Suppliers Quality Assurance Manual (PDFDrive)

Torque Transfer Solutions™
SUPPLIERS
QUALITY
ASSURANCE MANUAL
TREMEC 5F/ PE Level “9” – Issued Date March 02nd, 2015 – Revision Date May 17th, 2017 - Page 1 of 135
All printouts of the KUO Suppliers Quality Assurance Manual shall be considered as reference only, since the official information is the one shown on the screen.
Copyrights Reserved, Total or Partial Edition of this document without prior written consent from KUO is strictly forbidden .
Dear Supplier:
In these times of global markets, it is not longer enough for many worldwide enterprises to promise
their customers they will meet their requirements, in their country as well as abroad. Nowadays,
markets are increasingly demanding standardized Quality Assurance Systems, which will
guarantee their products and excellence services by enforcing the “Zero Defects” policy, among
others. Therefore, some improvements to Quality Systems have been implemented through time,
and today, the Technical Specification IATF 16949 is the outcome of continuous improvement and
a further step towards excellence. Moreover, it offers us the opportunity to be prepared for future
changes, and to have an exporting competence embracing the Total Quality concept, since Total
Quality is an endless race, as you shall know.
The General Director, General Leaders, Area Leaders and Personnel who are part of this
Organization, are aware of the effort and dedication required to attain IATF 16949 Certification in
each of our plants, as well as to become a state of the art group of enterprises committed to a
continuous and thorough search of Our Customers’ Satisfaction, thus we are requesting you, our
suppliers, to participate and get involved in the process in order to reach this goal.
As part of our team, we would like to share this Quality Assurance and Supplier Development
Manual with you, so that you may use it as a supporting tool to meet our Quality System’s
Requirements.
Yours Sincerely,
Antonio Herrera Rivera

General Director of Kuo Power Systems
TABLE OF CONTENTS
Letter of Director of Kuo Transmisiones
Table of Contents 2
Our Philosophy: Mission – Vision – Values 3
Introduction 6
0.1 KUO Transmisiones Goal 7
0.2 Purpose of Manual 7
0.3 Scope 7
0.4 Supplier’s Responsibility 7
0.5 KUO Transmisiones Policy 8
0.6 Supplier Development Philosophy 8
0.6.1 Search and Selection Process of New Suppliers 9
0.6.2 Supplier Selection Process for New Business 10
0.6.3 APQP/PPAP Process 11
0.6.4 Supply Process and Supplier’s Performance Assessment 12
0.7 KUO Transmisiones Suppliers Quality System Requirements 12
 ACP-007 PROCEDURE 13
1.0 Scope 13
1.1 General Information 13
1.2 Prototypes Requirements 13
1.3 Pre-production Requirements 13
1.4 Production Requirements 13
1.4.1 Controlled Shipments 14
1.4.2 Supplier Performance Monitoring 14
1.4.3 Defective Material Report (DMR) 14
2.0 References 14
3.0 Instructions and Responsibilities 15
o Prototypes Requirements 15
3.2 KUO Transmisiones Buyer’s Responsibility 15

o Pre-production Requirements 18
3.4.1 KUO Transmisiones Buyer’s Responsibility 18

3.5.2 Advanced Planning for Quality Product (APQP) 19
3.5.3 Operations Flowchart 19
3.5.4 Failure Mode and Effect Analysis (FMEA) 19
3.5.5 Pre-production and Production Control Plan 20
3.5.6 Statistical Process Control 21
3.5.7 Measurement Systems Analysis 22
3.5.8 Production Demonstration Run 22
3.5.9 Production Parts Approval Process Requirements (PPAP) 26
3.5.8.2 PPAP Submittance 26
3.5.8.3 Samples for PPAP 26
3.5.8.4 PPAP Submittance Levels 27
3.5.8.5 International Material Data System (IMDS) 29

3.5.8.6 Safety and Risk Prevention (MSDS) 29
 Containment Procedure in Pre-production 32
3.6.1 Supplier’s Responsibility 33

3.6.1.1 Process Validation 33
3.6.2 Plan Development 33
3.6.3 Duration of Containment 34
3.6.4 Material Identification 35
3.6.5 Outbound Criteria 35
3.6.6 Nonconforming Material Shipment Consequences 35
3.7 Product Validation 36

3.8 Identification of Parts from First Production Run (PPAP) 36
o Production Requirements 36
3.9 Annual Layout (Annual Validation) 36

3.9.1 Supplier’s Responsibility 37
3.10 Delivery Compliance 38
3.11 Quality Requirements in each Production Shipment 38
3.11.b Deviated Material Identification 38
3.12 Critical and/or Significant Characteristics Requirements in Production 39
3.12.1 Capability Studies (Cp, Cpk ≥ 1.33) 39
3.12.2 Capability Studies (Cp, Cpk < 1.33) 39
3.12.3 Reproducibility and Repeatability Studies (GR&R) 39
3.12.4 Requirements for each Shipment 39
3.13 Defective Material Report (DMR) 39
3.13.1 General Information 39
3.13.2 Defective Material Report System (DMR) 40
3.13.3 Quality Alert 40
3.13.4 Issue Identification 41
3.13.5 Responsibility 41
3.13.6 Suspect Material 41
3.13.7 Identification of DMR Origin and Type of Reject 42
3.13.8 Potential DMR 42
3.13.9 Determination of Quantities for DMR 43
3.13.10 Identification of Shipments Subsequent to a DMR Issuance 44
3.13.11 Corrections to the DMR 45
3.13.13 Disposition of Suspect Material 45
3.13.14 8 Disciplines (Containment Actions) 46
3.13.15 8 Disciplines (Corrective and Preventive Actions) 47
3.13.16 DMR Appeal Process 47
3.13.17 Cost Recovery Process 48
3.13.18 Cost Recovery Appeal Process (DMR Section 3) 49
3.14 Procedure and Requirements for Controlled Shipments 50
3.14.8 Controlled Shipments Level I 51
3.14.9 Controlled Shipments Level II 52
3.14.10 Specific Containment Requirements for Controlled Shipments 54
3.14.11 Specific Application Requirements for Controlled Shipments Levels I and II 54
3.15 Supplier’s Quality Performance Monitoring 57

3.15.2 Line Stoppage 57
3.15.2.1 Line Major Stoppage 57
3.15.2.2 Assembly and/or Process Line Stoppage 58
3.15.3 Supplier Quality Performance Assessment 58
3.15.3.1 PPM of Disassembly Performance 58
3.15.3.2 PPM of Manufacturing Process Performance 59
3.15.3.3 PPM of Incoming Inspection Performance 59
3.15.3.4 Complaints of KUO Transmisiones Customers Performance 60
3.15.3.5 Quality Problems Solutions (8D’s) Performance 60
3.15.3.6 PPAP’s Submission Performance 60
3.15.4 Supplier Delivery Performance Assessment 61
3.15.4.1 Delivery Performance 61
3.15.4.2 Flexibility Performance in Production Schedule Changes 61
3.15.4.3 Extra Freights Performance Attributable to Supplier 62
3.15.5 Supplier Global Competitiveness Performance Assessment 62
3.15.5.1 Supplier Cost Reduction Performance 62
3.15.5.2 Quotation & Feasibility Response Performance 63
3.15.5.3 Competitiveness Performance 63
3.15.6 Supplier Global Performance Assessment 64
3.15.6.4 Frequency of Supplier Occurrences in Controlled Shipping Level 2 64
3.16 Requirements for Tooling Identification, Inspection and Testing Devices, owned by KUO
or KUO’s Customers 65
3.17 Global Special Tooling Guidelines and Payment Responsibility Matrix 74

3.17.1 Special Tooling Guidelines and Definitions 75
3.17.2 Tooling Cost and Audit Guidelines Purchase Contract Term 76
3.17.3 Tooling Cost Documentation 77
3.17.4 KUO Tooling Audits 78
3.17.5 Tooling Payment Responsibility Matrix 78
4.0 Records 93
5.0 Definitions 93
6.0 Change Control 95
Appendix I: Supplier Profile and Self-Assessment Forms 96
Appendix II: KUO Transmisiones – Supplier Non-Disclosure Agreement Form 105
Appendix III: Quote Request and Manufacturing Feasibility Analysis Forms 110
Appendix IV: Level II Controlled Shipments Procedure Forms 115
Appendix V: New Production Lots Identification Form 123
Appendix VI: Tooling Worksheet Form and Visual Aid for Tooling Identification Property of KUO Customers 125
Appendix VII: Production Demonstration Run Calculation Worksheet 128
KUO TRASMISIONES
OUR PHILOSOPHY
MISSION
 ADD VALUE TO OUR CUSTOMERS BY FACING AND ASSUMING CHALLENGES.
VISION
 WE SHALL CONTINUE WITH A CUSTOMER-ORIENTED LEADERSHIP.
 WE SHALL BE A STEP FURTHER THE COMPETITION PARTICIPATING IN MARKET NICHES
OF HIGHER VALUE.
 WE SHALL BE THE OWNERS OF OUR DESTINY FEELING FREE TO ACT AND REACHING
THE BEST OF AGREEMENTS.
 OUR PEOPLE SHALL FACE CHALLENGES WITH MASTERY AND TEAM-WORK
 WE SHALL DEVELOP INNOVATIVE PRODUCTS BY MEANS OF WORLD-CLASS
PROCESSES, WHICH WILL RENDER A HIGH PROFITABILITY AND CONSOLIDATE OUR
IDENTITY AS THE PREFERRED SUPPLIER IN THE MARKET.
VALUES
 CUSTOMER-ORIENTED
 COMMITMENT
 DISCIPLINE
 CONSISTENCY
 INNOVATION
 RESPECT
 TEAM-WORK
0.0 INTRODUCTION
0.1 KUO Transmisiones Goal
KUO Transmisiones goal is to determine a common and attainable Standard to assure product Quality for
both, KUO Transmisiones and our Customers. KUO Transmisiones adopts the Technical Specification
IATF 16949 Industry Standard, as the basis for the development of Quality Systems operation. These
specifications apply to all suppliers, both Local and Foreign.
0.2 Purpose of Manual
This Manual contains KUO Transmisiones Specific Quality Requirements and Expectations for Suppliers. In
addition, it describes other KUO Transmisiones procedures and provides some means of communication
between (KUO Transmisiones – Supplier) Organizations. The main objective of this manual is to make KUO
Transmisiones Suppliers aware of KUO Transmisiones requirements applicable to suppliers, so that these,
in turn, are able to comply with them.
0.3 Scope
This Manual applies to all Local and Foreign suppliers of materials, products and services. These products
shall be produced, controlled, inspected and tested according to all applicable specifications.
0.4 Supplier’s Responsibility
The supplier shall solve all questions related to KUO Transmisiones requirements before accepting the
purchase order, otherwise KUO Transmisiones will assume that everything is clear and understood by the
supplier. Suppliers shall set up and keep a control system that will guarantee that all materials are in
accordance to what is being required in the purchase order, whether such materials are manufactured o
processed by the supplier or by the sub-supplier. Suppliers shall comply with all the required product
inspections and tests in accordance with the drawing, specifications and purchase order from KUO
Transmisiones. The Supplier’s Quality System to control the product shall be documented and available for
revision by our representatives, before production startup and during the life of the purchase order. The
supplier shall refer the requirements on this manual to its supplier’s base.
0.5 KUO Transmisiones Policy
1. Each of the suppliers shall have access to this document.

2. Suppliers shall continue sending the information to the corresponding KUO Transmisiones
plant using the due forms in this manual, and/or those required by KUO Transmisiones,
and/or those required by the AIAG/IATF Reference Manuals.
3. Suppliers shall comply with the profile defined by KUO Transmisiones (including ISO 9001
and/or IATF 16949 Requirements).
4. KUO Transmisiones group shall visit and perform audits to the supplier’s facilities when
appropriate.
0.6 Supplier Development Philosophy

KUO Transmisiones is aimed to work with our suppliers to ensure Our Customers Satisfaction. This begins
with the Advanced Planning of Quality Product (APQP), complying with Quality, Continuous Improvement
and Variation and Scrap Reduction Requirements. Suppliers are responsible for ensuring the compliance to
what has been required in the Purchase Order, Engineering Drawings to current level, and all the
Specifications and Standards referenced on the drawings and the applicable International Standards. This
Manual defines the Quality Systems the supplier shall use in order to control the material requested in the
purchase order. These requirements are an extension to the purchase order requirements. Nowadays, the
automotive sector is demanding the use of customer-oriented processes, where effectiveness and Efficiency
may be measured through the outcome from organizations and customer satisfaction. This has fostered the
use of models based on quality management, for example, ISO-9001 and IATF 16949. Therefore, KUO
Transmisiones has developed its own processes applicable to the supplier’s base.
0.6.1 Search and Selection Process of New Suppliers
KUO Transmisiones is searching for a profile in its supplier base, which shall comprise the following
concepts:
a. Quality
b. Competitive Cost
c. Deliveries (Time and Quantity)
d. State of the Art Technology
e. Time To Market (On-time new products launchings)
f. Environmental Responsibility
g. Technical Skills
h. Financial Viability
i. Government Regulations
j. Alignment with International Quality Systems Standards
k. Support and Service
With the aim of counting with a global supplier’s base in alignment with KUO Transmisiones plants’
requirements and those of their customers.
KUO Transmisiones questionnaire is applicable to New Suppliers and/or for the updating of KUO
Transmisiones suppliers, which is found in Appendix I of this manual. All KUO Transmisiones suppliers
can be audited by our Supplier Development team, before they can be incorporated into the KUO
Transmisiones Suppliers Portfolio with a minimum rate of 80% on his assessment, despite their status of
certification by a third party.
The Non-Disclosure Agreement, which shall be filled in and signed by the supplier after having been
notified by KUO Transmisiones, can be found in Appendix II of this Manual.
0.6.2 Supplier Selection Process for New Business
The supplier selected for the new business shall be the one who submits the following:
a) Technical Feasibility at a 100% (Including Machinery and Measuring Equipment)
b) More competitive price
c) Better “Lead Time”
“Red” Suppliers are not considered for new business, only after a status change (refer to ACP-
007 Procedure, item 3.15 of this Manual).
The Feasibility Analysis form required by KUO Transmisiones can be found in Appendix III of this
Manual.
0.6.3 APQP/PPAP Process
The supplier shall comply with APQP and PPAP Requirements of the AIAG/IATF
Reference Manuals, and the requirements stated in Procedure ACP-007 of this
manual.
0.6.4 Supply Process and Supplier’s Performance Assessment
The Supplier shall comply with ACP-007 Procedure as per requirement 3.9 of this Manual.
Supplier Performance shall be assessed by KUO Transmisiones according to ACP-007 Procedure, item
3.15 of this Manual.
0.7 KUO Transmisiones Suppliers Quality System Requirements

ISO/TS-16949 is the goal all our suppliers shall based their Quality System on. KUO Transmisiones requires
its suppliers to be certified by a third party, to IATF 16949 or ISO-9001 management systems at the most
updated revisions.
All ISO-9001 certified suppliers, shall comply with the Specific Requirements of KUO Transmisiones.
KUO Transmisiones reserves all rights to audit the Supplier’s Quality System and/or Manufacturing
Processes due to supplier’s performance, even if certified by a third party.
 ACP – 007 PROCEDURE
1.0 SCOPE
1.1 General Information
This procedure applies to all production & preproduction parts, services and prototypes
suppliers who are registered on the List of Suppliers Approved for any of KUO
Transmisiones Plants, and defines the activities, responsibilities and requirements for the
following processes:
a) Prototypes Requirements
b) Pre-production Requirements
c) Production Requirements
c.1) Controlled Shipments
c.2) Supplier’s Performance Monitoring in relation to:
c.2.1) DMR (Defective Material Reports)
c.2.2) PPM (Parts Per Million)
c.2.3) Controlled Shipments
c.2.4) Deliveries
1.2 Prototypes Requirements
Specific KUO Transmisiones requirements for its suppliers regarding the

submittance of quality documentation and material identification for the
validation of prototype parts, are described in this section.
1.3 Pre-production Requirements
Guidelines and procedures applicable to KUO Transmisiones Production Parts Approval

Process (PPAP) are described in this section for its supplier’s base regarding a new part for
production, which may represent significant risk for KUO Transmisiones facilities, and which
applies as compulsory by KUO Transmisiones.
1.4 Production Requirements
This section describes KUO Transmisiones guidelines and procedures applicable to all
suppliers in the production stage, which include sanctionatory procedures of Controlled
Shipments, and everything related to supplier performance monitoring regarding Quality and
Deliveries.
1.4.1 Controlled Shipments
This is a Sanctionatory Procedure which, at KUO Transmisiones Plant own discretion, is

implemented to provide an additional assurance in order for KUO Transmisiones to only
receive parts and products which comply with the requirements specified in the design.
Controlled Shipments require additional verification activities to be implemented at the
supplier’s plant, or a third party plant for product control of the supplier in question.
Controlled Shipments’ costs shall be paid by Supplier.
1.4.2 Supplier Performance Monitoring
This section defines the methods used to identify, communicate and measure supplier
quality performance, based on the information generated by PPM behavior, number of
DMR’s issued and number of times a supplier has been placed in a Controlled Shipments
position.
1.4.3 Defective Material Report (DMR)
The DMR process defines how quality and supply defects and issues are documented and
communicated to the supplier in charge.
2. REFERENCES
2.1 QS-9000 3rd Edition, March 1998, Third Approved Clause C9 of QS-9000
2.2 First Approved Clause C9, 4.6 Purchases (July 01, 2001) IASG, QS-9000:1998
2.3 Quality Assurance Manual for Suppliers, Tremec January 2000
2.4 FMEA (Potential Failure Mode and Effects Analysis)
2.5 APQP (Advanced Product Quality Planning and Control Plan)
2.6 MSA (Measurement System Analysis)
2.7 PPAP (Production Part Approval Process)
2.8 SPC (Statistical Process Control)
2.9 General Motors Global Procedure GP-5
2.10 General Motors Global Procedure GP-12
2.11 ISO/TS-16949:2009
2.12 ISO 9001:2015
2.13 IATF 16949:2016
3. INSTRUCTIONS AND RESPONSIBILITIES
 Prototypes Requirements.
3.1. The supplier shall send the process feasibility analysis, along with each quotation response,
to manufacture the product according to the specifications defined on KUO Transmisiones
Engineering drawing; such feasibility analysis shall reflect the flow of operations of the
process required to manufacture the part, as well as the equipment description, machinery
and measuring instruments suitable for the operation.
3.2. KUO Transmisiones Buyer’s Responsibility.
Send to Supplier:
3.2.1. Purchase Order for prototype parts including all purchasing data, adding the total value and
quantity of prototype parts, as well as the delivery date as required by the plant.
3.2.2. Tooling, Gages and Measuring Instruments Purchase Orders, required for the batch
manufacturing of prototypes (according to what has been indicated on the due supplier
quotation), where they shall include the tooling, gage or measuring instrument description,
quantity and terms of payment. In some cases, this purchase order shall be included within
the same purchase order of prototype parts.
Last-level-Engineering Design of prototype (shall be the same as that shown on the
purchase order) where special characteristics shall be indicated. Such characteristics shall
be identified as follows:
CC SC P P KCC MCC SPC DR PTC AQC
KPC PQC
3.2.3. Copy of Engineering Specifications referred in the design.
3.3. Supplier’s Responsibility
3.3.1 When the supplier receives the purchase order, he shall send a Process Development Plan
to the KUO Transmisiones Buyer and SDE, indicating the design, manufacturing, failure
prevention, assays and programs for the following:
1) Tooling
2) Manufacturing Frames
3) Inspection Frames, gages and Testing Equipment.
Refer to APQP Manual for further information on prototype stage.
3.3.2 Previous to the batch manufacturing of prototypes, the supplier shall develop the Prototype
Control Plan, where critical and/or significant dimensions and/or specifications indicated on
the design (see 3.2.3) shall be included. This document, signed by the supplier, shall
be sent to the Supplier Development Engineer for review and approval, previously to
prototypes manufacturing startup.
3.3.3 The documentation and requirements to be sent by the supplier, together with the prototype
batch shipment, are as follows:
3.3.3.1 PSW (Part Submission Warrant) making clear that it is a prototype batch
3.3.3.2 Numbered Design
3.3.3.3 Inspection Results for 5 parts inspected at a 100%, of all dimensions indicated on the
design, or whichever was agreed upon with KUO Transmisiones SDE.
3.3.3.4 100% Inspection result for all the parts which conform the prototypes batch, with the
dimensions described as critical and/or relevant in the design (see 3.2.2)
3.3.3.5 Metallographic and/or Metallurgic Report according to design specifications.
3.3.3.6 Material Report (raw material) as per design specifications
3.3.3.7 Results of Tests made to Engineering Specifications (tensile stress test to a
representative test tube of the prototype batch for Aluminum and Grey Iron Casts, with
graphical evidence of Stress-Deformation curve behavior, Yield Point and Last Tensile
Stress, among others, as per ASTM E8 ) according to design specifications. When
applicable
3.3.3.8 Prototypes Control Plan approved by the Suppliers Development Engineer (see 3.3.2).
3.3.3.9 Traceability. The parts shall be identified according to the component design.
Numerically, from [1] to [the total number of parts of the batch], with this identification
matching the number indicated on the dimensional reports (inspection results), the
engineering level, as well as the number of batch purchased, shall be indicated. This shall
comply with the next format:
LEVEL – BATCH – CONSECUTIVE/TOTAL
Example: AB – 2 – 13/50
Where…
 LEVEL: Level of design engineering used for the manufacturing of the prototype
(e.g: AB).
 BATCH: Number of batch purchased for the same prototype part number during
the project’s life (e.g.: 2, which means second batch purchased for the same
prototype part number).
 CONSECUTIVE/TOTAL: Consecutive numeric identification according to the
total number of parts, which conform the prototypes batch (e.g.: 13/50, which
means: part number 13 of the total 50-part batch purchased.
Note: In the case of bolts, latches, shims, springs, nuts, pins, etc., where part
identification may become difficult, the batch shall be identified (box, bag, etc.) with a
tag containing the above mentioned information. The color of the tag shall differ from
batch to batch.
3.3.4 When prototype parts are received, the KUO Transmisiones plant Inspection Receipt Area,
will inspect a batch part at a 100% in accordance to the design, in order to be able to ratify
the reliability of the information provided by the supplier. In case there are nonconforming
items to design, and whose supplier report indicates conformances, the supplier shall be
penalized for each nonconforming item, and an outside supplier (third party) approved by
KUO Transmisiones, shall be used to size the rest of the parts within the batch, charging the
supplier as per the fee agreed by such outside supplier. In case there is a non-conformance
regarding prototypes performance, whose issue is attributable to the supplier, a DMR
(Defective Material Report) shall be sent to notify the supplier on such issue, and the
supplier shall decide on the batch according to the indications shown on the due DMR, and
if necessary, the supplier shall replace the whole batch of the prototypes sent.
3.3.5 For parts that are purchased as “Ready to be Used” (or LPU, which is the acronym in
Spanish) whose semi-finishes are the responsibility of the supplier and the sub-supplier, all
the designs released by KUO Transmisiones shall be validated (casting, forging and/or
assembly components). Therefore, the supplier shall send:
3.3.5.1 The documentation described in item 3.3.2
3.3.5.2 (PSW) Guarantee for each number part supplied by the sub-supplier and approved
by the supplier
3.3.5.3 (PSW) Guarantee for each part number for KUO Transmisiones approval
3.3.5.4 Sub-supplier control plan for each part number
3.3.5.5 Dimensional report of 2 parts of each component, inspected at a 100%, for all the
characteristics of each of the designs released by KUO Transmisiones, where the supplier is
responsible for the supply.
3.3.5.6 100% inspection results for all the parts that conform the prototype batch, with
the dimensions, shown on the design, indicated as critical and/or relevant (see 3.2.3.)
3.3.5.7 Numbered design for each part number
3.3.5.8 Tests Results to Engineering Specifications according to the design specifications for
each part number. When applicable.
When the “RFU” component is approved, KUO Transmisiones will also approve each
of the PSW´s for each part number, which constitutes the final product supplied by the
vendor. KUO Transmisiones approval of all part numbers, which constitute the product
supplied by the vendor, shall be in the name of the Supplier and not of the sub-
suppliers.
 Pre-production Requirements.
3.4 The supplier shall send along every quotation response, the process feasibility analysis to
manufacture the product according to the specifications provided on the KUO Transmisiones
Engineering drawing. Such feasibility analysis shall show the flow of operations of the process
required to manufacture the part, as well as the equipment, machinery and measuring instruments
description required by operation.
3.4.1 KUO Transmisiones Buyer’s Responsibility

Send to supplier:
3.4.1.1 Purchase Order for Pre-Production including all the purchase details, adding the part
price and the required PPAP delivery date at KUO Transmisiones plant.
3.4.1.2 Tooling, Gages and Measuring Instruments Purchase Orders, required for the
manufacturing of products (according to what has been indicated on the proper supplier
quotation), where they shall include the tooling, gage or measuring instrument description,
quantity and terms of payment. In some cases, this purchase order shall be included within
the same purchase order of production parts.
3.4.1.3 Release of last-level Pre-Production Engineering Design (shall be the same as that
shown on the purchase order), where special characteristics shall be indicated as follows:
3.4.1.3a Critical Characteristics
MCC SPC AQC PTC

CC KCC
3.4.1.3b Significant Characteristics
SC KPC PQC
3.4.1.3c Standard Characteristic DR and no symbol.
3.4.2 Copy of Engineering Specifications referred in the design.

3.5 Supplier’s Responsibility
3.5.1 When the supplier receives the purchase order, he shall send a Process Development Plan
to the KUO Transmisiones Buyer and SDE, indicating the design, manufacturing, failure
prevention, assays and time tables for the following:
1) Tooling
2) Manufacturing Frames
3) Inspection Frames, gages and Testing Equipment.
4) Manufacturing Process Development including everything related to planning tools:
 Operations Flowchart (3.5.3)

 PFMEA (3.5.4)
 Pre-Production and Production Control Plan (3.5.5)
 Process Sheets and Work and Inspection Instructions
 Pre-Production Run
 GR&R studies or other in accordance with the MSA (see 3.5.7)
 Capability Studies (see 3.5.6) regarding Critical and/or significant characteristics for
the Product and/or Process (see 3.4.1.3)
 Packing Method and Type
 PPAP Submittance to KUO Transmisiones (See PPAP Manual)
Refer to APQP Manual on the Pre-production stage and the PPAP Manual for further reference.
3.5.2 ADVANCED PLANNING FOR QUALITY PRODUCTS PROCESS (APQP)
The Advanced Planning for Quality Products (APQP) is a standard for the automotive industry, by
which the new products are introduced into the market. The APQP is a structured method that
provides the necessary steps to ensure that a product meets the customer requirements. It is also
one of the reference manuals of the AIAG/IATF.
3.5.2.1 The Supplier Development Engineer (SDE) and the KUO Transmisiones Buyer, are
responsible for validating the supplier APQP process, as per the last edition of the reference
manual.
KUO Transmisiones customer may request the APQP and PPAP documentation from the supplier,
when required, for its review and verification. In case the requirements are not being complied with,
the supplier will have to take proper action to attain the requirements from KUO Transmisiones and
its Customer.
3.5.3 OPERATIONS FLOWCHART
The supplier shall comply with the elaboration of the Operations Flowchart, where KUO
Transmisiones specific requirements are the following:
The Process Operations Flowchart shall show the sequence of operations of all the process
by operations, Inspections, Transportation, Storage, etc.
3.5.3.1 The sequence of operations shall be in accordance with the sequence defined on
the KUO Transmisiones Engineering drawing.
3.5.3.2 The machinery and the equipment used in each operation shall be described.
3.5.3.4 Time used by operation shall be described

3.5.3.5 “Bottle Neck” operations shall be identified for the process, and machine capacity
studies shall exist
3.5.3.6 Critical machinery shall be identified according to the following:
+ By loads
+ By maintenance
+ By cycle time
+ By capability (Cpk)
+ By the complexity of Operations and/or by operator skills
3.5.3.7 The Process Operation Flowchart shall be approved by the “Core Team”
3.5.4 POTENTIAL FAILURE MODE AND EFFECTS ANALYSIS (FMEA)
The supplier shall comply with the methodology and criteria defined on the AIAG/AITF Reference
Manual. The FMEA (Potential Failure Mode and Effects Analysis), as well as the use of the official
format of the AIAG/AITF to the last revision and KUO Transmisiones specific requirements, are as
follows:
3.5.4.1 Severity on the PFMEA between 9 and 10 (applicable to critical characteristics, see
3.4.1.3)
3.5.4.2 Severity on the PFMEA between 5 and 8 and occurrence between 4 and 10
(applicable to significant characteristics, see 3.4.1.3)
3.5.4.3 Severity on the PFMEA below 5 (applicable to DR’s, AQC’s, PTC’s, PQC’s and no
symbol characteristics, see 3.4.1.3)
3.5.4.4 Characteristic class shall be indicated on the PFMEA and control plan
3.5.4.5 The section “Current controls of process prevention and detection”, of the PFMEA,
shall emphasize the use of SPC (X-R, X-S charts, etc) and the Implementation of
error-proofing devices (for example: error proofing / Poka Yokes, applicable for
Critical and Pass Through Characteristics)
3.5.4.5 Any failure mode with high priority risk shall have recommended actions and the
criteria for qualification of the priority risk must be according to recommendation of
last edition FMEA (AIAG/IATF) Reference Manual.
Refer to last edition FMEA (AIAG/AITF) Manual for further information.
3.5.5 PRE-PRODUCTION AND PRODUCTION CONTROL PLAN
The supplier shall comply with the Control Plan technique and methodology stated on the
AIAG/IATF (APQP & Control Plan) Reference Manual, as well as with the use of the official format
of the AIAG/IATF as of last revision. KUO Transmisiones specific requirements for the critical
and/or significant characteristics (see 3.4.1.3) are the following:
3.5.5.1 Include the type of characteristic, whether it is special (see 3.4.1.3)
3.5.5.2 Include an inspection at a 100 % of all the special characteristics (see 3.4.1.3)
in the Pre-Production Control Plan. All readings shall be recorded and used to
estimate capability studies (Critical Characteristics: Cpk≥ 1.67, Significant
Characteristics: Cpk≥1.5, Standard Characteristics: Cpk≥1.00, for the rest of
dimensional characteristics included in drawing without any kind of symbology and
when it is required by KUO Facility, the Cpk≥1.0 (see 3.5.6)).
3.5.5.3 When the process is not capable, an improvement plan shall be in place. The
inspection at a 100% shall be indicated on the Production Control Plan, until the
process capability meets the requirements; keeping the records documented for each
reading when dealing with measuring instruments by means of a continuous variable.
In order to use the inspection at a 100%, it is recommendable to use alternate control
methods, between continuous variables and discrete variables, whose purpose is first
to ensure a 100% compliance of requirements and second, collect data that will help
us monitor the process to carry out the capability studies, as well as the decision-
making process. Regarding discrete variables, it is recommendable to use measuring
instruments by attributes, as well as control charts per attributes (see “Containment
for Pre-Production” Procedure, item 3.6). When have been demonstrated the process
is capable, the use of SPC (X-R Charts) must be defined in the control method for the
characteristics in the Production Control Plan along the life of the product and meet
with the requirements of item 3.11.
3.5.5.4 For all characteristics not included in item 3.4.1.3, the supplier shall define the
method that will ensure the compliance of KUO Transmisiones drawing
specifications.
3.5.5.5 The Production Control Plan shall be approved by the SDE, until the supplier
shows the right capability to control the special characteristics (see 3.4.1.3 or those
defined by the nature of the process (See “Containment Procedure for Pre-
production”, item 3.6)
Refer to last edition APQP & Control Plan (AIAG/IATF) manual for further information.
3.5.6 STATISTICAL PROCESS CONTROL
The supplier shall implement the Statistical Process Control regarding the special characteristics
(see 3.4.1.3), or in accordance with the engineering design nomenclature, defined by KUO
Transmisiones and those defined by the nature of the process. The supplier shall comply with the
following KUO Transmisiones specific requirements in order to control the special Characteristics:
3.5.6.1 Process Preliminary Capability in Pre-production shall be, for Critical Characteristics:
Cpk≥ 1.67, Cp≥2.0 Significant Characteristics: Cpk≥1.5, Cp≥2.0 Standard
Characteristics: Cpk≥1.00, Cp≥1.33 for the rest of dimensional characteristics
included in drawing without any kind of symbology and when it is required by KUO
Facility, the Cpk≥1.0, Cp≥1.33
3.5.6.2 Readings used to perform Capability Studies shall be taken from the Pre-production
run (PPAP) and shall include at least 30 equally spaced readings within time’s
domain. In order to have more confidence level for the capability study, it shall be
carried out with 100 readings (20 sub-groups, 5 readings each).
3.5.6.3 All the characteristics described in item 3.4.1.3 shall be monitored under a strict
Statistical Process Control, according to AIAG, SPC y PPAP Reference Manuals at
last revision and PTC’s an error proofing or 100% inspection must be implemented in
the process to ensure the existence and for AQC’s a 100% inspection using attribute
gage must be implemented in the process to assure it meets the drawing
specification.
3.5.6.4 Each year, the capability study of all the special characteristics (see 3.4.1.3) as part
of high impact components shall be sent to KUO Transmisiones SDE, together with
the readings where the Cpk value is kept in compliance. In case there is a Cpk below
the requirement, then compliance to items 3.5.5.3 and 3.6 shall be required.
For any standard characteristic with no symbol in drawing the minimum Cpk is 1.00, below
that values an aggressive improvement plan is requested and while the process capability is
demonstrated a 100% inspection by attribute or variable gaging is required. In summary
Refer to last edition SPC (AIAG/IATF) Manual for further information.
3.5.7 MEASURING SYSTEMS ANALYSIS
The supplier shall perform Repeatability & Reproducibility and/or Linearity and/or Bias and/or
Stability or the MSA applicable depending of the type of measurement equipment on all gages and
measuring instruments used for the measurement of special and all characteristics identified on
KUO Transmisiones designs and Control Plan as per 3.4.1.3, and those defined by the nature of
the process. KUO Transmisiones specific requirements are:
3.5.7.1 For special characteristics (See 3.4.1.3): Studies shall be in force for one year, only
if no change is made on the measuring system (Operator, gage or inspection
method). R&R studies shall comply with MSA (Measurement System Analysis)
Methodology, where KUO Transmisiones acceptance criterion is ≤ 20% (when
dealing with continuous variables). As for discrete variables, criteria provided on the
MSA shall be used.
For any kind of characteristic described in Control Plan without any kind of symbology
the MSA study shall comply with the Measurement System Analysis Reference
Manual Criteria)
3.5.7.2 Each year, or every time a change is made to the measuring system (Operator,
Gage or Inspection Method), the supplier shall notify and send Reproducibility and
Repeatability Studies to KUO Transmisiones SDE. In regards to Linearity, Bias and
Stability studies, they shall all depend on the measuring equipment used; sending of
such studies shall be under KUO Transmisiones SDE consideration. This requirement
is applicable to all high impact components where the KUO Facility SDE is
responsible to communicate it to the supplier.
Refer to last edition MSA (AIAG and IATF) Manual for further information.
3.5.8 PRODUCTION DEMONSTRATION RUN
The supplier shall perform the Production Demonstration Run to assure that daily capacity required
by KUO facility is reached. Instruction about how must be filled out the Production Demonstration
Run Calculation Worksheet is described below:
Shared Machine? Yes or No (Y or N)

A) The combined KUO Daily Required Capacity should be obtained from the RFQ (Request
For Quotation) - "Annual Volume"
If shared Machine = N:
A1) Input the Daily Required Capacity and part number from the KUO Purchase
Order.
A2-A5) Leave as the default 0.
If shared Machine = Y, shared with KUO parts only:
A1-A5) Input the Daily Required Capacity and part number from the KUO Purchase
Order for the various parts being validated.
NOTE: The assumption for this calculation is that all of the part numbers have the
same operating pattern and the same takt time.
NOTE: If the components being validated have varying operating patterns or different
takt times, then separate calculation worksheets should be completed for each part.
If shared Machine = Y, shared with other customers:
A1-A5) Input the Daily Required Capacity from the KUO Purchase Order for the
various parts being validated.
C4) In hours/shift, input the time dedicated per shift to other customers.
NOTE: The assumption for this calculation is that all of the part numbers have the
same operating pattern and the same takt time.
NOTE: If the components being validated have varying operating patterns or different
takt times, then separate calculation worksheets should be completed for each part.
B) The shift pattern should be obtained from the current shifts information of supplier
B1) Number of shifts per day
B2) Production hours per shift
B3) Number of production days per week
NOTE: Please input appropriate comments in the blanks provided.
C) Downtime per shift
C1) Lunches - The amount of time, in hours per shift, where the production process is
not operating due to lunch.
C2) Breaks - The amount of time, in hours per shift, where the production process is
not operating due to breaks.
C3) Changeover and/or set up - The amount of time, in hours per shift, that the
production process is not operating due to changeover and/or set up activities. Only
changeovers that were quoted to occur during the production operating pattern should be
considered for this calculation.
Changeovers or set up not conducted every shift should be calculated on a per shift basis
(e.g. Changeover time per week divided by the number of shifts per week = changeover
time per shift).
NOTE: Please indicate when during the production process the changeovers will be
implemented (if they are conducted during the quoted operating pattern, or if they are to be
conducted during "off shifts").
C4) Operating time dedicated to other customers - The amount of time, in hours per
shift, that the production process is operating/manufacturing product for other customers.
Operating time dedicated to other customers calculated on a per shift basis (e.g. operating
time per week divided by the number of shifts per week = changeover time per shift).
C5) Scheduled/unscheduled downtime not considered - The amount of downtime, in

hours per shift, where was not considered. This could be any downtime such as PM,
changeover, etc. that was not included in the development of the shift pattern/pieces per day
quantity.
Scheduled/unscheduled downtime should be calculated on a per shift basis (e.g. operating

time per week divided by the number of shifts per week = changeover time per shift).
D) The parts attempted during the PDR are the total number of parts the supplier produced
including rejects/scrap.
E) First time through fall out during the PDR is the number of parts that were rejected from
the manufacturing process during first evaluation. This is not the final number of
unacceptable parts, but only those that failed first time through the process. (This number
will be used in the FTC calculation.)
F) Length of PDR in hours is the measured time it took to conduct the production
demonstration run. Please input start and finish time in cells provided.
G) Acceptable parts witnessed at the PDR are the total number of parts, minus any rejects,
which were demonstrated during the production run. (May differ from first time through
fallout.)
H) Available production hours/shift are the net hours per shift the supplier has available to
build product not including any scheduled downtime.
I) Available production hours/day are the net hours per day the supplier has available to
build product.
J) KUO required parts per hour at the PDR are the total number of acceptable parts the
supplier must produce, in an hour's time, necessary to satisfy KUO.
K) Witnessed parts per hour at the PDR are the number of acceptable parts witnessed by
the KUO team, which the supplier produced within an hour's time.
L) FTC (First Time Capability) is the percentage of acceptable parts witnessed at the
production demonstration run out the total number of parts attempted at the PDR.
If the KUO requirement of 90% or greater is met, the cell will turn green.
If the KUO requirement is not met (less than 90%), the cell will turn red.
NOTE: If the FTC is less than 90%, the KUO team shall take product and process
technology, complexity, supplier experience, and the effectiveness of defect containment
actions into account when deciding whether the demonstrated lower FTC values are
acceptable with a documented deviation. A KUO Supplier Quality Manager's signed
approval is required for deviation from the KUO FTC requirement.
M) The difference between required parts/hour and witnessed parts/hour gives the total
number of parts over or under the KUO requirement.
If the part difference is greater than (the KUO required parts per hour + 10%), the cell will
turn green indicating the operation speed is acceptable. i.e. (J + 10%) ≤ M, then cell =
green (requirements met).
If the part difference is between 0 and (the KUO required parts per hour + 10%), the cell will
turn yellow indicating the Operation speed has met requirements, but the part difference is
very close and may require additional attention. i.e. 0 <= M < (J+10%) then cell = yellow.
If the part difference is less than 0, the cell will turn red indicating the requirement is not met.
i.e. M < 0 the cell = red.
NOTE: In the event (M) is yellow, it is strongly advised to conduct an Extended Run to
stress the supplier's production line and increase confidence in the supplier's ability to meet
KUO requirements.
3.5.9 PRODUCTION PARTS APPROVAL PROCESS REQUIREMENTS (PPAP)
All product suppliers shall comply with “PPAP, Production Parts Approval Process”, to validate that
all the requirements for the design information and KUO Transmisiones engineering specifications
(last level), are adequately understood by the supplier, and that the process designed has the
potential to manufacture products that will comply with these requirements during a validation run,
as well as during normal production.
3.5.9.1 KUO Transmisiones Buyer shall become the official contact in order to communicate
last engineering level design specifications, as well as the changes made on KUO
Transmisiones Engineering levels, to the suppliers. In case there are questions about
the engineering level, the supplier shall request KUO Transmisiones Buyer/SDE, the
due clarifications in writing.
3.5.9.2 PPAP Submittal
PPAP shall be submitted to KUO Transmisiones by the supplier, when one or more of
the following cases come into play:
 A New Product.
 Correction of inconsistencies in Parts previously submitted with PPAP
 Engineering changes in the design of a product previously submitted under
PPAP and approved by KUO Transmisiones.
 Changes to the Process that was used in the previously approved part*
 Tooling: Transference, Replacement, Repair or additional
 Change of supply sources for sub-contracted parts, materials or services (eg.:
raw material, semi-finished parts, Heat treatment, Coatings, etc.)*
 Change to Optional Construction or Material*
 Parts Produced in a Different Place than that previously approved*
 Inactive Process for more than a year.
 Changes on the inspection / test method for new techniques.
 Modifications to the packing or preservation method (quantity, size, material,
labeling, corrosion protection, etc.)
 Updating Full Lay Out Drawing Results when so required by the KUO facility.
 Change of Firm’s Registered Name.
 When the SDE considers it to be appropriate.
* It is important to clarify that any change must be notified with enough time to do a joint
timing plan about to control the inventories, break points and validation of the new change
with the KUO Transmisiones plant and their customers. Normally, is used a stock of 6
months of original product after the new PPAP submission to support the required time for
the new PPAP approvals. Supplier must not ship components to any KUO Facility
without PPAP approval process by KUO.
3.5.9.3 Samples for PPAP
According to PPAP scope, the Supplier shall submit PPAP documentation in

accordance with the formats provided on AIAG PPAP Manual, in its last revision and
first 5 initial samples, sized at a 100% as per the design, according to PPAP
reference Manual requirements, applicable to PPAP Submittal level agreed upon
with KUO Transmisiones SDE.
3.5.9.4 PPAP Submittance Levels.

KUO Transmisiones requires all its Suppliers to submit a level 3 PPAP in each
presentation, according to PPAP reference Manual, unless otherwise provided by
procedures negotiated between KUO Transmisiones, SDE and the Supplier.
Submittance Level
Item Requirement Lev. Lev. Lev. Lev. Lev.
1 2 3 4 5
Product Design Records
- For details of properties of R S S * R
1 components
- For details of the rest of the R S S * R
components
Changes to engineering documents
2 R S S * R
(when applicable)
KUO engineering approval , if
3 R R S * R
required
Design FMEA. If supplier is the
4 R R S * R
owner of the design
5 Process Flowcharts (See 3.5.3) R R S * R
6 Process FMEA (See 3.5.4) R R S * R
Dimensional Result ( 5 parts at
7 R S S * R
100%)
Tests, Material, Performance
8 R S S * R
Results
Initial Study of Process Capability
9 R S S S R
(see 3.5.6)
Measuring System Analysis Study
10 R S S S R
(see 3.5.7)
Laboratory Scope Documentation
11 (According to ISO/TS-16949, R S S * R
7.6.3.1 y/o 7.6.3.2)
12 Pre-Production and Production R R S * R
Control Plan (See 3.5.5)

Part Submission Warrant (PSW)
Report IMDS Reference Number in
13 S S S S S
PSW (See 3.5.9.5)
Appearance Approval Report.

14 S S S * R
(When applicable)
Checklist of bulk material
15 requirements (only for bulk material R R S * R
in PPAP)
16 Product Sample (5 samples) R S S * R
17 Master Sample R R R * R
18 Inspection Aids R S S * R
Additional Records. When KUO
Transmisiones specifies these
19 R S S * R
requirements (Packing Method and
Type)
Production Demonstration Run
20 R R R * R
Results
Evidence of Tooling, Inspection &
21 Testing Devices owned by KUO or S S S S S
KUO’s Customers (See 3.16)
S = The supplier shall submit the designated activity for KUO Transmisiones part
approval and retain a copy of the records, or the item documentation in the
appropriate place, including manufacturing.
R = The supplier shall retain this in the appropriate place, including manufacturing,
and have it available when requested by KUO Transmisiones
* = The supplier shall retain this in the appropriate places and submit to KUO Transmisiones
when requested to do so.
3.5.9.5 International Material Data System (IMDS)
As part of a new regulation for the Automotive Industry regarding the supply of
information on the chemical composition of materials, being assembled in vehicles, a
data base has been developed to count on information in reference to a future
recycling of vehicle materials. It is mandatory for all the automotive industry suppliers
to provide such information.
Nowadays, the main automobile manufacturers world-wide have created the

International Material Data System (IMDS) for this purpose. Information regarding the
chemical composition shall be uploaded in the following Web page:
www.mdsystem.com. Each supplier is accountable for issuing the information on the
chemical composition of the materials supplied to KUO Transmisiones, on the above
mentioned page. Any company can have access to the plant and obtain a free ID to
sign in for IMDS. When uploading a part, the KUO Transmisiones plant ID number
shall be entered. To know the ID number for the KUO Transmisiones plant, please
contact your SDE in order to be given such IMDS Number.
3.5.9.5.1 The supplier shall send, along with PPAP documentation, the MDS
reference number and the part number submitted to the plant, after such MDS
number has been approved by the KUO Transmisiones plant.
3.5.9.5.2 Non-compliance to such requirement by the supplier, shall result in PPAP’s

rejection.
3.5.9.6 SAFETY AND RISK PREVENTION:

3.5.8.6.1 All shipments from the supplier to KUO Transmisiones shall be delivered
with the proper “Material Safety Data Sheet” (MSDS) when applicable to the product,
according to NFPA 704 and HMIS Code. With the purpose of minimizing or
eliminating health risks regarding the staff and/or the environment, storage, etc.,
products that are considered and are classified as contaminating or hazardous, such
as those described next, shall be included in this Sheet as well:
- Oils and Lubricants
- Adhesives and Sealants
- Chemicals and Solvents
- Paints
- Coatings and Non-corrosive Substances
3.5.9.6.2 The supplier shall send the following information when required by the
KUO Transmisiones buyer:
- Product Technical Sheet

- Product Safety Sheet
- Waste Treatment Methods generated by the Chemical Product, and the
specific information determined by the KUO Transmisiones buyer
3.5.9.6.3 The supplier shall send the material perfectly identified, with a label
indicating its safety rhombus. Such safety rhombus label shall be in a visible place, on
the package containing the product, whether it is a box, can, glass bottle, tube, drum,
etc.
Health Hazard
Very short exposure could cause death or serious residual injury
4
even though prompt medical attention was given.
Short exposure could cause serious temporary or residual injury
3
even though prompt medical attention was given..
Intense or continued exposure could cause temporary
2 incapacitation or possible residual injury unless prompt medical
attention is given.
Exposure could cause irritation but only minor residual injury even
1
if no treatment is given.
Exposure under fire conditions would offer no hazard beyond that
0
of ordinary combustible materials.
Flammability
Will rapidly or completely vaporize at normal pressure and
4
temperature, or is readily dispersed in air and will burn readily.
Liquids and solids that can be ignited under almost all ambient
3
conditions.
Must be moderately heated or exposed to relatively high
2
temperature before ignition can occur.
1 Must be preheated before ignition can occur.
0 Materials that will not burn.
Instability1
Readily capable of detonation or of explosive decomposition or
4
reaction at normal temperatures and pressures.
Capable of detonation or explosive reaction, but requires a
3
strong initiating source or must be heated under confinement
before initiation, or reacts explosively with water.

Normally unstable and readily undergo violent decomposition
2 but do not detonate. Also: may react violently with water or
may form potentially explosive mixtures with water.
Normally stable, but can become unstable at elevated
1 temperatures and pressures or may react with water with some
release of energy, but not violently.
Normally stable, even under fire exposure conditions, and are
0
not reactive with water.
1
Prior to 1996, this section was titled "Reactivity". The name was changed because
many people did not understand the distinction between a "reactive hazard" and the
"chemical reactivity" of the material. The numeric ratings and their meanings remain
unchanged.
Special Hazards
This section is used to denote special hazards. There are only two
NFPA 704 approved symbols:
This denotes an oxidizer, a chemical which can greatly
OX
increase the rate of combustion/fire
Unusual reactivity with water. This indicates a potential
hazard using water to fight a fire involving this material.
Other symbols, abbreviations, and words that some organizations use in the white Special Hazards
section are shown below. These uses are not compliant with NFPA 704, but we present them here
in case you see them on an MSDS or container label:
This indicates that the material is an acid, a corrosive

ACID
material that has a pH lower than 7.0
ALK This denotes an alkaline material, also called a base.
These caustic materials have a pH greater than 7.0

This denotes a material that is corrosive (it could be
COR
either an acid or a base).
This is a another symbol used for corrosive.
The skull and crossbones is used to denote a poison or

highly toxic material. See also: CHIP Danger symbols.
The international symbol for radioactivity is used to

denote radioactive hazards; radioactive materials are
extremely hazardous when inhaled.
Indicates an explosive material. This symbol is somewhat
redundant because explosives are easily recognized by
their Instability Rating.
 Containment Procedure for Pre-Production.
3.6 This Procedure is applied in order to contain an Early Production. It requires a Pre-Production
Control Plan, which is a significant improvement for the supplier’s production Control Plan itself,
and which increases the reliability level to ensure that all the products bought, comply with KUO
Transmisiones requirements. The Pre-Production Control Plan shall also be used to validate the
Production Control Plan. The Pre-Production Control Plan shall take into consideration all the
special characteristics (see 3.4.1.3), and those defined by the process nature, as well the potential
areas identified during PPAP.
The purpose of this Procedure is to:
 Validate the supplier production control plan
 Protect our KUO Transmisiones plants, assembly, manufacturing and material warehouses
during critical times of quality out of conformance.
 Document the supplier efforts to check his process control during startup, ramp up, future
revisions of manufacturing processes, or when the manufacturing run has a three-month
gap or a longer gap, between one run and the other.
 Ensure that any quality issue which may arise, is quickly identified, contained and corrected
at the supplier’s facilities.
 Increase the involvement and visibility of supplier’s top management.
3.6.1 Supplier’s Responsibility. The Supplier shall:

3.6.1.1 Process Validation: Establish a validation process which contains the following elements:
3.6.1.1.1 Identify the personnel responsible to ensure the development and implementation
of process verification.
3.6.1.1.2 Implement this procedure with an inbound date, outbound criteria, and outbound
date as defined by KUO Transmisiones.
3.6.1.1.3 Set up containment stations at the plant, which shall be out of the line and
separated from one another. They shall be checked independently from the
standard manufacturing process, and located at the end of such process.
Additionally, processes containment stations can be used even more effectively.
This shall be documented and approved by KUO Transmisiones Supplier Quality
Engineer/ Supplier Development Engineer.
3.6.1.1.4 Identify additional inspections, tests and dimensional checking required for
containment stations based on the Special Characteristics of the Product (see
3.4.1.3) and those defined by the nature of the process, high RPN and/or issues
identified during product development and the process.
3.6.1.1.5 Train personnel in regards to the standardization of work performed in containment
stations.
3.6.1.1.6 Establish a reaction plan for a single defect.
3.6.1.1.7 Implement an audit process for the containment, using management levels (Layer
audit, including the plant leader, to ensure the conformance of the Pre-Production
Control Plan.
3.6.1.1.8 Include subcontractors (Tier 3) in processes validation.
3.6.2 Plan Development: Develop a Pre-Production Control Plan, which is a significant extension
of the production control plan, consisting on additional controls, inspections, audits, and
tests to ensure conformance and capability of manufacturing processes. The plan needs to
consider the following:
3.6.2.1 Increase of sample continuity/size stated in the Production Control Plan.
3.6.2.2 Verification of identification requirements.
3.6.2.3 Verification of “error-proofing devices” effectiveness.
3.6.2.4 Immediate implementation of containment, as well as irreversible corrective actions

(non-negotiable and directed by KUO Transmisiones, due to the inefficiency of the
action taken by the supplier) when the non-conformance is detected at the

containment area or when it is given on the spot.
3.6.2.5 Documentation: Document the Pre-Production Control Plan using the
format provided on the AIAG/AITF Reference Manuals, and Advanced
Product Quality Planning & Control Plan (APQP). The Pre-Production Control
Plan is not a substitute for the Production Control Plan, but it is an addition to
it and it is used for validation.
3.6.2.6 Document additional inspections, functional tests and dimensional checks
required for the containment station, or for the process check station with the
Special Characteristics Control Plan, referenced on AIAG’s APQP manual-
Supplement K. The reference states that the Pre-Production Control Plan’s
document is considered as a specific operation itself.
3.6.2.7 Document the inspection work instruction for the containment station to
ensure work standardization.
3.6.2.8 Document execution evidence and control plan validation. Data shall be
available in an “Orderly Manner” (order, objectivity, clear, legible, etc.) for
revision by KUO Transmisiones Supplier Development Engineer (SDE).
3.6.2.9 Document problem resolution for both quality systems, the internal one and
that of KUO Transmisiones plant, using the format acceptable by KUO
Transmisiones; including problem description, root cause, irreversible
corrective action with breaking points, and adequate FMEA’S and Control
Plan updating. Why – Why Analysis to identify the root cause, and learning
application.
3.6.3 Duration of Containment: This procedure shall be implemented for a period of time, or
quantity of parts specified by KUO Transmisiones, or until the Production Control Plan has
been validated, whatever takes place first. If time and quantity have not been specified, the
containment procedure shall still be in force through acceleration (“Ramp Up”) or a minimum
of 2 weeks, whatever takes place first.
3.6.3.1 Containment inspection is mandatory for all parts requested during Pre-Production.
Based on the acceptable performance documentation, which includes non-identified
issues by KUO Transmisiones or during containment, KUO Transmisiones SDE may
approve a 100% reduction on inspection requirements after manufacturing validation
at the supplier facilities. This shall be documented and approved by KUO
Transmisiones SDE.
3.6.3.2 In addition, measuring and testing requirements shall be identified by the supplier
and/or KUO Transmisiones SDE, and approved by the latter.
3.6.3.3 Again, for validation at manufacturing facilities, a 100% inspection is a minimum
requirement. The outbound criterion is mentioned in 3.6.5.
3.6.4 Identification: In order to indicate the compliance to Pre-Production containment

requirements, stick a green circular label with approximately 25 mm in diameter, to
shipment. This shall be signed by the person responsible for ensuring the right
implementation of the Containment Procedure in Pre-Production, with the legend
“Containment PP”.
3.6.5 Outbound Criteria: The supplier shall be meeting the requirements in order to be out of
containment in Pre-Production after the validation of Process Control Plan effectiveness,
also in accordance to the criteria listed herein (3.6.5.1 al 3.6.5.3). If the supplier is unable to
meet all the criteria to be out of Pre-Production containment in order to identify non-
conformances, the supplier shall continue with the necessary containment measures to
isolate KUO Transmisiones, until quality issues have been satisfactorily solved for both, the
supplier and KUO Transmisiones, and the supplier Production Control Plan has been
validated.
3.6.5.1 Send the number of parts requested to meet production requirements as

specified by KUO Transmisiones for the Pre-production period, with no issues
identified on Pre-production containment, or identified by KUO Transmisiones. If
time or quantity is not provided, the period of time shall be that of the acceleration
(“Ramp Up”.)
3.6.5.2 If an issue is detected, in Pre-Production Containment or, by KUO
Transmisiones, then the Pre-Production Containment procedure shall be in force for
a minimum of 2 weeks after the corrective action implementation, or through the
original period of time for this procedure, whatever takes place first.
3.6.5.3 If the Pre-production containment plan continues in order to identify non-
conformances, the containment plan in Pre-production shall be kept in place, until
the process control and capabilities have all been approved by KUO Transmisiones
SDE, and the Production Control Plan validated by KUO Transmisiones SDE as
well.
3.6.6 NONCONFORMING MATERIAL SHIPMENT CONSEQUENCES:

3.6.6.1 Failure to execute Pre-Production Containment procedure shall result in having
to go to “Controlled Shipments Level II”.
3.6.6.2 Nonconforming material shipments to KUO Transmisiones plants, shall result

in the automatic placement of supplier in “Controlled Shipments Level II”.
3.7 Product Validation.

The supplier shall comply with the requirements provided from item 3.4 to item 3.6. KUO
Transmisiones shall validate the product according to PPAP (Production Parts Approval Process),
for it is mandatory that every supplier complies with the requirements established. Product
validation will take place only when the PSW (Part Submission Warrant) is approved by KUO
Transmisiones Product Engineering agent, and the Production Control Plan approved by KUO
Transmisiones SDE.
In case PPAP is rejected by KUO Transmisiones, the supplier shall make the necessary
corrections, in a period of time agreed upon both parties, and submit the documentation for the
corresponding validation again.
3.8 Identification of shipments after PPAP Approval

The supplier shall identify each shipment during the next 60 days after the PPAP approval by KUO
Transmisiones which will need to be shipped to any KUO Transmisiones plant, the supplier shall
identify such shipment in each case and in each side of the box, container, skid, bag, etc. with a
light blue label showed, as reference, in appendix V of this manual, with the aim of giving special
“treatment” (management of the breakpoint) to such material at the KUO Transmisiones plant. The
measurements suggested for the label are: 11” (279.5 mm) Width X 8.5” (216 mm) Height (these
measurements are for reference only when the size of the used container). Supplier shall follow the
next steps:
A) Select the number of the consecutive day of the shipment after the PPAP approval
B) Select the reason using the visual aid:
B.1) Engineering Change
B.1.1) When it is the case, then indicate the latest engineering level
B.2) New Part Number
B.3) New Supplier for the Part Number
B.4) Other
 Production Requirements
3.9 Revalidation (Re-submission of PPAP)
Supplier is responsible for updating the results of full lay out drawing of part number supplied when
so required by any of the KUO facilities, the reasons of that will be notified by the buyer or Supplier
Development Engineer (SDE) assigned to the supplier. When this occurs the provider must meet
the following:
3.9.1 Supplier’s Responsibility. The Supplier shall:

3.9.1.1 Submit a level 4 PPAP which includes:
3.9.1.1.1 Level 4 PSW, whose main rationale for PPAP submittal is the
“Revalidation”.
3.9.1.1.2 KUO Transmisiones Engineering Drawing Layout (Marked Drawing)
3.9.1.1.3 Five Parts 100% Dimensional Report
3.9.1.1.4 Capability Studies of the special characteristics (according to 3.4.1.3) and
those defined by the nature of the process.
3.9.1.1.5 GR&R Studies (Reproducibility and Repeatability), Linearity, Bias, Stability,
etc. (according to 3.5.7) of the Measuring System used to assess the special
characteristics (see 3.4.1.3) and those defined by the nature of the process.
3.9.1.1.6 Raw Material Certificate
3.9.1.1.7 Heat Treatment Certificate (as per KUO Transmisiones engineering
drawing, if applicable)
3.9.1.1.8 Certificate for complying with all KUO Transmisiones engineering tests
according to specifications (as per KUO Transmisiones Engineering drawing,
if applicable) or to what has been agreed upon with KUO Transmisiones
SDE.
If the supplier is providing KUO with an assembly containing different components,

whose drawings are owned by the supplier, then the supplier shall add the following
to what is already being required from 3.9.1.1.1 to 3.9.1.1.8:
3.9.1.1.9 Sub-supplier Level 4 PSW approved by Supplier

3.9.1.1.10 Supplier’ Drawing Layout (marked drawing)
3.9.1.1.11 100% Five Parts Dimensional Report
3.9.1.1.12 Raw Material Certificate
3.9.1.1.13 Heat Treatment Certificate (if applicable)
3.9.1.1.14 Certificate for complying with all the Supplier Engineering tests (if
applicable)
If the supplier is providing KUO Transmisiones with an “RFU” (Ready to Be Used)

assembly and/or component, and KUO Transmisiones owns the drawings of such
components and/or semi-finished products, then the supplier shall comply with the
following:
3.9.1.1.15 Level 4 PSW of each component for KUO Transmisiones approval

3.9.1.1.16 Everything required from 3.9.1.1.2 to 3.9.1.1.14.
3.10 Delivery Compliance
The supplier shall comply with deliveries, both in quantity and on a timely manner, in accordance
with the KUO Transmisiones plant Production requirements. In case this does not happen, the
supplier shall communicate with the KUO Transmisiones Plant Supply Production Control contact
and deliver a Corrective Action Plan to prevent problem recurrence. In case this requirement is not
met, the supplier shall be given a DMR (Defective Material Report) as provided in 3.13
3.10b Identification of Material in each Shipment
The supplier shall comply with the identification and traceability requirements. All material must be
identified in each of the individual packaging of the total shipment, always. The type of the ID label
must be a sticker, pre-printed and glued perfectly to the package, and must contain bars codes
describing, as minimum, the following information:
- TREMEC Part Number
- TREMEC Part Description
- Quantity of Pieces
- TREMEC Purchase Order Number
- Manufacturing Lot Code
- Shipping Date
You can take, as an example, the ID Bar Code Label attached below
3.11 Quality Requirements in each Production Shipment
The supplier shall send the following information, in each production shipment, to the KUO
Transmisiones plant, as a support for Quality and also to be able to comply with the Production
Control Plans approved by KUO Transmisiones SDE:
3.11.1 Raw Material Certificate
3.11.2 Heat Treatment Certificate (If required by KUO Transmisiones Drawing)
3.11.3 Dimensional Report, which certifies the compliance to the Production Control Plan in
accordance with the sampling and frequencies established.
3.11.4 Certificate for the compliance to Engineering specifications, such as: torque, stress,
microstructure, saline chamber tests, etc. (if required by KUO Transmisiones drawing,
and the shipment frequency shall be agreed upon between KUO Transmisiones SDE
and the Supplier).
3.11.5 In regards to special characteristics results (see 3.4.1.3), they must be considered in
the dimensional report (see 3.11.3).
3.11b Deviated Material Identification
When the supplier finds that the material is not complying with specifications, he shall notify so to
KUO Transmisiones SQE. The KUO Transmisiones SQE shall review such non-conformance to
specifications together with KUO Transmisiones Engineering, and if they consider the material
could be deviated, then the supplier shall comply with the following:
3.11b.1 Request KUO Transmisiones for a Deviation (see 3.13.8)

3.11b.2 The Deviation request shall clearly describe the reason for such deviation, and an 8
D’s Report shall be enclosed describing the root cause(s) and corrective action(s) to
be taken to prevent quality issues recurrences.
3.11b.3 If the supplier has already been given the approval of such deviation by KUO SQE
in writing, then the Supplier shall enclose a copy of such deviation inside each
container, package, case, bag, etc. before getting shipped to the KUO Transmisiones
plant.
3.11b.4 The supplier shall not ship any materials to the KUO Transmisiones plant without
KUO Transmisiones previous authorization.
3.12 Special Characteristics Requirements (see. 3.4.1.3) in Production for High Impact
Components (see 3.5.9 & 3.9)
3.12.1 Capability Studies. The supplier shall perform capability studies from readings
taken from X-R charts and keep available the records of those X-R charts with Cp
and Cpk calculations to be shared with the KUO Transmisiones SDE and/or Buyer,
when they require it.
3.12.2 Capability Studies below the requirements. The supplier shall keep available the
records of the 100% inspection including the rejection rate to be shared with the KUO
facility SDE and/or Buyer, when they require it. In this case, the supplier shall be
placed in regards to the “Containment Procedure for Pre-Production” and the criteria
described in such procedure shall be applied, it will be placed in that status until
demonstrate accomplishing to the KUO facility requirements and improvement must
be monitored, periodically by the KUO facility SDE.
3.12.3 Reproducibility and Repeatability Studies (GR&R). The supplier shall carry out
the GR&R study, in each PPAP submission and when a change has taken place in
the measuring system (Operator, Gage or Inspection Method); such study shall be
part of the PPAP initial & revalidation submission processes and they shall be part of
the validation documentation package to be sent to KUO facility SDE and/or Buyer.
These GR&R Studies shall comply with the methodology defined in the MSA, where
KUO facility acceptance criterion is ≤ 20% (regarding continuous variables).
3.12.4 Shipment Requirements. The supplier shall comply with item 3.11
3.13 Defective Material Report (DMR).
3.13.1 General Information
A DMR shall be issued when the KUO Transmisiones plant has verified that the supplier has
fallen into a Non-conformance. Non-conformances which originate a DMR, are issues
related to:
Quality: Appearance, dimensions, finish, contamination, metallurgy, lack of

operations, etc.
Packing: Incorrect labeling, inadequate container, package damaged due to

improper handling (damaged during transportation, poor stowage, loss), parts
mixed within package, poor packing, etc.)
Supply: Over or under shipments (compliances over or under 100%), late

deliveries, etc.
3.13.2 Defective Material Report System (DMR)

DMR’s are issued due to:
Quality Receipt area personnel and/or the Supplier Quality Engineering (SQE): When
engineering specifications are not complied with and/or there are inconsistencies in validated
processes.
Traffic area personnel: When there are issues originated by carriers, such as: poor handling
(damage during transportation, poor stowing, loss, etc.), late material deliveries, etc.
Purchasing Parts Production Control Area Personnel: When there are non-compliance issues
regarding material deliveries such as: Over Shipments, Under Shipments, late deliveries, etc.
And who shall be designated hereinafter as the issuing entity, in relation to the internal Defective
Material Reports (DMR System).
3.13.3 Quality Alert
When the data and facts of a potential quality issue with some material, or part from the
supplier are not sufficient evidence to determine that a DMR shall be applied to the supplier,
it is the SQE’s responsibility to notify the supplier of such finding via a Quality Alert, with the
purpose of promoting preventive actions to be taken in reference to material, or stock or
process parts.
It shall be the supplier’s responsibility to post such document at the work station, where the
characteristic of the product is manufactured, to fully certify suspect characteristics of the
part, to investigate at his plant, based on the findings and finally, give feedback to KUO
Transmisiones SQE on parts condition and/or existing material at his plant.
The termination of a deeper investigation which generates sufficient objective evidence,

shall determine if a DMR shall be issued to the supplier. If this is the case, the finding shall
become an obvious quality issue and shall stop being a Quality Alert.
3.13.4 Issue Identification.
The DMR issuing entity shall define the Non-conformance originated by the part defect or
quality issue into much detail. The following information shall be previously reviewed and
verified prior to DMR issuance:
a) Part Number
b) Issue extent, which depends on the process point where the no-conformance was found:
DASA Customer (customer assembly line or in the field), Line (assembly or machining),
Receipt, Accumulated (recurrence) or Other (specify) .
c) ¿Did the supplier notify KUO Transmisiones SQE of a possible Non-conformance
previous to material receipt?
d) ¿Did the Non-conformance originate an internal Corrective Action Request (SAC)?
e) Quantity of suspect and/or rejected parts at DASA plant, and those in transit, etc.
3.13.5 Responsibility
The KUO Transmisiones plant shall verify that the supplier was responsible for the Non-
Conformance, previously to the DMR issuance and shipment to the supplier.
The DMR issuing entity shall use the most reliable equipment, media and resources required
to verify the Non-Conformance, prior to a DMR issuance; if possible, the supplier shall be
contacted via telephone. Moreover, if it is necessary to accelerate the containment actions,
the issuing entity shall notify the supplier via telephone to discuss the immediate actions to
be taken.
Depending on the complexity of the issue analysis and its impact, the supplier shall be
involved in both, the identification and verification of the Non-Conformance at the KUO
Transmisiones plant facilities.
3.13.6 Suspect Material
It shall be the supplier’s responsibility to notify KUO Transmisiones plant SQE, on the
determination to be taken regarding suspect material, whether it is to be returned to its plant,
to be reworked, deviated or selected. In any case, one shall proceed as provided in
section.13.17 of this procedure. Whatever the determination is, this shall be received within
the next 2 hours upon DMR notification, otherwise the material shall be returned to the
supplier and all costs shall be charged to his account (see 3.13.17). In the case of the
material damaged during transportation, from the supplier’s plant to KUO Transmisiones
plant, KUO Transmisiones shall proceed in accordance with production needs; and all the
incurred costs shall be charged to the carrier.
3.13.7 Identification of DMR Origin and Type of Reject.
When a DMR is issued, it shall be clearly specified where the Non-Conformance was
originated or detected; some areas may be:
a) Receipt.- Issue detected during material inspection in Quality Receipt and before
sending it to the assembly line or machining.
b) Assembly.- This is once the material is located at the warehouse and/or the assembly
line, and the issue is detected by the line operator.
c) In Process.- At production lines’ machining centers, during raw material processing.
d) Accumulated.- Scrap generated by the assembly line or machining process, due to an
inconsistency or quality issue with a part or product from the supplier in a period of time.
e) Customer.- Issue at the customer’s assembly line or in the field. Part or material which
was found defective or nonconforming in a(some) transmission(s) rejected by a KUO
Transmisiones customer.
f) Other.- Some issue detected during a vehicle test, when there has been a previous
notification of the Non-Conformance by the supplier, or other which has not been
previously specified. If this option is selected, both the location and the rationale for the
Non-Conformance shall be clearly specified in the DMR.
g) Delivery Non-Compliance.- Under and Over Shipments, Late Shipments, etc.
h) Transportation.- Material damaged during transportation, late deliveries, etc.
The specification of the reject origin will allow the SQE and the Buyer to measure the extent
of the implications originated by the issue or non-conformance, therefore one shall proceed
as per section 3.13.17
3.13.8 Potential DMR
The SQE*, as well as Quality Receipt, shall identify a Potential DMR when the supplier has
notified that he has found an inconsistency on the material shipped, or on the material ready
to be shipped to the KUO Transmisiones plant.
a) If the material has not been entered into MFG-Pro System, no DMR issuance is required.
a.1) The supplier shall immediately replace the material. The supplier shall pay for an air
freight, if KUO Transmisiones considers it is appropriate to do so.
a.2) In case the non-conformance, detected by the supplier, is due to a characteristic

which is not impacting the Product’s operation, where such component is being
assembled, the supplier may fill in a Deviation Request and send it to KUO
Transmisiones Buyer and/or SQE to be approved by KUO Transmisiones
Engineering and Quality. The supplier shall be able to ship the material once he gets
the approval from KUO Transmisiones Buyer and/or SQE via this document. The
parts shall not be counted for PPM for the supplier.
a.3) If material is requested due to assembly requirements, one shall proceed as
provided in letter b) of this section.
b) If material has already been entered into MFG-Pro Systems and can be located in the
Quality Receipt area, the DMR shall be issued and identified in the reject location as
“Other”, and the reject details clearly described. It shall be specified that the supplier
notified about the non-conformance on a timely manner.
b.1) In case the parts may be deviated, selected at a 100%, or reworked, all costs shall
be charged to the supplier.
b.2) Only the parts which turn out as nonconforming or rejected after the determination
has been made, shall be counted for PPM. The reworked or deviated quantity shall
be counted for PPM, only in the case that the supplier did not notify about the issue
before the material shipment.
3.13.9 Determination of Quantities for DMR.
When a DMR is issued, the issuing entity shall precisely record the quantity rejected, the
quantity sampled and the quantity rejected after the disposition. The DMR System shall be
capable of allowing the edition of the recorded data.
a) Quantity Rejected.- In order to determine the quantity rejected in a DMR, the Quality
Receipt Insurer and/or the SQE shall identify and physically verify all suspect material
with the purpose of containing the issue. During the identification of the total of material
rejected, the DMR shall reference the production batch number, trial batch number, date
of shipment or receipt, etc., for traceability purposes, which shall allow for the isolation of
the suspect batch, setting up the breaking point of the issue. The determination of the
rejected or suspect quantity, does not exclude the quantity in transit that shall be
mentioned in the DMR.
b) Quantity Sampled.- The Quality Receipt Insurer shall identify and verify the quantity of
parts which have been sampled and/or inspected to define the non-conformance shown
in the DMR. The size of the quantity sampled is defined by the Sampling Tables, which
are an internal procedure that define the size of the sample to be inspected at material
receipt, and are determined by the supplier performance in DMR.
c) The Defective % is determined by the following formula:
Rejected % = Quantity Rejected x 100

Quantity Sampled
d) Quantity Rejected.- After Disposition.- The Quality Receipt Insurer determines and
defines the total quantity rejected after having proceeded with the type of disposition
given by the supplier, which may be of the following type:
d.1) Material pickup by the supplier within the next (3) working days upon notification of
issue. After this time, the KUO Transmisiones plant shall eliminate the material at its
own discretion, and costs generated by this shall be charged to the supplier’s
account.
d.2) Return material to supplier and charge shipment costs generated to his account. The
supplier shall send a Debit Authorization Number (RMA) (Return Material
Authorization).
d.3) Eliminate the material at the KUO Transmisiones plant and charge the costs
generated to his account. The supplier shall send a Debit Authorization Number
(RMA) (Return Material Authorization).
d.4) Inspect or Rework at KUO Transmisiones plant and/or third party supplier with the
supplier’s personnel, or with KUO Transmisiones own resources (if available),
charging a US$100.00 rate per man- hour. Costs generated by this shall be charged
to the supplier’s account.
The quantity rejected after the first disposition, shall be counted for PPM.
3.13.10 Identification of Shipments Subsequent to a DMR Issuance
The issuing entity shall verify that the DMR System does not contain an open and valid DMR
before issuing a new DMR. This requires that the following will be clearly defined each time
a DMR is issued:
 Name and number of supplier

 Defect location
 Part number
 Description of issue or non-conformance
If the non-conformance found is the same (repetitive) as that of the previous immediate
DMR and it is still open, the Quality Receipt Insurer shall include the quantity received in that
DMR opened, and such part number shall be placed in Controlled Shipments Level II (See
3.14.9 and 3.14.11).
Once the issue has been reported to the supplier via DMR, the supplier shall identify the
material physically, with a yellow dot on the parts, and a yellow label for the case, container
or package, with the legend “100% Certified Material, EC-I", making reference to “Controlled
Shipments” procedure (see 3.14.8 and 3.14.11). The supplier shall make reference to the 8
D’s on the type of identification used. This practice shall be until the 8 D’s are closed by the
SQE.
On the other hand, once the permanent Corrective Actions are implemented, the supplier
shall notify KUO Transmisiones SQE using the 8D format, on the breaking point via batch
number, trial batch number, date of shipment, or anything that gives an indication to KUO
Transmisiones on such implementation.
3.13.11 Corrections to the DMR
If any piece of information in the DMR is not correct, the issuing entity shall ensure the
necessary corrections are made on the DMR System. If the supplier complains about some
information included in the DMR, the SQE shall verify the details and then correct the
information, as appropriate. Any claim from the supplier in regards to the information on the
DMR, shall be directly discussed with the KUO Transmisiones plant SQE responsible.
 Supplier Responsibilities
3.13.12 General Information.
The supplier shall timely notify KUO Transmisiones SQE, when a suspect or nonconforming
material could have been shipped to the KUO Transmisiones plant.
When a non-conformance or non-conformity is detected by the KUO Transmisiones plant,

the supplier shall get involved on the issue identification at KUO Transmisiones plant
facilities, if so required by KUO Transmisiones.
3.13.13 Disposition of Suspect Material
Once the supplier has been notified and has received the DMR, the supplier shall give
disposition to the suspect material in no later than 2 hours after issue notification:
1. In the DMR System, the KUO Transmisiones SQE suggests the supplier the type of
disposition most suitable to issue conditions and implications. It is the supplier’s
responsibility to confirm and respond via DMR System by identifying the type of Material
Disposition he wishes to give.
2. Disposition given by the supplier, shall consider material coverage at the KUO
Transmisiones plant in order to prevent stoppages on the assembly or machining lines.
Likewise, supplier shall consider KUO Transmisiones feasibility of having resources
available, otherwise the supplier shall provide the KUO Transmisiones plant with the
necessary resources for the execution of the disposition, on a timely manner.
3. If required, KUO Transmisiones shall take the right actions such as selecting, inspecting or
reworking the material or parts, in order to prevent stoppages on the assembly or machining
lines, until Conforming parts are received as a result from the disposition made by the
supplier. These costs shall definitely be charged to the supplier and shall be shown in the
corresponding DMR.
4. In case KUO Transmisiones uses its own resources for the disposition execution, the costs
to supplier shall be charge at a rate of US$100.00 per man-hour plus the materials used for
that same purpose.
5. In case the supplier does not respond within the following 2 working hours after the
DMR has been sent, KUO Transmisiones shall take and give disposition of material,
and apply the necessary charges to supplier at its own discretion, and according to
what is provided in section 3.13.17
Quantity Rejected After Disposition.- The SQE determines and defines the total quantity
rejected after proceeding with the type of disposition given by the supplier, which may be as
follows:
a) Material Pickup by the supplier after (3) working days following the issue notification.
After this time, KUO Transmisiones shall eliminate the material at his own discretion,
and the expenses derived shall be charged to the supplier’s account.
b) Return material to supplier and charge him with the shipment costs generated. The
supplier shall send a Debit Authorization Number (RMA) (Return Material
Authorization).
c) Eliminate the material at the KUO Transmisiones plant and charge the
supplier for the costs generated. The supplier shall send a Debit
Authorization Number (RMA) (Return Material Authorization).
d) Inspect or Rework at KUO Transmisiones plant and/or third party supplier with the
supplier’s personnel, or with KUO Transmisiones own resources (if available),
charging a US$100.00 rate per man- hour. Costs generated by this shall be charged
to the supplier’s account.
The quantity rejected after the first disposition shall be counted for PPM.
3.13.14 Containment Actions
Once the supplier has been notified and has received the DMR, the supplier shall
implement the Containment Actions in no later than a 24-hour period of time:
1. In the DMR System, the KUO Transmisiones SQE suggests the supplier the type of
disposition most suitable to issue conditions and implications. It is the supplier’s
responsibility to confirm and respond via DMR System by identifying the type of Material
Disposition he wishes to give
2. Containment actions shall apply to existing material at the supplier’s plant, material in transit
and material at the KUO Transmisiones plant.
3. Disposition given by the supplier shall consider material coverage at the KUO
Transmisiones plant in order to prevent stoppages on the assembly or machining lines.
Likewise, supplier shall consider KUO Transmisiones feasibility of having resources
available, otherwise the supplier shall provide the KUO Transmisiones plant with the
necessary resources for the execution of the disposition, on a timely manner.
4. If required, KUO Transmisiones shall take the right actions such as selecting, inspecting or
reworking the material or parts, in order to prevent stoppages on the assembly or machining
lines, until Conforming parts are received as a result from the disposition made by the
supplier. These costs shall definitely be charged to the supplier and shall be shown in the
corresponding DMR.
5. In case KUO Transmisiones uses its own resources for the disposition execution, the costs
to supplier shall be charged at a rate of US$100.00 per man-hour plus the materials used for
that same purpose.
6. The containment actions shall be provided in the DMR System in the 8 Disciplines sections
(disciplines 1, 2 and 3), including the inspection analysis results from the different locations
at the supplier’s plant. The breaking point for the startup of containment actions, as well as
the identification method of the following batches, shall also be included in the 8 Disciplines.
7. In case the supplier does not respond within the following 2 working hours after the
DMR has been sent, KUO Transmisiones shall take and give disposition of material,
and apply the necessary charges to supplier at its own discretion, and according to
what is provided in section 3.13.17
3.13.15 8 Disciplines (Corrective and Preventive Actions)
The supplier shall respond to the Corrective Actions via DMR System in the 8
Disciplines format section within the following 10 calendar-days upon DMR issuance.
In case the supplier needs more time, he shall request so in writing to the SQE. This final
response shall include:
1. Containment Actions taken.

2. Methods used to assess effectiveness of containment actions taken.
3. Problem root cause, including the methods used to identify that(those) root cause(s) as
technical as well systemic. Supplier will have 5 calendar-days after notifying the quality
problem to respond to KUO Transmisiones.
4. Corrective and Preventive Actions implemented, including the rationale used to eliminate
any potential failure with an error proofing / poke yoke focus.
5. Clear description of the activities to be developed such as corrective and preventive actions,
showing the responsible persons and follow-up dates.
6. Definition of the assessment method for the effectiveness of actions, as well as the
capability statistical studies subsequent to corrective actions implementation.
7. Show how the solution shall be institutionalized in reference to other similar parts or
processes.
8. Dates on when the Failure Mode and Effects Analysis (FMEA), process sheets, inspection
instructions and Control Plan, if applicable, shall be updated and be available for revision by
KUO Transmisiones SQE. See FMEA and APQP Reference Manuals.
3.13.16 DMR Appeal Process
The supplier may appeal due to a DMR issuance or the specific information contained in the
DMR. The following process shall be followed by the supplier in order to make an appeal:
1. The supplier shall submit objective evidence to the SQE in order to prove the appeal
rationale. Any request to change a DMR, due to an error, shall be made within 5 working
days upon DMR issuance.
2. If the SQE and the supplier do not reach an agreement, and the supplier wishes to continue
with the appeal, the situation shall be turned to the KUO Transmisiones Supplier
Development and Quality Engineering Manager for revision and definition of evidence.
3.13.17 Cost Recovery Process
The Cost Recovery Process has been implemented by KUO Transmisiones to recover the
incurred costs due to a quality issue or non-conformance caused by a supplier. The Cost
Recovery Process (DMR Section 3) shall be documented with all the support information
related to man-hours invested, assembly or machining lines idle time and the impact on the
number of transmissions. KUO Transmisiones shall provide a detailed explanation of any
additional incurred cost when the Cost Recovery is sent (DMR Section 3).
1. The supplier shall be charged with a US$100.00 rate for each DMR issuance.
2. In case the KUO Transmisiones plant receives a part with a quality issue again, which has
already been previously reported and that is not part of the quantity in transit in the last
DMR, a US$500.00 rate shall be charged due to the issuance of a new DMR for a repetitive
problem caused by customer’s negligence.
3. Costs due to rework, selection, inspection and/or process time for an internal deviation, shall
be charged at a rate of US$100.00 per man-hour.
4. A rate of US$ 1000.00 shall be charged per hour (DMR Section 3) in the event of an
Assembly Line Stoppage
5. A rate of US$ 150.00 shall be charged per hour in the event of a Machining or Forging Line
Stoppage.
6. Costs due to the machining and/or processing of defective parts sent by a supplier to KUO
Transmisiones plant, shall be charged to the supplier.
7. Costs due to the disassembly of KUO Transmisiones transmissions and/or products,
because of a quality issue on a part from the supplier, shall be charged to supplier at the
man-hour cost of the assembly line, times the hours required for such disassembly, plus the
materials’ costs due to such disassembly.
8. Other costs, associated to the impact of a non-conformance or quality issue from the
supplier, shall be revised by the Buyer for the application of the due Cost Recovery (DMR
Section 3). These costs include the following but are not limited to:
8.1) Incurred expenses by KUO Transmisiones to travel to the supplier’s plant.
8.2) Retribution of costs by supplier to KUO Transmisiones, due to vehicles’
disassemblies with KUO Transmisiones defective transmissions and/or products
with quality issues present on the supplier’s part.
8.3) If there is a quality issue with a KUO Transmisiones product, caused by a
supplier’s defective part, and some customer makes charges to KUO
Transmisiones, these charges shall definitely be transferred to the supplier(s)

involved.
In all cases, all these charges shall be totally documented.
 Cost Recoveries (DMR Section 3) not exceeding US$ 20,000.00, when the supplier has
not responded after 6 weeks, shall be charged to the supplier’s account through
Accounts Payable. Costs Recoveries (DMR Section 3) equal or greater than
US$20,000.00, and with no response from supplier, shall be approved by KUO
Transmisiones Supplier Development and Quality Engineering Manager, as well as KUO
Transmisiones Purchasing Manager, before being charged to the supplier’s account.
It is the duty of the supplier to respond in writing to any Cost Recovery (DMR Section 3)
issued by KUO Transmisiones
3.13.18 Cost Recovery Appeal Process (DMR Section 3).
The supplier may appeal due to a Cost Recovery (DMR Section 3). The process to be
followed is as next described:
 The appeal process shall be concluded within 6 weeks upon Cost Recovery issuance
(DMR Section 3).
 The supplier shall initiate any appeal within the first three weeks upon Cost Recovery
issuance (DMR Section 3) contacting the Buyer, or the corresponding KUO
Transmisiones SQE.
 The supplier shall submit objective evidence regarding an unjustified or imprecise
charge. If the supplier and KUO Transmisiones reach an agreement, and the initial
charge deserves to me modified, the Cost Recovery Request shall be updated, and the
quantity reviewed shall be charged to the supplier.
 If there is no agreement between KUO Transmisiones and the Supplier, within the first
three weeks upon Cost Recovery (DMR Section 3) issuance, the supplier shall then
appeal and resort to KUO Transmisiones Supplier Development and Quality Engineering
Manager and KUO Transmisiones Purchasing Manager. If a new agreement is reached
between these new entities, then the modified cost shall be charged to the supplier’s
account.
 If there is no agreement between the previous parties within 6 weeks, the original costs
shown on the Cost Recovery (DMR Section 3), shall be charged to and discounted from
the supplier’s account.
3.14 Procedure and Requirements for Controlled Shipments
Controlled Shipments are a requirement from KUO Transmisiones for a supplier to place a
redundant quality assurance process, in order to select or inspect nonconforming material
resulting from an out of control process. This redundant inspection performed at the
supplier’s plant, is additional to the standard process controls. Data collected from the
redundant inspection process are critical, as well as the measurement of secondary
inspection processes effectiveness, and the corrective actions taken to eliminate the initial
non-conformance. Controlled Shipments are a Corrective Action for the infractor supplier.
This is not just a common inspection process.
There are two levels of Controlled Shipments:
3.14.1.1 Controlled Shipments Level I is defined as a redundant inspection process carried

out by the supplier’s personnel at the supplier’s plant, with the aim of isolating KUO
Transmisiones plant from the reception of nonconforming material and parts.
3.14.1.2 Controlled Shipments Level II is the same activity as Level I, but the entity
performing the inspection is a third company selected by KUO Transmisiones and paid by
the supplier. In addition, Level II activity can be required to be carried out at the supplier’s
plant using his material resources, except for human resources, who will be provided by the
service supplier assigned by KUO Transmisiones. In special cases, KUO Transmisiones will
lend its facilities to the service supplier in order to carry out the inspection using his own
human and technical resources.
The key points in this process are:
3.14.2 Consensus among SQE, SDE and KUO Transmisiones buyer on the current supplier’s
controls are not robust enough to isolate KUO Transmisiones Plant from receiving
nonconforming parts or material.
3.14.3 Formal communication with the supplier about the action (Level I or Level II) to be taken,
including the outcome or termination criterion of this condition.
3.14.4 If it is Level II, an initial meeting with the supplier shall be required at KUO Transmisiones
Plant facilities and/or conference call between KUO Transmisiones and the supplier, in order
to broadly explain the supplier about the requirements and responsibilities that both parts
shall adopt.
3.14.5 If it is Level II, a detailed definition shall be required for a specific inspection area, in case
the process is carried out at the supplier’s plant.
3.14.6 A revision of the containment action is required regarding the Controlled Shipment Level.
3.14.7 Controlled Shipments: ¿Level I or Level II?
The standard rule to determine the implementation of Controlled Shipments can consider
one or several of the following:
a) DMR issuance
b) Repetitive DMR
c) PPM performance
d) Issue impact and duration
e) Non-robust and incapable of producing quality parts processes
f) Field issue
g) Inadequate containment and/ or solution of non-conformances via the DMR process.
Based on the previous considerations, KUO Transmisiones decides if the supplier shall be
penalized with a Level I or Level II. In order to make such a decision, the assessment team
shall be formed by the corresponding team of Direct Material Purchases (SQE, SDE and
buyer), the Quality Assurance Manager of KUO Transmisiones Plant, the Quality
Engineering and Supplier Development Manager and KUO Transmisiones Purchasing
Manager. Controlled Shipments Level II is characterized by situations, where the previous
actions implemented by the supplier have shown and proved to be ineffective, and that they
have the prevailing need of outsourcing (third party) to perform such required inspection,
thus assuring KUO Transmisiones the non-reception of nonconforming parts from the
supplier.
3.14.8 Controlled Shipments Level I
Every DMR issued to the supplier places the part number and the supplier itself in the
Controlled Shipments Level I Status. KUO Transmisiones SQE communicates to the
supplier, in writing, the definition of the issue, the need of the implementation of an additional
and redundant inspection, the containment activities and the criterion to terminate the
Controlled Shipments Level I condition. This Controlled Shipments Level I procedure may be
substituted by the “ Pre-production Containment Procedure “ (refer to requirement 3.6)
It shall be the supplier’s responsibility to:
3.14.8.1 Immediately establish an inspection area at his plant.

3.14.8.2 Begin the inspection activities and deploy the results in a public and visible area in the
company.
3.14.8.3 Track and locate the previous points in the process, where the nonconforming material
shall be or shall have been detected.
3.14.8.4 The leadership team of the supplier shall meet on a daily basis in the selected inspection
area, to check the results and ensure that the corrective actions taken are being effective,
or that a change is required.
3.14.8.5 Communicate the results in writing on a daily basis regarding the inspection process to
the KUO Transmisiones SQE.
3.14.8.6 Request the termination of the Controlled Shipments process by sending the
documentation on the performance and results to the KUO Transmisiones SQE, provided
that 2 weeks after the last corrective action implementation, the issue has already been
eradicated.
It shall be responsibility of KUO Transmisiones SQE to assess and ensure that the criterion
to change the Controlled Shipments condition shall be communicated, in writing, to all the
affected entities in KUO Transmisiones implying thus, the release of the supplier from this
status.
The supplier shall comply with the following requirements for the Containment Actions in
Controlled Shipments Level I.
3.14.8.7 The inspection area shall be highly visible and appropriately lightened, equipped, etc.
3.14.8.8 It shall have a very well defined and efficient material flow, including clearly identified
areas for the inflow and outflow of material from this area.
3.14.8.9 No type of rework or material recovery shall be done in this area.
3.14.8.10 The inspection area shall be independent from the supplier’s production process.
3.14.8.11 The non-conformances, measurements, results and actions taken in reference to the
containment activity, shall be clearly deployed on the information boards.
3.14.8.12 The charts and results shall be updated and reviewed on a daily basis by the supplier’s
leadership team.
3.14.8.13 Solutions to issues found shall be clearly analyzed and documented with objective
evidence.
3.14.8.14 The inspectors designated to perform the containment inspection shall have the
corresponding work instructions, quality standards and/ or acceptance samples available.
3.14.8.15 Designated inspectors shall be previously trained.
3.14.9 Controlled Shipments Level II
The following are specific requirements for Controlled Shipments Level II:
The SQE communicates and describes to the supplier, in writing, the following:
- The action to be taken and executed.
- The Non-conformance driving to such decision.
- The type of inspection required
- The criteria to be covered in order to leave the Level II condition
- The request to state a date and to carry out an initial meeting between KUO Transmisiones
and the supplier at KUO Transmisiones facilities. The SQE, SDE, Buyer, Quality and
Supplier Development Engineering Manager, Purchase Manager from KUO Transmisiones

and The Supplier’s Quality Manager shall attend the meeting as a minimum.
- It shall be the supplier’s responsibility to complete the answer format to confirm Controlled
Shipments II and return it to the KUO Transmisiones SQE.
The initial meeting, if required, shall meet the following steps:

3.14.9.1 Describe the objective of the meeting, such as:
KUO Transmisiones has determined that Controlled Shipments Level II is being
implemented at its plant.
The production process is out of control and the Nonconforming parts and material shall be
isolated.
3.14.9.2 The agenda of the meeting shall include:

- Revision of the process flowchart
- Issue description
- Definition of activities and responsibilities
- Set the details for the Controlled Shipments II Plan.
- Define the criteria to terminate and leave the Controlled Shipments II condition.
- Define the means and plan of communication.
3.14.9.3 Activities and Responsibilities:
SQE and SDE:
- Participate in the decision about which outside company or third party shall carry out the
activities required for Controlled Shipments Level II.
- Define the dimensions, specifications, characteristics, etc. to be inspected.
- Decide about the definition of the criterion to leave the condition of Controlled Shipments II.
- Drive the implemented activities in the whole process.
Buyer:
- Assume responsibility for all the commercial and financial affairs resulting from the
Controlled Shipments II process.
- Shall participate in the decision about which outside company or third party shall carry out
the activities required for Controlled Shipments Level II.
Outside Company for Level II (third party)
- Provide personnel to carry out and perform the inspection activity and results record.
- Provide documentation to the supplier and to the KUO Transmisiones SQE about the
progress and results of activities in Controlled Shipments II.
- Certify the material in accordance with the agreement between the KUO Transmisiones
SQE and the supplier
- Place Label of Controlled Shipments Level II.
Supplier:
- Issue a Purchase Order to the Outside Company for Level II. The supplier shall be
responsible for all the costs generated by the hired Outside Company, which shall carry out
the containment activities and/ or shall supervise the plant’s employees at the supplier’s
plant.
- Provide an adequate space, equipment and necessary tools in order to perform the re-
inspection activity.
- Drive the Permanent Corrective Actions.
3.14.10 Specific Containment Requirements for Controlled Shipments.
The information boards shall deploy the following information:
- Quality and acceptance standards such as master samples, technical specifications,

drawings, etc .
- Action plans based on the non-conformances found
- Process Control Plan identified, where the non-conformances occurred.
- Work Instructions for operators and/or designated inspectors.
- Charts showing the number of inconsistencies found, PPM, DMR, etc.
- Quality Charts with trends, if possible, for the Statistical Process Control Charts.
The Communication Plan shall include:
- The means, format and frequency of communication from the supplier to KUO
Transmisiones SQE.
- The report of all the issues or non-conformances found during the inspection process
derived from the condition of Controlled Shipments Level II.
- Assure to maintain the same criterion of termination for Level II
The termination criterion shall:
- Include clear and measurable elements

- Shall be specific, relevant and focused on non-conformances or quality issues previously
detected.
- Include a program to assure that the corrective actions implemented are permanent.
3.14.11 Specific Application Requirements for Controlled Shipments Level I and II
 CONTROLLED SHIPMENTS LEVEL I:
It is the Supplier’s Responsibility:
3.14.11.1 To inspect at a 100% the characteristic that was found out of specification for the
defective part number, and all the part numbers that have a similar manufacturing
process, namely, those which are manufactured in the same machine and/or have the
same manufacturing concept. KUO Transmisiones SQE together with the supplier, shall
decide which part numbers are implied.
3.14.11.2 All the certified parts shall be identified with a yellow dot.
3.14.11.3 All the cases or bags where the certified material is packed shall be identified with a
yellow label which reads: “100% Certified Material CS-I”
3.14.11.4 Periodic feedback to the KUO Transmisiones SQE about the performance of the 100%
certification results. (Acceptance and rejection percentage).
3.14.11.5 Comply with all the events of the 8 D’s process and all the activities involved.
3.14.11.6 The supplier’s plant Quality Assurance Manager as well as the General Manager, shall
submit a complete report of the 8 D’s per quality issue during the next 15 working days
upon DMR issuance
All these activities shall be kept until the 8 D’s report is closed by the KUO Transmisiones SQE.
Failure to comply with any of the above mentioned activities shall cause the supplier to be
placed in “Controlled Shipments Level II”. Some of the reasons for this are:
3.14.11.7 If KUO Transmisiones finds in some of its facilities a repetitive issue: same defect in the
same part number or any other in a different part number with a similar supplier’s
manufacturing process.
3.14.11.8 Non-Compliance to material identification requirements for the next shipments after the
issuance of the DMR.
3.14.11.9 Non-Compliance to the tracking of events of the 8 D’s process.
3.14.11.10 If any part number provided by the supplier to KUO Transmisiones, results in a claim
from a KUO Transmisiones customer.
 CONTROLLED SHIPMENTS LEVELII:
It is the Supplier’s Responsibility:
3.14.11.11 200% Material certification in the defect found. The first 100% inspection shall be done
by the material supplier, and the second 100% inspection can be performed at:
a) The Material Supplier’s Plant using his own resources (facilities, gages, etc.) using a
Third Party Supplier defined by KUO Transmisiones, to perform the second 100%
certification before being shipped to KUO Transmisiones. The Inspection cost shall be
agreed upon between the Third Party Supplier and the Material Supplier. The material
supplier shall pay the total cost.
b) The Facilities of the Third Party Supplier defined by KUO Transmisiones, using his own
resources in order to carry out a second 100% certification before being shipped to KUO
Transmisiones. The cost shall be agreed upon between both suppliers, and the material
supplier shall pay the total inspection cost.
c) KUO Transmisiones Plant, using a third party supplier defined by KUO Transmisiones,
with an inspection cost of $100.00 USD per man hour, and the total cost shall be paid by
the material supplier.
3.14.11.12 All the parts shall be identified with a blue dot by the material supplier, and a green dot
by the Third Party Supplier.
3.14.11.13 All the cases or bags where the certified material is packed shall be identified with a
green label reading “ 100% Certified Material CS-II” This activity shall be carried out by
the Third Party Supplier.
3.14.11.14 Periodic feedback to the KUO Transmisiones SQE about the performance and
inspection results of the 200%. Acceptance and rejection percentage
3.14.11.15 Comply with all the events of the 8 D’s process and all the implied activities.
3.14.11.16 The General Director, General Manager and Quality Manager shall attend to KUO
Transmisiones Plant with the SQE, the respective team from KUO Transmisiones and the
Third Party Supplier, during the following three working days after the issue has been
notified by the SQE, which aim is to discuss the rationale used for such decision and to
formalize the agreements regarding the termination criterion and the development and
execution of the Procedure of Controlled Shipments Level II.
3.14.11.17 Same people on behalf of the material supplier (General Director, General Manager
and Quality Manager) shall submit the 8D’s Complete Report about the quality issue solution within
a span of no more than 15 working days after the Procedure for Controlled Shipments Level II has
been formalized.
3.14.11.18 While the material supplier is in the Controlled Shipments Level II status, he shall be
placed in “NEW BUSINESS HOLD” until he leaves such status and the 8D’s report is closed by the
KUO Transmisiones SQE.
The material supplier shall continue all the activities until the 8D’s report is closed by the KUO
Transmisiones SQE
Failure to comply with any of the above mentioned activities, shall cause the material supplier to be
replaced and deleted from the “KUO Transmisiones Approved Suppliers List”.
3.15 Supplier’s Global Performance Monitoring
The means to monitor the global performance of the supplier are defined in this section,
through the use of data generated by the behavior of the supplier in quality, deliveries and
competitiveness. All of these criteria will be clearly detailed below.
3.15.2 Line Stoppage
Based on the impact resulting from a non-conformance or a non-conforming part or material

from the supplier, the following classification has been determined:
Note 1: The number of line Stoppages induced by the supplier at KUO Transmisiones, is the
most important measurement in order to measure the quality performance of a supplier. This
measurement is used to enable KUO Transmisiones Purchases to grant or increase
business with the supplier.
Note 2: A line Stoppage implies that several areas within KUO Transmisiones, such as
Product Engineering, Manufacture, Production Quality and Control, shall get involved in the
problem with the aim of taking the necessary actions to enable the assembly line to continue
operating.
3.15.2.1 Line Major Stoppage
A line stoppage classified as Major is one in which the quality issue, regarding the
nonconforming part or product and the non-conformance, requires a KUO Transmisiones
Product replacement at KUO Transmisiones customer plant; parts in transit, in shipments
and obviously those that are being assembled or are scheduled to be assembled. This
includes the material or product in the warehouses and/or Quality Receipt. The supplier shall
involve the leadership team of his plant, which is mainly conformed by the Manufacturing
Manager, Plant Manager, Quality Manager, Production Control and/ or Production Manager,
etc.
The costs incurred as a result of a Line Major Stoppage, shall be recorded and addressed to
in the corresponding DMR, and per definition in section 3.13.17 of this procedure.
3.15.2.2 Assembly and/ or Process Line Stoppage
A line stoppage classified as Assembly and/ or Process is a quality issue, of the

nonconforming part or product, or the non-conformance, that has been found during the
assembly and/ or process in any of the lines and which has impacted the operation flow for 5
or more minutes. The part’s quality issue shall require the replacement of the product
provided by the supplier. This includes the material or product in warehouses and/or quality
receipt. The supplier shall involve the leadership team of his plant, which is mainly
integrated by the Manufacturing Manager, Plant Manager, Quality Manager, Production
Control and/ or Production Manager, etc., in order to solve the quality issue and address the
costs incurred due to such event.
The costs incurred as a result of an Assembly and/ or Process Line Stoppage shall be
recorded and addressed in the corresponding DMR (Cost Recovery – Section 3) and per
definition in section 3.13.17 of this procedure.
3.15.3 Supplier Quality Performance Assessment (40% of the total rating)
KUO Transmisiones updates in a monthly basis the assessment of the quality performance
of the supplier base conforming to the following parameters and criteria:
o PPM of disassembly performance (20%)
o PPM of manufacturing processes performance (12%)
o PPM of incoming performance (8%)
o External Customer complaints of KUO Transmisiones performance (10%)
o Problems solution (8D’s) performance (30%)
o PPAP performance (20%)
3.15.3.1 PPM of Disassembly Performance :

PPM rating that supplier has had by month in the assembly process. This entry has a value of 20%
of the total amount of the parameters rated in the quality criteria.
  PPM Re al  PPM Goal 

PPM FTQ  1    20%  ; If PPMReal  PPMGoal, then PPMFTQ = 20%
  PPM Re al 
 Total Quantity Re jected 

Where: PPM Re al    10 6  
 Total Quantity Assembled 
PPMGoal = Value of PPM defined by KUO Transmisiones plant for this process
3.15.3.2 PPM of Manufacturing Processes Performance:

PPM rating that supplier has had by month in the internal manufacturing processes in
the KUO Transmisiones plant. This parameter is different to the PPM ratings of the
assembly and incoming processes. This entry has a value of 12% of the total amount
of the parameters rated in the quality criteria.

PPM PROC .  1    12%  ; If PPMReal  PPMGoal, then PPMPROC. = 12%

Where: PPM Re al    10 6  
 Total Quantity Machined 
PPMGoal = Value of PPM defined by KUO Transmisiones plant for this process
3.15.3.3 PPM Incoming Area Performance:

PPM rating that supplier has had by month in the incoming area in the KUO
Transmisiones plant. This parameter is different to the PPM ratings of the assembly
and manufacturing processes. This entry has a value of 8% of the total amount of the
parameters rated in the quality criteria.

PPM REC  1    8%  ; If PPMReal  PPMGoal, then PPMREC = 8%

Where: PPM Re al    10 6  
 Total Quantity Re ceived 
PPMGoal = Value of Worldwide PPM Benchmark of the Commodity
3.15.3.4 Complaints of External Customers of KUO Transmisiones Plant Performance:

Rating of the events where supplier has participated with quality issues with external
customers of KUO Transmisiones. At the moment that supplier has an incident,
automatically; supplier is located in a “RED” status. This entry has a value of 10% of
the total amount of the parameters rated in the quality criteria.
3.15.3.5 Problems Solution (8D’s) Performance:

Rating of the effectiveness in the responses to the quality problems issued by KUO
Transmisiones plant, as well, the response time. This entry has a value of 30% of
the total amount of the parameters rated in the quality criteria.
  DMRIssued  DMRRe sponse on time 

Re sponse to the Quality Issues on Time RPC t   1    15% 
  DMRIssued 
If DMRResponse on Time = DMRIssued, Then RPCt = 15%
 DMRRe sponse  DMRRe jected 

Re sponse to the Quality Issues in Effectiveness RPC e    15% 
 DMR 
 Re sponse 
If DMRResponse = DMRRejected, Then RPCe= 0%; Also if DMRIssued = 0, then RPC = RPCt +
RPCe = 30%
3.15.3.6 PPAP Submissions Performance (PPAP’s):

Rating in performance in PPAP submissions as new submission as well anual layouts
(revalidations) according to the timing agreed upon between supplier and SDE of
KUO facility. Also, it is rating the effectiveness in the accomplishment to the quality
and design requirements. This entry has a value of 20% of the total amount of
parameters rating in the quality criteria.
  PPAPscheduled  PPAPRe ceived 
Performancein PPAP submissions versus schedule CV p  1    10% 
  PPAPScheduled 
if PPAPScheduled  PPAPReceived, then Performance in PPAP submissions versus Schedule

(CVp)= 10%
 PPAPRe ceived  PPAPRe jected 
Effectiveness in PPAP Submissions CVe    10% 
 PPAPRe ceived 
if PPAPReceived = PPAPRejected, then the Effectiveness in PPAP Submissions = 0%; also if
PPAPscheduled = 0, then Performance in PPAP submissions = CVp + CVe = 20%
3.15.4 Supplier Delivery Performance Assessment (30% of the total rating)

KUO Transmisiones updates in a monthly basis the assessment of the delivery performance
of the supplier base conforming to the following parameters and criteria::
o Delivery Accomplishment (40%)
o Flexibility in Production Schedule Changes (20%)
o Extra freights under supplier responsibility (40%)
3.15.4.1 Delivery Performance:

Rating the percentage of performance in delivery conforming releases (ERP) of the KUO
facility. Se califica el porcentaje de cumplimento en entregas conforme a los releases
(ERP) de la planta de KUO Transmisiones. This entry has a value of 40% of the total
amount of parameters rating in delivery.
  Quantity Scheduled  Quantity Re ceived 
Delivery Performance  1    40% 
  Quantity Scheduled 
If the received quantity is < or > tan scheduled quantity is equally sanctioned.
If the Received Quantity = Scheduled Quantity then Delivery Performance = 40%
3.15.4.2 Performance in Flexibility in Schedule Changes (Service):

Rating the flexibility that supplier has to abrupt changes in scheduling that prior were not
planned. However, they are from a market fluctuations that are not controlled by KUO
facility. This entry has a value of 20% of the total amount of parameters of delivery
criteria and it is rated subjectively using the criteria of the representative of the
purchasing planner of KUO Facility.
Positive Response to the Schedule Change = 20%
Negative Response to the Schedule Change = 0%
3.15.4.3 Performance in Extra Freights under Supplier Responsibility:

Rating the number of incurrence in Extra Freights that supplier has caused to the KUO
facility and there is enough evidence for cost recovery by KUO facility. This entry has a
value of 40% of the total amount of parameters of delivery criteria.
 # Total Shipments  # Extra Freights 
Extra Frieghts   40% 
 # Total Shipments 
3.15.5 Supplier Global Competitiveness Performance Assessment (30% of the total rating)
KUO Transmisiones measures the competitivity level of his supplier base conforming to the
following parameters and criteria:
o Price Reduction Plans (50%)
o Quotation & Feasiblity Response (20%)
o Competitiveness for New Business (30%)
3.15.5.1 Performance in Price Reductions Plans by Supplier:

Rating of the performance that supplier has had in price reductions or increasings where
the goal is to have price reductions to keep the competitiveness level with our customers.
These reductions could be, by:
 Negotiation
 Improvements in Productivity in the Manufacturing processes of the piece.
 Design Changes as:

 Material Change
 Manufacturing Process Change
 Tolerance Change, etc.
Whatever these initiatives of price reductions is valid. This entry has a value of 50% of
the total amount of parameters of the Competitiveness criteria.
 Increase of the year? Yes (0%) No (25%)
 % Price Reduction (vs. Global Amount of Purchasing): 1% (=5%), 2%
(=10%), 3% (=15%), 4% (=20%), >4% (=25%)
3.15.5.2 Performance in RFQ’s Response and Feasibility Accomplishment:

Rating the supplier performance in response to the RFQ’s (Request For Quotations) on
time and “clarity” in the operations costing in the piece manufacturing. Furthermore, the
supplier is invited to make a right revision and filled out of the feasibility analysis in each
RFQ. This entry has a value of 20% of the total amount of parameters in competitiveness
criteria
  # RFQ Sent  # Quotations Re ceived on Time * 

RFQ Re sponse RFQ   1    10% 
 
  # RFQ Sent 
* If the quotation was received without feasibility analysis or filled out wrongly, the
quotation is considered not sent
In each quotation must be sent the cost breakdown and it adds 10% on this rate.
3.15.5.3 Performance in Competitiveness:

Rating that supplier has won in new business with respect to the projects have been
quoted with him and where the project was a fact to be purchased by KUO facility. This
entry has a value of 30% of the total amount of parameters of global competitiveness
criteria.
  # Quoted Drawings & Re leased  # Allocated Purchase Orders 

Competitiveness  1    30% 
  # Quoted Drawings & Re leased 
3.15.6 Supplier Global Performance Assessment

The following addition is made: Quality + Delivery + Global Competitiveness = Total.
Depending on the result of this equation, the supplier is classified within the following
criteria:
“GREEN/VERDE Supplier 80%  Total  100%

“YELLOW/AMARILLO” Supplier 70%  Total < 80%
“RED/ROJO” Supplier Total < 70% or having at least one
Incidence in issues with external
customers.
“WHITE/BLANCO” Supplier INACTIVE Supplier that has not had
entries during the evaluation process
Once the suppliers have been assessed, all the “RED” and “YELLOW” ones are identified,
and the SDE performs an analysis in order to know why they fell into that classification, and
gives feedback to the suppliers regarding their status
3.15.6.1 The supplier shall send to the SDE an improvement plan where it shows specific
actions to be implemented in the supplier’s process in order to eradicate the quality
issue from the root.
3.15.6.2 The KUO SDE, together with the SQE, shall assess the effectiveness of the actions,
whose revision frequency shall depend on the monthly actions and monitoring of the
supplier’s quality performance, in order to watch the improvement trends. Otherwise,
the SDE and the SQE shall define the new strategy to be followed with the infractor
supplier.
3.15.6.3 The SDE posts the “RED” suppliers assessment results, as well as the quality
performance charts at KUO’s “War- Room”. Such suppliers are considered as the worst
KUO suppliers, and shall not be taken into consideration for new business until they
migrate to the “GREEN” status.
3.15.6.4 Frequency of the Controlled Shipments condition.
KUO tabulates the number of times that the supplier has been placed in the Controlled Shipments
Status, Level I or Level II, throughout the last 12 months. This indicator also determines the
supplier’s quality behavior, reflected in KUO’s Suppliers Portfolio, and decides on the opportunity
for the supplier to receive new purchase orders, or to participate in new projects.
3.16 Requirements for Tooling Identification, Inspection and Testing Devices, Owned by
KUO or KUO’s Customers
If the tooling (matrixes, molds, dies, prickers, centers, etc.), the manufacturing and/ or assembly
mountings and/or Inspection or Testing devices owned by KUO, are guarded by a supplier, the
latter shall meet the following requirements:
3.16.1 Identify, in a visible and permanent way, the tooling and/ or equipment with the legend
“Owned by KUO and the plant to which it belongs”.
3.16.2 Protect against potential damages and deterioration during transport and storage.
3.16.3 In the case of tooling, keep the original conditions according to its initial validation in
order to guarantee quality of the product through periodic maintenance programs,
Checklist, dimensional report in each assembly against product specification etc. Report
to KUO buyer, in writing, the conditions and remaining life estimated for the parts, every
3, 6 or 12 months according to the process where the tooling is used and/ or the
agreement made with the SDE/ KUO’s Buyer. Refer to Item 7.5.1.5 of the ISO/TS-16949
Technical Standard.
3.16.4 For the Inspection and/ or Testing Assemblies, these require to be controlled according
to Item 7.6 of the ISO/TS-16949 Technical Standard
3.16.5 For identification of tooling property of KUO’s Customers must be followed the next
identification instructions:
3.16.5.1 Tooling Property of General Motors Company
3.16.5.1.1 It is responsibility of KUO Project Manager fills out the form “Tooling Worksheet”
with the following information:
3.16.5.1.1.1 Program/Project
3.16.5.1.1.2 GM PO/Contract Number
3.16.5.1.1.3 KUO facility assembly part number
3.16.5.1.1.4 KUO facility component part number
3.16.5.1.1.5 VTAM Tool ID number for each tooling conforming KUO Purchase Order
3.16.5.1.1.6 KUO Customer Part Number
Note: A Tooling Worksheet Form must be issued for each VTAM Number
3.16.5.1.2 It is responsibility of the supplier the fill out of the points 2, 3, 4, 5, 6, 7, 8, 9, 10 of

the “Tooling Worksheet Form”
3.16.5.1.3 It is responsibility of the KUO buyer sends official ID plates to suppliers with the
legend “Property of General Motors”
PROPERTY OF GENERAL MOTORS PROPERTY OF GENERAL MOTORS
TOOL NO. TOOL NO.
PART
3 Inches/ 2 Inches/
PART NAME 7.6cm
NAME
5.2cm
PART NO.
PART NO.
3 Inches/ 7.6cm
5 inches/ 12.7cm
PROPERTY OF GENERAL MOTORS
TOOL NO. 1 Inch/ 2.5cm
2.5 Inches/ 6.35cm
3.16.5.1.4 It is responsibility of the supplier to mark the ID plates using permanent marks as
stamping, Laser Etch, engraving, etc. Use of permanent ink or using superficial
electric pencil is not allowed. The marking in the ID plates must have the
following information:
3.16.5.1.4.1 Tool Number: VTAM Tool ID
3.16.5.1.4.2 Part Name: Description of the KUO part (when it applies)
3.16.5.1.4.3 Part Number: KUO Part Number (when it applies)
This type of
marking is not
allowed. See
3.16.5.1.4
3.16.5.1.5 Location of the ID plate must be in a visible place of the tooling. For tooling GM
property where the ID plate is not possible to put in it for type of material, function
of the piece, size, etc., it must be riveted or turned in the box or packaging of the
tool and 2 pictures must be sent:
3.16.5.1.5.1 First one; zoom-in showing the ID plate with related data. Name of the
file (picture) using the VTAM Number plus word “Close Up”. Example: 79134-
1-A Close Up. Type of file must be in JPEG no bigger than 200Kb.
3.16.5.1.5.2 Second one; making a zoom- out showing the complete tooling and the
ID plate location of the VTAM number, as showed in image a), in the case of box is
plastic, see image b), if box is wood, see image c). Name of the file (picture) using the
VTAM Number plus the word “Complete”. Example: 79134-1-A Complete. Type of file
must be in JPEG no bigger than 200Kb.
Image a)
Image b)
Image c)
3.16.5.1.5.6 For tooling where it is possible to rivet or turn the ID plate with the legend of
Property of General Motors. Two pictures must be sent:
3.16.5.1.5.6.1 First one; zoom-in showing the ID plate with related data. Name of the
file (picture) using the VTAM Number plus word “Close Up”. Example: 33551-2-A Close
Up. Type of file must be in JPEG no bigger than 200Kb.
3.16.5.1.5.6.2 Second one; making a zoom- out showing the complete tooling and the
ID plate location of the VTAM number, as showed in image. Name of the file (picture)
using the VTAM Number plus the word “Complete”. Example: 33551-2-A Complete. Type
of file must be in JPEG no bigger than 200Kb.
3.16.5.1.6 Make an electronic file including:

3.16.5.1.6.1 The two pictures as previously explained
3.16.5.1.6.2 The Tooling Worksheet Form completely Filled out.
Note: Supplier must send the electronic file to the KUO buyer by e-mail for validation of
the information.
3.16.5.1.7 It is responsibility of the supplier to send all this information in the PPAP
documentation to the KUO Purchasing Team. If these tooling requirements are not
received in the PPAP documentation, PSW will not be approved by KUO Engineering and
tooling payment to the supplier will be delayed.
3.16.5.2 Tooling Property of Ford Motors Company

3.16.5.2.1 It is responsibility of the supplier submit the cost breakdown with detailed
information of the tooling; type, description, quantity, cost, etc.
3.16.5.2.2 It is responsibility of the KUO buyer to submit the Tooling ID conforming to the
“example of proper tool tag” to the supplier.
3.16.5.2.3 It is responsibility of the supplier to engrave the tooling of Ford Motors Co.
property conforming following instructions:
3.16.5.2.3.1 Engrave the Tool ID supplied by KUO buyer using laser etch or electric
pencil as showed in image a) or
Image a)
3.16.5.2.3.2 Use a steel ID where the Tool ID is described. The engrave must be
permanent. The Tool ID Tag must be located in a visible zone of the tooling. See image b)
Image b)
3.16.5.2.3.3 For tooling property of customer where the Tool ID tag is not possible to
put in it due to type of material, function of the part, size, etc., supplier must take an
individual picture where the complete tooling is showed and submit an explanation to
the KUO buyer via e-mail of the tooling characteristics associated with the Tool ID of
the paragraph 3.16.5.2.2
3.16.5.2.3.4 It is responsibility of the supplier to create an electronic file including:
3.16.5.2.3.4.1 Pictures according to 3.16.5.2.2
3.16.5.2.3.4.2 Tooling invoices with detailed description
documentation to the KUO Purchasing Team. If these tooling requirements are not received
in the PPAP documentation, PSW will not be approved by KUO Engineering and tooling
payment to the supplier will be delayed.
3.16.5.3 Tooling Property of DCC (Chysler)
3.16.5.3.1 It is responsibility of KUO Project Manager fills out the form “Tooling Worksheet”
with the following information:
3.16.5.3.1.1 Program/Project
3.16.5.3.1.2 Customer PO/Contract Number
3.16.5.3.1.3 Customer Assembly Part Number
3.16.5.3.1.4 KUO facility component part number
3.16.5.3.1.5 Tool ID number for each tooling conforming KUO Purchase Order
3.16.5.3.1.6 KUO Customer Part Number
Note: A Tooling Worksheet Form must be issued for each Tool ID Number
3.16.5.3.2 It is responsibility of the supplier the fill out of the points 2, 3, 4, 5, 6, 7, 8, 9, 10

of the “Tooling Worksheet Form”
3.16.5.3.3 It is responsibility of the supplier to mark the Tool ID using permanent marks as
stamping, Laser Etch, engraving, etc. Use of permanent ink is not allowed. The marking
must have the following information:
3.16.5.3.3.1 Legend: “Property of Chrysler”
3.16.5.3.3.2 Tool Identification Number: Tool ID (supplied by KUO buyer)
3.16.5.3.3.3 Customer Part Description
Note: The marked must be engraved under relief or stamped. If the tooling is used to
produce two or more part numbers of Chrysler, it must be specified in the engraving
as showed in image a) and b).
Image a)
Image b)
3.16.5.3.4 For tooling property of customer where the Tool ID tag is not possible to put in it
due to type of material, function of the part, size, etc., supplier must rivet or turn in the box
or original package. Supplier must take and send two pictures of the tooling:
3.16.5.3.4.1 First one; zoom-in showing the ID plate with related data. Name of the file
(picture) using the Tool ID Number plus word “Close Up”. Example: D-010-01 Close up.
Type of file must be in JPEG no bigger than 200Kb.
3.16.5.3.4.2 Second one; making a zoom- out showing the complete tooling and the ID
plate location of the Tool ID Number, as showed in images. Name of the file (picture)
using the Tool ID Number plus the word “Complete”. Example: D-010-01 Complete. Type
of file must be in JPEG no bigger than 200Kb.
Image
Image of Wood Package
3.16.5.3.5 Make an electronic file including:

3.16.5.3.5.1 The two pictures as previously explained
3.16.5.3.5.2 The Tooling Worksheet Form completely filled out.
Note: Supplier must send the electronic file to the KUO buyer by e-mail for validation of
the information.
documentation to the KUO Purchasing Team. If these tooling requirements are not
received in the PPAP documentation, PSW will not be approved by KUO Engineering and
tooling payment to the supplier will be delayed.
3.17 GLOBAL TOOLING GUIDELINES AND PAYMENT RESPONSIBILITY MATRIX
The purpose of this document is to set forth guidelines to assist the supplier’s understanding of
KUO policy, objectives and procedures with regard to KUO facility-owned special tooling located
at Supplier’s facility (ies), Machinery and Equipment (M&E), whether dedicated or non-
dedicated, including, but not limited to, stamping presses, weld presses (all variations), indexing
machines, CNC machines, automated transfer, robots, handling systems or computer/CAD
stations, tool room equipment, and lab equipment are not special tooling. This also includes
equipment where it may be necessary to alter uniquely in order to manufacture the necessary
KUO part. In addition, there may be items that may fall into a suppliers definition of tooling but,
are not items that KUO chooses to own at a suppliers site. The utilization cost of these items
are assumed to be included in the vendor’s burden portion of the piece price, they will
not be reimbursed by KUO facility as special tools. The fact that M&E may have been in a
KUO tooling purchase order in the past is not relevant nor does it set precedent for how we
manage our business today.
3.17.1 Special Tooling Guidelines and Definitions
The following summarizes KUO’s processes with respect to special tooling and KUO
authorized engineering changes to such tooling. It is the responsibility of Tier 2 supplier to
ensure its sub-suppliers comply with these guidelines.
 Special tooling is tooling specifically designated for the production of, and is unique to, a
KUO part.
 Generic tooling, general-purpose items and equipment are excluded, even if these items are
dedicated to the KUO part (i.e., fasteners, drills, etc.). Refer to further matrix for general
clarification.
 Unique computer software required directly for the production or gauging of the part is
considered part of special tooling and shall become the property of KUO or their customers.
Computer hardware is considered supplier-owned equipment.
 In some cases, tooling may need to be relocated from one supplier to another. During any
such tool move, the original supplier is required to keep the tooling in PPAP approved
condition. If KUO requests the tool move, the cost(s) of tool modifications required by new
supplier may be covered by KUO facility via Tooling Contract(s). If the new supplier requests a
tool modification or tool move, the new supplier must follow KUO’s Supplier Quality PPAP
Requirements, as well as the KUO Change Management Process described in this manual,
and the new supplier will be responsible for any cost not approved by KUO facility via a Tooling
Contract.
 Parts produced with tooling that have inserts subject to a high rate of wear (e.g., aluminum
die castings) that will not provide the program volume will require a request to KUO facility by
the parts supplier for funds to replace the inserts. Any such request (s) are subject to advance
review by KUO Facility Cost Engineering activity.
 Where a parts supplier designs, develops or manufactures production tooling or prototype
tooling in house, and the engineering center/tool room is budgeted as a separate profit center,
a reasonable profit margin on the cost design, development, and manufacture of the tools will
be allowed. All overhead costs and profit associated with the design and manufacture of
special tooling should be included in fully accounted tooling labor rates. When a separate profit
center is declared, the supplier is subject to a verification audit which may include a review of
such things as organization charts and factory layouts (in-house tool operation); ledger and
actual money transfers between units; and any documentation demonstrating that any in-house
tool costs are accounted for separately and not absorbed as overhead and SG & A. In addition,
KUO facility will review the composition of the labor and material rates and exclude any “double
recoupment” of these costs.
 Examples of tooling related expenses that are not acceptable are employee travel
expenses, layouts, sampling cost (PPAP, tooling/process run-offs), general staff
resources, etc.
 KUO does not permit parts supplier to make a profit on production or prototype tooling
designed and manufactured by a tool supplier. Additionally, incremental costs associated with
procurement, follow up, etc. are considered to be part of the parts supplier’s overhead costs
and likewise recovered in the burden portion of the production piece price.
 Funding for prototype special tooling, which will not be used to produce production parts,
will be provided through the Engineering budget. Pull-ahead production tooling used for
prototype, which will be used later to produce production parts, will be treated as normal
production tooling and be funded using a production Tooling Contract.
 KUO claims ownership of all tooling designs and tooling. Any vendor claims of proprietary
tooling, or tooling design, shall be deemed intellectual and physical property of the vendor, and
therefore NOT reimbursable by the KUO Facility Purchase Order. Any vendor claimed
proprietary tooling or design included in the KUO Facility Purchase Order may be removed at
any step of the review of audit process. KUO facility shall have access to all special tooling and
designs at their request.
 Final interpretation of these guidelines is the responsibility of the KUO Purchasing &
Development Team – Vendor Tool Group. These Guidelines are not subject to vendor
interpretation. Any questions of intent and purpose are to be discussed with the tooling group
before issuance of the Tooling Purchase Order to the Vendor.
3.17.2 Tooling Cost and Audit Guidelines

Purchase Contract Term
Special Term – Tooling
Buyer shall reimburse Seller the lesser of (i) the amount specified in this contract, or
(ii) Seller’s actual costs for purchased materials and services (including purchased
tooling or portions thereof), plus Seller’s actual direct costs for labor and overhead
typically associated with tool construction. Seller shall establish a reasonable accounting
system that readily enables the identification of Seller’s costs. Buyer or its agents shall
have the right to audit and examine all books, records, facilities, work, material,
inventories and other items relating to any claim of Seller for tooling.
KUO’s obligation is to reimburse the approved tooling incurred up to the amount authorized by
the Tooling Contract. KUO Facility does not reimburse suppliers for tooling costs in excess of
the amount authorized or for tooling that was not specified (and authorized) by the Tooling
Contract. If the actual cost incurred is less than the Tooling Contract amount, the supplier is
expected to notify the buyer so that the Tooling Contract can be adjusted to actual cost(s).
The supplier is responsible for monitoring the content of all subcontracted tooling such as
outsourced components, to ensure conformity to KUO requirements.
3.17.3 Tooling Cost Documentation
An accounting system, in accordance with generally accepted accounting practices, must be

maintained by the supplier to segregate, accumulate, and document expenditures for KUO-
owned tooling. The supplier’s accounting system must ensure that all eligible costs are
documented adequately and include the following:
3.17.3.1 Material
Material requisitions that indicate quantities used and unit cost by Tooling Contract must be
prepared made available. Material will be reimbursed normally at actual costs based on
invoices. Material costs should be reduced for any such costs recovered from tooling
authorized for disposal or for material used for prototype parts (that was purchased under a
separate tooling contract).
3.17.3.2 Labor Rates and Hours
The toolmaker will complete the KUO Production Tooling Cost Breakdown for Tools,
Assembly Fixtures & Gages. The labor rate quoted on the RFQ shall include all overhead
costs and profit associated with the design and manufacture of special tooling shall be
included in the Tooling Cost Breakdown Worksheet. The Labor rate will be reviewed by the
Tool Analysis group for reasonableness before the issuance of the Tooling Contract.
3.17.3.3 Subcontracted Work
All work subcontracted to tooling sub-suppliers must be supported by at least a tooling

contract, invoice, and proof of payment (including a waiver of claim or lien from the sub-
supplier).
If tooling is obtained through or by a supplier-owned subsidiary or affiliate (50%+ supplier

ownership), those costs will be regarded as “in-house” costs and subject to verification.
3.17.3.4 Supplier Billings
The supplier’s invoice for tooling costs incurred should reflect the Tooling Contract amount,
or the actual costs incurred, whichever is less. At no time should the supplier’s invoice
exceed the amount of the Tooling Contract. If a discrepancy exists with your tooling contract
amount, consult your Buyer prior to invoicing.
3.17.4 KUO Tooling Audits
All tooling contracts are subject to audit. In the event KUO audits the supplier’s tooling cost, it
will be necessary to make available supporting documents. This documentation will be
required to verify the actual and reasonable costs associated with the Tooling Contract(s) and
amendments selected for audit.
3.17.4.1 Administrative Issues
Tooling purchased by KUO is the property of KUO or their involved customers under KUO
notifications and held by suppliers on a bailment basis pursuant to KUO’s terms and
conditions of purchase.
Purchasing maintains a system for proper control and disposal of purchased tooling. In order
to minimize KUO’s costs and to ensure continuous availability of parts to our customers,
Service Parts Purchasing activities must be consulted before scrapping or reworking
production tooling to a new design level.
A supplier is not permitted to use existing tooling for the manufacture of parts for other
customers without the prior written approval of a Production Purchasing Director and
equivalent level Purchasing Manager at the appropriate Service Parts Purchasing activity (if
applicable). A tooling usage agreement must be obtained to authorize such use.
3.17.5 Tooling Payment Responsibility Matrix
The following tooling payment responsibility matrix is not considered all-inclusive, but rather is
provided by KUO to assist suppliers in determining the acceptability or unacceptability of
Special Tooling versus Capital Machinery & Equipment/investment of Facility Cost. This matrix
will be reviewed from time to time. In any event, specific questions should be directed to KUO
Purchasing & Supplier Development with Global Cost Engineering – Vendor Tool Group. A
supplier may choose to include components and/or processes listed are not acceptable in the
following matrix in their tools. However, KUO will not reimburse the supplier for these items.
Tooling and
Miscelaneous Items, General Related Cost Items KUO Cost Decision Reasoning
Associated Costs Responsibility
KUO Supplier For: Against:
Interest Carrying Cost X
Launch Cost X
Taxes X Only when assessed and
not recoverable on
special tools
Fitting production
Installation Cost, Set up Cost, And tooling to
X
Adaptation, Costs of Tooling manufacturing
equipment
Capital Items
Tooling can be
Standard Machine – Machine which can
replaced to process
shape of form material by means of
X other components
cutting, pressure Impact or Electrical
and also considered
Techniques (EDM, CNC)
a standard tool.
Special Purpose machine – a unique or Machine and
special machine for the production of a equipment 100%
part over the project life. Totally dedicated X supplier
to the production of a part o components responsibility
(CMM)
Assembly Machine – Powered process for Does not change the
putting togheter a set of mating shape of any
X
components to make a semi or finished individual part
product
Dies
Only when Integral Part
Air Cylinders, Gas, and Nitrogen Pads X
of Die
Only when Integral Part
of Die. Allowed details
are only those required
Automation – In most cases NOT
X to maintain part
acceptable
orientation, alignment, or
position during the
process
Binder Development X
Required for unique KUO
Blanking Dies/Trim Dies - X
part/s
Metal turning units,
standard racks, and
Blanking Dies/trim Dies X standard trim dies to
blank trapezoid or
rectangular blanks
Including upper and
Bolster Plates X lower plates for
transfer dies
These costs include
CAD/CAM, that is
engineering directly for
the stamping dies and
Design Directly Related to Dies and can include simulation
X
Details (only relating to special
tooling only) layout,
binder development, and
updating drawing
information with changes
Die Models are

acceptable when: No
CAD data is available
and model would be the
“Master”. A KUO
engineering request with
prior approval from
Die Models X
finance is charged to the
engineering budget, not
special tools program
budget (including sight
models). Models must be
updated with “CR”
changes
Die Risers X
Coining; Cold Forming;
Compacting (for
powdered metal parts
before sintering);
Extrusion; Forging;
Dies X
Progressive; Sizing (for
powdered metal parts
before sintering);
Stamping; Straightening;
Transfer & Warm forming
When used for semi-
Extrusion Dies X
finished parts
All maintenance
costs including post
Maintenance X repair tryout, spare
parts, second dies
set, etc.
Only when integral in die. Feed units for all are
Pierce/Stud Insertion Heads X
NOT allowed
Only form details (anvils)
which contact the
material to form shape
Roll Forming X (including details for pre
& post operations, only
details that are created
unique to the form)
Standard (Non
Transport Rails X
integral)
Integral in Progressive
Transport Rails X
Die
Transport Rails X Located fingers/details
Standard idle
stations, in process
Transport Racks X racks, shipping racks
Welding and Assembly Fixtures
It is highly recommended that the

design and build of weld and assembly
tooling utilize standard components.
These components can include
standard bases with uniform mounting
hole patterns and standard size riser
details such as North American
Mechanical Standard (NAMS) used in
North America. When utilized these
items are considered to be supplier
owned tooling and Not included as
special tooling
Automated, “Turn Key” Welding and
X
Assembly Equipment
Pedestal Welders
“C” Frames X
and Press Welders
Unless Integral Part of
Hydraulic and Pneumatic Items X
Fixture
Machine Feeds,
safety items, and
Machine Bases X
guarding (other than
tooling base)
Projection Weld Fixtures X Only Specific Locators
Hard Automation (weld gun mounted on Would only be allowed in
X
fixture) is not recommended Geo – Fixture
Motors X General Equipment
Ergonomic Handling Devices X
Only when unique and
Locating Fixtures X
required for KUO part
Weld Spot Models X
Weld timers,
Capital Welding Equipment X transformers and
cables
Weld Guns (All) X
Includes weld guns,
stud guns,
Operator Equipment X
templates, handling
devices, etc.
Including Geometric
Fixtures, respot
Welding & Assembly Fixtures X locating fixtures, and
other dimensional
holding fixtures.
Tables, Frames, and other Capital
X
Equipment
Casters/Wheels X
Table lift and turn tables X
Only part support (nest)
Laser Process X
designed for single part
Only specific locating

fixture including details to
Laser Fixture X
hold gap constant for
welding
Includes installation,
safety equipment,
Laser Cells X
exhaust equipment,
etc.
Lighting and Ventilation X
Light Curtains and other Safety
X
Equipment
Only integral pipe and
wire to fixture itself. Pipe
Fixture Pipe and Wiring X
and wiring to fixture not
allowed
Transfer Nest X
Prototype Parts For Tooling Aids (Only Included in Prototype
X
used to make production tools) Part Cost
Molds & Patterns
Designs Directly Related to Molds and Unique for manufacturing
X
Patterns KUO part
Development Plasters X
Molds for Rubber, Plastics, Foam, Unique for tool KUO Part
X
Nonferrous and Ferrous Metals
Water Jet Nests X
Patterns - Casting X
Models, Patterns, ILD
Foam X
Blocks, Templates
Gas Counter Pressure / Vacuum Systems
X
(Intellimold, etc.)
KUO will reimburse cost
Quick Change Mold Plates X of conventional clamp
plate only
Unless integral to mold
Water Manifolds X
block or rails
Quick Change Connectors – (Staubli type,
X
etc.)
Requires buy-off from
Cavitation beyond minimum required for KUO buyer – SDE team
X
production volumes and KUO Cost Engineer
(Piece price related)
Hot Runner Controllers/Manifold Capital Equipment
X
Controllers and Connectors
Pneumatic/ Hydraulic Controllers and Capital Equipment
X
Connectors
Only allowed when
Molds Flow Analysis X critical parts are
involved.
Robots / Automated Pickers X Capital Equipment
End of Arm Tooling X Grippers, Fingers
Inserts Holder Blocks X Only allowed when
critical parts are involved

Eye Bolts (Standard for Swivel) X
Gas Assist Controllers & Connectors Capital Equipment
X
(Gain, Epcon, etc. Though Nozzle or pin)
De-gating or Routing Fixtures X Nests only
Clip and Fasteners Fixtures X Nests only
Cooling Racks X
The supplier is
responsible for
Spare Parts X
maintenance /
replacement
These are PPAP
costs and therefore
KUO will not
Part Layout / Dimensional Studies X reimburse these
expenses as special
tooling. It is part of
piece price
Necessary to production
Core Boxes X
tool
Unique tool for KUO part
Die replacement (casting) X
cavity portion only
Mandrils or Mandrels – unique hoses X Unique tool for KUO part
Molds – Die Cast, Permanent, Low Unique tool for KUO part
X
Pressure, Gravity.
Die Cast Dies – Nonferrous X Unique tool for KUO part
Trim Dies X Unique tool for KUO part
Trim Fixtures X Unique tool for KUO part
Only when moving a
tool to new supplier
Set-up and Adaption Costs X
and under decision
of KUO
Tube and bar Benders
This style Bender is acceptable only

when special and unique to a specific
KUO part and Computer Numerically
Controlled (CNC) bending is not
practical due to part volumes, part
configuration, etc.
Benders design only, Excluded facility
engineering design
due to integration of
Design X
benders into specific
line operations at a
supplier location.
Only when they are part
Air & Hydraulic Cylinders X
an integral part of the
bending operation
Special part holding and
Arbors, Mandrels, Slides X
bending
Hardware -
Instruments (standard commercially X

available)
Computers (including monitor, keyboard,

etc.) X
Cabinets X
All Hydraulic, air, Control, & Electrical X

Lines (should be designed with quick
connectors)
Surge Tanks (Tanks should be outside of X

frame and designed with quick
disconnects)
Solenoid (Tanks should be designed with X

disconnect, not hardwired)
Note: All disconnects should be located to

a common header block for each system
Software –
Operating System X
Application Software X
Safety Related Equipment (e.g. shielding,
X
fencing, guards, light curtains)
Note: Although this topic is specifically titled for Tube Benders these rules will generally apply to all specialty
designed tooling that contains both the elements of special tooling and supplier owned equipment (AKA Capital
Equipment)
Casting
Design directly related to the actual tool
(i.e. detailed drawings of tool steels, plan X
of die, section views, etc..)
Development Patterns X
Requires buy-off from
Cavitation beyond minimum required for KUO buyer – SDE team
X
production volumes and KUO Cost Engineer
(Piece price related)
Already included in
Spare Cavities / Inserts X
piece price
Supplier is
Internal Engineering Changes X
responsible unless
driven by KUO “CR”

and must be
documented
Not acceptable
already included in
Engineering Related Costs X
burden and piece
price
Gas Counter Pressure / Vacuum Systems X
KUO will reimburse cost
Quick Change Mold Plates X of conventional clamp
plate
Quick Change Connectors – (Staubli type,
X
etc.)
Manifold Controllers and Connectors X Capital Equipment
Pneumatic / Hydraulic Controllers and Capital Equipment
X
Connectors
Robots / Pickers / Manipulators X Capital Equipment
End of Arm Tooling X Grippers & Fingers only
Nests and part touching
Process Tooling X
details – must be unique
Eye Bolts (Standard of Swivel) X
Gas Assist Controllers and Connectors X
De-gating or Routing fixtures X Nests only
Nests and Calibration
Leak Test Tooling X
Master
Only when specified by
Inspection Fixtures / Test Fixtures X KUO requirements – Not
in-process
When inspection gage is
a purchased electric
Final Inspection Gages X device; only the nest and
any part specific probes
will be accepted
The supplier is
responsible for
Spare parts X
maintenance /
replacement
These are PPAP
costs and therefore
KUO will not
Part Layout / Dimensional Studies X reimburse these
expenses as special
tooling. It is part of
piece price
Continuous Cavity Replacement Funds
(CCR Tooling Guidelines For Die Cast
Tools).
CCR tooling funds accumulated in the

piece price are to be used to purchase
replacement tooling for Tooling that
has been paid for by KUO through an

original Tool Purchase Order; or for
tooling moved by KUO to the new
supplier
That replace existing
Replacement Cavities, Inserts, Cores, tooling purchased
X
and related Tooling through a KUO Tool
Purchase Order
Replacement Retainer(s) X
Only when replacing
Ejector Pins X
cavity/core
Maintenance of the Die Cast Machine;
X
Trim Press
Trim Die, Blades, etc. X
Robots X
Clean and Lube Fixtures, Auto Sprayers,
X
auto lube, etc.
Casting Machine Components –
X
Replacement
Spray Manifolds - Replacement X
“Generally CR’s are
covered by a separate
Tool Purchase Order and
not from the CCR fund.
However, in the event an
insert would be obsolete
due to an engineering
change, the CCR funds
accumulated at that point
fro normal cavity
Engineering Design Changes – “CR’s” X replacement must be
used to offset the total
cost of the “CR” and
documented in the KUO
Purchase Order. When
the supplier is asking for
the engineering change,
then it will be the
responsible to cover the
total cost involved in the
change.
Die Modifications that Improve on Quality Unless pre-approved
of the Part, Die Life, Continuous X by KUO Team
Improvements
Try Outs Costs X
Internal Indirect Labor X
Normal Tool Maintenance X
Machining
Specific machining tooling are

acceptable only when special and
unique to a specific part, model, or

product and are not acceptable when a
standard shelf type item. Must not
include computer terminals,
keyboards, printers, “smart” columns,
or electronic readouts.
Air Cylinders X
Arbors X Special Part Holding
Broach Cutters X Only first complement
Broach Holders X Only for special
designs KUO can
Duplicating Aids X change that decision
Drill Plates X
Cams X Only unique
Special clamping portion
only (jaws, collets, etc.)
Jaws X and only the first
complement. Chucks
are not acceptable
Cutter Bodies X
Fixture design only.
Excludes facility
engineering design due
Design X to integration of fixtures
into specific line
operations at supplier
location
Part Holding Fixtures X All special types
Forming Tools X Only first complement
Gangmasters X Camshaft Contour
Grinding Wheel X Perishable tooling
Cam follower is
acceptable when a
specific/unique form
Grinding Wheel Tooling X
configuration is required
and only the first
complement of wheel
Heat Treatment Racks X
Hydraulic & Pneumatic Items X
Only when specific to a
Jigs X
KUO Part Number
Motors X
Spindle Heads X
Machine Detail X
Multiple Sets of Tools X
CNC Programming X
Master Gears – Checking, Lapping & Only first tool
X
Reference
Perishable Tools & Hand Tools X Covered by piece
price
Single, and Multiple Adjustable Spindle
X
Units
If directed by KUO,
Temporary Tooling – When required due
on limited basis and
to timing resulting from late engineering X
dependent on type of
changes or crash programs
tool
Tool Holders X Capital Equipment
CNC Cutter Paths (For manufacturing Included in supplier
X
part) overhead
Electric & Electronic
Components, Assembly, and Testing

Required for components
Dies and Details X
unique to KUO part
Grease Application Equipment X
Required for components
Injection Molds X
unique to KUO part
That hold components
during
“Nesting” Fixtures – that hold components (Automated/Manual)
X
during (Automated/Manual assembly assembly operations and
material handling tooling
unique to KUO part
(Capital in nature) –
Continuity Analyzers,
TSK Boards,
Test Equipment X
Indicators/Meters,
Verification Type
Equipment, etc.
Hardware –
- Instruments (Shelf bought) X

- Computers (inc. Monitor & X
Keyboard) X
- Cabinets X
- Cables X
- Automatic Stampers
Software –
- Operating System X
- Application Software X
- Test Code (specific to module X
under test)
Test Chambers –
X
- Burn-In X
- Refrigeration X
- Environmental
- Additional Requirements X
- Racks X
- Rack Fixtures X
- Test Fixtures
Wire Harness Assembly Boards / Checker

X
Test Boards
Wire Twist Units – Mastic Pad units,
Shrink Tubing units, conveyors, ovens, X
etc.
Other
Air Tools (single nutrunners, drills, etc…) X
Multiple Spindle Air Tools (used for
X
simultaneous fastening of a bolt pattern)
Balconies – Control Panels, Railings,
Stairways, Surge Tanks, and Overhead X
Lifts.
Compression Costs – Incremental
premium direct labor charges are
acceptable only when it is necessary to
improve tool timing. These charges must
be approved by the KUO buyer and X
identified separately as a line entry on the
Tooling Contract. Fully loaded labor will
not be acceptable for premium
compressions timing charges
Computer Equipment –
X
(Hardware/general software)
Control Devices & Error Proofing
- That regulate machine functions, X

line functions, and /or automated
handling mechanism functions
- That regulates fixture only X
functions and must be integral
part of tool.
Embossing Rolls – (unique

patterns/masks including unique X
engraving)
General and Special Purpose Automation
X
Equipment
Only when unique to
specific part, model, or
Load and Unload Fixtures, Transfer
X product and required to
Fixtures, or Turnover Fixtures -
perform another
necessary operation,
e.g., inspect, locate,

position, etc. and are not
capital in nature
Only when unique to a
Masks (painting or tin plating) for Custom
X product and cannot be
Integrated Circuits – (IC’s)
used for other
customers’ requirements
Material Handling Equipment –
Conveyors, hi-lows, Automated Guided X
Vehicles, etc.)
Microprocessors – Integrated circuits,
X
chips, modules, etc.
Microprocessor Controls – Commercially
available programmable devices (e.g., X
PLC’s, weld controllers, etc.)
Microprocessor – Costs related to
production of:
- Computer Equipment X
- Printer X
- Recording Devices (Audio and/or X
Video)
- Vision and Laser Equipment X
Only as authorized by
KUO Team under “CR”
Tooling Changes - X on items defined as
special tooling per these
guidelines
Any costs related to part
quality attainment
Quality / PPAP Costs X
including but not limited
to PPAP
Rearrangement – Supplier-Owned
X
Machinery and Equipment
All types including “Pick
Robots X and Place” and
reprogrammable robots
Standard Idle stations, in
Transport / Racks X process racks, paint
racks, shipping racks.
Try Out X Initial Tool Tryout only
Tryout Material X
Poke –Yoke Equipment (Error Proofing) X
Safety Related Equipment (e.g. shelding,
fencing, guards, light screens, safety X
mats, etc..)
(unique) when custom
Software Development X software is required by
KUO or is a normal part
of the supplier’s
manufacturing or tool
building technology, such
as the development of
CAM cutter tapes for use
in computer controlled
equipment, it is an
acceptable cost. It must
also be unique to a
product identified on the
KUO Tooling Purchase
Order as Software
Development
Only when required to
support production
saleable builds and due
to timing constraints
resulting from late
Temporary Tooling X
engineering changes or
expedited program
timing and containment
in hard tooling is not
feasible.
Test Equipment – (for “Test Fixtures” –
refer to “Gages” Section):
- Computer Test Equipment X

- Environmental Chambers X
- Printer (including barcode label X
prints)
- Recording Devices (Audio and/or X
Video)
- Vision and Laser and X-Ray X
Equipment
- Sequencing related equipment X
Vision Systems (camera, arms) X
X
Benders (Tube and Rod) (tooling details
only when designed as a dedicated
machine)
X Only when unique to a
Cut off Tools KUO design
Heat Staking Fixture (nests and horns) X
Vibration Welding Fixture (nests and X

horns)
Sonic Welding Fixture (nests and horns) X
Work In Process Containers X

Simulation (general simulation such as X
robot, cycle time, line simulations, not
specifically special tooling related)
Integration Costs X
Racks and dunnage
being shipped directly to
the KUO facility are
Dunnage or Packaging X
normally considered to
be KUO paid as
operations expense
Leak Tester – Frames, electronics,
lighting, safety equipment,
pneumatic/hydraulic equipment, casters,
X
table lifts, etc. KUO only reimburse as
special tooling the costs for nests or part
holding fixtures
Only when required to
Special Racks, Hooks. X
locate part in process
Only when required for
Masking devices X unique KUO part
application
Statistical Process Control (SPC)
X
Equipment
Gages – Gage tooling used on KUO
Final Assembly End Items Only is
acceptable. (Any gages for
components of sourced assemblies
are considered in process gages and
are the responsibility of the supplier).
Holding Tables / Carts X Capital Equipment
Certification (If required by KUO) X
In-Lines gages X
Final Inspection Gages Only (Attribute,
X
SPC Data Collecting, Templates)
In-Process Gages – Duplicate gaging for
validation, and/or gages for components
X
of an assembly, are the responsibility of
the supplier
Measurement Equipment Programming X Initial program only
Measurement Program (edits, on-going
maintenance, CR changes, development
X
of measurement points, concept
development, measurement reports, etc.
Optical Measurement Equipment –
(Laser, Stereo optical measurement X
system)
Only when designed and
Test Fixtures X built to achieve
compliance with KUO
Engineering
Specification (ES)
performance
requirements and unique
to a specific part, model,
or product (Tooling
Only). The special
tooling is defined as only
the holding fixture/nest
within the test fixture to
nest and/or hold the part.
Other peripheral
equipment such as
panels, tables, PLC’s,
printers, electronics,
automation, etc. are NOT
allowed as special
tooling.
Standard Equipment for Gages X
Automatic Inspection Equipment X
In Line/ End of Line Gage Equipment X
Duplicate Final Gages X
CMM Fixtures X
CMM Software X
Gage Master X
 All Dies, Trim Dies, Cavities & Inserts, Machining Tooling, must have their own unique
serial number identifier; so that tooling can be tracked on the KUO Tracking System.
PPAP’s shall refer to the “Die” or “Insert’s” serial Number. KUO Purchasing Team will
give you the Unique Serial Number Identifier (VTAM #) to identify each Tooling under
property by KUO Customers. See the paragraph 3.16 related all instructions to identify,
data submission and managing of the Tooling where the KUO Customers are the
proprietary.
4. RECORDS
 DMR Defective Material Report

 PPAP Documentation
 KUO Questionnaire for New Suppliers and/or Current Suppliers Updating
 Feasibility Analysis
 Non-Disclosure Agreement
 Controlled Shipments Level I & II

 Quality System Certificate by Third Party in ISO-9001 or ISO/TS-16949 at
latest revisions.
 Tooling Worksheet with pictures
5. DEFINITIONS
DMR Defective Material Report .- Quality record registered in TS16949 KUO Plant Procedures,
used to formally give notice to the suppliers when a non-conformance is found in the parts or
products provided to KUO. Where the Reject data, implications of the reject (including monetary),
the type of 8D that the supplier has to send and a suggestion from KUO regarding the disposition
of the material, depending on the magnitude of the problem, are specified in this item .
DMR System (Defective Material Report System) .- DMR issuance Management system where
the DMR’s issued to the supplier, part number, causes of the reject and quantities rejected,
implication regarding costs, etc. are controlled.
Non-Conformance .- Non compliance with the Quality System , Procedures, Instructions or

Specific Process Sheets
Non-Conformity .- Non compliance with the specific design and/ or specification requirements of a
product and/or part. Also known as inconsistency.
Controlled Shipments .- Additional inspection process implemented at the supplier’s plant, or with
a third party providing KUO Plant an additional quality assurance of the parts and/ or products
provided by a supplier who has shown poor quality in his products, within a certain period of time
due to his behavior regarding PPM’s and the number of DMR’s issued.
SQE (Supplier Quality Engineer) .- In charge of giving formal notice to suppliers about quality
issues found in KUO plant, and of the tracking of corrective actions via 8D’s process by working
together with the Purchase Team and Supplier’s Development.
SDE (Supplier Development Engineer) .- In charge of the selection and assessment of new
suppliers, validation of new products, APQP execution with suppliers and direct involvement to
make the manufacturing process and the Supplier’s Quality System more efficient by working
together with the Purchase Team and Supplier’s Quality Engineering Department.
Issuing Entity .- It refers to functions enabled to issue a Defective Material Report (DMR). This
can be carried out by the individual in charge of Receipt Quality Assurance or by The Supplier
Quality Engineer (SQE).
DASA.- Desc Automotive (Now KUO)
PPAP.- Production Parts Approval Process
APQP.- Advanced Product Quality Planning
FMEA .- Potential Failure Mode and Effects Analysis

QSA .- Quality System Assessment
MSA .- Measuring System Analysis
SPC .- Statistical Process Control
“RAMP UP”.- Production Stabilization Process. Time shall depend on project (customer production
requirements), capacity growth and the supplier’s process capability.
Production Stabilization
Requirements
(Release) Vs.
Production
Supplier’s
(Ramp Up)
PPAP
Time (t)
War- Room .- Room intended for the exhibition of performance charts of KUO’s worst suppliers.
8D’s. Report .- Report generated to Solve Quality Issues, which is a KUO Mandatory Requirement
and which is based on “Ford Motors Co. Global 8D’s” Process.
Poka-Yoke .- Error-proofing Device, classified into three types: (I) A defect cannot be produced,
(II) The defect is produced but the part cannot be released and (III) the defect is produced, the part
can be released but a light or sound alarm goes off.
Core Team .- Multi-skilled Team integrated by the supplier to carry out the APQP process planning
and development in all its phases.
PP Containment .- Pre-production Containment.
Supplier .- Organization or individual providing a product
Sub-Supplier .- Organization or individual who is a part of the supply chain, and who is actively
participating in the raw material supply or in the transformation of the product that is being provided
by the supplier.
Customer .- Organization or individual receiving a product
6. CHANGES
Date of Description of
Release Level Change Elaborated by Revised by Approved by
January 1 Issue R. Luis R.Luis J . Herrera
2000
April 18th, 2 General Revision Marco A. E. Martínez M. Suro
2005 Gutiérrez C.
Simón Méndez
G.
August 20th, 3 General Revision, Marco A. E. Valencia B. Neal
2012 Change DASA by Gutiérrez C.
KUO, add new 3.8,
3.15, 3.16 and add
3.17
February 4 Change KUO Marco A. E. Valencia B. Neal
19th, 2014 Transmisiones Logo Gutiérrez C.
by TREMEC Logo
September 5 Changed number of Marco A. E. Esparza B. Neal
19th, 2014 master samples for Gutiérrez C.
annual layouts and
Specific Customer
Requirements
March 02nd, 6 Correction of Marco A. E. Esparza A. Herrera
2015 Revision Level in the Gutiérrez C.
bottom of the pages
October 5th, 7 Revision paragraphs Marco A. Johan A. Herrera
2016 3.5.9.2, 3.9 and Gutiérrez C. Joensson
3.9.1.1.1
Jan 5th, 8 Revision of Marco A. Johan A. Herrera
2017 paragraphs 0.1, 0.5, Gutiérrez C. Joensson
0.6, 0.7, 2.0 (2.12,
2.13), 3.5.4.5,
3.5.5.2, 3.5.6,
3.5.6.1, 3.5.6.3,
3.5.6.4, 3.5.7.1,
3.4.7.2, 3.11.5,
3.12.1, 3.12.2, 3.12.3
May 17th, 9 Revision of Juan Fco. Marco A. A. Herrera
2017 requirements of Cárdenas Gutiérrez C.
special
characteristics and
related paragraphs
APPENDIX I
Supplier Profile
and
Self-Assessment
Forms
SUPPLIER GENERAL PROFILE
Date:
Name of Supplier
Address
Phone #
TAX ID #
Type of Product
TREMEC buyer
WEB Page
Name/Position e-mail Office Phone # Mobile Phone #

Main Contact/ Position
General Manager
Quality Manager
Customer Service
Sales Manager
Accounts Receivable
Engineering Manager
The intent of this questionnaire is to know in a general manner the Organizational Structure and the Main Capabilities and
Skills of the Supplier.
Turn in the Questionnaire and the Self-assessment duly filled out to your purchasing contact. This information will be distributed
to the adequate personnel for its evaluation and potential follow up Quality System Assessment in your site when it is
applicable.
General Information about the Site:
1.- Main Products and Processes:
2.- Main Customers:
3.- Main Awards Received (by Customer, Goverment or International Institutions):
4.- Main Material Suppliers:

Lead Time TS-16949? ISO-9001? ISO-14000? NONE I DO NOT KNOW
A.
B.
C.
D.
E.
F.
G.
H.
I.
Size of Company:
5.- Total Surface of the Land: m²

Total Constructed Surface: m²
6.- Personnel:
2 years ago 1 year ago Present year Next year (plan)
Number of Employees:
Production:
Administration:
Development/Engineering:
Quality Function/Environment:
7.- Sales Development:

General Sales Development ($):
Sales share Exportation (%):
Sales share Automotive Market (%):
Minimum Lot Size Produced (Units)
Maximum Lot Size Produced (Units)
8.- Union: Yes No

Name: Contract Expiration Date: Total of Unionized Personnel:
9.- Does your company have an insurance? YES NO Insured Amount $

Insurance Coverage:
Technical Competitiveness (Engineering/Manufacturing/Quality):
10.- Do you use CAD/CAM? YES NO

Description of CAD Softwares: Description of CAM Softwares:
11.- Do you work or under these kind of techniques and/or methodologies and/or improvement tools:
YES NO
Just in Time?
6 Sigma?
FIFO (First in - First Out)?
Lean Manufacturing?
G8D's?
5S's?
Zero Defects Quality Control (ZQC)?
Total Productive Maintenance (TPM)?
Error-Proofing?
Overall Equipment Efficiency (OEE)?
KAN BAN
KAIZEN
YES NO
12.- Do you have ERP (Enterprise Resources Planning)?
What Kind of ERP do you have?
13.- List the type of main machinery and quantity:
H o w m a ny
A xis ? True Position Type of
R e niS ha w
( jus t f o r Used Capacity How m any
Qty Description and Type of Machinery Brand E quippe d? Tolerance Size Machined
CNC of Machine (%) shifts?
(YES/ N OT ) Expertise (m m ) Material
C e nt e r
M a c hine s
14.- List the main Measuring, Inspection and Test Equipment:
Qty Description and Type of Equipm ent Qty Description and Type of Equipm ent
Main Metrics Performance Information:

15.- Minimum Compliance of Deliveries to your
Customers (%):
16.- Maximum Value of PPM with your

Customers:
17.- Customer Quality Complaints Qty:
18.- Internal PPM (Global):
19.- Internal Scrap vs Sales (%):
People Absenteeism (%):
20.- People Rotation (%):
21.- Overall Equipment Efficiency (OEE):

Minimum rate (%):
Maximum rate (%):
22.- Do you know, understand and you are in agreement to meet with the TREMEC's Supplier Quality Assurance Manual? YES NOT
(For better reference access to www.tremec.com\About Us\Supplier Information)
Supplier Business Representative Name & Signature
TREMEC SUPPLIER'S QUALITY SYSTEM ASSESSMENT FOR NEW SUPPLIERS

Date of Opening:
Name of the Supplier: Date of Revision:
Location: Date of Closing:
Type of product:
Commodity: SDE/TREMEC:
Done by: Tel # of SDE/TREMEC:
E-MAIL of SDE/TREMEC:
Pts Evaluation Criteria Pts Evaluation Criteria TREMEC Plant:
Element is not in place and there is no evidence of
0 3 Element is in place and it has track ing instability
implementation plans
1 Element is not in place but there is a documented plan 4 Element is in place and there is evidence of track ing
for implementation SUPPLIER SELF-ASSESSMENT
Element is not applicable for supplier k ind of bussines (for
2 Element is in place but it is not followed up NA
example: distrubuitorrs, brok ers and others)
TREMEC ASSESSMENT
G/
A. General Management Score Y/R
Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
Do you have a documented personal training program and
A.1 it is related to the ability evaluation of the R FOR TRAINING:
'- Evidence of a graduating step approach such as the 4 Step (Job
employee/worker according to the job descrition?
Instruction Training) process and are provided the opportunity to
Does the supplier use the G8D's methodology for problem
A.2 R practice the new skill or know ledge.
solving for every customer complaint? '- Prepare, Demonstrate, Try-out performance, Follow -Up.
Do you apply one or more of the following techniques for '- Documentation to show w ho is certified to train.
A.3 the root cause analysis: Cause-Effect Diagram, 5 Why's, R '- Ask operators how they are trained.
DD&W (Drill, Deep & Wide), etc.? '- Training record that documents training of procedures and overall job
Is there a documented procedure to implement and know ledge to:
A.4 manage the learned lessons to similar processes R '- Work safely (guards, start-up shut dow n, lock out)
'- Perform proper record keeping (production/quality)
/products?
'- Understand w ork place organization responsibility
Do you have a specific department or people in charge
A.5 R '- Quality requirements (containment, red-bins, andon, etc)
assigned for the APQP of new products? '- Records are available and easily retrieved.
Is your site certified regarding the Quality Systems by '- Individual Job training record w ith dates and trainer signoff for each
third parties? Please indicate with an "X" the type of job.
R
accreditation (* Attach an updated copy of the '- Record indicates the steps in training & skill/know ledge level achieved
for each job:
A.6 accreditations at latest revision by third parties)
'- Follow -up includes the trainer audits employee to standard w ork
ISO-9001?* instructions, verifies quality & productivity w ithin shift and again
ISO/TS-16949?* approximately one day later.
ISO-14001?* '- Verify a new operator is follow ing Standardized Work Instructions &
know the quality and productivity requirements.
Does your procedure indicate the communication with
'- Operator Tracking Sheets or equivalent posted at all operations or
A.7 your customer when the "certification of the quality R
w ork area.
system was lost or has expired? '- All operators listed including supplemental employees.
'- Review training dates and tracking sheet revision dates.
Do you use the bar code ID for purchased materials and
A.8 R BEST PRACTICES:
those materials shipped by your site to the customer? '- Chart show ing cross training/certification level in a cell such as a
flexibility chart.
Do plant managers make frequent tours to the
A.9 R '- Look for a job rotation plan or log. How often does team rotate?
Workstations? '- The number of Team Members certified per station should support the
Are there performance indicators of the production Job Rotation Plan.
lines/work stations checked on a daily basis, where it is '- If it does not, look for a plan such as a Flexibility Chart 2x2 or 4x4
check among others, the customer's feedback (PPM's, matrix, that show s the status, actual vs planned number certified per
A.10 R station that is being used to maintain job rotation.
DMR's, line shutdowns, % of on time deliveries, etc.) and
internal metrics as Safety, Productivity, FTQ, Line
shutdowns, Scrap, etc.
B. Customer Drawings and Specifications G/
Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
Control
Are the drawings and specifications for new products or
B.1 R
changes to currents reviewed before they are accepted?
- Multidiciplinary revision of draw ings and customer specifications in
Are there controls in order to assure that the last
RFQ process
B.2 engineering level of drawings and specifications are being R
'- Management process to assure alw ays w orking under last
used in production? engineering level of all darw ings and customer specifications.
'- Managememt process of control of obsolete documents and retention
B.3 Is there data and document control procedure in place? R time of records
Is there a document on records retention procedure? (Life

B.4 R
and service of the product + 1 year)
C. Managing Risk/PFMEAs & Risk Reduction -

G/
Annual Review/Bypass - Deviation Management Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
(Ref. BIQS-3, BIQS-4 & BIQS-5)
All operations have been analyzed for risk using PFMEA

and they are done by crossfunctional teams, including
C.1 manufacturing team member input. Risk Priority Number R - PFMEA available for all part numbers and all operations, especially high
risk such as labeling and rew ork.
(RPN) values must be consistently applied using Severity,
'- Accurate Severity/Occurrence/Detection Ratings w ith Valid RPN
Ocurrence and Detection ranking tables? numbers and revision dates w ith some correlation to know n problems
(PRRs, etc…).
Falilure modes are comprehended in the PFMEA (i.e. '- Are updated on a regular basis (living documents).
oversized/undersized feature, missing operation, hits or '- Cross-functional team agenda or other evidence of RPN reduction
C.2 R
nicks, wrong parts, mixed parts, containment control, activities.
etc.)? '- Documentation that frequency and prioritization of review s is based
on customer input, process capability, process changes, AIAG
Monthly or periodical RPN risk reviews by product focused guidelines, etc…
on preventive defects from leaving the work station are '- Review checklists, agendas or equivalent that assure adequate
C.3 held to drive continuous improvement? Action plans for top R PFMEA review (all operations/processes (paint, heat treat, material
issues must include: Recommended actions, handling, labeling, rew ork/repair, etc…) are included and accurate.
'- All process controls are included.
Responsibility, Timing and reverification of RPN.
'- Detection ratings are accurate.
'- Occurrence ratings are analyzed using data (SPC, FTQ,
Reverse PFMEA process is in place to identify new Quality Gate, C.A.R.E.*, Scrap, Layered Process
C.4 R
potential failure mode in the shop floor? Audits* results)
'- Top RPN list,
The organization has identified the manufacturing '- Tracking charts
C.5 processes and error proofing devices (Poka Yokes) can R '- Cross-functional team minutes noting improvement actions and
completion details.
be bypassed or placed in deviation?
'- Cross-functional team conducts a process w alk through audit .
Risk Priority Number (RPN) for all approved '- Action Plan.
C.6 Bypass/deviation processes are evaluated and risks are R '- Does this cover all High Risk Parts.
'- Are the findings driven back into Process Flow , PFMEA, Control Plan,
reviewed in the PFMEA?
Work Instructions as applicable.
Standard Work Instructions (SWI) are available for each '- Have Occurrence/Detection numbers been revised.
C.7 Bypass/deviation process and the operation team R '- Revision date of PFMEA to address error proofing and verification of
past failures.
members know, understand and accomplish them?
'- Action plans w ith target completion dates
'- Team validates the new Occurrence and Detection rankings and
Implemented bypasses/deviations are reviewed in daily resultant RPN.
C.8 Leadership Meeting with the goal to reduce or eliminate R '- Error proofing is verified per the Error Proofing Verification* process.
bypassed/deviated operations? '- Management review agenda/minutes
'- Cross-functional team training and individual qualifications review ed
and verified annually.
The organization is monitoring the accomplishing of the
C.9 R '- Evidence of documentation to track improvements. (Trend Chart,
processes/devices in bypass/deviation on the daily LPA? Process change validation, Layered Process Audit)
Restart verification of Bypassed/deviated

C.10 processes/devices is documented for defined period and R
the revalidation processes/devices are included?
D. Nonconforming Material Control / Material G/

Identification (Ref BIQS-1)
- Co lo r co ding o f scrap co ntainers, ho ld tags, scrap labels, in-pro cess tags,
Team members have standardized and understand what travelers, ro uters, etc…
D.1 R '- If red tags are used for bo th scrap and suspect material, tag must have dispo sitio n.
to do with nonconforming/suspect material? '- Suspect tags sho uld have last o peratio n perfo rmed.
'- Segregation areas are identified and/o r fo o t printed,
'- Scrap bins, rewo rk tables, ho ld areas, etc…are identified/fo o t printed.Co ntainment
wo rksheet o r equivalent,
'- There are standards in place fo r Co lo r coding o f scrap co ntainers fo r co ntainment
Conforming material is handled, stored and identified
D.2 R issues.
appropriately? Red = No n-co nfo rming P ro duct
Yello w = Suspect P ro duct
Green = A fter B reakpo int, Co nfo rming P ro duct
'- Std Co ntainers fo r W.I.P . and Finished goo d are no t used fo r so rting and
Nonconforming/suspect material is clearly identified placement o f defective material.
'- No nco nfo rming material area and asso ciated do cuments. Do cuments to ensure
D.3 and/or segregated for review/disposition (i.e. appropriate R co mmunicatio n and fo llo w-up activities o ccur as required such as:
color coding red, yellow)? '- A n A lert do cument that is used:
- Fo r external and internal issues
- To establish tasks, time line,& co mmunicatio ns necessary to meet custo mer
requirements.
A containment method is in place to ensure that an - Defines the pro blem & the standard
D.4 effective breakpoint has been established. Containment R '- Internal/external distributio n and no tificatio n
activities and results are documented? '- Custo mer co ntact list
'- Certified shipment lo g
'- Tiered supplier co ntacts and certified shipment do cuments.
'- Lo o k fo r evidence o f reintro ductio n, at o r prio r to po int o f remo val.
'- Verify that reintro ductio n includes all do wnstream checks such as erro r pro o fing.
Traceability is applied according to the traceability
D.5 R (A ll co ntro l plan inspectio ns & tests to be perfo rmed)
methods of the finished product? '- If it canno t be reintro duced into the pro cess, verify that an appro ved (Quality
M anager) do cumented rewo rk and inspectio n pro cedure is fo llo wed.
'- Lo o k fo r an identifier such as serial number o r special marking that can be traced
Is the nonconforming product analyzed to find the back to the supplier reco rd to sho w what was do ne and when.
D.6 R '- Fo rm to release pro duct with autho rized signature and appro ved inspectio n o f
rejection causes and their effects? pro duct
Are corrective actions applied to eliminate and prevent B E S T P R A C T IC E S :
D.7 R '-System is Sto plight visual management where red indicates scrap o r and yello w
repetition of non-conformance? indicates suspect pro duct/material. Green o r any o ther co lo r (except yello w o r red)
Is there a documented procedure where it is stated the indicates acceptable pro duct.
D.8 necessary time to dispose the nonconforming/suspect R '- The limit fo r the number o f times repaired is no t mo re than 2 times with a tracking
metho d.
material? Does it accomplish? '- P ro cedure and metho d fo r materials/parts designated as scrap to ensure it is
Are there quarantine areas to control the pro perly identified and kept fro m being reintro duced back into the no rmal material
D.9 R flo w. (e.g. destructio n, paint, lo cked co ntainer)
nonconforming/suspect material? '- P erfo rmance metrics and go als established to reduce scrap at all levels o f the
Are there rework and sorting instructions where the o peratio n.
D.10 recovered and /or selected material undergoes inspection R '- P erio dic summary repo rts
'- M aterial Review B o ard info rmatio n and signatures
again?
G/
E. Error Proofing (Ref. BIQS-6) Score Y/R
E.1 All Error Proofing Devices are included in the PFMEA? R

- Documentation (verification logs) of device verification at a minimum of
once per day & are easily accessible.
All Error Proofing Devices are checked for function (failure '- Reaction plan includes w ho is notified and actions to be taken.
E.2 or simulated failure ) at the beginning of the shift? R '- Containment and corrective action documentation for failures.
Otherwise according to the operation set up instruction? '- Master list of all devices that prevent/detect the manufacture or
assembly of nonconforming product.
'- Verification failures on Fast Response Tracking Sheets, Layered
Error Proofing Masters/Challenge parts (when used) are
E.3 R Audit, Management Review agenda, Verification tracking forms
clearly identified and records of verification are available? available.
E.4 When applicable the "rabbits" part are calibrated? R
F. Control of Tests and Measuring Equipment G/

(Ref. BIQS-7)
Is there a documented procedure about the control of
F.1 R
calibration of the test and measuring equipment?
Are all of the test and measurement equipment identified
F.2 R
and coded according to the procedure? Documented procedure and gage/fixture use instructions.
Are the qualification standards in accordance with the '- Calibration sticker.
F.3 National Institute of Standards and Technologies (NIST) or R '- Operator gage training to the current gage instruction.
the appropriate International Standard? '- Gage master device.
'- Gage certification frequency.
The monitoring, test and measuring equipment is '- Gage R@R.
evaluated conforming gage capability studies (e.g. gage '- Gage calibración codification
F.4 R
R&R, bias, linearity, stability, etc.) and the equipment is '- MSA studies to control test and measurement equiipment as: bias,
certified/calibrated at scheduled frequency? linearity, stability, etc.
Are the studies of the measuring systems in accordance

F.5 with what is stated in the MSA manual of AIAG's last R
revision?
G. Fast Response Problem Solving Process G/
(Ref. BIQS-8)
G.1 Minimum criteria for initiating Fast Response is met? R

- P rio r to the meeting review the bo ard:
- fo r repo rt o ut dates and statusing to see if any are past due,
statused appro priately with detail explaining missed dates.
Plant Manager ensures the applicability and the timely - A sk if there are any new issues.
G.2 R '- Observe the repo rt o ut pro cess and verify that the P ro blem So lving repo rt fo rmat is
completion of the items being tracked? used to do cument & co mmunicate the status o f the issue.
'- Sign-in Sheet identifying cro ss-functio nal & plant wide suppo rt is in attendance daily.
'- Natural o wners are assigned to pro blems
'- Internal issues are included and addressed to the same Fast Respo nse criteria.(e.g.
Plant Staff level personnel actively participate in daily LP A findings, Verificatio n Statio n o r Do ck A udit issues, Supplier Issues)
G.3 R '- Who leads the meeting & is there a designated back up perso n.
meetings? '- Quality Q or o ther metho d to track FR perfo rmance is tracked, po sted and up to
date.
'- Co mpare Quality "Q" to Fast Respo nse Tracking Fo rm fo r co rrelatio n. Do the
metrics sho w impro vement?
Required documents are reviewed in each phase of the '- Co mpleted P ro blem So lving fo rms used acro ss the plant fo r internal, custo mer and
supplier issues.
problem solving process (Fast Response Tracking Sheet, '- Standard fo rms (P P SR o r equivalent) used with a fo rmat that fo llo ws the co re '6
G.4 R
Problem Solving Document, PFMEA, Process Control Steps' o f pro blem so lving
(Define, Co ntain, Ro o t Cause, Co rrect, Validate, Institutio nalize)
Plan, Standardized Work, Layered Audits, etc.)? '- Fo rms identifying ro ot cause( Drill Deep, 5 Why, Fishbo ne, Cause & Effect, etc...)
'- Changes to P FM EA and Co ntro l P lan indicating ro o t cause eliminatio n.
'- Evidence o f cro ss-functio nal team approach.
'- Superviso rs/Team o r Gro up Leaders and OP ERA TORS about their ro le in
Exit citeria with appropriate timing are defined for closing
G.5 R P ro blem So lving
issues? '- Review Lesso ns Learned pro cedure & fo rms.
'- Do cumented so urces that capture lesso ns learned such as Fast Respo nse,
P ro blem So lving Do cuments, Co ntinuo us Impro vement P ro cess, A P QP , Risk
Is there read across of corrective actions to like Reductio n team checklist, Read-A cro ss, Custo mer re-allo catio ns (to o l mo ves).
G.6 R '- Co mpleted Lesso ns Learned info rmatio n which is easily retrievable by all who need
operations? the info rmatio n. (e.g. M aster FM EA , Read A cro ss, Electro nic fo rms o r database).
'- A P QP P ro gram check list reviews lesso ns learned.
'- Co ntinuo us impro vement team no tes and agendas
A well developed, standardized problem solving process '- M etho d which assures implementatio n suppo rted by evidence o f review dates,
G.7 R distributio n lists, o r po sted Lesso ns Learned.
exists at all levels of the organization? (e.g. A ctive Drill Wide, Read-A cro ss tracking)
'- Leadership no tes o r agenda indicating Lesso n Learned system is reviewed such as
thro ugh a LP A o r internal systems audit.
Issues are identified, root causes analyzed and robust '- Regularly scheduled reviews do cumenting steps o f institutio nalizing lesso ns
G.8 R learned. (e.g. Read-A cro ss)
actions completed in a timely manner?
B E S T P R A C T IC E S :
- Fo rms co mpleted o n sho p flo o r by Superviso rs/Team o r Gro up
Leaders (no n-engineering staff) with team input.
Problem solving is driven at the Team level and all Teams
G.9 R - A standard training metho d fo r all Team M embers/Leaders
are involved coaching and guiding the process?
High risk quality focused items from customer feedback

G.10 R
and problem solving are included
G/
H. Production Capacity and Metrics Score Y/R
Is there capacity available to support a new business or
H.1 R
an increase in the current production volume?
Are "down times" analyzed in production and are there
H.2 R
indicators of performance?
Are the deliveries assessed in accordance to the
H.3 R - Capacity studies to support the customer volumes and the production
customer's requirements? planning about the quantity of shifts requiered to meet w ith the
Does the supplier execute Run @ Rate studies to customer releases.
H.4 demonstrate the enough production capacity to the R '- Monitoring of performance of the process including the customer
customer production demands? feedback in quality, productivity, delivery, safety, shutdow ns, OEE, etc.
Is the internal and customer's feedback posted in the and their respective metrics w ith goals and action plans
Workstations where the PPM's, DMR's, line shutdowns,

H.5 % of on time deliveries, % productivity, % Efficiency, R
scrap, OEE (Overall Equipment Efficiency), etc. are
shown?
G/
I. Layered Process Audits/LPA's (Ref. BIQS-2) Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
Layered audits are in place to assess compliance to - Written P rocedure

standardized processes, identify oportunities for '- A udit & wo rk instructio ns
I.1 R '- Co unter measure process
continuous improvement, and provides coaching
'- Owned by M anufacturing
opportunities? '- A udit Schedule sho wing level o f participatio n and frequency.
'- Evidence that A LL layers o f the o rganizatio n perfo rm regularly scheduled
standardized audits. P lant M anager sho uld be mo nthly, Shift Leaders and
Layered audit process is owned by Management. Audit M anagement Suppo rt Staff - Weekly, Gro up Leader-Team Leaders-Daily.
I.2 R '- Tracking to ensure every wo rk statio n is evaluated o n regular basis.
plan shall include multiple levels of Management? '- Quality Fo cused checks fo r past custo mer failures. (i.e. A ssigned at Fast
Respo nse, fo r P RR o r Liaiso n Repo rt issues, erro r-pro o fing verificatio n, etc...)
'- Wo rkstatio n Specific check items (Review o f actual wo rk perfo rmed by Team
M embers to standardized wo rk instructio ns, 5S-WP O, Ro tatio n Lo g, Training, etc..)
'- Wo rk Statio n and Quality Fo cused items are checked by all audito rs.
I.2 Audits are tracked and their results recorded? R '- System Specific items (P reventative M aintenance, B usiness P lan reviews, Sho p
Flo o r M anagement standards, etc..)
'- Verificatio n in the Layered P ro cess A udit under system specific items that, where
applicable, A udits fo r special pro cesses are perfo rmed.
'- Results reviewed with team members & area superviso rs
'- Evidence and do cumentatio n o f immediate co rrective actio n fo r no nconfo rmance.
High risk quality focused items from customer feedback (Items co rrected immediately)
I.4 and problem solving are included in the LPA's or other R '- Co untermeasure list with respo nsibility and dates for items that co uld no t be
co rrected immediately.
suitable checklist, and checked each shift? '- Review o f co unter measure pro cess at least o nce per week.
'- When appro priate no nco nfo rmance is added to Fast Respo nse o r C.A .R.E.
'- Lesso ns Learned system, do cumentatio n.
'- Repo rts o r graphics that are reviewed by management.
I.5 Follow up to address non compliance is in place? B E S T P R A C T IC E :
R
'- Check that the A udits are verified by the next level Superviso r.
G/
J. Standardized Work (Ref. BIQS-11) Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
- A sk the Team M ember where their standardized Wo rk instructio ns are lo cated.

'- Instructio ns are lo cated fo r quick and easy reference. (clo se to the wo rkstatio n)
'- Do cumentatio n o f required P P E, availability and use at the wo rkstatio n.
'- Instructio ns include Wo rk Elements & Times (element-walk-wait), Wo rk Flo w
Sequence (operato r path), Standard in-pro cess sto ck, Operatio n Cycle Time, Takt
Time (Customer and A ctual).
'- Visuals accurately represent the wo rkstatio n layo ut and wo rk sequence.
'- Evidence that o perato rs are trained in the use o f Standardized Wo rk Instructio ns.
'- A sk team member ho w the Standardized Wo rk Instructio ns are used.
'- A sk the Team M ember/Leader their level o f invo lvement in develo ping their
standardized wo rk.
'- Verify Team Leaders, Team M embers, Gro up Leader o riginal signature is o n the
do cument.
'- A sk if the Gro up Leader understands their ro le in the suppo rt o f standardized wo rk
by acting as a liaiso n to the suppo rt o rganizatio ns.
'- A sk the Team Leader if there is a pro cess (fo rmal o r info rmal) fo r teams to seek
All work is documented using standard format and meets agreement fo r jo b element sequence within the team and acro ss all shifts and crews.
'- Operato r instructio ns in o r near wo rk areas that are accessible to o perato rs.
all safety, quality and element time requirements? (e.g. '- Co mpare instructio ns to wo rk perfo rmed by o perato rs.
J.1 what, how & why for tasks performed: Procedures, Work R '- OB SERVE 3 full cycles o f the jo b in statio n &Verify:
' - That the M ajo r Steps (What), Key P o ints (HOW),
Instructions, Processes, Working Methods, Data
and Reaso n (WHY) are fo llo wed (A ll key po ints shall have a reaso n Why)
Collection, etc.) '- A sk the Team M ember ho w they kno w they have made go o d part.
'- Quality checks are included.
'- Specific to o l requirements are listed at the o peratio n.
'- Verify critical items such as to rque o r Custo mer Safety requirements are specified
in the do cument.
'- Review revisio n history o f o perato r instructio ns.
'- Co mpare revisio n levels o f o perato r instructio ns with P FM EA o r Co ntro l P lan
revisio n levels.
'- Check to see if it is marked up, signed, and dated aro und the timing o f a recent
custo mer pro blem o r CI actio n item.
'- Evidence o f appro priate o perato r training reco rds when revisio ns were made.
'- M ajo r Steps (What), Key P o ints (HOW), and Reaso n (WHY) are pro perly explained.
(What is the o utco me if the step is no t perfo rmed as described)
'- Last P art Checked sho uld be held fo r co nfirmatio n o f last kno wn go o d part at a
frequency o f at minimum o f 1per shift. B est practice wo uld be to retain ho urly
samples fo r each inspectio n, retained fo r the entire shift o r previo us 8 ho urs.
K. Finished Product Verification (Final G/

Inspection/CARE*/GP-12) (Ref. BIQS-13)
- Ho w pro cess info rmatio n is mo nito red and info rmatio n is relayed upstream to
tho se that need to kno w and react:
Final Inspection/GP-12 is conducted on all finished - Statio n staffed fo r 100% inspectio n with a defect tally sheet
K.1 R listing defects to lo o k fo r.
product prior to shipping? - A uto mated testing and list o f part characteristic/defect
checks being verified. (fault co des, defect descriptio n)
- Co ntro l chart no ting reactio n to o ut-o f-co ntro l co nditio ns.
'- When C.A .R.E. (Custo mer A cceptance and Review Evaluatio n) is in place,
do cumentatio n requires identificatio n and inspectio n o f custo mer satisfactio n
Final Inspection/GP-12 features to be inspected were items: warranty issues, pass-thro ugh items, DM R's issues, past Quality pro blems,
based on risk (e.g. model launch, pass through high RP N items, etc...
K.2 R '- Lo o k fo r evidence in the do cumentatio n stating:
components and characteristics pass through, major '- When and who to call,
changes, shut down or customer feedback)? '- Who respo nded and when
'- The immediate fix, co rrective actio n taken and breakpo int.
'- Do cument that describes when a pro blem is to be escalated.
'- Escalation identifies who is the next perso n to be called and their co ntact
info rmatio n
'- A ssignment o f pro blem so lving activities related to statio n data
Final Inspection/GP-12 characteristics are clearly defined
K.3 R '- Tracking sheet displayed in the area o n the sho p flo o r.
and quality checks are included in standardized work? '- P ro blem so lving do cumentatio n
'- P ro blem Repo rt o ut Schedule
'- P erfo rmance Graphic o r repo rt card sho wing (i.e. calendar days-red/green)
feedback from do wnstream custo mers and details.
'- Graphic o r repo rt card sho wing findings at the station fo r co mmunicatio n to
upstream pro cesses/suppliers.
Final Inspection/GP-12 inspection methods are '- FTQ o r scrap analysis sho wing impro vement trend, reductio n o f events/defects
K.4 R o ver time.
incorporated in the work station and they are applied? '- Sign-in sheet, and meeting assignment lo g.
'- Evidence the statio n o perato r repo rts results and respo nses to calls
'- A t the meeting, a review o f the current findings and the previous shift to determine
if the escalatio n pro cess is effective.
- Lo o k fo r a minimum o f 1at the end o f each pro duct assembly line, o r between
Final Inspection/GP-12 records meets with the temporality
K.5 R departments such as mo lding, paint, assembly, which pro vides feedback to
required by customer? upstream o peratio ns.
- A larm & Escalatio n is applied at each step o f the o peratio n where defect detectio n
exists.
L. Materials Flow Management (Ref. BIQS-27 & G/

BIQS-28)
Are the parts stored and identified (Visual aids assist in - FIFO attains a sequential flow of material to ensure the quality of the
L.1 R part is not compromised.
process flow) and do they have an assigned location ?
'- Visual management includes process diagrams, FIFO tools, rotation
schedules, etc.
'- Preferred storage method is flow through storage or roller racks to
Is a plan FIFO (First in First Out)/Material Handling promote FIFO. Dead end storage should be minimized, any use should
L.2 R
processes documented and practiced in all operations? be justified.
'- Ask for documented FIFO process for entire plant. Team Members and
Team Leaders should be able to explain the process. Process should
WIP Containers, racks and bins protect parts from cover material against the w all, material in flow -thru lanes, material on
L.3 R racks, point-of-use indirect material areas, part buffers, sub-assembly
damage?
areas, and overflow areas.
'- Check the FIFO/ Material Handling in each department/area
Material is shipped in the designated production container '- Containers, racks and/or bins used for WIP storage and movement
L.4 with proper labelling for regular production and meet the R protect the parts from damage and easily identify the parts as WIP.
customer requirements? '- WIP is not kept or stored in GM returnable dunnage.
'- Production intent containers are being used for any build events.
Is there a "zero stock" policy (One Piece Flow) in the '- A process is in place to ensure that violations of the requirement are
L.5 R identified and corrected.
operations unless the operation is a "Bottle Neck"
G/
M. Statistic Process Control (Ref. BIQS-21) Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
Do you have any kind of program to train your personnel in
M.1 R
Statistic Process Control (SPC)?
Do you have documented the strict use of the " Statistic
Process Control" for Special Characteristics of the
M.2 R
Product (e.g. CC's, SC's, PTC's, DR's, etc.) or Key
Characteristics by Manufacturing Process?
Is the manufacturing area responsible for the " Statistic
M.3 R - Look for capability studies on Special Characteristics and confirm that
Process Control"?
Do the process capability indexes (Cp, Pp, Cpk, Ppk) action plans are documented to address characteristics w ith low
M.4 R capability.
meet with the customer requirements?
'- Trimester capability studies are required on all special characteristics
Are there process improvement plans documented in case and critical equipment at a minimum, verify this is taking place
M.5 the capability of the process is not reached or the process R
is out of control according to the customer requirements?
While the improvement plan is implemented to reach the

process capability required by customer, 100%
M.6 R
inspection is executed and it is documented in the Control
Plan and all standardized work documents?
G/
N. Process Control (Ref. BIQS-19) Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
Is the inspection and approval of the first piece required
N.1 R - Sample PFMEA, Process Control Plan and standardized w ork
(cast, batch, thermal treatment charge, sample, etc)? documents to ensure process controls flow one from the other.
Do you perform process audits to the product in
N.2 R '- Review critical operations to ensure they are identified as critical
production? operation using an special symbol (e.g. delta) and in the standardized
N.3 Is the material identified through the process? R w ork formats.
Are the PFMEAs, Control Plans, Work Instruction, '- Records of Set Up process and Initial Sample report before release
the operation for production running.
Process Sheets and all standardized work documentation
N.4 R '- Identification of material in the operation and along the process, to
available, comprehensive, sufficient, and flow one from the
know its status and condition.
other?
G/
O. Workstations Organization (5 S's) Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
Are there just the materials, tools and equipment required
O.1 R - Workstation:
for the operation, in the work station?
Are materials, tools and equipment perfectly identified and '- Order
O.2 R '- Cleanliness
is the storage location clean and organized?
'- Material, Gaging, Station, Tool, Tooling, etc. organized, identified,
Is the order and cleanliness as part of the company
O.3 R clean in the storage location and only the required quantity by operation.
culture? Is it along the organization? '- Order and Cleanliness along the organization, not only in the
Are there order and cleanliness audits for the workstations w orkstation.
O.4 R
and for the whole site?
G/
P. Machinery and Tooling (Ref. BIQS-26) Score Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
Y/R
Are there a planning process that achieves reliability - To maintain equipment and tools to the required standard, achieve
excellence with Manufacturing, Operations and business results, and to ensure availability for production.
P.1 Maintenance working together and comprehensive tasks R '- List of critical spare parts.
are developed and delivered that support Total Productive '- Stock of spare parts: reception / organization / consumption.
Maintenance of Machinery and Tooling? '- Conditions of storage.
'- Computer aided system.
Are the spare parts and their storage managed? Are '- Inventory (take an example of a critical part and verify the robustness
P.2 R of the inventory).
identified the critical parts?
'- MTTR (Mean Time To Repair) /MTBF (Mean Time Betw een Failure)
Is there a documented procedure and records about the '- Look for evidence that PM schedule generates w ork orders and that
P.3 R these are closed as scheduled must cover machine, toolings and
control of the wear out of tooling?
gages.
Are the tooling and machinery control characteristics '- Look for use of predictive and preventive maintenance, check some
4 identified, monitored, measured and controlled for every R examples.
machine and tooling? '- Look for PM frequencies appropriate to needs.
G/
Q. Tiered Supplier Management (Ref. BIQS-29) Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
Q.1 Is there a list of approved suppliers? R

Tier supplier targets are defined and their performance are
Q.2 R
tracked? - Procedures that require supplier audits to support sourcing decisions,
Annual Quality Audits/ Assessments are performed to
Q.3 R quality systems, special processes, and product/process specific
Suppliers and issues found are tracked until closed? evaluations.
Q.4 Quality data is used in the sourcing decision process? R '- Potential supplier assessments
Is the supplier required to use the Statistic Process '- Quality Systems Basics audit
Q.5 R '- Special Processes such as Heat Treat, Plating, and Coating.
Control, and are there records/ data available?
'- Labeling PFMEA/Control Plan
Do you have the approval for internal and external Heat '- Compliance to Customer specific requirements such as GP-5, GP-12,
Treatment, Plating & Painting Sources in accordance to etc.
Q.6 R
the specific requirememts of CQI-9, CQI-11 & CQI-12, '- Process Control Plan Audits
respectively? '- Gaging Audits
'- Problem Solving w ith disciplined method for root cause analysis such
Is the sub-supplier required with the material certification as 5-Why.
Q.7 per batch or lot to be sent in each shipment and is it R '- Methods to determine ranking of Key suppliers w ith review s of
frequently verified in your facilities? supplier performance to specified goals.
Q.8 Is the PPAP process applied to the sub-suppliers? R '- Key Supplier list w ith defined metrics/goals
'- Review s of supplier performance w ith a defined procedure and
Is there a Material Incoming Area to manage the actions for poor performing suppliers.
purchased material and assure the accomplishing to the '- Method or process in place to communicate problems and track
Q.9 R
requirements. Are there Inspection data results and corrective action.
supplier performance data available?
Are there controls to prevent rejected materials to be sent
Q.10 R
to the warehouses or points of use?
Do you track the product from reception to shipment (door
Q.11 R
to door)?
G/
R. Managing Change (Ref. BIQS-12) Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
- A plant pro cess change fo rm utilized to do cument all changes.

Plant processes are validated relative to changes in '- Change Fo rms are co ntro lled thro ugh a Do cument Co ntro l P ro cess. (e.g. tracking
R.1 R lo g sheet, revisio n numbering system, appro val pro cess)
Design, Man, Machine, Material, Method and Evironment? '- B o th planned and emergency changes co vered by the change pro cedure.
'- A standardized co mmunicatio n pro cedure and fo rm to co ntro l and mo nito r all
P ro ductio n Trial Runs that do cuments each step o f the pro cess & reco rds all
appro vals and results.
'- B uild readiness reviews required to authorize the start o f the trial run pro ductio n
The plant follows a documented change control process pro cess.
R.2 R '- Quality reviews do cumented to release pro duct fo r P TR shipment and verificatio n
for customers and internal changes? pro cess has returned to no rmal pro ductio n.
'- Defined pro cedure and respo nsibility fo r the executio n o f lo ng term sto rage o f parts
o r materials?
The PFMEA and all related planing documents are '- Established guidelines fo r pro tective packaging fo r parts and material.
R.3 R '- Quality reviews to established inspectio n criteria fo r the autho rized release o f
updated to reflect any change, as required? banked parts and material.
'- Written procedure to include:
'- Ho w pro duct quality standards are maintained
Any process change (machine, gaging, process flow, '- M etho d fo r pro per autho rizatio n to enter and exit the pro cess
fixtures, mold, etc.) after current customer PPAP approval '- Defines when the pro cess is initiated and returned to no rmal
'- Standardized wo rk and o perato r training are do cumented
R.4 is notified to customer prior to ship material and meet with R '- A Wo rksheet is used to track each pro cess that is in bypass.
the customer requirements about the procedure to '- The bypassed pro cess is frequently audited fo r co mpliance (B est P ractice is ho urly)
'- B ypassed pro cesses are do cumented in P FM EA and Co ntro l P lan
manage the change for new approval
G/
S. Deviations/Concessions Score Y/R Looking for…. Comments of accomplishing to the requirement Deviation to the Requirement
Is there a documented procedure to manage deviations/

S.1 R
concessions to the Customer? - Verify process robutness to assure that any defective or discrepancy
Does such procedure include the customer's approval for material is shipped to customer w ithout approval.
S.2 R
the deviation/ concession? '- Assure that for any deviation/concession approved by customer are
Does such procedure include not ship non-comforming accomplished the customer requirements for identification of the
S.3 material to the customer unless exist the customer R material in the shipment.
approval?
TREMEC SDE REPRESENTATIVE NAME AND SIGNATURE SUPPLIER QUALITY REPRESENTATIVE NAME AND SIGNATURE
TREMEC'S SUPPLIERS QUALITY SYSTEM ASSESSMENT
Date Opening: 0
Supplier: 0 Date of Revision: 0

Location: 0 SDE/Auditor's Team: 0
Supplier Review
A. General Management I. Layered Process Audits/LPA's (Ref. BIQS-2)
0 Training 0 Existency of Layered Process Audits Criteria
0 G8D's Methodology 0 Layered Process Audits Escalation SUMMARY BY ELEMENT
0 Root Cause Analysis 0 Layered Process Audits Plan Tracking RED YELLOW GREEN TOTAL
0 Learned Lessons System 0 Inclusion of Customer Feedback High Risk Issues in LPA's A.- 10 0 0 10
0 APQP for New Products 0 Layered Process Audits Follow Up B.- 4 0 0 4
0 Quality System Certification 0 Total Potential: 20 0.0% C.- 10 0 0 10
0 Quality System Certification Management D.- 10 0 0 10
0 ID Bar Code Identification System J. Standardized Work (Ref. BIQS-11) E.- 4 0 0 4
0 High Direction Management 0 Standarization of Processes & Formats and all related documents F.- 5 0 0 5
0 Floor Management 0 Total Potential: 4 0.0% G.- 10 0 0 10
0 Total Potential: 40 0.0% H.- 5 0 0 5
K. Finished Product Verification (Final I.- 5 0 0 5
B. Customer Drawings & Specifications Control Inspection/CARE/GP-12) (Ref. BIQS-13) J.- 1 0 0 1
0 Revision of Customer Designs & Specificactions 0 Final Inspection/GP-12 Implementation K.- 5 0 0 5
0 Control of Latest Engineering Level of Customer Designs & Spec's 0 Definition of Final Inspection/GP-12 Criteria and Application L.- 5 0 0 5
0 Procedure of Document & Data Control 0 Final Inspection/GP-12 Deployment as Standardized Work M.- 6 0 0 6
0 Records Retention Procedure 0 Final Inspection/GP-12 Methods Definition N.- 4 0 0 4
0 Total Potential: 16 0.0% 0 Final Inspection/GP-12 Records O.- 4 0 0 4
0 Total Potential: 20 0.0% P.- 4 0 0 4
C. Managing Risk/PFMEAs & Risk Reduction - Annual Q.- 11 0 0 11
Review/Bypass - Deviation Management (Ref. BIQS-3, L. Materials Flow Management (Ref. BIQS-27 & BIQS-28) R.- 4 0 0 4
BIQS-4 & BIQS-5) 0 Storage & Identification of Materials S.- 3 0 0 3
0 PFMEA Multidisciplinary Risk Assessement 0 FIFO Process
0 PFMEA Failure Modes Definition 0 WIP Containers/Materials Damage Protection
0 PFMEA Periodical Risk Assessment 0 Materials Packaging for Shipment to Customer
0 Reverse PFMEA 0 "Zero Stock Policy"/One Piece Flow
0 Error Proofing Bypassed Definition 0 Total Potential: 20 0.0%
0 RPN for Bypassed Devices
0 Standardized Work for Bypasses Devices M. Statistic Process Control (Ref. BIQS-21)
0 Bypassed Devices Tracking 0 SPC Training Program
0 Bypassed Devices/LPA's 0 SPC Application for Special Characteristics
0 Revalidation of reintegration of Bypassed Devices to Operation 0 SPC Implementation & Monitoring Responsibility
0 Total Potential: 40 0.0% 0 Process Capability Indexes Meet Customer Requirements
0 Improvent Plans for Low Process Capabilities
D. Nonconfoming Material Control / Material 0 100% Inpection for Low Process Capabilities for Customer Protection
Identification (Ref. BIQS-1) 0 Total Potential: 24 0.0%
0 Standardized Handling of Nonconforming Material
0 Appropriate Nonconforming Material Handling N. Process Control (Ref. BIQS-19)
0 Identification of Nonconforming Material 0 ISR Approval
0 Containment Actions of Nonconforming Material Cleaning Up 0 Product & Process Audit during Production Running
0 Traceability Methods 0 Material Identification through Process Flow
0 Nonconforming Material Analysis 0 Process & Quality Documents for Operator using
0 Nonconforming Material Corrective Actions 0 Total Potential: 16 0.0%
0 Nonconforming Material Handling Procedure
0 Quarantine Areas Definition for Nonconfoming Material Segregation O. Workstations Organization/5S's

0 Rework/Sorting Instructions Process 0 Tool & Material Required in Operation
0 Total Potential: 40 0.0% 0 Tool & Material Properly Identified & Storaged in Operation
0 Cleanliness Culture in Workstation and along the organization
E. Error Proofing (Ref. BIQS-6) 0 5 S's Audits as Regular Process
0 Error Proofing Included in PFMEA 0 Total Potential: 16 0.0%
0 Error Proofing Functionality Test
0 Identification of Master Parts for Error Proofing Effectiveness Validation P. Machinery & Tooling (Ref. BIQS-26)
0 Using & Identification of "rabbit" parts 0 TPM in Machinery & Tooling % Pts Element Status
0 Total Potential: 16 0.0% 0 Material Replacement Stock for Critical Machines & Tooling 0.0% 0 A. General Management RED
0 Tool & Tooling Wearing Out Control 0.0% 0 B. Customer Drawings & Specification Control RED
F. Control Test & Measurement Equipment (Ref. BIQS- 0 Product Features Process Capability Control in Critical Machines 0.0% 0 C. Managing Risk/PFMEA's & Risk Reduction RED
7) 0 Total Potential: 16 0.0% 0.0% 0 D. Non Conforming Material Control RED
0 Procedure of Calibration of Test & Measurement Equipment 0.0% 0 E. Error Proofing RED
0 Identification & Codification of Test & Measurement Equipment Q. Tiered Suppliers Management (Ref. BIQS-29) 0.0% 0 F. Control Test & Measurement Equipment RED
0 Qualification of Masters conforming International Standards 0 List of Approved Suppliers 0.0% 0 G. Fast Response Problem Solving Process RED
0 MSA Studies Application to Test & Measurement Equipment 0 Supplier Performance Evaluation in a Periodical Base 0.0% 0 H. Production Capacity Metrics RED
0 Measurement System Analysis aligned with AIAG/MSA Last Revision 0 Suppliers Quality System Audits Tracking 0.0% 0 I. Layered Process Audits
RED
0 Total Potential: 20 0.0% 0 Quality Data for Sourcing Decision 0.0% 0 J. Standardized Work RED
0 SPC Requirement to Suppliers 0.0% 0 K. Finished Product Verification RED
G. Fast Response Problem Solving Process (Ref. BIQS- 0 Accomplishing with CQI-9, CQI-11 & CQI-12 0.0% 0 L. Material Flow Management RED
8) 0 Suppliers Material Certificates Requirement by Shipment 0.0% 0 M. Statistics Process Control RED
0 Criteria for Fast Response Process 0 PPAP Requirements with Suppliers 0.0% 0 N. Process Control RED
0 Involving of Plant Manager in Fast Response Process 0 Supplier Materials Incoming Inspection 0.0% 0 O. Workstation Organization RED
0 Involving of Plant Staff in Fast Response Process 0 Suppliers Non Conforming Material Control 0.0% 0 P. Machinery & Tooling RED
0 Documentation Evidence in Fast Response Tracking 0 Suppliers Materials Traceability 0.0% 0 Q. Tiered Suppliers Management RED
0 Exit Criteria of Fast Response Process 0 Total Potential: 44 0.0% 0.0% 0 R. Managing Change RED
0 Read Across as part of Fast Response Process 0.0% 0 S. Deviations/Concessions RED
0 Standardized Fast Response Process along Organization R. Managing Change (Ref. BIQS-12)
0 Robust Root Cause Analysis 0 Validation of Plant Processes 0.0% 0 GLOBAL RATE RED
0 Fast Response Process Management 0 Process Change Control
0 High Risk Issues Customer Notification as part of Fast Response 0 PFMEA & Control Plan Updating
* ALL "RED" ELEMENTS AND GLOBAL RATE LESS THAN 80% MUST
0 Total Potential: 40 0.0% 0 Process Change to Customer Notification HAVE AN ACTION PLAN TO MEET WITH THE TREMEC REQUIREMENTS
0 Total Potential: 16 0.0%
H. Production Capacity and Metrics
0 Existency of Availbale Capacity for New Business S. Deviations/Concessions
0 "Down Times" Analysis and Corrective Actions 0 Procedures to Manage Deviations/Concessions to Customer
0 Delivery Assessment to Customer Criteria 0 Deviations/Concessions Customer Approval FINAL SCORE CRITERIA: FINAL SUPPLIER STATUS:
0 Existency of Run @ Rates Excersises to demonstrate enough Capacity 0 Shipping Material Control under Deviation/Concession GREEN REJECTED SUPPLIER
≥80%, ≤100%
0 Existency and Management of Customer Metrics Feedback 0 Total Potential: 12 0.0% ≤60%, <80% YELLOW
0 Total Potential: 20 0.0% <60% RED
APPENDIX II
Non-Disclosure
Agreement Form
NON-DISCLOSURE AGREEMENT
NON-DISCLOSURE AGREEMENT, MADE BY THE COMPANY NAMED

TRANSMISIONES Y EQUIPOS MECANICOS S.A. de C.V. REPRESENTED IN THIS
ACT BY IN THE FIGURE OF LEGAL
REPRESENTATIVE, WHOM SHALL BE HEREINAFTER CALLED “THE COMPANY”
FOR THE PURPOSES OF THIS AGREEMENT, AND THE COMPANY NAMED
______ . IN THIS ACT REPRESENTED BY __
_____ WHO HAS SUFFICIENT AUTHORITY TO ENTER
INTO THIS AGREEMENT ON ITS BEHALF, WHICH AUTHORITY HAS NOT BEEN
REVOKED, LIMITED OR MODIFIED IN ANY MANNER WHATSOEVER AS OF THE
DATE HEREOF AND WHOM SHALL BE HEREINAFTER CALLED “THE RECEIVER”,
BOTH “PARTIES” DETERMINE THEY SHALL EXECUTE THE PRESENT
AGREEMENT, ACORDING TO THE FOLLOWING STATEMENTS AND CLAUSES:
STATEMENTS:
I. - “The Company” states, through his representative:
1. - To be a Trading Company legally constituted according to the laws of the Mexican

Republic, whose main Corporate Objective is to manufacture Transmissions and
components which shall be called "the products”, for the effects of the present
document.
II.- That for the effects of the present agreement indicates as his Corporate domicile
Av. 5 de Febrero N° 2115 Fracc. Industrial Benito Juárez, Querétaro, Qro. CP 76120,
México.
III.- That it is represented by in the figure of LEGAL

REPRESENTATIVE who has sufficient authority to enter into this Agreement on its
behalf, which authority has not been revoked, limited or modified in any manner
whatsoever as of the date hereof.
II.- "THE RECEIVER " STATES :
1.- To be the representative in this act of the company that

for the best interest of the corporate aims, and of his profession and a better exercise
of his activities; requires the information of industrial application, of the methods,
characteristics and production processes of the "products" manufactured by "THE

COMPANY”.
III.- Both “PARTIES” STATE :
1.- That it is their will to be bound to the present non-disclosure agreement, “THE
COMPANY”, providing the pertinent assistance and information to "THE RECEIVER" to
study and know the operation of "THE COMPANY", also known as “THE PURPOSE”,
keeping the secrecy, discretion and non-disclosure of everything he has seen, listened,
read, talked about, investigated in the facilities, with the individuals and documents
and electronic means, from and in "THE COMPANY".
2.- That they acknowledge the personality by which they appear, and decide to be
bound to the present Agreement, according to the following:
CLAUSES:
FIRST.- "THE COMPANY", allows "THE RECEIVER", to acknowledge and observe in a

strict and exclusively confidential manner, the confidential information of his property
including, but without limitation, the following items: drawings, pictures, files,
specifications, work processes and procedures, of the plant and offices personnel,
price information, commercial information, documents, electronic or magnetic means,
optical discs, visually or verbally collected data, conversations with the personnel of
"THE COMPANY", and in general terms, all the data collected, that could have been
observed in the facilities and with the technicians of "THE COMPANY".
SECOND.- Both “PARTIES” accept and are bound to keep in strict secret the
information received by "THE RECEIVER" as of the 9th day of the March of 2012
(Effective Date).
THIRD.- "THE RECEIVER" would not be able under any circumstances to grant, or
transmit, neither partially nor totally, to any third party, the information neither the
knowledge acquired, nor the rights and liabilities, derived from the present
agreement, unless there is an express consent in writing granted by "THE COMPANY"
for such effect.
Likewise, it shall restrict the access to documentation of any kind containing
confidential information to third parties. Additionally, Receiver is bound to:
a. Promptly notify THE COMPANY of any unauthorized release of Proprietary Information;
b. To use the Proprietary Information solely for THE PURPOSE contemplated in this Agreement;
c. To protect THE COMPANY’s Proprietary Information whether in storage or in use with no less
than a reasonable degree of care;
d. To disclose THE COMPANY’s Proprietary Information only to those employees for whom it
may be strictly necessary for the purpose contemplated in this Agreement and only on a
“need to know” basis (“Representatives”). Such disclosure to them shall be made only under
equivalent conditions of strict confidentiality;
e. To immediately notify the THE COMPANY in the event that THE RECEIVER or any of its
Representatives are required to disclose all or any part of THE COMPANY’s Proprietary
Information under the terms of a valid and effective subpoena or order issued by a court,
governmental body of competent jurisdiction or stock exchange, so that it may seek and
appropriate protective order or waive the THE RECEIVER’s compliance.
FOURTH. The obligations in this Agreement shall not apply to Proprietary Information which:
i) is already in, or hereafter comes into the public domain other than through the fault or negligence of THE
RECEIVER; or
ii) is lawfully obtained by THE RECEIVER from a third party with full rights of disclosure; or
iii) as shown by written records of THE RECEIVER has been independently developed by THE RECEIVER;
iv) is disclosed pursuant to THE RECEIVER validly issued administrative or judicial demand requiring it to
disclose Proprietary Information.
If THE RECEIVER believes that any of those events or conditions that remove restriction on the use,
disclosure and reproduction of the Proprietary Information apply, THE RECEIVER shall promptly notify THE
COMPANY of such belief before acting on such belief. Unless otherwise expressly agreed between the
Parties, this Agreement shall commence from the date it is signed (Effective Date) and shall terminate five
years thereafter.
FIFTH. "THE RECEIVER", is bound to return or destroy to “THE COMPANY” all the
documentation containing confidential information, or that related to it as required by
“THE COMPANY”at the termination of this Agreement. “THE RECEIVER” may keep a
copy in storage for legal matters.
SIXTH. Any modifications made to this Agreement shall be written and signed by both
Parties in order to be effective.
SEVENTH. THE RECEIVER acknowledges and agrees that THE COMPANY would be
irreparably injured by a breach of this Agreement, therefore, THE COMPANY may
access to any remedies available at law or in equity.
EIGHTH- This Agreement shall be construed and interpreted in accordance with the laws of
Mexico City, which shall have sole and exclusive jurisdiction over any dispute or lawsuit between
the Parties In case of a controversy concerning this Agreement arises, both “PARTIES”
commit to seek a friendly composition; only if it fails THE PARTIES would be entitled to
file a lawsuit in Mexico’s City Courts. “THE PARTIES” renounce to the jurisdiction due
to their domicile or any other reason could appertain.
Having the “PARTIES” acknowledged the content and legal effects of this agreement
they sign it before the Witnesses, who underwrite herein, in the
______________________ at the ___ day of the month ___________ of ______
(City, State and Country) (Number of day) (Name of Month) (Year)
_____________________________ _____________________________
“THE COMPANY” "THE RECEIVER”
_____________________________ _____________________________
"WITNESS" "WITNESS"
APPENDIX III
RFQ & Manufacturing

Feasibility Analysis
Forms
REQUEST FOR QUOTATION

REQUIRED
QUOTE No: QUOTE DATE: 05-ene-17 13-ene-17
DATE:
PART NUM BER: DESCRIPTION:
QUOTE REQUESTED TO: P ROJECT:
PROTOTYPE QUANTITY:
ANNUAL VOLUM E:
AT´N. PAYM ENT TERM S:
E-M AIL: PAYM ENT TERM S FOR TOOLING:
TEL1. PACKAGING TYPE INFORM ATION:
TEL2. PRODUCTION UNIT PRICE:
OTHER CONSIDERATIIONS:
PROTOTYPE UNIT PRICE:
SUPPLIER NUM BER: CURRENCY:
A DDITIONA L INFORM A TION COST STRUCTURE
ANSWER SHOULD BE DELIVERED IN THIS QUOTE REQUEST FORM AT, PLEASE

ATTACH ANY EXTRA INFORM ATION TO THIS PAGE. RAW M ATERIAL:
LABOR:
“ IT IS CRITICAL TO BE PROVIDED WITH YOUR ANSWER
WITHIN THE ABOVE MENTIONED TIMING IN ORDER TO TAKE
YOUR QUOTE INTO CONSIDERATION."
OVERHEADS:
TOOLING COST (ATTACH DESCRIPTION) (See tooling Cost

T R EM EC ' s C o nsi d er at i o ns f o r T o o l ing Payment : Breakdown Worksheet , includes only Special Tooling & Special Gages
T his q uo t at i o n w il l co nsid er t hat T R EM EC wi ll no t make any under TREM EC Responsibility)
p ayment i n ad vance f o r d evelo p ing and f ab r i cat i o n o f t he t o o li ng
need ed f o r t his p r o ject . Payment f o r t o o li ng w il l t ake ef f ect o nce TOOLING LIFETIM E:
t he f inal cust o mer r elease f o und s and vali d at e f i nal p r o d uct .
R eq ui r ement s exp r essed i n " T o o l ing W o r sheet " f o r mat must b e
co mp l et ed f o r vali d at io n p ur p o se in t he PPA P sub mit t al. TOOLING LEADTIM E (WEEKS)
INITIAL SAM PLES LEADTIM E:
APPLICANT PRODUCTION PARTS LEADTIM E:
F.O.B. POINT
TEL: RAW M ATERIAL BASE COST:
NET WEIGHT OF THE PART:
GROSS WEIGHT OF THE PART:
TOOLING COST BREAKDOWN WORKSHEET

Quote Number: 0 Part Number: 0
Quote Date: 05-ene-17 Supplier Name:
(*) See TREMEC's Supplier Quality Assurance Manual, paragraph 3.17, Global Tooling Guidelines (For Vendor Tooling) and Tooling Payment Responsibility Matrix
(*) See TREMEC's Supplier Quality Assurance Manual, paragraph 3.16, Requirements for Tooling Identification, Inspection and Testing Devices, owned by TREMEC or TREMEC's Customers
Tooling Payment under Gage Payment under
Responsibility of (mark Responsibility of (mark
with an "X" where it is with an "X" where it is
applicable)(*) applicable)(*)
Number of item Number of item

of characteristics of characteristics
Detailed Special Tooling Gage
to be generated Available to be inspected Gage Cost
Operation Detailed Tooling Description Inspection Gages Cost Tooling Lead Lead
Description of Operation Description of Machinery in this process Capacity of Standard Cost/Hour (USD) with Special Currency TREMEC Vendor Breakdown Currency TREMEC Vendor
# Required in Operation(*) Description required in Breakdown Time (Weeks) Time
operation (see Machine (%) Gage (see (*)
operation(*) (*) (Weeks)
ballooned ballooned
drawing) drawing)
Total Amount of Investment: $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
SUPPLIER MANUFACTURING FEASIBILITY ANALYSIS - Part I

Bill of Process
Part Number: 0 Design Engineerng Level:
Part Description: 0
Transmission Model:
* Note: add lay out drawing
Special Characteristics Requirements:
CC = Critical Characteristic = Cp≥2.5, Cpk≥2.0, SPC (X-R Chart)
SC = Significant Characteristic = Cp≥2,0, Cpk≥1.67, SPC (X-R Chart)
DR = Standard Characteristic = Cp≥1.5, Cpk≥1.33, SPC (X-R Chart)
PTC= Pass Thru Characteristic = 100% Inspection and Error Proofing Required
Standard Characteristics (Any of drawing without any symbol) = Cp≥1.33, Cpk≥1.0, No SPC Required, but Inspection Frequency in Control Plan is Required
*ALL SPECIAL CHARACTERISTICS LISTED BELOW MUST BE PLACED IN PPCP (Pre-production Containment Procedure)DURING 90 DAYS AFTER PPAP SUBMISSION TO DEFINE THE INSPECTION FREQUENCIES AND CONTROL METHOD IN PRODUCTION CONTROL PLAN
*ALL CHARACTERISTICS INCLUDED IN DRAWING MUST BE INCLUDED IN PRODUCTION CONTROL PLAN. INSPECTION FREQUENCIES AND CONTROL METHOD MUST BE APPROVED BY TREMEC SDE
Special Instructions for Standards Characteristics that are Important to the Function (Exclusive for TREMEC Representative)
100% Inspection
Preliminar
during 90 days Long Term
Capability
Type of Characteristics after PPAP Process Capability
Requirement -
Consecutive Item submission is Requirement Control Method in Pre- Control Method in
Characteristics Specification Short Term Special Instructions
of drawing lay out required? Production Control Plan Production Control Plan
SC/ STD
CC KCC/ DR PTC (No Pp Ppk Yes Not Cp Cpk
MCC Symbol)
x 1.5 1.33 x 1.5 1.33

1) 100% inspection by variable gage or CMM during 90 days after
x 1.5 1.33 x 1.5 1.33
PPAP submission.
x 1.5 1.33 x 1.5 1.33 2) Match the physical part with the CMM inspection report and send the
reports in every shipment for each single piece (send by e-mail and/or
x 1.5 1.33 x 1.5 1.33 SPC (X-R Chart) attach a hard copy in the shipment).
<<Inspection 3) With the complete data of the 100% inspections during 90 days must
x 1.5 1.33 x 1.5 1.33 Frequency in Control be used to calculate the real Cp and Cpk and the required values must be
Plan (Depending of reached, if not, then a 100% inspection must be documented in
x 1.5 1.33 x 1.5 1.33
the Process Production Control Plan until process capabilities meet the requirements.
x 2 1.67 x 1.67 1.33 capability of Data 4)Send copy of last X-R chart issued in the end of each quarter of the
Collection during 90 year with calculation of the Cp and Cpk value.
x 2 1.67 x 1.67 1.33 days)>> 5) Dimension & Material results of these features must be considered as
part of the Certificate of Compliance attached in every shipment. This
requirement is forever during the life of the part under TREMEC
Release. (Production Control plan inspection frequencies must be in
x 2 1.67 x 1.67 1.33
agreed upon with TREMEC SDE).
x 1.33 1 x 1.33 1
x 1.33 1 x 1.33 1 <<Inspection
x 1.33 1 x 1.33 1 Frequency in Control
x 1.33 1 x 1.33 1 Plan (Depending of
x 1.33 1 x 1.33 1 the Process 6) Apply the same requirements 1, 2, 3 & 5 above specified.
100% Inspection
capability of Data
Collection during 90
x 1.33 1 x 1.33 1
days)>>
x 2 1.67 x 2 1.67 Error Proofing Type I

or II
SPC (X-R Chart) 7) Apply the same requirements 1, 2, 3, 4 & 5 above specified
100% Inspection in
Production
x 2 1.67 x 2 1.67
Error Proofing Type I

or II or 100% 8) Apply the same requirements 1, 2, 3 & 5 and,
Inspection using 9)Send copy of last nP chart issued in the end of each quarter of the year
x 2 1.67 x 1.67 1.33
Gage In Process or with calculation of the rejection rate.
by Attributes (Chart
nP)
For exclusive use of TREMEC Representatives
Drawing Requirements Requirements Understanding Requirements Feasibility Action Plan Tracking
Is the
Is the Requirement Attainable? Does the Action ¿Is Design
Requirement
Type of Characteristic require design Change Final Status
Consequtive Clear &
If the Requirement is not attainable, describe what is the change? accepted?
item of drawing Drawing Specification Understood? If the Requirement was not understood what is needed to be clarified? Action Needed Responsible Why? Special Instructions after PO allocation.
Yes concern?
lay out
SC/ Not
Type of Inspection Open Close
CC KCC/M DR PTC Yes Not Operation # Type of Machine Yes Not Yes Not
Equipment (Red = R) (Green = G)
CC
Supplier's Representative Name and Signature TREMEC´s SDE Representative (Name and Signature) TREMEC's Purchaisng Representative (Name and Signature) TREMEC's Production Control Representative (Name and Signature) TREMEC's Product Engineering Representative (Name and Signature)
SUPPLIER MANUFACTURING FEASIBILITY ANALYSIS - Part II

Date:
Supplier's Name 0 TREMEC Part Number: 0

Part # description: 0 Telephone #: 0
Fax # 0 Design Level: 0
e-mail: 0
This document represents a commitment betw een the supplier and TREMEC implying that the proposed design can be manufactured, assembled and shipped according to the required quality levels. Information in this format should
be used as the foundation to assess the supplier's skills and capabilities to comply w ith all the specified requirements. This list does not intend to contain all the required information; it is just a group of considerations that should be
taken into account w hen performing a manufacturing feasibility assessment. Every negative answ er should be supported w ith comments proposing changes that expedite the accomplishment of the specified requirements. Please
use the attachments if you require more space for comments.
To be Filled by the Supplier TREMEC Revision

YES NO N/A YES NO
1.- Did the supplier perform a feasibility analysis of the Process vs. the Design?
2.- Does the supplier understand all the engineering and quality requirements?
3.- Did the supplier take into account the implications of the special characteristics; critical characteristics (CC's), and/or
significant (SC's) and/or standard (DR's) for their manufacturing and control?
4.- Did the supplier analyze the design tolerances vs the process ones before answering to a quotation?
5.- Does the supplier count on all the machinery, measuring and test equipment required to manufacture and evaluate the
part?
6.- Does the supplier count on the TREMEC supplier's Quality Assurance Manual?
7.- Does the supplier know, clearly understand and accept to meet our specific quality requirements?
8.- The quotation includes the accomplishment to all our specific quality requirements including to meet with the annual
revalidations?
9.- Does the feasibility analysis include the packaging and does it assure the integrity of the supplied product? (Packaging
validation will be required in PPAP)
10.- Did the supplier include the required sub-suppliers in the feasibility analysis to perform any operation and/or service or
direct material supply?
11.- Did the supplier assess and/or check the feasibility analysis of the sub-suppliers following the same concepts of this
procedure?
12.- Does the supplier have an objective evidence that a multidiscipline approach was used in such feasibility analysis?
13.- Did the supplier envision the part manufacturing process in an schematic way (Sequence of Operations item by item) and
describe the type of machinery, measuring equipment to be used, standard cost per hour per operation and available
capacity of machinery?
14.- Does the available capacity cover our required production volume? (Run @ Rate is required in PPAP running)
15.- Does the supplier have experience in the concept of production of parts that are similar to ours?
16.- Does the supplier know and clear understand our identification requirements for tooling which are property of our
Customers?
17.- Were considered the applicable Legal/Government regulations?
18.- The heat treatment processes to be used meet with CQI-9? (Evidence of the accomplishment is required)
19.- The plating processes to be used meet with CQI-11? (Evidence of the accomplishment is required)
20.- The coating & painting processes to be used meet with CQI-12? (Evidence of the accomplishment is required)
21.- Is the manufacturing process feasible?
22.- If the previous answer was "NO" which are the considerations to make the design feasible?
Supplier's Representative Name and Signature TREMEC's Supplier Development Representative Name and Signature
TREMEC's Production Control Representative Name and Signature TREMEC's Product Engineeering Representative Name and Signature
TREMEC's Purchasing Representative (Name and Signature)
APPENDIX IV
Controlled Shipping
Level I and II
Forms
SUPPLIES
Supplier Top Level Name:

Title:
Company:
Location:
Supplier Number (Code):
Subject: Entry Into Level 2 Controlled Shipping
Controlled Shipping Status is a part of Suppliers Quality Assurance Manual of KUO referenced at ACP-007, and it is part of the
Supplier Quality Improvement Process. KUO Facility has determinated that current controls by your organization are not
to insulate to (KUO Plant Name) from the receiving of nonconforming parts/material produced by your facility.
This document is a formal notification and confirms discussion held with (supplier contact and date) that your facility has
been placed in Controlled Shipping Status Level 2 for the following non-conformances:
Transmission
Part Number Part Name DMR No. Nonconformance
Model Line
The procedures you have enacted to date have been insufficient in stopping the flow of non-conforming material to our
(KUO Plant Name). Therefore, you must inmediately:
1.- Pay the 100% inspection costs to a reworking supplier defined by KUO as Containment activity in addition
to your current process controls
2.- Clearly identify the qualified shipments.
3.- Identify the root cause of the nonconformance (s).
4.- Define and implement irreversible corrective action for the root cause (s) of the problem (s). This will normally include
revised FMEA's, Process Flow Diagrams, and Process Control Plan.
5.- Validate effectiveness of the corrective actions. Outline your plan for reviewing your controlled shipping data.
6.- Track and report your progress submiting regular reports as specified by representative of KUO monitoring this activity.
7.- Meet the defined exit criteria. The parts will remain in controlled shipping status until irreversible corrective actions are
implemented and confirmed. Exit criteria will be established until verify the identification of the true root cause, and verify
the appropiate corrective actions are implemented, properly documented, and effective.
Note: Failure to comply this process, or the inab ility to implement a succesful action plan or containment activity will b e
result in the implementation of new b ussines hold. Reference the Supplier Quality Assurance Manual of KUO
If you have any questions contact (Supplier Quality Engineer; Name, phone, Fax, E-mail), who will be monitoring and
defining your Controlled Shipping Status and related activities.
Sincerely,
Purchasing Manager of KUO Plant Plant,Quality manager
Copy:
Purchasing Mgr.
Plant Manager Supplier Quality & Development Engineering Mgr. Incoming Quality Supervisor
SQE & SDE Name Plant
Incoming Quality Sup.
SUPPLIES
CONTROLLED SHIPPING CONFIRMATION REPLY

To: (Name of SQE responsible of KUO Plant)
Plant Name:
Adress:
City, state and zip code:
Fax Number:
FROM: (Supplier Facility Name)

Supplier number (code)
Adress:
City, State and Zip code
We acknoledge receipt of your letter dated, advising us that our above facility has been placed in:
Check these (that apply):
Controlled Shipping Level 2
We understand the containment process requirements.

We do not fully understand the containment process requirements. Please contact:
Name of contact:
Telephone Number:
Following is a description of how conforming parts and shipments will be identified to indicate that they have been qualified
as conforming to requirements:
The containment activity will be performed at following location:
The person responsible for the containment activity:
Name:
Phone:
Date:
Signature of person responsible for containment)
SUPPLIES
Part Number:
Name:
Supplier:
Supplier code:
Controlled Shipping Status:
First Second Third

Dmr No. Start date Identification Date Identification Date Identification Date Exit Date
Blue* dot Blue* dot Blue* dot
* The paint dot must be blue color until supplier guarantee 20 consecutive lots w ithout any problem and 8D's Report is closed by KUO SQE
First Certification, Comments:

Mfg. Date/lot
number
Second Certification, Comments:

Mfg. Date/lot
number
Third Certification, Comments:

Mfg. Date/lot
number
Name inspector, Closed Date
SUPPLIES
Part Number:
Name:
Supplier:
Supplier code:
DMR reference:
8 Disciplines No.
First Following:
The 1,2,3 steps of 8D´s report were completed correctly? Yes No
The containment actions were taken according to the 8D's proposed? Yes No
The certification was appropiate according to the requirements of Yes No

KUO Facility?
The method to certify 100% the material is capable to assure "zero" Yes No
defective parts at KUO Plant?
The lots shipped to the KUO Plant were certified

and identified according to our procedures? Yes No
KUO SQE Recomendations:
Page 1
SUPPLIES
Part Number:
Name:
Supplier:
Supplier code:
DMR reference:
8 Disciplines No.
Second Following:
The root cause (s) was (were) found and identified clearly? Yes No
The supplier used an appropiate technique to identify the root Yes No

cause (s)?
Has the supplier defined an action plan to implement the Yes No

Corrective Actions?
Those Corrective Actions have been implemented on similar Yes No

process or parts?
Page 2
SUPPLIES
Part Number:
Name:
Supplier:
Supplier code:
DMR reference:
8 Disciplines No.
Third Following:
The Corrective Action (s) has (have) been implemented? Yes No
The Corrective Action(s) is (are) enough to assure "zero" defective Yes No

parts at KUO Plant?
The Corrective Action(s) was (were) completed on time and with Yes No
enough resources?
The Corrective Action(s) required modify the next documentation in Yes No

process, or design?
*Process FMEA Yes No
Last Level: New Level:
*Control Plan Yes No
*Process Sheet Yes No
*Visual Aids Yes No
*Engineering Drawing Yes No

Page 3
SUPPLIES
Part Number:
Name:
Supplier:
Supplier code:
DMR reference:
8 Disciplines No.
Conformity number:
Next document is an advise that your plant has been moved from Controlled Shipping Status
Level 1
Level 2
Your containment Actions, Certification Method and Corrective Actions have been convincing to assure that all products
shipped to the KUO Plant fulfilled with all requierements described on the ACP-007 Document. Your product
will be received at KUO Plant and inspected according to own internal procedures of sampling.
As representative personal of (Name of KUO Plant) I confirm that all actions were taken by (Supplier Name) fulfilling with
all requierements of Quality to assure good parts at own facilities. I confirm that all actions were taken using a development
of a global 8D's process and the actions were verified at Supplier's Facilities
Supplier Quality Representative KUO Suppllier Quality Engineer
Note:
The cost by inspection, sorting or returning of parts to your facilities will be charged at your debit account, each cost will be
displayed on a formal memo at your account department.
Copy:
KUO Purchasing Manager:
Plant Manager:
KUO SQE:
KUO Incoming Quality Sup.:
APPENDIX V
Identification of New
Production Lots
Form
FIRST PRODUCTION RUNNINGS
AFTER PPAP APPROVAL

(A) SHIPMENT: NUMBER OF DAYS AFTER PPAP APPROVAL:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44
45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60
(B) REASON OF USING THIS KIND OF VISUAL AID:
DRAWING ENGINEERING CHANGE LATEST ENGINEERING LEVEL:
NEW PART NUMBER
NEW SUPPLIER FOR THIS PART NUMBER

OTHER Please Explain the Reason:
APPENDIX VI
Tooling Worksheet
and Visual Aid Form
(For Tooling
Identification Property
of Customer)
Tooling Worksheet
Please use this worksheet to provide TREMEC with the information needed after obtain tooling numbers.
Weights and mesurements can be estimated. TREMEC will provide you with the information required as first
step of this format. Supplier will take photos (close up of ID plate riveted added in tooling and open picture
showing the complete tooling with riveted ID plate according to attached visual aid) of the die and/or, molds,
and/or fixtures and/or tools with the ID information supplied by TREMEC and attach them to the PPAP
documentation.
Program/Project Example: 2012 Camaro SS o r 2011Co rvette EWO 112453

Customer Name
Customer PO/Contract Number * This information must be part of the
Customer Tool Number* Tooling ID.
TREMEC PO Number
TREMEC Assembly part number
TREMEC Component Part Number*
TREMEC Component Part Name*
Tool Category
1&2 Put an X in the right box Die Mold Fixture Machine Tool
Progressive
Extrusion
Die Cast
Trimming Die
Line Die
Injection
Compression
Vacuum
Tool Type
Blow
Other
Checking
Holding
Machining
Other (Please describe)
Holding
Cutting/machining
Other: (Please describe type)
3 Daily capacity for the tool

4 Country of Origin for the tool
5 Tool location (street address)
6 Length
Be consistent ‐
7 Heigth
either English
8 Width or Metric Units
9 Weight
10 Tool material (Steel, aluminum, etc.)
This information is needed for EACH tool as designated on the Tooling PO.
Visual Aid for Tooling Identification:
APPENDIX VII
Production
Demonstration Run
Calculation Worksheet
PRODUCTION DEMONSTRATION RUN

TREMEC REQUIREMENT
PART NAME(S): 0 SUPPLIER: 0

MANUFACTURING LOCATION: 0
PART NUMBER(S): 0 SUPPLIER CODE: 0
DATE: 00/01/1900
CHANGE LEVEL(S): 0 0
PROGRAM: 0 0
Buyer/SDE concurrence (optional)
Calculation Witnessed information Input information

Data input from production P.O.:
Shared Machine? Yes or No (Y/N)

A) Combined KUO P.O. Daily Required Capacity
A1)KUO P.O. Daily Required Capacity Part Number 0 Pieces/day
Total (suma(A1:A5)) 0 Pieces/day
B) KUO P.O. Shift Pattern
B1) Number of shifts per day shifts
B2) Production hours per shift hours
B3) Number of production days per week days
Data input from manufacturing process:

C) Downtime per shift
C1) Lunches hours/shift
C2) Breaks hours/shift
C3) Changeover and/or set-up hours/shift
C4) Operating time dedicated to other customers hours/shift
Comments:
C5) Scheduled/unscheduled downtime (as applicable) hours/shift
Comments:
D) Parts attempted during the PDR attempted parts

E) First time through fallout during the PDR failed parts
F) Length of PDR in hours Start: Finish: hours
G) Acceptable parts witnessed at the PDR pieces
In process calculations:
H) Available production hours/shift [B2-(C1+C2+C3+C4+C5)] 0.00 hours/shift

I) Available production hours/day [B1*H] 0.00 hours/day
J) KUO required parts per hour at the PDR [A/I] #¡DIV/0! parts/hour
K) Witnessed parts per hour at the PDR [G/F] #¡DIV/0! parts/hour
Requirements:
L) FTC calculation [((D-E)/D)*100] Minimum requirement of 90% #¡DIV/0! %

M) Difference between witnessed parts/hour and required parts/hour [K-J] #¡DIV/0! pieces
Must be 0 or greater for approval #¡DIV/0!

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Torque Transfer Solutions™

Antonio Herrera Rivera

3.2 KUO Transmisiones Buyer’s Responsibility 15

3.4.1 KUO Transmisiones Buyer’s Responsibility 18

3.5.8.5 International Material Data System (IMDS) 29

 Containment Procedure in Pre-production 32

3.6.1 Supplier’s Responsibility 33

3.7 Product Validation 36

3.9 Annual Layout (Annual Validation) 36

3.14.11 Specific Application Requirements for Controlled Shipments Levels I and II 54

3.15 Supplier’s Quality Performance Monitoring 57

3.17 Global Special Tooling Guidelines and Payment Responsibility Matrix 74

6.0 Change Control 95

Appendix I: Supplier Profile and Self-Assessment Forms 96

Appendix II: KUO Transmisiones – Supplier Non-Disclosure Agreement Form 105

Appendix IV: Level II Controlled Shipments Procedure Forms 115

Appendix V: New Production Lots Identification Form 123

Appendix VII: Production Demonstration Run Calculation Worksheet 128

0.1 KUO Transmisiones Goal

0.2 Purpose of Manual

0.4 Supplier’s Responsibility

1. Each of the suppliers shall have access to this document.

0.6 Supplier Development Philosophy

0.6.1 Search and Selection Process of New Suppliers

0.6.2 Supplier Selection Process for New Business

0.6.3 APQP/PPAP Process

0.6.4 Supply Process and Supplier’s Performance Assessment

0.7 KUO Transmisiones Suppliers Quality System Requirements

 ACP – 007 PROCEDURE

1.1 General Information

1.2 Prototypes Requirements

Specific KUO Transmisiones requirements for its suppliers regarding the

1.3 Pre-production Requirements

Guidelines and procedures applicable to KUO Transmisiones Production Parts Approval

1.4 Production Requirements

1.4.1 Controlled Shipments

This is a Sanctionatory Procedure which, at KUO Transmisiones Plant own discretion, is

1.4.2 Supplier Performance Monitoring

1.4.3 Defective Material Report (DMR)

3. INSTRUCTIONS AND RESPONSIBILITIES

3.2. KUO Transmisiones Buyer’s Responsibility.

CC SC P P KCC MCC SPC DR PTC AQC

3.2.3. Copy of Engineering Specifications referred in the design.

3.3. Supplier’s Responsibility

Refer to APQP Manual for further information on prototype stage.

LEVEL – BATCH – CONSECUTIVE/TOTAL

3.4.1 KUO Transmisiones Buyer’s Responsibility

MCC SPC AQC PTC

3.4.1.3b Significant Characteristics

3.4.1.3c Standard Characteristic DR and no symbol.

3.4.2 Copy of Engineering Specifications referred in the design.

3.5 Supplier’s Responsibility

 Operations Flowchart (3.5.3)

3.5.2 ADVANCED PLANNING FOR QUALITY PRODUCTS PROCESS (APQP)

3.5.3 OPERATIONS FLOWCHART

3.5.3.4 Time used by operation shall be described

+ By the complexity of Operations and/or by operator skills

3.5.4 POTENTIAL FAILURE MODE AND EFFECTS ANALYSIS (FMEA)

Refer to last edition FMEA (AIAG/AITF) Manual for further information.