LS Automotive India Pvt.

Ltd

SUPPLIER QUALITY
ASSURANCE MANUAL (SQAM)

ISSUE NO. / DATE: 00 / 20.04.2019

REVISION NO. / DATE: 00 / 20.04.2019
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Supplier Quality Manual Rev.No. 00

Rev.Date. 20.04.2019

Table of Contents

Section # Description Page No.

1 Foreword 3

2 Change History 4

3 Abbreviation & Acronyms 5,6

4 Introduction 7

5 Overview of the manual 8

6 Interaction structure of LSAI with Supplier 9

7 Document Control 10

8 Supplier QMS Requirement 11

8.1 Accreditation 11

9 New Supplier Selection procedure 12

9.1 New Supplier Selection Guideline & Registration 13,14

10 Advanced Product Quality Planning 15,16,17

11 Production Part Approval Process 18,19,20

11.1 Agreement of Inspection 21

11.2 Process Control Plan 21

11.3 Failure Mode Effective Analysis 21

11.4 Statistical process control 21

11.5 Measurement System Analysis 22

11.6 Material Certificate 22

11.7 Heavy Metal/Performance Test Certificate 22

11.8 Material Safety Data Sheet 22

11.9 Special & Critical Characteristics 23

11.10 POYE YOKE – Mistake Proofing 23

11.11 Identification & Traceability 23

11.12 Packing & Shipping 24

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Section # Description Page No.

11.13 Calibration 24

11.13.1 Gauge Work Instruction 24

11.13.2 Gauge Calibration Sticker 24

11.13.3 Gauge/Equipment/Test Calibration Record 24

12 Engineering Change management 25,26,27

13 Supplier Evaluation Audit 28

14 Supplier Process Audit 28

15 Customer Specific Requirements 29

16 NC Handling management 30

17 Rework/Repair Procedure 31

18 Contingency Plan 31

19 Supplier Rating 32

20 Operator Training & Skill Evaluation 33

21 Environment Management Requirements 33

21.1 Statutory & Legal Requirements 34

22 Risk / Opportunities Management Process 34

22.1 Risk Analysis Process 35

22.2 Risk Evaluation & Control 35

22.3 Opportunities 35

23 Supplier Claim Management 35,36,37

24 Supplier Acknowledgement 38

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1. FOREWORD

This manual is the property of LS Automotive India Pvt Ltd and shall not be
copied, issued or re-produced without the written consent and approval of Quality
Management System (QMS) head.

Effective Date from 2nd Jan 2018 with the revision status of 00 The Supplier
Quality Manual takes place the new release in LSAI.

LS Automotive India Pvt. Ltd recognizes the critical role that suppliers play in our
success and the intent of this manual is to promote a clear understanding of our
supplier management system.

LS Automotive India Pvt. Ltd continues to be the supplier of choice of our

customers who are continuously upgrading their Quality Requirements to meet
the Customer expectations. To achieve their expectations and recognize our roles
in the Supply Chain, it is our intention to upgrade our Supplier Manual which is
relevant in this scenario.

We expect our suppliers to be committed to a ZERO DEFECT APPROACH and to

demonstrate this commitment through:

 Delivering fully conforming parts or products,

 On time delivery,
 Rigorous adherence to approved processes and requirements,
 Risk management

We assure you will be able to meet our expectations without any difficulties within
a short time and you will continue to do the best work in the future.

DGM-Quality

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2. CHANGE HISTORY

The information in this Manual is subject to change without notice, revision levels
and history is available for identification of latest version.

Revision Revision
Revised By Approved By Sections Revised
No Date

00 02.01.2018 - DGM-Quality Initial Release

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3. ABBRIVATIONS & ACRONYMS

AOI Agreement of Inspection

AAR Appearance Approval Report

AIAG Automotive Industrial Action Group

APQP Advanced Product Quality Planning

CAR Corrective Action Report

CC Critical Characteristic

CI Continuous Improvement

PCP Process Control Plan

Cp Process Capability (Long-term)

Cpk Process Capability Index (Long-term)

ESQS Evaluation of Supplier Quality System

FMEA Failure Mode and Effect Analysis

FFF Fit, Form, Function

FIFO First In First Out

FTC First Time Capability

IMDS International Material Data System

ISIR Initial Sample Inspection Report

ISLR Initial Sample Laboratory Report

LC Least Count

LSL Lower Specification Limit

MSA Measurement System Analysis

MSDS Material Safety Data Sheet

MSE Manufacturing Systems Engineering

NCR Nonconformance report

OEM Original Equipment Manufacturers

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PO Purchase Order

PA Preventive Action

PPM Parts Per Million

PFMEA Process Failure Mode and Effects Analysis

PPAP Production Part Approval Process

Pp Process Performance (Short-term)

Ppk Process Performance index (Short-term)

PSW Part Submission Warrant

PTC Pass Through Characteristic

PTR Production Trial Run

QC Quality Control

RPN Risk Priority Number (as developed in the PFMEA)

RFQ Request for Quotation

RI Receiving inspection

SNCR Supplier Non-Conformance Report

SPC Statistical Process Control

SOP Start of Production

SC Special Characteristic

SDI Supplier Development and Integration

SDS Supplier Data Sheet

SIR Sample Inspection Report

SQA Supplier Quality Assurance

TPM Total Productive Maintenance

USL Upper Specification Limit

WI Work Instruction

Xbar Arithmetic average of data

ISIR Initial Submission Inspection Report

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4. INTRODUCTION

LSAI has developed this manual to communicate the Supplier Quality

requirements and common processes that include PPAP Submission and Current
Supplier Quality to all of our suppliers. This manual is to be utilized by LSAI
personnel to promote equality in the way we work with suppliers.

LSAI believes it is imperative that all suppliers are treated equitably and
understand what is expected prior to producing parts and throughout the life of
the program.

Our aim is to create a favorable business environment for both LSAI and our
suppliers that strive for customer satisfaction in an environment that supports
continuously improving costs, quality, efficiencies, and productivity.

This Supplier Manual includes Supplier Pledge on Quality performance following

for parts supply contract with LSAI that need to be agreed and signed and
returned to LSAI. Changes in contact, manufacturing locations or other
information outlined must be promptly communicated to LSAI.

Scope:
The requirements contained in this manual are applicable to all LSAI suppliers.
LSAI selects and purchases from suppliers based upon their ability to provide
products of superior quality, on time and at a competitive price.

Purpose:
The purpose of this section is to

 Provide an overview of this manual

 Define the document control method followed
 Interaction structure of LS Automotive India Pvt Ltd with the Supplier

This manual applies to all suppliers providing production parts to LS Automotive

India Pvt Ltd and its subsidiaries.

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5. OVERVIEW OF THE MANUAL

All direct material suppliers to LSAI production plants shall be certified for IATF
16949 : 2016 (OR) SQ Mark Certificate (OR) MAQMSR (MINIMUM AUTOMOTIVE
QUALITY MANAGEMENT SYSTEM REQUIREMENTS) Requirements has to fulfilled
in the organization, SQ MARK Certificate has applicable to HMI Suppliers / Sub-
Suppliers and ISO 9001:2015 Suppliers shall have a definite time target for
IATF16949:2016 certification.

a. Supplier selection and approval method is to ensure supplier with

demonstrated abilities of sustaining required quality levels are selected.

b. Production part approval process with specific emphasis on defect prevention

and also to ensure constant delivery capability.

c. The process to be followed for re-qualification of parts that are already under
supply.

d. The Change management system to be followed in the event of a change in

Design / Process / Location / Material etc.

e. System to be followed to ensure quality sustenance, quality rating and the non-
Conformance reporting, corrective and preventive action process.

f. LS Automotive India Pvt Ltd to be followed process and System assessment

audit in supplier Premises.

g. Supplier Claim Control System to be followed for Quality problems occurring,

the cost of losses.

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6. INTERACTION STRUCTURE OF LSAI WITH SUPPLIER

The following table describes the interacting functions of LSAI with the suppliers.

Function Interaction for

- Supplier Selection
Vendor Development - Business Relationships
(VD)
- Issuing & Updating of drawings/standard

- New Supplier Approval

- Production Part Approval

- CMR adequacy closure verification during audit

Supplier Quality Assurance
(SQA) - Quality improvement activities

- Supplier process audits

- ISIR Approval follow

- Receiving Inspection

- Sample development (Quality related)

Manufacturing Unit - Closure of SNCR raised by LSAI
(IQC)
- CAR closure based on effectiveness of CMR.

- Implementation of skip / FIFO

Supplier shall use the documentation / format specified in this manual. However,
the supplier may substitute any other forms, provided it contains all the
information specified in the LSAI format. This must be agreed with the supplier
quality assurance representative prior to use.
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7. DOCUMENT CONTROL

a. Supplier shall have a documented process to maintain documented

information.

b. The retention period of PPAP shall be Part life plus one calendar year.

c. Retention period of initial samples is till the part life.

d. Retention period of layout inspection, Test or any other functional or audit

reports shall be maintained for one calendar year.

e. Retention period of traceability records such as Invoice copy, Inspection report

etc. shall be maintained for six months

f. When supplier is own Documented information retention policy Supplier shall

get approval for LS Automotive India Pvt Ltd in prior

g. The latest specifications / Drawings of “LS Automotive India Pvt Ltd” shall be
preserved and having control over the validity of these documents.

h. Special characteristic symbols, when applicable, should be shown on process

Control plan, SOP and other related documents.

i. “LS Automotive India Pvt Ltd” Inspection report and other communications
regarding quality shall be properly documented.

j. A Master list of documents shall be maintained to identify current revisions.

k. Appropriate documents, displays should be available at locations where

activities related qualities are performed.

LSAI Quality Management system department will provide a soft copy of the
manual to the supplier and also intimate to all suppliers, in case of any revision.

Supplier shall ensure that the entire operating team is conversant with
this manual.

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8. SUPPLIER QMS REQUIREMENTS

A robust Quality Management System is an initial base requirement to become an

LS Group Supplier, it is our expectation the Supplier to adopt continuous
improvement practices in their organization this should be in the form of annual
continuous improvement plans documented and approved by upper management.

LS Group prefers Suppliers certified to IATF 16949. Suppliers are expected to

implement, maintain, and improve their certification to this technical specification
with the objective of achieving zero defects and continually striving to improve
product quality and delivery.

LS Group will accept Suppliers registered to ISO 9001 with the ability to meet
AIAG (Automotive Industry Action Group) latest edition manuals of Core Tools
(APQP, PPAP, FMEA, MSA, and SPC), At least MAQMSR (MINIMUM AUTOMOTIVE
QUALITY MANAGEMENT SYSTEM REQUIREMENTS) Requirements has to fulfill in
the organization and our customers’ “Customer Specific Requirements”.
Certificates are to be provided to the individual plants placing orders with the
individual Suppliers and updated as required.

Calibration and Testing Service Suppliers must be certified to ISO/IEC 17025 by

an accredited third party certification body or approved Third party of NABL
source. In the event of changes to the quality management system certification
status, LS Group procurement department is to be notified within five business
days.

8.1 Accreditation

Supplier to be certified for IATF 16949/ISO 9001 of Current version is minimum

requirement for any supplier to get registered in approved Vendor list by LSAI
after the Initial Assessment Audit by LSAI.

ISO 9001 /IATF 16949 Certification to be obtained from accredited certification

body. Suppliers to submit the copy of certificate to plant Purchase after the
supplier assessment and approval. Supplier having only ISO 9001 to submit
detailed timing plan to achieve IATF 16949 Certification.

It is the responsibility of the supplier to renew the certificate timely once in 3

years and submit a copy of the same to plant Purchase, failing which suppliers will
be removed from approved suppliers list. Re-approval will be based on the
renewal of ISO / IATF certification followed by LSAI assessment.

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9. NEW SUPPLIER SELECTION PROCEDURE

LS Automotive India Pvt. Ltd requires all the Suppliers to be ISO 9001 (OR)
IATF 16949 certified and the Supplier Supporting to HMI parts, should be certified
SQ MARK and to maintain their status as an “Approved Supplier”.

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9.1 New Supplier Selection Guideline and Registration

a. The VD departments heads shall be receive supplier survey assessment

commissioned Report from New “Party” organized purchase department.

b. The VD department in charge shall be conducting Feasibility Audit at New

“party” Premises itself.

c. The Purchase department shall request to SQA team for Supplier

evaluation audit.

d. The Quality Department in charge shall be conducting the Audit as per the
ESQS (Evaluation of Supplier Quality System) at Supplier Premises.

e. Evaluation is complete, Evaluation Audit results are documented in the

"Supplier

f. Evaluation Report" shall be reported to VD department.

g. Based on Evaluation Audit Result, The VD department shall be registered

in AVL (Approved Vendor list)

h. ‘A’ Grade - The Overall Rating is above 85 - 100%, the Supplier is

Excellent Category.

i. ‘B’ Grade - If the overall rating is 75% ~ 85%, The Supplier is Re-Audit
Category based on the commitment against 100% deployment of Audit
Improvements.

j. ‘C’ Grade - If the overall rating is below 75%, Not selected

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1. New Supplier Selection Criteria

Grade Number of Criteria Selection Criteria

points Defined
A grade 85 to 100 points Pass in Audit Approved

B grade 75 to 84 points Fail in Audit Re-Audit after

improvement

C grade Below 74 points Fail in Audit

Re-Audit impossible

Suppliers are generally classified as the following.

1) Sub – Contract (Out Source) Suppliers

2) Bought Out Suppliers

3) Traders/Agents

2. Evaluation for Bought Out Suppliers

The suppliers are evaluated by Materials, Quality and department to assess

their capacity & technical capability and the same is filled in Supplier Evaluation
Form. If required based on necessity Engineering and Tooling also involved in
this activity. Overseas suppliers are evaluated based on Group Company’s
evaluation report. Supplier evaluation & re- evaluation not required for Group
Company & customer approved source. (If necessary it will be done).Based on
the evaluation, the results would be any of the following:

 VD & SQA will finalize the Supplier Approval based on the evaluation
form.

 On satisfactory performance of the supplier evaluation, the suppliers are

approved and their details are updated in the List of Approved
Suppliers.

3. Evaluation for Traders/Agents Suppliers

VD Department of “LSAI” will collect all details of the supplier through Supplier
Registration form (If required). The registration forms shall be reviewed for all
Relevant information.

Evaluation / re-evaluation of these suppliers will not be carried out as the

suppliers are identified based on product reputation / proprietary items.

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10. ADVANCED PRODUCT QUALITY PLANNING

Advanced Product Quality planning is a systematic method of establishing necessary

steps which supplements supplier quality to ensure that component will meet LSAI
requirements.

In order to ensure that the supplier will be in a position to deliver, as of Start of

production (SOP) by conducting LSAI thorough validation of design, product and
process.

Supplier Production Capacity Planning:

Once the business is awarded, Supplier should create the production capacity like
man, machine, material, Methods (Tools, Jigs, Fixtures and Inspection equipment) to
meet the customer events of proto samples, Production trial Run and SOP volume.
Supplier should submit their production capacity planning to validate their capacity.

RESPONSIBILITY ACTIVITY FLOW OUTPUT

Business Decision by Management on Customer's Decision on New Product

CEO - LSK/LSAI
Enquiry developments

PM - LSK/LSAI Formation of a Cross Functional Team CFT Sign Off

Manager - Sales /
Customer Ensure Customer requirements includes Specific Capture of all Customer
Representative - requirements are obtained from Customer Requirements
LSK/LSAI

Prepare the preliminary Timing Plan with activity

PM - LSK/LSAI involved, responsibility and target date. Ensure timing is Development Timing Plan
aligned with Customer timing

Product design activites such as DFMEA

Design Team - LSK DFMEA, DFM, Bill Of Material DFM & Bill Of Material.

Identification and finalisation of Special & Critical

CFT - LSK SC/CC List
Characteristics & Customer sepcified definition

Design Team - LSK Release of Approved Drawing for the Drawing

products based on Customer requirement

Preparation of Intial Process docuements, Process

MFG Team - LSK Capability Studies considering SC/CC. PFD, Control Plan

CFT - LSK Initial Product Validation ( Proto) A Proto Validation Report

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RESPONSIBILITY ACTIVITY FLOW OUTPUT

CFT - LSK A Preparation of new equipment, facilities, Error Proofing, tools, Facilities Review
moulds and test equipments & Transfer to India

Manufacturing /Maintenance Line Installation, Trial and Debugging and Maintenance plan for new Installation report,
Engineer - LSAI lines Pre-Production report

CFT & Manufacturing Engineer - Control and Monitoring activities for Special charactieristics for Identified actions through PFMEA
LSAI Product and Production Process

CFT & Manufacturing Engineer - Prepare Pre-Launch Control Plan, Work Manual, Product Option Process Documentation released
LSAI Table for trials

Manufacturing Engineer - LSAI Operator Recruitement & Training Training Records

Packing Specification specific to

Sales - LSAI Preparation of packing specification the product under development

MSA plan updation, MSA studies

Quality - LSAI Evaluation of Measurement Systems as per Work Instructions and evaluation

Manufacturing Engineer -LSAI Conduct Production Trial Run Production Trial Run
(Run @ Rate Studies)

CFT - LSAI Verification of Product Product Verification Report

Samples Preparation & Despatch to Korea for Product Validation ( Samples prepared with Tool &
CFT - LSAI ES/MS Testing)
Line Localized condition

R&D - LSK Product Validation Testing as per Drawing standard B ES/MS Test Report

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RESPONSIBILITY ACTIVITY FLOW OUTPUT

VD - LSAI Supplier Fixation based on Capacity and Quality Supplier source list
B performance

VD/SQA - LSAI Process & Capacity verification Audit in Supplier Audit Reports
End & Readiness

CFT - LSAI Perform Process validation & Packing Validation PP Report, Bin Approval

PPAP compilation,
Quality - LSAI FPSC Audit completion & Compilation of PPAP /
ISIR and submit to Customer Correspondance with customer.

Release of Control Plan to

production for mass production,
Manufacturing Engineer Production Control Plan and Transfer to assembly
Continuous Improvement,
- LSAI & moulding
Reduction in Variation in Process
and Product characteristics

After Concurrence of CFT members about the Hand over the project to regular
CFT - LSAI
issues addressal and clearance status, project will team.
be handed over to Regular team

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11. PRODUCTION PART APPROVAL PROCESS

The Production Part Approval Process (PPAP) defines generic requirements for
production part approval. The purpose of PPAP is to determine if all customer
engineering design records and specification requirements are properly understood by
the supplier and the process has the potential to produce parts constantly to meet
these requirements during an actual production run at the quoted production rate.

This approval is required for an existing supplier who develops a different part family
than existing. LSAI shall notify the supplier about the exact date of audit in advance.
Audit can be planned based upon mutual consent of supplier and LSAI.

Audit will be based (focused) on audit checklist and following will be covered.

a. Part / material receiving

b. Equipment’s / gauges

c. Machine condition / Machine Layout

d. In-process production management and quality control

e. Inspection
f. Parts shipping area.

g. Internal audit by the supplier

h. Line rejections & customer complaints
i. Corrective & preventive action (problem solving)

j. Continuous improvements in overall plant and QMS development

k. Mould (or) Tool Preventive Management activity

Evaluation criteria are given in the subsequent pages and Supplier has to give proper
corrective action to close the gaps/observations made during audit with time plan if
selected & a re-audit will be done if required.

a. Selected supplier should follow the procedure for new product

development.
b. Selected supplier should follow the procedure for regular LS audit too.

All PPAP’s/ISIR’S are submitted in accordance with AIAG’s PPAP (4th edition) manual
and the individual Customer Specific Requirements.

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Vendors classification prototypes endorsements and required documents for PPAP/ISIR

Approval process are shown in the below table

Sl.No Item Description Molding Subsidiar Post Assembl Remarks

y Process y
1 Inspection of agreement ○ ○ ○ ○

2 Inspection standards ○ ○ ○ ○

3 Control Plan & PFD ○ ○ ○ ○

4 Parts FMEA(Process/Design) ○ ○ ○ ○

5 Measurement System ○ ○ ○ ○
Analysis
6 Test Measuring Equipment’s ○ ○ ○ ○

7 List of Vendors ○ ○ ○ ○

8 ISIR ○ ○ ○ ○

9 Material Performance test ○ ○

Reports

10 Heavy Metal test Report ○ ○

11 Material test reports ○ ○ ○ ○

12 Process capability Study ○ ○ ○ ○

13 Certificate of Inspection ○ ○ ○ ○
Appearance
14 Operation Standard / ○ ○ ○ ○
condition list

15 Drawing ○ ○ ○

16 Layout Inspection Report ○ ○ ○

17 Packing Standard ○ ○ ○ ○

18 PDI Inspection Report ○ ○ ○ ○

19 PSW ○ ○ ○ ○

20 Production Part Samples ○ ○ ○ ○

cavity wise
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Production Part Approval Process (PPAP) for New Project

For a new project a routing sheet will be prepared which details out whether the parts
are to be produced in-house or to be sourced out.

a. Once this is done, VD will identify the source for the same. Supplier audit
approval is required for any new supplier. Details are given in new supplier
selection section.

b. In case of new part family with existing source, supplier has to pass 85points
min in SQA Audit check sheet.

c. Supplier will be called for design review, feasibility review & process review.

d. Supplier shall have a timing plan and have periodic reviews with LS Automotive
India Pvt Ltd during development period.

e. Samples, inspection report & process flow chart to be submitted to VD who in

turn will forward the same to IQC for inspection. The procedure is further
detailed given in sample submission section.

f. IQC will clear the samples after obtaining comments from R&D and approve the
initial samples inspection report.

g. PPAPs are categorized based on part criticality/supplier’s capability, etc.

Documentation Requirements are specified in the guidelines in the following
pages.

h. List of PPAP (or) ISIR documents to be submitted, the format to be used and
methodology to be followed are explained in the subsequent sections.

i. Supplier to ensure compliance in the production line as per the documents

submitted. Upon confirmation, SQA representative will visit the supplier and
will witness a production run for 300 nos. or one shift quantity (whichever is
minimum) as per the documents and fill in compliance audit report. Yield of OK
parts should be minimum 90 % for approval.

j. If the production run is satisfactory and there are no concerns, the PSW will be
approved by SQA. Otherwise, a re-run will be required or the PSW will be
conditionally approved. In the event of conditional approval the supplier has to
submit a firm action plan. Further details are given in PSW approval section.

k. Supplier has to inform SQA upon implementation of action plan and then it will
be verified by SQA and the conditional status will be removed provided the
implementations are satisfactory.

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11.1 Agreement of Inspection

LSAI and the suppliers will enter in to an Quality agreement in order to initiate Zero
Defect suppliers. The purpose of quality agreement is to make supplier to understand
the product quality and Frequency of Inspection & Test. LSAI plant In-charge of
Quality Personnel and supplier’s personnel will mutually sign the agreement. Any
clarification needed to be sorted out before signing the agreement. The retention of
the agreement is till the product supplied is active.

11.2 Process Control Plan

Supplier to develop control plans as per the AIAG methodology. Suppliers to develop
prelaunch and production control plans. Control plans to be approved by LSAI before
mass production. All Special & Critical Characteristics has to identify on the PFMEA to
be linked to process control plan. Process control plan shall make or identify its linkage
to process flow chart, work instruction and operation standard very clearly.
Reaction plan to be made for all the non-conforming situation and actions instructions
are to be very clearly identified as “Action on the process and action on the Product”.

11.3 Failure Mode and Effect Analysis

Supplier to develop failure mode and effect analysis using the guidelines given by
AIAG. Supplier to submit the copy of DFMEA (if Applicable) and PFMEA as a part of
PPAP / ISIR package. FMEA’s to be living document and to be updated once in 6
Months. Conditions and Situation where FMEA’s to be changed or to be revised to be
defined and documented in suppliers internal Procedure.

11.4 Statistical Process Control

Supplier to use suitable statistical tools to control the process variation. Suppliers to
deploy X Bar and R Chart or any other method to improve and sustain the process
capability.

Process capability to be applied to only for stable and control process and Which are
Parameters are identified as a Special Characteristics (SC) & Critical Characteristic
(CC) & Customer Requirement in process Control Plan against SPC study shall be
conduct in the process through online X Bar & R Chart Acceptance criteria are given
below.

S.NO CAPABILITY INDEX PROCESS

1 PpK > 1.33 Initial Process

2 Cpk > 1.67 Ongoing Process

Suppliers to initiate suitable actions like 100% inspection in case if the above
capabilities were not met.
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11.5. Measurement System Analysis

Suppliers to conduct measurement System analysis for all the characteristics identified
on the control plan. Suppliers to deploy both variable and attribute methods to
establish R&R. the suppliers to Calculate number of distinct data categories for each
variable MSA Study. The acceptance is given as below

S.NO GUAGE R&R ACCEPTANCE CRITERIA

1 > 30% Reject

2 10% to 29% Conditionally Accepted with countermeasures.

3 < 10% Accept. Recommended for using SPC.

11.6 Material Certificate

All raw materials shipped to LSAI Plant must have material certifications indicating
specification number, required value(s), and results (Certificate of Analysis), Material
certification refers to documentation from the material producer specifying the
manufacturing location, lot number, part name, test dates, test specification, and test
data. All components shipping outside of their region/country the submission of
Material Certificate must be submitted in English. This requirement may be excluded
In case of RM supplied by customer.

11.7 Heavy Metal/Performance Test Certificate

All raw materials shipped to LSAI Plant must have material certifications indicating
specification number required value(s), and results (Certificate of Analysis). For each
raw material batch, raw material certificates CoA) are required. In addition, the raw
material supplier shall provide at a minimum yearly testing results related to control
plan and material specification, and raw material technical data sheets.

The Heavy Metal test (OR) Performance test shall be conduct by supplier as per MS
Standard / Customer Defined Standard, That test certificate has to submit to LSAI as
per “Customer Revalidation test plan”.

11.8 Material Safety Data Sheet

Suppliers to provide List of Chemicals /MSDS sheets and Hazardous substances

supplied to LSAI. If required suppliers will be called for a special training on MSDS
and MSDS Sheet has to display in the shop floor.

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11.9 Special and Critical Characteristics

Suppliers to identify the special and safety characteristics involved in the product and
process. Characteristics affecting safe vehicle operation, Product safety, Government
regulations or failure mode with severity of 9 or 10 are declared as safety
characteristics. Suppliers to follow suitable symbols for identifying such characteristics.

Severity with ranking of 7 or 8 will be declared as critical characteristics and the same
to be identified with suitable symbols for identifying such characteristics. Special
controls like Mistake Proofing, 100% Inspection etc. are to be in place for controlling
such characteristics.

11.10. POKA YOKE – Mistake Proofing

The Supplier’s shall implement all necessary error proofing into the manufacturing
process to eliminate or reduce the manufacture of defective product. The error
proofing methods and devices shall be recorded in the PFMEA and process Control
Plans.

The Suppliers to deploy these methodologies to control safety and critical

characteristics. The Mistake Proofing of Sensors with masters or sensors used as
POKA-YOKE’s must be controlled or checked periodically. Error and Mistake Proofing
software should test for all possible failures and bypass scenarios. Supplier should not
skip any Poka Yoke System

- To be tested and validated periodically using suitable methods.

11.11. Identification & Traceability

The First-In First-Out (FIFO) inventory control and lot traceability will be verified by
LSAI. Material storage locations must be clearly identified. A method must exist to
clearly identify and differentiate rework, repair, scrap, WIP, etc. All perishable
materials and components shall have a known life expectancy and visible expiration
date.

Supplier to identify the status of the product throughout its manufacturing process till
dispatch. Suppliers to follow positive identification for the product. Suppliers to use
suitable methods for the identification process like Stamping, Marking and Labeling
and Suppliers to follow lot traceability system for each lot produced. The heat No, Lot
No / Batch No to be noted and printed on the identification system. The same to be
identified on the supplier; s material test Certificate or the inspection report.

The Supplier has to mark the Traceability Lot code in the finished components as per
the LSAI requirement.

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11.12. Packaging & Shipping

Packaging will be designed by LSAI Development & PCL team to ensure that the
integrity of the product is maintained throughout the supply chain, Even though the
Suppliers are required to perform Packaging Validation tests to prove that the
packaging will protect components from any type of damage and the Quality of the
part cannot be damaged during shipment.

Cleanliness and maintenance are a requirement to ensure no part damage in transit

All Packing Standard with Specification of packing material must be approved by LSAI.
Packaging proposals by the Supplier must be submitted to LSAI Purchasing for
approval and be signed-off by LSAI Purchase/Engineer prior to implementation.

All products shipped to LSAI Plants shall be clean and free from contamination and
Suppliers responsibility to remove all old labels from returnable containers.

11.13 Calibration

All gages used in the process must be listed on the control plan and have applicable
Measurement Systems Analysis (MSA) studies performed such as Gage Repeatability
and Reproducibility (GR&R) and 3rd party sources used for gage and test equipment
calibration and testing must be evaluated by NABL accredited lab only and the supplier
be certified to ISO/IEC 17025 or locally recognized accreditation board or government.
Laboratory scope must be verified.

11.13.1 Gage Work Instructions

Gage handling Instruction must include how the operator places the part into the
gage, clamping sequences in the Gage Operating Work instruction and it has to display
at work place.

11.13.2 Gage Calibration Stickers

All gages and test equipment shall be calibrated, reflect the last calibration date and
next calibration date and/or expiration date. Gages that are used to determine quality
level acceptance must be recorded, monitored and controlled in the preventative
maintenance program.

11.13.3 Gauge/Equipment/Test Calibration Records

All gages and test equipment shall be calibrated, reflect the last calibration date and
next calibration date and/or expiration date. Gages dedicated to the process must be
recorded, monitored and controlled in the preventative maintenance program.
Calibration must be traceable to a known source.

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12. ENGINEERING CHANGE MANAGEMENT

For re-qualification of parts that are already under supply where changes are made to

Design, agreed process, tooling, measurement method, location and approved sub-

suppliers.

Unapproved changes are not acceptable; they put at risk our processes so LSAI will

take action as per the Supplier Claim procedure. Any requested changes shall be

initiated with a formal change request to LSAI SQA and LSAI procurement personnel

followed by a PPAP meeting the conditions required for re- submission as detailed in

AIAG’s PPAP manual and applicable Customer Specific Requirements.

Any request for changes will be addressed to the respective LSAI representative and

LSAI procurement personnel. Approvals to a request for change must be obtained

before implementing the change. A deviation may be obtained from LSAI in the form

of a signed Design or Process Concession.

LSAI expects its suppliers to verify and document the product dimensional before and

after each approved ECR change. They are to communicate any issues or concerns

with the design, material, performance, appearance, durability or any other key

characteristic based on their expertise, knowledge and lessons learned from similar

products.

This procedure is applicable to all existing part suppliers

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Engineering Change Process Flow

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Procedure for Engineering Change

1. If any of the below mentioned conditions change, the change management

process is required after mutual discussion with supplier & customer.

2. Following situations leads to change management approval process.

3. Any technical changes, PSW approval required.

4. For design change if design authority of component is with LS Automotive India

Pvt Ltd, unit will inform to concerned supplier for respective design changes.

5. For tooling, sub – supplier, process change & location change situations, the

respective part supplier has to inform LS SQA/LS VD before any one of above

changes are initiated.

6. Ensure no old inventory available with supplier while implementing ECN change

to avoid parts mix-up

7. Final decision for further process requirements will be arrived after discussion

with supplier. The Supplier is to submit “supplier’s change request” with

indication of changes to LS SQA. LS SQA will send back the request with

requirements to approve the change.

LSAI will audit the new location / sub-supplier along with the supplier as required. The

results of the findings are evaluated and the adequacy of the changes is checked. If

result is found ok, decision is taken for approval.

 If the adequacy is not ok, actions plan to be submitted & implemented.

 If the implementation adequacy is not ok, the supplier is re audited and results

are again evaluated.

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13 SUPPLIER EVALUATION AUDIT

LSAI will carry out the periodical audit for all suppliers. The audit costs of both
Processes (QMS & Manufacturing process). Annual Audit plan will be sent to supplier
by LS SQA. LS SQA will conduct the evaluation audit as per the audit and Audit
frequency will be defined based on last year supplier performance & PPM.

The Observation and opportunities for improvement a raised and shall be closed with
suitable countermeasure. Before & after format will be followed for all major concern.
Action Plan to be submitted by supplier for all the findings and the same Action plan
verification audit shall be reviewed by LSAI on Next Audit itself. Action plan and
countermeasures to be submitted within 5 Working days & as per required date given
by LS SQA.

The Audit results should be reported separately as follows

Grade Number of points Criteria defined

A grade 91 to 100 points Excellent

B grade 85 to 90 points Satisfactory
C grade 75 to 84 points Revaluation

D grade Below 75 points Untradeable

Assessment Audit frequency criteria

Audit frequency is fixed based on Supplier PPM of previous year

14. SUPPLIER PROCESS AUDIT

LSAI will carry out the periodical Process audit for all suppliers. The audit focuses on
the Product and Process in the suppliers manufacturing process. Annual Audit plan will
be sent to supplier by LSAI. LSAI will conduct the Process audit based on last year
audit performance and LSAI Incoming PPM.

Process audit shall be conduct as following criteria

 Major Quality Issues in Customer In-line & LSAI In-line, Immediately

LSAI will conduct process audit at supplier Premises.

 LSAI & Customer will conduct the new car Process audit for New
Projects.
 Engineering Change (4M) by Customer/LSAI/Supplier, LSAI & Customer
will conduct the process audit in supplier premises.

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 The Observation and opportunities for improvement a raised and shall be

closed with suitable countermeasure. Before & after format will be followed for
all major concern. Action Plan to be submitted by supplier for all the findings
and the same Action plan verification audit shall be reviewed by LSAI on Next
Audit itself. Action plan and countermeasures to be submitted within 15
Working days from the audit date to LSAI.

 The Audit results should be reported separately as follows.

Grade Score Criteria defined

A grade 91 to 100 points Excellent

B grade 85 to 90 points Satisfactory

C grade 75 to 84 points Revaluation

D grade Below 75 points Untradeable

Process Audit frequency criteria

Audit frequency is fixed based on the previous year supplier performance and PPM

15. CUSTOMER SPECIFIC REQUIREMENTS

Specific OEM’s Customer Specific Requirements are an integral part of doing business
in the automotive industry and are a part of the contract with LSAI. It is expected that
all suppliers become knowledgeable in and practice all applicable OEM’s customer
specific requirements

If decided to rework, it shall be done as per the rework instructions and should be
100% re- inspected. While reworking, supplier should ensure that other parameters of
the product remains unchanged (Both dimensional & Aesthetics). If any such
conditions are witnessed, separate concession request should be raised and 100%
inspection should be introduced to the deviated parameter.

Supplier should move the scrap materials immediately to scrap yard / scrap area.
Where possible they should mutilate them to prevent mix up. In case of material
supplied by LSAI they should return the same to LSAI at the earliest with proper
confirmation by LS PC&L Team and it should be separately identified.

Records of rework and scrap are to be maintained. It is auditable by LSAI at any time.
If required by LSAI the supplier has to give corrective action for the nonconformance’s
noticed to avoid further recurrence.

Supplier arranges for Containment Company or company representative to complete

containment activities within a 24 hour window at LSAI plant

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16. NC HANDLING MANAGEMENT

NCR raised by LSAI to be closed within 3 days (or) priority time given by LSAI from
the date of issue raised with proper root cause analysis and corrective action plan.
Monitoring the effectiveness of Corrective action received from supplier for the next 3
Lots receiving from Supplier, and then NCR closure will be done.

NOTE: LSAI have a specific Countermeasure format so Supplier could use it LSAI
template.

Non-Conformity Handling Process Flow

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17. REWORK/REPAIR PROCEDURE

Based on the judgment, the repairable parts must be transferred to the Repair Bin
/Tray /trolley. The rework parts must be moved to designated repair area for further
processing. Repair activity has to be done under the supervision of qualified technical
expert.

The repaired part must pass through the Inspection process for revalidation of the
repair activity. It is recommended to have an additional expert member to check the
repaired part beyond the normal Inspection system.

The count of the repair parts must be completely accounted for and acknowledged by
the Quality & production in-charge.

The repaired parts lot no must be identified with a special identification mark / label
on the parts Note: - All rework and repair operations must to be get approval from
LSAI by before implementation.

18. CONTINGENCY CONTROL

Suppliers are required to prepare contingency plans to protect to LSAI deliveries and
quality in as of major disruptions. The supplier shall notify the LSAI receiving plant,
the buyer, and VD within 24 hours of organization production interruption. The nature
of the problem shall be communicated to LSAI and immediate actions taken to avoid
supply disruption.

NOTE: Production interruption is defined as the supplier inability to meet the LSAI
specified capacity volume of conform parts.

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19. Supplier Rating

Supplier Performance Rating will be done on monthly basis evaluated in terms of

Quality, Delivery, Packing, Co-Operation & Documentation and communicated to all
suppliers (Approved Suppliers) through mail on every month.

Rating Criteria:

SUPPLIER RATING SYSTEM

SL NO FACTOR CRITERIA SCORE RATING POINTS

<6000 PPM

6001-12000 PPM
> Target PPM 15
12001-18000 PPM

>18001 PPM

> Rating for Field quality issues Zero Defect

10
(CS10000) & Other OEM 1 Defect - 0

Zero Defect
> Product quality issues - Due to child
1 Quality part issues 5 Defects < 5 no's
( customer line)
Defects > 6 no's

Followed
> System follow up activity - QMS,
ISIR,CMR, revalidation reports & Quality 10 Average
Meeting
Poor Response

> 85%
> Process Audit Score & Response to
10 < 85%
QIR
< 80%

> 98%
> Supply Qty. 90 - 97%
Plan Vs. Actual 10
80 - 89%

< 80%

No Line Stop incidents

2 Delivery > On time Delivery 10
Line stop incidents > 0

No Premium Freight incidents

> No. of. Premium Freight occurances 5
Premium Freight incidents > 0

> Customer line stop incidents Special No Line Stop incidents

5
status on customer notification Line stop incidents > 0

A. Std. Packing Follw (3C) A, B, C - Followed

B. No Dust & Proper cleaning
3 Packing 10 A & B or A & C - Followed
C. Proper Barcode Label
A - Not Followed

A. Resopnse to Phone calls A, B, C, D - Followed

B. Suppport for Plan changes
4 Co-Operation 5 1 missing
C. Response to RFQs
D. Support for AS Parts, EO changes more than 2 missing

A. No Receivng Error A, B, C, D - Followed

B. No Invoice Error
5 Documentation 5 1 missing
C. No supply on DC
D. Monthly Reconcilliation done more than 2 missing

Total scores 100

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Best Suppliers:

To motive the Supplier performance Annual awards will be conferred for best
performing Suppliers in the categories Overall performance, Best Quality and
Best Delivery. Preference will be given to the best performing suppliers during
new project supplier selection.

Worst Suppliers:

The suppliers who performs poor in terms of Quality and Delivery will be asked
to submit the action plan to improve. If not improved as per plan and
continuously performing poor for more than 3 months, no new RFQs will be
sent and no new business will be awarded to them. And look for alternate
actions to change the supplier and discontinue the poor performing supplier.

20. Operator Training & Skill Evaluation

Operator on the shop floor and persons carrying out jobs affecting quality to be
adequately trained skill matrix with license card to be displayed on the shop floor. Skill
levels to be verified at periodical interval using quantifiable methods. Persons working
on the special process to be retained twice in a year to check the skill level maintained
at the time of initial qualification.

a) Sufficient cycles of training, Skill & Knowledge test must be performed

before induction into the production / Inspection line.

b) Periodic skill / Knowledge retention check & training must be in place

with Job license reissuance system.

21. Environmental Management Requirements

Suppliers shall not only comply with all environmental laws and regulations, but also
implement measures contributing to the protection of the environment. Therefore,
they should strive to minimize the adverse environmental impact of their products and
services during the whole product life cycle: conception, development, production,
transport, use and disposal or recycling, LSAI encourage the supplier to obtain ISO
14001 certified or equivalent.

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21.1. Statutory and Legal Requirements

Suppliers are to comply with all the legal requirements as applicable. Suppliers are
requested to submit the requisite copies of legal documents with Air, water and
Hazardous waste consent to LSAI supplier contact.

- Statutory and regulatory requirements for product safety – the organization

needs to identify all legal and other requirements related to product safety.
This can include the methods of identification and review of this information.
- Customer requirements regarding product safety – usually, this information is
clearly stated by the customer, but there are always some requirements that
are implied and are part of the Statutory and regulatory requirements for the
product safety.
- Safety-related characteristics of the product – considering the lifecycle of the
product and how it is used, the organization needs to identify those
characteristics that are relevant for product safety.
- Product safety-related controls at the point of manufacture – the organization
needs to establish appropriate process controls to ensure that the product
meets safety requirements.

- Special approval of process FMEA and control plans – special approval is

additional approval by the function (usually the customer) that is responsible
for approving such documents with safety-related content.
- Reaction plans – these usually include containment of the product and 100%
inspection if necessary.

22. Risk/Opportunities Management Process

Supplier has to establish and maintains a process for identifying potentially

undesirable situations associated with the provision of services, estimating and
valuating the associated risks, controlling these risks and monitoring the effectiveness
of the control. This risk management process includes the following elements:

1. Risk/ Opportunities – Internal Issues

2. Risk/ Opportunities - External Issues

3. Risk Opportunities - Compliance Obligation

4. Risk /Opportunities for Significant Aspect

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22.1. Risk Analysis Process

Risk Analysis shall be performed using a risk management plan that has been
approved by the Management Representative or Head of Operations. This plan shall
include the system used for qualitative or quantitative categorization of probability
estimates and determining their severity level.

22.2. Risk Evaluation & Control

Supplier shall use the criteria defined in the risk management plan to estimate the
significance of each identified potentially undesirable situation.

Supplier shall identify risk control measures that are appropriate for reducing
identified risks to an acceptable level. Supplier shall then implement the risk control
measure(s) selected, and shall verify the effectiveness of any measures taken.

22.3. Opportunities

The methods specified above may also be used for determining opportunities related
to this Environment Management System (EMS) and its processes. Where such
opportunities are identified, they should be noted as such as part of the final risk
assessment report, and action taken as appropriate. Such opportunities shall also be
considered as part of the organizations’ annual Management Review process

23. SUPPLIER CLAIM MANAGEMENT

This guidance how to handle LSAI customers CLAIM due to our Supplier Logistics and
Quality problems occurring, the cost of losses could be claimed to our suppliers.

1. CLAIM Handling Process

Domestic and overseas A / S CLAIM receipt of complaint due to Supplier Problem, so

that responsible Department VD/QA to handle the Claim.

Customer claims caused due to our supplier of logistics costs and quality problems,
VD/PC&L/Quality has the responsibility to Supplier partners to handle the claim.

Our Company Inline caused due to our supplier quality problem/Logistics, IQC/PC&L
has the responsibility to notify Supplier to handle the claim

Overall Claim details collecting from customers/FIELD CLAIM in charge person and
suppliers claim based on Claim Category

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Classification of CLAIM Applicable:-

Division Classification Sub Category Remarks

Domestic A/S CLAIM

FIELD CLAIM
Overseas A/S CLAIM

Customer
Customer CLAIM Cost
CLAIM

Supplier CLAIM Major Failure

Notify by Relevant
(In-line / Line Stop Cost & Tool dept. Head
Outgoing) correction Cost
LSAI
Repeated Quality Problem
In-line CLAIM
SNCR CLAIM Cost

Logistics Problem

Others

2. Customer CLAIM Process:-

1. Domestic/Overseas A / S CLAIM product occurred reason of supplier Quality

Problem, if sharing with suppliers is unlikely to occur constantly recognized
can be applied.

2. Customers line CLAIM losses occurred due to the negligence of the supplier
and the supplier shall be claimed

3. FOR CLAIM calculate the amount shall be calculated according to the

following criteria.

Description Division Calculating Criteria Remarks

Domestic, Supplier charges is responsible or share

FIELD CLAIM
Overseas A/S for any applicable amount

If the Amount
charged from the Supplier of charges is responsibilities
customer
Notify by
Product loss costs + Segregation costs + Relevant dept.
CUSTOMER Rework (repair)Costs (If Applicable) Head
LINE CLAIM If there is no +Third party rework (repair) costs (If
amount charged Applicable) + Travel Costs + Delivery
from customers Costs + Countermeasure Preparation
cost + General Management Expenses
cost

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4. All the costs charged to the Supplier will be formalized in a document Called
as CLAIM INFORM/RESPONSE.

3. In-Line Claim Process:-

1. In appropriate departments (production, quality control, and purchasing

departments in charge) occurs following nonconforming product or MAN /
HOUR losses due to our Supplier Logistics and Quality problems.

2. In accordance with Complaints Procedure Respective Person to review the

information according to the occurrence of the Imperfect and
nonconforming Products when deemed appropriate CLAIM processing tasks
must handle.

3. CLAIM amount calculated in accordance with the following criteria:

Description Calculating Criteria Remarks

Incoming Product Segregation Cost + Product loss cost+

CLAIM General Management Expenses Cost

Notify by
Relevant dept.
Head
Product loss costs + Segregation costs +
Final product CLAIM Rework (repair)Costs (If Applicable) +
General Management Expenses cost

4. All the costs charged to the Supplier will be formalized in a document Called
as CLAIM INFORM/RESPONSE.

4. Process Violation Claim Process:-

1. In case of Supplier’s violation, LSAI is able to terminate the supply Contract

(OR) Penalty, The Penalty Cost will be decided by LSAI Management.
2. In case Received any claim from Customer for Supplier 4M Violation that claims
cost will be applicable to Supplier.

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24. SUPPLIER ACKNOWLEGEMENT

To be returned by Supplier to LS Automotive India Pvt Ltd.

Confirmation Statement:

We here by confirm that we have received and understand the Supplier Quality
Management (SQM) manual.

We understand that this manual defines the overall quality targets for the products
that are purchased by LS Automotive India Pvt. Ltd and the ways of working as a
partner to achieve quality excellence.

We agree to strive to meet these customer requirements and expectations in working

in development and production with LS Automotive India Pvt. Ltd.

We understand it is our responsibility to ensure that only the latest revision of the
SQM is used but periodically checking with the SQA to verify revisions or updates. We
understand it is our responsibility to deploy this manual in all existing, and future
development and manufacturing facilities working with LS Automotive India Pvt Ltd.

Supplier Name

Supplier Vendor
Code

Submitted by
(Provide Name)

Telephone Number

Email Address

Date Signed

Signature with seal

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