API Q2 SDI Operations Quality Manual 1000-MAN-QMS-OPS-20024

Page Dept Type Level Document # Date Rev
1 of 27 QMS MAN 1 1000-MAN-QMS-OPS-2002 2/23/2017 1.0

Title SDI Operations Quality Manual (API Q2) Applies To OPS
SDI Operations Quality Manual

(API Q2)
Approvals
The signatures below certify that this document has been reviewed and accepted for use and
distribution.
Approver Name and Title Approval Media Date
Robbie Phillips, MFG/Prod Quality Manager BullsEye 12/21/2016
Chip Abrant, Senior Vice President of Operations and Sales BullsEye 2/6/2017
Betty Perez, HR Manager BullsEye 2/22/2017
Doug McGregor, SVP Measurements Products & Services BullsEye 2/10/2017
Revision History
Documents are reviewed annually to ensure relevance to the systems and process that they
define.
Rev Date Originator/Reviser Dept DSR Reason for Change
1.0 12/20/2016 Boldt, David M. QMS 1975a Initial Release
Internal
Once printed this document becomes an uncontrolled revision unless noted otherwise by the Document Control Center.
Table of Contents
1. Introduction and Purpose ..........................................................................................................5
1.1. Application and Scope ........................................................................................................5
1.2. Exclusions ........................................................................................................................... 5
2. Reference Documents...............................................................................................................5
3. Terms and Definitions................................................................................................................6
3.1. Responsibilities ...................................................................................................................7
3.2. Symbols .............................................................................................................................. 8
4. Quality Management System ....................................................................................................8
4.1. General ............................................................................................................................... 8
4.1.1. Quality Management System .......................................................................................8
4.1.2. Quality Policy................................................................................................................9
4.1.3. Objectives.....................................................................................................................9
4.1.4. Planning .......................................................................................................................9
4.1.5. Communications...........................................................................................................9
4.2. Management Responsibility ..............................................................................................10
4.2.1. Organization Structure ...............................................................................................10
4.2.2. Responsibility and Authority .......................................................................................10
4.3. Organization Capability and Resources Provisions ..........................................................11
4.3.1. Provision of Resources ..............................................................................................11
4.3.2. Human Resources......................................................................................................11
4.3.3. Work Environment......................................................................................................12
4.4. Documentation Requirements ..........................................................................................12
4.4.1. General.......................................................................................................................12
4.4.2. Control of Documents.................................................................................................12
4.5. Control of Records ............................................................................................................13
5. Realization of Service and Service-Related Product ...............................................................13
5.1. Contract Review................................................................................................................13
5.1.1. General.......................................................................................................................13
5.1.2. Determination of Requirements..................................................................................13
5.1.3. Review of Requirements ............................................................................................13
5.2. Planning ............................................................................................................................ 14
5.3. Risk Assessment and Management .................................................................................14
5.4. Design and Development..................................................................................................15
5.4.1. Design and Development Planning ............................................................................15
5.4.2. Design and Development Inputs ................................................................................15
5.4.3. Design and Development Outputs .............................................................................15
Internal
5.4.4. Design and Development Verification ........................................................................16

5.4.5. Design and Development Final Review and Approval ...............................................16
5.5. Contingency Planning .......................................................................................................16
5.5.1. General.......................................................................................................................16
5.5.2. Planning Output..........................................................................................................16
5.6. Purchasing ........................................................................................................................16
5.6.1. Purchasing Control .....................................................................................................16
5.6.2. Purchasing Information ..............................................................................................17
5.6.3. Verification of Purchased Services and Service-Related Product..............................17
5.7. Execution of Service .........................................................................................................18
5.7.1. Control of Service Execution ......................................................................................18
5.7.2. Service Quality Plan ...................................................................................................18
5.7.3. Identification and Traceability.....................................................................................19
5.7.4. Service-Related Product Status .................................................................................19
5.7.5. Customer Property .....................................................................................................20
5.7.6. Preservation of Service-Related Product ...................................................................20
5.7.7. Validation of Service-Related Product........................................................................20
5.7.8. Preventative Maintenance, Inspection and Test Program..........................................21
5.8. Control of Testing, Measuring, Monitoring and Detection Equipment...............................21
5.9. Service Performance Validation........................................................................................22
5.10. Control of Nonconformities .............................................................................................22
5.10.1. General.....................................................................................................................22
5.10.2. Nonconforming Service Execution and Service-Related Product ............................22
5.10.3. Verification and Documentation ...............................................................................22
5.10.4. Customer Notification ...............................................................................................23
5.11. Management of Change (MOC)......................................................................................23
5.11.1. General.....................................................................................................................23
5.11.2. MOC Implementation ...............................................................................................23
5.11.3. MOC Evaluation, Notification, and Controls .............................................................23
6. Quality Management System, Analysis, and Improvement .....................................................23
6.1. General ............................................................................................................................. 23
6.2. Monitoring, Measuring, and Improving..............................................................................24
6.2.1. Customer Notification .................................................................................................24
6.2.2. Internal Audit ..............................................................................................................24
6.3. Analysis of Data ................................................................................................................25
6.4. Improvement .....................................................................................................................25
Internal
6.4.1. General.......................................................................................................................25
6.4.2. Corrective Action ........................................................................................................25
6.4.3. Preventative Action ....................................................................................................26
6.5. Management Review ........................................................................................................26
6.5.1. General.......................................................................................................................26
6.5.2. Input Requirements ....................................................................................................26
6.5.3. Output Requirements .................................................................................................26
7. Records ................................................................................................................................... 27
Table of Figures
Figure 1. Interaction of Processes at SDI......................................................................................8
Internal
1. Introduction and Purpose

Scientific Drilling International’s (SDI) goal is to be the leader in wellbore placement and
productivity around the world. This Manual provides an overview of the Quality Management
System (QMS) that Scientific Drilling has established to meet our commitment to quality. It
establishes the policies that provide for the management of planning, organizing, reviewing, and
continually improving the products, services, and processes to provide the highest level of
customer satisfaction.
This manual also describes the organization's key business processes, the mechanisms for
effectiveness, and control of these processes. SDI audits, monitors, measures, and analyzes
these processes to achieve results based on customer, legal and regulatory requirements, and
continually improves the effectiveness of its Quality Management System based on feedback.
1.1. Application and Scope

This Quality Manual is intended to provide general information regarding SDI’s Quality
Management System for serviced-related products (SRP) and service delivery operations by our
District Operations. District Operations deliver and operate multiple service/product offerings
utilizing drilling and measurement tools that are provided by both internal and external
manufacturers.
This manual does not constitute any offer, obligation, or representation. SDI’s responsibilities to
its customer will be as set out in the contract between them.
1.2. Exclusions
When SDI performs activities addressed within this manual, including the provision of service-
related product, all requirements are to be performed and no claims to exclusion of any
requirements are permitted. The only time exclusions may be possible is when service-related
product is not provided, in that case, the basis for claiming shall be identified and such exclusion
shall not affect SDI’s ability, or responsibility, to meet customer and applicable regulatory
requirements. Exclusions are limited to requirements within the following clauses:
 5.7.3 Identification and Traceability
 5.7.4 Service-Related Product Status
 5.7.6 Preservation of Service-Related Product
 5.7.7 Validation of Service-Related Product
 5.7.8 Preventative Maintenance, Inspection and Test Program
Where claims of conformity are made, exclusions shall be identified in conjunction with these
claims.
2. Reference Documents
Document Number Title
1000-FRM-QMS-OPS-2003 Facility Inspection Form (API Q2)
1000-POL-QMS-ALL-1002 Quality Policy
1000-POL-QMS-ALL-1004 Product Preservation, Identification, and Traceability Policy
1000-PRC-QMS-ALL-1002 Document Control Procedure
Internal
Document Number Title

1000-PRC-QMS-ALL-1003 Control of Records Procedure
1000-PRC-QMS-ALL-1004 Corrective Action and Preventive Action Procedure
1000-PRC-QMS-ALL-1014 Management of Change Procedure
1000-PRC-QMS-OPS-2002 Contract Review Procedure (API Q2)
1000-PRC-QMS-OPS-2003 Risk Management and Contingency Planning Procedure (API Q2)
1000-PRC-QMS-OPS-2004 Design and Development Plan and Control Procedure (API Q2)
1000-PRC-QMS-OPS-2005 Service Quality Plan Integration Procedure (API Q2)
1000-PRC-QMS-OPS-2006 Nonconforming Product Procedure (API Q2)
1000-PRC-QMS-OPS-2007 Internal Audit Procedure (API Q2)
1000-PRC-QMS-OPS-2008 Management Review Procedure (API Q2)
1000-PRC-QMS-OPS-2009 SDI Purchasing and Supplier Qualification Procedure (API Q2)
1000-PRC-QMS-OPS-2010 Control of Testing, Measuring, Monitoring and Detection Equipment Procedure
(API Q2)
1000-PRC-QMS-OPS-2011 Personnel Competence, Training, and Awareness Procedure (API Q2)
1000-PRO-QMS-ALL-1002 New and Updated Controlled Document Publication Process Flow
1000-PSD-ALL-OPS-2002 SDI Service Quality Plan
External ISO 9001:2015 Standard
External API Q2: Specification for Quality Management System Requirements for
Supply Organizations for the Petroleum and Natural Gas Industries
MySDI Central Library Preventative Maintenance, Inspection and Test Procedures
(specific to product line)
3. Terms and Definitions

Term/Abbreviation/Acronym Definition
API American Petroleum Institute
ASL Approved Supplier List
BullsEye QHSE Software Applications/Suite
Dept Department
DSR Document Services Request
Function The term “Function” within this document refers to the various teams of
people within the district organization that execute a particular task. Most
of the time these teams form a division, group, or department. Examples of
Functions include District Managers, Coordinators, Sales or
Representations thereof.
HSE Health, Safety and Environmental
KPI Key Performance Indicator
MAN Manual
MOC Management of Change
OEM Original Equipment Manufacturer
Internal
Term/Abbreviation/Acronym Definition
OPS Operations
PMITP Preventative Maintenance, Inspection, and Test Program
PPE Personal Protective Equipment
QMS Quality Management System
SDI Scientific Drilling International
SQP Service Quality Plan
SRP Service-Related Product
3.1. Responsibilities
Role Responsibilities
Senior Management Ensures that quality processes, methodologies, and objectives are
implemented
QMS Director Develops and monitors QMS Programs that comply and continually
improve SDI’s overall Quality Management System
QMS Department  The Corporate QMS Department, which may include
employees at the Corporate, Regional, and District level, is
responsible for coordination of QMS activities and providing
support on all QMS matters
 Any questions regarding QMS policies or procedures should
be directed through the QMS Department
District Managers  Develops and sustains a Culture of Quality in each area of the
operation
 Complies with the QMS guidelines for the region in which the
office is based and in which the job is being performed
Coordinators and Supervisors  Develops and sustains a Culture of Quality in the area of the
operation for which they are responsible
Business Development/Sales Personnel  Responsible for obtaining customer requirements, stated and
unstated and legal requirements
Engineering/Product Line Management  Identifies and plans the processes and documents needed for
service and SRP realization
All Employees  QMS compliance in all areas

 Cooperate with supervisors and managers to develop and
maintain quality products and services
Internal
3.2. Symbols
The following symbols are used in this document.
Symbol Definition
Key: The Key signifies relevant information that can assist the user when
performing the task or set of tasks.
Note: The Pencil represents a note. Notes are additional information
encouraged for later use.
Reference: The Book symbol identifies a reference to an external document.
4. Quality Management System

4.1. General
4.1.1. Quality Management System
SDI establishes, documents, maintains, and measures the effectiveness of the Quality
Management System (QMS) and continually improves upon the QMS and organizational
effectiveness in accordance with the requirements of this manual.
Note: The policies and procedures for Human Resources; Training; Health,
Safety, and Environment; and Information Technology are governed by corporate
SDI Policies. Each organization has a representative from these Functions on
staff to support the needs of the organization. Corporate Policies can be found in
the Document Control System.
District Manages ensure that legal and other applicable requirements with which SDI claims
compliance are taken into account in its quality management system.
The QMS defines the sequence and interaction of the processes as per Figure 1.
Figure 1. Interaction of Processes at SDI
Internal
Reference: Parenthetical references to the API Q2 standard are visible

throughout this document.
4.1.2. Quality Policy

Senior Management has endorsed a Quality Policy that is appropriate to SDI’s business activity
and company structure. This policy statement has been published as a separate approved
document and communicated to all employees.
Through total commitment from Senior Management, all employees are empowered to engage
in the continual improvement of our API Q2 based Quality Management System.
Our Quality Policy statement indicates SDI’s commitment and focuses on what is important to
us at all relevant functions and levels of the organization.
Key: The Quality Policy [1000-POL-QMS-ALL-1002] shall be regularly monitored
and reviewed to ensure ongoing effectiveness and suitability.
4.1.3. Objectives
Senior Management has defined the quality objectives and has tailored them for the appropriate
organizational functions and levels. These quality objectives include service-related product
(SRP) and service requirements that are measureable and consistent with the Quality Policy.
4.1.4. Planning
The Director and managers of Quality establish plans to meet quality objectives and the general
requirements of the QMS. Senior Management reviews planned changes to the QMS to ensure
integrity is maintained.
SDI’s QMS system is implemented and controlled through this manual. Accordingly, this manual
constitutes SDI’s overall plan for establishing, maintaining, and improving an effective QMS.
4.1.5. Communications
4.1.5.1. Internal
SDI communicates information regarding QMS processes by means of training, emails,
communication meetings, technical bulletins, company web sites, and notice boards.
SDI has established numerous processes at relevant levels of the organization that are focused
on data analysis (see 6.3) and the effectiveness of the QMS. These processes include internal
audits, continuous improvement activities, corrective/preventive actions, and management
review.
All managers, coordinators, and supervisors are responsible for establishing internal
communications as needed to convey relevant customer, legal, and other applicable
requirements, and the importance of these activities with their staff. Typically, this information is
conveyed through communications and/or management review meetings. Communications
regarding how employees contribute to the achievement of objectives is also conveyed and
reinforced.
Internal
4.1.5.2. External
SDI has determined, documented, and implemented processes for communicating with
organizations external to SDI. Customers will be provided with points of contact within the
company to ensure an effective communication process is established and maintained. These
processes ensure that requirements are fully understood and that risk is identified and managed
(see 5.3) throughout the execution of contract and services including:
 Execution of inquiries, contracts, or order handling and amendments (see 5.1)
 Control of service and SRP information, including SRP nonconformities (see 5.10)
 Service quality plans and subsequent changes (see 5.7.2)
 Addressing feedback and complaints (see 6.2.1)
4.2. Management Responsibility

4.2.1. Organization Structure
SDI Senior Management ensures the availability of resources essential to establish, implement,
maintain, and improve the quality system
Note: Resources can include human resources and specialized skills,
organizational infrastructure, technology and financial resources.
District Managers shall provide evidence of its commitment to the development and
implementation of the QMS and continually improving its effectiveness by:
 Communicating to his or her organization the importance of meeting customer as well as
legal and other applicable requirements.
 Ensuring that quality objectives are established including key performance indicators (KPIs)
for use in data analysis
 Conducting management reviews (see 6.5)
Key: The quality of SDI’s products and services is every employee’s
responsibility.
4.2.2. Responsibility and Authority

SDI has defined, documented, assigned within, and communicated the roles, responsibilities
and authorities essential to the QMS.
Senior management has appointed the District Manager as the specific management
representative(s) at each of its district locations. The District Manager and members of their
staff have defined roles, responsibilities, and authority for:
 Ensuring that the quality management system is established, implemented, and maintained
in accordance with the requirements of this document
 Initiating action(s) to minimize the likelihood of the occurrence of nonconformities
 Reporting to management on the performance of the QMS for review, including
recommendations for improvement
Internal
4.3. Organization Capability and Resources Provisions

4.3.1. Provision of Resources
Senior management has determined and provided the resources needed to implement,
maintain, and improve the effectiveness of the QMS.
4.3.2. Human Resources
4.3.2.1. General
SDI has documented a procedure for defining personnel competency within the organization
and identifying training requirements in the Personnel Competence, Training, and Awareness
Procedure (API Q2) [1000-PRC-QMS-OPS-2011]. The procedure includes provisions for
ensuring the effectiveness of the actions taken to achieve the necessary competency of
personnel.
4.3.2.2. Personnel Competence

At SDI, personnel performing activities are competent based on the appropriate education,
training, skills, and experience needed to meet service and SRP requirements. Records of
training and personnel competency are evaluated and maintained (see 4.5).
Reference: Personnel Competence, Training, and Awareness Procedure (API
Q2) [1000-PRC-QMS-OPS-2011]
4.3.2.3. Training and Awareness

The Quality, HSE, and Training organizations at SDI:
 Provide for quality management system training and for job training of the organization’s
personnel and contractors who affect the execution of services or provision of SRP
 Ensure that customer-specified training and/or customer-provided training, if required, is
included in the training program
 Ensure that the frequency and content of training complies with legal and other applicable
requirements
District Management and Coordinators:
 Ensure that their staff are aware of the relevance and importance of their activities and how
they contribute to the achievement of the quality objectives
 Identify and provide training on legal and other applicable requirements
 Has access to appropriate records of education, training, skills, and experience (see 4.5).
Internal
4.3.3. Work Environment

SDI determines, provides, manages, and maintains the work environment needed to achieve
conformity to applicable service or service-related product requirements. Work environment
includes, as applicable:
 Buildings, workspace, and associated utilities
 Process equipment (both hardware and software)
 Supporting services (such as transport or communication or information systems)
 Conditions under which work is performed (including physical, environmental, and other
factors)
4.4. Documentation Requirements

4.4.1. General
SDI’s QMS documentation includes a Quality Policy with management supported quality
objectives, and a quality manual that addresses each requirement of the API Q2 standard.
Through these documents, the scope of the QMS is defined.
A description of the interaction between the processes of the QMS (see Figure 1 on page 8)
references to documented procedures that ensure the effective planning and conformance to
the QMS processes (see 4), and the identification of legal and other applicable requirements for
which SDI claims compliance are maintains. When applicable, allowable exclusions and the
basis for claiming those exclusions are defined (see 1.2).
Procedures required by API Q2 and the SDI quality management system are established,
documented, implemented, and maintained.
Note: In some cases, a single document might address the requirements for one
or more procedures. The opposite can also apply where a requirement for
documented procedure can be covered by more than one document.
4.4.2. Control of Documents

SDI maintains a document control procedure for the identification, distribution, and control of
documents required by the quality management system and the API Q2 standard, including
required documents of an origin external to the organization.
This Control of Records Procedure [1000-PRC-QMS-ALL-1003] defines the controls needed to:
 Ensure that document required by the quality management system, including revisions,
translations, and updates are reviewed and approved for adequacy prior to issue and use
 Define responsibilities for approval and re-approval of documents
 Identify changes to documents
 Ensure that documents remain legible and readily identifiable
 Ensure relevant versions of applicable documents are available where the activity is being
performed
Internal
It is the responsibility of district operations management to ensure that obsolete documents

within their control are removed from all points of issue or use, otherwise identified to prevent
unintended use if they are retained for any purpose.
A master list exists which identifies current revision status of documents.
4.5. Control of Records

SDI maintains a documented procedure that defines the controls and responsibilities needed for
the initiation, identification, collection, storage, protection, retrieval, retention time, and
disposition of records.
Records, including those from outsourced activities, are established and controlled to provide
evidence of conformity to requirements and of the effective operation of the quality management
system.
It is the responsibility of district operations management to ensure that records will remain
legible, identifiable, and readily retrievable. Records are retained for a specified amount time as
required by customer, legal, and other applicable requirements. Specific times for record
retention are identified in the Control of Records Procedure [1000-PRC-QMS-ALL-1003].
5. Realization of Service and Service-Related Product

5.1. Contract Review
5.1.1. General
SDI maintains a documented procedure for the review of requirements related to the execution
of services or SRP.
5.1.2. Determination of Requirements

Business Development/Sales Personnel with District Management seek and determine:
 Requirements specified by the Customer, including the requirements for service planning,
execution, and evaluation
 Legal and other applicable requirements
 Requirements not stated by the Customer but considered necessary by the organization for
the execution of service and provision of SRP
Where the Customer provides no documented statement of the requirements, the Customer
requirements shall be confirmed by Business Development/Sales Personnel and/or District
Management and records maintained (see 4.5).
5.1.3. Review of Requirements

Business Development/Sales and District Operations personnel review the requirements related
to execution of the service or provision of SRP. This review is conducted prior to the District
Operations commitment to provide a service to the Customer and ensures that:
 Requirements are defined
 Requirements differing from those previously identified are resolved
 SDI has the capability to meet the defined requirements
Internal
Where contract requirements are changed, District Operations personnel ensure that relevant
documents are amended and that relevant personnel are made aware of the changed
requirements.
Records of the results of the review, including resulting actions, shall be maintained (see 4.5).
5.2. Planning
At SDI, Engineering/Product Line Management identifies and plans the processes and
documents needed for service and service-related product realization.
In Planning, SDI addresses the following topics:
 Customer-specified requirements, including critical success factors (see 5.1)
 KPIs
 Legal and other applicable requirements
 Initial risk assessment (see 5.3)
 Required resource and work environment management (see 4.3)
 Service and/or SRP design (see 5.4)
 Contingency planning (see 5.5)
 Management of change (see 5.11)
 Records needed to provide evidence that the realization processes meet requirements (see
4.5)
Records of risk assessment and actions taken shall be maintained (see 4.5).
5.3. Risk Assessment and Management

At SDI, we maintain a documented procedure to control risk throughout the execution of a
service. The procedure shall:
 identify risks (potential or real) associated with services and service-related products;
 identify and use risk management tools and techniques;
 select, communicate and implement the mitigation or preventive control measures to reduce
or avoid exposure to loss; and
 select, communicate and implement the mitigation or preventive control measures to reduce
or avoid exposure to loss; and
 notify the customer of remaining risks that may impact the service
Records of risk assessment and actions taken shall be maintained (see 4.5).
Internal
5.4. Design and Development

5.4.1. Design and Development Planning
SDI maintains a documented procedure to plan and control the design and development of the
service, including the use of SRP.
The Design and Development Plan and Control Procedure (API Q2) [1000-PRC-QMS-OPS-
2004] identifies the:
 Design and development stages
 Activities required for completion, review and verification of each stage
 Interfaces between different groups involved in design and development
 Responsibilities and authorities for the design and development activities
If SDI outsources design and development, Product Line or District Operations ensure the
Supplier meets the requirements of 5.3 and provides objective evidence that the Supplier has
met these requirements.
5.4.2. Design and Development Inputs

Inputs relating to design of service are determined and records maintained (see 4.5). These
inputs include:
 Customer-specified requirements (see 5.1)
 Legal requirements
 Other applicable requirements including:
 Requirements provided from an external source (if applicable)
 Requirements for SRP, including their functional and technical requirements
 Environmental and operational conditions
 Results from risk assessments (see 5.3)
 Historical performance and other information derived from previous similar service
designs
5.4.3. Design and Development Outputs

The outputs of SDI’s design and development are documented to allow verification against the
design and development input requirements.
Design and development outputs:
 Meet the input requirements for design and development
 Provide information for purchasing of any required SRP
 Provide controls for the execution of the service, including allowable variations in the service
execution parameters
 Include or reference acceptance criteria for the completion of the service
 Identify critical service-related product
Internal
5.4.4. Design and Development Verification

Verification of the design of the service is performed in accordance with planned arrangements
(see 5.4.1) to ensure that the design and development outputs have met the design and
development input requirements. District Operations maintains records of the verification results
(see 4.5).
5.4.5. Design and Development Final Review and Approval

District Managers conduct and documents the final design and development review and
approval. Competent individuals (persons other than the person or persons who developed the
design) review and approve the final design and development outputs (service quality plan).
Records of the results of the final review and approval are maintained by local District
Operations (see 4.5).
5.5. Contingency Planning

5.5.1. General
SDI has documented and maintains a procedure for contingency planning. The Risk
Management and Contingency Planning Procedure (API Q2) [1000-PRC-QMS-OPS-2003]
includes incident and disruption prevention plus mitigation measures. Contingency planning is
integrated into services and supporting processes between the District Operations, their
suppliers, and the Customer.
5.5.2. Planning Output

Outputs of the contingency planning output are documented and communicated to the relevant
operational staff, and updated as required to minimize the likelihood or duration of disruption of
the execution of service. The contingency plan is based on assessed risks (see 5.3) and
includes, at a minimum:
 Actions required in response to significant risk scenarios
 Actions required to mitigate effects of disruptive incidents
 Identification and assignment of responsibilities and authorities
 Internal and external communications controls (see 4.1.5)
5.6. Purchasing
5.6.1. Purchasing Control
SDI maintains a documented procedure that ensures purchased SRP and/or outsourced
services and SRP conform to specified requirements.
The SDI Purchasing and Supplier Qualification Procedure (API Q2) [1000-PRC-QMS-OPS-
2009] addresses:
 The determination of the criticality of the services and/or SRP obtained
 The evaluation and selection of suppliers based on their ability to supply services and SRP
in accordance with SDI‘s requirements
 The type and extent of control applied to the supplier and service and/or SRP based on the
criticality of the service and SRP
Internal
 Criteria, scope, frequency, and methods used when performing an assessment on a

supplier
 Maintaining a list of approved suppliers and scope of approval
For critical SRP or outsourced services, for the initial evaluation and selection of suppliers by
SDI shall include the following criteria prior to initiation of the purchase agreement:
 Assessment of the Supplier to meet SDI’s purchasing requirements
 Verification that the Supplier’s quality management system conforms to the quality system
requirements specified for suppliers by SDI
For re-evaluation of suppliers and the initial evaluation of suppliers for non-critical services or
SRP by SDI, one or more of the following criteria shall apply:
 Assessment of the Supplier to meet the SDI’s purchasing requirements
 Verification that the Supplier’s quality management system conforms to the quality system
requirements specified for suppliers by SDI
 Assessment of the Supplier upon delivery of the product or service
Records of the results of assessments and any necessary actions arising from the evaluation
are maintained (see 4.5). Where Supplier-assessment results in the need for actions, evidence
of effective implementation of such actions are maintained in accordance with 6.4.2.
5.6.2. Purchasing Information

Purchasing information provided to the Supplier is documented and describes the services or
SRP to be purchased, including (where appropriate):
 Requirements for acceptance criteria of service and SRP
 Requirements for approval of supplier's procedures, processes, and equipment
 Applicable version of specifications, drawings, process requirements, inspection instructions,
and other relevant technical data
 Requirements for qualification of Supplier's personnel
 QMS requirements
5.6.3. Verification of Purchased Services and Service-Related Product

SDI maintains documented procedures for the verification or other activities necessary for
ensuring that purchased service and SRP meets specified purchase requirements. SDI
maintains records of these verification activities (see 4.5).
SDI ensures and maintains evidence that outsourced services and SRP conform to specified
requirements.
Reference:
 Product Preservation, Identification, and Traceability Policy [1000-POL-QMS-
ALL-1004]
 Service Quality Plan Integration Procedure (API Q2) [1000-PRC-QMS-OPS-
2005]
Internal
5.7. Execution of Service

5.7.1. Control of Service Execution
5.7.1.1. General
SDI maintains documented procedures that describe the integration of the following criteria, at a
minimum, into the development of a service quality plan (see 5.7.2):
 Personnel training and competence (see 4.3.2)
 Defined contract requirements (see 5.1)
 Risk assessment and management (see 5.3)
 Information that describes the characteristics of the service and SRP, and, ensuring design
requirements are satisfied (see 5.4)
 Identification of equipment, including required testing, measuring, monitoring, and detection
devices (see 5.8)
Reference:
ALL-1004]
2005]
5.7.1.2. Documentation
Controls for execution of the service are documented in routings, travelers, checklists, process
sheets, or other types of documents and include requirements for verifying conformity to service
quality plans, procedures, and applicable standards/codes.
The control documents include or reference instructions, workmanship, and acceptance criteria
for processes, tests, inspections, and customer’s inspection hold or witness points (where
applicable).
5.7.2. Service Quality Plan
5.7.2.1. General
SDI has developed service quality plans (SQPs) that controls the execution of services or use of
SRP.
5.7.2.2. Plan Content

The SQP addresses each of the following items:
 Required activities and documentation for compliance with customer and legal requirements
 Identification of responsible functions for each activity, including external parties
 Identification and reference to control of subcontractors
 Identification of the relevant revision for each procedure, specification, or other document
referenced or used in each activity
Internal
 Identification of the requirements to perform acceptance inspection for each activity,

including hold, witness, monitor, and document review points for representatives of the
organization and the Customer
 Service equipment and monitoring devices (see 5.8)
 Identification and controls of risk (see 5.3)
 Identification of critical services and service-related product
 Identification of the required deliverables
 Identification of the required records (see 4.5)
The SQP is updated when any of the plan content changes.
5.7.2.3. Plan Approval

SQPs and any revisions to them are documented and approved by SDI.
When required by contract, the SQP and any revisions will be communicated by SDI to the
Customer.
5.7.3. Identification and Traceability

SDI maintains documented procedures for identification, and traceability of SRP. The
procedures include identification controls at all stages of delivery, installation, repair, and
redress as required by SDI and the Customer. The procedures also include requirements for
maintenance or replacement of identification and traceability marks, and records (see 4.5).
SRP and critical SRP are identified and are traceable to preventive maintenance, inspection,
and test program (PMITP) records (see 4.5 and 5.7.8) and the original manufacturer.
Reference:
ALL-1004]
2005]
5.7.4. Service-Related Product Status

SDI maintains a documented procedure for the identification of SRP status.
Internal
5.7.5. Customer Property

SDI maintains documented procedures for the identification, verification, storage, preservation,
maintenance, and protection of customer property, while under control of the organization.
Customer property includes customer-derived intellectual property and customer-specific data.
Control of customer property includes reporting to the customer any loss, damage, or unsuitable
use of customer-supplied property.
SDI identifies, verifies, protects, and safeguards customer property provided for use in the
service and/or with the SRP.
Records for the control and disposition of customer-supplied property are maintained (see 4.5)
Reference:
ALL-1004]
2005]
5.7.6. Preservation of Service-Related Product

SDI maintains a documented procedure and form describing the methods used to preserve the
SRP during internal processing through execution of service. As applicable, preservation
includes identification and traceability, transportation, handling, packaging, storage, and
protection. Preservation also applies to the constituent parts of the SRP.
To detect deterioration, the condition of the SRP or related parts in stock is assessed at
intervals specified in the procedure.
Reference:
ALL-1004]
 Facility Inspection Form (API Q2) [1000-FRM-QMS-OPS-2003]
5.7.7. Validation of Service-Related Product

Validation of SRP is completed by Coordinators and Supervisors prior to the execution of the
service. Records of the result of validation, when performed, are maintained (see 4.5).
Internal
5.7.8. Preventative Maintenance, Inspection and Test Program

SDI maintains documented procedures for the establishment of a PMITP. The product-line-
specific procedures address record keeping requirements (see 4.5), inspection, maintenance,
redress, repair, make-up, testing, and acceptance criteria of SRP.
As a minimum, the PMITP includes:
 Actions which address preventive maintenance
 Reports that document usage history, repairs or redress, modifications, remanufacturing,
inspection, and test activities that allow direct verification for reuse of product
 List of critical spare parts requirements by the Customer and/or technical requirements
including those recommended by the original equipment manufacturer (OEM)
 Controls that ensure equipment integrity to original performance requirements and design
acceptance criteria are maintained
Original performance requirements that cannot be met undergo the management of change
(MOC) process (see 5.11) for continued use.
5.8. Control of Testing, Measuring, Monitoring and Detection

Equipment
SDI has determined the required testing, measurement, monitoring, and detection equipment to
be controlled and necessary to provide evidence that service or SRP meets specified
requirements.
SDI maintains a documented, Control of Testing, Measuring, Monitoring, and Detection
Equipment Procedure [1000-PRC-QMS-OPS-2010], to ensure that testing, measurement,
monitoring and detection equipment is calibrated and maintained for the execution of the service
or in the provision of the SRP.
The procedure includes equipment traceability, frequency of calibration, calibration methods,
acceptance criteria, and suitable environmental conditions. This procedure identifies required
assessments and maintains records (see 4.5) when the validity of the previous testing,
measuring, monitoring, or detection results are found not to conform to calibration requirements.
SDI takes appropriate action on the equipment and any service affected.
Testing, measuring, monitoring, and detection equipment shall:
 Be calibrated or verified, or both, at specified intervals, or prior to use, against measurement
standards traceable to international or national measurement standards; where no such
standards exist, the basis used for calibration or verification is recorded (see 4.5)
 Have identification to determine its calibration status
 Be safeguarded from adjustments that would invalidate the measurement result
 Be protected from damage and deterioration during handling, maintenance, and storage
When software is used in the testing, measurement, monitoring, and detection of specified
requirements, SDI confirms that the computer software satisfies the intended application. The
software is checked for compatibility prior to initial use and reconfirmed as necessary.
When equipment is externally provided, SDI verifies that the equipment is suitable to provide
evidence of conformity of service or SRP to specified requirements.
Internal
SDI maintains a registry of the required testing, measurement, monitoring, and detection
equipment that includes an unambiguous form of identification, specific to each piece of
equipment.
Records of the results of calibration and verification are maintained (see 4.5).
5.9. Service Performance Validation

SDI maintains a documented procedure and form to validate the execution of the service
performance to confirm requirements were achieved.
This process is carried out at appropriate stages during the execution of the service in
accordance with design requirements (see 5.4) and the service quality plan (see 5.7.2).
Evidence of conformity with established acceptance criteria, including KPIs and critical success
factors, are maintained.
Records of the service performance validation are also maintained, including identification of the
person(s) accepting the results (see 4.5).
Reference:
2005]
 SDI Service Quality Plan [1000-PSD-ALL-OPS-2002]
5.10. Control of Nonconformities

5.10.1. General
SDI maintains a documented procedure to define the controls and related responsibilities and
authorities for addressing nonconforming service execution and SRP. The level of response is
proportionate to the severity of the nonconformity and its effect on the safe and successful
execution of the service.
5.10.2. Nonconforming Service Execution and Service-Related Product

SDI addresses nonconforming service execution or service-related product by the following
sequence of activities:
1. By taking action to correct the nonconformity
2. When taking action to correct the nonconformity is not possible or appropriate, by taking
action to preclude the use of SRP from its intended use or application
3. When “1 and 2” as aforementioned are not appropriate, by authorizing release or
acceptance under concession by a relevant authority or by the customer
For nonconforming service execution, SDI shall take corrective action in accordance with 6.4.2
that is appropriate to the effects, or potential effects, of the nonconformity.
5.10.3. Verification and Documentation

When nonconforming services and/SRP are corrected they shall be subject to verification to
demonstrate conformity to the requirements.
Records of the nature of nonconformities and any subsequent actions taken, including
concessions obtained, are maintained (see 4.5).
Internal
5.10.4. Customer Notification

SDI shall notify customers in the event that the service execution does not conform to service
design requirements or when nonconforming SRP has been delivered or used in the execution
of the service. District Operations shall maintain records of such notifications (see 4.5).
5.11. Management of Change (MOC)

5.11.1. General
SDI maintains a documented procedure for management of change (MOC). For the MOC, the
District Operations identify the potential risks (see 5.3) associated with the change, likely
mitigations for any such risks identified, and any required approvals prior to the introduction of
such changes.
5.11.2. MOC Implementation

SDI uses the MOC process for any of the following situations that could impact the execution of
a service:
 Changes or proposed changes in the organizational structure
 Changes in key or essential personnel, whose absence or departure could negatively impact
the service
 Changes in critical suppliers whose absence or departure could negatively impact the
service
 Changes to the management system procedures, including temporary changes and
improvements, resulting from corrective and preventive actions (see 6.4)
 Changes to original equipment manufacturer’s specifications, applications and/or software
for SRP
 Changes in approved design (see 5.4) including those that were originally agreed upon by
the customer and those required by changes in legal and other applicable requirements
5.11.3. MOC Evaluation, Notification, and Controls

SDI conducts risk assessments (see 5.3) when evaluating a potential change. District
Operations notifies relevant staff, including the Customer, of the change and residual or new
risk due to changes that have either been initiated by SDI or requested by the Customer.
SDI ensures that relevant documents are amended and records are maintained (see 4.5) of
MOC activities.
6. Quality Management System, Analysis, and Improvement

6.1. General
SDI plans and implements the monitoring, measurement, analysis, and improvement processes
needed to ensure conformity of the quality management system, and to continually improve the
effectiveness of the QMS.
QMS measurement, analysis, and improvement includes determination of applicable methods,
including techniques for the analysis of data, and the extent of their use.
Internal
6.2. Monitoring, Measuring, and Improving

6.2.1. Customer Notification
SDI maintains a documented procedure, Management Review Procedure (API Q2) [1000-PRC-
QMS-OPS-2008], to monitor customer satisfaction. The procedure addresses customer
feedback, KPIs, and other information that the District Operations monitor to determine whether
they have met customer requirements. Records of the results of customer satisfaction
information are maintained (see 4.5).
6.2.2. Internal Audit
6.2.2.1. General
SDI maintains a documented procedure, Internal Audit Procedure (API Q2) [1000-PRC-QMS-
OPS-2007], to define responsibilities for planning and conducting internal audits. The planning
of internal audits takes into consideration the results of previous audits and criticality of the
process.
The quality organization defines the audit criteria, scope, frequency, and methods to ensure that
all elements of the management system claiming conformity to the requirements of this
document are audited at least annually.
Outsourced suppliers that impact the quality of services or SRP, located at the SDI’s facility,
shall be included as part of the internal audit of the organization.
6.2.2.2. Performance of Internal Audit

District Operations conduct internal audits to determine whether the QMS conforms to the
requirements of this document and is effectively implemented and maintained.
Audits are performed by competent personnel (see 4.3.2.2) independent of those who
performed or directly supervised the activity being audited.
An audit of all elements of the management system is conducted prior to claiming conformance
to the requirements of this document.
6.2.2.3. Audit Review and Closure

District Operations identifies response times for addressing detected nonconformities. The
management responsible for the area being audited ensures that any necessary corrections and
corrective actions are taken to eliminate detected nonconformities and their causes. Follow-up
activities include the verification of the actions taken (see 6.4.2). Records of the audits and their
results are maintained (see 4.5).
Internal
6.3. Analysis of Data

QMS-OPS-2008], for the identification and use of the techniques for the analysis of data. SDI
determines, collects, and analyzes appropriate data to demonstrate the suitability and
effectiveness of the QMS and to evaluate where continual improvement of the effectiveness of
the QMS can be made. This results shall include data generated as a result of monitoring and
measurement and from other relevant sources.
The analysis of data provides information relating to customer satisfaction (see 6.2.1),
conformity to service design requirements (see 5.4), characteristics and trends of processes
and SRP including opportunities for preventive action (see 6.4.1 and 6.4.3), supplier
performance (see 5.6), and quality objectives (see 4.1.3).
6.4. Improvement
6.4.1. General
QMS-OPS-2008], that identifies the methods used to monitor, evaluate, and improve the
effectiveness and implementation of the QMS processes for the execution of the service and
use of the SRP.
The procedure identifies how District Operations uses the quality policy, quality objectives,
customer feedback, audit results, analysis of data, corrective and preventive actions, and
management review for the continual improvement of the effectiveness of the QMS.
6.4.2. Corrective Action

SDI maintains a documented procedure, Corrective Action and Preventive Action Procedure
[1000-PRC-QMS-ALL-1004], to correct nonconformities and to take corrective actions, both
internally and within the supply chain, to eliminate the causes of nonconformities to minimize the
likelihood of their recurrence.
The procedure defines requirements for:
 Reviewing nonconformities (including customer complaints)
 Identifying the root cause of the nonconformity and implementing corrections
 Evaluating the need for corrective action to reduce the likelihood that nonconformities recur
 Identifying the timeframe and responsible person(s) for making corrections and taking
corrective action
 Reviewing and ensuring the effectiveness of the corrections and corrective action taken
 Maintaining records of the corrections and corrective action taken (see 4.5)
When the corrective action identifies the need for new or changed controls, the procedure
requires that the MOC process (see 5.11) be applied to the proposed action.
Internal
6.4.3. Preventative Action

SDI maintains a documented procedure, Corrective Action and Preventive Action Procedure
[1000-PRC-QMS-ALL-1004], to determine and implement preventive actions, both internally and
within the supply chain, to eliminate the causes of potential nonconformities to minimize the
likelihood of their occurrence.
The procedure defines requirements for:
 Identifying potential nonconformities and their potential causes
 Evaluating the need for preventive action, including any immediate or short term action
required, to prevent occurrence of nonconformities;
 Identifying the timeframe and responsible person(s) for implementing preventive action
 Reviewing the effectiveness of the preventive action taken
 Maintaining records of results of preventive action taken (see 4.5)
When the preventive action identifies the need for new or changed controls, the procedure
requires that the MOC process (see 5.11) be applied to the proposed action.
6.5. Management Review

6.5.1. General
SDI‘s QMS is reviewed at least annually by the District Manager to evaluate the QMS’s
continuing suitability, adequacy, and effectiveness. This review includes assessing opportunities
for improvement and the need for changes to the QMS, including the quality policy and quality
objectives.
6.5.2. Input Requirements

The input to management review includes, but is not limited to:
 Effectiveness of actions resulting from previous management reviews
 Results of audits (see 6.2.2)
 Changes, including legal and other applicable requirements, that could affect the QMS
 Customer feedback (see 6.2.1)
 Process effectiveness, including the results of risk assessment (see 5.3)
 Status of corrective and preventative actions (see 6.4.2and 6.4.3)
 Review and analysis of failures in service and/or service-related products (see 6.3)
6.5.3. Output Requirements

The output from the management review includes a summary assessment of the status of the
QMS. The assessment includes any required changes to the processes and any decisions and
actions, required resources, and improvement of service and SRP in meeting customer
requirements.
SDI Senior Management reviews and approves the output of management reviews.
Management reviews are documented and records of these reviews are maintained (see 4.5).
Internal
7. Records
The document(s) listed below shall be completed based on the instructions in this document:
Title/Description Retention Period Retained By
- - -
Internal

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Page Dept Type Level Document # Date Rev

1 of 27 QMS MAN 1 1000-MAN-QMS-OPS-2002 2/23/2017 1.0

SDI Operations Quality Manual

5.4.4. Design and Development Verification ........................................................................16

1. Introduction and Purpose

1.1. Application and Scope

Document Number Title

3. Terms and Definitions

All Employees  QMS compliance in all areas

4. Quality Management System

Figure 1. Interaction of Processes at SDI

Reference: Parenthetical references to the API Q2 standard are visible

4.1.2. Quality Policy

4.2. Management Responsibility

4.2.2. Responsibility and Authority

4.3. Organization Capability and Resources Provisions

4.3.2. Human Resources

4.3.2.2. Personnel Competence

4.3.2.3. Training and Awareness

4.3.3. Work Environment

4.4. Documentation Requirements

4.4.2. Control of Documents

It is the responsibility of district operations management to ensure that obsolete documents

4.5. Control of Records

5. Realization of Service and Service-Related Product

5.1.2. Determination of Requirements

5.1.3. Review of Requirements

5.3. Risk Assessment and Management

5.4. Design and Development

5.4.2. Design and Development Inputs

5.4.3. Design and Development Outputs

5.4.4. Design and Development Verification

5.4.5. Design and Development Final Review and Approval

5.5. Contingency Planning

5.5.2. Planning Output

 Criteria, scope, frequency, and methods used when performing an assessment on a

5.6.2. Purchasing Information

5.6.3. Verification of Purchased Services and Service-Related Product

5.7. Execution of Service

5.7.2. Service Quality Plan

5.7.2.2. Plan Content

 Identification of the requirements to perform acceptance inspection for each activity,

5.7.2.3. Plan Approval

5.7.3. Identification and Traceability

5.7.4. Service-Related Product Status

5.7.5. Customer Property

5.7.6. Preservation of Service-Related Product

5.7.7. Validation of Service-Related Product

5.7.8. Preventative Maintenance, Inspection and Test Program

5.8. Control of Testing, Measuring, Monitoring and Detection

5.9. Service Performance Validation

5.10. Control of Nonconformities

5.10.2. Nonconforming Service Execution and Service-Related Product

5.10.3. Verification and Documentation

5.10.4. Customer Notification

5.11. Management of Change (MOC)

5.11.2. MOC Implementation

5.11.3. MOC Evaluation, Notification, and Controls

6. Quality Management System, Analysis, and Improvement

6.2. Monitoring, Measuring, and Improving

6.2.2. Internal Audit

6.2.2.2. Performance of Internal Audit

6.2.2.3. Audit Review and Closure

6.3. Analysis of Data