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Challenge Manufacturing Supplier Quality Manual

Supplier quality manual

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0% found this document useful (0 votes)
46 views16 pages

Challenge Manufacturing Supplier Quality Manual

Supplier quality manual

Uploaded by

Trevor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Challenge Manufacturing

3200 Fruit Ridge Ave., Walker, MI 49544


www.challenge-mfg.com

Supplier Quality
Manual
Expectation for suppliers throughout the
U.S and International

Challenge Mfg. Company LLC Supplier Quality Requirements 1


CONTROLLED DOCUMENT
Challenge Manufacturing
3200 Fruit Ridge Ave., Walker, MI 49544
www.challenge-mfg.com

Achieve
Success

SC-002
Revision: 11/29/2022

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Challenge Manufacturing
3200 Fruit Ridge Ave., Walker, MI 49544
www.challenge-mfg.com

Table of Contents
Challenge Quality Policy............................................................................................................................ 5
Challenge Objectives ................................................................................................................................. 5
Expectations & Philosophy ....................................................................................................................... 5
SECTION 1- Introduction ........................................................................................................................... 6
A. Policy and Vision................................................................................................................................ 6
B. Purpose ............................................................................................................................................... 6
C. Scope................................................................................................................................................... 6
D. Responsibility ..................................................................................................................................... 6
E. Challenge Supplier Quality Manual Availability .............................................................................. 7
SECTION 2- Challenge Supplier Requirements ....................................................................................... 7
A. Supplier Selection and Approval Process ....................................................................................... 7
1. ISO 9001:2015, TS 1649:2009, and IATF 16949:2016 Registration ............................................ 7
2. Challenge Supplier Evaluation (Ref. Section E for form) .............................................................. 7
3. Preferred Supplier List .................................................................................................................. 7
4. Customer Dictated Sources .......................................................................................................... 7
B. Supplier Launch Readiness .............................................................................................................. 7
1. Supplier Classification .................................................................................................................. 8
2. Challenge 5-Phase Supplier Launch Readiness .......................................................................... 8
3. Advanced Product Quality Planning (APQP) ................................ Error! Bookmark not defined.
4. Production Part Approval Process (PPAP) ................................................................................... 8
5. Run @ Rate .................................................................................................................................. 8
6. Government Regulatory Compliance............................................................................................ 8
7. End-of-Vehicle Life Directive (ELV) .............................................................................................. 9
8. Material Reporting ...................................................................................................................... 10
9. Conflict Mineral Reporting .......................................................................................................... 10
10. Packaging ................................................................................................................................... 10
11. Lot Control and Traceability ........................................................................................................ 11
12. Supplier Management Process................................................................................................... 11
C. Continual Improvement Process .................................................................................................... 11
1. Supplier Performance Reporting ................................................................................................ 11
2. Concern Management/ Problem Solving .................................................................................... 11
3. Escalation of Issues .................................................................................................................... 12
4. Controlled Shipping .................................................................................................................... 13
5. Supplier Cost Recovery .............................................................................................................. 14
6. Supplier Request or Engineering Change (SREA) (Ref. Section E for form) ............................. 14
7. Part Validation or Annual Validation ........................................................................................... 15

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8. Business Continuity Planning ..................................................................................................... 15


9. Records and Sample Retention .................................................................................................. 15
D. Verification of Purchased Product ................................................................................................. 15
E. References ........................................................................................................................................ 16

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3200 Fruit Ridge Ave., Walker, MI 49544
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CHALLENGE QUALITY POLICY

Challenge is committed to customer satisfaction and continual improvement.

CHALLENGE OBJECTIVES

• Achievement 100% On-Time Delivery performance from Suppliers


• Overall Supplier PPM Score of 25 or less (Issued by CMC)
• ISO 9001:2015 and working towards IATF 16949:2016

EXPECTATIONS & PHILOSOPHY

The procedures and policies defined in this manual will help support supplier efforts toward
our shared objectives.

Challenge competes for business in the most competitive markets in the world. We must
constantly improve our performance, our technologies, and our costs to remain competitive.
Our suppliers are critical to our ability to succeed and must fully support our efforts in these
activities.

The goals for Challenge and our suppliers are simple; be the very best at what we do and
do it at the lowest cost. We must have the best quality, the lowest cost, and the highest
level of customer satisfaction to survive and to ensure profitable growth. To achieve this, we
must have a highly flexible, highly motivated and highly robust supply base.

Challenge requires 100% On-Time Delivery from all suppliers. We expect “Zero” defects and
rigorous continuous improvement from suppliers. We expect 100% on time and 1st time
approval for PPAP from all suppliers. We expect “flawless” supplier launches.

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3200 Fruit Ridge Ave., Walker, MI 49544
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SECTION 1- Introduction
A. Policy and Vision
It is the policy of Challenge Mfg. Company LLC (“Challenge”) to utilize only those suppliers who
can fully support our competitive goals, fully utilize the concepts of Continual Improvement, and
strive to be number one in quality, delivery, and costs.
B. Purpose
The purpose of the Challenge Supplier Quality Manual is to clearly define the expectations and
policies for suppliers to Challenge
C. Scope
This manual applies to all direct material and service suppliers to Challenge. In addition, many
of the policies and procedures defined in this manual apply to indirect material and service
providers when indicated on the purchase order.
D. Responsibility
1. Suppliers are responsible for ensuring that they are using the most recent revision of the
Supplier Quality Manual, and all other reference documents cited herein. This includes,
but not limited to Customer, Industry, as well as Statutory and Regulatory requirements.
2. Suppliers are responsible for meeting the requirements defined in this manual.
3. Failure to meet these requirements may result in loss of existing or future business with
Challenge. Any/all costs associated with supplier failures will also be the responsibility of
the supplier.
4. Suppliers are responsible for 100% on-time delivery and “Zero” defects.
5. Suppliers are responsible for supporting Challenge continuous improvement activities.
6. Suppliers are responsible for supporting Challenge efforts and procedures for ensuring
flawless launches, including on-time PPAP submissions. This includes compliance with
any applicable Customer Specific Requirements for Program specific documentation or
other requirements.
7. Suppliers are responsible for ensuring compliance to Challenge requirements throughout
their respective Supply Chain.
8. Suppliers are responsible for developing and implementing part specific and executable
contingency plans for ensuring continued delivery of product and services in the event of
unplanned events including catastrophic events.
9. Suppliers are responsible for Annual Validation unless otherwise stated in writing.

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E. Challenge Supplier Quality Manual Availability


The Challenge Supplier Quality Manual can be obtained on the Challenge website:
www.challenge-mfg.com/suppliers.
SECTION 2- Challenge Supplier Requirements
A. Supplier Selection and Approval Process
1. ISO 9001:2015 and IATF 16949:2016 Registration
• Suppliers to Challenge must be 3rd party certified to ISO 9001:2015 and working
towards IATF 16949:2016. Challenge customers have established IATF or TS
16949 as the standard for the Automotive Manufacturing sector. In accordance with
Challenge Purchasing procedures, Challenge may select a supplier which is only
ISO 9001 Certified (prevailing edition). Challenge will also recognize ISO 9001
Certification for those suppliers that are not manufacturers, and therefore may not
comply with these requirements.
Suppliers must adhere to the appropriate AIAG standards. Requirements include:
Production Part Approval Process (PPAP), Advanced Product Quality Planning
(APQP), Per Challenge PPAP Checklist requirements.
2. Challenge Supplier Evaluation (Ref. Section E for form)
• All potential suppliers to Challenge must meet the minimum requirements defined in
the Challenge Supplier Self- Assessment.
• All potential suppliers will complete a self-assessment utilizing the Challenge
Supplier Self- Assessment form. Upon review of the evaluation documents,
Challenge Purchasing/Supplier Quality/Internal Auditors will determine whether to
accept the results of the self-assessment and/or conduct an onsite evaluation.
3. Preferred Supplier List
• Suppliers will be considered for new business based on the classification on the
Preferred Supplier List and the current rating at Challenge user plants.
4. Customer Dictated Sources
• Customer dictated sources- Unless otherwise stated in writing by our Customer and
Challenge Purchasing, Customer- directed sources must also comply with the
requirements defined in this manual.
B. Supplier Launch Readiness
Suppliers will be required to follow a formal process for launching new product as defined in the
Challenge Supplier Launch Readiness.

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The process will include the steps identified in IATF or TS16949 and the appropriate AIAG
guidelines. Successful launches and launch documentation submitted on time will be key
performance metrics for suppliers. Examples of some of the requirements defined in this process
include:
1. Supplier Classification
Supplier/ Commodity is classified into categories, which define the level of Challenge
participation, and the type of documentation a supplier must submit to support a new
product launch.
2. Challenge 5-Phase Supplier Launch Readiness
Challenge has a 5-Phase launch process for suppliers.
The phases include:
• Phase 1- Plan and Define
• Phase 2- Process/Tooling development
• Phase 3- Product & Process Validation
• Phase 4- Production Launch Plan
• Phase 5- Continuous Improvement Plan
3. Process Flow Diagrams are required for all Level 3 PPAP submittals. (Process Flow)
Supplier must submit a process flow chart to identify each process step for manufacturing
product. Each process step number must be identified the same as on the Control Plan
and FMEA.
4. Control Plans are required for all Level 3 PPAP submittals. (Control Plan) Supplier must
submit a control plan which includes all manufacturing applications. Special characteristic
if applicable must be identified. The gage and measurement technique should be described
and listed along with tool, fixture, frequency and test device used for data collection.
Reaction Plan for failed product or process should be listed as well.
5. Potential Failure Mode and Effects Analysis (FMEA) Supplier FMEA must list each process
step on the FMEA table. The list should include all the ways the product or process can fail
during manufacturing. Assign Severity, Occurrences, Detection and calculate RPN
rankings. Supplier decides which failures will be worked on based on the risk priority
numbers. Focus on the highest RPN, re-evaluate each of the potential failures once
improvements have been made and determine the impact of the improvement. Special
Characteristics must define as product characteristics or manufacturing process
parameters which can affect safety or compliance with regulations, fit, function,
performance, or subsequent processing of product.
6. Supplier must submit (CPK) showing process is capable and in control by measuring it’s
spread / dispersion within the specification limit. Challenge require CPK of 1.67 or greater
and PPK of 1.33
7. Measurement Systems Analysis (MSA) For all Level 3 PPAP submittals, Challenge
requires separate GR&R’s be submitted for each measurement gage or device family
gage that is used to validate Special (Significant, Critical, Major or CSI) Characteristics

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identified on the Design Record or listed in the Control


Plan. The minimum number of appraisers, trials and parts when performing GR&R’s are
as follows:
• Variable data - 3 appraisers, 3 trials, 10 parts
• Attribute data - 3 appraisers, 3 trials, 30 parts.
Assessment of the measurement system should be based on the Total Tolerance of
the feature being measured (%GRR to TOLERANCE). Guidelines for measurement
system acceptability are as follows:
• The percent GRR should be less than 10% for gages used to measure Special
Characteristics
• Gages whose percent GRR is between 10% to 30% may be acceptable for some
applications, but use of the gage must be approved by Challenge Quality
Engineering or Customer
• Gages whose percent GRR is over 30% are considered unacceptable for the
application and cannot be used
8. Statistical Process Control (SPC). This includes compliance to applicable “CQI”
Standards for Special Processes (CQI 9, CQI 11, etc.)
9. The Supplier must submit (Run at Rate) to prove and demonstrate its manufacturing
process is capable of producing parts according to Challenge requirements at the quoted
production rate
10. Government Regulatory Compliance
Suppliers shall comply with all applicable governmental regulations and safety
standards. Registration to ISO 14001 is strongly recommended. At a minimum, suppliers
shall have a formal process in place to ensure compliance to government regulations,
health and safety of employees, and a positive impact on the environment.
Must have a certified quality management system (QMS) (for example, ISO 9001:2015,
TS 16949:2009 or IATF 16949:2016).
11. End-of-Vehicle Life Directive (ELV)
The European Commission implemented the End-of-Life Vehicle Directive (ELV) which
prohibits the use of mercury, lead, cadmium, and hexavalent chromium in vehicles and
components. The Directive is intended to minimize the impact of “end-of-life” vehicles on
the environment. This is mandated for all European Union (EU) Member States and is
also required by North American and Japanese vehicle manufacturers.

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12. Material Reporting


Automotive companies require suppliers to provide detailed information for all materials
used in their products. The format for this is the International Material Data System
(IMDS). IMDS can be found at www.mdsystem.com. Challenge suppliers are required to
complete IMDS submissions prior to PPAP. (Submit to Challenge IMDS CODE: 15732)
13. Conflict Mineral Reporting
The term “conflict minerals” is defined as columbite-tantalite (coltan), cassiterite, gold,
wolframite, tantalum, tin, tungsten, and any other mineral or its derivatives determined
by the U.S. Secretary of State to be financing conflict in the Democratic Republic of the
Congo (DRC) or an adjoining country.
When required, Challenge requires our Suppliers to certify compliance to applicable
statutory requirements.
14. Packaging
Challenge and the supplier will agree upon packaging during Phase 2 of the Supplier
Readiness Process. The Challenge Packaging Information Form will be used to define
the packaging details, and record submission and approval of Packaging parameters.
Wherever possible, returnable packaging will be utilized. Suppliers are responsible for
developing contingency packaging (expendable) should the returnable containers not be
available.
Basic requirements will include:
• All packaging must have a proper label that complies with AIAG barcode label
guidelines. The labels must include the following information at minimum:
- Challenge Part Number with engineering change level and description
- Number of pieces/quantities
- Supplier name and/or supplier code
- Lot Control/ Traceability information (refer to Paragraph 11 below)
- Part specific information that may be specified by Challenge
• There shall be only one part number in each container and only one part number on
each pallet. (Unless otherwise agreed upon during Phase 2 planning with the
Challenge Launch Team)
• Packaging must be robust enough to protect the component/ materials and prevent
damage or contamination during shipment. Challenge may require formal,
independent testing

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• All Packaging materials must comply with E-078 requirements.


15. Lot Control and Traceability
Lot control and traceability are essential requirements for suppliers to Challenge. The
size of the lot reflects the amount of risk should a problem with product occur and
therefore must be managed accordingly. Traceability must include the Manufacturing
date, and the means to trace other critical processing streams (Heat Treat Lots,
Assembly Cells, Cavities, etc.), as required for effective product identification.
16. Supplier Management Process
Suppliers must have effective systems in place to ensure that services, incoming
materials, and components from sub-contractors meet all requirements.
C. Continual Improvement Process
1. Supplier Performance Reporting
Challenge will update supplier performance quarterly and publish as needed. It is the
supplier’s responsibility to communicate the importance of these metrics within their
organization. It is also the supplier’s responsibility to develop an improvement plan and
implement the required improvements.
It is the goal and expectation that Suppliers to Challenge maintain “Zero” PPM and
100% On-Time Delivery. Supplier Corrective Action Request (SCAR) and /or other
remedial actions may be implemented for any occurrence that can put these above 25
PPM or below 100% on- time delivery. In addition, suppliers will be monitored for on-
time PPAP and APQP events and 1st time approval rate for both processes. Suppliers
may also have and be required to support- specific objectives for cost improvement,
engineering support, and Electronic Data Interchange (EDI) functionality.
2. Concern Management/ Problem Solving
Challenge Supplier Corrective Action Request (SCAR) defines requirements and
expectations for suppliers regarding problem solving, Root Cause Analysis and
Corrective Action. The SCAR outlines a disciplined, formal approach for problem solving
and specifies the approach required for each step of the 8D process.
The SCAR process applies to all suppliers of production material, parts, subassemblies,
or services. Suppliers will utilize the SCAR for resolving any/ all issues including quality
related problems, delivery related problems, late submissions, and other issues
identified in this manual and on the Challenge purchase order.
Supplier Corrective Action Request (SCAR) Response Requirements:

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• Initial Response- 24 Hours


• Short Term Corrective Actions (Including Containment) - 48 Hours. Must include
written confirmation of a Return Material Authorization (RMA) number.
• If Return Material Authorization (RMA) is not received within 48hrs, non-conforming
material will be debited automatically in the next pay cycle and/or thru a debit memo
“CMC Vendor Debit” and defective parts will be scrapped.
• Completed/ Verified Long Term Corrective Actions- 2 weeks
3. Escalation of Issues – PEP 1 – 4
Challenge requires Suppliers to ensure that all material, services, and processes are
in conformance to all specifications and requirements. This includes adherence to the
defined delivery schedule. Repeat product and/ or process issues, launch or delivery
disruptions- may require the use of Controlled Shipping at the expense of the Supplier.
Challenge uses PEP, Performance Escalation Process for repeat occurrences. A
Supplier failing to protect a Challenge facility from repeated incidences will be subject
to the Performance Escalation Process, up to and including resourcing. Complete
details of the PEP program is provided in Plex under Purchasing P-709. The general
criteria regarding Supplier Performance initiating PEP are:

• PEP 1 – Supplier Score Card is below the acceptable performance margin


with Zero to 1 issue in any given consecutive 6-month period. This would not
require an onsite Supplier Quality Control Plan review and/or Systems Audit
but would require the supplier’s plant management to present their recovery
plan. *
• PEP 2 – Supplier Score Card is below the acceptable performance margin
with 2 repeat issues in any given consecutive 6-month period. This requires
an onsite Supplier Quality Control Plan review and/or a Supplier Quality
Audit, including a CAPA (Corrective Action Preventative Action) verification.
Supplier’s middle management is required to present their recovery plan. *
• PEP 3 – Supplier Score Card is below the acceptable performance margin
with 3 repeat issues in any given consecutive 6-month period. This requires
Supplier’s Executive team meet with CMC Supply Chain Directors. Supplier
status is changed to Conditional Supplier New Business Hold/Category. An
onsite CAPA verification is required. *

• PEP 4 – Supplier Score Card is below the acceptable performance margin


with 4 repeat issues in any given consecutive 6-month period. Supplier’s

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Executive team meets with CMC Executives where the Supplier Exit Plan is
initiated and cancelling of PO’s.

*De-Escalation occurs when the supplier meets KPI agreements within the designated
time frame & corrective action is effective.
4. Controlled Shipping
Challenge may determine that special measures are required to ensure adequate quality
and delivery performance.
Controlled Shipping is a requirement by Challenge for a Supplier to add a separate,
redundant inspection process for containment of a specific non-conformance, while
implementing Corrective Action(s). The containment activity is in addition to normal
controls and should be completed in a separate, controlled area. Submission of the
sorting data showing inspection results is required. The data obtained from the
redundant inspection process is critical as both a measure of the effectiveness of the
secondary inspection process and the Corrective Actions taken to eliminate the initial
non-conformance.
Challenge will notify the Supplier when they have been placed in Controlled Shipping.
Examples of criteria for a Supplier being placed on controlled shipping may include the
following:
• Repeat quality performance issues
• Product nonconformance during Launch
• Repeat Shipping (count, labelling, etc.) discrepancies
Two levels of Controlled Shipping exist
• Level 1 includes a problem-solving process as well as a redundant inspection
process. The Supplier’s employees at the Supplier’s location enact the inspection
process in order to isolate the Customer from receipt of non-conforming parts/
material.
• Level 2 includes the same processes as Controlled Shipping Level 1, with an added
inspection process by a third-party representing Challenge or our Customer. The
third party is selected by the Supplier, approved by Challenge, and paid for by the
Supplier. Continued failure to meet expectations could result in removal from the
Approved Supplier List.

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NOTE: Suppliers at CS level 2 are not permitted to bid for new, existing or transfer
business unless notified by either the plant or Challenge Purchasing.
Other measures may be required if level 2 controls are not effective.
Criteria for exiting Controlled Shipping Level 1 or 2:
• Challenge will make the determination whether the Supplier can effectively correct
the nonconforming material situation through the normal corrective action process
and isolate Challenge from the problem.
• Application for an Exit Letter from Level 1 or 2 will be reviewed and approved by the
Challenge plant, provided all of the criteria has been met, and action plans have
been completed and validated.
5. Supplier Cost Recovery
Suppliers are responsible for the quality, on-time delivery, and reliability of the product
they supply. Product must meet all design and specified requirements. The Supplier
accepts financial responsibility for the consequences of nonconforming product and
rejected PPAP submissions. This includes, but is not limited to, costs incurred for
containment, sorting, premium freight, rework, repair, and replacement of defective
material, resulting overtime, and productivity loss incurred by Challenge or by Challenge
customers.
• Charge Back Debit
The method of charge back will be by debit memo, processed by Challenge Mfg.
Purchasing.
• Changes
In cases where a Supplier has implemented an unauthorized change or has failed to
deliver contracted products in accordance with the specifications and terms of the
Challenge Purchase Order, all cost that are incurred by Challenge and/ or its customers
will be the sole responsibility of the Supplier.
6. Supplier Request or Engineering Change (SREA) (Ref. Section E for form)
Any changes to process or product [Including, but not limited to: Material Change,
Manufacturing Method Change, Process Order Change, Machine Change, Jig/Tool
Change, Die/Mold Change, Inspection Method Change, New sub-supplier, Design
Change, and Transportation/Packaging Change] must be submitted to CMC Purchasing
and then by Challenge in writing. Prior to production shipments of the change,
PPAP/PA/IPP submission will be required as necessary. The initial shipment of the

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changed parts shall be denoted with an orange CMC ‘New Model’ sticker on the outer
container of the first parts shipped. Failure to obtain written approval before any change
is implemented will be viewed as a nonconformance. It can also result in immediate loss
of the existing business.
7. Part Validation or Annual Validation
Suppliers are required to submit an Annual Validation for all, or any Production Part(s) or
Service(s) provided to Challenge Manufacturing.
Unless otherwise specified, any Validations must be submitted utilizing the AIAG PPAP
format and criteria for completion.
Challenge will specify the Level of submission.
Annual assessment of “CQI” results for Special Processes (CQI 9, CQI 11, etc.) shall be
submitted
8. Business Continuity Planning
It is expected that Suppliers to Challenge prepare a Business Continuity Plan for the all
Products/Services on contract (Business Continuity Planning checklists and templates
can be found at the AIAG or SAE websites). This plan ensures that suppliers are
prepared for natural disasters and man-caused events that can disrupt business
practices. A contact list with alternate and “all- hour” contacts is required. The plan and
lists (including updates) must be provided to Challenge Corporate Purchasing and the
appropriate Contact Lists to Challenge user plants.
9. Records and Sample Retention
Records or Sample Retention must comply with the appropriate statutory, regulatory,
industry and/ or Customer standard.
D. Verification of Purchased Product
Challenge representative and/or our customer’s representative shall be afforded the right to verify
at the supplier’s premises that the product/services conform to specified requirements.
Such verification shall not be used by the supplier as evidence of effective control of quality by
the supplier. Verification by Challenge or our customer shall not absolve the supplier the
responsibility to provide acceptable product, nor shall it preclude subsequent rejection by the
customer.

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E. References
NOTE: All applicable publications are assumed to be current to the most recent “practical” edition.

ISO 9001:2015 International Organization for Standardization


TS 16949:2009 Technical Specification International Automotive Task Force
IATF 16949:2016 Automotive Quality Management System Standard
AIAG Production Part Approval Process (PPAP)
AIAG Advanced Product Quality Planning and Control Plan (APQP)
AIAG Potential Failure Mode and Effects Analysis (FMEA)
AIAG Statistical Process Control (SPC)
AIAG Measurement Systems Analysis (MSA)
AIAG CQI-19 Sub-tier Supplier Management Process
AIAG CQI-20 Effective Problem Solving Practitioner Guide
AIAG M-12 Business Continuity Planning for the Automotive Industry
AIAG M-9 Materials Operation Management Guidelines
Challenge (Q-025) Supplier Self-Assessment Form
Challenge (Q-247) Supplier PPAP & Annual Layout Requirements Workbook
PEP (Performance Escalation Process) for Suppliers (P-709)
Challenge (SC-003) Supplier Request for Engineering Approval Form
Challenge Terms and Conditions

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