Supplier Quality Handbook - Ericssontracy.ericsson.net/.../Ericsson_Supplier_Quality_Handbook--Rev_D.pdf · 2 | Supplier Quality Handbook Management introduction Today, Ericsson holds

Supplier Quality Handbook

Edition May 2017

2 | Supplier Quality Handbook

Management introductionToday, Ericsson holds a leading position in mobile infrastructure solutions, OSS and BSS, Services and TV and Media delivery. Globally, we manage networks that service some 1 billion subscribers, and 40 percent of mobile traffic is carried by an Ericsson Network. And as we work toward our corporate vision of the Networked Society, the range of industries we can address with new solutions and services is increasing.

This requires an agile and flexible supplier capability that can evolve to meet new challenges, whilst at the same time ensuring the highest quality and integrity of the supply chain. We expect a commitment from our suppliers to achieving a Zero defect approach.

This Supplier Quality handbook shall be treated as a reference document and guide to understand Ericsson specific requirement.

Rigorous process

adherence and control

Pro-active risk

management

Delivering fully

conforming product

On time deliveries

To fulfill this commitment we expect our supplier to have a

Supplier Quality Handbook | 3

ContentsManagement introduction 2

1 Definitions and Acronyms 4

2 Management System and Compliance Requirements 5

2.1 Management system requirement 5

2.2 Compliance requirement 5

3 Supplier Quality Assurance Plan (SQAP) 7

3.1 Purpose 8

3.2 Scope 9

3.3 Documentation requirements and record retention 10

3.4 Supplier Quality Assurance Plan (SQAP) steps 1-10 11

4 Production Requirements (Supporting Processes) 15

4.1 Product related requirement 15

4.2 Manufacturing processes 15

4.3 Sub-Supplier 15

4.4 Traceability 15

4.5 Marking 15

4.6 Packaging 16

4.7 Product change (PCN/PCR) 16

4.8 Last Time Buy 18

4.9 Exemptions 18

4.10 Return flow 18

5 Performance Measurement and Corrective Actions 19

5.1 Quality Notification 19

5.2 Controlled shipping 20

5.3 Ericsson Quality Targets 20

5.4 Supplier Performance Card (SPC) 21

5.5 Supplier audit and process assessments 23

5.6 Continuous improvement 23

6 Revision record 23


Definitions and AcronymsComponent Technology Department within Ericsson, responsible for all electronic components

Electronic Components Component related to electronics, (e.g. LLD, RF components, Dedicated IC, RCL, Memories, RF power)

Ericsson Authorized Companies All companies that purchase product based on an Ericsson agreement

PCN Product Change Notification

PCR Product Change Request

Poka-Yoke Is a Japanese term that means “mistake-proofing”

QN Quality Notification

SSM Strategic Sourcing Manager

SPC Statistical Process Control

SQE Supplier Quality Engineer


Management system and compliance requirements

Management System Requirement

All suppliers must have a quality management system compliant to ISO 9001 and environmental management system compliant to ISO14001, third party certification is viewed as favourably.

The supplier shall have a Business Continuity Management system that covers the entire business (including supply chain, services, production facilities, IS/IT, and customer products) in place and communicated to relevant stakeholders. Risk assessment and Business Impact analysis is continuously performed in a systematic way and risk are proactive mitigated. There is also a formal, clearly defined and trained Crisis Management Team in place. Plans are regularly tested and there is a continuous improvement process in place. Their sub-suppliers required to work with BCM as well. Escalation process to customers is defined.

Compliance Requirement

TradeSuppliers need to know and follow the US Export/re-export rules (EAR & ITAR) and the local Export rules to be able to deliver to Ericsson. They must also ensure that they don’t use black listed sub-contractors or personnel. Ericsson requires to get correct ECCN, CoO, HST and if applicable CCATS number or ERN number. Suppliers must be C-TPAT and/or AEO or equivalent customs program certified.

Supplier Code of ConductAll Suppliers shall be aware of, and comply with all requirements specified in Ericsson’s Code of Conduct. Supplier awareness and compliance of the requirements benefit our suppliers’ employees, the environment and society at large, and reduces Ericsson’s supplier-related business risk.

Ericsson’s Code of Conduct includes requirements related to human rights, labour standards (including freedom of association, forced labour avoidance, fair employment conditions, working hours, corporal and financial punishment, child labour avoidance, elimination of discrimination, fair working conditions, information and training, environment and anti-corruption.

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www.ericsson.com/responsible_sourcing%0D


The Code of Conduct is available in a number of languages all of which are approved as contractual appendices.

Occupational Health & SafetyAll Suppliers shall be aware of, and comply with all applicable Occupational Health & Safety (OHS) requirements specified in Ericsson’s General and Specific OHS requirements, and in all applicable requirements in the 11 Operational OHS Standards. Supplier awareness and compliance of the requirements benefit our suppliers’ employees, and reduces Ericsson’s supplier-related business risk.

Ericsson’s OHS requirements includes requirements related to OHS governance, incident reporting and investigation, safety planning, sub-contractor management, training

and competence, etc) and 11 operational standards: Chemical handling, Climbing and working at heights, Construction and civil work management, Driver and vehicle safety, Noise, Exposure to radio frequency electromagnetic fields, Fire prevention, Lone working, manual handling, personal protective equipment and Working with electricity.

Ericsson’s General and Specific OHS requirements and the 11 Operational OHS Standards are available in a number of languages all of which are approved as contractual appendices.

Banned and Restricted SubstancesWhen delivering products, the suppliers shall comply with the Ericsson’s directive regarding banned and restricted substances.


Supplier Quality Assurance Plan (SQAP)

ProcessVerificationSPVR - Capacity - Capability

Handover toMaintenance

Approved for Volume

Design ProduceAbility Review

Risk AnalysisProcess FMEA

DOE SPC &Control Plan

Securing Sub-contractors

Capability Studies

Prep forSPVR

Gauge R&R

Process SampleApproval

This describes the general purposes, requirements and expectations for the Ericsson Supplier Quality Assurance Plan (SQAP).

The SQAP should be applied by all direct Ericsson suppliers that provide custom parts and assemblies. Including Ericsson designed, supplier designed and Products designed in co-operation with Ericsson and supplier. It shall also serve as a general guideline for quality assurance requirements placed on all suppliers by Ericsson. Depending on the circumstances deviations from the general concept described in this document can be necessary - but this must always be agreed upon in advance with the responsible SQE.

(Note: standard catalog purchased components, i.e., diodes, resistors, inductors, capacitors, packaging material, 3PP, etc., do not go through the SQAP. Expectation is that product quality is assured at the same level or higher).

It is important to note that once the SQAP is approved, the supplier cannot make any modifications without approval from Ericsson.


Purpose

The purpose of the use of these SQAP tools and methods is to:

> To determine if all Ericsson design, specification and requirements are properly understood by the supplier

> Identify potential problems before they occur and take actions to make sure that these risks are reduced to a minimum

> To ensure that suppliers take a systematic approach in order to be able to secure product requirements and process capabilities during a new product introduction

> The manufacturing process has the capability to produce conforming parts in the actual production environment

> The manufacturing process has the capacity to support production quantities at a consistent quality level

PRA PRG/MC1

Pre-development

Definition Supply Preparation Maintenance

SQAP

Phase OutRE1 RE2 RE5, RE6

1


Scope

> New part or product

> Correction to discrepancy in previous submission

> Design or process change

Process

The SQAP request will normally be submitted by the Ericsson buyer to the supplier together with the request for quotation, (RFQ) included information is when the expected dates are for the process sample approval (PSA - step no. 9 in the SQAP) and the SPVR (step no. 10 in the SQAP).

When the supplier responds with a quotation, the quotation should include:

> The quotation. > The Supplier Quality Assurance Plan (SQAP) itself – With the relevant dates written for when each step (it is sufficient with week dates)

is completed (i.e. ready to send to Ericsson) – signed by the person responsible at the supplier

> The Design Produce ability Review (DPR - step one in the SQAP).

The submission of the other steps shall be co-ordinated and agreed together with the SQE, it shall be aligned with the overall time plan for the project. Any issues or delays according to the agreed plan of submission must be communicated to the SQE.

Ericsson has a release process for the supplier and product connection. These releases are labelled MC 0, 1, 2, 3, 4, 5 or 6, MC1 being the final code when SQAP is approved/released for volume production.

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S = Submit report to Ericsson and store internal R = Retain and store report internal, send to Ericsson on specific request,* = Mandatory verification at supplier site.

The different levels, as decried below, are decided by the SQE and reflect the product and process complexity together with supplier previous performance.

> Level 0 is suppliers with an excellent track record and standardized products > Level 1 is suppliers with an excellent track record of SQAP and performance. > Level 2 is suppliers with good track record of SQAP and performance > Level 3 is suppliers that are new to Ericsson and/or needs support in the SQAP activities

The SQE may ask for submission of additional information. Prior to submission, supplier shall contact the SQE to determine if additional documentation or activities are required. Proprietary documents that cannot be submitted must be available for review. Supplier may be required to travel to Ericsson sites for review of proprietary documents.

All documents must be issued in English as first language and as additional other languages can be used.

Ericsson product related documentations are key inputs to the supplier’s production. The supplier shall have a process to assure timely review, distribution and implementation of all Ericsson change of specification or requirements. The supplier shall maintain record of the date on which each change is implemented in production, independently if the change is proposed by the supplier (PCN) or Ericsson. Implementation shall include updated documents. Retention periods longer than those specified below may be specified by an organization in their procedures. The organization shall eventually dispose of records. These requirements do not supersede any regulatory requirements. All specified retention periods shall be considered “minimums”.

SQAP Requirement SQAP Submission LevelsLevel 0 Level 1 Level 2 Level 3

DPR = Design Produce ability Review R S S S *Process FMEA R R S S *SPC and Inspection and process control plan R R S S *Preparation SPVR R R R R *Quality plan sub-supplier and Outsourced process control R R S S *Gauge R & R R R S S *Capability studies R R S S *Verification Process Sample Approval R S S S *Serial Process Verification Run R S S S *

Documentation Requirements And Record Retention3


Document Type Examples Retention PeriodSQAP Documentation

Drawings, Process flows charts, Control plans, FMEA’s etc.

Duration of production Plus 1 year. Unless otherwise specified by Ericsson

Quality Records Inspection records, Functional Test result, Material certification, Other test results, etc.

3 years from date of production

Supplier Quality Assurance Plan (SQAP) Steps 1-104

In the reference guideline for SQAP a more thorough explanation and description be found, attached as appendix to this guideline.

1. Design Produce Ability Review (DPR)

The primary purpose of this step is to:

> Secure that the supplier fully understand Ericsson Product requirements, their intended use and installation conditions. > Assist Ericsson in finding a robust and

cost effective design from a manufacturing perspective. > Minimize the need of late design changes

or design changes after finalizing of the production set-up.

The supplier is expected to go through the technical documentation (e.g. drawings, specifications, standards, quality instructions etc.) and record (document) the observations with reference to the feasibility of production, inspection, testing, assembly, etc.

Queries, if any, need to be stated in the DPR submission that shall be submitted with the RFQ response and will be reviewed by Ericsson. No queries from the supplier indicate a complete understanding of Ericsson’s requirements, and the supplier is committed to delivering the Products as per the drawing, specifications, purchase agreement, etc.

Submission:DPR shall be submitted as a part of the RFQ response.

A copy of the DPR shall be included in the SQAP document plan. This to ensure that all issues addressed during DPR process are properly addressed during the SQAP review.

2. Process Failure Mode and Effect Analysis (P-FMEA)

All suppliers shall conduct a Process FMEA (P-FMEA). The purpose of the P-FMEA is to identify potential failure modes, and to mitigate the risks in the process and Product by taking preventive and corrective actions at all stages of production.

The Process FMEA should address each production process from incoming inspection to shipping and identify material handling between each process step. Please note that suppliers using sub-suppliers for both partial and complete components delivered to Ericsson should make sure that failure modes with the corresponding action plans from their sub-suppliers' processes must be identified. The easiest and best way to accomplish this is to have the same requirements on the sub-suppliers (i.e. require that they do a risk analysis assessment performed on the production processes used by them for the specific component(s), and make correlating action plans to remedy the highest risks).


Submission:Process FMEA should be submitted following the receipt of a stable Supplier or Ericsson design, but prior to the physical installation or modification of processing equipment. Once a process flow diagram can be established a process FMEA should be performed and submitted to the assigned SQE.

3. SPC and Control Plan

The control plan comprises documentation of all the quality assurance measures in the production process, and describes how to control activities. All steps of the process shall be included. In the control plan, the supplier shall state the characteristics and specifications to be controlled, the methods to be used, the method of results evaluation, as well as the frequency of the inspection activities. It shall also include a reaction plan describing actions to be taken if the characteristics or specifications are not met. The supplier needs to establish a connection (rigid link) in the design review, process flow diagram, FMEA and control plan, which will ensure the delivery of a defect free Product.

There is no specific form required, however it should contain the process flow, preferably in a graphic format. It should include each process step from incoming inspection to shipping. The plan should consist of, at a minimum, the following information:

> Process Step – incoming inspection, stamping, pad printing, etc. > Characteristic/parameter being measured:

force, dimension, adhesion, cosmetics etc. > Specifications/requirements: min/max

requirements, cosmetic inspection > Test Method (if applicable) – Ericsson

specified or internal > Measurement Device (include fixture

number if applicable) > Measurement Responsibility – operator, QC > Sample Size

> Sample Frequency > SPC Method – control chart, worksheet, etc. > Corrective actions/ reaction to out of

control/specification

Submission:Submit the plans to the designated SQE prior to the Process Sample Approval ,so that it is reviewed before the PSA is sent.

4. Preparation SPVR

Presentation of how Capacity & Capability shall be verified in a volume production context.

5. Quality Plan sub-supplier

It is the responsibility of the suppliers to require all quality assurance actions and documentation needed to secure the overall performance of the Ericsson sub-components from their sub-suppliers. This may be approached in a manner similar to the Ericsson SQAP or as a similarly structured plan. The level of detail will be dependent on the sub-supplier's products or processes, and their significance on the product supplied to Ericsson.

All the demands in the SQAP apply to the complete component/product delivered by the supplier. All parts manufactured by sub-suppliers are considered the supplier's full responsibility. For example, a Cpk demand also applies to the sub-suppliers and it is up to the supplier to prove to the Ericsson that they have this control over their suppliers' processes. If Ericsson has a problem with the component it is the supplier's responsibility to have the communication and control over the sub-supplier so that information concerning quality can be assessed very quickly (within one working day). Examples of the type of information needed can for example be Cpk analyses, SPC information, incoming goods inspection results, test methods, criteria for cosmetic parts, traceability, yields etc…


Submission:Sub-Supplier quality plans must be submitted before the Process Sample Approval (step 9 in the SQAP). Note that suppliers delivering value-added sub-assemblies to Ericsson should include failure modes from sub-suppliers in risk analysis studies.

6. Gauge R&R

Definition:Statistical studies shall be conducted to analyse the variation present in the result of each type of measuring and test equipment system. This requirement shall apply to measurement systems referenced in the control plan.

This step is the same as an analysis of the repeatability and reproducibility of test fixtures and measurement systems. A measurement system includes the measurement method itself with all equipment and all operators with their knowledge and training.

Purpose:

> To ensure that the measurement method, equipment and environment has the adequate precision and stability to meet Ericsson needs regardless of environmental and operator variation.

> To gain understanding of the magnitude of measurement error and how it contributes to process variation > To perform an on-going process control

system for the measurement equipment to control the measurement uncertainties.

Requirements: Studies are required on test equipment that measures critical parameters as well as all custom test fixtures.

Submission: Gauge R&R may be submitted with the Process Sample Approval (PSA - step 9 in the SQAP, or earlier. The reason for this is to ensure that the measurement methods given in the capability studies and the SPVR (step 8 and 10 in the SQAP) are valid.

7. Capability Studies

Definition:The initial process capability studies will provide early demonstration that the combination of people, machine, methods, material, and measurements will produce a product that will consistently meet the design requirements. Process studies should be performed on critical to quality process parameters. These parameters may have been determined using design of experiments. The process study should first demonstrate process stability using appropriate control chart methodology. Sub group size should be calculated based on desired probability of detecting a shift. Capability studies should be performed on critical to quality process parameters once these can demonstrate stability and should achieve Cpk ≥ 1.33.

Process studies should be performed on all critical to quality process parameters.

Process capability can only be determined if the process is stable.

Purpose:

> To see if the supplier's processes are able to meet the specifications (both to ensure that the supplier is on the right way and to know the quality of the components being built in prototypes etc) > To provide a baseline for continuous

improvement and to prioritise improvement efforts.

Requirements:Capability studies are required according to the critical parameters specified in the product requirements. Studies are Requested:

> when parts are supplied for Ericsson prototype runs > together with the Process Sample Approval

(PSA), the following step in the SQAP)


Submission: Capability studies should be submitted with the PSA and with all prototypes if they are available (if samples are used for prototypes).

8. Process Sample Approval (PSA)/First Article Inspection (FAI)

Definition:Process Sample Approval: The proof to the Ericsson designer that the supplier is able to produce the part according to specifications (well within tolerances and with acceptable finish). This is done by sending process samples together with measurement reports to the designer.

Process Sample: A volume of samples taken in such conditions that a proper judgement of the part's functionality and cosmetics is possible and is representative of when the production processes are running in high volumes.

Purpose:

> Verify that the supplier is able to produce parts according to Ericsson's specifications. > Accomplish process averages as close

to the nominal values as possible. The total volume motivates focusing on achieving the nominal (target) value, since there usually is a large number of tool sets for all interfacing parts.

Requirements Recommendation The Supplier shall perform his own tests beforehand to verify that the requirements are met before the final tests start.

9. Serial Process Verification Run (SPVR)

A Serial Process Verification Run (SPVR) is required for all new products and it is a part of

the SQAP process.The verification shall answer if the capabilities are in place and if the capacity requirement can be fulfilled in a volume scenario.

The SPVR requires that an adequate quantity of products be produced to allow:

> Completion of capability studies > Calculation of throughput time > Manufacturing cycle time > Secure overall process stabilization

The minimum quantity of products to be produced during the SPVR is specified by Ericsson, but can be increased by the supplier.

The number of parts produced during the SPVR should be determined by the type of equipment, tooling and production processes required by the type of part. Suppliers should ensure enough products are produced during the SPVR to ensure that the process is fully tested.

The SQAP must be approved before Serial Process Verification Run is authorized or interim SQAP approval with approved deviation.


Product Requirements

In addition to the Production requirement in this chapter shall supplier consider all products related requirements defined in product documentation or Request for Quotation’s (RFQ), to understand and secure adherence to all workmanship requirements.

Manufacturing Processes

Supplier shall have good knowledge of all process related to produce the product and apply industrial standards to achieve good workmanship.

Sub-Supplier

Supplier has full responsibility for the quality assurance and corrective actions for products delivered from a sub-supplier appointed by them. Suppliers have the responsibility to for managing the SQAP at their suppliers and maintain necessary evidence of compliance. When product is approved, changes at sub-supplier shall follow the product change process (PCN/PCR).

Traceability

To allow the identification and tracking of products out of specification, shall the supplier maintain control of lots or batches throughout

the processes; storage of raw materials, components and other materials used for production, tracking inventory in process, storage of finished goods, distribution installation and service.

The extent of definition and control shall be based on risk analysis of the products and the potential impact to customer. Suppliers are responsible to ensure the lot traceability system maintains its integrity throughout the entire supply chain, including raw material and purchased products.

For products marked in Product information System (PIS) with traceability requirement are the supplier also required to report serial number in Tracy system, to secure traceability of unique products in the full supply chain.

Responsible Strategic Sourcing Manager (SSM) and Tracy helpdesk [email protected] will support you in implementation.

Marking

What marking to use and apply on a product shall be specified in the documentation for the actual product, e.g. product specification, product structure, information structure or requirement specification, using for example decimal classes as: > 1301- (product specification) > 131 32- or 131 61- (structure specifications) > 1095- (information structure) > 1056- (requirement specification)

Production requirements (supporting processes)

1

2

5

3

4


When “Traceability req.” is set Yes in the PIS, it means Label must include Serial Number (S/N) and Serial Number information must be sent to Tracy.

The marking done by the supplier is used by Ericsson to secure the continued traceability of the product after the goods received by Ericsson or an authorized company.

Packaging

Product packaging must protect the product during transport, handling and storage. The packaging solution also acts as an information carrier and provides an interface to facilitate transport, handling and storage of the product.

The packaging material is critical for efficient handling of the product and therefore the first Production Site/NPI site to use a component makes a process sample approval (PSA). This approval also covers the packaging material. Package material shall support an efficient material handling during the whole transport chain including the place of usage.

The packaging solution also acts as an information carrier and provides an interface to facilitate transport, handling and storage of the product.

What packing requirement to be used for a specific product shall be specified by Sourcing representative or in the documentation for

the actual product, e.g. product specification, product structure, information structure or requirement specification, using for example decimal classes as:

> 1301 - (product specification) > 131 32 - or 131 61- (structure specifications) > 1095 - (information structure) > 1056 - (requirement specification)

Product Change (PCN/PCR)

Ericsson’s requirement is that a supplier cannot implement a change to a product or production process after Ericsson approval of SQAP, without prior approval or notification to Ericsson. Electronic components shall follow requirement 105 63-2031 as described later in the chapter. Suppliers are required to follow the PCN guide, but are also responsible to consider other impacts than the stated one in the PCN guide.

The supplier desiring or requiring a change shall submit a completed Product and Process Change Notification to the PCN/LTB mailbox [email protected] with a copy sent to the Supplier Quality Engineer as soon as the modification project is known, and at least 12 weeks for Electro mechanical products and 6 month for Electronics, prior to the intended Start of Production. Suppliers may be required to submit additional information to support evaluation of the proposed change.

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No Area Change Ap-proval

Notification N/A

1 All Change to significant characteristics agreed with Ericsson for the product, sub-assembly. component, process

A

2 All Electronics or and connections to other pheripherals A

3 Design All electronic components to follow "PCN process for electronics"

4 Design Change to design, tooling A

5 Design Change to product software A

6 Design Change to a dimensioning not included in the customer drawing A

7 Design Change of materials A

8 Design Change of internal specification or tolerances outside customer specification A

9 Design Change of internal specification or tolerances outside, but still within customer specification N/A

10 Design Change to identification/marking but still within customer specification N/A

11 Design Change to early manufactoring stages, pre-drilled hole etc N/A

12 Process Change in process chain, (including duplicated production lines) A

13 Process Change in checks, checking sequence or other reasons A

14 Process Change in process parameters (injection temperature, etc) affecting form, fit, function or reliability

A

15 Process Change in number of cavities in tool, progression tool, incremental tool N

16 Process Duplication of production and checking equipement within existing line N

17 Process New type of machine obtained and installed N

18 Transfer Tools moved from one line to another, lines are the same N/A

19 Transfer Movement of equipement in a production plant with no change to the process chain N/A

20 Transfer Location change: equipement, parallel production (not early manufactoring as No 12) A

21 Testing Change or Reduction of checks,that increase risk priority number in FMEA NOT APPROVED

22 Testing Change of checking method: RPN is unchanged or improved N

23 Testing Extended checks with no change to method (e.g. Larger sample size) N/A

24 Testing Reduction/elimination of check not relevant to customer (e..g random sample check) N/A

25 Supplier Change of supplier, 2nd 3rd tier supplier changes A

26 Transport New carrier or LSP N

27 Packaging Customer packaging, shipping invoicing A

28 Packaging Internal packaging (e.g. Plant to plant, within the plant...) and suppliers N/A

29 Doc Documents adjusted to status of approved/released product A

30 Doc Documents adjusted to status of approved/released product to correct formal defects N/A

31 Doc Change to documents not product-related (work instructions, etc.) N/A

32 Re-use of tools following 12 months or more out of use A

33 Maintenance/overhaul of existing tool/ tools subject to rapid wear (e.g.,turning tools) N/A

A Approval from Ericsson required

N Notification sent Ericsson

N/A Ericsson involvement not required, all SQAP document to be updated but not submitted

LSP Distribution service provider


Since Ericsson functions as a global company with manufacturing functions on most continents, suppliers must be prepared to support the impact of a change request at all Ericsson facilities. This expectation applies to all changes covered by submission and approval of a PCR. Suppliers making a process or product change must be capable and willing to provide information and resources required to secure product quality and uninterrupted deliveries.

After Ericsson receipt of a PCN or PCR that requires Ericsson approval, the request is submitted to a team for analysis. Based on the impact to Ericsson and the risk associated with the change, the PCN may have one of the following decisions:

> Authorize the supplier modification. > Ask to adapt the content of the supplier

modification. > Ask the supplier to delay the implementation

until extra actions/verifications are performed. (Actions include, but are not limited to, audits, safety stock, testing, …) > Ask the supplier to cancel the proposed

modification.

The level of SQAP documentation required to support the introduction of the change will be determined by the SQE.

Electronic componentsChanges to Electronic components handled by Component Technology shall fulfill the requirements regarding PCN described in General Quality Requirements 105 63-2031, found at Tracy website

http://tracy.ericsson.net/instructions/index.html.

The supplier shall submit a completed Product and Process Change Notification to the PCN/LTB mailbox [email protected]

Last Time Buy

Supplier shall notify Ericsson in writing if any Product is discontinued. Seller shall send the written notice as soon as possible, but no later than the agreed time before the last date on which Buyer can place an order for the Product to be discontinued. Supplier undertakes to make available any quantity of the Product that Buyer orders within agreed time period after Ericsson receives the notice. Seller shall deliver such orders within the agreed period after Buyer issues the purchase order. Notices shall be sent to the following e-mail address: [email protected]

Exemptions

In case where the supplier wishes to request a deviation to supply products that do not fully comply with Ericsson requirements, the supplier must request an approval. For supplier that has access to Product Information System (PIS), use Ester light tool to request an exemption, contact SQE if guidance is needed for selecting receiver (mailbox) of exemption request. Supplier without access to PIS may request for an exemption/waiver by contacting the SQE.

The exemption or waiver for the deviation of specification must be approved by Ericsson in writing, before deliveries are allowed.

Quality problems on components detected after delivery that may cause production or field problems must be reported to Ericsson immediately by an email sent to: [email protected] and to the responsible SQE.

Return Flow

The supplier shall have an established RMA (Return Material Authorization) process to enable prompt handling of non-conforming material returns. When agreement regarding responsibility settled shall RMA be submitted within 48 hours.

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10

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http://tracy.ericsson.net/instructions/index.html.%20


Quality Notification

The supplier shall take all necessary actions to respond to a non-conforming product that reach an Ericsson facility (customer site, production, warehouse, etc.) Every effort is taken to investigate and document non-conformances and to inform the supplier immediately.

A formal Quality Notification will be issued for all product non-conformity that is detected in an Ericsson site, by an Ericsson authorized company. In advance of a Quality Notification may Ericsson or an Ericsson authorized company inform supplier of potential quality deviation, this information shall be handled in the same way as a Quality Notification.

Suppliers are expected to respond immediately to any non-conformance and ensure that all receiving sites are protected. Suppliers are required to notify Ericsson immediately if it is suspected that non-conforming products have been shipped to a receiving site.

Suppliers shall be prepared to take any or all of the following actions after non-conforming products have been identified at Ericsson or at an Ericsson authorized company:

> Replacement > Perform required rework > Provide third party sorting

> Authorize Ericsson to initiate third party activities > Provide instructions and acceptance criteria

required to support inspection and sorting

Corrective Action Response ReportingBased on the severity of the problem Ericsson may request submission of 8D reports or more simplified RCA/CAR reports. However every time non-conformity is detected must the causes for the problem be investigated and the corrective action set and implemented.

Corrective Action Response Time It is critical that a supplier starts the problem solving process as soon problem is detected and supplier notified. When notified with a quality notification is supplier requested to react accordance with the following timeline:

> Immediately: Acknowledge of Quality Notification or quality alert > 24 hours: Begin containment activities in

the supply chain > 48 hours: Containment completed and

short term corrective action implemented > 10 working days: Root cause analysis

complete for both occurrence and non- detection, permanent corrective action defined and implemented

> 20 working days: Effectiveness of permanent corrective action checked and recurrence prevented. If resolving time last longer than 20 working days, the supplier must reach agreement with responsible SQE.

1

Performance measurement and corrective actions


Controlled Shipping

Ericsson may request controlled shipping if the agreed quality level not can be fulfilled, if Internal Controlled Shipping is not effective, the request will be to use an external independent company for inspection.

Controlled Shipping 1 is an additional 100% control (in addition to the standard end of line check) set up by SUPPLIER at his production unit, using own personnel. 100% of parts shall pass through this inspection prior to delivery to the plant. Defect results and running improvement plan shall be sent at a specified interval (usually weekly) to the plant SQE for the duration of the control shipping period.

Controlled Shipping 2 is an additional 100% control but now using an external independent company nominated by Ericsson to inspect for non-conforming parts (the contract must be established directly between independent company and the supplier). External Controlled Shipping is used if the CS 1 is unsuccessful. 100% of parts shall pass through this inspection prior to delivery to the plant. Defects results and running improvement plan shall be sent at a specified interval (usually weekly) to the plant SQE for the duration of the control shipping period. CS 1 or CS 2 can only be stopped when the quality level (based on defects in the Controlled shipping inspection activity) has returned to an acceptable level for a minimum one month or minimum 5 shipments and with the approval from the Production site quality manager at receiving site.

Ericsson Quality Targets

Target Demand

PPM As defined for the actual category group for the current year, communicated by the SQE

Quality Notification As defined for the actual category group for the current year, communicated by the SQE

Capability Cpk 1,33 for process under control (excluding Electronic components)

Product Performance requirements can be stated on product level in -1301 or -1056

the amount of components which cannot be used directly in Ericsson factories

the total amount of components sent to Ericsson factories ))

X 1 000 000PPM Level =

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The PPM level stands for parts per million and is used for calculation of the defect rate (per one million). The measurement states that a batch or a lot that cannot be used direct in production, without sorting or other activities is measured as claimed. The target level for specific components can be obtained from the SQE.

Quality Notification The Quality Notification is the formal claim for one or several products where the defect type is the same. Each released QN is related to a disturbance in our incoming inspection, production or in the field at our customer’s premises. The target number of QN will be measured on number of released QN per month and set for a category group. The target level for specific category can be obtained from the SQE.

Capability The Cpk level defines how well the product complies with the specification and its tolerances. The initial Cpk-levels should be above 1,33 at the time when starting volume production.

General requirements as the ones stated above (Cpk 1,33) are possible to state since the requirement depends on the accuracy of the specifications. The specifications should

therefore be analysed very carefully by the supplier at an early stage NOTE: Capability analyses are only valid if the processes are proven to be in statistical control. There is therefore an inherent requirement of stability for the suppliers' production processes. For process not in statistical control shall implementation of automated or electronic Poka Yoke be the preferred solution or, as acceptable alternative, 100% check and inspection control, with full traceability.

Corrective Action quality is measured as the quality and capability of the implemented solution. Have the solution mitigated the same or similar problems to occur.

Supplier Performance Card (SPC)

Supplier Performance Measurement (SPC) is a tool developed to provide a method to measure supplier performance. It consists of hard measurement (objective) and soft measurement (perceptions) rated by R&D, Supply and Sourcing, the Ericsson authorized companies also provide input in different areas.

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Supplier Performance Card (Example) Hardware

Supplier Name Measured Period

(Enter supplier name here)

Prepared by: (enter name)

Date: (enter date)

TemplDocNo/Revision EAB-14:018157 Uen, Rev B

Measurements Section Quarterly Score1.0 Product/Service Portfolio Management (33%) weight 2016Q1 2016Q2 2016Q3 2016Q4

1.1 Skills, Competences, Certifications & Experiences

1.2 Responsiveness & Project Contribution

1.3 Current status - Product/Service Portfolio, Process & Technology

1.4 Future outlook - Product/Service Roadmap Alignment & Technology

1.A Leadtimes in R&D - Samples & Documentation

1.B Product Quality in Product Development 2x

1.C Innovation & Pro-activeness in R&D

Score no value no value no value no value

2.0 Delivery (33%) weight 2016Q1 2016Q2 2016Q3 2016Q4

Vendor Managed Inventory share N/A N/A N/A N/A N/A

2.1 Quality 2x

2.2 Service & Support 2x

2.A On Time Delivery vs. Request - PO

2.B On Time Delivery vs. First Confirmed - PO

2.C On Time Delivery Service Level 2x

2.D Actual and Contracted LTWF

2.E Capacity Management


3.0 Commercial (33%) weight 2016Q1 2016Q2 2016Q3 2016Q4

3.1 Quotation Accuracy & Time Respect

3.2 Ease of Business Interaction, Professionalism & Pro-activeness 2x

3.3 Agreements in place:

3.3.1 - GPA/GOPA 2x

3.3.2 - SPA

3.3.3 - Software License Agreement

3.3.4 - Logistic Agreement

3.4 Contribution to Total Cost of Ownership / Cost Efficiency

3.A Code of Conduct

3.B Secure Supply


Overall scoring 2016Q1 2016Q2 2016Q3 2016Q4

Overall Score no value no value no value no value

Overall Rating

Red Flags

Rating LegendUnacceptable Conditional Good Excellent

Take Urgent Actions Engage in Substantial Improvements Go For Full Compliance Keep Full Compliance

0-44% 45-59% 60-79% 80-100%


Revision TableEdition Revision Description

May 2017 Changes in sub section 2.1, 2.2, 4.5 and 4.6 links to various documents withdrawn

May 2017 Changes in section 3, DOE excluded as mandatory submission

May 2017 Changes in 4.8, notice time excluded

The tool is aiming to present performance/adherence divided into 3 areas:

Product/Service Portfolio Management This module refers to competitiveness and performance of the Supplier’s current and future Product/Service/Resource Portfolio. It also refers to the Supplier’s contribution in Ericsson projects and to their level of competences and skills.

DeliveryThis module refers to the Supplier’s ability to commit and deliver on time, and with the right quality, to meet the Ericsson demands. This module also assesses the Supplier’s ability to secure purchased materials/services, to plan production capacity and allocate necessary human resources.

Commercial This module refers to the Supplier’s performance related to commercial aspects, including ease of doing business, quotation handling and agreements

The quality aspects of the performance measurement are included in the first and the second block, dived into NPI related performance and volume performance.

SPC is prepared and presented on a quarterly basis.

Supplier Audit and Process Assessments

The supplier audit and assessment is used to evaluate suppliers to ensure contract compliance and that they are capable of supplying products to Ericsson. The supplier audits focus on all the contract compliance criteria, and the supplier assessment focus on the production process and supporting process requirements. Further assessment in addition to above is performed related to follow up SQAP submission or SPVR for a specific product.

Continuous Improvement

Suppliers are expected to use lesson learned from each incident to improve production processes, product design, or supporting process. In addition to managing incidents, the supplier shall use statistical data to continually evaluate and improve the processes. This evaluation should include analyze quality incidents, Quality Notifications from Ericsson and authorized companies, and internal findings, PPM, scrap, downtime and warranty failures.

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BURA-16:007086 Uen © Ericsson AB 2017

The content of this document is subject to revision without

notice due to continued progress in methodology, design and

manufacturing. Ericsson shall have no liability for any error or

damage of any kind resulting from the use of this document.

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