact	Ppk > 1.67	Quality Plan
F	Functional / customer interface	Ppk > 1.67	Quality Plan

SUPPLIER RESPONSIBILITIES: It is the Supplier’s responsibility to conform to all the above conditions and additional details as may be contained in this manual. Where not otherwise specified, TS 16949: 2002, ISO 9001: 20000, and/or AIAG standards are to be followed. It is the Supplier’s responsibility to obtain the required Technical Specifications and AIAG documents.

SECTION 3.2 -ADVANCED PRODUCT QUALITY PLANNING (APQP)

PURPOSE: To define the Advanced Product Quality Planning requirements.

SCOPE: Applies to the development of all Level 1 commodities and the processes employed to produce them (see Purchasing Section Commodity definitions).

EXPLANATION: Reference the Automotive Industry Action Group (AIAG) manual titled Advance Product Quality Planning and Control Plan – APQP for explanations of product quality planning. This AIAG standard is considered an extension of this document.

SUPPLIER RESPONSIBILITIES:

The Supplier is responsible for obtaining the latest revision of the APQP standard from the AIAG. The supplier is responsible for knowing this standard and applying it during product quality planning of all components.
Process Flow Charts, Process Failure Mode and Effects Analysis (PFMEA), and Control Plans are required for NSSA’s review and approval prior to PPAP submission. As "living documents", these documents should be reviewed jointly between the supplier and NSK Steering Systems America for completeness and to assure they reflect the current design level.
The Supplier should make these documents available for review at the feasibility and/ or kick-off meetings on the purchased material, product, or service.
Multiple (i.e., "prototype", "pre-launch", and "production") Control Plans may be required for NSK Steering Systems America’s review at appropriate stages of the APQP process.
Special Product and Process Characteristics: Significant and/ or Critical Characteristics will be identified on NSK Steering Systems America’s drawings with an "S", "SR", "F", or "HI". In some cases, other (usually customer specified) identifiers may be used for special characteristics ("sc", "cc", etc.). It is the responsibility of the Supplier to include, identify, and properly control these items on the Control Plan(s) and related documents. For coil steel see NOTE: Section 3.1, item 18.

S: Safety Characteristics that could affect safe vehicle operation.

SR: Safety Regulation Characteristics that could affect compliance with government standards.

F: Functional Characteristics that could affect performance requirements, fit/function, or ease of assembly either at NSSA or the NSSA customer.

HI: High Impact Characteristics that severely affect the operation of the process or subsequent operations. Non-conformances in these characteristics are related to improper manufacturing and/or assembly operations that may result in subsequent operations being skipped or performed incorrectly.

Gages/ Testing Equipment Requirements: It is the responsibility of the Supplier to provide details of all gages, testing equipment, and measurement techniques that will be used to evaluate components to NSSA. This includes, but is not limited to, drawings and details of special gages, holding fixtures, or CMM setups. Whenever practical, duplicate gauging or holding fixtures should be produced for use at NSSA. This will facilitate the coordination of measurement techniques between NSSA and the Supplier. Measurement Systems Analyses (MSAs) are required for all gauges used to measure special characteristics (i.e. S, SR, F and HI designated characteristics).
Customer Specific Requirements: Suppliers may be responsible for NSSA customer specific requirements and requests, ie. Honda MPR requirements and Feasibility requirements. In these cases, NSSA representatives will direct the supplier as to the intent and outputs mandated.

OTHER: The latest revision of the AIAG APQP standard is an extension to this document. It is to be followed for any procedure or part thereof not specifically addressed by this document.

SECTION 3.3 -PRODUCTION PART APPROVAL PROCESS (PPAP)

PURPOSE: To define the Production Part Approval Process (PPAP) requirements.

SCOPE: Applies to all Level 1 commodities (see Purchasing Section Commodity definitions). This includes all commodities new to NSK STEERING SYSTEMS AMERICA, Inc., as well as those affected by design, material, or process changes as described below.

EXPLANATION: Production part approval shall conform to all requirements as defined in the Automotive Industry Action Group’s (AIAG) Production Part Approval Process – PPAP manual. A level 3 submission shall be observed for all submissions unless otherwise noted on the Purchase Order or formally conveyed in writing. Customer required Substance of Concern information is required and must be submitted through IMDS. See Supplier Responsibilities: Item 4

Suppliers to NSSA are required to obtain production part approval (PPAP) prior to the first production shipment of any commodity in the following situations:

A new part or product (as defined by the AIAG PPAP standard, latest revision).
A new part number.
A part number revision change.
Any change that requires a revision of the control plan, flow chart or PFMEA.
Correction of a discrepancy on a previously submitted part.
Product modified by an engineering change to customer specifications, design records/ customer drawing, or materials.

Additionally, NSK STEERING SYSTEMS AMERICA, Inc. must be informed in writing of any of the following activities prior to their implementation. These activities will require PPAP approval prior to the shipment of production parts, unless otherwise indicated in writing by NSSA. Your NSSA Supplier Quality Assurance representative will inform you of the PPAP level required.

A material change that was not previously PPAP’d.
Production from new or modified tools (except consumable tooling), dies, molds, patterns, etc. including additional or replacement tooling.
Tooling changes affecting, but not changing, customer print dimensions/ characteristics (e.g., adding an automatic part feeder to a machine).
New customer-owned tools, dies, molds, patterns, etc. including additional or replacement tooling. This does not include consumable tooling.
Production following refurbishment or rearrangement of existing tooling or equipment.
Equipment change, refurbishment, relocation, rearrangement or repositioning if the change involves significant/ critical characteristics or results in a change to customer print dimensions/ characteristics.
Refurbishment of existing tooling; Internal PPAP only, unless the Control Plan is changed.
Movement of tooling between like equipment; Internal PPAP only, unless the Control Plan is changed.
Refurbishment of existing equipment; Internal PPAP only, unless the Control Plan is changed.
Replacement of existing equipment with like equipment; Internal PPAP only, unless the Control Plan is changed.
Equipment moves or repositioning within the same plant; Internal PPAP only, unless process flow and / or the Control Plan is changed. In such cases PPAP must be approved by NSSA.
Production following any change in process or methods of manufacture.
New equipment of different design or type for existing process.
Any change in heat treat (define heat treat) (e.g., sourcing, equipment, processing, sequencing, etc.).
Change in process, method of manufacture, Control Plan, or change to the print dimensions/ characteristics, including any change to the revision of any material or technical specification.
Remove or combining operation(s). If the Flow Chart requires revision to accurately portray this rearrangement, it should be submitted to NSSA under a Level II PPAP for information.
Each occurrence of, or permanent allowance for, salvage of parts that is not already formally defined and documented in the approved flow chart and control plan.
Each occurrence of, or permanent allowance for, reworking, re-sequencing, or reprocessing of a part involving customer significant/ critical characteristics that is not already formally defined and documented in the approved flow chart and control plan..
Change in appearance not designated by any customer specification (e.g., paint dots, etc.).
Add modify, or eliminate a machine monitor.
Change in packaging.
Change in inspection sample size or frequency, gauging method, or other customer approved Control Plan information. Production from tooling and equipment transferred to a different plant area or from an additional plant area.
Physical movement of tooling and / or equipment to a different building.
Having a process job step performed at a different building than done in a previously approved Part Submission Warrant (PSW).
Change of source for subcontracted parts, materials, or services (e.g., heat treating, plating, material melt source, etc.).
Product re-released after the tooling has been inactive from volume production for 12 months or more.
Following a customer request to suspend shipment due to a supplier quality concern.

In addition to the above circumstances, an annual review and re-PPAP is required on all commodities. A level 3 PPAP will be submitted, unless otherwise specified in writing by the NSSA Quality representative. At a minimum, a level 4 PPAP including complete dimensional layout, material certifications, and an updated Quality Key Contact Report will be required. The layout will include actual measurement results of all dimensions on the NSSA drawing. In the case of multiple workstations, fixtures, mold cavities, etc., a layout will be required from product produced on each one.

SUPPLIER RESPONSIBILITIES:

The Supplier is responsible for submitting a Part Submission Warrant (PSW) to the required level, with supporting PPAP documentation, for all new and existing Level 1 commodities as defined in the conditions in the "Explanations" section of this document. Periodic reviews of APQP status and progress (including, but not limited to documentation, tooling progress, design reviews, build schedules) may be required throughout the APQP process prior to actual PPAP submission. All documentation (progress reports, dimensional results, PPAP documentation packages, etc.) must be submitted directly to your NSSA Supplier Quality Assurance representative. DO NOT submit documentation by placing it in containers with parts.
All PPAP documentation is to be submitted in English.
The Supplier is responsible for obtaining the latest revision of the PPAP standard from the AIAG. The supplier is responsible for knowing this standard and applying it as part of the approval process for all commodities.
IMDS Submission: A copy of the print screen of the part number showing the “acceptable status” must be included with the PPAP submission as required by the end customer.
Dimensional Results: NSSA suppliers shall submit dimensional results in a format provided by NSSA unless an alternate format is agreed to in writing by NSSA's Quality Representative. This document will combine the AIAG requirements for Dimensional Results and Preliminary Process Capability Studies. A report on the control of special processes and a specific work instruction shall accompany the dimensional results when specified by the NSSA Quality Representative.
Control Plan: A copy of the latest revision of the Control Plan shall be submitted to NSSA as part of any initial or re-PPAP. NSSA also reserves the right to request specific work instructions or any other document related to the Control Plan. In addition to containing controls for all in-house processes, the control plan must also include verification of the characteristics contained in any pass-through components.
Process Capability Studies: Required Process Capability Studies shall be submitted for identified characteristics at or prior to PPAP submission. Results shall be submitted using NSSA’s Dimensional Results/ Process Capability Studies form or other suitable format. Studies must be based on a minimum of 25 subgroups containing at least 100 readings from consecutive parts of a significant production run (typically a minimum of 300 parts or 2 hours production, whichever is more stringent). An initial process study index value > 1.67 Ppk is required on required Special Characteristics. If required, ongoing capability must be maintained at > 1.33 Cpk throughout program life. In certain cases, a "Pp max." or "Pp min." may be acceptable, such as where tooling is targeted at one end of a tolerance range to allow for wear, or for a specified "min." or "max." tolerance. In addition to this requirement, capability studies may be requested on any other identified characteristic, either for PPAP or at anytime thereafter. Capability on all characteristics is expected throughout the life of the program. Refer to Section 3.1, item 18 for additional information.
Sample Stickers: Sample stickers shall be applied to each box/ container used to ship samples. Refer to section 6.2 for specific information.
Report on Special Process Controls: Reports on special processes may be required for operations including, but not limited to, heat treating, welding, painting, or plating. This requirement is only applicable upon specific request by NSK STEERING SYSTEMS AMERICA, Inc.
Quality Key Contact Report: The Supplier should supply an updated copy of this document at each component kick-off. Whenever supplier key contact responsibilities change, the supplier must submit a revised Quality Key Contact Report. Quality Key Contact Reports must include contact information outside of normal working hours to support NSSA's 24/7 operation. Quality Key Contact Reports must be updated with annual PPAPs.
Numbering Samples: All parts used in the process of dimensional evaluations shall be numbered in accordance to their recorded results and submitted to NSK STEERING SYSTEMS AMERICA, Inc.
Master Samples: In addition to master samples retained by the Supplier, the Supplier is responsible for supplying master samples to NSK STEERING SYSTEMS AMERICA, Inc. for retention at NSSA. The Supplier shall submit master samples for each position of a multiple cavity die, mold, tool or pattern, or production process unless otherwise specified by the customer. Master samples should be selected from the parts measured for the dimensional report at PPAP and numbered to correspond with the data submitted.
Functional Approval: When the design of a component is the responsibility of the Supplier, fit and function approval will be required. If the NSK STEERING SYSTEMS AMERICA, Inc. has design responsibility for the component, this requirement will be waived.
A Process-Based Audit and Process Sign-Off (PSO) may be required as a pre-condition to production part approval. A NSK STEERING SYSTEMS AMERICA, Inc. Quality Representative will be on-site at the Supplier’s location as required to observe a production run of a pre-determined quantity. In most cases, the parts from this run will also be used for PPAP submission. The requirement for a PSO will be determined by NSSA and will be communicated to the Supplier at or before part kickoff. The supplier is responsible for notifying the NSSA Quality Representative of the planned production run at least 3 weeks in advance of the scheduled run date. Also, the Supplier is responsible for submitting preliminary documentation and data to demonstrate readiness to do a production run. Additionally, a Process-Based Audit and PSO may be required at any time during the life of the program to assure maintenance of adequate process performance and controls.

OTHER: The AIAG PPAP standard, latest revision is an extension to this document. This Standard is to be followed for any procedure or part thereof not specifically addressed by this document.

SECTION 3.4 - LOT TRACEABILITY

PURPOSE: To define NSK Steering Systems America’s requirements for lot traceability.

SCOPE: Applies to all suppliers of Level 1 commodities (see Purchasing Section Commodity Definitions).

EXPLANATION: Lot traceability is required on all purchased components. Lot traceability is intended to assure good inventory control, proper implementation of part or process changes, and limited exposure in the event of discrepant product.

SUPPLIER RESPONSIBILITIES:

Lots cannot contain more than one material batch or heat number
A new lot number should be assigned for all significant process variations. Examples include, but are not limited to, material batches, tooling and equipment setups, and operator changes (if the process is highly dependent on operator skill).
The subcontractor must have a documented system(s) to trace product to a raw material heat lot and date of manufacture or processing.
The supplier must ensure that documented systems are in place at all sub-suppliers to trace product to the raw material lot and date of manufacture or processing.
Suppliers shall establish and maintain documented procedures for unique identification of product batches or lots.
Lot numbers must be traceable from raw material receipt through all stages of production by the supplier, including shipments to NSK Steering Systems America.
Only one lot should be shipped on a pallet. If multiple lots are shipped on a pallet, each pallet will be received as one lot at NSK Steering Systems America. If discrepant material is found, the supplier shall be responsible for any associated liabilities with the larger quantity of product resulting from the mixed lots on a pallet.
Only one part number should be shipped on a pallet.
If parts are bulk packed, mixed lots are not allowed in the bulk package.
All product should be shipped on a "first in/ first out" (FIFO) method.
For traceability at NSSA, the label shall include a 6 digit manufacturing date code (year-month-day). For example, product produced on April 9, 2003 will have the date code 030409. This date code must appear on both the label and the packing list. If this date code does not appear on the label, NSSA will charge the supplier for re-labeling. (The only exception to this policy is heat lot numbers.)

OTHER: NSK Steering Systems America, Inc. may perform periodic, random audits to verify suppliers' traceability of product.

SECTION 3.5 - DISCREPANT PRODUCT & CORRECTIVE ACTION

PURPOSE: To define NSK Steering Systems America’s expectations regarding:

· Supplier responsibility for assuring the quality of incoming product

· Supplier responsibility for the handling of discrepant product

SCOPE: Applies to all suppliers of Level 1 commodities (see Purchasing Section Commodity definitions).

EXPLANATION: NSK Steering Systems America expects its suppliers to assume responsibility for assuring the quality of components shipped. Parts are expected to be certifiable to NSK Steering Systems America standards (see General Quality Requirements, section 3.1 of this manual). The Supplier will assume responsibility for all nonconforming products.

Non-conformances (either verified, suspected, or potential) will be reported to the supplier via a Quality Problem Report (QPR). QPRs will be sent to the suppliers' quality contact via e-mail. Prompt response is expected. Generally an initial written response is expected within 24 hours. This written response must include the appropriate portions of the QPR form filled out and returned. In addition, if an 8D is required, a level 3 response is expected by the response date. (The required date of initial response will be found on the QPR form.)

SUPPLIER RESPONSIBILITIES:

The Supplier is responsible for supplying product which meets all specifications.
When non-conforming product is found, NSK Steering Systems America will generate a Quality Problem Report (QPR). In addition to a written response in the appropriate QPR fields, an 8D response may also be requested.
The Supplier is responsible for the sorting, scrap, or rework of all non-conforming material. When feasible, non-conforming product can be returned to the Supplier.
If discrepant product cannot be returned due to production requirements, the supplier will be requested to provide on-site assistance with sorting or rework. The Supplier is expected to provide this support within 24 hours of receiving the request. The Supplier may enlist the support of outside services for this activity. However, the Supplier must have a responsible employee on site at all times to supervise the sort or rework activity. Employees of outside services already supporting other activities for NSSA are not to be utilized by the supplier.
If NSK Steering Systems America is required to sort and/ or rework nonconforming product to maintain production requirements, the supplier will be charged a predetermined hourly rate. In addition, if the sort and/ or rework involves finished product, only NSK Steering Systems America representatives are authorized to conduct the sort and/ or rework operation. A debit will be issued for the expenses incurred.
If a supplier has repeated discrepancies that require sorting at NSK Steering Systems America, the supplier will be required to maintain a minimum level of certified inventory so discrepant product can be returned to the supplier’s facility for sorting.
In addition to sorting costs, the supplier may be liable for other costs associated with the handling and disposition of discrepant product. This may include, but is not limited to, engineering costs, manufacturing down-time, test lab costs, supervision costs, and administrative costs.
The Supplier may also be responsible for the cost of any customer related activities imposed on NSK Steering Systems America, if the root cause is found to be discrepant product from the Supplier. This includes, but is not limited to, sorts of finished product at NSK Steering Systems America’s customers, field actions, and/ or recalls.

SECTION 3.6 - QUALITY ASSESSMENTS

PURPOSE: To define NSK Steering Systems America requirements and expectations for on-site quality assessments

SCOPE: Applies to all suppliers of Level 1 commodities to NSK Steering Systems America (see Purchasing Section Commodity definitions).

EXPLANATION: NSK Steering Systems America requires all suppliers to implement a system that is compliant (Third Party certified) to ISO 9001:2000, with registration to TS 16949 preferred.

NSK Steering Systems America reserves the right to conduct quality assessments on all suppliers using NSK Steering Systems America’s Supplier Quality Assessment form. The purpose of this document is not to duplicate a TS-16949 audit (although it may cover some of the same elements), but is intended to identify a good fit between NSK Steering Systems America’s needs and the Supplier’s quality system and process controls.

NSK Steering Systems America Supplier Quality Assessments will be conducted:

· With all new suppliers before the award of any contracts

· Annually with selected suppliers. Selection will be based on quality performance and previous assessment results.

· As required as part of a corrective action resulting from a below-standard Supplier Performance Rating.

· As required by NSK Steering Systems America’s customers.

Typically, NSK Steering Systems America will conduct assessments only on suppliers that supply direct to NSK Steering Systems America. However, NSK Steering Systems America reserves the right to selectively conduct Supplier Quality Assessments on sub-suppliers.

Prior to a Supplier Quality Assessment, the Supplier will be contacted by a NSK Steering Systems America Quality Representative to confirm a schedule for the assessment. The NSK Steering Systems America Quality Representative will also forward a copy of the NSK Steering Systems America Supplier Assessment form to the supplier for review (and a self pre-assessment, if requested).

SUPPLIER RESPONSIBILITIES: The Supplier is responsible for developing and implementing an operating system that complies with ISO 9002: 2000 and/or TS-16949.

The Supplier is responsible for obtaining and being familiar with the ISO 9002: 2000 and/or TS-16949 and applicable AIAG documents. Upon receipt, the Supplier will also be responsible for becoming familiar with the NSK Steering Systems America Supplier Quality Assessment.

SECTION 3.7 – QUALITY KEY PERSON REPORT

PURPOSE: To define NSK Steering Systems America requirements and expectations for defining the Quality contact individuals.

SCOPE: Applies to all suppliers of Level 1 commodities to NSK Steering Systems America (see Purchasing Section Commodity definitions).

EXPLANATION: NSK Steering Systems America requires all suppliers to submit to their Supplier Quality representative a Quality Key person report.

SUPPLIER RESPONSIBILITIES: The supplier shall complete the Quality Key Person Report per the following instructions:

Issue Date: Enter the date the document was completed.
Subcontractor Name: Enter the supplier name.
Subcontractor Location: Enter the specific mailing address of the supplier.
Initial/ revised: "Initial" box is applicable for the initial submission of the document – usually part of the PPAP documentation package. "Revised" box is applicable for those situations when the subcontractor is submitting a revision to any of the document’s original contents.
Principle Person Responsible for Quality Assurance: The principle person responsible for Quality Assurance should be the one who assumes the obligations of the head of the supplier’s Quality Assurance department which, in turn, is responsible for assuring the quality of commodities and services supplied to NSK Steering Systems America, Inc. This individual should, preferably, be the supplier’s Quality Assurance Manager. All fields for contact information on the report form should be completed.
Secondary Person Responsible for Quality Assurance: The secondary person responsible for Quality Assurance should be the member of the supplier’s Quality Assurance department who assumes direct responsibility for assuring the quality of commodities and services supplied to NSK Steering Systems America, Inc. If the Principle Person (i.e., QA Manager) also assumes day to day responsibilities for product supplied to NSSA, supply the name of a "backup" contact to reach in the event the primary contact is not available. (In this case, indicate that the Primary Person Responsible is also the primary contact) All fields in this section should be completed.

The supplier is also responsible for notifying the Supplier Quality Assurance representative at NSK Steering Systems America, Inc. in the event of changes in contact information. .

SECTION 3.8 - INSPECTION DATA SUBMISSION

PURPOSE: To define the requirement for suppliers to record, maintain, and submit (upon request) inspection data to NSSA.

SCOPE: Applies to all suppliers of Level 1 commodities (see Purchasing Section Commodity definitions).

EXPLANATION: Subcontractors are responsible for the quality of the products and services supplied to NSSA. As evidence that supplied components meet required specifications, suppliers are required to record and retain data for each manufacturing lot of product shipped to NSK STEERING SYSTEMS AMERICA, Inc. Data from any given lot must be readily available and submitted to NSSA upon request.

SUPPLIER RESPONSIBILITIES:

1. The Supplier is responsible for recording data per NSSA's requirements. Data is to be retained at the suppliers’ location and available on request.

2. NSSA will supply inspection requirements to the Supplier. In the event that specific requirements have not been communicated, data must (at a minimum) be recorded and maintained per the supplier's control plan for the given part.

3. Data is to be recorded for each manufacturing lot as defined in section 3.4: Lot Traceability.

4. Data must be readily accessible. When data is requested by an NSSA representative, the Supplier must submit inspection data for the required lot within 2 hours of receipt of request. The data may be submitted in any easily interpreted format. (An acceptable form for recording and submitting data can be found in Appendix B (Forms)).

5. Whenever a data point is found to be out of specification, the supplier is to immediately notify his Supplier Quality Assurance (SQA) representative. Non-conforming product may only be accepted if a temporary deviation has been approved via NSSA's "Managing Change" procedure (ref. section 2.1 Managing Change).

6. Suppliers may be randomly audited at any time to verify their compliance with NSK STEERING SYSTEMS AMERICA, Inc's. requirements for data availability, submission, and lot traceability. Suppliers that fail this audit can be subject to corrective action.

SECTION 3.9 – SAFE LAUNCH PLAN REQUIREMENTS

PURPOSE: To define the requirement for suppliers to implement a quality plan to heighten awareness and inspection for initial start up product to contain and fix any concerns.

SCOPE: Applies to all suppliers of Level 1 commodities (see Purchasing Section Commodity definitions). All new parts supplied to NSSA will be required to follow a Safe Launch Plan, unless waived by your SQA representative.

EXPLANATION: The Safe Launch Plan is a temporary process implemented at the supplier during SOP to validate that the production process is capable of maintaining NSSA quality expectations. The Safe Launch activity is intended to "act as the customer", therefore any quality defects found would be considered abnormal and would require corrective action. Typically the default Safe Launch activity is an "offline" operation for a predetermined duration of time.

SUPPLIER RESPONSIBILITIES: The Safe Launch Plan requirements shall be agreed to and documented at or before time of kickoff. The supplier shall document the Safe Launch activity in the pre-launch control plan as a permanent process, or alternatively in the production control plan as a temporary process. The supplier is required to maintain internal data regarding rejects found in Safe Launch. Internal data shall be provided to NSSA SQA upon request.

The Safe Launch Plan shall include the following detail:

-Minimum duration. (number of parts, number of tool runs, number of production days, etc)

-Labeling requirements.

-Scope (characteristics to be checked, method of check, frequency of check, etc)

-Exit criteria.

Any questions regarding Safe Launch Plan requirements should be directed to your NSSA SQA representative.

SECTION 4 – LEAN MANUFACTURING

PURPOSE: To explain Lean Manufacturing requirements.

SCOPE: Applies to all NSK Steering Systems America suppliers and all components.

EXPLANATION: To define NSSA expectations in regard to Suppliers utilization of Lean Manufacturing principles.

SUPPLIER RESPONSIBILITIES: It is highly recommended that the supplier manufactures to a documented production system (procedures) which may include:

Value Stream Metrics: Utilizes lean metrics such as First Time through (FTT), Uptime %, Dock to Dock (DTD), and Value Added % to measure the effectiveness of the value stream and support lean behaviors. Metrics are understood by all members of the value stream.
Cell Metrics: Lean behavior is driven within each production cell by recording and communicating key information such as Safety, 5S audits, Changeover time, FTT, production status to customer TAKT, attendance, training status, etc.
Planning and Problem Solving: Definitive plans, utilizing a Plan  Do  Check  Act (PDCA) cycle, are in place to continuously remove waste from the value stream towards perfection. Clear problem solving techniques (i.e. 5 Why’s) are deployed to determine root cause(s) of problems and implement recurrence elimination with cell/value stream members involved in improving the performance of their areas. Management reviews the status of the value stream metrics and plans on a regular basis.
5S (Workplace Organization): A system to maintain workplace organization and cleanliness is in place that meets the intent of 5S. Audits are conducted regularly with the results being utilized by cell/value stream members to continuously improve.
Standardized Work: All personnel perform production, rework, and changeover activities by following a standardized and documented sequence. Wherever possible, visual aids such as photographs and sample parts should be used to clarify key points. Best known sequence should be determined by performing process studies to allow analysis of motion and removal of waste. Process studies, in turn, should be used to balance the workload amongst operators and establish standardized workflow within the cell to support continuous (one-piece) flow.
Quick Changeover: Supplier has provisions for quick change tooling wherever necessary and employs SMED (Single Minute Exchange of Die) or similar techniques to continuously reduce changeover time. Takes advantage of reduced changeover time to run smaller batches by changing over more often in support of lead time reduction.
Pull System: Inventory is controlled and production, as well as the movement of inventory, is triggered through a pull system using kanban or a similar system. Parts should be replenished through standardized repetitive cycles.

SECTION 5.1 - DELIVERY PERFORMANCE REPORT

PURPOSE: To explain the suppliers’ delivery performance responsibilities.

SCOPE: Applies to all shipments to NSK Steering Systems America Inc., including initial samples, prototype and mass production requirements.

EXPLANATION: To insure proper delivery performance all suppliers will be able to view their performance report card distributed by NSSA Purchasing Department at a minimum quarterly.

SUPPLIER RESPONSIBILITIES:

Supplier responsibilities include:

1. Delivery of on time shipments

2. Ship to schedules

3. Correct Barcode labeling per Section 6.3

4. ASN (Advanced Shipping Notice) for every shipment as required

5. Proper packaging as specified in Section 6.1

6. Expedites of past due product as specified in 7.3

7. Use of SupplyWeb

SECTION 5.2 - INVENTORY MANAGEMENT

PURPOSE: To explain the Inventory Management expectations at NSSA.

SCOPE: Applies to all subcontractors that perform business functions with NSK Steering Systems America Inc.

EXPLANATION: To ensure that there is a process for management of all in-process and finished goods at all levels of work-in-process (WIP), even if the WIP is stored at off-site locations. To assure that WIP is managed using visual management and that all materials are identified to support the product being produced. In addition, to ensure that the facility uses physical inventory counts.

SUPPLIER RESPONSIBILITIES:

There shall be systems in place that facilitate access to and management of all levels of inventory – finished goods, raw materials, and all levels of Work In Process (WIP). This should include inventory being stored/processed at off-site facilities.
The facility shall strive for an inventory level that supports visual management.
The facility shall have a process to ensure the appropriate identification of all unusable or damaged material (obsolescence, scrap, returns, rejections, etc.). Storage or holding areas shall be clearly marked and easily distinguishable.
The facility shall possess a current material flow diagram. Physical inventory flow shall be designed to support FIFO where applicable.
The facility shall have proper practices and controls in place (including cycle counting) to ensure accurate perpetual inventory numbers (by location). The long-term goal should be to eliminate the requirement for physical counting of inventories.
The facility shall have and use designated storage locations for all material.
The facility shall have a process to ensure physical inventory counts, if performed, are accurately reflected in inventory records.
The facility shall have a process that ensures Bill of Material (BOM) records are maintained and accurate.
Where assigned inventory locations exist, they shall be accurately identified with labels that are easy to locate, understand and update.
The facility shall have one integrated system encompassing both perpetual inventory and associated financial functions (i.e., "one set of books") to ensure that inventory transactions and balances are accounted for properly.
The facility should have a process to continually evaluate (and adjust if necessary) inventory buffers based on demand variability, desired customer service levels, and process capabilities.
The facility shall have a process to control Maintenance, Repair and Operating (MRO) inventory.
The facility shall have a process in place to coordinate "balanced out" inventories (e.g. those affected by engineering changes and programs that are being phased out) with both supplier and customer.
The facility shall have a process to identify and route defective/obsolete material to either a rework or scrap location in a timely manner.
The facility shall have a process that ensures defective/obsolete material is segregated, and disposed of properly (e.g. reworked or scrapped) in a timely manner.
The facility shall have a process to safeguard environmentally sensitive, easily damaged and/or high theft material.

SECTION 5.3 – OBSOLESCENSE MANAGEMENT

PURPOSE: To control and monitor the build out of component parts from our Domestic and over seas suppliers.

SCOPE: To prevent obsolescence at NSK Steering Systems America at our suppliers and to ensure part Supply is adequate to meet Customer needs.

EXPLANATION: To ensure NSK Steering Systems America and their supply base keeps obsolescence at a minimum while meeting customer needs.

SUPPLIER RESPONSIBILITIES: (A) The supplier will receive a build out part verification list four months prior to the end of the program. Review the list of your build out parts and verify it matches your understanding of the model build out parts. Any changes, additions or deletions should be noted on the form. Circle any build out parts that can be returned or sold back to you. Sign and return the form (fax OK) to your Production Control Specialist even if there are no changes. (B) It is the suppliers’ responsibility to protect NSSA’s production schedule by maintaining your production capability for all build out parts throughout the build out. Preliminary forecast data (SupplyWeb generated releases) will continue to be sent throughout the build out period (via SupplyWeb). These dates and quantities refer to planned NSSA usage, not planned shipping or order requirements. Supply Web releases do not consider on hand inventory, in-transit material, and on order material. Do not use Supply Web forecast volumes for ordering raw material or level two components for build out parts during the build out period.

OTHER:1. The first left to ship requirement will be sent three months prior to the end of the program.

2. The second left to ship requirement will be sent two months prior to the end of the program. NSSA becomes committed from the second left to ship requirement. Additionally, NSSA will fax you updated build out yet-to-order requirements the Monday following each build out inventory or after any major customer changes so you can monitor your materials inventory.

3. The third and final left to ship requirement will be sent one month prior to the end of the program.

4. In our parts order control countdown process, we intend to inventory all build out parts prior to sending each left to ship requirement. Please arrange to conduct your own inventories at the same time so that you can accurately utilize NSSA’s left to ship requirements in your material planning process.

5. NSSA will inform you of any supplemental requirements following the second and subsequent inventories. Supplemental requirements should be limited to scrap replacement, inventory miscalculations or customer changes. In order for NSSA to have a successful build out, effective and timely communication is critical. NSSA will fax or email left to ship requirements to you following each build out inventory. Please review this information in detail and notify your Production Control Specialist if you have any questions, concerns, or problems.

SECTION 5.4 - RAMP-UP SCHEDULE

PURPOSE: To insure proper start up of all new programs

SCOPE: To all Production suppliers of new programs

EXPLANATION: NSSA will fill out timing sheets for all new programs and update when changes are made. “Start up notification sheets” will be sent to all suppliers 6 months before SOP. PC Specialists at NSSA will assure that suppliers sign these sheets and send them back. A start up folder will be kept for all new programs.

SUPPLIER RESPONSIBILITIES: Sign all sheets and return them in a timely manner showing acceptance of the ramp up numbers. Any issues with the ramp up schedule need to be conveyed ASAP.

SECTION 6.1 - MATERIAL HANDLING, PACKAGING, LABELING

PRESERVATION AND DELIVERY

PURPOSE: To outline the supplier’s packaging, labeling, preservation and delivery/shipping requirements to NSK Steering Systems America.

SCOPE: Applies to all parts shipped to NSSA including mass production parts, initial samples, process change parts, engineering samples, etc.

EXPLANATION: To ensure part quality, the supplier shall establish a system to ensure that all parts shipped to NSSA meet specified packaging, labeling, preservation and delivery requirements established by NSSA’s Purchasing and Production Control Department’s.

The supplier should contact the NSK Steering Systems America Purchasing or Production Control Department regarding any issues or questions related to the contents of this section.

SUPPLIER RESPONSIBILITIES: Packaging

1. The supplier shall establish and maintain a procedure to assure that the NSSA packaging requirements are met. The supplier shall maintain documentation of all NSK Steering Systems America packaging specification requirements. This documentation shall be updated as appropriate. The packaging specification records shall also contain packaging acceptance/approval by the NSSA Purchasing Department.

2. The supplier shall develop packaging and dunnage which ensures that all parts are received free of damage. NSSA may assist with the initial packaging design and development but is not liable for any nonconformance of the final package.

3. Packaging of all shipped materials must be robust enough to assure the proper condition and quality of parts therein upon delivery receipt to NSSA and 30 days past receipt. Parts must arrive at NSSA without damage, rust/corrosion, or contamination.

4. The supplier shall complete and return the "Packaging and Shipping Data Form" submit a quotation prior to final packaging approval. Any subsequent changes will require the resubmission of the "Packaging and Shipping Data Form."

5. The supplier shall establish a designated contact to address any packaging issues as well as a shipping contact to address any transportation issues. These contacts must be specified on the Quotation Form.

6. All corrugated containers and palletized loads must be stackable unless part configuration and/or weight requirements do not permit this and prior written approval is received from NSK Steering Systems America. The supplier shall receive NSK Steering Systems America Production Control approval for temporary use of packaging which does not meet requirements.

7. For non-conforming packaging, the supplier shall have a documented system for resolving customer problems. This plan shall establish a procedure for timely review of and response to packaging problems by appropriate supplier personnel.

8. If non-conforming packaging is discovered at the supplier or NSSA, the supplier shall follow all NSSA Purchasing or Production Control instructions, including:

a. Problem notification format and timing.

b. Countermeasure response format, timing and implementation.

c. Special handling or labeling.

d. Sort and rework at NSK Steering Systems America.

Note: Packaging related sort and rework activity, including the use of temporary service workers shall be coordinated with NSK Steering Systems America personnel.

1. The supplier shall establish a system and implement a procedure to audit the part count per container. The audits shall be conducted on a random basis by an individual other than the packer. Documentation of the audit process shall be maintained.

2. The supplier shall have facilities adequate to meet packaging requirements. These facilities shall be:

· Well lit

· Adequately maintained

· Adequate for the goods being packaged. No packaging will be left outside.

3. The supplier shall ensure that any manually handled packages do not exceed a 40 lb. weight limit.

4. The supplier shall ensure that only one part number is packed per container.

5. The supplier shall keep on a separate pallet and properly label all in-process parts, deviated parts, change-in-process parts, trial parts, design change levels and special order parts.

Returnable Packaging Wherever feasible and practical, the supplier shall make every effort to use returnable packaging for all parts shipped to NSSA. Returnable containers include modular packaging such as plastic totes, pallet boxes, plastic pallets and special containers such as racks, carts, vacuum formed tray packs and sleeve packs.

The selection of the appropriate returnable containers used for each part will be determined by NSSA and the supplier, considering the following:

a) safety f) total gross weight requirements

b) quality of the part g) material handling requirements

c) part configuration h) daily production rates

d) dunnage requirement i) transportation

e) supplier location j) stacking/nesting capabilities

When new parts or models are introduced, or new packaging is proposed, the supplier shall complete the "Packaging and Shipping Data Form" and "Packaging Proposal Quotation Worksheet" for each affected part number.
After approval by NSSA, the supplier shall conduct a test shipment to NSSA using a trial container with scheduled trial parts. All test shipments must be clearly marked using the NSSA "Trial Packaging" label. The supplier shall notify Material Control prior to any test shipments. The review process must be repeated until final NSSA approval is made.
If using returnable containers, the supplier shall establish a system for maintenance that includes a) cleaning, b) procedures for regular inspection, and c) documentation for repairs or modifications.
The supplier shall maintain a supply (minimum of one day inventory requirement) of expendable packaging for shipments in case of delays in returning containers or shortages.
Suppliers who need to ship parts in returnable containers must receive authorization from Material or Production Control at NSSA prior to shipping in expendable packaging. Authorization will only be given in an emergency situation.

Pallet Requirements

Production parts shall be palletized to allow handling by industrial fork lift trucks.
Pallets shall not be smaller than the length and width of the load. No product may overhang.
The gross weight of any palletized unit shall not exceed 1,500 lbs.
All pallets shall allow 4-way entry with minimum openings 2 3/4in. ht. by 9in. w.
Pallet dimensions shall conform to the Automotive Industry Action Group (A.I.A.G.) standard footprints 48 in. x 45 in. The overall height of any palletized unit, including the pallet, must not exceed 46 in.
All packaging must be secured to the pallet by the use of banding (plastic only) and/or stretch wrapping to prevent the load from shifting.

Labeling

Part identification labels used on returnable containers or expendable packaging must conform to the NSSA Part Identification Label Standard. This label also conforms to the Automotive Industry Action Group (A.I.A.G.) B-3 standards.
The supplier shall provide part number, quantity, revision level, serial number and supplier name on all labels. These are mandatory fields and must be included in both human readable and bar-code form.
Part number and description must match the current monthly purchase order and/or material release. This labeling must be consistent with the information on the "Packaging and Shipping Data Form." The supplier shall establish and implement an audit procedure to verify correct parts to labels.
Part identification labels are to be applied to 2 adjacent sides of expendable containers. Any special labels are to be applied directly below part identification labels. All labels must be clearly visible after containers have been palletized for shipping.
The supplier shall have a plan to assure that no problem reports have been received for labeling errors for which the supplier is responsible.
If any old labels are still on packaging, the supplier shall remove labels prior to shipping new parts to NSSA.

Preservation

The supplier shall establish and maintain a material handling system that eliminates the potential for damage throughout all operations and transportation to NSK Steering Systems America.
The supplier shall systematically review material handling processes and equipment to prevent damage to in-process parts and finished goods. At a minimum, the following items shall be reviewed:

· Appropriateness of transfer mechanisms and containers for the commodity produced.

· Parts damaged through in-house material handling.

· Process to address or resolve damage caused through material handling.

Shipping

The supplier is expected to ship all materials in conformance with NSK Steering Systems America requirements and transportation routings. The supplier shall maintain a file that includes documentation demonstrating that specified routings and shipping methods are being followed. The supplier shall have facilities adequate for shipping and receiving operations. At a minimum, the supplier shall assure that:

· The number of doors/bays is adequate for shipping/receiving schedules.

· Dock areas are will lit, are adequately maintained and contain adequate space for shipping/receiving activities.

The supplier shall be responsible for checking all products being shipped to NSSA to ensure accuracy of part numbers and quantities being shipped.

The supplier shall prepare a Supply Web generated packing list to include all parts in a shipment and must accompany every shipment being made.

SECTION 6.2 – SAMPLE LABELING

PURPOSE: The purpose of this section is to establish a consistent means of identifying sample submissions or the first lot of mass production product.

SCOPE: Applies to all suppliers of Level 1 commodities upon submission of sample parts or first lot of mass production product.

EXPLANATION: Each individual box or container shipped to NSSA as a sample submission or the first lot of mass production must be properly identified. The means of identifying these boxes or containers should be the green "SAMPLE" label (reproduced below in black and white for clarity).

SUPPLIER RESPONSIBILITIES: The supplier shall complete the SAMPLE label as follows:

Part Number: The supplier should input the full part number, program, and to whose attention the samples are sent.
Rev: The supplier should input the revision level that the product was manufactured to.
P.O. Number: The supplier should input NSK Steering Systems America, Inc.’s purchase order number.
Trial Type: The supplier should note the sample level of the product being submitted (e.g., "Engineering Samples", "Trial 1", Trial 2", "Trial 3", etc.). on the "TRIAL" line provided.
PPAP Samples: If samples are for PPAP submission, indicate this in the space provided.

Example of SAMPLE label

SECTION 6.3 - BARCODE, LABEL, PACK & SHIP REQUIREMENTS

PURPOSE: The purpose of this section is to establish a consistent means of identifying requirements during the final pack and shipping of the product to NSSA.

SCOPE: Applies to all suppliers of Level 1 commodities upon shipment of production parts

EXPLANATION: Each individual box or container shipped to NSSA must be properly identified. The means of identifying these boxes or containers should be a barcode label that matches the parts in the container.

SUPPLIER RESPONSIBILITIES: Subcontractors are required to provide a barcode label and master label in accordance with AIAG B-3 Shipping / Parts Identification Label standards on all products shipped. The barcode format should include the following:

Part Number
Revision Level
Quantity
Serial Number (Optional)
Supplier Number – Provided by NSK Steering Systems America, Inc and identified on your purchase order
Supplier Name (on bottom of label)
Purchase Order Number (Optional)
Lot Code. For traceability at NSSA, a lot code in a standard 6 digit format (year-month-day), corresponding to date of manufacture, must be provided. See Section 3.4, Lot Traceability, for further explanation.
Description, must match the Purchase Order

Figure one shows an example of an acceptable Barcode Label.

Figure 1

Placement of Barcode Labels: Barcode Labels are to be applied to two adjacent sides of all containers. Any special labels should be applied directly below the barcode label. Bar code labels must be clearly visible after containers have been palletized for shipment.

Master Barcode Label Requirements: A master label is required with each shipment, needs to contain the Supplier Number and the ASN Number. Please see figure 2 for an example.

Figure 2.

Pack List: NSSA Pack List generated at the time of ASN Entry IS REQUIRED to be printed, and must accompany every shipment. A supplier generated pack slip may accompany the shipment, this does not replace the need for the SupplyWeb generated pack slip.

Advance Shipping Notice (ASN) Number: The ASN Number is generated at the time of ASN Entry at supplyweb.nskssa.com. The ASN should be entered as close to the time of shipment as possible. Please review the supplier manual available on supplyweb.nskssa.com for ASN from Release functionality.

SECTION 7.1 - PERFORMANCE EXPECTATIONS

PURPOSE: To explain the performance expectations required by NSSA.

SCOPE: Applies to all transportation carriers that deliver or pick-up freight for NSSA.

EXPLANATION: To ensure that all freight is picked-up and delivered at NSSA in a timely manner. All transportation companies that work with or for NSK Steering Systems America should strive to deliver a high level of service and quality.

SUPPLIER RESPONSIBILITIES: To ship the right part, the right quantity at the right time.

OTHER: A performance evaluation of freight carriers is conducted annually. The criteria for performance evaluation is outlined in 7.2.

SECTION 7.2 - PERFORMANCE RESULTS

PURPOSE: To explain the performance results of a particular trucking company.

SCOPE: Applies to any and all transportation companies that deliver or pick-up at NSSA.

EXPLANATION: This is a system to track all incoming production parts. NSSA will keep track and report on the following categories.

A: Total shipments handled

B: Total late shipments

C: Total damaged shipments

D: Total discrepant bills

NSSA wants all carriers to have a 99% delivery rating. Any score below a 99% may be required to give a written explanation with corrective action plan. NSSA will have the option to keep, put the carrier on probation, or replace at anytime as is deemed necessary.

SUPPLIER RESPONSIBILITIES: The supplier is expected to have all material packaged properly and ready at the specified date and time.

OTHER: Making sure material is ready when a carrier picks up will be a big factor in delivery timeliness.

SECTION 7.3 - PREMIUM FREIGHT

PURPOSE: To explain the supplier’s responsibilities when there is a need for premium freight.

SCOPE: Applies to any shipment that requires premium freight.

EXPLANATION: To ensure all associated cost of premium freight is incurred by the responsible party and also ensures the freight arrives on the specified time.

SUPPLIER RESPONSIBILITIES: All materials must be shipped in accordance to NSSA requirements and transportation routings. If conformance cannot be achieved, the supplier is responsible for transportation and cost of freight.

OTHER: If a supplier can not meet a NSK Steering Systems America deadline they must notify their Production Control representative immediately.

SECTION 7.4 - ROUTING CHOICES

PURPOSE: To explain the routing choices suppliers have when they are responsible for freight.

SCOPE: Applies to all suppliers who work with or for NSSA.

EXPLANATION: To ensure that all freight is booked with a quality carrier that NSSA has a superior working relationship with. Deviation from routing indicated below without authorization will result in excess freight charges debited to your company. Shipments are to be made in accordance with the regular method of conveyance indicated below. Exceptions must be authorized.

SUPPLIER RESPONSIBILITIES:

Please contact your NSSA Production Control Specialist or Logistics coordinator for specific shipping instructions.

OTHER: Please be advised that failure to comply with these requirements will adversely affect your supplier performance rating with NSSA.

SECTION 8.1 - ENVIRONMENTAL REQUIREMENTS

PURPOSE: To provide NSSA suppliers with requirements relative to adherence of environmental standards to eliminate environmental impacts and enhance Team Member safety.

SCOPE: This requirement applies to all NSSA suppliers, contractors and their representatives.

EXPLANATION:

MSDS: For suppliers of actual or potential hazardous substances, a Material Safety Data Sheet (MSDS) must be provided to the NSSA Purchasing department prior to shipment of materials to NSSA. Upon receipt of the MSDS, NSSA Health Services or Facilities department will review for health and environmental hazards associated with the product. Approval or denial of use will be promptly reported to the NSSA Purchasing department via use of a New Chemical Approval Form, DDS-FRM-NEW CHEMICAL APPROVAL FORM-REV.B.DOC.

IMDS: Suppliers are required to notify their Buyer when submission has been made in the IMDS system and advise the ID version number from the IMDS System. All suppliers are required to submit a copy of the approved IMDS submission noting acceptance status with their PPAP submission. See Section 3.3 – Production Part Approval Process (PPAP).

PACKAGING MATERIALS: Packaging used should be returnable to the supplier for continuous re-use. Plastic recyclable materials are preferred, to accommodate end of life reclamation. Filler materials shall be consistent with recyclables. In the event of the use of wooden pallets, or containers, coniferous woods are not acceptable unless compliant with European Union Measures of kiln-dried or heat-treated. Fumigated woods are also acceptable providing the appropriate stamp from a certified authority is visible.

WASTE FROM SERVICES PERFORMED: Any wastes generated as a result of actions performed by Contractors, Sub-Contractors and Supplier Representatives, shall be controlled so as not to impact the environment inside the building as well as the natural environment. Appropriate containers must be utilized and proper labeling attached, consistent with Local, State and Federal regulations.

BANNED AND RESTRICTED SUBSTANCES: See appendix A for reference location for the NSK corporate chart of hazardous materials. Contact your buyer with any questions

SUPPLIER RESPONSIBILITIES: Contractors, Sub-Contractors and Supplier Representatives must be aware of NSK Steering Systems America’s commitment to environmental excellence.

SECTION 9 - PROTOTYPE REQUIREMENTS

PURPOSE: To define specific requirements for suppliers who are providing prototype components, assemblies, or services to NSSA.

SCOPE: Applies to all suppliers of prototype commodities, assemblies, or services.

EXPLANATION: Subcontractors who supply prototype commodities, assemblies, and/or services to NSK STEERING SYSTEMS AMERICA, Inc. are responsible for the delivery and quality of the products and services they provide. The details outlined below are provided to assure compliance with this requirement.

SUPPLIER RESPONSIBILITIES:

1. All characteristics must conform to drawings, engineering specifications, and any other specified requirements unless otherwise agreed to in writing.

2. Specific inspection requirements will be communicated by an NSSA Supplier Quality Assurance (SQA) representative to the supplier at the time the Purchase Order is placed. Generally, complete layouts will be required on a selected sampling of parts, with data on selected characteristics for all parts being supplied.

3. Inspection data is to be sent to NSSA prior to shipment of the parts. A form for inspection data submission can be found in Appendix B (Forms) of this manual. Use of this form is optional, but encouraged. E-mail inspection data, recorded on this form, to your SQA contact and any other contact specified on the Purchase Order.

4. If a non-conformance is found, the supplier is to immediately contact the NSSA SQA representative. Non-conforming product can only be shipped on receipt of written authorization.

5. Parts and their corresponding inspection data are to be identified with the manufacturing date in NSSA 6-digit (year-month-day) date code (reference Supplier Manual section 3.4: Lot Traceability, item 11).

6. When inspection data is e-mailed, the file name should contain the part number and date code. For example, data for part number 1234N5678 manufactured on April 1, 2004 should be sent under file name 1234N5678-040401.xls.

7. All parts which are inspected and for which data is submitted are to be numbered. Numbers are to correspond to the line number on the inspection sheet.

8. Measurement methods are to be identified on the inspection sheet in the appropriate heading field at the top of each column.

9. Parts are to be labeled according to NSSA standards for sample labeling as found in section 6.2: Sample Labeling.

OTHER: If there are any questions regarding prototype manufacturing, delivery, or quality requirements, please contact the Supplier Quality Assurance representative or Buyer identified on the Purchase Order.

APPENDIX A

The attached hyperlink will take you to the NSK corporate Restricted and Banned substance list. Please right click and select “Open Hyperlink”

Restricted Material List Link

APPENDIX B

FORMS:

Supplier Manual Section Reference	Report Name	Location
2.1	Change Request Record	Click here
3.2	Honda MPR Checklists	Click here
3.7	Quality Key Person Report	Click here
5.4	Start up notification sheet	Click here
6.1	Packaging and Shipping Data Form	Click here
8.1	New Chemical Approval Form	Click here

APPENDIX C-1

830 (Planning Schedule With Release Capacity)

This BRAIN North America, Inc. standard provides the format and establishes the data contents of the 830 (Planning Schedule with Release Capability Transaction Set). The planning schedule with release capability transaction set provides for customary and established business practice relative to the transfer of forecasting/material release information between organizations.

Seg. ID	Name	Req. Des.	Max. Use	Loop Repeat
Data Segment Sequence for the Heading Area
ST	Transaction Set Header	M	1
BFR	Beg Seq for Planning Schedule	M	1
N1	Name	M	1	N1/200
Data Segment Sequence for the Detail Area
LIN	Item Identification	M	1	LIN/10000
UIT	Unit Detail	M	1
REF	Reference Numbers	M	2
PER	Admin Communications Contact	O	3
ATH	Resource Authorization	M	20
N1	Name	O	1
N3	Address Information	O	2
N4	Geographic Location	O	1
FST	Forecast Schedule	M	260
SHP	Shipped/Received Information	M	1	SHP/25
REF	Reference Numbers	O	5	SHP
Data Segment Sequence for the Summary Area
CTT	Transaction Totals	M	1
SE	Transaction Set Trailer	M	1
Sample 830

APPENDIX C-2

856 (Ship Notice/manifest)

This BRAIN North America, Inc. standard provides the format and establishes the data contents of the 856 (Ship Notice/Manifest Transaction Set). An 856 comprises a shipment's contents and other information relating to shipment, packaging, marking, and carrier data, as well as the packing configuration of the shipped goods. It enables the sender to describe a shipment's contents and configuration in varying levels of detail, while providing an ordered flexibility of data conveyed. Note: *Only two N1 segments are used by RPS. One is used to load the ship-from data and the other to load the ship-to data. Both of these are required.

Appendix D

NSK STEERING SYSTEMS AMERICA, INC. TERMS AND CONDITIONS OF PURCHASE

1. DEFINITIONS. “PO” means this document, whether a purchase order, confirmation, Inquiry or RFP or any contract into which this document is attached or has been incorporated by reference. “Goods” means the goods, materials, parts, assemblies, drawings, documents, or services covered by this PO. “Affiliate” means, with respect to a party, any entity that controls, is controlled by or is under common control with such party. The terms “production” and “delivery” as used herein shall apply equally to goods and services.

2. THE CONTRACT. a. Additional Documents. All specifications, drawings, data, samples, descriptions and documents expressly referred to in this PO are incorporated herein by reference. If such reference is to a portion only of such specifications, drawings, data, samples, descriptions or documents, then only the portions referenced shall be incorporated herein.

b. Complete Agreement; Amendment. This PO contains the final and entire contract between Purchaser and Seller with respect to the Goods and no other agreements or understandings purporting to amend this PO shall be binding upon Purchaser unless agreed by Purchaser in writing subsequent to the date of this PO. Seller performance shall constitute acceptance of all Purchaser’s terms and conditions. Acceptance of this PO must be made on the exact terms as they appear in this PO. Purchaser expressly rejects any amended or additional terms proposed by Seller in its acceptance of this PO. In case of conflict between this PO and any document not executed by Purchaser subsequent to this PO, this PO prevails. Purchaser may use Seller’s invoice to confirm pricing and payment information but Seller agrees that no other terms and condi-tions contained therein apply to the transaction involving the Goods. If any proposed change to this PO increases or decreases the cost or time to produce the Goods, Seller shall immediately so notify Purchaser.

c. Non-Assignment. This PO binds and inures to the benefit of Purchaser, Seller and their respective successors and permitted assigns. Seller may not assign any interest in or delegate any obligation here-under without the express prior written consent of Purchaser. Purchaser shall be entitled to assert against any permitted assignee of Seller all rights, claims and defenses of any type (including, but not limited to, rights of setoff, recoupment and counterclaim) that Purchaser has against Seller whenever acquired.

d. Law. This PO is governed by the laws of Michigan without regard to its choice of law provisions. The U.N. Convention on Contracts for the International Sales of Goods does not apply to this PO.

3. PRICE TERMS. a. Discounts. All cash discount periods shall be computed from the date Purchaser receives a correct invoice or Goods, whichever is later. Cash discounts will be based on full amount of invoice less freight charges and taxes separately stated on invoice.

b. Extra Charges, Invoices and Payment. No extra charges of any kind will be allowed. Price is to cover net weight. No invoices shall be issued nor payment made prior to delivery. All state and federal excise, sales and use taxes shall be stated separately on the invoices. All payments are subject to adjustment by Purchaser for storage or rejection. No adjustments will be made for cost increases, including increases in Seller's cost for labor, material, freight or overhead for Goods sold hereunder.

c. Transportation Charges. Any transportation charges for which Seller is entitled to reimbursement shall be noted separately on the invoice with the receipted freight bill attached. No parcel post insurance charges will be allowed. Any excess charges resulting from use of unauthorized transportation will be charged to Seller. No Goods valued in excess of $500 are to be shipped via Parcel Post. Seller shall not declare any value on goods shipped via United Parcel Service, Air express, Air Freight or Parcel Post. Seller shall release rail or truck shipment at the lowest valuation permitted in governing tariff or classification.

d. Reduction in Rates, Duties or Taxes. The difference in cost resulting from any reduction in applicable freight rates, customs duties, import taxes, excise taxes, and/or sales taxes from those in force on the date of this PO, whether separately stated on the face of the order or not, shall be paid or credited to Purchaser.

e. Duty Drawback Rights. This PO includes all related customs duty drawback rights that are transferable from Seller to Purchaser. Seller shall inform Purchaser of the existence of any such rights and supply all documents requested by Purchaser to help it obtain any such drawback.

4. DELIVERY. a. Transportation. Goods shall be properly packed, marked and loaded as required by Purchaser and the transporting carrier, and shipped in a manner that incurs the lowest transport rates. Seller shall route shipments as directed by Purchaser and shall offer all shipments to Purchaser’s Transportation Operations unless otherwise instructed. Seller shall reimburse Purchaser for all expenses or losses incurred due to improper packing, marking, loading, shipping or routing.

b. Risk of Loss. Unless otherwise specifically provided by this PO, the Goods shall be delivered on an F.O.B. destination basis to Purchaser. Delivery shall not be complete until Goods are actually delivered to and accepted by Purchaser, notwithstanding any agreement to pay freight, express, parcel post or other transportation charges. Seller retains risk of loss in transit, except that, if shipment is by Purchaser’s vehi-cle, risk of loss passes to Purchaser upon completion of loading.

c. Quantity; Shipping Schedules. Seller shall not produce any Goods, procure any materials required in their production, or ship any Goods to Purchaser except as authorized in writing by Purchaser or as necessary to meet specific delivery dates provided in this PO. Purchaser shall have no responsibility for Goods for which such writing and delivery dates have not been provided. Seller shall make up any shortage of Goods immediately upon receipt of Purchaser's written notice and all additional costs thus incurred (e.g., insurance, freight, duties and other expenses of the additional shipment of Goods) shall be borne by Seller. Purchaser may from time to time change shipping schedules specified in this PO or contained in other written instructions or direct temporary suspension of such scheduled shipments without cost to Purchaser.

d. Delays. TIMELY DELIVERY OF GOODS IS OF THE ESSENCE. Seller shall deliver the Goods according to the schedule(s) provided in this PO or other written instruction from Purchaser. Seller shall notify Purchaser 30 days before shipment regarding delivery status. In the event of any delay or threat of delay in the production or delivery of the Goods, Seller shall immediately notify Purchaser and provide all relevant information regarding such delay or threatened delay. Seller is liable for all damages resulting from delayed delivery of Goods and/or from failure to deliver Goods free from defect (including, without limitation, direct or indirect costs or losses, consequential damages and opportunity costs related to production line shut downs, missed customer shipments and visits to customers to deal with suspect Goods), unless, in the case of delay, the cause is beyond Seller’s reasonable control and Seller notifies Purchaser as aforesaid.

5. INSPECTION AND ACCEPTANCE; RETURNS. a. Goods may be inspected or tested by Purchaser and its customers at all times (even prior to acceptance) and everywhere (even Seller’s facility).

b. Acceptance or rejection of the Goods shall be made as promptly as practicable after delivery, except as otherwise provided in this PO; however, failure to inspect and accept or reject Goods shall not relieve Seller of its obligations under this PO nor impose liability on Purchaser.

c. Payment shall not constitute final acceptance. Defective and excess Goods may be returned at full invoice price at Seller’s risk and expense and at no cost to Purchaser. Seller shall pay all packing, handling, sorting, loading and transport expenses related to such returns. Seller shall not replace defective Goods unless specified in writing by Purchaser. Purchaser may reject and return any portion of any shipment of Goods under this PO that may be defective or fail to comply with applicable specifications, drawings, data, samples, descriptions, documents or PO terms without invalidating the remainder of the order.

6. TERMINATION. a. This PO may be terminated in whole or in part without cause by Purchaser upon notice to Seller. Upon receipt of such notice, unless otherwise directed, Seller shall immediately:

1. terminate all production of Goods terminated by such notice and, in the case of a partial termination, continue to perform the portion of this PO not terminated by such notice;

2. terminate all orders and subcontracts relating to production of Goods terminated by such notice;

3. settle all claims arising out of such terminated orders and subcontracts;

4. transfer title and deliver to Purchaser (I) all Goods completed as of the effective date of termination that conform to the requirements of this PO and do not exceed the amount authorized for production by Purchaser, and (II) all reasonable quantities (but not in excess of amounts authorized by Purchaser) of Goods in process and materials produced or acquired specifically for the production of the Goods, pro-vided such items are of a type and quality suitable to produce Goods for Purchaser or its customers;

5. take all action necessary to protect property in which Purchaser has or may acquire an interest;

6. submit to Purchaser no later than 3 months after the effective date of termination (1 month in the case of partial termination) its termination claim, which shall reasonably calculate and separately list the fol-lowing amounts without duplication:

A. PO price for all Goods produced and delivered in accordance with this PO;

B. actual costs incurred by Seller in accordance with this PO to the extent reasonable in amount and properly allocable to the terminated portion of this PO, including the actual cost of Goods in process and materials delivered to Purchaser per sub-paragraph 6(a)(4) above and actual cost of discharging liabilities so allocable; and

C. Seller’s reasonable costs to protect property in which Purchaser has or may have interest.

If Seller fails to submit its termination claim within the applicable period, notwithstanding anything herein to the contrary Purchaser may determine the amount, if any, due to Seller with respect to the termination on the basis of information in its possession and such determination shall be final.

b. Within a reasonable time after receipt of Seller’s termination claim, Purchaser shall pay amounts set forth therein to the extent Purchaser reasonably agrees such claim accurately reflects amounts owed. Payments under this clause, exclusive of payments made under clause 6(a)(6)(C), shall not exceed the aggregate price specified in this PO, less payments otherwise made or to be made.

c. This PO may be terminated by Purchaser for cause, in whole or in part, upon written notice to Seller. The following circumstances justify termination “for cause”: failure by Seller to make any delivery of Goods in accordance with the agreed delivery schedule(s); failure to comply with any other instructions, terms, condi-tions or warranties applicable to the PO; commencement by or against Seller of any proceedings in bank-ruptcy or state insolvency proceedings; appointment of a receiver or trustee for Seller; assignment for the benefit of creditors; or inability of Seller to pay debts as they become due. In the event of termination for cause of this PO, in whole or in part, Purchaser may, in addition to any other right or remedy provided herein or by law, immediately cancel without cost to Purchaser any shipment contemplated by the PO. Purchaser may require a financial statement from Seller at any time during the term of this PO for the purpose of determining Seller's financial responsibility. Paragraph 6 shall survive termination of this PO.

7. WARRANTIES; RIGHTS CUMULATIVE; NO WAIVER. In addition to any other express or implied warranties, Seller warrants that all Goods covered by this PO will be merchantable, free from defects in material, design and workmanship and will conform to specifications, drawings, data, samples, descriptions and documents made available to Seller. Seller acknowledges that Seller knows of Buyer’s intended use and expressly warrants that the Goods selected, designed, produced, assembled and/or delivered by Seller will be fit for such use. Seller further warrants that the Goods will not infringe any patent, copyright, trademark, service mark or other intellectual property right and that it has or will obtain any rights necessary for it to fully perform hereunder. If any Goods are defective or nonconforming, in addition to all other remedies of Purchaser, Seller shall at Purchaser’s option either credit Purchaser for such Goods or, at Seller’s expense, replace, repair or correct such Goods and deliver them to Purchaser. All warranties and guarantees herein shall run to Purchaser, its successors and assigns, to their respective customers and all users of products of any such parties that contain or use Goods in any way, and such warranties and guarantees shall survive any inspection, delivery, acceptance or payment of or for the Goods by Purchaser. Rights and remedies hereunder are cumulative and not alternative and do not exclude any remedies available at law or in equity. No failure or delay in exercising any right will operate as a waiver. Acceptance or payment for any Goods shall not waive any breach.

8. PURCHASER’S PROPERTY; NO DISCLOSURE. Unless otherwise agreed in writing, all tools, equipment, documents or other materials furnished to Seller, or for which Seller has been reimbursed, by Purchaser, including any replacements thereof and any materials affixed or attached thereto, shall be the personal property of Purchaser. Such property shall at all times be properly maintained by Seller; shall be deemed to be personalty; shall be appropriately marked to establish Purchaser’s ownership; shall not be commingled with the property of Seller or any third party or moved from Seller’s premises without Purchaser’s prior written approval; and shall be held at Seller’s risk and expense. Seller shall, upon request, file a Financing Statement as “Con-signee”, in accordance with Article 9 of the UCC, to secure title of such property in Purchaser. Such property shall be subject to removal at Purchaser’s request, in which event Seller shall redeliver it in the same condition in which it was received, reasonable wear and tear excepted, all at Seller’s expense. Purchaser has the right to enter Seller’s premises at all reasonable times to inspect such property and Seller’s records with respect thereto. Seller agrees not to use any designs, tools, patterns, drawings, materials or other information or equipment furnished by Purchaser in the manufacture or design of any goods for other customers and further agrees not to use or disclose to any third party any confidential or proprietary information of Purchaser. All information regarding the Goods, including, but not limited to, specifications, drawings, data, samples, descriptions, documents, processes and customer lists, are confidential and proprietary information of Purchaser. Seller shall not disclose that Purchaser has contracted with Seller without Purchaser’s prior written consent.

9. INDEMNIFICATION. If Seller’s agents, employees, or subcontractors enter upon premises occupied by or under the control of Purchaser or any of its customers or suppliers in performing hereunder, Seller shall take all necessary precautions to prevent injury (including death) to any person and damage to any property that might arise out of any acts or omissions of Seller's agents, employees or independent contractors. Seller shall indemnify and hold harmless Purchaser and its customers against any liability, loss, damages, expense (including attorneys' fees), lien (including mechanic’s liens), claim and cause of action (whether direct, indirect, incidental or consequential, in contract or in tort) arising out of or connected with (i) any act or omission of Seller, its agents, employees or subcontractors, (ii) any breach by Seller of this PO, (iii) any subcontract referenced in clauses 6(a)(2) and/or 6(a)(3) hereof, or (iii) any alleged or actual, direct or contributory infringement of patent, copyright, trademark, service mark or other right arising from the purchase, sale or use of Goods. In case the purchase, sale or use of any of the Goods is held to constitute infringement or is enjoined, in addition to pursuing other remedies, Purchaser may require Seller, at Seller’s expense, to (x) procure for Purchaser and/or its customers the right to continue to purchase, use and sell such Goods; (y) modify the Goods so they become non-infringing, or (z) remove such Goods and refund the purchase price (including all related charges). This indemnification is undertaken by Seller in addition to its warranty obligations.

10. HARMFUL INGREDIENTS OR DEFECTIVE DESIGN. If Seller becomes aware that any ingredient or component of the Goods is or may become harmful to persons or property, or that the design or construction of the Goods is defective in any manner so they may become harmful to persons or property, Seller shall imme-diately notify Purchaser thereof, providing all relevant information.

11. LICENSING OF INVENTIONS. If this PO involves experimental, development or research activities, including engineering related thereto, all information developed in the course thereof shall be owned by Purchaser and be deemed confidential and proprietary property of Purchaser, whether patented or not, and Seller shall, and cause its employees to, cooperate in executing any documents and taking any other actions necessary or convenient to patent or otherwise perfect or protect for the benefit of Purchaser any inventions conceived, developed or reduced to practice in performance of this PO. If this PO does not involve such activities but the Goods are to be produced in accordance with specifications, drawings, data, samples, de-scriptions or documents furnished by Purchaser, Seller hereby grants to Purchaser an irrevocable, non-exclusive and royalty-free license to make, have made, use and sell any improvement in the Goods that is conceived, developed or reduced to practice by Seller in producing the Goods.

12. INSURANCE; RELEASES; WAIVER OF IMMUNITY. Seller shall provide insurance coverage for all its liability and indemnity obligations hereunder, including, without limitation, worker’s compensation, general liability, contractual liability and automobile liability coverage. Seller hereby releases Purchaser and its affili-ates, directors and employees from losses or claims for bodily injury, property damage, or other insured claims arising out of Seller's performance hereunder, and Seller shall cause its insurers to waive their rights of subro-gation against such released parties. Seller specifically and expressly waives any immunity that may be granted it under the state industrial insurance act. Further, the indemnification obligation hereunder shall not be limited in any way by any limitation on the amount or type of damages, compensation, or benefits payable to or for any third party under workers' compensation acts, disability benefits acts, or other employee benefits acts, provided Seller's waiver of immunity by the provisions of this paragraph extends only to claims against Seller by Purchaser and does not include, or extend to, any claims by Seller's employees directly against Seller.

13. SET OFF. Purchaser is entitled to set off any amount owing at any time from Seller, or any Affiliate of Seller, to Purchaser or its Affiliates, against amounts payable at any time by Purchaser to Seller.

14. COMPLIANCE WITH LAWS. Seller shall comply with all laws, regulations, ordinances, or other govern-mental regulations now or hereafter applicable to the Goods or the production or delivery thereof, including, but not limited to the (a) Fair Labor Standards Act of 1938, as amended, and all invoices shall state: “Seller repre-sents that it has complied with the Fair Labor Standards Act of 1938, as amended, on producing the supplies or performing the services covered by this invoice;” (b) Vietnam Era Veterans Readjustment Assistance Act of 1974, Public Law 93-508, as it amends 38 USC 2012, the Vietnam Era Readjustment Assistance Act of 1972; (c) Age Discrimination in Employment Act of 1967 as amended in 1978; and (d) Toxic Substance Control Act of 1976, as amended; and, in each case, all rules and regulations issued pursuant thereto. Seller warrants that the Goods comply with the Clean Air Act of 1990 labeling requirements.

15. EQUAL OPPORTUNITY; AFFIRMATIVE ACTION; AND VETERANS. The following are incorporated herein by reference: (a) the contract provisions of Paragraph (1) through (7) of Section 202 of

Executive Order 11246 issued in 1965, as amended by Executive Order 11375 of 1967, and all rules and regulations pursuant thereto; (b) the provisions of the affirmative action clause, entitled “Employment of the Handicapped,” contained in the regulations re: Affirmative Action Obligations of Contractors and Subcontractors (20 CFR 741.3) issued pursuant to the Vocational Rehabilitation Act of 1973, as amended by the Rehabilitation Act Amendments of 1974; and (c) the contract clause of contained in the regulations re: Veteran’s Employment Emphasis Under Federal Contracts. 41 CFR 5C-250 2.

16. INDEPENDENT CONTRACTOR. Seller is an independent contractor. This PO does not create any other relationship, including one of employment, agency or joint venture, between the parties. Each party is solely responsible for the acts, omissions, control and direction of its own employees.

17. WAIVER. Neither any failure nor any delay by any party hereto in exercising any right, power or privilege under this PO will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege under this PO.

18. SURVIVAL. Those provisions of this PO, which by their nature are intended to survive termination, cancel-lation, completion, or expiration shall continue as valid and enforceable obligations of the parties notwithstand-ing any such termination, cancellation, completion, or expiration.

NSK Steering Systems America, Inc.

SUPPLIER MANUAL REVISION LOG

Manual Revision	Date Revised	Sections Affected	Revision Summary
3	01/02/03	ALL	General Revision, 1^st electronic release
4	02/14/03	3.1	Added reference to pass-through characteristics section
4	02/14/03	3.7	New section added
4	02/14/03	2.2	New section added
4	02/14/03	6.2	New section added
4	02/14/03	3.8	New section added
4	02/14/03	3.9	New section added
5	5/6/03	2.2	Rev. 2, Added Corrective Action table
5	5/6/03	3.3	Rev. 4, Added "level 4 w/ layout" minimum to annual PPAP requirement
5	5/6/03	3.4	Rev. 4, Added 6 digit lot code requirement
5	5/6/03	6.3	Rev. 4, Added 6 digit lot code requirement
5	5/6/03	6.3	Rev. 4, Added 6 digit lot code requirement
5	6/12/03	6.3	Modified supplier pack slip requirements
5	11/5/03	1.1	Holiday Gift Giving
5	11/23/03	EDI	Updated HTML Layout EDI Specifications
6	01/05/04	3.3	Section rev. 5, general revision
6	01/05/04	3.1	Section rev. 5 - reword section on inspection data submission. Removed section on part certification.
6	01/08/04	3.2	Section rev. 4: Added references to "HI" characteristics
7	03/05/04	3.1	Added link to section 3.10
7	03/05/04	3.10	New section (Inspection Data Submission)
8	5/3/04	3.1	Section Rev. 7: Changed wording referencing section 3.10
8	5/3/04	3.10	Section Rev. 2: General revision to requirement (supplier no longer required to submit each lot)
8	5/3/04	9.0	New section 9.0: Prototype Requirements
9	3/21/05	2.2	Major revision to supplier performance (change from DMN base to QPR base performance scoring)
9	3/21/05	3.1	Added capability requirements to section
9	3/21/05	3.3	Rewording of capability requirements and addition of "documentation supplied in English"
9	3/21/05	3.5	Added reference to QPRs and 24 hour response requirements
10	7/28/05	Appendix D	Added Terms and Conditions (Appendix D)
11	1/4/06	2.2	Changes to QPR ranking and supplier performance scoring
12	1/26/06	All	Added Link informing suppliers about Purchasing move to AA
13	8/10/06	2.2	Update supplier performance to reflect current procedures
13	8/10/06	3.1	Updated section to change QS 9000 references to ISO 9001:2000 / TS 16949
13	8/10/06	3.6	Updated section to change QS 9000 references to ISO 9001:2000 / TS 16949
13	8/10/06	9.0	Updated procedure for submission of prototype data (elimination of RI Lab email)
13	8/10/06	Appendix C	Updated NES listing
14	7/25/07	Appendix C	Updated NES listing
14	7/25/07	2.2	Updated supplier performance section to reflect changes in scoring and reporting
15	3/12/08	3.3	Added new IMDS requirements
15	3/12/08	8.1	Added new IMDS requirements. Updated New Chemical Approval Form # DDS_FRM_NEW CHEMICAL APPROVAL FORM-Rev.B.Doc.
15	3/12/08		Added new section Supplier Communication. 2007 Supplier Symposium presentation added.
16	8/26/08
17	4/22/10	All	Moved manual from FrontPage Web style format to WORD. Added header, Added to NSSA intranet QMS controlled documents, Added Quality Policy. General cleanup of grammar, syntax, Removed holiday letter & summarized, took out QS9000 references, Removed Appendix C-Engrg Stds, added NOTE: on steel coil testing for capability, Added Safe Launch plan requirement 3.9, Replaced NSSA hazardous materials list with NSK corps list. Removed old Supplier communications. Added latest Terms & Conditions. Changed Appendix numbers, added form matrix for contacts. Removed Eng standards. Added ref to Appendix A: Banned & Hazardous substance.
18	7/14/10	1.2, 2.2, 3.2, 6.1,Appendix B	1.2: Added Working Conditions expectations, 2.2: Removed PPM references, 6.1: Added to supplier responsibilities rust/contamination req’mt, Appendix B, added link to Honda MPR checklists.
19	4/14/11	Appendix D	Updated Terms and Conditions to text instead of a picture.
20	12/19/11	3.1.18	Reworded Process Capability Requirements, added Special Characteristic Matrix. Updated Note to include Teflon-coated steels.
20	12/19/11	3.3 Supplier Responsibilities 7	Reworded Process Capability Studies to align with 3.1.18.

Approval Authority ( Process owner)
Name:	Title:	Date:
Amy Holloway	Manager, Purchasing and Supplier Quality
Affected Departments
Purchasing
Supplier Quality

OTHER: If there are any questions regarding prototype manufacturing, delivery, or quality requirements, please contact the Supplier Quality Assurance representative or Buyer identified on the Purchase Order.

APPENDIX A

The attached hyperlink will take you to the NSK corporate Restricted and Banned substance list. Please right click and select “Open Hyperlink”

Restricted Material List Link

APPENDIX B

FORMS:

Supplier Manual Section Reference

Report Name

2.1

Change Request Record

3.2

Honda MPR Checklists

3.7

Quality Key Person Report

5.4

Start up notification sheet

6.1

Packaging and Shipping Data Form

8.1

New Chemical Approval Form

APPENDIX C-1

830 (Planning Schedule With Release Capacity)

APPENDIX C-2

856 (Ship Notice/manifest)