Supplier requirements
1 PURPOSE
The purpose of this document is to describe and inform minimum criteria required from all Ensto's key Suppliers and Subcontractors. The document is public and introduced to the key suppliers at least during the tendering process. Suppliers have a very important role in the value chain we offer to our customers and with these requirements we want to ensure the irreproachable performance of our Suppliers and Subcontractors. The general requirements described herein do not supersede requirements in the contracts, specifications or applicable legislations. Required documents can be checked during visits or audits.
2 SAFETY AND SUSTAINABILITY
All the Suppliers and Subcontractors shall have documented policies and processes to ensure that their operations comply with all relevant health and safety standards and legislations. We appreciate our Suppliers and Subcontractors having implemented and certified OHSAS 18001 or equivalent management systems for occupational health and safety.
2.1 Values and Ethical Principles
The Suppliers and Subcontractors shall follow the highest ethical standards as disclosed in Ensto Supplier Code of Conduct published on Ensto website. Values and Ethical principles are based on the United Nations Global Compact initiative and embedded in Ensto Employee Code of Conduct.
2.2 Environment
Environmental Policy and Management System; The Suppliers and Subcontractors shall have an up-to-date, documented Environmental Policy including commitment to environmental protection, prevention of pollution, compliance with environmental legislation, and continuous improvement. Ensto appreciates its Suppliers and Subcontractors having implemented and certified ISO14001 or equivalent Environmental Management System.
Environmental Performance; The Suppliers and Subcontractors shall evaluate their environmental performance and set improvement targets when needed. If a subcontractor is used for waste disposal the Suppliers shall ensure- that subcontractor is correctly authorized and licensed through on-site inspection on third party certification.
Design for Environment; The Suppliers and Subcontractors shall take into consideration environmental matters in all phases of product development and manufacturing process design, e.g. with specific design for environment tools or defined checklists. Choices and actions done in the product creation should reduce or eliminate negative impact on environment.
2.3 Risk Management
Risk Management; The Suppliers and Subcontractors shall have procedures to be aware of risks threatening manufacturing and operation as a whole. Additionally during visits and audits by Ensto identified risks shall be reported. The Suppliers and Subcontractors shall take the necessary actions to minimize the identified risks (strategic, financial, operational, commercial, technical, risks related to location, natural hazards, export control, product liability, etc.).
Disaster Recovery Plan; The Suppliers and Subcontractors shall have a documented Disaster Recovery Plan. The document shall establish the procedures and responsibilities to be used by the management. These actions should guarantee the continuity of manufacturing operations and customer services following a disaster or an accident which damages or destroys processes. Recovery Management Teams shall be nominated and trained to deal with the recovery work. Ensto expect to be informed about possible delays as soon as possible.
3 QUALITY MANAGEMENT
3.1 Management Support
Management Support for Quality System; The Management of the Suppliers and Subcontractors shall support the Quality System by renewing it periodically in order to ensure its continued effectiveness and, if necessary, to develop it further. The stated measurable targets shall support the high performance quality. The Management shall allocate the resources necessary to achieve this objective.
3.2 Quality Management
Quality Management; The Suppliers and Subcontractors shall have and maintain a quality system according to ISO9001 or equivalent quality management system. Ensto also expects its Suppliers and Subcontractors to make continuous efforts to improve the performance quality and value adding processes. Awareness of Lean methods and implementation is recommended.
4 SUPPLY AND PRODUCTION CONTROL
4.1 Supply Chain
Supply Process; The Suppliers and Subcontractors shall be able to clearly define the supply processes, in the form of flow charts, from information that triggers shipments or order placement to product delivery or replenishment. The Suppliers and Subcontractors shall also be able to specify associated lead-times for the main actions of the whole demand/supply chain.
Distribution Structure; The Suppliers and Subcontractors shall have a supply structure (local warehouses, regional warehouses, direct shipments) and means of transportation defined on a global basis both for normal and urgent deliveries. Transportation terms shall be agreed with Ensto.
Supply Chain Performance and Improvement Plans; The Suppliers and Subcontractors shall have documented procedures for measuring and monitoring internal and external demand/supply chain performance and have active performance improvement plans. The Suppliers and Subcontractors shall also have a system to inform Ensto in case of potential short or long term delivery problems, e.g. capacity shortages, transportation delays.
4.2 Material Control
Incoming Material Verification; The Suppliers and Subcontractors shall verify incoming materials used for production for conformance to relevant specifications. Such verification consists of incoming inspection reports, certificates of conformance, certificates of analysis, etc., which shall be available as Quality Record.
Controls for Radioactivity; The Suppliers and Subcontractors shall have appropriate controls in place to ensure that the levels of radioactivity in scrap and raw materials are below the levels recommended by IAEA to protect human health.
REACH, RoHS and Conflict Mineral Compliance; when applicable, the Suppliers and Subcontractors shall declare that the material(s) and products purchased by Ensto are compliant with the valid regulation by sending declarations of conformity.
Material content; The suppliers and subcontractors are expected to hand out a comprehensive list of the materials used in the products, purchased by Ensto. The material information shall include the CAS-numbers.
Material Release for Production; The Suppliers and Subcontractors shall have an operation that releases materials for production and positively identifies them by stickers, labels, lot number control, dispatch control, etc.
Claim Handling Process; The Suppliers and Subcontractors shall have a documented process for handling any arising claims promptly and efficiently.
4.3 Production Process Control
Process Flow; The Suppliers and Subcontractors shall perform all production operations according to the documented process flow charts with reference made to relevant procedures and specifications. Any part of the process that is subcontracted shall be indicated.
Process and Material Qualification; The Suppliers’ and Subcontractors’ processes and materials and their changes shall be qualified and approved internally according to the documented procedures, and changes notified to Ensto before implementation. Materials, subcontractors or suppliers defined by Ensto cannot be changed without Ensto's approval.
In-Process Controls; The Suppliers and Subcontractors shall have in-process controls at appropriate stages of the process in order to maintain processes under control. Operators shall have access to the control data and instructions for action in out-of-control situations.
Inspection and Test Records; The Suppliers and Subcontractors shall maintain inspection and test records as evidence that the products have been inspected and tested in accordance with applicable procedures. The Suppliers and Subcontractors shall analyze these records regularly and forward them to Ensto if requested.
Non-conforming Management; The Suppliers and Subcontractors shall have an efficient system to handle and prevent non-conformities and to avoid shipping non-conformity products.
4.4 Sourcing
Subcontractor and Supplier Selection; The Suppliers and Subcontractors shall select their material suppliers according to the documented procedures. Supplier selection criteria shall be defined and second source availability is recommended.
Responsible Sourcing; The Suppliers and Subcontractors shall not purchase materials or products from such sources that conflict with Ensto Suppliers Code of Conduct or Ensto Conflict Minerals Policy.
Subcontractor and Supplier Control; The Suppliers and Subcontractors shall continuously monitor their Suppliers and Subcontractors performance by measurable key indicators such as quality indexes, assessment results, ratings, etc. The Suppliers and Subcontractors shall have a system to make complaints and claims to their Subcontractors and Suppliers.
Purchasing Documents; The Suppliers’ and Subcontractors’ purchasing documents shall include all information necessary to define materials, components and products to be purchased. Such information includes item name, specification, revision, quantity, delivery time, price, transportation, etc.
Purchaser Supplied Product Control; The Suppliers and Subcontractors shall have a procedure to control materials and products supplied by Ensto Purchaser.
5 PRODUCT LIABILITY AND CONTROL
5.1 Product Liability
Product Liability Procedure; The Suppliers and Subcontractors shall have a documented Liability Procedure including recall procedure and clearly defined liability related responsibilities.
Liability Protection; The Suppliers and Subcontractors shall take necessary steps, from product development to final test, to protect against future product liability actions. Non-hazardous and safe materials and components shall be used in products and their approval obtained from authorities as applicable (e.g. CE, UL, REACH)
Liability Insurance; The Suppliers and Subcontractors shall hold a global liability insurance including product liability coverage on normal European terms with a sum insured of not less than 1 (one) million euro unless otherwise agreed with Ensto.
5.2 Product Control
Release for Delivery; The Suppliers and Subcontractors shall control all product releases for delivery to Ensto in accordance with documented procedures and control plans.
Control of Non-Conforming Products; The Suppliers and Subcontractors shall have clear documented procedures for the control, handling and disposition of non-conforming products (scrap, losses, rework). Where rework is performed the product shall be re-inspected in accordance with applicable procedures.
Production Identification and Traceability; The Suppliers and Subcontractors shall have a system for identifying the products as regards type and lot or serial number, and their status during all stages of production and testing. The Suppliers and Subcontractors shall have a system for ensuring finished product traceability back to the factory, date code and reference number as specified by Ensto. The Suppliers and Subcontractors shall also have a system for identifying and tracing raw materials back to the source. Code of Conduct documents shall be presented if required. Valid safety data sheets shall be forwarded with a batch if required in legislation.
5.3 Product and Tools Management
Product Verification, Qualification and Validation; Products shall be verified, qualified and validated in accordance with the documented procedures, agreement with Ensto and product related legislation. Resulting data shall be available as a Quality Record. If necessary master samples shall be approved by Ensto and stored in a suitable way by the Supplier. Storing and handling method shall not damage the master samples or other evidences (non-conformity samples etc.).
Additional Requirements; ATEX/EX Suppliers and Subcontractors shall implement and follow valid ATEX/EX standard requirements. Suppliers and Subcontractors of ESD sensitive devices shall implement and follow an Electrostatic Discharge (ESD) Control Program. The Suppliers and Subcontractors are also recommended to follow IEC 61340-5-1 and IEC 61340-5-2 standards.
Product Design Changes; The Suppliers and Subcontractors shall notify Ensto of product design or specification changes and modifications made after the product is approved. Change histories shall be documented in the Quality Record. Product design owned by Ensto cannot be changed without Ensto's approval. Ensto expects to get all possible improvement proposals that can or might improve the product quality and minimize environmental impact.
Tools; Ensto tools, measurement equipment's, machines, molds shall be well maintained. Maintenance activities shall be registered and possible damages informed Ensto as soon as possible. Effective and well planned preventive maintenance system and professional know-how is expected.
6 CONTRACT AND BUSINESS MANAGEMENT
Business Contacts; The Suppliers and Subcontractors shall nominate contact person(s) to consistently handle business operations between Ensto and the Supplier. If Suppliers or Subcontractors have questions related to requirements or business operation they should contact nominated category manager(s) published in Ensto website. Contact persons changes shall be informed by Suppliers and Subcontractors to Ensto as soon as possible.
Regular Audits by Ensto; The Suppliers and Subcontractors shall allow audits by Ensto or a third party authorized by Ensto. The degree and frequency of such audits will depend on the criticality of the product / service being supplied. The Suppliers and Subcontractors will be informed if auditing is part of Ensto's Supplier Approval Process.
Confidentiality Agreement Policy; The Suppliers and Subcontractors shall sign Confidentiality/Non-Disclosure Agreement with Ensto upon request. If signed, the Suppliers and Subcontractors shall comply with the requirements of the Confidentiality/Non-Disclosure Agreement.
Formal Contract Review; The Suppliers and Subcontractors shall allow regular formal contract reviews at a frequency agreed locally or whenever changes happen.
Agreements with Ensto; If a written contract is not signed between Supplier or Subcontractor and Ensto then Order Confirmation is considered to be a binding agreement where Ensto general Terms and Conditions published in Ensto website apply.
7 MONITORING PERFORMANCE
Performance Quality Monitoring; Ensto evaluates the Suppliers' and Subcontractors' performance regularly and shares results with the relevant stakeholders. Main factors included in the evaluation process are; delivery accuracy, claims and PPM, lead time, payment terms and cost development. Ensto expects that Suppliers and Subcontractors have a systematic way to monitor performance quality internally and to carry out corrective actions when needed. A performance improvement plan with relevant actions, resources and root causes is expected to be prepared by Suppliers and Subcontractors and presented if requested.