Federal-Mogul Supply Chain Vision
“Be the benchmark global Supply Chain organization within our Industry as recognized by our Customers, Operations and Suppliers. We are a center-led organization which adds value through innovation, quality, delivery performance and cost reduction.” Gifts and Entertainment
Summary
Federal-Mogul recognizes there are times when suppliers or customers will offer to our employees gifts or entertainment opportunities and when our employees may want to offer the same to our suppliers or customers. Pursuant to Federal-Mogul's Integrity Program, it is Federal-Mogul's policy that all relationships with suppliers and customers be based entirely on sound business decisions and fair dealing. Business gifts and entertainment can build goodwill, but they can also make it harder for the recipient to be objective about the person providing them. In short, gifts and entertainment can create their own "conflicts of interest."
Definitions
Federal-Mogul's gifts and entertainment policy applies to all Federal-Mogul operations globally. The terms "suppliers" and "customers" are used in this policy in the broadest possible sense. A supplier is any person or organization who furnishes goods and/or services to Federal-Mogul. A customer is any person or organization who receives goods and/or services from Federal-Mogul.
Policy/Scope
Gifts and entertainment to governmental officials raise special risks -- see "Avoiding Improper Payments or Gifts to Government Officials" in Section E below.
A. Accepting/Providing Gifts or Entertainment from/to Suppliers and Customers
As a general guideline, you should not accept/provide anything that:
-- Compromises or appears to compromise the integrity of the business
relationship;
-- Places you or others in an unsafe environment (e.g., gifts of alcohol, wine, beer
or alcohol-related activities); or
-- Potentially embarrasses or damages your reputation or the reputation of
Federal-Mogul (e.g., adult entertainment or establishments, including brothels,
erotic dancing establishments or sex clubs).
Accepting or providing gifts or entertainment from or to suppliers, customers or potential suppliers or customers should be infrequent, freely offered, consistent with the customer or supplier's policy and/or practice, be reasonable and customary in scope, legal, and have a business-related purpose that advances Federal-Mogul's interests. Infrequent is defined as uncommon or occurring at widely separate intervals. Employees around the world are to apply this understanding prior to accepting or providing gifts or entertainment.
B. Accepting/Providing Gifts from/to Suppliers and Customers
Gifts must not be lavish and should be nominal in value. For purposes of this policy, nominal means US$50.00 or less (unless a different value has been determined for a country by the Federal-Mogul Human Resources Department based on local law, custom and practice). Cash gifts or equivalents, whether in the form of gift certificates, gift cards, prepaid debit cards or consumption cards, shall not be accepted or provided under any circumstances. All gifts provided must be disclosed on an expense report. Depending on the country in which we are doing business, appropriate gifts may vary. Certain exceptions to these guidelines, including offering gifts in excess of US$50.00 (or such other value determined for a country by the Federal-Mogul Human Resources Department based on local law, custom and practice), may be made in countries where differing practices are customary, with the prior approval of the relevant Business Unit Senior Vice President or a member of the Federal-Mogul Strategy Board, in consultation with the senior member of the Federal-Mogul Legal Staff in your region.
If any employee receives any gift in excess of US$50.00 (or such other value determined for a country by the Federal-Mogul Human Resources Department based on local law, custom and practice) and such gift cannot be rejected because it may potentially damage Federal-Mogul's business relations with the customer or supplier or under local customs and practices it is unacceptable to reject such gift in such circumstances, then such gift shall: (a) be accepted by an employee on behalf of Federal-Mogul; (b) immediately be turned over to the Human Resources Director in the country; and (c) be publicly displayed in the lobby or other public area of a Federal-Mogul office designated by such Human Resources Director.
Examples of generally acceptable gifts, assuming they do not exceed the generally acceptable maximum, include:
-- Fruit baskets and other foods
-- Flowers
-- Standard sales promotion, advertising or publicity items
C. Accepting/Providing Entertainment from/to Suppliers and Customers
Business-related entertainment or social contact may be appropriate when properly conducted on a non-lavish, limited basis and must not involve adult entertainment (e.g., brothels, erotic dancing establishments or sex clubs), regardless of whether or not it is an acceptable practice in a particular part of the world. Employees should make every effort to ensure the nature of entertainment would withstand public scrutiny. Business-related entertainment and social contact must never give the appearance of impropriety.
Examples of permissible entertainment include:
-- Refreshments before, during or after a business meeting
-- Meals before, during or after business meetings or when otherwise
business-related
-- Infrequent business-related invitations to engage in activities such as golfing,
hunting, fishing, sporting, theater or other cultural events or a dinner invitation
when accompanied by a representative of the supplier or customer.
If an overnight stay is involved, the employee should give consideration to the nature of the business purpose in relation to the entertainment provided. In any case, the employee must advise his or her supervisor that an overnight stay is involved and obtain approval prior to accepting.
D. Soliciting Gifts, Cash, Cash Equivalents or Entertainment
Employees shall not solicit gifts, cash, cash equivalents or entertainment from anyone. Soliciting gifts, cash, cash equivalents or entertainment, either directly or indirectly for yourself or family members is strictly prohibited (and, in some countries, may be a criminal offense). The size of the gift, cash, cash equivalent or entertainment is immaterial.
E. Avoiding Improper Payments or Gifts to Government Officials
We believe in promoting good governance and the fair and impartial administration of laws. Under applicable laws, bribery, improper payments or gifts to government officials, political party officials, or employees of state-owned or controlled entities (collectively, "Government Officials") by any Federal-Mogul employee or agent are illegal. Under these laws, Federal-Mogul is accountable for the actions of its employees, including employees of all its subsidiaries, controlled joint ventures and agents throughout the world.
It is, therefore, strictly prohibited for any Federal-Mogul employee to give, offer or promise to give a Government Official anything of value (including cash or cash equivalents, whether in the form of gift certificates, gift cards, prepaid debit cards or consumption cards ), directly or indirectly, to influence his or her judgment in the performance of official duties, in order to obtain or retain business or to secure any improper advantage.
Additionally, Federal-Mogul's policy on interacting with Government Officials recognizes and reflects local law, custom and practice in the countries in which we operate. Make sure you know and follow such law, custom and practice when interacting with Government Officials.
There are circumstances where facilitating payments may be appropriate or nominal gifts or entertainment may be customary, but those situations must be discussed with and approved by the Federal-Mogul Legal Staff, the relevant Business Unit Senior Vice President and the senior officer responsible for Federal-Mogul operations in your region prior to any action being taken. All such facilitating payments or nominal gifts or entertainment must be appropriately disclosed on an expense report and properly reported in our accounting records. Any questions regarding the appropriateness of a facilitating payment or gift should be addressed with the senior officer responsible for Federal-Mogul operations in your region and the senior member of the Federal-Mogul Legal Staff in your region.
A reminder to all Federal-Mogul employees: "Everybody does it," or "It's the only way we can compete," are not reasons for making payments to Government Officials in any country to influence their judgment regarding doing business with Federal-Mogul. Back to Top
Introduction
Realizing that communication and cooperation are key elements in maintaining high-quality standards, this manual has been developed as a guide for aiding suppliers to understand Federal-Mogul requirements. The Supplier Requirements Manual outlines the minimum practices that you must be effectively implementing at your facility. By outlining common global policies, Federal-Mogul hopes to simplify procedures for suppliers. Back to Top The Supplier Requirements Manual applies to all suppliers, distribution centers, internal and external suppliers of production materials, production or service parts, and manufacturers of machinery or any component thereof. Machinery consists of tooling and equipment to perform such processes as assembly, plating, machining, casting, stamping, measuring, molding, forming, packaging, gauging, welding, painting/coating or other related manufacturing technologies. Increasing quality and delivery expectations, cost reduction pressures from automakers and globalization of markets are putting tremendous pressures on our business to identify new ways to deliver high quality products and systems and to continually improve on our processes. It is Federal-Mogul’s mission to globally supply our customers with zero defects and the lowest total cost. The goal is simple — be the benchmark supplier in every market in which we participate. This goal can only be achieved with the support and commitment of you, our supplier. Clear and concise expectations and requirements should make the supplier-customer relationship more productive.
Back to Top
Quality Systems Federal-Mogul Quality Policy
It is Federal-Mogul Corporation ’s objective to be recognized as a world-class supplier of automotive components, modules and systems serving the world’s original equipment manufacturers and the aftermarket. To achieve this we are committed to: - Customer satisfaction — Providing our customers with products and services that meet or exceed their requirements.
- Continual Improvement — Measurable improvement of the effectiveness of our quality management system.
- Employees — Providing training to employees to promote continual improvement. Empowering our employees to use their skills and talents to achieve the quality policy and business plan objectives.
- Management System — Maintaining a management system compliant to ISO/TS 16949:2002, ISO 9001:2000 and ISO 14001:1996. Reviewing our management system on a continual basis for robustness. Setting and reviewing quality objectives to meet our business goals.
- Environment — Maintaining operations that protect the environment and natural resources of our communities, our states and our nations.
- Safety — Providing a safe work environment for our employees and visitors.
As a global manufacturer of automotive components and sub-systems to original equipment manufacturers and the aftermarket, Federal-Mogul must meet the requirements set forth by the ISO/TS 16949:2002 Quality System. This system is based on the process approach of ISO 9001:2000. We will meet these requirements by January 1, 2005. The first step toward this goal is ensuring that all Federal-Mogul suppliers are registered to a minimum of ISO 9001:2000 by December 31, 2005. Certification to ISO 9001:2000 and compliance to the Supplier Requirements Manual is mandatory. Potential new suppliers are required to complete a Federal-Mogul Supplier Profile and provide a copy of their quality and/or environmental management certificates such as ISO 9001:2000, ISO/TS 16949 or ISO 14001 to Corporate Supplier Quality. In addition, new suppliers to Federal-Mogul will be required to undergo an Initial Supplier Qualification Assessment. The goal is to better understand the capabilities and systems of each supplier. This information will assist Federal-Mogul in determining each supplier’s ability to provide quality products and services necessary to remain an industry leader. Suppliers are fully responsible for the quality of their products and for assuring their products and/or materials function properly as part of a system or assembly. Federal-Mogul reserves the right to have products tested by an accredited third party laboratory at any time. All materials used in part manufacture shall satisfy current governmental and Federal-Mogul constraints on restricted, toxic and hazardous materials (including the Federal-Mogul Restricted Substances Standard); along with environmental, electrical and electromagnetic considerations applicable to the country of manufacture and/or sale. Supplier shall have a process to assure that constraints on restricted, toxic and hazardous substances are complied with relative to purchased products and the manufacturing process.
Suppliers are required to include a copy of the Material Safety Data Sheet (or legal equivalent outside of the United Sates) with the shipping documents accompanying with their initial shipment and with the first shipment after any of the said documents are updated. These documents must be provided in the predominant language(s) spoken in the countries where storage and transportation occurs. Statistical Process Control (SPC) must be an integral part of the supplier’s process to provide the necessary information for continual improvement in quality, productivity and cost reduction through variation reduction.
Back to Top |
- To recognize exceptional supplier performance
- To promote & encourage improved communication on performance issues
- To provide objective data for use in supplier management & sourcing decisions
- To identify continuous improvement opportunities
Supplier quality and delivery performances are monitored regularly by Federal-Mogul manufacturing facilities. Corporate Supplier Quality summarizes the data provided by the manufacturing facilities and issues the Global Supplier Score Card monthly, both internally and externally. Supplier ratings are assigned based on the Global Supplier Score Card Overall Rating. Annual supplier awards are issued to suppliers achieving prescribed targets, and corrective action is requested when unacceptable performance exists. Persistent poor performance or recurrence of the same issues may be cause for supplier development activities or for Purchasing to resource a product.
Back to Top
Program Planning (APQP)
Process parameters and product characteristics shall be managed to ensure that the initial process capability is Ppk > 1.67 and then ongoing process control shall be maintained. Ongoing process control is demonstrated by the application of control charts or other statistical methods that demonstrate the process has not changed. Δ Control Characteristic: A Control Characteristic is a product characteristic that may affect the form, fit and/or function of the product and that requires managing its variation within the specified tolerances.
§ Safety/Regulatory Characteristic: A Safety/Regulatory Characteristic is a product characteristic that the customer or Federal-Mogul Corporation has determined is impacted by that safety, environmental or other regulatory compliance requirements. These symbols shall be used on all appropriate documentation, unless a customer requires the use of specific customer symbols. Federal-Mogul drawings issued prior to 6/27/2000, which use other symbols, are acceptable for continued use. However, future drawings shall use the symbols above.
Every supplier of production material is required to complete a Level 3 Production Part Approval Process (PPAP) submission for each part or material prior to initial shipment, unless instructed otherwise by Federal-Mogul. If requested, suppliers will provide a layout drawing/sales print for receiving inspection purposes.
Back to Top
Change Notification
All proposed design changes or modifications, whether permanent or temporary and including proprietary designs, must be reviewed and authorized in writing by the Federal-Mogul Plant Quality Manager or his designee. The supplier or sub-suppliers shall not make any changes in part design, material, or manufacturing process without prior written Federal-Mogul authorization. A new PPAP submission may be required. In circumstances where a supplier wishes to change manufacturing location(s), the supplier or sub-supplier must also obtain prior written authorization from Federal-Mogul, and the new manufacturing location shall be qualified (an Initial Assessment will be conducted) and material/part validation and a new PPAP submission shall be required. Under no circumstances can verbal requests be accommodated!
Requests for change shall contain the following minimum information:
Permanent Change: Must include detailed information of the required change, its proposed timing and the reason for change, e.g. Continuous Improvement.
Temporary Change: Where component or material deviates from the F-M specification, but is considered on a temporary basis “fit for purpose” both functionally and/or cosmetically. Such temporary written Change Requests as a minimum shall include: |
Corrective Action
Response to nonconforming product requires corrective and preventive action. All root cause analysis activities shall be conducted using the Federal-Mogul Techniques in Problem Solving (FM-TIPS) Corrective Action methodology as outlined in the Supplier Corrective Action Request (SCAR) database. The process will flow as follows: FM-TIPS
1. Use Team Approach: Establish a small group of people, with the process/product knowledge, allocated time, authority and skill in the required technical disciplines to solve the problem and implement corrective actions. The group must have a designated champion.
2. Describe the Problem: Specify the internal/external customer problem by identifying in quantifiable terms who, what, when, where, why, how and how many (5W2H) of the problem.
3. Implement and Validate Interim Containment Actions: Define and implement containment actions to isolate the problem from any internal/external customer until permanent corrective action is available. Verify the effectiveness of the action.
4. Define Root Cause(s): Identify ALL potential causes. The FM-TIPS process requires the team to identify ALL the potential root causes BEFORE selecting and acting on the real root causes.
5. Choose Real Root Cause and Permanent Corrective Action(s): Review ALL root causes identified and either ACCEPT or REJECT each, maintain documentation on decisions. Identify permanent corrective action for EACH root cause accepted. Through pre-production test programs quantitatively confirm that the selected corrective actions will resolve the problem(s) for the customer and will not cause undesirable side effects. Define contingency actions, if necessary, based on risk assessments.
6. Implement Permanent Corrective Action(s): Implement the best permanent corrective action(s). Choose ongoing controls to ensure the root cause is eliminated. Once in production, monitor the long-term effects and implement contingency actions, if necessary.
7. System Prevention: Identify what management systems, if in place, would have prevented this problem. Modify the management systems, operating systems, practices and procedures to prevent recurrence of this and all similar problems and provide copies of updates to the customer. Apply this solution to similar processes within the organization.
8. Congratulate Your Team: Recognize the collective efforts of the team. The supplier has financial responsibility for nonconforming materials and their effects, which may include warranty issues and/or cost recoveries for sorting, re-work, scrap, premium transportation, etc. The Supplier Corrective Action Request (SCAR) application enables interactive communication and documentation of corrective actions with the supplier. The SCAR database is used as a communication tool to notify suppliers of nonconformance and track their resolution.
Back to Top
On-Site Contractor Services
All contractors working in or on Federal-Mogul premises are responsible for themselves, their employees and any sub-contractors employed by them for the following: - Complying with all legal or Federal-Mogul EHS requirements
- Complying with all health, safety, fire security and site instruction requirements
- Ensuring that all equipment brought onto the site, including any borrowed or hired, is safe and only used in accordance with legal requirements
- Indemnifying the company against any and all loss, injury, damage or claim which may arise directly or indirectly as a result of any EHS acts or omissions on the part of the contractor. The contractor must prove adequate insurance covering this liability.
- Reporting all accidents and occurrences, as required by law, to the EHS Coordinator and Site Manager employing their services and any other such accidents or occurrences that pose a hazard to Federal-Mogul employees and/or property.
- Reporting any unsafe act or conditions that may affect the ability to meet the contract.
- Wearing appropriate safety equipment on-site.
- Notifying Federal-Mogul personnel of any chemicals to be brought on-site and disposition of any waste generated.
Back to Top |
