SUPPLIER QUALITY STANDARD -...

Document No. ENG0000220

SUPPLIER QUALITY MANAGEMENT STANDARD

A SUPPLIER QUALITY MANAGEMENT TOOL FROM

SUPPLIER ENGINEERNG AND QUALITY

Dell Inc Dell PN ENG0000220

SUPPLIER QUALITY MANAGEMENT STANDARD Document No. ENG0000220

TABLE OF CONTENTS

1.0 REVISION HISTORY 3 2.0 FREQUENTLY USED TERMS 4 3.0 QUALITY SYSTEM REQUIREMENTS 4 4.0 CONTRACT REVIEW 6 5.0 DESIGN CONTROL 6 6.0 DOCUMENT CONTROL 7 7.0 SUPPLIER QUALITY CONTROL 8 8.0 PRODUCT IDENTIFICATION AND LOT TRACEABILITY 9 9.0 PROCESS CONTROL 9 10.0 INSPECTION AND TESTING 10 11.0 INSPECTION AND TEST STATUS 12 12.0 CONTROL OF NONCONFORMING PRODUCT 12 13.0 HANDLING, STORAGE, PACKAGING, AND DELIVERY 14 14.0 QUALITY RECORDS 14 15.0 DELIVERABLES 14 16.0 RELIABILITY 15 17.0 PROCUREMENT 17 18.0 COMPONENT ENGINEERING 19 19.0 ACRONYMS 20

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1.0 REVISION HISTORY

Revision #

Description

Approved Date

Rev A00 Initial Release Fred Bahrenburg 6/01/05 Rev A01 • Added reference to 2 new sub-tier supplier management

documents in Section 7.0 • Deleted reference to D4394 spec which is obsolete • Added reference to SVLRR metric • Changed VIFIR references to VFIR • Changed reference to ISO 9000-2000 to ISO 9001:2000 • Minor edits and corrections

Barb Conway 6/23/06

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SUPPLIER QUALITY MANAGEMENT STANDARD

Dell Suppliers shall comply with the quality program requirements set forth in this document. In the event of conflict between the requirements contained in this document and the RFQ/Contract, the RFQ/Contract shall take precedence. Any exceptions to these requirements must be approved by Dell SQE. Dell Suppliers may utilize this document to manage their suppliers. When this occurs, Suppliers will update this document. It will be customized by removing Dell and entering the Supplier’s name. Content will remain the same to ensure standard practices are maintained.

2.0 FREQUENTLY USED TERMS

2.1 SUPPLIER The supplier who provides product or subsystems directly to Dell

2.2 SUB-TIER SUPPLIER Suppliers who deliver subsystems to a Dell Supplier for further integration before delivery of product to Dell

3.0 QUALITY SYSTEM REQUIREMENTS

3.1 QUALITY PROGRAM The Supplier is required to implement and maintain a quality program that shall assure design and manufacture of products is consistent with the requirements of ISO 9001-2000. The Supplier shall assure that ISO 9001-2000 requirements are implemented during the design phase and also implemented for the manufacturing of product. The Supplier shall notify Dell of any changes in its quality program prior to implementation.

3.2 MANAGEMENT RESPONSIBILITY The Supplier’s executive management will develop a company-wide quality policy. This policy will be deployed and understood by all employees. A management review system will be implemented. The Quality policy and system will be reviewed at prescribed intervals to assess the continuing suitability and effectiveness of the quality system. This review will include the quality policy, internal audit results, product complaints and returns, process and product quality reports, and others as they apply. Executive management will appoint a management representative with the responsibility and authority to monitor compliance to the system and to ensure corrective and preventive measures are implemented.

3.3 ORGANIZATION The Supplier will have an organization that will support, implement and maintain the quality system at all levels.

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3.4 QUALITY POLICIES, PROCEDURES AND WORK INSTRUCTIONS The Supplier shall establish and maintain a documented quality program as a means of ensuring that product and/or services comply with the requirements set forth in this standard. All work affecting the quality of products and/or services shall be documented in clear and concise policies, procedures and work instructions. The Supplier shall ensure that these documents are deployed, effectively implemented and understood within the company.

3.5 QUALITY MANAGEMENT PLAN The Supplier shall submit a Quality Management Plan to Dell that describes the overall quality program used for the design, manufacture, test, and inspection of product delivered to Dell. The Plan shall at a minimum describe the following:

Identification of support team for Dell (critical contacts) Product differences from previous models/parts Quality performance goals Site matching (if multiple Supplier sites are manufacturing the same part for Dell use) Manufacturing processes Inspection and test strategies and processes Process control techniques – Statistical techniques will be used such as SPC, CP/CPK,

etc First article requirements Internal change control procedures Procedures for handling discrepant material (identification, containment, root cause,

corrective action) Failure analysis support for Dell’s line rejects (VLRR) and field returns (VFIR/FIR) Engineering change requirements Record retention Continuous Improvement Program (CIP) and/or BPI Supplier's AVL procedure for control, validation and qualification - Must include

application qualification Supplier must obtain written approval from Dell before making product changes

3.6 INTERNAL AUDIT PROGRAM The Supplier shall implement an effective internal audit program that provides for the following:

Gap Analysis (Audit) System Audits Process/Product Audits

Only qualified auditors (trained) will conduct audits and will be independent from the area being audited. The audit program shall be provided to Dell GSQE for review and approval. All audit results shall be maintained and made available to Dell GSQE upon request.

3.7 DELL AUDITS On a periodic basis, Dell may conduct audits or visit the Supplier’s manufacturing locations. The Supplier shall, at Dell’s request, permit access to manufacturing operations involved in the production and/or inspection of Dell’s products, including access to sub-contractor facilities. Periodic audits will include quality inspection data and other data related to the product being produced or process audits to verify compliance to the contractual requirements.

Under normal circumstances, the Supplier shall be given advance notice of Dell’s visits.

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3.8 TRAINING The Supplier shall establish and maintain a program for the identification of training requirements for all personnel that affect the quality of a product during production and installation. Qualification to perform assigned tasks shall be based on individual education, training and/or experience as required. The Supplier shall also assure that a system exists for the qualification, re-qualification, and disqualification of personnel. As a minimum, training for applicable personnel shall consist of quality system training, auditing techniques, Supplier Quality Engineering processes, assembly techniques, workmanship standards and inspection requirements. Supervisors in the production area shall also have a working knowledge of quality systems and statistics. Records of all training shall be maintained and made available for Dell SQE to review upon request.

4.0 CONTRACT REVIEW The Supplier shall assure that an element of the quality program provides for the effective and timely review of Dell mandated or implied requirements. The Supplier shall review each contract to ensure that:

Dell requirements are understood. Conflicts between specifications, drawings and contract requirements are resolved. Assure that any requirements differing from those in the tender are resolved. The Supplier has the capability to meet contractual requirements.

Coordination of such activity is usually performed with Dell Worldwide Procurement and in the event of further information; the Supplier shall notify the Dell Commodity Manager.

5.0 DESIGN CONTROL The Supplier shall establish and maintain documented procedures to control and verify the design of the product, and all product sub-components, in order to ensure that specified requirements are met.

5.1 DESIGN DEVELOPMENT AND PLANNING The Supplier shall plan for each design and development activity. The plan shall describe or reference these activities and define responsibility for the implementation. Qualified personnel shall perform the design and development activities. Plans shall be updated and regularly reviewed with appropriate Dell organizations as the design evolves.

5.2 DESIGN INPUT The Supplier shall implement a system and associated processes to ensure contractual and/or customer requirements are clearly identified. In addition, the Supplier shall assure that applicable statutory and regulatory requirements are also identified, documented and their selection reviewed for adequacy.

5.3 DESIGN OUTPUT The Supplier shall implement a system and processes to assure design can be assessed for the following:

Verification that design meets all design input requirements Contains or make reference to acceptance criteria as identified in specifications Identification of characteristics that is crucial to the safe and proper functioning of the

product

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All design output documents shall be reviewed prior to release by the design and quality engineering function at Dell and Supplier.

5.4 DESIGN REVIEW The Supplier shall assure that design is reviewed at appropriate levels of development. Records of these reviews shall be kept and made available for Dell to review upon request. In addition, formal design reviews are to be held with Dell at key milestones in the development process.

5.5 DESIGN VERIFICATION During the different stages of design (i.e. EVT, DVT, PMT), the Supplier shall perform verifications to ensure the design meets customer requirements as defined for the current stage of product development. Any or all design verification activities shall be recorded and functional samples made available for the Dell SQE to review upon request.

5.6 DESIGN VALIDATION The Supplier shall perform design validation testing or analysis to ensure that product conforms to defined Dell needs and/or requirements. Records of any or all validation testing shall be kept and functional samples made available for Dell to review upon request.

5.7 DESIGN CHANGES All design changes and/or modifications shall be identified, documented, researched and approved by authorized personnel at the Supplier. Final approval for these changes shall be submitted to Dell for written approval prior to implementation. The Supplier must have the capability to manage Engineering Change Order (ECO) levels on all assemblies and component parts. No verbal changes will be authorized; i.e., all changes must be documented either by an issued ECO, issued drawing or an approved deviation. Change directives for non-prototype parts are not valid unless issued from Dell Procurement. Commodity-specific requirements for change notification are listed in the Quality Agreement.

6.0 DOCUMENT CONTROL The Supplier shall assure that all documents such as software/firmware, engineering drawings, specifications, contracts, policies, procedures and work instructions (including test procedures) are under revision control and available to all necessary personnel in the manufacturing environment. A system shall be established for the effective updating/removal of any obsolete documentation from all areas.

6.1 RED LINE DRAWINGS/PROCEDURAL DOCUMENTATION In order to expedite changes prior to completing the release cycle of documentation, the Supplier may elect to use a “Red Line” process. Dell will accept Red Line documentation providing that:

Such documents have been clearly marked using red ink The Quality, Engineering, and Production managers have reviewed and approved those

changes as evidenced by original signatures on every copy Date of issue and expiration dates are clearly marked on all Red Line copies.

All Red Line documentation shall be replaced by a formal, controlled revision within 5 days.

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7.0 SUPPLIER QUALITY CONTROL In addition to the requirements of ISO 9001-2000, the Supplier shall implement a Supplier Management Plan for the control of its suppliers. As a minimum, the Plan shall provide for quality goals, the performance of site surveys/audits, quality program requirements, change/revision control requirements, tests and inspections, first article inspections and data package reviews. The requirements are summarized in sections 6.1 through 6.5 below. More detailed requirements are specified in the following document: Sub-tier Supplier Management Program Requirements, COR.30.WWP.SQ.0046_Ver_1.0 Dell has developed the following audit checklist to assess sub-tier supplier management against these requirements: STSM Audit Checklist Version A_00, COR.40.WWP.SQ.0046

7.1 DEFINED QUALITY AND TECHNICAL REQUIREMENTS The Supplier shall develop and implement a system that will provide for an effective process to define quality and technical requirements to their suppliers. Quality and technical requirements are defined as quality programs, engineering drawings, specifications and functions to be performed by sub-tier suppliers. The Supplier may elect to use a contract, purchase order or other suitable means in defining these requirements. However, Dell requires that quality and technical requirements are fully documented and that the Supplier verify understanding and implementation of such requirements.

7.2 SUB-TIER SUPPLIER APPROVALS The Supplier shall perform a quality review of its proposed suppliers prior to the placement of purchasing documents and acceptance of parts/product. The approval of suppliers shall be based on review of sub-tier suppliers’ quality programs and ability to meet Dell expectations. Records of supplier approval shall be maintained in a central location and made available for Dell to review upon request.

7.3 SUB-TIER SUPPLIER AUDITS The Supplier shall implement a system to assure sub-tier suppliers are audited periodically. The Supplier’s audit process should also provide for re-assessments when quality levels drop below established quality goals or as warranted by Dell.

In the event that a sub-tier supplier is responsible for final production and packing of the product (subcontractor shipping directly to Dell on behalf of the Supplier), the Supplier shall facilitate access to these sites so that Dell may conduct audits as per Section 3.7 of this document.

7.4 FIRST ARTICLE INSPECTIONS The Supplier shall perform First Article Inspection on units from the first production run or for design changes that affect form, fit or function. First Article Inspections shall be performed to verify built-as-designed configuration and shall include 100% dimensional verification, electrical testing, raw material certification and compliance with drawing notes. First Article data shall be maintained and submitted for the Dell SQE to review upon request.

7.5 RECORDS All records that provide evidence of Supplier activity such as Source Inspections and First Article Inspections shall be maintained in a central location and made available for the Dell SQE to review upon request.

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8.0 PRODUCT IDENTIFICATION AND LOT TRACEABILITY The Supplier shall establish and maintain procedures and processes for the identification and lot traceability of critical items during all stages of production, delivery and installation. This is to be traceable through the finished product serial number or equivalent method.

9.0 PROCESS CONTROL The Supplier shall ensure that all manufacturing processes that affect the quality of a product are carried out in a controlled condition. Dell defines controlled conditions as:

Documented work instructions that provide clear and concise direction for the assembly, inspection, tests and acceptance criteria of products

Identification of critical parameters, implementation of statistical process controls and initiation of corrective actions when necessary. Additionally, triggers shall be defined and documented for the purpose of initiating a stop build and/or stop shipment action.

Proofing out the manufacturing, inspection and test processes prior to mass production

Validation that manufacturing equipment (including fixtures) can produce a product meeting design intent and customer requirements. This should include formal gage repeatability and reproducibility (GR&R) studies where appropriate.

Detailed workmanship criterion that stipulates the highest standard of quality Preventive maintenance program for all equipment used in the manufacturing,

inspection and test of products

9.1 PROCESS QUALIFICATION All processes shall be qualified by Dell as outlined in the following paragraphs before commencement of volume production. The Supplier must obtain written approval from Dell prior to any change to a qualified manufacturing process or material.

Special test or burn-in requirements may be necessary to assure delivery of product to provide zero defects. This request may occur based on the process evaluation presented and also the prior performance of the product.

Process qualification shall include Supplier-generated process capability assessments.

Dell expects that process stability is demonstrated and maintained. In this endeavor, sound statistical methods should be utilized particularly control charts and analysis by variables. In some cases, specific control chart data or a certificate of conformance may be a required attachment to the Supplier’s shipment.

9.2 QUALITY METRICS The Supplier shall use quality metrics as a basis to monitor the quality of its products and processes. Additionally, the Supplier’s quality program shall define the metrics for a stop ship and/or stop build action. Quality metrics, as a minimum shall include:

Incoming Quality Assurance (IQA) results Manufacturing Yields Test Station Yields Inspection Yields Mean Time Between Failures (MTBF) demonstration data and/or Parametric ORT data. Out of Box Audits (OBA) Annualized Failure Rate (AFR)/Annualized Return Rate (ARR) performance Reliability test results Supplier Verified Line Reject Rate (SVLRR) Dell Verified Field Incident Rate (VFIR)

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Dell Verified Line Reject Rate (VLRR)

9.3 CONTINUOUS IMPROVEMENT PROCESS The Supplier shall develop and implement a Continuous Improvement Process (CIP) that will provide for a cost-effective reduction in process-related excursions. The program at a minimum shall include:

A documented, systematic approach for identifying CIP focus areas Design for quality initiative (i.e., HALT, FMEA, Margin Analysis, Tolerance Stack-up

Analysis) Supplier management strategy Manufacturing process controls SVLRR, VFIR and VLRR reduction plans to achieve Dell goals

The Supplier shall provide status of the implementation and results upon Dell SQE request.

9.4 CHANGES AFFECTING MATERIALS SPECIFICATIONS: When a print or specification is revised and released by the Supplier, the revised part will be inspected and tested by the Supplier as needed to assure proper form, fit, function, and reliability. Future shipments may be inspected to verify that supplier can maintain quality levels and process stability on the revised part. Dell and the supplier will work together to re-establish certification status per this procedure.

9.5 CHANGES AFFECTING MATERIALS SUPPLIED: The supplier must notify Dell via a Product Change Notice (PCN) process of any changes that could affect form, fit, function or reliability. Types of changes may include but are not limited to changes in:

Manufacturing process, formula or equipment Test Methods or procedures Manufacturing or assembly facility involving relocation, expansion, or major

rearrangement Raw material suppliers or outside labor for further processing Change in supplier company ownership

Following notification, Dell will authorize the change or determine what type of testing and/or product evaluation will be necessary to approve material, qualify future shipments for certification and verify process stability.

10.0 INSPECTION AND TESTING The Supplier shall develop and maintain processes and procedures for the effective quality assessment of product and equipment through the utilization of inspection and testing techniques. As a minimum, the Supplier shall implement the following:

Source/Receiving Inspection and Tests In-Process Inspections and Testing Final Inspection and Testing Shipping Inspection (OBA Testing/Inspection) Reliability Testing Maintain Inspection and Test Records

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Testing implemented at Supplier manufacturing sites shall assure product meets Dell’s VLRR, SVLRR and VFIR /FIR goals.

10.1 SOURCE/INCOMING INSPECTION AND TESTS The Supplier shall implement a Source/Incoming Inspection program that will provide for the verification of components and subassemblies to design drawings and specifications. Source/Incoming Inspections shall be conducted using clear and concise work instructions that define parameters to be verified, measuring tools, sample size, etc. In the event the Supplier chooses to utilize sampling inspection techniques, the Supplier shall document the sample plan and process to be used for normal, tightened, reduced, and/or skip lot inspections. Additionally, the Supplier shall inform Dell of any sampling plan changes with supporting data. This is considered an informal notification; formal approval from Dell is not required if these changes are part of the documented sample plan. The Supplier shall maintain records of all inspections to be made available for the Dell to review upon request.

10.2 IN-PROCESS INSPECTION AND TESTING The Supplier shall inspect and test product as defined in the quality plan and procedures. As a minimum, the Supplier shall assure that products are manufactured in accordance with approved processes, work and disposition instructions. Workmanship and functionality of products shall be the main focus of such inspections and tests. The Supplier may elect to perform in-process inspections utilizing process-auditing techniques or sample inspections as provided for in documented procedures. Products shall not be released for shipment until all necessary in-process inspections and tests are performed. In the event of a nonconformance, product shall be identified per documented procedures and segregated.

10.3 FINAL INSPECTION AND TESTING The Supplier shall ensure that all inspections and tests are performed as described in the quality plan and documented procedures. All products shall undergo a final inspection and test prior to shipment, including Dell specific requirements if applicable. As a minimum, the final inspections and tests shall ensure workmanship, assembly verification and functionality to test requirements. Product not meeting specified requirements shall be identified and segregated per documented procedures. Products shall not be released for shipment to Dell without completion of all final inspections and tests.

10.4 SHIPPING INSPECTION (OBA TESTING/INSPECTION) Prior to shipment, the Supplier shall assure that the lot passes OBA testing and all applicable miscellaneous hardware such as cables and power cords, user material, Dell unique labeling requirements and packaging are verified.

10.5 RELIABILITY TESTING Prior to or during shipment to Dell the Supplier shall ensure that the lot passes extended reliability testing. A reliability monitor program should be implemented for every product line. The program should include pulling finished components off the manufacturing line on a periodic basis and submitting to reliability testing. The Predicted Field Failure Rate (PFFR) should be calculated based on the continuous reliability tests.

If product is shipped before completion of testing, the Supplier will ensure proper controls are in place for identification and recall of any failed lots. Any failed lots are required to be contained by Supplier until released by Dell.

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10.6 INSPECTION AND TESTING RECORDS The Supplier shall maintain records of all inspection and test activity which will provide the objective evidence that products have passed acceptance criteria. These records shall be made available for the Dell SQE to review upon request.

10.7 CALIBRATION The Supplier shall develop and maintain a system to assure all equipment used for the acceptance of product is calibrated with traceability to an internationally/nationally recognized Standards Institute such as the National Institute of Standards and Technology. Where appropriate, this should also include formal GR&R studies. These records shall be made available for the Dell SQE to review upon request.

10.8 CALIBRATION PROCEDURES Calibration procedures shall be established that define the measurements to be made, accuracy required, temperature/humidity required and test equipment to be used in performing metrology verifications.

10.9 RECALL LIST The Supplier shall maintain a listing of all equipment requiring calibration and shall identify them by assigned tracking number, location, and re-calibration frequency. As a minimum, the recall system shall provide for early notification that an instrument is due for calibration.

10.10 CALIBRATION RECORDS The Supplier shall maintain records of all calibrations performed. Calibration records shall as a minimum address the calibration procedure used, personnel performing the calibration, results, calibration status and traceability to a Primary or Secondary Standard. These records shall be made available for the Dell SQE to review upon request.

10.11 OUT OF TOLERANCE (CALIBRATION) NOTICES In the event that tools or equipment used for product manufacturing, testing or inspection are found to be out of tolerance or out of calibration, the Supplier shall implement a system that will provide for the review of all product produced and accepted by the defective instrument. The Supplier shall also implement a plan to repair/replace the equipment. The Dell SQE will be notified of the results of any such review and determination will be made at that time as to status of products built for Dell.

11.0 INSPECTION AND TEST STATUS The Supplier shall assure that a system exists that will readily discern the inspection and test status of components, subassemblies and assemblies. That is, the Supplier shall be capable of tracing the acceptance status of such items and assuring that nonconforming product is not co-mingled with acceptable product. The Supplier may use tags, electronic bar codes, routing cards or other suitable means for tracking status.

12.0 CONTROL OF NONCONFORMING PRODUCT The Supplier’s quality program shall have an effective system for controlling nonconforming product. The system shall provide for the identification, documentation, evaluation, segregation and timely disposition of nonconforming products. The Supplier’s system shall include controls for product returned from Dell.

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12.1 REVIEW AND DISPOSITION OF NONCONFORMING PRODUCTS The Supplier shall establish, document and implement a process for the effective review and disposition of nonconforming products. The Supplier’s process shall include the following dispositions:

Rework or Repair – product has been reworked or repaired to meet specified requirements

Rework or Repair – product has been reworked or repaired to be functional but does not meet specified requirements

Use as Is – no actions taken on product; product does not meet specified requirements but is functional

Scrap – product not useable and does not meet specified requirements Screen – additional product test/inspection to meet specification

The Supplier shall implement a Material Review Board (MRB) to review and disposition nonconforming product. As a minimum, the MRB shall consist of representatives from Design Engineering, Manufacturing Engineering, Procurement and Quality Engineering. When assigning the “Use as Is” disposition, the Dell SQE will be contacted for final approval. All MRB records shall be maintained by the Supplier and made available for the Dell SQE to review upon request.

12.2 CORRECTIVE ACTION PROCESS The Supplier shall develop and implement a corrective action process that utilizes structured problem solving techniques to:

Investigate the root causes of nonconforming product and identify the corrective actions needed to prevent a recurrence.

Analyze all processes, work operations, quality records, service reports and Dell complaints to detect and eliminate potential causes of nonconforming product.

Apply controls to ensure that corrective actions are taken and that they are effective. Implement and record change in procedures as a result of corrective actions taken.

Additionally, the Supplier’s corrective action process shall provide for documentation that identifies the following:

Specific defect Technical investigation/analysis Root cause Containment for defect Corrective action plan Preventive actions to preclude a recurrence Verification of effectiveness of actions

Implementation of corrective actions shall be done in less than 30 days from the issuance of a nonconformance document from Dell unless otherwise directed by Dell. The Supplier shall utilize its CIP procedures to address cases of “regular” product nonconformance issues contained within the Supplier production line.

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13.0 HANDLING, STORAGE, PACKAGING, AND DELIVERY The Supplier’s quality program shall provide for the establishment, documentation and maintenance of procedures for handling, storage, packaging and delivery of product.

13.1 HANDLING The Supplier shall provide for methods of handling product during all stages of inventory and production to prevent damage and deterioration. As a minimum, component, subassemblies and assemblies shall be protected from the environment, Electrostatic Discharge (ESD) and from damage incurred during shipment and transfer within stages of manufacture.

13.2 STORAGE The Supplier shall ensure that provisions are in place to provide for secure storage areas or stock rooms to prevent damage or deterioration of product prior to consumption and/or delivery to Dell. The Supplier shall use appropriate methods to protect product from the environment, ESD and from damage incurred during shipment and transfer within all stages of manufacturing. The Supplier shall implement a First In First Out (FIFO) system for disbursement of product from storage.

13.3 PACKAGING The Supplier shall ensure all parts/products are packed, marked and preserved as defined in specifications. Parts/products shall be packaged to prevent damage and/or deterioration while facilitating usage requirements on the Dell manufacturing lines. The Supplier shall ensure conformance to Dell packaging requirements and shall identify, preserve and segregate all products until delivered to Dell.

13.4 DELIVERY Dell requires the Supplier to be responsible for product quality until point of issue to Dell manufacturing sites.

13.5 AGED MATERIAL Dell will not accept any material from a supplier that is older than 12 months old unless they have done adequate reliability testing on the parts to ensure there are no reliability issues with the product.

14.0 QUALITY RECORDS The Supplier shall establish and maintain procedures for identification, collection, indexing, filing, storage, maintenance and disposition of quality records. Records shall be kept either the entire warranty period or the period established in the specification, whichever is longer, and made available for the Dell SQE to review upon request.

15.0 DELIVERABLES The Supplier shall provide Dell with the required documentation on request (or have it readily available for review).

15.1 QUALITY MANAGEMENT PLAN The Supplier shall jointly own with Dell Supplier Quality Engineering, the Quality Management Plan (QMP) for each Dell part number prior to RTS at Dell.

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The Supplier shall provide input to the QMP on its proposed quality plan for each part number. The Plan shall address the requirements in Section 3.5 of this document. Dell will review and provide approval authority.

15.2 SUB-TIER SUPPLIER MANAGEMENT PLANS The Supplier shall provide the Dell SQE with its Supplier Management Plans for review. These plans shall be submitted within 30 days from notification of contract award.

15.3 INTERNAL AUDIT PROGRAM PLAN The internal audit program plan shall be submitted to the Dell SQE for review. This plan may be included as a subset of the overall quality plan. Submittal of this plan is required within 30 days from notification of contract award.

16.0 RELIABILITY Dell expects the supplier to perform Reliability activities as appropriate to aid in ensuring that the reliability of the product is maintained from development throughout the manufacturing life. The supplier should evaluate, at a minimum, the following reliability tools for use on their product as appropriate. The supplier can recommend other reliability analysis and test activities to be reviewed and considered by Dell. Also note Reliability requirement in Section 10.5 of this document.

16.1 ENGINEERING VALIDATION TOOLS

HALT HALT (Highly Accelerated Life Testing) is a tool intended to aid the designer in the development of the product by experimentally testing for weaknesses. Engineering weaknesses are the targets of this process. Vibration, thermal and electrical stresses are applied to the product to accelerate the weaknesses into their failure modes. The supplier shall make recommendations regarding implementation of HALT for their product designs or subassemblies. HALT will be implemented by supplier recommendation or by direction of the DELL SEQ/Reliability Engineer. Test Plans, Test Results and other documentation (e.g. FA reports, test logs, etc.) shall be made available to Dell for review upon request.

DERATING Component derating improves a product’s inherent design reliability, increases its operating margins and ultimately reduces warranty costs. The goal is to achieve a more robust design. Through derating the design is enhanced by compensating for many variables inherent in any design. The benefits of proper component derating include lower failure rates through reduced stresses, less impact from material and manufacturing variability and proper circuit operation with part parameter changes. The supplier shall implement a program for proper derating of components used in their product(s) which shall at a minimum comply with Dell Derating guidelines. Derating review information (e.g. analysis documentation or files) shall be made available to Dell for review upon request. For more information see Dell Spec P/N 9E154.

DEMONSTRATION/LIFE TESTS The demonstration/life test is an accelerated testing designed to establish the products demonstrated estimate of a reliability metric (e.g. mean time between failure (MTBF), failure rate, etc.) and provide the opportunity to identify failure mechanisms and corrective actions during the development testing program to decrease the product’s “In Service Failure Rate”.

Why is this underlined?

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Failures are detected and analyzed in a controlled environment and the original product configuration is available for FA. The supplier shall make recommendations regarding implementation of demonstration/life testing for their product designs or subassemblies. Implementation shall result from supplier recommendation or by direction of the DELL SEQ/Reliability Engineer. Test Plans, Test Results and other documentation (e.g. FA reports, test logs, etc.) shall be made available to Dell for review upon request.

STATISTICAL TOLERANCE ANALYSIS (ENGINEERING VARIATION) Perform worst case electronics parts tolerance analysis (a Monte Carlo methodology to stochastically model all sources of variation for components in the circuit under analysis). Sources of variation include component quality, drift due to component aging, humidity, temperature and other external electrical inputs. This activity will be implemented by supplier recommendation or by direction of the DELL SEQ/Reliability Engineer. Analysis information (e.g. documentation or files) shall be made available to Dell for review upon request.

Why is this underlined?

16.2 ONGOING PRODUCTION VALIDATION TOOLS

HASS The product is assumed to be free of engineering issues and ready for production. The purpose of HASS (Highly Accelerated Stress Screen) is to detect and separate from production all products with manufacturing defects. The tools used in HALT are basically the same used in the HASS test. The production process often creates latent defects by automatic or manual assembly and temperature processes. The HASS process can accelerate the latent defects into patent defects. The patent defects are identified and fixed and the product returned to the line for re-HASS and other processing. The supplier shall make recommendations regarding implementation of HASS for their product or subassemblies. HASS will be implemented by supplier recommendation or by direction of the DELL SEQ. Test Plans, Test Results and other documentation (e.g. FA reports, test logs, etc.) shall be made available to Dell for review upon request.

ORT The Ongoing Reliability Test activity is, like the demonstration/life test, an accelerated testing program. Its goal is to monitor the product’s estimate of a reliability metric (e.g. mean time between failure (MTBF), failure rate, etc.) and ensure its objective is maintained. It also provides the opportunity to identify failure mechanisms and corrective actions during production; therefore, providing feedback to production process to decrease the products in service failure rate. It also allows for the testing/monitoring of alternate sources (e.g., random test of ASL parts). The supplier shall make recommendations regarding implementation of demonstration/life testing for their product designs or subassemblies. Implementation shall result from supplier recommendation or by direction of the DELL SQE/Reliability Engineer. Test Plans, Test Results and other documentation (e.g. FA reports, test logs, etc.) shall be made available to Dell for review upon request.

16.3 CRITICAL DESIGN AND PROCESS PARAMETERS The supplier shall document and establish a process for identifying product and process critical parameters to be measured and monitored throughout the various reliability or product functional tests.

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17.0 PROCUREMENT

17.1 CONTRACTS/AGREEMENTS The Supplier is required to implement and maintain a Contract Management System that is used to document, maintain and archive all contractual agreements between the Supplier and its suppliers. The contracts/agreements between the Dell Supplier and the Dell subtier suppliers must clearly document and communicate all Dell performance requirements passed by Dell to the Dell Supplier. The Supplier must perform Semiannual Audits of the Contract Management System and accurately transmit Dell performance requirements to the subtier supplier.

17.2 HUB AND LOGISTICS The Supplier must have a methodology to ensure that its Suppliers are utilizing effective material handling, warehousing and shipping practices. The Supplier should provide and support an efficient and effective logistics structure for all material movement between its Suppliers and its operations locations. Programs focusing on the education, implementation and review of a Hub/Logistics practices must be incorporated with the suppliers. All logistic cost and warehousing cost should be quoted as separate line items to ensure accurate review and understanding of the logistics plans with each supplier for each part number.

17.3 ALIGN WITH PERFERRED SUPPLIERS The Supplier must have a documented process that considers alignment of its suppliers with Dell Preferred 2’nd Tier (subtier) suppliers during the supplier evaluation phase of a program. Selection of new subtier suppliers that are not currently on the Suppliers Preferred Supplier list or the Dell Preferred 2nd Tier (subtier) Supplier list must be documented and communicated during the supplier selection phase of a program. Development of new subtier suppliers into preferred suppliers is an important function of Procurement. A risk management action plan is required for all new suppliers.

17.4 CONTINUITY OF SUPPLY / ADVANCE CAPACITY PLANNING The supplier must implement and maintain material planning methodologies and tracking systems to ensure continuity of supply between the Supplier and the Supplier’s suppliers. A materials requirement system must be used to communicate demand at the part number level and to receive supply commitments against the demand. A methodology for capacity planning must be implemented by the Supplier to ensure that adequate capacity is being planned and implemented by their supply base. Different demand scenarios should be reviewed quarterly (for example: 25% upside, 50% upside) to determine if additional capacity should be proactively installed. Levels of demand variation must also be considered when determining the capacity levels and safety stock levels of part numbers. Risk associated with Capacity plans and Continuity of Supply plans should be reviewed quarterly with Dell.

17.5 SUPPLIER RATING SYSTEM The Supplier must implement and maintain a performance rating system with all its suppliers. The performance rating system must communicate the critical requirements to a supplier in the areas of Quality, Continuity of Supply, Cost Management, Safety/Environmental, Strategy Alignment and Overall Cooperative Behavior. The elements rated in the performance management system should be updated annually to reflect new strategic initiatives and changing business environments. Records of supplier performance must be maintained and consideration of past performance must be referenced during the award of new business. Corrective action plans based on the trends documented by the supplier performance rating systems should be reviewed during quarterly business reviews.

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17.6 AWARD OF PURCHASE ORDERS The Supplier must implement and maintain systems and methodologies to track the award and execution of purchase orders with its suppliers. The systems and methodologies must be dynamic and allow the control of financial exposure during all the volume phases (volume ramp up, steady state volume, volume decline at end of life) of a program or part number. Purchase orders must clearly state all business requirements not covered in existing master agreements, contracts and program schedules. The financial liabilities associated with open purchase orders must be tracked and communicated by the Supplier.

17.7 SERVICE The Supplier must implement and maintain systems and methodologies for the planning and fulfillment of demand generated by service orders. These systems and methodologies must work in conjunction with the systems and methodologies used to procure production materials. Service demand requirements, capacity plans, production plans and supply plans must be created and maintained during the entire serve life of a program and/or part number.

17.8 COMMON DATA SHARE The Supplier must implement systems and/or tools that facilitate the share of common data between its supplier and its customers. The implementation of systems to ensure smooth communication all along the supply chain will help reduce cost, increase quality and ensure continuity of supply for all companies in the chain. Typical elements for data share are: quality goals, engineering change orders, quality instructions and notifications, performance reports, engineering specification and requirements, supply & demand reports and any other information appropriate for communication among the supply chain. Different levels of access and security must be supported by the common data share systems and tools.

17.9 COST MANAGEMENT The Supplier must implement and maintain systems and methodologies for the planning, tracking and management of all purchase prices cost elements. These methodologies must address cost management at all aspects of a program/part number life cycle. Initial cost quotes related to new part numbers must be tracked and communicated against program goals and business plans. Cost associated with production parts must be reviewed on a monthly or quarterly basis to drive cost reduction. Industry and Regional cost factors and elements must be reviewed on a regular basis to ensure that changing a cost environment is managed properly. Cost reductions should be captured immediately and passed along the supply chain while potential cost increase should be mitigated or eliminated through proactive planning. The Supplier must measure the performance of its supplier against cost management goals and communicate this performance during quarterly reviews.

17.10 RESOURCES The Supplier must plan and staff the Procurement resources required to effectively manage and develop its supply base. Resource plans and budgets must be implemented by department and aligned with the strategic plans of the Procurement organization.

17.11 SOURCING STRATEGIES The Supplier must create and maintain a 3 Year Strategic Sourcing Plan to document its strategy related to supply base development and alignment. The strategic planning process should include an annual revision. Quarterly or semiannual updates should be used to track progress to the strategic plan. The Strategic Planning Process should be forward looking with an emphasis on identifying expected future business requirements in the following major categories: (1) Product Design & Development, (2) Business Operations, (3) Competitive/Industry Environment, (4) Regulatory & Legislative Requirements and (5)

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Geographic Considerations. Coordination of strategic plans between a Supplier and its supplier and its customers is highly recommended.

18.0 COMPONENT ENGINEERING

18.1 COMPONENT QUALIFICATION SPECIFICATIONS Dell has developed component level qualification specifications for the various types of components. The Supplier needs to verify that the qualification of their component is in compliance with the applicable specification.

18.2 COMPONENT QUALIFICATION Part qualification determines if the component in question meets the specification given by the Supplier in the data sheet, and/or requirements specified by Dell and/or the Supplier for the particular part. Part qualification is a verification of the part in an isolated condition (or in a test circuit), but not in the specific Dell platform application. Part qualification is Dell platform-independent.

Types of requirements covered in Part Qualification:

Electrical Mechanical Functional Design Component reliability test report Compliance with restricted materials requirements

Methods used in Part Qualification may include but are not limited to:

Data sheet review Supplier test and characterization data Measurement by Supplier D-FMEA, P-FMEA, control plans PPAP (Production Part Approval Process) First Article Data

18.3 APPLICATION QUALIFICATION Application qualification determines if the component meets the Dell platform design requirements. This is a measure of whether or not the application is using the part correctly relative to its specified parameters or of undesirable side effects of any unspecified component parameters. The Dell or Supplier Design team will decide if a system level qualification is required for the component.

18.4 CAPABILITY STUDIES FOR CRITICAL PARAMETERS The Supplier will designate the appropriate key characteristics on the component specification with an [X] (referred to as Box-X). A minimum of one key characteristic per spec is preferred. If no parameters are flagged with an [X] on the specification, the Supplier shall select the appropriate process control parameters to monitor. It should be verified that the components key characteristics are within the required tolerances. See the individual component qualification specifications for the critical characteristics.

The characterization of new part requires a procedure that provides in-depth information about the capability of the part design / process to produce the part. The characterization procedure for electrical components should include measuring to the part specification requirements across the operating voltages, frequencies and temperatures or the use of documented simulation methods. A characterization report should be completed for each component.

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The characterization report for all components should include the following:

A summary of the PFMEA (Process FMEA) and DFMEA (Design FMEA) and the related Control Plans or equivalent methods that link failures to the manufacturing process and design process

A detailed discussion of the characterization methods used A listing of all critical parameters monitored during the characterization. A listing of all

critical parameters that do not show a Cpk of 1.5 to the specification test limits. Discussion of device weaknesses and corrective actions both design and process

related. Containment plans for handling uncorrected part weaknesses and reliability concerns The report should be approved by a responsible Supplier representative

The results of the characterization should be shared with the customer. At the discretion of the Supplier, this sharing may include a hard copy of the characterization report or selected portions of the characterization report.

Process monitoring records shall be maintained for each lot shipped to the Supplier for periodic review upon request.

The Supplier and Dell must agree on the selection and identification of the key parameters; however, Dell reserves the right to make the final decision in the event of a conflict.

18.5 ROHS (RESTRICTION OF HAZARDOUS SUBSTANCES) COMPLIANCE For all Dell platforms designated as RoHS Compliant, all components applied to the affected platforms shall conform to the following Dell documentation:

Dell Spec M4461-Lead (Pb) Free Component Requirements Dell Spec 6T198-Materials Restricted for Use

For each RoHS compliant component part number that is provided to Dell, the suppliers shall declare in writing that they guarantee these parts conform to the above mentioned requirements. This shall be achieved by the completion and submittal of Dell Spec N6685 “Declaration of Conformity with Dell Specifications” to Dell Environmental Affairs. Any supplier part number that does not have this document properly filled out and submitted to Dell shall not and cannot be added to the associated Approved Supplier List.

18.6 ROLES AND RESPONSIBILITIES The Supplier should have a Component Engineering team that will complete the activities listed in Dell Specification ENG0000189, EM and ODM Component Engineering Roles and Responsibilities.

18.7 ELECTRICAL CHARACTERIZATION The supplier shall be capable of demonstrating, over the application temperature range, that the part is capable of meeting parametric limits in the individual component specification. For conditions that require review (Cpk below 1.5, supplier request, non-normal distribution, or measurement issues), the Supplier must notify Dell. The Supplier is required to maintain the Cpk data for on-going production lots on file and provide to Dell upon request.

19.0 ACRONYMS AFR – Annualized Failure Rate ARR – Annualized Return Rate

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CIP – Continuous Improvement Program DPPM – Defective Parts Per Million DVT – Design Validation Testing ECO – Engineering Change Order ESD – Electro Static Discharge EVT – Engineering Validation Testing FAI – First Article Inspection FIFO – First In First Out FIR - Field Incident Rate FMEA – Failure Mode Effects Analysis GR&R – Gage Repeatability & Reproducibility GSQE – Global Supplier Quality Engineer HALT – Highly Accelerated Life Test HASS - Highly Accelerated Stress Screen IFIR – Initial Field Incident Rate IQA – Incoming Quality Assurance LRR – Line Reject Rate MRB – Material Review Board MTBF – Mean Time Between Failures OBA – Out of Box Audit ORT – On-going Reliability Testing PMT – Process Maturity Testing RFI - Request for Information RFQ – Request for Quote RTS – Ready To Ship at Dell SPRT – Sequential Probability Ratio Test Supplier – The supplier who provides product directly to Dell. Also referred to as Subtier supplier – refers to the supplier who provides product to VFIR – Verified Field Incident Rate SVLRR – Supplier Verified Line Reject Rate

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