Fourth Edition May 2016 - volvogroup.com

1 Fourth Edition May 2016 SECTION Page 2 of 53 INTRODUCTION The Quality Challenge Every day at VOLVO, we are working to improve our organization, our processes and the skill of our employees to be the best in class. We are committed to quality excellence, a customer-focused process approach and continuous improvement. We expect and encourage our suppliers to adopt these same principles and practices. The mission of VOLVO Purchasing is to provide a competitive advantage to our organization and our customers through the selection, development and partnership with suppliers that are capable of exceptional performance. VOLVO is actively seeking to attract suppliers that are capable of delivering superior products in terms of quality, delivery, price and features. In support of our strategy, this manual describes the sourcing process used to identify and select suppliers that share the VOLVO Drive for Quality.

2 This manual also covers the expectations, requirements, guidelines and practices expected of suppliers doing business with VOLVO. Once selected, our goal is to work closely with these suppliers to develop a strong, stable, structured relationship. We expect a commitment from our suppliers to achieving a ZERO DEFECT APPROACH. Suppliers demonstrate this commitment through: Delivering fully conforming parts and products On time delivery Rigorous adherence to approved processes and requirements Pro-active risk management VOLVO products have always been characterised by quality and safety. Maintaining the reputation of selling the highest quality and safest products in the market is a must for us. We expect suppliers to contribute to maintaining this reputation by the care they invest in the parts they produce and deliver.

3 VOLVO suppliers are expected to extend the requirements in this manual to their suppliers and assume responsibility to ensure that quality is consistent through their supply chain. This document is intended to serve as a reference document and a guide to understanding VOLVO specific requirements and the responsibility shared by our suppliers in ensuring products that meet consistently high standards for quality and safety. With your commitment to participate as a VOLVO supplier , we will succeed in our mission to our customers and at the same time begin a long term and mutually beneficial relationship. Patrik Lundblad Martin Ran ng Christian Swahn Senior Vice President Vice President supplier Quality Senior Vice President Volvo Group Purchasing Volvo Group Purchasing Volvo Bus Purchasing SECTION Page 3 of 53 Table of Contents 2 TABLE OF 3 USING THIS 4 BASIC 6 PERFORMANCE 7 MANAGEMENT SYSTEM 8 QUALITY MANAGEMENT SYSTEM 10 SHORT supplier EVALUATION 10 CONFIDENTIALITY 10 REQUEST FOR 10 supplier EVALUATION 11 INDEX 11 FINAL 11 ADVANCED PRODUCT QUALITY 13 APQP 13 RESPONSIBILITIES IN 13 KEY COMPONENT 14 APQP 14 SOFTWARE APQP 15 PRODUCTION PART APPROVAL 18 18 SIGNIFICANT PRODUCTION 19 DOCUMENTATION 20 APPROVAL OR NEW OR REVISED 21 VOLVO SPECIFIC VOLVO SPECIFIC REQUIREMENTS.

4 24 REVIEW OF TECHNICAL 24 PRODUCT APPLICATION 25 PART HANDLING 25 SPECIAL 26 LEGAL REQUIREMENTS - CONFORMITY OF 27 CLEANLINESS 28 PROTOTYPE 29 REACH COMPLIANCEAND IMDS REPORTING .. 31 PRE-LAUNCH CONTROL 31 AFTERMARKET PARTS 32 MAJOR SYSTEMS OR ORGANIZATION 32 SAFETY 34 34 IDENTIFICATION OF SAFETY 34 PRODUCTION 35 SAFETY MANAGEMENT 36 LOT TRACEABILITY 36 PASS THROUGH PART 36 PRODUCTION PRODUCT PROCESS CHANGE 39 REQUESTING 40 LOT 40 FIRST IN FIRST OUT 41 SUB-TIER supplier 41 41 42 LABORATORY 42 RECORD 42 PERFORMANCE MEASUREMENT AND CORRECTIVE MANAGEING NONCONFORMING PARTS .. 44 SCORE CARD PRESENTATION .. 45 QUALITY PERFORMANCE MEASUREMENT .. 46 THE VOLVO PROCESS AUDIT .. 47 CONTINUOUS IMPROVEMENT .. 48 LOW PERFORMING supplier .. 48 FIELD QUALITY 49 REVISION SECTION Page 4 of 53 USING THIS DOCUMENT ORGANIZATION This document defines the expectations and working procedures intended to assist suppliers in achieving and maintaining a successful working business relationship with VOLVO.

5 This document is organized in chapters related to our main processes. KEY ELEMENT PROCEDURES In addition to this supplier manual, VOLVO maintains a set of procedures that define specific requirements and expectations in key areas. These Key Element Procedures cover VOLVO requirements related to environment, logistics, corporate social responsibility, and cost management. Suppliers should consider the Key Elements Procedures as part of this document. The Key Element Procedures are available on the supplier portal. Scope This supplier Quality Assurance Manual is a joint document recognized and used by the following organizations: VOLVO Truck, Mack Trucks, Renault Trucks, VOLVO Bus, VOLVO Bus North America (VBNA which includes both Nova Bus and Prevost Bus), UD Trucks, Eicher, DFCV and Renault Trucks Defense.

6 To simplify the text in this document, the name VOLVO refers to this collective group of companies. VEHICLE refers to both trucks or busses. THE VOLVO supplier PORTAL VOLVO maintains an internet portal that allows suppliers to access current documents and news regarding changes that may impact them. Suppliers are responsible to apply for access to the VOLVO supplier Portal by contacting the host buyer. Designating a Super User Suppliers are required to maintain the contact data for key individuals and business information for their organization on the portal. To ensure timely and accurate information, suppliers should designate a Super User who is responsible to maintain the supplier s information on the Volvo portal. The designated Super User has the ability to grant access to the VOLVO supplier Portal through IDM.

7 The Super User functionality within the Volvo Group supplier Portal allows the supplier to add, edit, delete and manage their own employees access rights to our system and applications. This functionality removes the need to request assistance from Volvo employees to add, modify or delete users inside a supplier s organization when organizational changes occur. Creating a Super User In order to establish a Super User, the supplier must sign the supplier Portal Terms and Conditions agreement and complete the eForm which designates the suppliers Super User. Suppliers can designate a Basic Requirements Sourcing VOLVO Specific Requirements APQP PPAP Production Requirements Managing Performance Safety Management SECTION Page 5 of 53 single Super User at the parent level. Once a Super User is assigned for a supplier , that person will be responsible for administering the access rights for their supplier code(s).

8 Technical support will be offered and available to assist super users if necessary. Maintaining contact information It is recommended that the Key Account representative to Volvo be designated as the default Super User. It is also strongly recommended that the designated Super User review the contact information at least every six months. This will help to ensure the effective exchange of important information. Additional guidelines, communication kits, and templates are posted in the quality section of this E-library. The latest version of this supplier Quality Assurance Manual is available in the Quality Section within the E-Library. GUIDE TO SYMBOLS USED IN THIS DOCUMENTS supplier FEEDBACK Feedback concerning this document is welcomed and encouraged.

9 Any suggestions, including suggestions for additional information or improvements to this document, should be emailed to: Links to VOLVO Information Changes to documents, or internal systems may cause links within this document to no longer work. In that case, information referenced within this SQAM is available by accessing the VOLVO supplier Portal on the internet. Text in frame boxes like this provide an overview of the information in the section and may be used as a quick reference. MANDATORY REQUIREMENTS ARE HIGHLIGHTED IN THIS FORMAT BASIC REQUIREMENTS Performance Expectations and Management Requirements Supplying products to the vehicle Industry is a very demanding business. It requires the ability to mass produce complex assemblies employing state of the art technologies.

10 To achieve this level of performance, the vehicle industry and their suppliers have developed specialized processes and systems to support the demands of this type of production while delivering high levels of quality expected by the vehicle customer. VOLVO has adopted these quality processes and systems, and successful application by our suppliers is key to our shared success. The success of our performance is determined by the final customer. These customers are the businesses and people who rely every day on safe, reliable transportation solutions. We believe that achieving this level of quality and reliability can only be achieved by robust processes and rigorous monitoring. This requires a Customer focus mind set, a continuing search for effective solutions, and opportunities for continuous improvement.