Supplier Quality System Requirements Manual

Transcription

1 Supplier Quality System Requirements Manual

2 Quality Policy "AxleTech International is committed to exceeding our customers expectations by continually improving the cost, quality, reliability and delivery of our products and services."

3 TABLE OF CONTENTS 1.0 INTRODUCTION 1.1 SCOPE 1.2 PURPOSE 1.3 PLEX ONLINE 2.0 SUPPLIER REQUIREMENTS 2.1 SUPPLIER APPROVAL PROCESS 2.2 PRE-AWARD MEETING 2.3 CONTRACT REVIEW 2.4 PRODUCTION PART APPROVAL PROCESS 2.5 PROCESS CAPABILITY REQUIREMENTS 2.6 ENGINEERING PROTOTYPE SAMPLE SUBMISSION 2.7 MANUFACTURING PROCESS REVIEW 2.8 APPROVED CHANGES 2.9 VERFICATION REVIEWS 2.10 SUB-SUPPLIER MANAGEMENT 2.11 ANNUAL LAYOUT 2.12 WARRANTY 3.0 MANUFACTURING CONTROL 3.1 SUPPLIER TOOLING 3.2 NON-CONFORMANCE REPORTS 3.3 QUALITY / DELIVERY PERFORMANCE MEETINGS 3.4 PACKAGING / IDENTIFICATION / TRACEABILITY 3.5 QUALITY PERFORMANCE EXPECTATIONS 3.6 MATERIAL CONFORMANCE 3.7 DEVIATIONS 3.8 DELIVERY PERFORMANCE EXPECTATIONS 3.9 BUSINESS CONTINUITY 4.0 REVISION RECORD 5.0 APPENDIX APPENDIX A.... DEFINITIONS APPENDIX B CONTROL CHARACTERISTICS APPENDIX C. Supplier letter for top 10 poorest performers APPENDIX D. Certificate of Conformance Template APPENDIX E Labeling Standards APPENDIX F. Terms and Conditions on ATI Purchase Order

4 1.0 INTRODUCTION 1.1 SCOPE This Manual defines the minimum mandatory requirements that are expected from an AxleTech approved supplier regardless of global location. 1.2 PURPOSE The purpose of this manual is to communicate the requirements for the quality management systems for any company that supplies goods or services to AxleTech. AxleTech requires suppliers to: 1. Establish and Maintain ISO processes or equivalent. 2. Control processes, maintain process capability, maintain quality systems, and control waste. 3. Show evidence of use of APQP, PPAP, FMEA and all of the disciplines included in these processes both at PPAP and during serial production. 4. Stay up to date with supplier requirements of this website and AxleTech s Plexus Database. 1.3 PLEX ONLINE AxleTech utilizes an online service to manage Corrective Actions, PPAP records and provide access to Controlled documents named PLEX ONLINE. This site can be accessed directly at or thru the AxleTech International web site by going to the supplier page and clicking on the link. Each supplier will be assigned access based on their need but only one individual will be set up as the key contact. That individual will receive all automatic s from the system to inform them of Defective Material notices, Corrective Action requests, PPAP requirements and system changes. If for any reason the key contact needs to be changed the Supplier will need to contact the Quality Department at their Customer and provide the updated contact information. As part of the system there is a section that is identified as Document Control System which contains all of AxleTech s specifications as well as other Controlled documents. This allows the Supplier access to the latest revision of the specification and allows automatic notification when a specification is updated. The information on this site is to be considered proprietary which is covered under the Nondisclosure agreement between the Supplier and AxleTech.

5 2.0 SUPPLIER REQUIREMENTS 2.1 SUPPLIER APPROVAL PROCESS Current and potential suppliers to AxleTech must operate within a comprehensive quality system. Suppliers must provide proof of compliance with or written confirmation of third party certification to ISO or TS16949, or provide action plan dates for achieving third party certification to one of these standards. This requirement may be waived at the discretion of AxleTech Purchasing and Quality Assurance based on a visit to the supplier or information presented by the supplier during a pre-award meeting. At the discretion of AxleTech, a review of supplier s manufacturing process may be conducted at the supplier s facility. This review will audit processes and determine supplier feasibility. 2.2 PRE-AWARD MEETING Suppliers offering new products, prototypes or services to AxleTech shall be required, prior to purchase order issuance, to meet for a Pre-Award Meeting and/or a Technical Review. During these meetings, technical, quality, PPAP, manufacturing, engineering, purchasing, delivery, and business issues will be addressed to give the suppliers an understanding of AxleTech s requirements. A Pre-Award check sheet will be compiled by the buyer and will serve as a guideline for further steps in the process. The Check sheet will also be input into Plex as part of the sppap record. 2.3 CONTRACT REVIEW The supplier shall verify all Purchase Orders (P.O.) issued by ATI upon receipt. Any discrepancies in price, quantity, specifications, packaging, or delivery requirements must be communicated to and resolved with ATI Purchasing before taking action on the purchase order. The supplier accepts responsibility for compliance with the current ATI Order terms and conditions by accepting and/or acting upon the P.O. The current P.O. terms and conditions are specified on the back of the ATI purchase order (See Appendix F). 2.4 PRODUCTION PART APPROVAL PROCESS (PPAP) PPAP is a quality tool for planning, prototype, pilot, pre-launch, and production. All suppliers are required to use the Supplier Production Part Approval Process (sppap) tool in the Plexus on line system (Standard PPAP Manuals are available thru AIAG). The sppap system is set up to allow AxleTech Purchasing to notify the supplier of the requirements and to allow AxleTech Quality to post the requirements, review, and approve or reject each document submitted. All required documents must be uploaded by the supplier into the sppap system. Once a PPAP is approved in the sppap system it then becomes a permanent record of the approval and cannot be modified.

6 Suppliers are required to conform to AxleTech print specifications and dimensional requirements at all times. Any shipment of production product without first obtaining interim or full approval on a part submission warrant (PSW),and an approved engineering deviation or approved Drawing Change Request (DCR), shall be considered defective product. As a Default, Suppliers are required to submit a Level 3 PPAP for: 1) Any new product that is being released for production 2) Any part where a supplier has made a pre approved change in the process, product, location of manufacture or sub-supplier. 3) Or when requested by AxleTech Purchasing or Quality Assurance. Deviation from the Level 3 PPAP requirement can be determined during the Pre-Award meeting with the joint consensus of ATI Purchasing and Quality. This deviation will be reflected in the requirements posted in the sppap system. For standard catalogue items a Certificate of Conformance may be deemed acceptable. See appendix D for a template. AxleTech will periodically hold PPAP training sessions with selected suppliers to assist them in broadening their knowledge in the tools used in the PPAP process. This training material is available in the Plex-on-line system for review. Suppliers are invited to request inclusion in the training if they wish to expand their knowledge of the PPAP process. 2.5 PROCESS CAPABILITY REQUIREMENTS As part of the PPAP requirements all suppliers are expected to provide documentation that all Major Characteristics or Safety Related Characteristics are capable and in control or provide evidence on their Control Plan that these items will be checked 100%. Ongoing process monitoring and control of these items is mandatory and data should be available for review at any time. Statistical control levels will be finalized at the Pre-Award meeting but as a standard it is expected that the supplier meet a Cpk of 1.33 on all Major and Safety Characteristics during serial production. See Appendix B for definitions. A Statistically Significant sample size must be used to determine Cpk values (30 piece minimum is recommended). If the initial orders do not allow for this sample size it is expected that the supplier will check all product 100% until enough data is available for evaluation. 2.6 ENGINEERING PROTOTYPE SAMPLE SUBMISSION Submission of prototype parts may be requested with documentation of specification conformance that meets AxleTech s Prototype Approval Process. At a minimum, a PSW, dimensional report and material certification is required for submission. Full requirements will be discussed during the Prototype Review meeting and expectations will be outlined on the Purchase Order.

7 2.7 MANUFACTURING PROCESS REVIEW Axletech International reserves the right to review the supplier s manufacturing process at their facility. A reasonable lead time will be established. Validation of PPAP submission, Run at Rate, Corrective Action responses and Quality Certification Scheduling are all possible reasons for scheduled visits. If a supplier has consistently exhibited poor Quality and/or Delivery performance Purchasing and Supplier Quality will contact the supplier and schedule regular visits to ensure improvement in performance (see letter in appendix C). In addition a supplier may be invited to be part of the Quality Systems Basic (QSB) Assessment process. This process involves an AxleTech Quality representative visiting the supplier s site and reviewing their Quality Management System and Production facilities to determine possible areas for Continuous Improvement. Action plans and follow up meetings will be established to track progress and Supplier Scorecards will be evaluated to determine the impact of the actions taken. 2.8 APPROVED CHANGES AxleTech must be notified in advance if a supplier plans to change an approved material, process, location of Manufacture or sub-supplier. Written approval from AxleTech (either through a PPAP submission for permanent changes or a deviation request form for temporary changes) must be received prior to change implementation. No deviations/concessions shall be permitted without the appropriate validation and customer approvals. 2.9 VERIFICATION REVIEWS OF PURCHASED PRODUCT AxleTech and its customers have the right to verify, at the suppliers premises that the product and subcontract product(s) conform to specific requirements. The AxleTech representative shall specify both the arrangements and method of performing the review SUB-SUPPLIER MANAGEMENT AxleTech s direct suppliers are responsible for the Quality and Delivery of all of their sub-suppliers. The supplier is expected to proactively manage their supply base in a manner that ensures that AxleTech Quality and Delivery expectations are always met. This includes AxleTech directed sub-suppliers. The supplier is expected to request, obtain, approve and maintain a level 3 PPAP from all suppliers unless approved in writing by AxleTech. AxleTech reserves the right to validate the sub-supplier PPAP but this in no way transfers the responsibility of managing sub-suppliers from the Supplier.

8 2.11 ANNUAL LAYOUT A full layout of each part number currently in production is may be required annually unless previously agreed to in writing by AxleTech Purchasing and Plant Quality. Documentation must be sent to the AxleTech plant where the product is used. It is assumed that first-piece inspections, process performance records, and process capability data are always available. These records may be requested in place of full layouts. In addition all applicable material certifications must be submitted annually at a minimum to ensure that AxleTech has the latest records of certification on file WARRANTY AxleTech may identify, review, and document other specific warranty requirements at a Pre-Award Meeting that are not specified in the Purchase Order. 3.0 MANUFACTURING CONTROL 3.1 SUPPLIER TOOLING AxleTech property shall be permanently marked showing AxleTech as the owner and it must be visually apparent on all tooling. For AxleTech International tooling at supplier location, the supplier, as holder of the tooling is responsible for establishing a preventive maintenance procedure, maintaining the tooling, and ensuring that all applicable equipment is calibrated as needed. Records should be available for review at any time. The supplier is expected to notify AxleTech Purchasing prior to the tooling reaching the end of its useful life. Notification should be made with enough lead time to allow for tooling to be repaired or replaced without interruption of supply or the need for mitigation of Quality problems. At a minimum an evaluation should be made at the completion of a purchase order to ensure that all concerned have an opportunity to plan for any repair or maintenance prior to the next run. 3.2 NON-CONFORMANCE REPORTS (PLEXUS ON-LINE) Any supplier who receives a Defective Material Notification (DMN) through must utilize Plexus-On-line for their response to any and all DMN s. A Defective Material Notification (DMN) is issued for defective parts or conditions utilizing an automatic e- mail sent to the main Supplier contact. All suppliers are required to utilize this internet-based quality system to communicate with AxleTech on the containment and resolution of DMN s. This system is located at the internet address An initial acknowledgement reply, including a containment plan and Short Term Corrective Action Plan indicating immediate action to correct the inventory and the next delivery, must be returned within one business day of notification. If the form indicates that a Corrective action is required, a Final Corrective Action Plan is due within fourteen days of receipt. At a minimum this Final Corrective Action Plan should include the Root Cause Analysis and a Long Term Corrective Action. The supplier may provide his action plan on his own 8D template under the condition that they upload it as an attachment to the DMN.

9 3.3 QUALITY / DELIVERY PERFORMANCE MEETINGS Suppliers who do not meet AxleTech s expectations and requirements will be required to attend a Quality/Delivery Performance Meeting. Reasons for meeting request may be, but are not limited to: 1. Poor Delivery performance. 2. Excessive DMN s and poor response time. 3. Poor PPAP performance. 4. Scrap issues. If at the end of the Quality/Delivery Performance Meeting the supplier has been deemed unacceptable, the supplier shall be prohibited from bidding on new business and/or has their current business may be resourced. 3.4 PACKAGING/ IDENTIFICATION/ TRACEABILITY Every shipment (box, pallet, or rack) to AxleTech shall be identified as instructed in the Pre-Award Meeting or by the Buyer. Part number, supplier name, and address shall permit traceability back to the supplier records. At a minimum, safety related parts shall be identified to all legal and /or AxleTech requirements. In addition all parts will be packaged in a manner that protects them from damage and deterioration. On parts that are susceptible to corrosion the supplier is expected to take measures that ensure preservation for 6 months from the time of shipment. Any changes to packaging must be approved by AxleTech in writing prior to implementation. Various shipping terms do not absolve the supplier from proper packaging. Packing Lists & Shipping Labels Packing lists must contain: ATI s part number, manufacturer s part number, all lot numbers in the shipment with quantities per lot, P.O. number, number of cartons and quantity per carton and total quantity shipped. Shipping labels shall be formatted and located according to ATI s standard label as referenced in supplier quality manual appendix E. Labels must contain ATI s part number, part revision level, part description, supplier number, supplier location, manufacture date, number & quantities of lots, total quantity shipped and P.O. number. The supplier is responsible for maintaining lot traceability while the product is at the supplier s location. Lots are not to be mixed together. Bar-Code Label Instruction ATI will accept bar code labeling in accordance with AIAG (Automotive Industry Action Group) shipping/parts Identification Label Standard AIAG-B-3.

10 3.5 QUALITY PERFORMANCE EXPECTATIONS As part of the Supplier Performance tracking system AxleTech has implemented Supplier Scorecards for key suppliers. These scorecards will be compiled quarterly and sent out to the suppler to provide feedback on their individual performance. All AxleTech suppliers are expected to meet or exceed all dimensional, packaging, identification and material specifications as listed on the approved part print. Any cost incurred to correct deficiencies will be the responsibility of the supplier. NOTE: Any costs associated with the nonconforming parts, such as shipping, reworking, inspection and replacement shall be charged to the supplier at US $75 / EUR 75 per hour. 3.6 MATERIAL CONFORMANCE Material Certifications - The supplier is responsible to ensure that production materials supplied to ATI is in compliance with all material specifications as shown on the drawing, associated specification or purchase order. Material Certifications must have lot test data attached specifically showing the specification requirements and results of the tested lots. Certifications must include the manufactures name and address, part number, lot number, manufacture date, results measured, signature and title of individual approving certificate, and order number of the product is being certified to. Copies of lab accreditation are required if materials are being tested and certified by commercial laboratories. Suppliers must maintain material certifications records for all products produced. Regulatory Conformity (EPA/DOT/Safety/Reach) All supplied products or materials used in the supplier s process must comply with current governmental safety and environmental standards and laws regarding restricted, toxic, and hazardous materials. Hazardous materials must be marked clearly as such, and packaged appropriately. Material Safety Data Sheets (MSDS) must be provided for new items and /or products utilized to provide corrosion protection prior to delivery of samples or production materials. An updated version of the MSDS will be forwarded to ATI whenever it is revised. If a MSDS sheet cannot be submitted an Engineering Technical Data sheet must be submitted. The supplier shall have a form of documented compliance for this type of material on site, and make available upon request. Restricted Materials Supplier of components and materials is responsible for ensuring that their supplied products do not conflict with ATI s (New) restricted materials list. If an issue exists supplier must contact ATI Purchasing Department for approval prior to manufacture of parts.

11 For the European market Chemical substances integrated into products shall be made only with substances pre-registered and authorized by REACH regulations. This requirement is also applicable for chemical substances and preparations used in manufacturing process. The list of pre-registered chemical substances is available on the following web site: The Supplier shall inform the Buyer if one substance part of the candidate list is present in product above a concentration of 0.1% weight by weight List of candidate substances is available on the following web site : The Supplier shall evaluate impact of REACH regulations on design and/or manufacturing of the Product and implement actions in order to ensure compliance with contractual obligations about products quality and deliveries. Note 1: The substances of a chemical are listed in section 2 of Material Safety Data Sheet (MSDS) of the relevant product. Note 2: Information and guidelines about REACH regulations are available on the following web site : DEVIATIONS It is AxleTech s policy to reject material that does not meet requirements of the drawings and/or specifications. In the event a deviation is desired, it must be submitted to the AxleTech Quality Department to be reviewed and possibly approved by the Engineering and Quality Managers before the parts have shipped from the supplier properly identified per the requirements on the returned, approved deviation form. The deviation must be on an official AxleTech Deviation Form with all information filled in (quantity, date, reason, signature, and Corrective Action plan). A copy of this form is available on the PLEX ONLINE system under Document Control System in the PPAP Template file. 3.8 DELIVERY PERFORMANCE EXPECTATIONS All AxleTech suppliers are expected to maintain 100% on time delivery performance. Any cost incurred as a result of delivery problems, including premium freight, will be the responsibility of the supplier.

12 3.9 Business Continuity By either submitting its proposal/quotation or accepting an ATI order, Seller represents and warrants that it has a Business Continuity Disaster Recovery Plan (BCDR) in place to protect itself and ATI in the event of any business disruptions. Seller shall use commercially reasonable efforts to develop and maintain this plan regarding contingency management to alleviate the effects of any events impacting business that may have a material and adverse impact on Seller's ability to perform its obligations. The BCDR shall contain at a minimum provisions for a risk assessment and business impact analysis, a prevention/mitigation plan, and a resumption of services plan, including a recovery/restoration plan. The preceding will cover, but not be limited to, services documentation storage and protection (including, but not limited, to storage of deliverable technical information, Specifications, design documents, and documentation related to tools, fixtures, and process), information systems security and redundancy, and demonstrating Seller's ability to rapidly recover the loss of capability to deliver services and Product. Seller shall apply similar risk management requirements to its own supply chain relative to ATI s orders and shall immediately notify ATI if a risk seems likely to materialize that could impact Seller's delivery or performance for ATI 4.0 REVISION HISTORY A) 3 January, Created B) 9 April, Modified assessed charges. C) 1 January, Modified changes per Oshkosh and STE Quality Managers D) 17 June, Modified changes per Oshkosh and STE Quality Managers E) 28 March, Modified changes per review on 3/18/05 F) 25 June, Modified changes per review on 6/18/05 G) 10 November, Modified changes per review on 11/10/05 H) 5 September, Added waiver possibility to supplier approval process. I ) 20 January, Added items listed in Bold Type J) 29 September 2011 Updated items listed in Bold Type. Charges changed to reflect current labor costs. K) September 2013 Added items listed in Bold Type and added section 1.3 PLEX ONLINE Section 3.9 Business Continuity and Appendix D, E, and F 5.0 Appendix Appendix A - Definitions Definitions for the abbreviations used for the quality tools required of suppliers to AxleTech: Quality System Requirements (ISO, QS, etc.) Quality System Assessment (QSA) Production Part Approval Process (PPAP) Advanced Product Quality Planning and Control Plan (APQP) Potential Failure Modes and Effects Analysis (FMEA) Measurement Systems Analysis (MSA) Statistical Process Control (SPC)

13 Appendix B - AxleTech International Control Characteristics A Control Characteristic is either a Safety Related Characteristic (SRC) of a Safety Related Component or a Major Characteristic of any component that requires particular attention on the part of manufacturing to ensure conformance to specification. Control Characteristics are designated by AxleTech design control authority through: The application of special symbols on engineering drawings Special symbols on material and process specifications Appearance on a Quality Control Characteristics (QCC) list Characteristics deemed major due to the supplier s manufacturing process It is of critical importance that all identified Control Characteristics must be addressed in the supplier s quality planning process and documentation i.e. control plans, operator instructions, and FMEA s, with the supplier specifying for each Control Characteristic the control method, inspection method, testing frequency, and reaction plan for incoming, layout, in-process, and final inspection operations on the Control Plan. Suppliers may have specific Control Characteristics required to maintain robust process control. Definitions of control characteristics and their AxleTech symbols are as follows: Safety Related Characteristics A dimensional, material, process, or performance specification or standard which, if violated, may cause a failure or malfunction resulting in: An unreasonable risk of personal injury or death, or A condition of non-compliance with any federal, state or local law, rule, or regulation Safety Related Characteristics are to be reported 100% on every production shipment until Process Capability studies are conducted and approved by AxleTech. Safety Related Component Any part, component, assembly or system that contains One or more Safety Related Characteristics. Major Characteristics A dimensional, material, process, or performance specification or standard which, if violated, may cause a failure or malfunction resulting in: A major repair An inability to manufacture or assemble the product properly A significant customer complaint

14 Appendix C: SAMPLE LETTER FOR NONCOMPLIANT SUPPLIERS To: AxleTech International Suppliers From: Quality Dept. Date: 03/26/09 Subject: Notification for Unresponsive (DMN-Step Process) DMN- We regreat to inform you that the following DMN/s are under review due to your lack of response. This is your nofication that you have been placed in our unresponsive 4 step process. This notification is being sent to your Plexus contacts and associated senior managment. We have quarentined these items in our Quality hold area and are urgantly waiting for an RGA. Our policy requires that within 24 hours you ensure us that the following action have occured: 1 Validate your in-house inventory. 2 Identify any suspect product in transit. 3 Issue an RGA for the disposition of the parts on Quality hold. 4 Step Escalation Notifications process 1) DMN not responded to in 7 day, Plexus contact, QA Manager 2) DMN not responded to in 14 days, Plexus contact, QA Manager, Plant Manager 3) DMN not responded to in 21 days, Parts scraped, debited your account Prohibited from quoting new business. 4) DMN not responded to in 28 days Resourceing activities begin at AxleTech. All suppliers are expected to respond to any and all DMN s issued to them within the time period allowed. If you have any questions please contact AxleTech Plant Supplier Quality.

15 Appendix D: Certificate of Conformance Template CERTIFICATION OF CONFORMANCE Purchase Order #: Item Description: Part Number: Revision Level: Quantity: Date: WE HEREBY CERTIFY THAT ALL PARTS AND/OR MATERIAL INCLUDED IN THIS SHIPMENT HAVE BEEN MANUFACTURED, PROCESSED, INSPECTED, TESTED AND FOUND TO BE IN COMPLIANCE WITH ALL APPLICABLE DIMENSIONAL AND METALLURGICAL REQUIREMENTS OF THE PURCHASE ORDER, DRAWING(S), AND SPECIFICATION(S). Authorized Signature Name: Title:

16 Appendix E: Labeling standards Below is a copy of the labeling standards required for North America; From: SUPPLIER NAME SUPPLIER ADDRESS CITY, STATE ZIP Part Number (P) Part Description E *P E* Ship to: AXLETECH INTERNATIONAL 1400 ROCHESTER ROAD TROY, MI USA Date (D) BRAKE SHOE ROLLER PIN 4/30/2013 Quantity (Q) 250 PO Number (K) *Q250* *K267909* Supplier Number (V) Eng. Revision (2P) C *V69293* *2PC* Lot Code or Date Code (1T) Serial Number (S) *1T130425* *S00005* Basic AIAG B-3 LABEL Format for code 39 barcode and content meeting ATI Supplier Manual requirements for Ship Label Label Dimensions: 4" x 6" Part Number: ATI Part Number Part Description: Description per ATI Print or Design Record Date: Mfg.Date, Ship Date or Label Date Quantity: Quantity per container/pallet P.O. Number: ATI Purchase Order Number Supplier Number: Eng.Revision: Lot Code,Date Code: Serial Number: ATI Number in MRP System Assigned To Supplier Revision of the part per ATI Print or ATI Design Record. Rev. level provides the ATI revision to which the part is made Parts' Traceability code via supplier's lot or batch I.D. (supplier's traceability back to mfg. lot) Serialized Container/Pallet I.D. [above indicates 5th container/pallet of "X" pallets/containers in specific LOT shipment

17 Appendix F: Terms and Conditions on ATI Purchase Orders NOTE: This page is for Reference only. Please refer to your Purchase Order for the latest update. THIS ORDER IS SUBJECT TO THE FOLLOWING TERMS and CONDITIONS Control No. PUR006 AxleTech International, LLC (AS OF August 19, 2013) 1. ACCEPTANCE: This order is Buyer's offer to purchase the goods or services (the "Products") described in this order. Acceptance of this offer is limited to its terms. This order consists only of the terms contained herein and in any documents or specifications expressly incorporated by reference. It does not constitute an acceptance by Buyer of the terms contained in any quotation, proposal or order confirmation furnished by Seller. This order must be accepted in writing by Seller. If Seller does not accept this order in writing, any conduct by Seller which recognizes the existence of a contract pertaining to the subject matter of this order shall constitute acceptance by Seller of this order and of all of its terms and conditions. Buyer objects to any terms proposed by Seller in accepting this offer which are additional to or different from those contained in this offer. If Seller objects to any of the terms then the Seller must do so in writing with regard to specific provisions of this document. 2. BLANKET ORDERS: if this order is identified as a "blanket order," Buyer shall issue a "Vendor Release and Shipping Schedule" to Seller for specific quantities and delivery dates for Products. Buyer shall have the right to cancel, adjust or reschedule the quantities of Products shown in such "Vendor Release and Shipping Schedule," except that it may not cancel, adjust or reschedule the Products shown as "Firm Obligations" on such Vendor Release and Shipping Schedule 3. WARRANTY: Seller warrants that it has good title to the Products, free and clear of all liens or security interests. Seller warrants that Products will conform to any drawings or specifications furnished by Buyer as part of this Order. If Buyer has not furnished any such drawings or specifications then Seller warrants that Products will be fit and sufficient for the purpose intended. Seller also warrants that all Products supplied will be merchantable, of good material and workmanship, free from defect and in compliance with all applicable statues, regulations, and standards. These warranties shall survive inspection, test, acceptance of, and payment for the Products and shall run to Buyer and its end users and customers. Buyer shall have all legally available remedies for breach of warranty. In addition to its other remedies, Buyer may either return for credit or refund or require prompt correction or replacement of the defective or nonconforming Product or part thereof. 4. QUALITY ASSURANCE: Seller shall qualify as an acceptable vendor in compliance with the requirements of the current revision of Buyers supplier quality systems requirements manual (available on-line) within a reasonable time after Seller accepts Buyers initial order for Products. Seller shall also supply initial samples and documentation per the Production Part Approval Process (PPAP) for Buyers approval prior to the commencement of production runs by Seller. If Seller does not supply reports as required, Buyer may either reject the samples or inspect and test the samples and invoice Seller for cost. After its initial qualification, Seller shall maintain its status as an acceptable vendor under Buyers supplier quality system requirements. 5. PRICES: The prices shown in this order shall be firm unless Buyer has expressly agreed to adjust the prices shown during the performance of this order. The prices shown also include all applicable federal, state and local taxes except taxes which Seller is required by law to collect from Buyer. Seller shall show taxes which it is required by law to collect from Buyer separately on its invoices and shall not invoice any tax for which Buyer has furnished a valid exemption certificate. Seller represents that its prices charged for Products under this Order are at least as low as the prices charged by Seller to any other customer of the same kind as Buyer under conditions substantially similar to those specified in this order. 6. NEW MATERIALS: The goods to be delivered hereunder shall consist of new materials (not used or reconditioned). 7. SHIPPING AND DELIVERY: Seller will comply with Buyers "ship to" and "bill to" instructions as shown in this order or in the applicable "Vendor Release and Shipping Schedule." Seller will route

18 its shipments in accordance with the instructions of Buyer or its shipping agent. Title to and risk of loss of the Products shall pass to Buyer upon delivery of the Products in accordance with the Shipping Terms. Seller understands that Buyer establishes its manufacturing schedules in reliance on Sellers timely performance of this order and that time is of the essence in Sellers performance. Seller agrees to show the engineering revision level of the Products shipped on all shipping documents. 8. INSPECTION: Buyer or Buyers customer shall have the right to review any designs, drawings or specifications prepared by Seller under this order and to inspect and test Products at Sellers premises prior to delivery to Buyer. Buyer shall make such inspections and tests so as not to delay the work unduly. Buyer shall also have the right to inspect Products at Buyers plant within a reasonable time after delivery. Any review, inspection or test by Buyer under this section shall not relieve or excuse Seller from its obligations under this order. 9. CHANGES: By giving written notice to Seller, Buyer may modify at any time the specifications, designs or drawings, samples or other description to which the Products are to conform, the methods of shipment and packaging Products, or the place of delivery. If such modification affects the cost of, or the time required for, the performance of any part of the work under this order, and if Seller makes a written claim for adjustment within thirty (30) days after receipt of the written notice of modifications, then Buyer shall make an equitable adjustment to the terms of this order within a reasonable time. Only modifications for which Buyer submits a written notice to Seller shall become part of this order. 10. INFORMATION: If Buyer supplies drawings, data, design, inventions, computer software or other technical information to Seller to facilitate the performance of this order, then such information shall remain Buyers property and Seller shall hold it in confidence. Seller shall not reproduce, use or disclose such information to others for any purposes other than the performance of this order without Buyers prior written consent. Such information shall be returned to Buyer upon completion by Seller of its obligations under this order or upon demand, along with all copies Seller has made and all other documents in which such information has been incorporated. Unless Buyer has entered into a separate written nondisclosure agreement with Seller, any information which Seller may disclose to Buyer with respect to the design, manufacture, sale or use of the Products covered by this order shall be deemed to have been disclosed as part of the consideration for order, and Buyer shall be free to use such information. 11. BUYER'S PROPERTY: All property used by Seller in connection with this order which Buyer owns and delivers to Seller, or pays Seller for, or pay's Seller's sub-supplier for, including, but not limited to, tools, dies, jigs, molds, patterns, fixtures and equipment and any replacement thereof, shall be and remain the property of Buyer. Buyer may remove or inspect such property at any time and Buyer shall have free access to Sellers premises for such purposes All property owned by Buyer shall be marked as Buyer's property and used only for performing Buyers orders. Seller shall maintain and repair such property and return it to Buyer in its original condition, reasonable wear and tear excepted, at the request of the Buyer. 12. PATENT INDEMNITY: Seller shall indemnify Buyer, its successors, assigns, agents, customers and users of the Products against loss, damage. or liability, including costs and expenses, including attorneys' fees, which may be incurred on account of any suit claim, judgment or demand involving infringement or alleged infringement of any patent, copyright, industrial design, right or other intellectual property rights in the manufacture, use or disposition of the Products supplied under this order, if the Products delivered under this order are produced to a specification or design other than one provided by Buyer. It shall be a condition of this indemnity that Buyer shall notify Seller of any suit, claim or demand against it and, shall permit Seller to defend or settle such suit claim, judgment or demand. 13. RELEASE OF INFORMATION AND ADVERTISING: Seller and Buyer agree that this order is confidential business information. Neither party, without the prior written consent of the other, shall share this information nor data with any third-party, make any news release or public announcement of this order or advertise or publish the fact that Buyer has placed this order with Seller. 14. ASSIGNMENT: Seller may assign this order or any of Sellers rights or duties under this order, or subcontract the performance of any of its duties under this order, only with Buyers prior written

19 consent. The terms and conditions of this order shall bind any permitted successors and assigns of Seller. 15. BUSINESS CONTINUITY: By either submitting its proposal/quotation or accepting this order, Seller represents and warrants that it has a Business Continuity Disaster Recovery Plan (BCDR) in place to protect itself and Buyer in the event of any business disruptions. Seller shall use commercially reasonable efforts to develop and maintain this plan regarding contingency management to alleviate the effects of any events impacting business that may have a material and adverse impact on Seller's ability to perform its obligations. The BCDR shall contain at a minimum provisions for a risk assessment and business impact analysis, a prevention/mitigation plan, and a resumption of services plan, including a recovery/restoration plan. The preceding will cover, but not be limited to, services documentation storage and protection (including, but not limited, to storage of deliverable technical information, Specifications, design documents, and documentation related to tools, fixtures, and process), information systems security and redundancy, and demonstrating Seller's ability to rapidly recover the loss of capability to deliver services and Product. Seller shall apply similar risk management requirements to its own supply chain relative to its Buyer orders and shall immediately notify Buyer if a risk seems likely to materialize that could impact Seller's delivery or performance for Buyer 16. EXCUSABLE DELAYS: Neither Seller nor Buyer shall be liable for damages for delay in or prevention of its performance of this order arising out of causes beyond its reasonable control, including, but not limited to, acts of the public enemy, acts of any Government in either its sovereign or contractual capacity, fires, floods, strikes or other labor disputes, or freight embargos. It shall be a condition of excuse under this section that the party seeking excuse notifies the other party in writing within ten (10) days after the beginning of any cause which may excuse performance under this section. If all or any material portion of Sellers performance of this order is excused under this section for a period exceeding ninety (90) days, Buyer shall have the right to terminate this order without further liability to Seller. 17. TERMINATION RIGHTS: a) If triggered by a higher tier contractor terminating AxleTech s contract for convenience, then Buyer may either terminate part or all of this Purchase Order for its convenience by giving written notice to Supplier, upon receipt of such notice, Supplier shall immediately: (i) cease work; (ii) prepare and submit to Buyer, an itemization of all completed and partially completed deliverables and services; (iii) deliver to ATI deliverables satisfactorily completed up to the date of termination; and (iv) deliver upon request any Work in Progress. Supplier shall use reasonable efforts to mitigate its liability under this Purchase Order by, among other actions, accepting the return of, returning to its suppliers, selling to others, or otherwise using the cancelled deliverables and provided such expenses do not exceed the cost and/or funding ceiling set forth in this Purchase Order. AxleTech s only obligation shall be to pay Supplier for those reasonable, allowable and allocable expenses incurred by Supplier prior to the notice of termination. b) For a termination for convenience not covered by subpart (a) above, Buyer may terminate the performance of work under this order (or any part thereof) at any time without cause upon written notice of termination to Seller and upon receipt of such notice, Seller shall, discontinue work under this order within ten (10) days after receipt of the written notice of termination, Seller shall submit any claim for its expenses resulting from the termination and Buyer shall promptly make a reasonable settlement of the claim. c) Buyer may terminate the performance of work under this order (or any part thereof) for cause upon written notice of termination to Seller if (a) Seller fails to cure any material failure to perform, discharge or fulfill its obligations under this order to the reasonable satisfaction of Buyer within ten days after receipt of a written notice from Buyer that Buyer considers Seller to be in default under this order, or (b) Seller, without the prior written consent of Buyer, assigns or transfers all or part of its rights and obligations under this order to another person, either voluntarily or by operation of law; or (c) Buyer has reasonable grounds for insecurity about Sellers ability to continue to perform this order satisfactorily, including Sellers ability to maintain acceptable quality standards and delivery schedules, or a satisfactory financial condition. 18. STOP WORK ORDER: Buyer may, at any time, by written order to the Supplier, require the supplier to stop all, or any part, of the work called for by this purchase order for a period of 100 days after the order is delivered to the Supplier, and for any further period to which the parties

20 may agree. The order shall be specifically identified as a stop-work order. Upon receipt of the order, the Supplier shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order, including costs incurred by subcontractors, during the period of work stoppage. 19. HAZARDOUS MATERIALS: Seller shall notify Buyer of all "hazardous materials" (as that term is defined in applicable federal, state and local statutes) which are contained in the Products. Seller shall furnish Buyer with copies of all applicable "Material Safety Data Sheets" for Products no later than the initial shipment date under this order. Seller shall also comply with all laws, orders and regulations pertaining to the use, storage, and disposal of restricted, toxic, and hazardous materials. 20. RECALL CAMPAIGNS: Seller shall indemnify and hold Buyer harmless against all loss, liability, cost or expense incurred by Buyer if Buyer recalls from Buyers customers or others any Products furnished hereunder or an end product employing any such Products as a part or component thereof or repairs, replaces or refunds the purchase price of such Products or end product. This indemnity shall apply only if the recall, repair, replacement or refund (a) is required pursuant to applicable statutes, laws, or regulations or (b) in Buyers reasonable commercial judgment is necessary to preserve Buyers commercial reputation as a supplier of reliable, high quality products. If Sellers Product is not the sole cause for such action by Buyer, then Buyer shall apportion its costs, damages and expenses as it shall determine is reasonable and equitable. Buyer shall use reasonable efforts to inform Seller promptly after Buyer learns of facts which may require a recall, or repair, replacement or refund pursuant to this section. Buyer shall have the right without the consent of Seller, to report to any administrative or regulatory body, any information which Buyer obtains indicating that the Products furnished by Seller either fail to conform to any standard required by law, or constitute or create of themselves or within the end product of which they are a part or component a situation requiring recall or notice as defined by the applicable law. Seller shall prepare, maintain and file with the appropriate agency those records and reports relating to the manufacture, sale, use and characteristics of the Products furnished to Buyer under this order which may be required by any federal, state or local law or regulation concerning the manufacture, sale or use of the Products or the end products of which the Products may be a part or component. Seller shall provide Buyer with copies of such records at Buyers request and shall give Buyer access to Sellers records that allow Buyer to confirm Sellers compliance with this section. 21. WORK ON BUYERS PREMISES: (a) If this PO involves work by Seller on Buyers premises, Seller shall comply with all safety and security regulations and shall take all precautions required by Buyer or otherwise necessary to prevent the occurrence of any injury to person or property during the progress of such work. Seller shall inform Buyer within 24 hours of any individual injury or property damage that occurs while on Buyers site. (b) Seller shall provide timely notice to secure approval of Buyer prior to the introduction to the premises of any hazardous material, as defined in any Federal, state or local law or ordinance, or in any lawful order, rule or regulation hereunder, applicable to the premises. Seller shall equip its employees, agents and subcontractors for the use of such hazardous material, and for the use of such other hazardous materials, as identified by Buyer to Seller, used by Buyer on the premises. (c) Seller, and any subcontractors used by Seller in connection with this PO, shall carry Worker's Compensation and Employee Liability insurance to cover Seller's and such subcontractor's legal liability on account of accidents to their respective employees. Seller and its subcontractors shall carry adequate Comprehensive General Liability and adequate Comprehensive Automobile Liability Insurance covering the legal liability of Seller and such subcontractors on account of accidents arising out of the operations of Seller or such subcontractors and resulting in bodily injury, including death, being sustained by any person or persons, or in any damage to property. At Buyers request, Seller shall furnish to Buyer, certificates from Seller's insurers showing such coverage in effect and agreeing to give Buyer ten days prior written notice of cancellation of such coverage.

21 (d) Whenever this PO involves work on Buyers premises, Seller also shall implement and maintain a program for achieving the objective of a drug-free workforce. Seller's program shall be written and shall include as a minimum drug testing when: (i) employees are newly-hired or rehired after a break in service, (ii) employees are involved in accidents or unsafe practices, and (iii) reasonable suspicion exists that an employee is using illegal drugs. Seller shall provide Buyer with a copy of its written program with its bid or proposal. Seller shall make available for Buyers inspection at reasonable times and places all of Seller's records relating to its drug-free program. In addition to any other remedies that Buyer may have if Seller fails to comply with the provisions of this paragraph,. (e) Whenever this PO involves work on Buyers premises, Seller shall ensure all employees and subcontractors conform to Buyers site requirements for personal protective equipment and provide all personal protective equipment necessary to safely perform tasks. Prior to beginning work on site, Seller shall provide Buyer signed safety documents from each person representing the Seller acknowledging the sites safety requirements and committing to conformance. (f) Whenever this PO involves work on Buyers premises and that work demand specialized equipment, the seller shall arrange to secure such equipment, ensure its safe use and ensure all employees or subcontractors are properly equipped to use the equipment. Buyer will not be responsible for any equipment stored on site prior, during or following completion of the tasks outlined in this PO (g) Whenever this PO involves Sellers performance of work considered to be of significant risk by the Buyer, Buyer may require that a Job Hazard Assessment be performed prior to initiating any activity on site (h) Buyer may without notice or an opportunity to cure: (1) terminate this PO for default, and (2) expel from Buyers property any employee, agent, or subcontractor of Seller working in an unsafe manner or who is suspected of using, possessing, or selling alcohol or illegal drugs on Buyers property (i) Prior to the commencement of any work to be performed under this PO, Seller must certify that all employees of seller and seller's subcontractors that will perform work at Buyer facilities or will have access to technical data are U.S. citizens. Seller's certification shall be inclusive of any new or additional employees working at Buyer facilities or new or additional employees provided with access to technical data during the course of performance this PO. 22. GOVERNING LAW: This order shall be governed by the law of the state of Michigan, including the Uniform Commercial Code, but excluding the provisions of the United Nations Convention on Contracts for the International Sale of Goods, and excluding Michigan law with respect to conflicts of law. 23. EXPORT, TRADE CREDITS, OFFSET & COUNTER TRADE CREDITS: To the extent permitted by law or Treaty, Seller shall assign to Buyer all such credits which arise from this Order with the right to reassign such credits as determined by Buyer. 24. CONFLICT MINERALS CLAUSE: To enable Buyer to comply with the Dodd Frank Wall Street Reform and Consumer Protection Act (Pub. L , H.R. 4173), Seller is required to certify the existence of any conflict minerals (tantalum, tin, tungsten, and gold) in products to be provided under this Subcontract or Purchase Order as part of its proposal in the form of Seller s Conflicts Mineral Certification (Form PUR007). The certification will identify the country of origin of any conflict minerals, whether the conflict minerals came from scrap or recycled sources, whether the conflict minerals came from a covered country (Democratic Republic of Congo, Burundi, Central African Republic, Tanzania, Zambia, Angola, Rwanda, South Sudan, and Uganda), whether the conflict minerals from the covered countries directly or indirectly finance armed groups, and Seller s process for determining and verifying the information provided. If there are any changes to Seller s supply base in regard to this part that affect this certification, Seller is required to send an amended certification to Buyer s point of contact. Buyer reserves the right to request any additional information on Conflict Minerals associated with this Subcontract or Purchase Order necessary to comply with its legal requirement and Seller will make good faith efforts to provide the requested information. 25. CUSTOMS DOCUMENTATION: Seller shall provide Buyer all necessary information and documentation in the possession or control of Seller relating to the Products supplied under this