SUPPLIER QUALITY REQUIREMENTS MANUAL

REVISION HISTORY

REVISION DATE EDITED BY APPROVED BY DESCRIPTION OF CHANGES

A 07.31.2017 MICHAEL O’DONNELL NEW RELEASE

_________________________ __________________________

ROBERT PETTIS PATRICIA MORRISDIRECTOR, STRATEGIC SOURCING DIRECTOR, QUALITY

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TABLE OF CONTENTS

Introduction Page 3ScopeTherma-Stor OverviewMission Statement Page 4Terms & DefinitionsSupplier Code of Conduct Page 51.0 Quality Systems Requirements2.0 Supplier Qualification Requirements

2.1 Supplier Assessment2.2 Supplier Selection Page 62.3 Supplier Qualification

2.3.1 Approved Suppliers2.3.1.1 Strategic2.3.1.2 Develop2.3.1.3 Maintain

2.3.2 Unapproved Suppliers2.3.2.1 Exit

2.4 Re-evaluation of Suppliers3.0 Supplier Performance Requirements

3.1 Business Continuity & Risk Management Page 93.2 Organizational Knowledge & Training3.3 Document Control & Retention3.4 Contract Review

4.0 Tooling Qualification Requirements Page 104.1 Tool Drawings4.2 Design Requirements Review4.3 Tooling Validation/Verification4.4 Asset Tagging

5.0 Product Qualification requirements Page 115.1 PPAP

5.1.1 Level 1: Part Risk Level is Low5.1.2 Level 2: Part Risk Level is Low to Medium5.1.3 Level 3: Part Risk Level is High5.1.4 Level 4: Part Risk Level is Medium5.1.5 Level 5: Part Risk Level is High (on-Site)

5.2 PPAP Status Classification Page 125.2.1 Approved5.2.2 Interim Approval5.2.3 Rejected

6.0 Production & Service Provision Requirements Page 136.1 Product Identification6.2 Product traceability

6.2.1 FIFO (First In First Out)6.3 Product Preservation

6.3.1 Shelf-Life6.3.2 Handling

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6.3.3 Packaging6.4 Preventive Maintenance Page 146.5 Final Inspection6.6 Control of Non-Conformances

6.6.1 Process Requirements6.6.2 Identification6.6.3 Exemptions6.6.4 Notification/Containment requirements Page 156.6.5 Return Goods Authorization requirements6.6.6 Cost of Non-Conformance requirements6.6.7 Business Sanctions Page 16

6.7 Sub-tier Management6.8 Change Management6.9 Key Product characteristics (KPC) Page 176.10 Pilot Build Process6.11 Control of Monitoring &Measuring Devices6.12 Records of Compliance7.0 Performance Evaluation Criteria Page 187.1 Problem Solving Process7.2 Supplier Scorecards

7.2.1 Defective Parts 7.2.1.1 Use as Is Page 197.2.1.2 Vendor Return7.2.1.3 Scrap7.2.1.4 Rework7.2.1.5 Sort

7.2.2 Supplier Development Page 208.0 Warranty Page 22

8.1 Indemnification Page 238.2 Product Defects Page 238.3 Recalls Page 238.4 Quality Requirements and Testing Page 238.5 Compliance Page 248.6 Contingency Plan Page 248.7 Initiative Page 248.8 Facility Access Page 248.9 Performance Page 248.10 Factory Audit/Testing/Inspection Responsibility Page 258.11 Supplier Responsibility Page 258.12 Responsibility of Costs Page 26

Appendix A: Root Cause Analysis Page 25Appendix B: Final Inspection Recommendations Page 26Appendix C: Supplier Scorecard Example Page 27Appendix D: Non-Conforming Material Letter Page 28Appendix E: PPAP Shipment Label Page 30Appendix F: PPAP Checklist Page 31Appendix G: Supplier Change Request Form Page 32

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Appendix H: Supplier Temporary Deviation Page 33Appendix I: Part Submission Warrant Page 34Appendix J: Supplier Quality Requirements Manual Acknowledgment Page 35

INTRODUCTIONSuppliers play an integral role in supporting Therma-Stor’s strategic business objectives. Relationships with our suppliers are built on quality beliefs and practices to accomplish the best performance, delivery, service and value to our end customers. We partner with our suppliers to provide the earliest possible engagement on the development of components and sub-assemblies. We welcome the open exchange of ideas and receiving feedback on the manufacturability of our designs through the use of Advance Quality Planning tools. As a result, we expect each supplier to strive for a target of Zero (0) defects, and 100% On-Time Delivery. If a supplier cannot meet these performance targets, development plans can be put in place to assist improvement. The supplier is encouraged to proactively take corrective actions on items determined to be systemic in nature. Formal corrective action requests may be issued based on risk of the defect escaping to our end customer or negatively impacting our production lines. If targets still cannot be attained, re-evaluation of the relationship may occur. Therma-Stor reserves the right to seek financial re-imbursement for nonconformance’s that have impacted our bottom-line or brand image through warranty claims or production disruptions when necessary.

When communicating with Therma-Stor all written documentation must be in English. If a supplier has a concern or question regarding a commercial or delivery issue, their primary contact will be a member of the Therma-Stor Sourcing or Supply Chain team. If a supplier has a concern or question regarding a quality or technical specification their primary contact will be a member of the Therma-Stor Quality team.

SCOPEThis manual defines the minimum requirements, processes, and systems for doing business with Therma-Stor LLC. The manual outlines the processes used to ensure that Therma-Stor’s production supply base is providing the best service level while continually improving to prevent quality and delivery disruptions. It is the responsibility of the Supplier’s leadership to ensure compliance to this manual throughout their facility and their entire supply chain.

THERMA-STOR COMPANY OVERVIEW

Therma-Stor LLC, located in Madison, Wisconsin, was established in 1977 to apply advanced heat transfer technologies to residential and commercial equipment. Beginning with heat recovery water heaters, Therma-Stor now also manufactures residential dehumidifiers, including the Santa Fe series free-standing dehumidifiers and the Ultra-Aire series whole house ventilating dehumidifiers.

Therma-Stor also offers HI-E Dry plug-and-play dehumidifiers; Phoenix restoration equipment for dehumidification, air scrubbing, water extraction and evaporative drying; Quest Climate Control Equipment for construction, concrete, painting applications and any indoor gardening application. Additional information about Therma-Stor can be found at:

www.ThermaStor.com

www.Questhydro.com

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MISSION STATEMENT

Therma-Stor is a team dedicated to creating and sustaining a competitive advantage via:

Leadership in technology for high efficiency heat transfer, dehumidification, and restoration products.

Passion for providing the highest value to our customers, employees, and owner. Commitment to success through honest hard work, our goals and initiatives are designed to

create an employment environment that nurtures and guides superior individual & group performance.

TERMS & DEFINITIONS

Term DefinitionAPQP Advanced Product Quality Planning is a structured method of defining and establishing the

steps necessary to assure that product meets expectations, and that the supplier’s manufacturing processes have the capability to consistently meet these requirements.

Audit Systematic, independent and documented process for obtaining and objectively evaluating evidence to determine the extent to which criteria are fulfilled

CAR Corrective Action Request: A formal request to take action to eliminate the cause(s) of an existing non-conformance or other undesirable situation in order to prevent recurrence.

Certificate of Compliance (C of C)

A quality record received from a supplier that indicates the results of specified measurement on products performed before shipment.

ERP Enterprise Requirements Planning – an electronic system to control inventory transactionsESD Electrostatic Discharge - sudden flow of electricity between two electrically charged objects

caused by contact, an electrical short, or dielectric breakdown.ESDA s20.20 ESDA is the multi-industry standard for the development of ESD control programs that

protect today’s increasingly sensitive electronic components, assemblies, and equipment.OTD On Time Delivery measures the amount of product received within the delivery window.PPAP Production Part Approval Process: Defines generic requirements for production part

approval, including production and bulk materials. The purpose of the PPAP is to determine that customer engineering design record and specification requirements are properly understood by the supplier and manufacturable in a consistent repeatable manner.

Therma-Stor supplies a PPAP manual for term clarification and process guidance. Please refer to that document for any questions on terminology or expectations.

SES Special Engineering Specifications; Therma-Stor document used to call out performance requirements of a component or material properties.

SIP Standard Inspection Plan: Plan employed by Therma-Stor to inspect components upon receipt. SIPS can be provided to the suppliers to allow performance as outgoing dock audits.

Supplier The legal entity identified as the supplier in the applicable contracting document (e.g., purchase order or supply agreement).

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SUPPLIER CODE OF CONDUCT

The following points represent the Therma-Stor expectations and requirements for all suppliers of goods and/or services in regards to conducting business in a legal and ethical manner. Any uncovered violations to these points will be grounds for business sanctions, up to and including removal from the Approved Vendors List (AVL).

Supplier shall comply with all applicable laws, rules and regulations, including but not limited to, federal, state, local and foreign laws.

Supplier shall maintain all required environmental permits and registrations and follow all required reporting protocol.

Supplier shall comply with regulated/restricted substances control and reporting (ROHS, REACH, California Prop 65, etc.). Supplier shall provide material declarations if requested.

Supplier shall make every effort to decrease use of hazardous substances, reduce waste and emissions and provide safe and healthy work environments that prevent accidents and injuries.

Supplier shall ensure that product supplied to Therma-Stor meets all electrical requirements, if applicable, to the country of manufacture and sale.

Supplier shall not use child labor or any form of forced labor. The supplier shall use Therma-Stor Confidential Information solely for the purposes of

supporting the current business relationship with Therma-Stor. The supplier shall not disclose Therma-Stor Confidential Information to any third party without

buyer’s express written consent, except that the supplier may disclose Therma-Stor Confidential Information to its contractors, sub-suppliers, consultants or agents who have a need to know and have executed confidentiality agreements with the supplier.

The supplier shall not falsify any documents related to the origin or quality of purchased products.

The supplier shall not knowingly supply or incorporate counterfeit components into Therma-Stor products.

Suppliers having design or co-design responsibility must participate in reducing the number of warranty concerns surrounding said components. The supplier must track and analyze the causes of warranty claims and share the information with Therma-Stor in order to jointly improve process, product quality and the end customer value.

1.0 QUALITY SYSTEM REQUIREMENTS

Suppliers shall maintain a Quality Management System (QMS) suitable to the products and services supplied to Therma-Stor. Compliance with or registration to an internationally recognized standard is preferred. If the supplier is claiming compliance with, rather than registration to an international standard, it is the expectation of Therma-Stor that they would have all minimum requirements of the chosen standard implemented and effectively deployed in their facilities. Therma-Stor reserves the right to verify these claims through on-site audit.

Requirements listed on our Purchase Order, Engineering Documentation and this Supplier Quality Requirements Manual are considered customer specific requirements that must be met in order to satisfy Therma-Stor’s quality expectations. The supplier has the flexibility to meet these requirements

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in any manner they choose. Therma-Stor reserves the right to determine the acceptability of the suppliers QMS through supplier self-assessments or on-site review.

2.0 SUPPLIER QUALIFICATION REQUIREMENTS

2.1. Supplier Assessment:Upon initial contact a potential production supplier will be requested to complete and return a standard work

packet that includes at minimum the following items: Non-Disclosure Agreement Supplier Profile W9 Form Acknowledgement to comply with this Supplier Quality Requirements Manual If the supplier has a third party registered QMS we request that either a copy of their valid

certificate be returned with the completed work packet or; a copy of their Quality Manual be sent for review.

Once the work packet has been returned, reviewed and it is determined that a mutual desire to explore a formal business relationship exists, Therma-Stor will initiate cross-functional visits to the vendor’s manufacturing locations and schedule tours of our production facilities. These mutual visits will solidify the relationship and set the initial expectations for the supplier partnership.

An On-site risk assessment of the supplier’s manufacturing facility may be performed by Therma-Stor in order to assess either the QMS and/or the proposed process flow for Therma-Stor products. This On-Site Risk Assessment will be used to determine if the supplier’s capabilities, strategies and objectives are in alignment with the requirements of the Therma-Stor product design and company mission. The assessment may take the form of a process audit, a systems audit or some combination thereof.

In some cases a supplier may be added based on a customer directive. In those cases the same qualification process will apply, however if an issue or concern arises during the course of the relationship, the directing customer may be asked to intercede on behalf of Therma-Stor.

2.2. Supplier Selection:Therma-Stor will select suppliers based on the following criteria once the assessment portion has completed:

Technical capability to manufacture quoted components in a sustainable fashion Commitment to Quality – Goal of achieving Zero Defects Commitment to Delivery – Goal of 100% OTD Service – Responsiveness to Therma-Stor concerns - 24 hour containment, 30 Days corrective

action implementation Customer Value Add - commitment to continual improvement through partnership with Therma-

Stor

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2.3. Supplier Qualification:Upon qualification, Therma-Stor assigns a vendor code and category to the supplier. Those categories are Approved/Unapproved and are maintained in the Therma-Stor ERP system.

2.3.1. Approved Suppliers have demonstrated compliance with all Therma-Stor requirements and expectations. Within the approved category there are 3 distinct classifications, based on performance that a supplier should be aware of:

2.3.1.1. Strategic – These are suppliers that have partnered with Therma-Stor and embraced our Mission to add value to our end customer. Suppliers in this category are often given first opportunity to engage with Therma-Stor on new product development and business expansion opportunities.

2.3.1.2. Develop – These are suppliers that meet all current requirements and have shown willingness to work with Therma-Stor to improve their performance, but may not have all requirements in place at initial business inception. Based on product risk and development status, these suppliers may have to do extra work in order to expand business with Therma-Stor. An official development plan will be initiated to be deployed by the Supplier and reviewed periodically for completion of deliverables by Therma-Stor.

2.3.1.3. Maintain – These are suppliers that meet all requirements but may not represent a best fit with the long term growth of either one or both organizations. If a supplier is in this category and would like to be promoted to Develop or Strategic they should proactively approach Therma-Stor with a future development plan.

2.3.2. Unapproved Suppliers have failed to meet Therma-Stor requirements and/or expectations, either through lack of performance, lack of quality management systems, or lack of manufacturing capabilities. These suppliers will be blocked from new business.

2.3.2.1. Exit – These are suppliers that have either been disqualified due to performance or lack of QMS, but are still in the process of transitioning product to an alternate approved supplier. They may maintain existing business, but cannot be awarded additional business of any kind.

2.4. Re-evaluation of Suppliers: Re-evaluation of suppliers is done on a periodic basis, typically every 3 years. During this process the supplier performance is formally considered, and all original requirements re-examined to see if compliance is still intact. If any issues are uncovered during the re-evaluation appropriate corrective actions will be undertaken to attempt permanent resolution.

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3.0 SUPPLIER PERFORMANCE REQUIREMENTS

The following set of general performance requirements are mandatory and apply to all Suppliers.

3.1. Business Continuity & Risk Management: Suppliers shall develop, deploy and maintain, functional Contingency Plans to address the following types of issues and risks: Event based risks such as: fires, chemical spills, natural disasters, terrorist threats, pandemics, strikes Sub-tier supplier disruptions or shortages IT security breaches Financial distress Regulatory compliance issues

3.2. Organizational Knowledge & Training: Suppliers shall assign key contacts for interacting with Therma-Stor in order to conduct business effectively. Suppliers shall be able to demonstrate that employees involved with the production of Therma-Stor parts have the necessary competence, training, education or experience to perform their role. Besides understanding their immediate job function, employees should be competent in the following quality principles: Formal problem solving techniques (8D, A3, 5-Why, Fishbone Diagrams, etc.) Basic Control charting, such as Pareto Charting Use of Control Plans and pFMEA’s (See PPAP Manual for further details)

Every organization shall have personnel with demonstrated expertise in the following functions: Supply Chain Management Resource Planning Manufacturing Engineering Product Engineering Quality Management Human Resource Planning

Suppliers shall provide Standard Operating Procedures sufficient to ensure that production is performed in a repeatable manner and not reliant on tribal knowledge. A training record must be available for all employees producing product for Therma-Stor.

3.3. Document Control & Retention: Suppliers shall maintain both quality system as well as quality performance records to ensure traceability to the manufacturing process and product outputs by lot. Records including, but not limited to, the following items will be available for review upon request and/or audit: Calibration Change Management First Article Inspections Preventive Maintenance Standard Work Inspection Purchasing Controls Corrective Action

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Product/Process Validation Material Certification

The supplier’s QMS shall ensure that: Quality records are protected from loss or loss of integrity, and are readily retrievable upon

request. Retention timing has been implemented based on agreement with Therma-Stor, not to be less

than 6 years unless otherwise documented in writing from Therma-Stor.

3.4. Contract Review:Suppliers shall have a defined process to ensure that all technical, quality and purchase order requirements can be achieved before committing to supply products or services to Therma-Stor. During the Request for Quote (RFQ) process the supplier will complete a Production Feasibility

Agreement (PFA) on all newly released or changed engineering drawings. All drawings must be under some form of revision control during this process.

If suppliers take exception to anything on the drawing and/or associated material, cosmetic or technical specifications during this process a design iteration or re-evaluation of capabilities will need to occur. If no exceptions are taken to the engineering documents, they will be considered acceptable for production and the component will move on to the PPAP stage.

It is the responsibility of the Therma-Stor Purchasing team to ensure that all current prints and specifications are sent to the supplier during the RFQ process.

Any changes to the commercial terms and conditions, forecast and delivery process should be addressed with the Therma-Stor Sourcing organization as part of the contract review process. If no concerns are raised the supplier is expected to abide by those original conditions until such time as changed by Therma-Stor.

4.0 TOOLING QUALIFICATION REQUIREMENTS

4.1 Tool Drawings: Therma-Stor may elect to contract with a product vendor or separate tooling vendor to build production intent tooling and/or fixtures. The supplier selected is governed by Therma-Stor Purchase Order and this Supplier Quality Requirements Manual. All drawings or specifications related to the tool will become the property of Therma-Stor. All drawings must be supplied in electronic format and be marked as confidential, property of Therma-Stor. Paper copies of the drawings may also be requested. All 3D models must be keyed and synched to 2D drawings to maintain traceability and prevent unintended loss of integrity of either document.

4.2 Design Requirements Review: Tooling design is an iterative process between the tooling supplier and Therma-Stor Engineering. The expectation is that the Tooling supplier is the subject matter expert on creation of tooling/fixturing and has all capabilities required to validate that the tool will produce a part that meets Therma-Stor design requirements. The supplier of the tooling shall assign a Program Manager who will be responsible to conduct periodic design requirements reviews with Therma-Stor Engineering, Sourcing, and Quality to assess the progress of the tooling and allow for enhancements or adjustments prior to finalization of the design. It is the tooling supplier’s responsibility to document these meeting and ensure all actions are closed prior to the release of the design concept to tool production. Timing of tooling release will be agreed upon by contract, if issues arise during the process which impact the end target release date, the supplier may be subject to financial penalties.

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4.3 Tooling Validation/Verification: The Tooling supplier bears the burden of validation and verification, meaning does the tooling meet the design requirements of the Therma-Stor product it will produce, and can it produce it in production quantity to the expectation set forth in the original contract. Tooling validation will be objectively demonstrated by measuring the tool out against the final tooling drawing, to ensure all dimensions, tolerances, attributes etc. conform to 3D models and 2D drawings. Tooling verification will be objectively demonstrated by First Article Inspection of initial parts produced by the tool; at minimum 1 piece per cavity or 5 pieces for single cavity tools. Parts will need to be sent to Therma-Stor for Fit, Functional and Cosmetic verification prior to release of the tooling for formal Part qualification. These parts will be specially labeled and addressed to the attention of the Quality Department. See Appendix for formal Labeling and shipping instructions.

4.4 Asset Tagging: All tooling and equipment owned by Therma-Stor shall be permanently marked “Property of Therma-Stor LLC”, including part number and asset number via permanent marker.

5.0 PRODUCT QUALIFICATION REQUIREMENTS

5.1. PPAP: Prior to shipping production components to Therma-Stor those components must first be approved via Therma-Stor’s Production Part Approval Process (PPAP) patterned after the Automotive Industry Action Group (AIAG) model. The expectations listed below must be followed in order for components to be used in production units. Components being used for Engineering Sampling or Pre-production may be exempt from these processes, but the supplier should check with their Quality Representative to be certain.

PPAP submissions will be requested after the final PFA document has been approved by both the supplier and Therma-Stor. The level of PPAP will be determined by the Therma-Stor Quality representative and is based on component risk level. An electronic PPAP kit will be sent to the supplier via e-mail detailing the elements that must be submitted, along with sample size and submission timing. All paperwork will need to be submitted electronically to the Therma-Stor quality representative requesting the documentation. Samples of parts will need to be shipped under a PPAP PO to the Quality representative in a specially labeled package (see Appendix) to avoid unintentional consumption by production. PPAP parts need to be produced on production equipment and tooling, by production personnel using released production processes at production run rates. Therma-Stor will supply a PPAP manual and training to assist suppliers new to the process if requested.

Below is an explanation of PPAP Levels based on part risk. For detailed explanations please request a copy of the PPAP manual and Forms Kit from your Quality Representative or download from www.Thermastor.com.

5.1.1.5.1 Level 1: Part Risk level is low.

Used for Catalog Parts for which the only requirement is a vendor part number. Therma-Stor does not own the Intellectual Property (IP) and requires no special handling or packaging of the item.

Used for Circuit Board Component Obsolescence when a part has been discontinued by the manufacturer and is being replaced with an engineering approved substitution.

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Used for Customer Directed purchases, where Therma-Stor has no control over the design or qualification of the component.

Used for components developed for Therma-Stor or by a Therma-Stor competitor in which Therma-Stor does not control the IP or portions of the IP are held in confidentiality and governed through a document such as a long term agreement or statement of work, where specifics of the venture are expressly governed

5.1.2. Level 2: Part Risk level is low to medium.Used for bulk material or commodity type material where no critical to quality characteristics have been identified on the Engineering drawings or specifications. Typically materials such as copper tubing, packaging, foam, adhesives, chemicals, cable, etc. fall into this category. The Therma-Stor Quality representative will determine when this level is used or when a higher level may be required.

5.1.3. Level 3: Part Risk Level High.Used for custom components for which a Therma-Stor Engineering drawing, material specification, or some combination thereof exists and contains identified critical to quality characteristics. These components represent the highest risks for production defects and potential end customer nonconformance’s. It is therefore imperative that the supplier and Therma-Stor put the highest scrutiny and effort into insuring the production process is understood, repeatable and sustainable prior to releasing components for production use.

5.1.4. Level 4: Part Risk Level is Medium.Used for custom components for which a Therma-Stor Engineering drawing, material specification, or some combination thereof exists and contains NO identified critical to quality characteristics. These components represent the second highest risk for production defects and potential end customer nonconformance’s. While MSA and Gage R&R can be eliminated initially, there is a continued need to control the production processes associated with these types of components. So sampling and reaction plans must be determined, maintained and inspected through proper use of control documentation.

5.1.5. Level 5: Part Risk Level is High done on-site.Used when a Level 3 PPAP is required, but completed at the supplier’s location due to urgency, or when the product being qualified is difficult to transport due to size or complexity. All elements listed under Level 3 are required with a Level 5 submission as well, except for Layout samples, as these will be examined at the vendor location.

Suppliers may be required to recertify their components under the following circumstances (not inclusive) as directed by the Therma-Stor quality department:

12 months of inactivity Change in product or process Non-conformances which resulted in warranty claims or excessive rework efforts at Therma-Stor Change in tooling/equipment Change in inspection techniques

5.2. PPAP Status Classifications:All PPAP’s will be dispositioned in one of 3 ways:

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5.2.1 Approved: Meets all Therma-Stor requirements, supplier is authorized to ship production quantities. A co-signed Part Submission Warrant by the Supplier and Therma-Stor is on file with both parties. The warrant signifies the part or part family and the applicable revision level. If a new revision of the component is released a new PPAP or a PPAP for the changed parameters will be required. If a PSW is based on a part family and a new part number is added to the family, a Level 1 PSW will be issued for the new part number.

5.2.2. Interim Approval: Part or part family is conditionally approved for no more than 90 days. Interim approval is issued when one or more elements of the PPAP are non-compliant and require a formal corrective action, either through an update of the Therma-Stor engineering documentation, correction of a tooling issue or stabilization of a production process. A PPAP specification deviation form, included in the standard Therma-Stor PPAP kit must accompany the submission, detailing the non-compliance and proposed corrective action. The deviation will be routed through the Standard Therma-Stor deviation process for cross-functional review and approval. If after 90 days the issues remain unresolved, the Therma-Stor quality team will determine next steps, which may include revocation of interim approval status. Supplier is authorized to ship production for limited time/quantity as specified on the Part Submission warrant.

5.2.3. Rejected: Product or documentation does not meet Therma-Stor requirements, supplier is NOT authorized to ship any product.

6.0 PRODUCTION & SERVICE PROVISION REQUIREMENTS

Suppliers shall implement production and service provision in accordance with this manual and their local Quality Management System.

6.1. Product Identification:Suppliers shall establish a documented process for part identification including revision level throughout their facility. The identification shall include that ability to differentiate product status in all areas including the following: Production Testing Rework Repair Scrap Storage Areas

6.2. Product Traceability:Suppliers shall establish a lot traceability system that tracks components through the value stream from raw material to finished goods. Traceability must include all process steps, including inspection, test, rework and sub-tier operations.Supplier shall define lot numbering during PPAP submission, providing clear definition of what constitutes a lot, how to read the lot # and where to find the lot#. At minimum lot #’s must appear under the part number and description on the packaging label and material certification documentation.

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In certain circumstances the supplier may be asked to provide or adhere a specific Therma-Stor Component Tracking System (CTS) label to their products. This requirement will be reviewed during the Production Feasibility Assessment portion of product qualification.

6.2.1. FIFO (First In First Out)Therma-Stor requires that material are shipped in order of production date from oldest to newest. Shipping material out of order may result in the lot being held or rejected.

6.3. Product Preservation:Suppliers shall take steps to adequately protect product from damage and deterioration throughout the production lifecycle including and up to delivery to Therma-Stor.

6.3.1. Shelf-Life: All material subject to expiration will be marked and tracked for manufactured date versus expiration date. No product will be shipped to Therma-Stor with less than half of the shelf life remaining.

6.3.2. Handling: For electronic components the supplier shall indicate all components susceptible to ESD or Moisture controls clearly on the label and package. Packaging material should be dissipative and/or low static generating material. The use of packaging peanuts and silicon desiccants is strictly prohibited for electronic components. See Mil-1686 of ESDA s20.20 for addition guidance.

6.3.3. Packaging: Suppliers shall provide a validated packaging plan if requested during PPAP, and ensure that all production shipments adhere to the approved plan. Responsibility for the integrity of the parts to Therma-Stor is the supplier’s responsibility and could be grounds for issuance of a corrective action if parts are repeatedly received in a damaged condition.

Suppliers must include a Packing list with each shipment containing the following information:

Purchase Order Number Part Number Revision LevelManufacturer’s Name Quantity Shipped Certificate of Compliance

Suppliers Certificate of Compliance must contain the following information:Vendor Name Date Purchase Order NumberPart Number Inspection Characteristics-

resultsSignature of relevant authority

Suppliers shall meet Therma-Stor labelling requirements:Purchase Order Number

Part Number Revision Level Quantity

Manufacture Date Lot Number Expiration Date(if required)

Therma-Stor Receiving address

6.4. Preventive Maintenance:Suppliers shall have a preventive maintenance program that is documented, implemented and monitored for timely completion of the prescribed schedule. In addition the supplier should be able to provide objective evidence for: History of Repairs

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# of Completed PM’s # of Overdue PM’s Critical Spare Parts

6.5. Final Inspection:Suppliers shall implement a final product inspection plan that includes checks typically performed upon receipt at Therma-Stor. Suppliers may inspect additional criteria but at minimum must include inspections provided by Therma-Stor via our Standard Inspection Process check sheet. Suppliers can elect to use an AQL sample size based on lot quantity as long as C=Zero. See Appendix B for further recommendations.

Therma-Stor will place suppliers on Dock-to-Stock status once a part has been PPAP approved, and the supplier has verified that they have implemented Therma-Stor SIP. If a defect is later found by Therma-Stor during our assembly process, the Dock-to-Stock status will be revoked and certified stock will be required. If Therma-Stor has to hire a third party or perform the certification of vendor stock the cost associated with this work will be the responsibility of the supplier until such time as a corrective action is permanently implemented. Once corrective action is implemented, the supplier will move to a no-fee Skip Lot inspection, and once successfully fulfilling the requirements of that inspection/quantity criteria will be returned to Dock-to-Stock.

6.6. Control of Non-Conformances:6.6.1. Process Requirements:

Suppliers shall implement a process to: Clearly identify and segregate nonconforming material to prevent unintended use or delivery. Contain material that has previously shipped to Therma-Stor Control material through removal from the ERP system, and physically from the facility Retain all required documentation related to the non-conformance Accept returned material from Therma-Stor identified as non-conforming either at

incoming, in-process or as returned from the customer.

6.6.2. Identification:Defective material may be identified at any point in the process including incoming inspection, use, assembly or packaging. Defects can also be discovered during by the end customer or through warranty claims.

Suppliers will be notified electronically through e-mail communication of a correction action request upon the detection of nonconforming material and/or service.

Nonconformances discovered at Therma-Stor may be handled in any of the following ways and at the discretion of Therma-Stor:

• Rejection of the entire lot and return to the supplier • Deviation initiated by Therma-Stor. Product cannot be shipped or consumed

prior to deviation approval.• Sorted, screened or reworked at Therma-Stor; Supplier site and/or third

party.

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6.6.3. Exemptions:Under specific circumstances, detailed below, Therma-Stor will not write nonconformances: Shipments of suspect parts shipped prior to containment being in place. We will

record these defects on the original NC rather than issuing a new NC. A vendor will not be penalized for SPC that is missing when received but present

when shipped provided that it can be sent electronically prior to the use of the parts in production.

When temporary engineering changes or deviations are in place to cover the defect.Lot(s) recalled by the supplier due to nonconformance issues prior to Therma-Stor receiving the lot(s) into inventory.

Product shipped prior to the expiration of a deviation by arrives or is consumed after the deviation has expired.

Whenever parts meet requirements set forth on the print or engineering specification, material and/or cosmetic specifications. Therma-Stor will not reject to an undocumented requirement. If an issue is unacceptable but not documented when found a Therma-Stor specification-print review should be undertaken to correct the discrepancy.

Short shipments, invoice issues, EDI/Administrative errors or any other non-quality issue.

Shipping/transportation damage where a packaging plan has not been defined and approved.

Parts are not slated for production, but are classified as engineering samples, pilot parts, or PPAP samples. Issues found in these units will be handled through engineering or quality directly.

Parts were found to be damaged through Therma-Stor handling. These parts will be scrapped against the internal department that caused the damage.

6.6.4. Notification/Containment Requirements:Suppliers are expected to notify Therma-Stor immediately via email to the purchasing and quality representatives, upon suspicion of non-conforming material, so that together we can proactively protect Therma-Stor’s end customer. The notification shall include the description of the nonconformance, the impacted part numbers and lot codes, and the initial containment actions taken or requested by the supplier. In the case of non-conforming material, containment activities are expected within 24 hours. Therma-Stor once notified may provide additional mandatory actions for the supplier to follow until permanent corrective action can be implemented, including but not limited to: Heightened inspection levels Witness marking of components and containers Third party inspection Formal Corrective Action

Suppliers may submit a written deviation request to Therma-Stor for product not conforming to design requirements for a temporary time. The deviation is not to affect form, fit, function, durability or interchangeability of the part in Therma-Stor production.

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The request must be made and approved prior to shipment of questionable material. All deviated material must be clearly identified with the Therma-Stor deviation number. If the supplier would like the change to be permanent in nature then they must follow the Supplier Change Process outline within this manual instead. The Temporary deviation form can be downloaded from www.thermastor.com.

6.6.5. Return Goods Authorization Requirements:Suppliers shall issue a Return Goods Authorization (RGA) within 10 business days of request by Therma-Stor in order to facilitate removal of material from our facility to prevent unintended incorporation into finished goods. The Supplier can authorize Therma-Stor to scrap material on-site or provide shipping instructions on return of the suspect material to their location.

Suppliers may request expedited samples of material or come on-site to inspect suspect material. Depending on the level of defect and the associated risk Therma-Stor may request the supplier to provide full corrective action, in which case having samples of the product is advised.

If RGA is not received within 30 days of request, Therma-Stor will scrap the material and debit the supplier for the quantity of parts scrapped. Lack of response will be noted in the supplier file and may impact the suppliers performance scorecard. Please see Appendix D for further information.

6.6.6. Cost of Non-Conformance Requirements:Suppliers could be responsible for the cost of nonconformances if issue is conclusively traced to their product/process including but not limited to: Mandatory inspections incurred due to issue Sorting Activities Customer management for warranty and field inspections Rework, repair or scrap of product at Therma-Stor Line disruption/speed reduction Premium freight Premium product cost paid to support production Outside processing & testing required Additional labor costs including overtime and extra manpower Process changes needed to accommodate nonconforming product Administrative fees to manage actions On-site verification/audits

6.6.7. Business Sanctions:Based on the severity of the nonconformity business sanctions may be warranted. Sanctions could include limiting business expansion up to actual removal from the approved supplier's list.

6.7. Sub-Tier Management:Suppliers shall maintain appropriate documentation of their Sub-tier suppliers/contractors including, but not limited to: Supplier qualification and performance monitoring Product qualification and performance monitoring

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Change Management process Capacity Planning and Contingency planning

Therma-Stor reserves the right to direct or approve sub-tier suppliers used by its suppliers in the production of Therma-Stor components.

Therma-Stor First Tier suppliers, whether they are manufacturers or pass-through distributors, are held responsible for cascading the requirements of this manual to their supply chain. They are also held responsible for the quality of sub-tier supplied components and will be expected to complete PPAP’s and corrective actions should these types of components or services be incorporated into the product we procure directly from them.

In the case of a Tier One distributors, Therma-Stor reserves the right to directly qualify their manufacturing supply chain and stipulate an approved supplier’s list to be used in the case where multiple sources are regularly used. It is up to the distributor to maintain lot traceability of Therma-Stor custom components.

6.8. Change Management:All supplier initiated changes to product and process must be pre-authorized in writing by Therma-Stor prior to implementation in the supplier’s facility or supply chain. Therma-Stor has an established Supplier Change Request (SCR) process that suppliers must follow when considering product or process changes as of Jan 1, 2018. The form and training can be downloaded from www.thermastor.com. A summary of when the process is to be used is listed below:

Type of Change ExamplesProduct Design A change to the engineering or associated material specification, to allow

improved manufacturability, reduced cost, or supply chain continuity.Manufacturing Process/ Inspection Sequence

A change in the manufacturing process or method that may impact the form, fit function, durability or interchangeability of the part including:

New or modified tooling, dies, mold patterns, reintroduction of inactive tools

Rearrangement, upgrade of or new tooling/equipment Change of manufacturing location Change of production methodology Change of testing methodology, frequency or sequence

Material/Material Source New source of material or change in material compositionSub-Supplier Source Change of sub-tier supplier or change of existing sub-tier supplier location or

any of the aforementioned changes in the sub-tier supply chain.Special Processes Changes to heat treat, plating, painting, welding, brazing, potting, or other

process changes that cannot be verified without destructive testing.

A SCR is a method to request approval of a change, not to implement the change. All changes will be assess for risk and if approved will require some level of PPAP to be submitted and approved to implement the change into production parts.

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Failure to contact Therma-Stor and obtain written authorization prior to implementing changes and shipment of product will result in:

Issuance of a Corrective Action Request Supplier compensating Therma-Stor for all associated collateral costs and expenses Possible business sanctions up to removal from the approved vendor list

6.9. Key Product Characteristics (KPC)Key Product Characteristics are processes that can affect form, fit, function and performance. Controlling the process is key to making sure Therma-Stor customer’s expectations are met.

KPC is a characteristic defined by Therma-Stor design engineering team. A KPC is considered important to the design and function of the part. KPCs are identified, in the drawing, by a triangle symbol with the letter “C” in the middle; it designates a critical characteristic. The presence of KPC’s on the drawing will cause a Level 3 PPAP request. Please refer to the PPAP manual for further guidance.

Example:

6.10. Pilot Build Order ProcessMaterial ordered outside of normal production assembly on unreleased drawings shall be exempt from normal quality processing controls (e.g. PPAP). For these reasons Therma-Stor engineering and Quality will control the disposition of purchased non-conforming parts. Parts ordered for engineering purposes are expected to conform to the current unreleased drawing at the time of order.

Engineering Samples are made on non-production Purchase Orders to avoid unintended consumption upon receipt. All Engineering PO’s should be addressed to the attention of the requesting Engineer. If the name of the Engineering is unknown, please address the shipment to the Therma-Stor Quality Department instead.

6.11. Control of Monitoring and Measuring DevicesSuppliers shall insure that any device or software used to make a quality disposition is properly controlled and calibrated prior to use in production. Records of calibration and validation must be made available upon request.

6.12. Records of ComplianceRecords of compliance (e.g. ETL, CSA, UL, etc.) will be documented and maintained to make sure that the supplier’s products meet part specifications, engineering design specifications and quality requirements.

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Records must provide traceability to specific product information including:1. Part number and revision level 2. Part specifications with revisions3. Manufacturing facility4. Lot number 5. Product file number6. Purchase order7. Certifying body8. Test results that indicate pass/fail criteria

7.0 PERFORMANCE EVAULATION CRITERIA

Supplier’s performance shall be monitored and measured by Therma-Stor for continual improvements.

7.1. Problem Solving ProcessThe supplier should show due diligence to reduce and eliminate nonconformance’s. When a nonconformance happens the goal is to identify the problem quickly, contain it within 24 hours, determine the root cause within 10 days, implement corrective actions within 30 day and verify effectivity of actions after a short period of time or “x” number of pieces. The goal is to eliminate recurrence by removing process and product variation. A strong problem solving methodology leads to effective root cause identification and elimination. Therma-Stor recommends the 8D problem solving method and the use of 3 legged-5-why analysis in ensuring that true root cause is acted upon. Therma-Stor does not accept a root cause of operator error; if you reach this conclusion you have not asked why the operator error occurred and have not reached true root cause. Please see Appendix A for a 5-Why template.

The supplier should: Establish the problem solving team and key contact person. Define the problem description – state the problem using the following guidance:

o Who (supplied the defect), o What (part was impacted),o Where (in the process was the defect found, where on the part was the defect

located),o Why (is it impactful to the customer),o When (did the customer receive the defect)o How (did the defect escape: may not know this until after root cause analysis is

completed)o How many (parts impacted)

Develop an interim containment plan – immediate actions to contain product typically within 24 hours

Identify root cause – ask the 5 Why’s typically within 10 business days Develop corrective actions plan to prevent recurrence – verify actions taken to eliminate

the problem Implement corrective action – A process to validate effectiveness typically within 30

business days

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Implement preventive actions – take steps to prevent similar problems from occurring again once effectiveness is verified

7.2. Supplier ScorecardsSupplier performance feedback is important for a positive supplier-customer relationship. Performance metrics aid the vendor in continuous improvement. Therma-Stor’s expectation is for all suppliers to target 50% year-over-year performance improvement in the metrics described below. When requested, suppliers are expected to provide updates on actions being taken to address non-conformances.

Suppliers are measured on an ongoing basis in five key categories. The category measurements are weighted to develop an overall score. The resulting Supplier Scorecard is communicated to the supplier periodically. Please see Appendix for example of a Scorecard.

7.2.1. Defective Parts Per Million (DPPM)DPPM is a metric that defines the Defective Parts Per Million (DPPM) shipped using the following formula.

(Total Rejected/Total Received)* 1,000,000

The definition of “rejected parts” is the total number of parts found to be unusable in Therma-Stor saleable goods.Supplier DPPM is tracked month-over-month to monitor trends and improvements.

For DPPM calculation the following rules will be applied:7.2.1.1. Use As Is: Any product that is consumed for production is not to be debited to

the vendor, nor counted against their DPPM metric. A corrective action could still be issued to ensure any contributing issues are appropriately addressed. NOTE: If parts can be used as is the CAR request may be directed to Therma-Stor engineering to update the drawing or specification. Any additional work required on the part of Therma-Stor to make the parts consumable should be recorded for potential cost recovery activities.

7.2.1.2. Vendor Return: Parts are collected and returned to the supplier under their authorization. Entire returned quantity is counted against the supplier DPPM metric.

7.2.1.3. Scrap: Must be supplier authorized (if intent is to debit them), or Plant authorized (if intent is to debit local accounts). All supplier authorized quantity is counted against the supplier DPPM metric, including items which defaulted to scrap due to lack of supplier response for return authorization.

7.2.1.4. Rework: Therma-Stor activities completed on behalf of the supplier to make parts acceptable for production use are removed from the actual rejected

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quantity. The quantity and time to rework the parts is still subject to financial recovery. Activities completed by the supplier either at their facility or Therma-Stor will reduce the rejected quantity to only those parts that could not be made useable for production.

7.2.1.5. Sort: Anything found conforming is removed and the rejected quantity is reduced to only those components found discrepant.

7.2.2. Supplier DevelopmentSuppliers who present the greatest opportunity for improvement and the greatest potential impact to the organization may be selected for development. Development can occur either because the supplier has a negative performance trend or because the supplier wants to move into a Strategic relationship with Therma-Stor. A formal development plan will be initiated and executed jointly by the supplier and Therma-Stor with periodic updates.

8.0 Warranty

The warranties contained in this section are in addition to and are not be construed as restricting or limiting any warranties or remedies of Buyer, express or implied, which are provided by the Supply Agreement or by law. Any attempt by Seller to limit, disclaim or restrict any such warranties or remedies of Buyer, in any manner whatsoever shall be null, void, and ineffective. Without limitations, the Seller unconditionally warrants to the Buyer and its customers that the products:

Seller’s warranties shall extend for a time period equal to timeframe extended by Buyer to its customers for units in which the products are used.

Inspection, test, acceptance, or use of the Products in Buyer’s Units shall not affect the Seller’s obligation under Seller’s warranties and shall survive inspection, test, acceptance, and/or use. Upon notice from Buyer that product failed within the warranty timeframe, in addition to any rights or remedies Buyer may have under the Supplier Agreement or at law, seller shall reimburse Buyer for all direct or indirect costs incurred by Buyer as a result of such failure including all repair and replacement costs and Seller replacement and Seller shall replace such defective Products at no cost to Buyer. Warranty failures shall be returned to Seller at Seller’s expense and at Buyer’s discretion. This provision shall survive termination or expiration of any Purchase Order or the Supplier Agreement.

Seller shall give (90) days prior written notice to the Buyer of any change in the manufacturing processes, locations or test methods for mutual assessment for the effect on processes or product(s).

8.1 Indemnification The Seller further warrants that the Products are manufactured, packaged, labeled, and otherwise

produced in compliance with all applicable laws and regulations in any country where the Seller manufactures, sells, resells, ships or uses the Products, “the Local Laws”, and agrees to indemnify and hold the buyer or its customers may incur from failure to comply with the Local Laws or from breach of warranty, express or implied, with respect to Products. No disclaimer or qualification of any express or implied warranty relating to the Products shall be valid or effective. All warrants survive delivery, inspection, acceptance and payment. If it appears that the Seller has breached any

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of the foregoing warranties, the Buyer may, in addition to any other remedy that it may have under applicable law, correct the defect or deficiency and bill the Seller the cost (including any applicable penalties) of such work.

8.2 Product Defects Product produced must match the approved product control sample. The Therma-Stor team will be

utilizing the control sample when reviewing product quality. Product control samples will reside at Therma-Stor U.S.A Office and factory.

Seller shall respond to product defect claims through the NCM (Non-Conforming Material) and CAR (Corrective Action Report) processes no later than 3 business days from notification.

Costs of quality are the responsibility of the Seller.

8.3 Recalls In the event of any voluntary or mandatory recall of a Product (regardless of who initiates the

recall); (i) Buyer reserves the right to use any reasonable means necessary to remove the applicable Products, and (ii) Seller shall reimburse the Buyer for all costs and expenses associated with the recall, including but not limited to attorney’s fees, Product retail price, transportation, destruction/disposal costs and allocable overhead. Seller shall provide Buyer with no less than 24 hour written notice prior to the public announcement of any recall or safety-related issues in connection with the Products. Such notification shall include (without limitation) all of Buyer’s item numbers affected by the recall, expected inventory levels affected, and a detailed description of the nature of the public announcement. Notwithstanding any limitations of liability elsewhere in this Agreement, Seller shall be liable to Buyer for any losses incurred by Buyer, regardless of type, with respect to any recalled Product, including (without limitations) lost profits in connection therewith.

8.4 Quality Requirements and Testing The seller, at its expense, is required to perform any necessary tests, of have any necessary tests

performed by outside labs or other parties, as required by Buyer’s customer during or after product assembly to demonstrate compliance to the designs and specifications as either furnished to the seller or approved by the Buyer. The Buyer requires fourteen (14) days advance notice of testing. The Buyer may waive the fourteen (14) day notice in the event the Buyer’s order does not allow sufficient time to comply with the requirement. The Seller is to provide to the Buyer written results of any required testing. The Seller is required to promptly correct any nonconformities found during testing and repeat the test. The Buyer will review all tests results within seventy-two (72) hours of receipt and provide product shipment disposition. The Buyer reserves the right to resample and retest any product accepted for shipment and give final approval. The Buyer will approve or rejects Products in its sole discretion.

Minimum AQL “Acceptance Quality Limit” Level 2

Seller agrees that all of the following scenarios shall require a (new) initial sample submission”

o If the product is being produced for the first timeo A change in (geographic) location of supplyo A change in Seller’s sub-contractor/sub-suppliero A product design modification or material change

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o A production process modificationo Implementation of additional or replacement tools/cavities/molds/forming deviceso Utilization of alternative capital equipmento A planned change in material specificationso A supply or production interruption of more than one (1) year. Does not include

perishable tools like weld tips and cutting tools which are replaced multiple times a day/shift

o Supplier agrees to provide advanced written notification of such changes to the responsible Buyer and receive back written concurrence from Buyer prior to any such changes being initiated

8.5 Compliance Seller to maintain and support their compliance program. Compliance follow-up by Therma-Stor.

Compliance support may include providing upcoming audit awareness to factory base and/or corrective action follow up in preparation for customer specific factory audit(s). The Seller agrees to comply with all documentation requirements to allow importation into the destination country of Product by Buyer or Buyer’s customer.

8.6 Contingency Plan Seller must establish and provide an executable contingency plan to ensure supply of product to

Therma-Stor. This plan should generally address natural disasters, power outages, labor, work stoppages, etc. This plan should also specifically address the facility and equipment used to produce Therma-Stor products and details regarding the alternative means to continue the supply of product to Therma-Stor.

8.7 Initiative As a Supplier partner, Therma-Stor would like to encourage proposals for improvements regarding

productivity through potential changes in the manufacturing method or flow, material or sub supplier location, or sub supplier product or part specification. These could also include proposals that may change the product function and specification. These initiatives although welcome must be agreed with Therma-Stor, prior to any change being implemented to ensure that appropriate part or product verification can be performed to reduce any potential risk to the final customer, including managing the after sales supply.

8.8 Facility Access By prior notice, suppliers shall allow Therma-Stor and Therma-Stor customers’ access to both their

facilities and their seller’s facility for the purpose of evaluating parts, processes, documents (i.e. PPAP, Control Plan, PFMEA, instructions, records…), methodologies and systems used in the manufacturing of Therma-Stor products. Therma-Stor may, at its discretion, use 3rd Party independent auditors. These individuals represent Therma-Stor and will audit the seller’s processes to establish conformance to validated quality systems.

8.9 Performance Seller’s performance will be reviewed at a minimum on annual basis on the dimensions of quality,

customer service and cost. All Sellers are expected to maintain a passing assessment score. Sellers who fail to meet the expectation set forth in this agreement will be terminated via written notice.

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8.10 Factory Audit/Testing/Inspection Responsibilities The continued growth of our mutual business is reliant on the prompt and accurate delivery of

products and services to our customer base. Many of Therma-Stor’s customers require factory audits; product testing and/or production inspection to assure suppliers and their products can demonstrate their ability to meet needs of industry and society. Therma-Stor and our supply chain must be committed to working with our customers and their assigned representatives in meeting their expectations in comprehensive, accurate and timely manner.

8.11 Supplier Responsibilities Factory Audit:

o Open, honest and timely communication with Therma-Stor, customer and/or customer assigned representative.

o Access to factory for unannounced random visits and inspectionso Complete understanding of customer specific audit requirements (this may

include unannounced audits)o Commitment to meeting the customer defined requirementso Assignment of compliance responsibility to individuals within your organization

who have the authority and ability to assure complianceo Development of internal audit processes to assure your compliance systems are

in place and functioningo Accurate and timely pre and post audit responseso Accurate, timely and sustained improvement actions resulting from audits

Product Testing:o Open, honest and timely communication with Therma-Stor, customer and/or

customer assigned representativeo Complete understanding of product requirementso Commitment to meeting the product requirementso Assignment of quality assurance responsibility to individual within your

organization who have the authority and ability to assure qualityo Thorough quality review of all products prior to submittal for testingo Development of internal audit processes to assure your quality systems are in

place and functioningo Accurate and timely sample submittalo Accurate and timely pre and post product testing responseso Accurate, timely and sustained improvement actions resulting from testing

Product Inspection:o Open, honest and timely communication with Therma-Stor, customer and/or

customer assigned representativeo Complete understanding of product requirementso Commitment to meeting the product requirementso Assignment of quality assurance responsibility to individual within your

organization who have the authority and ability to assure qualityo Development of internal audit processes to assure your quality systems are in

place and functioning

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o Accurate, timely and sustained improvement actions resulting from inspections

8.12 Responsibility of Costs Factory Audits:

o Therma-Stor agrees to pay for supplier’s first compliance audit for a customer in each category audited (i.e. social compliance, security, environmental, etc.)

o All subsequent audits are the responsibility of the supplier Product Testing:

o All costs associated with product testing are the responsibility of the supplier Product Inspection:

o All costs associated with product inspection are the responsibility of the supplier

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Appendix A: Root Cause Analysis – Blank forms can be downloaded at www.thermastor.com

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5-why template available with downloadable version.

Appendix B: Final Inspection RecommendationsThe Purpose of Parts Verification is to accomplish several goals, for example: To ensure the part quality and the process controls established during PPAP stage are sustained. To verify that suppliers are producing & supplying consistently acceptable parts and assemblies to Therma-

Stor. Reduce the risk of nonconforming parts entering Therma-Stor facility and negatively impacting quality and

customer satisfaction. Ensuring a continuous supply of defect free parts as part of manufacturing operations.

Supplier Final or In-Process InspectionBased on Therma-Stor Standard Inspection Plan (SIP), supplier should inspect parts prior to going into inventory. If a nonconformance is found, the entire lot is suspect and will need to be 100% certified prior to release to inventory.

Acceptable Quality Limit (AQL) sampling plan is used to determine the acceptance or rejection of inspection material. Material can be raw goods, purchased parts, services, etc.

AQL Sampling Steps:1. Select the appropriate lot size2. Determine the AQL number (e.g. 1.0, 1.5, 4.0)3. Randomly select the number of parts4. Inspect each part for each characteristic (per SIP) 5. Accept or Reject the remaining parts.

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Appendix C: Supplier Scorecard Example

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Appendix D: Nonconforming Material Letter (Requesting Credit and RMA)

Hello (contact name), We have identified a nonconforming part. Please reference the following information. We are requesting credit on this nonconformance. Please provide us with return instructions including (if applicable):

Therma-Stor requires an RMA to be sent within ten (10) business days of the nonconformance notification. At that time your company will have two (2) options for disposition: (1) Therma-Stor will return the part(s), using your company’s shipping instructions and carrier preference, and expect your credit to be issued within fifteen (15) business days after receiving the nonconforming product; (2) Therma-Stor will discard the nonconforming part(s) and credit your account.

If you have any specific questions or concerns regarding the rejection of your company’s parts you may contact the Therma-Stor Quality Team.

RMA Number Freight Collection Information RMA Document Shipping Address

NC ID#: Vendor Item Number: Item Number:

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Description: PO Number: Quantity: Details of Nonconformance:

Responses should replied to this email. (quality@thermastor.com)

Regards,Therma-Stor Quality Team ____________________________________________________________________________________

Nonconforming Material Letter (Requesting CAR)

Hello (contact name), We have identified a nonconforming part. Please reference the following information. Your response is required as follows:

Initial response required within 24 hours or prior to next shipment of product. Initial response must include a containment plan.

Final written response must include containment plan, root cause, corrective and preventative action, as stated on the attached CAR. If you do not have a controlled problem solving form internally please use the attached form. All updated documentation should be sent along with the TS 5D form

Therma-Stor requires an RMA to be sent within ten (10) business days of the non-conformance notification. At that time your company will have two (2) options for disposition: (1) Therma-Stor will return the part(s), using your company’s shipping instructions and carrier preference, and expect your credit to be issued within fifteen (15) business days after receiving the non-conforming product; (2) Therma-Stor will discard the non-conforming part(s) and credit your account.

If you have any specific questions or concerns regarding the rejection of your company’s parts you may contact the Therma-Stor Quality Team.

We are requesting credit for this nonconformance. Please provide the following:

RMA NumberRMA DocumentShipping AddressFreight Collect Information

NC ID#: Vendor Item Number: Item Number: Description: PO Number: Quantity: Details of Nonconformance:

Responses should replied to this email. (quality@thermastor.com)

Regards,Therma-Stor Quality Team

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Appendix E: PPAP Shipment Label

Attention Quality Department

PPAP Submission First Production Shipment

Part Number:_____________________________________________________________________

Quantity:________________________________________________________________________

Part Name:______________________________________________________________________

Ship Date:_______________________________________________________________________

Supplier:________________________________________________________________________

Deviation Number:_______________________________________________________________

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Revision Level:___________________________________________________________________

Contact Name:___________________________________________________________________

Comments:

Appendix F: PPAP Checklist

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DOCUMENTATION YES NON/A FOLLOWINGS ARE FOR LEVEL 4 YES NO

N/APASS FAIL PASS FAIL

WARRANT PROCESS FLOW DIAGRAMCorrect Part Number Therma-Stor Part No. included in Heading Correct Rev. Level of Part Number Process Follows a Logical SequenceCorrect Date of Rev. Level Include all steps in the order that is actually occurs

Identify all controls used for key characteristics

Correct Reason For Submission DESIGN FMEACorrect Submission Level Therma-Stor Part No. included in Heading

Address all Areas of Design RequirementsIdentify & establish critical/major characteristics

Submission Results Checked (Yes or No) Action Plan for Failure Mode with higher RPN

If Submission Results checked as No, explanation added PROCESS FMEASigned & Dated By Supplier Representative Therma-Stor Part No. included in Heading

DRAWING Address all areas in Process Flow DiagramAre Therma-Stor Prints submitted? Complete With All Potential FailuresCorrect Revision Level of Engineering Change Action Plan for Failure Mode with higher RPN Marked up print signed/dated by Therma-Stor Engineering PROCESS CONTROL PLAN

Therma-Stor Engineering approval for non Therma-Stor Prints Therma-Stor Part No. included in Heading All dimensions and requirements are numbered All critical/major requirements controlled

FULL INSPECTION REPORT Failure modes with higher RPN controlledTherma-Stor Part #, Rev. level are in the Heading CAPABILITY STUDIESTooling # is in the Heading Capability studies for all critical/major dimensions

Characteristics are numbered linking to the print Pre-production run size equals 5 or more

3 samples randomly chosen Sample size N=>xxx, or explained when using N<xxx All Dimensions and Requirements are Inspected Critical/majors are 100% inspected when N<20 Inspection Points Disposition (PASS/FAIL) Histogram charts submitted and analyzedAll Inspection Points Passed Process capable (Cpk>1.67 for critical & Cpk >1.33 for major)Signed & Dated By Supplier Representative Action plan for each unacceptable Cpk

MATERIAL/PERFORMANCE TESTINGTherma-Stor Part # included in Heading Material Certifications signed & dated Performance Report SubmittedTest data or certificates less than 1 year oldMaterial made to the same or equivalent standard

Meets Physical requirements COMMENTSAll Specified Materials certified

APPEARANCE INSPECTION REPORT

Dimensional, Material/performance, Appearance & Statistical studies Boxes Checked as Applicable

Appendix G: Supplier Change Request Form

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Appendix H: Supplier Temporary Deviation Form

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TYPE OF REQUEST: Prior to productionProduction completed, not delivered

DURATION:

TEMPORARY (Redlined Print)

Duration:

REQUESTOR: COMPANY: DATE:

SUBJECT PART:

QUANTITY:

PURCHASE ORDER # :

PRESENT REQUIREMENT/SITUATION:

Model AffectedREQUESTED CHANGE (Provide Redlined Drawing):

REASON FOR CHANGE AND ANTICIPATED RESULTS:

SUPPORTIVE DATA (ATTACH INSPECTION RESULTS, CORRESPONDENCE, ETC.):

STATE OF EXISTING INVENTORY:

OTHER INFORMATION:

SUPPLIER APPROVALS:QUALITY MANAGER DATE:PLANT MANAGER DATE:

SEND TO THERMA-STOR QUALITY DEPARTMENT TO COMPLETE BOTTOM SECTION

REPLY: DEVIATION #

THE SUBJECT REQUEST IS APPROVED AS WRITTEN. PENDING THE ISSUANCE OF A FORMAL SPECIFICATION REVISION, THE SUBJECT SPECIFICATION SHOULD BE REGARDED AS HAVING BEEN OFFICIALLY REVISED.

THE SUBJECT REQUEST IS APPROVED WITH THE CLARIFICATION LISTED BELOW.THE SUBJECT REQUEST IS NOT APPROVED FOR THE REASONS LISTED BELOW.

COMMENTS:

DEVIATION REQUEST APPROVALS/REJECTIONS:PRODUCTION MANAGER DAT

E:

QUALITY MANAGER DATE:

ENGINEERING DATE:

OTHER (if applicable) DATE:

Appendix I: Therma-Stor Part Submission Warrant

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Appendix J: Therma-Stor Supplier Quality Requirements Manual Signoff

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The supplier acknowledges that he/ she has read and understands the expectations written in the Therma-Stor LLC Supplier Quality Manual. The supplier’s management team will sign off below and forward a copy via e-mail to the Quality@Therma-Stor.com to keep on file for record retention.

Supplier Facility Name:

General or Plant Manager Name:

Quality Manager Name:

Date:

Supplier, please FAX, or email the signed copy back to Therma-Stor LLC.

ATTN: Supplier Quality RepresentativeTherma-Stor 4201 Lien RoadMadison, WI. 53704Email: modonnell@thermastor.comFax: (608).222.7255

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