Requirement catalogue for

suppliers
thyssenkrupp Bilstein GmbH
thyssenkrupp Bilstein of America Inc.

thyssenkrupp Bilstein S.A.

thyssenkrupp Components Technology de Mexico, S.A. de C.V. / Plant

Damper

thyssenkrupp Presta Shanghai Co., Ltd Operating Unit Damper

CHAPTER SUMMARY 2

CHAPTER SUMMARY
AREA OF APPLICATION _______________________________________ 3
1. PRINCIPLES ___________________________________________ 4
2. PROJECT MANAGEMENT ________________________________ 15

3. SUBMISSION OF OFFERS AND ACCEPTANCE OF ORDERS ______ 19

4. PRODUCT DEVELOPMENT _______________________________ 21
5. DESIGN AND LAYOUT ___________________________________ 23

6. PROTOTYPES _________________________________________ 24
7. PRODUCT TESTING _____________________________________ 25
8. SUPPLIERS MANAGEMENT _______________________________ 26

9. PRODUCTION PREPARATION AND SERIES PRODUCTION _______ 28

10. LOGISTICS ___________________________________________ 34
11. CLAIM MANAGEMENT ___________________________________ 37

12. TOOLS ______________________________________________ 40

13. SUPPLIER PERFORMANCE RATING (SPR)____________________ 43
14. APPENDIX ____________________________________________ 44

Copies of any kind are uncontrolled!

MAN-00009-4 Release date: 31.01.2020 Owner: Head of CT-DA/PSM - Procurement & Supply Management
AREA OF APPLICATION 3

AREA OF APPLICATION
This standard sets forth the fundamental specifications required of suppliers by thyssenkrupp Bilstein
(hereinafter called BILSTEIN), and all its companies, with the aim of achieving successful business through the
fulfillment of quality requirements as well as improvements in all areas of company operations, along with
sustained customer satisfaction.
This BILSTEIN standard applies to all suppliers of prototype parts, components, manufacturing materials,
production and spare parts, to all types of processing as well as to all services and development activities.
The performance schedule represents a supplement to the standards mentioned in the attachment. In the event
of conflict with these standards, the supplier is required to clarify such contradiction with the specialized
departments involved.
The standard provides a comprehensive overview of the supplier performance requirements laid down by
BILSTEIN. Detailed information, forms and agreements are defined in the attachments. The application of this
standard, i.e. the relation of the individual requirements to the supplier’s scope of supply in each individual case,
is specified in the respective chapter. In the event that clear assignment is impossible, the supplier is required to
voluntarily co-ordinate in this respect with the particular BILSTEIN project manager respectively purchaser
involved.
The abbreviation “QM” used hereinafter stands, for BILSTEIN quality management, i.e. for the staff member
responsible in each individual case for quality management. Should the supplier not be aware of the responsible
QM manager or other contact person, the supplier is called upon at BILSTEIN Purchasing to acquaint himself
with this person prior to effecting supplies or services. Country-specific translations of the "Catalogue of
requirements for suppliers" may exist, but the original German version is binding!

This document is a translation of the German original version: „Anforderungskatalog an Lieferanten“, valid in all cases is th e German version!
PRINCIPLES 4

1. PRINCIPLES
This document is designed to inform suppliers in a timely and comprehensive manner as to the requirements set
forth to supply BILSTEIN. These requirements are in accordance with, and supplement to the standards
mentioned in the attachment (IATF 16949, ISO 9001, ISO 14001) and should be added to the suppliers formal
Quality System Plan. They must be considered by the supplier prior to submission of any quotation. In addition,
BILSTEIN expects that the requirements set forth in this standard are fulfilled upon the initial start of
development activities, and throughout the ongoing supply relationship, including the supply of spare parts.
Upon request the supplier must be able to demonstrate financial stability, provide industry references and show
adequate capability to insure their ability to supply products or services to BILSTEIN.
The following fundamental principles must be considered in order to fulfill these requirements:
• Clear customer orientation
• Employment of cross-functional teams (i.e. project org. or series production development teams)
• Promotion of information flows and communication
• Efficiency and effectiveness
• Prevention of defects (zero defect target)
• Process Capability for prevention instead of detection
• Economic and punctual supply performance
• Maintenance of agreed target values in all processes and company sectors
• Continuous improvements (CIP)
• Consideration of environmental aspects
• Obligation to 100% delivery performance (quantities and deadlines)
• Capability to supply service parts requirements (15 years after the end of series production)
• Compliance with the thyssenkrupp AG general terms and conditions of purchase
• Product integrity and compliance

All principles apply during the entire term of the contract, starting with the product development process through
to series production, including the supply of spare parts.

Compliance with valid norms and standards

PARTNER is obliged to comply with all VDA volumes (red and blue volumes) in the currently valid version.

Technical Compliance
PARTNER shall comply with the technical regulations which apply to its delivery item in accordance with the
contractual agreements with SUPPLIER (e.g. regulations, guidelines, laws and technical standards), taking into
account the objective of the respective regulation. PARTNER shall also create suitable structures within its
organisation to ensure compliance with these technical regulations during the product development process. In
particular, these structures shall serve as orientation and assistance for the PARTNER's employees and take
appropriate account of aspects of technical conformity, integrity and ethical understanding.

PARTNER shall comply with and implement the requirements of the VDA Volume Product Integrity.

PARTNER shall appoint a Product Safety & Conformity Representative (PSCR, formerly PSB) for each production
site and oblige its sub-suppliers to comply with this requirement.
PRINCIPLES 5

Content
1.1 Quality Management System
1.2 Zero Defects Target
1.3 Key Characteristics
1.4 Cleanliness and corrosion prevention
1.5 Traceability from procurement to shipment
1.6 Production process and product approval
1.7 Auditing / verification, pilot lots, run @ rate
1.8 Incoming goods inspection at BILSTEIN
1.9 Exchange of data / Product Data
1.10 Procedure in the event of problems
1.11 Continuous improvement (CIP)
1.12 Ecology, recycling, health and safety
1.13 Negative materials list / hazardous materials, EU-REACh regulation
1.14 thyssenkrupp – Code of Conduct, Compliance
1.15 Compliance with “Altautoverordnung” (AAV) / IMDS Data entry
1.16 Warranty for defects, claims
1.17 Quality management agreement
1.18 Customer requirements
1.19 Disclosure of requirements to sub-suppliers
1.20 Supplier contact information
1.21 General Terms and Conditions of Purchase of thyssenkrupp AG
1.22 Validity
1.23 Documents cited

1.1 Quality Management System

In order to ensure a flawless and consistent quality of the products, PARTNER shall set up a quality management
system. The QM system must be aligned in accordance with IATF 16949 in the currently valid version. Proof
must be provided by certification by a certification company approved by the IATF (International Automotive
Task Force). Any deviation from this requirement requires a separate approval by BILSTEIN. PARTNER shall
align its QM system in such a way that it obliges its subcontractors to comply with this requirement.

BILSTEIN reserves the right, after consultation, to verify the PARTNER's assessment of its quality capability by
means of QM system audits and/or process audits. In addition, BILSTEIN reserves the right to inspect the
PARTNER's and its subcontractors' facilities (accompanied by BILSTEIN's customer, if necessary) after prior
notice. The PARTNER is obliged to provide BILSTEIN with a copy of the most recent certification status.

Any change in the manufacturing process and/or change in the company and/or address of a production site,
including subcontractors, which may affect the validity of the certifications (e.g. relocation of equipment, tools or
the entire site, change of address, shutdown of sites, final stockpiling at suppliers or changes of name) must be
notified by the PARTNER to BILSTEIN immediately upon becoming aware of it.

Similarly, the PARTNER must notify BILSTEIN of any special status with automotive customers (e.g. NBH = New
Business Hold) or withdrawal of registration.
PRINCIPLES 6

1.2 Zero Defects Target

The PARTNER is required, within the framework of quality management, to aspire to the target of zero defects
and to prove the freedom from defects by appropriate quality documents (e.g. test reports, SPC, measurement
reports, specification-reviews and design-reviews etc.). If the PARTNER assets that he is unable to achieve the
zero defects targets, he has to inform BILSTEIN promptly. If the PARTNER does not achieve the zero defects
targets, BILSTEIN will include the supplier in its quality-improving program and agree measures and
intermediate targets in order to reach the goal. The suppliers’ qualification system is described in BILSTEIN
Supplier Performance Rating (SPR). When including the PARTNER in the qualification program, BILSTEIN informs
the PARTNER about the required single steps.

1.3 Key Characteristics

BILSTEIN establishes the so called key characteristics of the product with increased importance for BILSTEIN in
respect to safety, function, subsequent processing and assembly, and advises the PARTNER.
In order to ensure the product safety and function, the PARTNER must identify and mark product and process
features that are important for its development and manufacturing process as “key characteristics“.
With development service suppliers of BILSTEIN the definition of key characteristics at “interfaces” is done
together with BILSTEIN’s customers by an “interfaces FMEA”.
The product and process characteristics are to be established in each individual case by the supplier for its
process, even when the development and design of the component to be supplied have been completed by
BILSTEIN.
The key characteristics e.g. deduced from the design-FMEA, represent the basis for process capability
examinations, work and test planning, process regulation, QM-verification etc. and are to be determined and
documented in an understandable manner using appropriate methods (e.g. SPC).
Generally, the process capability has to be proved for key characteristics. The process monitoring has to be
done in an appropriate mode (e.g. SPC).

If, in the event of a product defect, a risk to life and health cannot be excluded through the use of the product,
the PARTNER shall avoid defective deliveries by all means.

If a PARTNER produces or supplies CC characteristics (D/TLD parts) which are incorporated into an end product
of the Volkswagen Group, an annual D/TLD audit in accordance with the Formula Q questionnaire shall be
carried out independently by PARTNER. The results must be available for inspection by BILSTEIN or the OEM
customer. If the questionnaire is not available to the PARTNER, the PARTNER must proactively request it from
BILSTEIN. If the PARTNER is not aware of the further use of the parts by the OEM customer, the PARTNER must
enquire about this independently from BILSTEIN.

1.4 Cleanliness and corrosion prevention

The PARTNER guarantees the delivery of clean and rustles components. Chips or adhering particles on
components respectively transport packages, as well as oiled parts excepting corrosion protection are not
allowed. The PARTNER guarantees the delivery of clean and rust-free parts according to the WNB 881.
Investigations carried out by BILSTEIN show that dirt particles, adhering particles (e.g. chips or burrs), residues
of production aids (lubricants, contaminated oils) can impair or even completely destroy the function of shock
absorber systems, especially of shock absorber control systems. BILSTEIN has created “contamination
avoidance FMEA” for the complete process chain at BILSTEIN, analyzed potential problematical areas and
PRINCIPLES 7

introduced measures for their elimination. The parts requirements defined here are included in the drawings
respectively BILSTEIN company norms or technical supply conditions. The PARTNER has to prove the fulfillment
of these requirements for cleanliness, e.g. drawings or Bilstein standards, in the ISIR and to ensure it over the
entire running period.
In case of components which are critical for the system, the PARTNER has to take targeted measures to achieve
the cleanliness requirements, such as:

• Creation of a „Cleanliness – FMEA“

• Deduction of measures based on the identified risk potential as a result of FMEA
• Securing cleanliness associated with the control plan in the current production
• Regular evidences agreed with BILSTEIN

For parts produced of materials likely to corrode but which are not provided with surface anti-corrosive
protection, the PARTNER must take steps, in co-ordination with the specialized departments of BILSTEIN, to
ensure that corrosion does not appear over a period of 10 (ten) weeks. If an anti-corrosive is used, this must be
alkaline washable, compliant to humans, environment and further use (e.g. in shock absorber oil or hardening
processes). The PARTNER must record the anti-corrosive used and provide BILSTEIN uncalled with appropriate
information (technical data sheets or MSDS [Material Safety Data Sheet]) within the scope of the initial samples.

1.5 Traceability from procurement to shipment

Proof of complete traceability of all components from raw materials to shipment of the finished parts and
components is to be made by the PARTNER. He must also ensure traceability within production lots that are
delivered to BILSTEIN in partial deliveries.
Traceability documentation is necessary for all parts included in the scope of supply and must be submitted to
BILSTEIN QM upon request. If the components have to be marked permanently (e.g. date of manufacture), this
will be separately agreed upon. However BILSTEIN recommends, an individual and permanent marking of
products where possible, in order to ensure a better limitation of defects and localization of defective parts. In
this case, the marking has to be up to date and readable.

1.6 Production process and product approval

This section specifies BILSTEIN's sampling requirements for its PARTNERs. Sampling is an important element of
partnership and helps to build trust within the supply chain. It is a means of demonstrating the quality capability
of the product and process. The PARTNER is obliged to carry out all sampling at BILSTEIN in accordance with
the specifications listed below. Any deviations must be agreed with BILSTEIN in advance. The PARTNER shall be
obliged to ensure by contractual arrangements that the requirements are also passed on to its subcontractors.

Sampling procedure
The requirements and the structure of the documentation are based on the VDA 2 Production Process and
Product Release (PPF) procedure. The requirements from the AIAG Product Part Approval Process (PPAP) are
considered within the sampling specification. Therefore the PARTNER is obliged to carry out the sampling
PRINCIPLES 8

according to the VDA 2 PPF procedure, taking into account the requirements of this document. Sampling
according to AIAG PPAP is only permitted after prior consultation and approval by thyssenkrupp BILSTEIN.

Specification of the scope of sampling

Table 1 shows the basic requirements for the scope of sampling. The presentation levels are listed in
accordance with the Risk Part Classification (ABC) according to BILSTEIN's specific customer requirements. The
PARTNER must prepare the sampling scopes in accordance with the respective parts classification. All scopes
marked with "V" must be enclosed with the initial sample test report (ISIR) when sampling. All scopes marked
with "D" shall be performed, documented and archived during sampling. The PARTNER receives the information
about the corresponding risk part classification (ABC) when ordering the sampling. If the PARTNER does not
have any information about the risk part classification, the PARTNER must actively approach the BILSTEIN
contact person and obtain the information.

BILSTEIN will give the PARTNER a date for the sampling. Even if no separate order is placed, the PARTNER shall
deliver sample parts by the aforementioned date, unless BILSTEIN expressly waives delivery.

In the event of deviations, the PARTNER shall obtain BILSTEIN's written approval (deviation permission) in
advance and enclose it with the samples. The corrected status must be presented in the context of a re-
sampling, before the expiry of the deviation permission.

Sampling coordination meeting

Deviations or additions to the described procedure will be agreed individually in the sampling coordination
meeting between BILSTEIN and the PARTNER. The decision as to whether a sampling coordination meeting
should be carried out is the responsibility of BILSTEIN.

ABC-
Part classification
Verification if applicable for process and product
A B C
0.1 Cover sheet for the PPA report V V V
0.2 Self-assessment of product, process and, if applicable, software V V V
1. Verification for the product engineering
1.2 Technical Specifications V V V
1.3 Approved design modifications V V V
1.4 Design and development approvals V V D
1.5 Material data sheets in IMDS V V V
1.6 Design-FMEA D D D
2. Verification for the production process engineering
2.1 Process flow chart V V D
2.2 Process-FMEA D D D
2.3 Production control plan (PCP) V V D
3. Proof of validation of the product (exclusively against the requirements of the technical specifications agreed with the
customer)
PRINCIPLES 9

3.1 Geometry, dimension V V V

3.2 Material (strength, physical properties, ...) V V V
3.3 Function V V V
3.4 Haptics V V V
3.5 Acoustics V V V
3.6 Odor V V V
3.7 Appearance V V V
3.8 Surface requirement V V V
3.9 Technical cleanliness V V V
3.10 Reliability V V V
3.11 Resistance to Electrostatic Discharge (ESD) V V V
3.12 Electrical safety / high voltage safety V V V
3.13 Electromagnetic compatibility (EMV) V V V
4. Verification for the production process

Protection of special features as per technical specifications and agreed features

4.1 V V D
(e.g. Poka Yoke, 100 % testing, process capabilities...)
4.2 Laboratory qualification V D D
4.3 Samples incl. production documentation V V V
4.4 Reference sample D D D

4.5 Proof of achievement of the agreed capacity (achievement of the series cycle time) V V V
4.6 Tools list (with unit nos./number of nests and statement on tool quality) V V D
5. General Verification
5.1 Compliance with legal requirements V V V
5.2 Overview of the Partner’s supplier and in-house parts with part and process release status V V D
5.3 Inspection and Test Equipment List V D D

5.4 Verification of test equipment capability V V D

5.5 Parts history product and process V V V
5.6 Suitability of the used charge carriers incl. their storage V V V
Documentation of the agreements on the reporting and analysis process
5.7 - Complaint processing (e.g. 8D) V D D
- Damage analysis field
5.8 Requalification agreement V D D

Tabelle 1 – PPA documented evidence

V = Submission to BILSTEIN D = Execution, documentation and archiving of the organization

1.7 Auditing / verification, pilot lots, run @ rate

BILSTEIN (if necessary together with its customers) is authorized to verify the quality assurance measures of the
PARTNER and to evaluate them in audits. Identified weak points have to be improved by the PARTNER. This
investigation may be carried out by a third party appointed by BILSTEIN and/or its customer.
The PARTNER has to enable BILSTEIN (if necessary together with its customers) also the auditing of its sub-
suppliers. Nevertheless, the PARTNER is generally responsible for auditing of sub-suppliers.
PRINCIPLES 10

The PARTNER’s quality capability is checked using BILSTEIN-Checklist based on VDA 6.3. Different audit
procedures can be agreed upon.
BILSTEIN is authorized to verify the manufacturing quality during the production of pilot lots (run @ rate).
The purpose of run @ rate is to verify:
• the capability and control of PARTNER’ current production processes
• that the products comply with the quality requirements
• that the planned quantities are to be produced under series conditions
• that the production and quality schedules, documented in the PPAP and other requested documents,
comply.

All production facilities, personnel and support systems, as well as cycle times, must correspond to series
production conditions when pilot lots are produced. The pilot lots are to be produced by the PARTNER within the
scope of the initial samples production, and the determined short period process capabilities documented within
EMPB / PPAP. If no pilot lots are included in the initial sample orders placed by BILSTEIN, the PARTNER is
obliged to maintain a minimum production time of 2 hours or a minimum quantity of 300 pieces. This run @ rate
is carried out under series production conditions (production devices, cycle times, process flows, etc) and is to
be documented as such. BILSTEIN reserves the right, upon appointment, to conduct production and product
releases at the PARTNER’s premises. If the PARTNER carries out performance tests on its own responsibility, the
date must be notified to BILSTEIN in good time so that BILSTEIN can participate.
If process release is rejected, BILSTEIN reserves the right to transfer the costs (costs by cause principle) of a
new process release.

The PARTNER must adopt an analogous procedure for subcontracting, if necessary involving BILSTEIN.

The PARTNER shall introduce an audit program in accordance with IATF 16949. This includes both 1st and 2nd
party process audits and is carried out by certified auditors on the basis of VDA Volume 6 Part 3. Any deviating
regulation requires written approval by BILSTEIN.

1.8 Incoming goods inspection at BILSTEIN

The PARTNER guarantees that all product deliveries meet the requirements laid down in the drawings and
specifications. This is to be ensured by controllable and capable processes as well as suitable test methods
installed at the PARTNER’s premises.
BILSTEIN restrains the incoming goods inspection to a rough visual check of identity, visible external damages,
quantity as well as completeness and supply of the required test certificates.
If the deficiencies are established within the framework of an orderly business process and the PARTNER is
informed immediately, the PARTNER disclaims the objection of a delayed claim.
Before starting of serial process a product release (ISIR/PPAP) is required. In case that, at the moment of SOP
the product release is not yet available, the PARTNER has to agree with BILSTEIN QM an adequate procedure /
special approval.

1.9 Exchange of data / Product Data

The PARTNER must be in the position, at an early stage, to supply data (CAD data, measuring data, other
product data, logistics data etc.) on the basis of the requirements set forth down and in co-ordination with
BILSTEIN.
Records are to be retained in accordance with IATF 16949.
PRINCIPLES 11

1.10 Procedure in the event of problems

BILSTEIN expects to be immediately advised of any problems at the PARTNER which could affect BILSTEIN or
BILSTEIN’s customers. The PARTNER must subsequently provide proof that the causes of the problems have
been eliminated. BILSTEIN has the right to demand a renewed supply of samples from case to case. The
supplier is required to apply purposeful problem solution methods (8D report, Fish-Bone Diagram, and 5 Why
amongst others). The PARTNER must have the appropriate tools / methods for its production scope in
preparation of any need for appraisals. In a reclamation case the PARTNER must be ready to acquire external
assistance (labors, institutes) at their own cost. The defect appraisal process itself must be described and
established.
The processing of claims with the supplier is concluded by means of BILSTEIN inspection report.
In the event of justified claims, BILSTEIN reserves the right to initiate special measures, rework, sorting, special
transports, assembly and dismantling, procurement of spares etc. to maintain production and supply the
customer with the required quantities on the agreed dates. The extra costs incurred, including extra costs
caused by special actions performed at customers of BILSTEIN, will be passed onto the PARTNER. This also
applies to problems caused by late deliveries or deliveries not made at all.
Here, it is the duty of the PARTNER to implement and maintain suitable emergency strategies in line with the
requirements of IATF 16949 as well as scheduling and installing reserve stocks commensurate with the scope of
supply in order to be able to provide replacement supplies in good time. The PARTNER guarantees a reaction
time from covering all eventual contingencies, which prevents any possible production line stoppages at
BILSTEIN and its customers. In the chapter Claim management the requirements are described in detail.
BILSTEIN will make every effort to inform the PARTNER as early as possible about any extra costs and will
generally follow the principle of damage minimization.

1.11 Continuous improvement (CIP)

To stay competitive in the future it is necessary to constantly improve the business processes (e.g. Kaizen, Six-
Sigma and CIP activities). This transgresses the solving of current problems. The main aim is to get business
processes in place, such that the deviations from target values are constantly reduced. The target values
represent requirements like for example technical specifications, include also quality goals, costs, global
competitiveness, transparency through cost analysis, deadlines, supply reliability, etc.
Through suitable, measurable operating figures for all aspects of the business the PARTNER should strive to
make noticeable improvements. Efficiency and cost effectiveness are important aspects of continuous
improvement.

1.12 Ecology, recycling, health and safety

It is the duty of the PARTNER to comply with current legal, state, country and branch of industry related
regulations in respect of health and safety, environment protection and recycling as a minimum requirement.
Concerning ecology, attention should be paid, amongst others, to the following points:
• Examination of bought-in materials, manufacturing processes and products in respect of environmental
compatibility
• Minimization of resources consumption
• Environment-friendly packaging, transportation and logistics concepts
• Use of recyclable materials
• Avoidance of problematical materials
• Identification of materials for effective recycling
PRINCIPLES 12

• Reprocessing of prod. materials and production aids (e.g. cooling, lubrication, washing agents )
• Schedule of logistics for returnable items
• and so on.

The environmental management system must be aligned with ISO 14001 or EMAS in its currently valid version.
The proof is to be provided by means of certification by an approved certification company. Any deviation from
this requirement requires a separate approval by BILSTEIN. The PARTNER shall align its environmental
management system in such a way that it obliges its subcontractors to comply with this requirement.
Certification is an important criterion in the selection and evaluation of suppliers.

1.13 Negative materials list / hazardous materials, EU-REACh regulation

The supplier as a PARTNER of BILSTEIN is obligated to comply with the prevailing German or country specific
regulations, and in the USA with the state and federal regulations (e.g. TA air, PCB, EPA [Environmental
Protection Agency], “Altautoverordnung” etc.).
It is strictly prohibited that components, materials, transportation and packaging materials contain materials
known to be dangerous or suspected of being dangerous to health or are classified as being dangerous/harmful
to health or environment in Germany, and in any country in which BILSTEIN production facilities are located.
BILSTEIN expects that all PARTNERs comply with the materials restrictions contained in the latest and current
version of the AAV (Altautoverordnung) and customer specifications (e.g. negative materials list, GADSL of
IMDS). This list of negative materials can be used to identify materials, or categories of materials, which must be
considered as being critical with regard to human beings and environment. The list also serves as an aid in
establishing the types of materials and production methods to be used starting with the pre-development of
components.
The PARTNER must comply with the prevailing national standards, regulations and laws on hazardous materials
applicable to his production facilities and for the supplied BILSTEIN sites. If required, for the BILSTEIN sites from
the USA nevertheless mandatory, all shipments of hazardous materials shall be accompanied by the appropriate
MSDS (Material Safety Data Sheet) document. PARTNERs, which products contain Silicon are required to contact
the responsible specialized department at BILSTEIN because the contents of Silicone might have an impact on
product or e.g. paint quality
The requirements and measures resulting from the EU-REACh-Regulation (Registration, Evaluation,
Authorization and Registration of Chemicals) must be achieved for all substances, preparations and products
supplied to BILSTEIN.

1.14 thyssenkrupp – Code of Conduct, Compliance

BILSTEIN is committed to the principles of thyssenkrupp – Code of Conduct. The PARTNERs ensure also the
compliance of these principles and are obliged based on the business frame agreement with BILSTEIN to avoid
culpable actions. A signed thyssenkrupp Code of Conduct is stringently required for a business relationship with
thyssenkrupp Bilstein. In case of violation of these obligations, BILSTEIN is entitled to retreat or to cancel without
any transition period any contractual relationship with the PARTNER and to stop any negotiation.
Notwithstanding the above provisions, the PARTNER is obliged to respect all the statutory provisions and rules
applicable to both him and the contractual relationship with BILSTEIN.
PRINCIPLES 13

1.15 Compliance with “Altautoverordnung” (AAV) / IMDS Data entry

For all new parts, the data entry into the IMDS system is required within the ISR / PPAP process; without a
corresponding data entry no initial sample release is possible. The PARTNERs of BILSTEIN are obligated to
forward these requirements onto their sub-suppliers. The PARTNERs have to enter data into the IMDS database
for their complete scope of deliverance, uncalled and immediate. This applies as well for services like surface
coating, finishing etc.
The “Altautoverordnung” restricts the use of certain materials for products of the automotive industry and settles
limits regarding the use of specific materials. The compliancy with AAV has to be proven by data entry into the
IMDS database. The IMDS is a material database of the automotive industry, which was created by the leading
OE manufacturers.
Within the IMDS database, all materials used in the automotive industry are archived and organized.
Only in this way it is possible for manufacturers and suppliers to be in compliance with the specification set forth
by national and international norms, standards, legislation and regulations.
In case of any questions the specialized departments at BILSTEIN are be contacted.

1.16 Warranty for defects, claims

Unless otherwise agreed by the parties in this catalogue of requirements or in another document, the legal
regulations applicable at the respective delivery location are valid.
Furthermore unless other agreements apply, on top of the applicable law of the delivery destination, the supplier
guarantees for all deliveries after the 01.01.2007 a functional capability for 15 years and 300,000 km. If there is
a malfunction within this period the PARTNER picks up all costs and any indirect costs.
BILSTEIN can enforce a guarantee /warrantee case about the detection of faults on products in reference
markets.
Differing from this rule, it is also possible to agree upon a client specific warrantee. Claims in warranty period,
for which the PARTNER takes responsibility are transmitted accordingly to the requests of OE-customer.
The PARTNER is obliged to take a product liability insurance corresponding to the possible warranty costs.
The PARTNER rests on product monitoring obligation for his scope of supply. If the PARTNER becomes
acquainted of quality problems with his products at any of his customers, he is obliged to report to BILSTEIN in
case that he delivers the same or similar products to BILSTEIN and quality-relevant impacts on BILSTEIN
products or processes are not excluded.
As for the rest the General Terms and Conditions of Purchase of thyssenkrupp AG apply.

1.17 Quality management agreement

The requirements to the supplier’s quality management are established in the present Supplier Performance
Schedule. Special quality management agreements are stipulated only in case that special agreements or
targets are necessary.

1.18 Customer requirements

The PARTNER shall generally fulfil all requirements placed on BILSTEIN by the customer, insofar as they are
applicable in the supply relationship between the PARTNER and BILSTEIN. This applies to both, customer-
specific QM system requirements within the meaning of IATF 16949 (CSR = Customer Specific Requirements) as
well as all other requirements, e.g. relating to product or the production process. He must take these
PRINCIPLES 14

requirements into account when preparing his offer and assures with the submission of the offer that the
requirements are known to him, that he acknowledges them, takes them into account without restriction and
complies with them.

Customer Specific Requirements (CSR) of the IATF-OEM are made available via the website of the IATF Global
Oversight Office in their latest version: http://www.iatfglobaloversight.org/oem-requirements/customer-specific-
requirements/. The PARTNER keeps himself informed about these requirements and ensures their
implementation in his QM system.

In the case the PARTNER has no own access to additional customer requirements (e.g. through portal access),
these will be provided by BILSTEIN upon request (e.g. Volkswagen Formel-Q, Mercedes-Benz Special Terms,
…).

1.19 Disclosure of requirements to sub-suppliers

The PARTNER shall be obliged to pass on to its subcontractors all relevant requirements (e.g. specifications,
drawings, quality requirements, logistical requirements, customer-specific requirements, etc.) of BILSTEIN or of
BILSTEIN's customers that ensure product and delivery quality, and to oblige them to comply with them. The
PARTNER is responsible for the implementation of the requirements in its supply chain, including outsourced
value added (e.g. outsourced manufacturing processes, partial production at secondary locations, extended
workbenches, contract manufacturing, etc.). All documents and documentation are to be treated with
confidentiality and can not be transmitted to third parties without the written approval of BILSTEIN.

1.20 Supplier contact information

At project start or before serial delivery, the PARTNER has to communicate to BILSTEIN an organizational chart
or a contact person overview. He also has to inform BILSTEIN in case of management changes, if possible in an
electronic form agreed upon with BILSTEIN.

1.21 General Terms and Conditions of Purchase of thyssenkrupp AG

If not otherwise agreed upon with BILSTEIN (e.g. special customer requests), for all deliveries from PARTNERs
apply basically the General Terms and Conditions of Purchase of thyssenkrupp AG. The general terms can be
obtained from BILSTEIN purchasing.

1.22 Validity
The Supplier Performance Schedule is part of every order and every supply call-off and always valid in the latest
release. The latest release can be obtained from BILSTEIN purchasing.

1.23 Documents cited

If not otherwise agreed, the current prevailing edition of the documents cited applies.
PROJECT MANAGEMENT 15

2. PROJECT MANAGEMENT
Content
2.1 Project schedules
2.2 Product-related quality planning
2.3 Project-Reviews
2.4 Launch-management
2.5 Confidentiality
2.6 Lessons Learned
2.7 Change Management

2.1 Project schedules

The PARTNER shall compile project plans that serve to secure project results in line with the specifications set
forth, such as setting of deadlines, scope, content and format. The key milestones important to the PARTNER
and BILSTEIN shall be agreed upon in due time with the responsible project management i.e. with the BILSTEIN
staff.

2.2 Product-related quality planning

The PARTNER compiles a universal plan of his preventive and safeguard measures to be in place during
execution of the project and for series production according to APQP or VDA 4.3. This quality plan including
appropriate measures, responsibilities and deadlines shall be integrated in the overall project plan; if necessary
tools like APQP Check-Sheets can be provided.

2.3 Project-Reviews
The PARTNER is called upon, within the scope of internal project reviews to compare the current status of the
project with the desired goals and record the results. BILSTEIN is to be advised, in the manner agreed, of the
progress of the project and any eventual problems that may occur.
Trouble-free series start-up in line with agreed deadlines is a priority requirement of BILSTEIN and its customers.
Joint project reviews will be conducted together with BILSTEIN at milestones to be fixed. These milestones are
derived from the milestone planning of the OEM client. In the project review each Quality Gate will be evaluated
and passed. The processing and pursuing long-term measures can take place e.g. by „list of open points“,
supplier days or workshops to review the stage of development within the projects are similarly to be understood
as project reviews.
PROJECT MANAGEMENT 16

2.4 Launch-management
Together with those of BILSTEIN, the PARTNER’s products are incorporated in sophisticated systems and
components produced by the automotive industry. Shorter development times and quicker ramp-up to the peak
production requirements represent just a portion of the challenges to be accepted not only by BILSTEIN but also
by its PARTNERs.
With an overall focus to achieving trouble-free series start-up production, procedures for product and process
release have been developed in VDA volume 2. This standard has to be used, if not otherwise agreed upon.
BILSTEIN requires, amongst others, the completed bought-in parts deadline schedule for the purpose of
planning and controlling the start of production. This schedule has to be submitted as an electronic file, as
agreed with BILSTEIN. All changes to deadlines affected during production must be promptly and uncalled
brought to the attention of the project managers and agreed upon.
The PARTNER sends a written confirmation that the correct quantity of units for peak production and ramp-up
will be delivered
Within the projects BILSTEIN will agree a so called “Launch Containment” with the PARTNERs that mean that
special attention is placed on the first delivered quantities / lots. After successful deliveries the conditions of the
“Launch Containment” will be removed. In case of unsuccessful deliveries the conditions will remain.

2.5 Confidentiality
Regarding the collaboration with BILSTEIN, the PARTNER is obliged to confidentiality towards third parties. An
exception represents the legally mandatory duties of disclosure. Confidentiality obligations are to be agreed
upon also with sub-suppliers / service providers, if necessary for the purpose of this regulation.

2.6 Lessons Learned

The aim of “Lessons Learned” by/with PARTNERs is to ensure that past experiences are implemented in new
projects. Expertise from development, production, customer complaints and research projects can be utilized.
Tools which can be of use to this include knowledge databases, FMEA databases, design guidelines and
standards. BILSTEIN expects that corresponding systems are applied for the improvement of subsequent
projects.

2.7 Change Management

The PARTNERs ensure within their projects an accurate change management. All changes (product, process,
packaging, logistics chain, etc.) must be fully documented in the parts history. The change management applies
to production material and the related manufacturing equipment, production processes and tools.

All changes to the production process and product must be submitted to the relevant BILSTEIN Supplier Quality
Engineer by the PARTNER for approval at least 9 months in advance using the completed form FOS-00936
Supplier Change Request. The responsible purchaser must be informed at the same time. Unless otherwise
agreed, the PARTNER shall proceed in accordance with Table 2.
PROJECT MANAGEMENT 17

#Trigger

1 New parts V

2 Product modifications including material modifications (approved by development) V

3 Relocation of production V

4 Product process modification also including modifications in the logistical value chain V

5 Modification of test processes A

6 Interruption of production for more than 12 months V

7 Use of new, modified or replacement tools (not applicabe to cutting tools) V

8 Production site change of second tier suppliers (BILSTEIN 2nd tier). In the case of parts V
with special characteristics (SC/CC), the above obligation exists up to the supplier
responsible for the characteristic.

9 Production site change of second tier supplier (BILSTEIN 2nd tier) for components with V
SC/CC characteristics.

10 Production site change of second-tier supplier (BILSTEIN 2nd tier). A

11 Modifications in the PARTNERs purchased parts/primary material V

12 No unconditional series production approval V

13 Failed requalification V

Table 2 – Trigger PPA-process

V= Implementation of the PPA procedure and submission of results by the PARTNER

A= Obligation of PARTNER to notify the BILSTEIN department in writing.
The BILSTEIN department decides on the implementation and scope of the PPA procedure.

No changes may be made during the entire start-up phase (up to 3 months after OEM SOP). In well-founded
exceptional cases, BILSTEIN will make alternative arrangements.

Risks within the supply chain (resulting from e.g. changed legal and official requirements, changes in political
framework conditions etc.) must be regularly evaluated by the PARTNER and reported to BILSTEIN without
delay.

Tool changes may only be made with the prior written consent of BILSTEIN. If tool modifications become
necessary due to changes in BILSTEIN's technical specifications, a written modification offer shall first be
submitted.
PROJECT MANAGEMENT 18

Costs caused by supplier-induced modifications shall be entirely covered by the PARTNER.

If BILSTEIN is not notified in written form of a change, or is not notified in an appropriate time, the PARTNER acts
according the above mentioned obligations and shall be included in the BILSTEIN escalation procedure (see
section 13 "Supplier Performance Rating") and may be blocked from placing new orders (New Business Hold).
SUBMISSION OF OFFERS AND ACCEPTANCE OF ORDERS 19

3. SUBMISSION OF OFFERS AND ACCEPTANCE OF ORDERS

Content
3.1 Request for quotation
3.2 Submission of offers for parts and assemblies
3.3 Request of quotation documents, completeness / clearness
3.4 Feasibility study prior to order acceptance
3.5 Order confirmation

3.1 Request for quotation

The request for quotation to PARTNERs is made by BILSTEIN Purchasing. All requests for quotations are time-
bound and therefore they have to be processed within the requested transmission deadline.

3.2 Submission of offers for parts and assemblies

The PARTNER submits an offer for parts in a particular manner. The form to be used for the submission of offers
contains certain information (project, quantity, contact person). BILSTEIN expects to receive the offer from the
PARTNER in this detailed and comprehensible form.
These documents are provided by BILSTEIN Purchasing with detailed information. Deviations hereto have to be
agreed upon with BILSTEIN Purchasing.

3.3 Request of quotation documents, completeness / clearness

Prior to acceptance of the order, the PARTNERs ensures a verifiable examination of the documentation received
from BILSTEIN like product description, technical specifications, purchase terms and conditions etc. Should this
documentation prove to be insufficient from the point of view of the PARTNER, then he is invited to ask BILSTEIN
for supplementary information.

3.4 Feasibility study prior to order acceptance

The PARTNER shall examine the feasibility of the goods / services he has offered. Besides the technical
feasibility (manufacture of the parts under series conditions in line with the specifications and the required
process capability), this also encompasses such aspects as logistics, quality, deadlines, costs, compliance with
environmental regulations (AAV) etc. Feasibility is to be proven by the supplier, uncalled, to BILSTEIN along with
the submission of offer.
SUBMISSION OF OFFERS AND ACCEPTANCE OF ORDERS 20

3.5 Order confirmation

A written order confirmation is to be submitted uncalled by the PARTNER within 3 working days in any case. The
PARTNER, in examining the order, takes the following contents into consideration and confirms them:
• Technical design ( drawing index amongst others )
• Supply reliability, quantity and delivery date
• Destination
• Identification (amongst others VDA tags, e.g. project designation)
• Price, price setting
• Proof of compliance with the AAV (“Altautoverordnung”)
• thyssenkrupp AG general conditions of purchase
Court of jurisdiction, unless not otherwise agreed in writing, is that of the respective location of BILSTEIN.
Though BILSTEIN is authorized to call upon the PARTNER at their respective court of jurisdiction.

Order confirmations for serial deliveries are to be sent to the responsible logistic department. Order
confirmations for samples, prototypes, initial samples and trial parts are to be sent to Purchasing. In addition
BILSTEIN may require an ASN (advanced shipment note) for notifying all shipments of serial production parts.
This document shall be sent to the logistic department.
PRODUCT DEVELOPMENT 21

4. PRODUCT DEVELOPMENT
This section deals with PARTNERs engaged in product development. In the event that the task of product
development is shared between PARTNER and BILSTEIN, the areas of responsibility and competency regarding
detailed scope, competences and responsibilities will be clearly defined. Project-related or customer-related
deviations from standard can be agreed upon.

Content
4.1 Planning of development activities
4.2 Methods and techniques
4.3 Technical documentation
4.4 Examination of development specifications and feasibility
4.5 Design-Reviews
4.6 Homologation
4.7 Procedure when modifications are made to the parts

4.1 Planning of development activities

The PARTNER has to conduct suitable planning prior to the implementation of development activities including
contents, processes, interfaces, deadlines, competencies, infrastructure, design and testing standards, make-
up of technical documentation etc. A clear goal definition regarding development results must be agreed upon
with BILSTEIN.

4.2 Methods and techniques

To the extent that they are required for the completion of the project, the PARTNER must be in a position to
master the following methods:
• establishment of form and positional toleration
• evaluation of the tolerances chain, statistical toleration
• design for Manufacturing and Assembly DFMA
• value analysis
• test methodology (Design of Experiment DoE)
• FMEA (Failure Mode and Effects Analysis)
• Finite Element Method (FEM)
• Computer Aided Design (CAD)
• Development of solid models (Solid Modeling)
• reliability techniques
• simulation techniques
• use of CMM (3 D Measuring)
• and so on
PRODUCT DEVELOPMENT 22

4.3 Technical documentation

The content/form of the technical documentation is to be agreed upon between BILSTEIN and the PARTNER
prior to the placement of the order (process, methodology, distribution, EDI etc.).

4.4 Examination of development specifications and feasibility

Prior to order acceptance and commencement of development work, the PARTNER must ensure himself that the
requirements related to the development result such as performance characteristics, reliability, purpose of
utilization etc. have been established in adequate form. The PARTNER shall check the development
specifications in connection with fulfillment / feasibility and record the results of such examination. The PARTNER
has to confirm the feasibility with regard to technical processing, capacity and logistics. This confirmation is to
be supplied uncalled to BILSTEIN. The compliance with environmental requirements e.g. with AAV is a
precondition.

4.5 Design-Reviews
The PARTNER must conduct design reviews at fixed points of time. The development results presented will be
systematically analyzed during the Design Reviews to establish the extent to which the specifications defined
have been met. The procedure for Design Reviews will be coordinated between the PARTNER and the BILSTEIN
project management. The targets here are derived from the requirements of the OEM client. For the Reviews
BILSTEIN requires a brief, comprehensible presentation of the results.

4.6 Homologation
For the homologation the proof will be required that the product adheres to the specific laws and norms of its
destination country. In the event that homologation is to be carried out, the appropriate competencies are to be
coordinated and fixed at the time orders are placed. The competent project manager is responsible at BILSTEIN.

4.7 Procedure when modifications are made to the parts

The effects of modifications on function and performance, durability, manufacturing and mounting etc. are to be
clarified jointly with BILSTEIN. The modification is released by the project management. In instances where
approval of modifications is not required by BILSTEIN, this will be agreed separately. Modifications carried out
are to be recorded in accordance with the procedures established in the respective documents (drawings, bills of
material and similar) and kept up to date as history and transmitted to BILSTEIN after each modification. The
PARTNER undertakes to implement and maintain this procedure also at its sub-supplier. The modifications are
subject to the conditions of PPAP respectively VDA Band 2. Particular submission levels should be agreed with
QM BILSTEIN in advance.
DESIGN AND LAYOUT 23

5. DESIGN AND LAYOUT

Content
5.1 Design-FMEA
5.2 Manufacturing, assembly and measuring aspects
5.3 Technical calculation

5.1 Design-FMEA
PARTNERs with development tasks assure basically a systematic and comprehensible analysis of the risks
associated with the product utilization and possible malfunctions throughout the products’ period of use. For this
purpose, design FMEA’s according to the latest automotive standards are to be carried out in order to ensure
that potential problems are detected at an early stage, thus enabling appropriate preventive steps to be taken.
The product-related agreement between BILSTEIN and the PARTNER in respect of FMEA subjects, evaluation of
the significance associated with the consequences of faults, information exchange etc. is to be concluded prior
to start of design activity. The PARTNER has to submit, as a minimum, a brief but comprehensible presentation
of the FMEA results with focus on critical points, special characteristics and measures taken in order to alleviate
the risks. An “Interface-FMEA” will be carried out with BILSTEIN or BILSTEIN’s customers respectively.

5.2 Manufacturing, assembly and measuring aspects

The PARTNER assures to take into account in development aspects such as:
• manufacturability (performance of manufacturability analysis involving production engineers)
• mounting capability (adoption of effective design steps to avoid mounting faults)
• measurability (reasonable testing facilities of requirements)
• availability / procurement of materials (no critical materials)
• aimed target price (regular determination of calculated production costs)
• process stability (evaluation of expected process spreads and their significance for product functions etc.)
Agreements in this respect are to be made uncalled with BILSTEIN QM.

5.3 Technical calculation

As far as necessary for the project, the PARTNER shall prove by calculation that the product meets the requested
specifications like e.g. tensile strength, reliability, safety and functionality etc. This can be established by
dynamic / kinematical simulation on CAD, life-cycle analysis, distortion calculation (FEM), mold flow analysis and
similar.
The specifications are to be coordinated with the responsible BILSTEIN project management.
PROTOTYPES 24

6. PROTOTYPES
In order to ensure the product development, BILSTEIN and the PARTNER have to make explicit agreements for
the manufacturing and delivery of prototypes. These agreements must be defined in particular in a prototype-
guideline. The guideline, together with the Supplier Performance Schedule, will be valid for the current
BILSTEIN-development.
As far as no prototype-guideline is available, the below defined principles will apply.

Content
6.1 Technology, processes, sub-suppliers
6.2 Documentation of prototypes, testing of trial samples
6.3 Testing procedures and methods
6.4 Delivery conditions for trial, prototype and initial sample parts

6.1 Technology, processes, sub-suppliers

The same technologies, processes and sub-suppliers, including their processes, used for series production,
should also be employed, to the extent possible, for the production of prototypes. Deviations from the planed
series production are to be documented, and BILSTEIN is to be informed accordingly.

6.2 Documentation of prototypes, testing of trial samples

The prototype parts, assemblies and aggregates that need to be tested, have to be documented properly over
the whole creation cycle, manufacturing of parts and mounting. Beginning with the prototype status the supplier
has to be in compliance with the AAV (“Altautoverordnung”) and has to prove this with the appropriate
documentation. Any special requirements on the part of BILSTEIN shall be agreed upon separately. All
reworking, repairs and similar carried out on prototype parts are also to be documented. The scope of
documentation is to be agreed upon between the PARTNER and the BILSTEIN project management. A
dimensional record is to be sent with every delivery until the PPAP yellow release. Unless otherwise agreed, each
drawing feature of each component must be checked 100% and documented in the dimensional protocol.

6.3 Testing procedures and methods

The testing procedures and methods, basis of measuring, reference points, documentation, evaluation etc. are
to be coordinated in a timely manner between the PARTNER and the BILSTEIN QM.

6.4 Delivery conditions for trial, prototype and initial sample parts
Details of trial, prototype and initial sample parts are regulated in the delivery conditions for prototypes as well
as possibly by additional agreements listed in the appropriate orders. If there is anything in this respect which is
unclear to the PARTNER, he shall contact the responsible department at BILSTEIN to seek additional information.
PRODUCT TESTING 25

7. PRODUCT TESTING
Content
7.1 Test programs
7.2 Test evaluation
7.3 Testing of robustness
7.4 Design validation / verification

7.1 Test programs

Requirements to be specified in the test program, such as test / collective loads, load cycles, supporting
evidence, number of prototypes etc., if not noted in the technical specifications or on the drawing shall be
agreed upon separately. The PARTNER has to consider in the test programs the defined specifications for the
product like function, life cycle, reliability, dimension, material, etc., in a comprehensible way.

7.2 Test evaluation

The form of evaluation and reporting of test results at the PARTNER’s premises, if not noted in the technical
specifications or on the drawing, is to be agreed upon separately.

7.3 Testing of robustness

The robustness of the product is also to be determined within the scope of testing in respect of fluctuations in
manufacture. It may be necessary to intentionally keep desired characteristics of several prototypes not within
the range of the actual values but on the limit or outside the proposed range of tolerance limits. This must,
under all circumstances, be agreed upon with BILSTEIN prior to implementation.

7.4 Design validation / verification

Design validation / verification are to be carried out by the PARTNER. In doing so, the supplier must prove that
the product developed meets the specifications set forth. The manner in which design validation / verification is
carried out and documented is to be coordinated with BILSTEIN, DVTP form might be required.
SUPPLIERS MANAGEMENT 26

8. SUPPLIERS MANAGEMENT
Content
8.1 Procurement at sub-suppliers
8.2 Suppliers’ evaluation
8.3 Suppliers’ benchmark, suppliers’ nomination
8.4 Suppliers’ competitiveness

8.1 Procurement at sub-suppliers

BILSTEIN requires from its PARTNER s great care at their procurement activities. The requirements defined in the
Supplier Performance Schedule apply accordingly also for the procurement at sub-suppliers. The PARTNER
obliges himself, to implement these requirements at his PARTNER s and to supervise the compliance with these
requirements. Deviations have to be agreed upon separately and in writing.
If the PARTNER planes to change one sub-supplier he has to inform BILSTEIN. After a common evaluation of the
basic conditions and risks, the PARTNER has to plan the measures requested by BILSTEIN and implement
appropriate process and product releases. Changes of sub-suppliers are not permitted without the written
approval from BILSTEIN. This is also valid when the production of the supplier is transferred to service providers
(site in site relation).
BILSTEIN reserves its right, after prior coordination to conduct its own process releases or to participate at such
releases together with the BILSTEIN – client, if necessary.
The PARTNER shall document the procurement structure of its subcontractors and make this available to
BILSTEIN on request.

Unless otherwise agreed, PARTNER shall have sole responsibility for the selection of subcontractors. The
PARTNER shall be responsible for ensuring that the subcontractors reliably achieve the quality level required by
BILSTEIN by the start of series production and, beyond this, that they continuously maintain or improve the
quality level until the end of the supply relationship. PARTNER shall assume responsibility for all tasks associated
with subcontractor management, including those of directed suppliers, unless expressly agreed in writing
(interface agreement).

If the PARTNER obtains supplies and/or services from third parties ("Suppliers") for the manufacture of the Parts
or if the PARTNER obtains parts from third parties ("Sub-Suppliers"), the PARTNER shall constantly check these
supplies and/or services by sub-Suppliers to ensure that they are free from defects.

If BILSTEIN asserts any rights against the PARTNER due to defective parts, and if such rights presuppose fault
on the part of the PARTNER, the PARTNER shall be responsible for fault on the part of subcontractors, suppliers
and sub-suppliers to the same extent as for fault on its own part.

8.2 Suppliers’ evaluation

BILSTEIN evaluates regularly the performance of its PARTNERs. The evaluation covers wide criteria like:
• Adherence to delivery deadlines / quantities
• Rate of claims (ppm-values) and number of claims
SUPPLIERS MANAGEMENT 27

• Competitiveness, potential for cost reduction

• Cooperation
• Communication
• Capacity for innovation

8.3 Suppliers’ benchmark, suppliers’ nomination

A suppliers’ benchmark, e.g. within one project reaches from price comparison (parts category C/D) till concept
competence (parts category A), that is bidding of a “Black Box“ based on technical specification or similar.
In order to comply with the requirements of the automotive industry, the competence evaluation of future
BILSTEIN PARTNERs are evaluated on the basis of a supplier self-assessment and the potential analysis in
accordance with VDA 6.3, which can result in the future PARTNER processing an action plan.
A VDA 6.3 potential analysis can also be applied:
• for PARTNERs which have changed their requirement profile / parts portfolio
• for PARTNERs with important technological modifications (processes, materials)
• in case of important increases of volumes or important increase of parts numbers respectively, e.g. in new
projects
• in case of important modifications in the company structure / organization / personnel of the PARTNER

A formal supplier’s nomination can be done based on a Letter of Intent (LOI).

VDA 6.3 Audits can be performed at the PARTNER as further element of the nomination and release process.
Audits will be carried out, after prior coordination, also together with the BILSTEIN-client if necessary.

8.4 Suppliers’ competitiveness

BILSTEIN requires from his PARTNERs a constant improvement of the cost effectiveness.
Only in this way BILSTEIN can fulfill together with the PARTNERs the requirements for environment-friendly, safe
and high quality products with a competitive cost/performance ratio.
For increasing its competitiveness, the PARTNER must implement the following measures:
• Identification of potential by cost analysis
• Creation of an increased cost transparency, starting with a clean offer break-down (Cost-break-down) until a
„open book calculation“ is necessary
• Identification of cost potential by PARTNERs in the course of constant improvement, innovations, new
technologies, new production sites
• Common workshops on cost reduction (e.g. technical savings, revision of logistic concept etc.)

BILSTEIN expects the support of its PARTNERs for the improvement of the cost efficiency. Details hereby have to
be requested at BILSTEIN Purchasing.
PRODUCTION PREPARATION AND SERIES PRODUCTION 28

9. PRODUCTION PREPARATION AND SERIES PRODUCTION

Content
9.1 Process sequence schedule
9.2 Control and test plans
9.3 Critical processes and technologies
9.4 Process FMEA
9.5 Process analysis and process capability investigations
9.6 Monitoring of product and process, process regulation
9.7 Process monitoring and tests
9.8 Test equipment capability, test equipment monitoring
9.9 Conformity attestations, test certificates
9.10 Maintenance of equipment and tools
9.11 Changes in the manufacturing process
9.12 Securing of production and supply availability / emergency strategies
9.13 Changes of product specifications
9.14 Deviation release
9.15 Recording of product and process data, identification and traceability
9.16 Requalification

9.1 Process sequence schedule

The PARTNER lays out his manufacturing processes in the process sequence schedules. These contain in a
clearly recognizable and comprehensible manner the interfaces to his sub-suppliers and to BILSTEIN, the
process stages, the type of process regulation, the scope of testing and the quality-related documentation. The
PARTNER is requested to continuously up-date the process sequence schedules throughout the whole duration
of the project. Modifications in the process flow charts have to be sampled and released by BILSTEIN.
The PARTNER is requested to create the process sequence schedules according with AIAG, APQP. Process
sequence schedules are part of the initial samples and must be submitted as shown in table 1 to BILSTEIN.

9.2 Control and test plans

Within the APQP processes the PARTNER has to elaborate appropriate control and test plans. In these
documents all control and test steps necessary for a free-from-defects series production have to be presented.
Tests’ complexity, tests’ frequency, requalification and measures in case of deviations have to be defined in
these documents. The control plans are part of the initial samples and must be submitted according to table 1 to
BILSTEIN. For special parts, the control plans have to be agreed upon with BILSTEIN (Project
management/Development/QM).
PRODUCTION PREPARATION AND SERIES PRODUCTION 29

9.3 Critical processes and technologies

The PARTNER has to identify critical processes and technologies (which also contain bottle neck analysis) in his
production. Hereby the supplier has to take appropriate measures to achieve the required output and process
capability by detailed planning, process analysis, identification and definition of “special characteristics“, that is
characteristics with increased importance for the process and important process parameters, process release for
series production, process monitoring and regulation, immediate measures at deviations, etc.

9.4 Process FMEA

The PARTNER must analyze his manufacturing processes by means of process FMEA’s. The process FMEA’s
must, as a minimum, take into account the reliable manufacture of key characteristics, along with the required
process capability. The procedure to be adopted in connection with the FMEA shall be agreed upon between the
PARTNER and BILSTEIN. In generally the standards of the automotive industry apply. BILSTEIN requires a brief
but comprehensible presentation of the FMEA results by the PARTNER. The PARTNER has to assure BILSTEIN at
least access to the created FMEA’s. If improvements have been determined, the PARTNER has to consider them
in the FMEA and implement the improvements.

9.5 Process analysis and process capability investigations

Appropriate process analysis and process capability investigations have to be conducted, short and long term,
for achieving and providing evidence of process control and capable processes accordingly. This applies
especially for “special characteristics”. BILSTEIN requires:
• Coordination of quality critical characteristics with BILSTEIN.
• For attributive characteristics verifications based on WNB-875
• For processes that are not demonstrably stable and capable, the process results must be verified to 100%
(for further control methods see WNB-875).
• If a product characteristic cannot be demonstrated via process capability parameters (e.g. in the case of
special processes such as welding, heat treatment, casting), evidence of secondary characteristics must be
provided and/or 100% testing must be used.
• Requirements regarding preliminary process capability (ppk), machine capability (cmk) and continuous
process capability (cpk) are specified in the working standard "Feature scaling" (WNB-875).
For all characteristic applies basically the zero defect target.
If characteristics or components "Pass Trough Characteristics (PTC)" are produced by a sub-supplier and are no
longer tested by the PARTNER, the PARTNER shall ensure appropriate monitoring measures at the place of
production.

9.6 Monitoring of product and process, process regulation

The regulation regarding the manufacturing processes has to include the monitoring of the product
characteristics and process-influencing parameters. For this, appropriate methods like e.g. SPC have to be
employed. The process parameters complying with this regulation have to be defined in the control plans and
documented in an appropriate form.
BILSTEIN requests proofs of stability and process capability at least for critical safety related characteristics and
other “special characteristics”
Prevention before error detection applies here!
PRODUCTION PREPARATION AND SERIES PRODUCTION 30

9.7 Process monitoring and tests

The PARTNER has to concentrate first on achieving and providing evidence for capable processes, as zero-
defects strategies are normally not guaranteed in an economical manner by means of tests. The PARTNER has
to plan and implement for all production phases appropriate tests. The characteristics with increase importance
have to be considered in a special way in the test planning. The planned tests have to be documented in the
control plans. Nevertheless the aim has to be to reduce tests to a minimum by capable process. Tests have to
serve, as much as possible only for confirming and documenting the achievement of the requirements and not
for identification of deviations.
The test procedures and methods (measuring basis, reference points, test equipment, documentation,
evaluation, immediate measure in case of deviations, etc.) have to be agreed upon in time between the supplier
and BILSTEIN.
BILSTEIN has the right to take part at tests and diagnoses carried out by his suppliers and his sub-suppliers, to
indicate third parties authorized by BILSTEIN to monitor such activities or to conduct himself after prior
agreement suchlike tests at his PARTNERs and his sub-suppliers or indicate third parties authorized for
performing such tests.

9.8 Test equipment capability, test equipment monitoring

The PARTNER ensures that the capability of his test equipment can be proven at all times and that all current
values are known to all concerned. This applies in particular to the following scopes:
• Suitability of test equipment for the proposed purpose
• Appropriate accuracy and precision
• Stable test equipment capability, that is repetitiveness and comparability of the measurements (reference:
MSA) especially for “special characteristics” and characteristics with increased importance

The PARTNER organizes the monitoring of his test equipment in a manner that the capability and functionality of
such equipment can be credibly proven at any time.
Gauging concepts are to be adapted and agreed upon in time with BILSTEIN.

9.9 Conformity attestations, test certificates

The PARTNER must provide evidence, in a suitable manner, that he meets the BILSTEIN specifications. This
should primarily take place in the form of attestation of process capabilities. Upon request of BILSTEIN the
PARTNER has to present supplementary test certificates (e.g. according to DIN EN 10204) and agreed test
verifications respectively. Agreement can be reached with BILSTEIN QM for the certificates to remain at the
premises of the PARTNER and kept available as required by BILSTEIN.

9.10 Maintenance of equipment and tools

Through a preventive maintenance and service program the PARTNER ensures the constant operational
readiness and capability of its tools, equipments and devices is given.
This must be documented by suitable maintenance plans.
The documentation on equipment and tools shall be directed in a suitable manner, i.e. tool changes and new
use shall be documented including internal release.
For further details please see also chapter Tools.
PRODUCTION PREPARATION AND SERIES PROD UCTION 31

9.11 Changes in the manufacturing process

Changes in the manufacturing processes of the PARTNERs which, for example, can lead to changes in the
product characteristics (in respect of geometry, mechanical properties, tensile strength, durability, machining
and similar) are to be advised to BILSTEIN prior to their implementation. After joint evaluation of the basic
conditions and risks, the PARTNER has to plan and implement the measures required by BILSTEIN. Changes
must be processed in compliance with the demands of IATF 16949. BILSTEIN reserves his right to accept and to
release these changes after prior agreement and to pass on incoming costs according to the costs-by-cause-
principle.

9.12 Securing of production and supply availability / emergency strategies

The PARTNER shall establish suitable measures to assure 100% production and supply availability in the scope
agreed upon. An emergency strategy for unforeseeable events has to be implemented for the following:
• Tool breakage / machine failure
• Fire
• Flooding
• Strike
• Power cuts
• Transport loss
• etc.
The PARTNER has to provide appropriate emergency plans for supplying BILSTEIN with its products.

9.13 Changes of product specifications

The PARTNER is not allowed to implement changes to the product without a prior written approval of BILSTEIN.
Changes initiated by BILSTEIN within ongoing serial production will be announced in written form. The PARTNER
has to confirm this accordingly and forward all these requirements to his sub-suppliers. The PARTNER is
responsible to check that on the orders are the most up to date drawings and specifications from BILSTEIN,
according to the drawing index.
Run-out of old products and introduction of modified version must be unmistakably indicated by the PARTNER in
the delivery documents and on the packaging in a way that cannot be lost. The form of identification / marking is
to be voluntarily agreed upon by the supplier with the responsible logistics department and BILSTEIN QM.
BILSTEIN reserves the right to claim on goods not clearly identified and to pass on the costs (such as production
stoppages, higher administration costs, return consignments etc.) to the PARTNER.

9.14 Deviation release

The PARTNER must deliver in compliance with the drawings and specifications. In the event that he is
temporarily not able to do so as a result of slight deviations, the opportunity exists of submitting a written
request to BILSTEIN for deviation release. Deviations can only be approved when safety, function, durability,
machining and assembly capability of the parts is not in any way affected. A deviation release always requires
the written approval of BILSTEIN to become effective and is limited to a certain number of parts or a certain
period of supply.
PRODUCTION PREPARATION AND SERIES PRODUCTION 32

9.15 Recording of product and process data, identification and traceability

The PARTNER has to ensure at least one batch-related (production lot) traceability and to determine and
contoniously determine and record product and process data. Based on the recorded data following issues have
to be ensured:
• assignment of production conditions and feature characteristics of the product (actual values) to the
production and delivery lots
• Reconstruction of the chain of events in case of problems’ occurrence
• Localization of the units affected.
If the PARTNER supplies parts with special characteristics (SC/CC), a traceability concept must be submitted to
BILSTEIN when the offer is submitted and approved by BILSTEIN. Unless otherwise agreed, individual part
traceability shall be implemented.

It is the responsibility of the PARTNER to determine suitable labelling methods and data for traceability on the
basis of his knowledge (know-how regarding the product and processes), to create appropriate records and to
archive the data. Detailed requirements can be specified in project-specific documents (e.g. drawings,
specifications, etc.).

If a parts related identification (e.g. calendar clock, production calendar) is required, the PARTNER shall ensure
that this identification form is readable and up-to-date on all production parts.

It is the duty of the supplier based on his knowledge (know-how in respect of product and processes) to
establish suitable methods of identification and data for traceability, keep appropriate records and archive data.

9.16 Requalification
The PARTNER ensure for parts of category A, B, C the requalification process of parts as described in the IATF
16949.
1. Frequency of requalification: If nothing else has been agreed, frequency of requalification is once per
year starting from SOP. More frequent requalifications can be required by BILSTEIN if customer relevant
target deviations (i.e. exceeding of ppm-targets) occur.
2. Content of requalification: The minimum content of the requalification is specified in the IATF 16949.
Examples of requalification checks are:
a. Durability test
b. Certification of endurance tests
c. Burst pressure test
d. Dimensional verifications
e. Material certificates
f. Corrosion tests
g. etc.
During project phase additional requalification requirements can be defined by BILSTEIN.
3. Planning of requalification: If nothing else has been agreed, the requalification content is self-
responsible planned by the PARTNER according to the requirements.
4. Product families: Creation of product families is possible in consultation and agreement with
BILSTEIN.
5. Monitoring of requalification: BILSTEIN reserves to verify PARTNER requalification, if necessary on-
site. Trigger can be 0-km/field claims or planned monitoring activities.
PRODUCTION PREPARATION AND SERIES PRODUCTION 33

6. Non-conformity procedure: In case of any deviations, PARTNER shall inform immediately BILSTEIN,
conduct corrective and preventive actions and repeat requalification with regard to the deviation.
7. Communication and storage: Results of requalification shall be stored 30 years after creation at
PARTNER site and shall be provided on request of BILSTEIN.

Through the requalification the PARTNER shows proof that his products comply with existing laws, specifications
(technical specifications, drawings) and approved samples.

The PARTNER has to ensure that the requalification at its suppliers, subcontractor and sub-suppliers is
conducted.
LOGISTICS 34

10. LOGISTICS
In order to assure a good functioning parts supply, clear agreements between BILSTEIN and the PARTNER are
required. The met agreements have to be defined in a supply concept and or in a consignment warehouse
contract for each BILSTEIN production plant. These agreements together with the supplier performance
schedule release are then valid for the respective BILSTEIN-production plant.
In case that special transport is needed to maintain deliveries, the PARTNER has to inform without delay the
responsible person at BILSTEIN.
Apart from individual regulations the following regulations are valid.

Content
10.1 Logistic concepts
10.2 Packaging
10.3 Identification of series supplies
10.4 Order confirmation (quantities, deadlines, revision status), ASN (Advanced Shipment Notice)
10.5 Serial productions call-off orders
10.6 Shipment / carriers
10.7 Safety stock

10.1 Logistic concepts

The PARTNER establishes a concept for his sales logistics. This has to be coordinated with BILSTEIN and further
developed by the PARTNER in line with the progress of the project. The PARTNER must incorporate fundamental
logistic aspects such as traceability and FIFO (first in – first out) etc.
The logistics concept is to be systematically examined in respect of possible risks, e.g. by means of a logistics
FMEA. The PARTNER must make sure that he fulfills his supply obligations 100%. BILSTEIN greatly encourages
the use of AIAG, Odette, MMOG (Materials Management Operational Guide).

10.2 Packaging
The PARTNER has to co-ordinate the selection of packaging materials with the responsible departments at
BILSTEIN (e.g. skeleton containers, returnable containers or Euro pallets).
If not defined separately in packaging specifications in each individual case, the selection of sub-packaging is
the responsibility of the PARTNER and the type of packaging is to be chosen such that:
• the goods are protected from damage, contamination or environmental influences which could have a
detrimental effect on the quality of the goods
• packaging is in line with statutory regulations in respect of environment protection
• possible corrosion of the goods is excluded
• electrostatic loading of the goods is prevented
• containers or packaging are storable and stackable
LOGISTICS 35

Prior serial delivery, the PARTNER is asked to agree with BILSTEIN Logistics upon adequate packaging and
identification by mean of following (facility-referred) specifications.
Lack of packaging release does not exempt the PARTNER from delivery.

10.3 Identification of series supplies

Identification of the goods on series deliveries must be effected such that
• clear, unmistakable identification is guaranteed
• traceability is guaranteed
• identification has been carried out in line with the requirements (e.g. by bar code, if required)
• appropriate delivery details, for example “Werk Mandern, Linie ASA, Tor 2” from the order or call-off order
have been taken over
• compliance with standards of transited countries is ensured

10.4 Order confirmation (quantities, deadlines, revision status), ASN

(Advanced Shipment Notice)
The PARTNER must ensure that he fulfills his delivery obligations to 100%. The PARTNER is required to confirm
all purchase orders according quantities, delivery dates and revision status. In addition he might be required to
issue an ASN (advanced shipment notice) for each shipment, whereas this must be sent to the BILSTEIN
Logistics on date of the shipment. The ASN should include information like BILSTEIN drawing- or part number,
quantity shipped, carrier’s address, shipment identification numbers, purchase order.

10.5 Serial productions call-off orders

BILSTEIN Logistics will issue delivery call-off orders for products required, with frequency of one week or two
weeks. In some cases EDI maybe required.
In case of direct deliveries to corresponding BILSTEIN factory, the call-off order represents the basis for the
PARTNER in respect to quantities and deadlines. The delivery dates are to be understood as dock dates at the
respective BILSTEIN facility and they are binding for the PARTNER.
If the PARTNER delivers into a consignment warehouse, then the call-off orders are the basis of the production
planning of the PARTNER. The details to this will be defined in a special agreement. BILSTEIN expects from the
PARTNER to be flexible in regards to changes of call-off orders and purchase order. In order to mitigate the
effects of fluctuations measures have to be taken as follows:
• Safety stocks on finished parts and raw material
• Flexible production control to a fast reaction
• Extra shift
• etc.

10.6 Shipment / carriers

All PARTNER shipments, where BILSTEIN is responsible for freight, must utilize BILSTEIN approved carriers.
Further information on this is to be received through the responsible logistic employee or project management. It
is the PARTNERs responsibility to contact those carriers and plan accordingly to properly dispatch product to
ensure delivery as per order.
LOGISTICS 36

10.7 Safety stock

The PARTNER is required to install permanent finished goods storage as agreed with BILSTEIN logistics or
project team in order to insure product supply capability at all times.
CLAIM MANAGEMENT 37

11. CLAIM MANAGEMENT

Content
11.1 General claim management
11.2 Potential defects and deviations prior to delivery to BILSTEIN
11.3 Deviations detected within incoming goods inspection
11.4 Deviations detected by BILSTEIN in the course of subsequent processing
11.5 Deviations detected at BILSTEIN’s clients

11.1 General claim management

BILSTEIN informs his PARTNER promptly and in written about deviations and claims. Thereby non-conformities
can be identified at incoming inspection, production or final client. The processing will be carried out by means
of inspection report, preliminary information can be given per Mail, Fax or Phone. In case no reliable problem
solving is taken, then the PARTNER has to take further measures within the escalation management. There is
clearly defined escalation steps described within the reclamation handing with the PARTNER. Depending on the
effectiveness of agreed measures (improvement of delivery performance), the reaction time of the PARTNER,
quality of information and supply level at BILSTEIN etc, the individual escalation steps will be gone through.
The PARTNER is required to have a prompt and adequate reaction (stock turnover examination, replacement
delivery, emergency measures, special deliveries, 8-D report, Fish-Bone diagram, 5 Why, amongst others) in
case a claim is filed. The introduced measures have to be agreed upon together with BILSTEIN QM. BILSTEIN
will notify and pass on the cost resulting from the claim (e.g. line stoppage, sorting, return transport, special
inspection etc.). Thereby the effective costs will be invoiced. Concerning the internal reclamation handling, the
costs will not be determined separately, but as a lump sum (actual 500,-€) stated on the inspection report and
passed on. Costs can vary for the different BILSTEIN locations. Detailed information can be requested from
BILSTEIN QM. The PARTNER is required to ensure against special damages from BILSTEIN or BILSTEIN’s
customers using an appropriate insurance.

The following requirements apply tot he processing time of 8D processes:

Discipline: Content Within:
D1 Team 24 hours 10 working days 20working
D2 Problem analysis days
D3 Emergency measures
D4 Cause analysis
D5 Definition of corrective actions
D6 Implementation and proof of effectiveness
corrective measures
D7 Implementation of preventive measures
D8 Conclude report and Lessons Learned
Table 3 – Throughput times 8D process

In the event of a problem, BILSTEIN reserves the right to access sub-contractors directly if the PARTNER's
problem-solving activities are not successful within the specified time periods. If necessary, BILSTEIN customers
may also be involved.
CLAIM MANAGEMENT 38

11.2 Potential defects and deviations prior to delivery to BILSTEIN

In the event of potential defects and deviations from the agreed object of supply, which the PARTNER discovers,
or suspects, prior to or after dispatch, but prior to income delivery (passing of risk) at BILSTEIN’s premises, the
PARTNER must react immediately (self report).
At all events, the following measures must be adopted by the supplier in the sequence stated below:
• Notification to BILSTEIN QM of the nature and scope of the defects and / or deviations suspected or
detected.
• This also applies to delayed or non-executed deliveries as well as to excess and short-shipped
consignments. This information and measures to assure BILSTEIN production capability is to be made
immediately available to BILSTEIN Logistics.
• Stoppage of dispatch and delivery to BILSTEIN premises and immediate faultless 1: 1 replacement within
the agreed delivery deadline.

The PARTNER must ensure traceability through the entire process and if required the documentation has to be
presented accordingly. In case immediate, faultless replacement delivery is not possible within the agreed
deadline, then application is to be made to BILSTEIN QM in written form for a deviation release regarding the
supply of limited lots under these conditions. Nevertheless the dispatch has to be delayed until the confirmation
from BILSTEIN is available.
BILSTEIN reserves the right to pass the costs incurred in such operations onto the PARTNER. Self reports will not
be included in the evaluation of suppliers.

11.3 Deviations detected within incoming goods inspection

It is the policy of BILSTEIN in the future to only co-operate with PARTNERs with whom a quality assurance
agreement and the supplier performance schedule have been concluded. In such cases, BILSTEIN will waive a
random logistic incoming inspection and will only make a visual check of identification, external damage and
correct quantities prior to acceptance of the goods. If deviations are noted within this inspection, the goods will
be returned to the PARTNER with the appropriate report.
In this case the PARTNER has to take the measures agreed upon with BILSTEIN QM. The necessary special
measures are depending on the urgency of the situation. Provided that the PARTNER is not reachable (e.g. night
shift, week-end), BILSTEIN will apply remedial actions, the costs incurred will be charged to the PARTNER and
further measures will be agreed with the PARTNER when reached.
Concerning the quantities and schedule deviations there has to be generally unrequested taken contact with
BILSTEIN Logistics and take the necessary measures, in order to assure the supply capacity of BILSTEIN.
BILSTEIN reserves the right to pass on costs incurred in such operations to the PARTNER, following the costs-
by-cause principle. The arising n.i.O. (nonconforming) quantities will have a ppm–relevant impact in the
evaluation of suppliers.

11.4 Deviations detected by BILSTEIN in the course of subsequent

processing
Deviations identified just in the course of subsequent processing, respectively in assembly process, the
PARTNER is obligated, within 24 hours, to either supply:
• conform replacement parts and/or
• to carry out or to order sorting at his cost and/or
CLAIM MANAGEMENT 39

• to obtain special releases.

The special measures must be agreed with QM BILSTEIN. The necessary special measures depend on the
urgency of the situation. Provided that the PARTNER is not reachable (e.g. night shift, week-end), BILSTEIN will
apply remedial actions, the costs incurred will be charged to the PARTNER. Further measures will be agreed with
the PARTNER when reached.
In order to ensure continued BILSTEIN delivery capability, deviations in quantities and deadlines are to be
voluntarily taken up by the supplier with the BILSTEIN logistics department and appropriate corrective action
steps are implemented.
BILSTEIN reserves the right to pass on costs incurred in such operations to the PARTNER, following the costs-
by-cause principle. The arising n.OK. (nonconforming) quantities will have a ppm–relevant impact in the
evaluation of suppliers.

11.5 Deviations detected at BILSTEIN’s clients

If non conforming parts are detected by BILSTEIN’s clients, immediate action of the PARTNER for cost
minimization is necessary. Special measures are to be agreed with BILSTEIN QM. These will be agreed between
BILSTEIN QM and the OE-client.
The necessary measures depend on the urgency of the situation. Provided that the PARTNER is not reachable
(e.g. night shift, week-end), BILSTEIN will apply remedial actions, the costs incurred will be charged onto the
PARTNER. Further measures will be agreed with the PARTNER when reached.
BILSTEIN reserves the right to pass on costs incurred in such operations to the PARTNER, following the costs-
by-cause principle. The arising n.i.O. (nonconforming) quantities will have a ppm–relevant impact in the
evaluation of suppliers.

11.6 Findings & analysis of damaged parts

All equipment which is necessary for the analysis must be available at the PARTNER. In exceptional cases,
external service providers can also be used for problem analysis (universities, institutes, external laboratories).
These external service providers must have valid accreditation for the specific activities according to ISO/IEC
17025 or be approved by BILSTEIN for this purpose. The PARTNER is responsible for providing BILSTEIN with
such proof. BILSTEIN must be notified of the external service providers designated to deal with the problem.

BILSTEIN and its customers shall be entitled to participate in tests and findings carried out by the PARTNER and
its subcontractors, to have such tests and findings observed by third parties authorised by BILSTEIN and/or its
customers, or to carry out such tests at the PARTNER's and its subcontractors' premises themselves or have
them carried out by authorised third parties after prior consultation. In the event of danger, they are allowed to
access at any time. Proof must be provided that the necessary capacities are available.

The PARTNER shall introduce a damage analysis process in accordance with VDA Volume Damage Analysis
Field. In addition to a standard test, this includes a load test and a defined No-Trouble-Found (NTF) process,
including NTF trigger criteria defined by the PARTNER. BILSTEIN reserves the right to check and supplement
these.
TOOLS 40

12. TOOLS
Content
12.1 Provisions for subsidization of tools
12.2 Maintenance and storage
12.3 Tool modification
12.4 Duty to return
12.5 Restriction on use / labeling
12.6 Tool Insurance
12.7 Liability

Definition
Tools are only original, forming and cutting tools according to the definitions in DIN 8580/8582/8588; all other
equipment is not regarded as tools.

12.1 Provisions for subsidization of tools

BILSTEIN only subsidizes tool costs on new parts in the form of a single payment when such costs are refunded
by BILSTEIN’s customers. In all other cases, subsidization of tool costs is covered by a jointly agreed quantity
included in the price of the part. If not otherwise agreed, the ownership of tools is transferred to BILSTEIN as far
as BILSTEIN takes a share on the tooling costs by single payments or assessments. The handing-over of the
tools won’t take place as usually, but after successful release of the samples, based on a cession agreement,
the PARTNER has the right to use the tools free of charge and BILSTEIN gains the indirect ownership over the
tools.
Additional production aids necessary for manufacture of the parts, as well as the cost of service and
maintenance, are not subsidized. Tool modification costs are accounted in accordance with the principle of
whom or what caused them. Property of BILSTEIN or its customers must be marked as such immediately.

12.2 Maintenance and storage

Tools are to be stored in an orderly manner to protect them from damage of any kind. The PARTNER must
ensure, at his own cost, constant, faultless functional readiness of the tools for the purpose of perfect supply
through continuous servicing and maintenance. This encompasses all expenditure for maintaining operational
readiness and for remedying all defects and damage, as well as to cover all modifications and deterioration
resulting from wear. The PARTNER must document the maintenance in a maintenance schedule, which can be
shown to BILSTEIN if required.
As far as not otherwise agreed upon, (e.g. production of “all-time” demands), the PARTNER has to store tools
and production devices properly and clean for other 15 years after serial run-off, and also to ensure their
functional readiness and the delivery of spare parts in this period. These rules are also applied for not subsidized
tools and production devices. Prior to scrapping of tools and production devices, the PARTNER has to obtain the
scrapping approval from BILSTEIN, because before scrapping „old-timer-demands“ might have to be covered
by alternative production, single production etc.
TOOLS 41

12.3 Tool modification

See chapter 2.7 “Change Management”

12.4 Duty to return

On request of BILSTEIN, the PARTNER is obliged to return anytime the tools which belong to BILSTEIN or to
BILSTEIN’s customers in a condition such that faultless series production is guaranteed.

12.5 Restriction on use / labeling

Subsidized tools (also amortization by part price) are to be used exclusively for the purpose of fulfilling the
PARTNER’s delivery obligations to BILSTEIN and must be marked with the name of the owner. The owner can be
BILSTEIN or a BILSTEIN-customer. If not otherwise agreed, owner, part name and part number, date of
manufacture and if necessary project assignment have to be mentioned readable on the tool.
In case that property of BILSTEIN or its customer are imperiled by enforcement measures, especially such as
seizure, confiscation, insolvency proceedings, the PARTNER has to inform BILSTEIN about this immediately.
Anyway, the executor officer has to be informed without delay about the property right of BILSTEIN or its
customer. At the same time, the PARTNER will send a copy of the enforcement documents to BILSTEIN.

BILSTEIN reserves the right to pass on its own rights and obligations to its end customers. In this case, these
shall apply in the interests of BILSTEIN's end customer. In such a case, BILSTEIN will inform the PARTNER in
written form. The PARTNER shall ensure that its obligations also extend to tools at its subcontractors. The
PARTNER shall ensure that its subcontractors, where tools are located, grant BILSTEIN the rights agreed in this
document. This applies in particular to the obligation to mark the tools as BILSTEIN property (or as property of
the end customer).

With regard to tools, devices and gauges as well as all subsequent tools, devices and gauges, BILSTEIN shall
receive, upon their acquisition or manufacturing, security ownership in order to secure the delivery. BILSTEIN
may demand the return of the tools, devices and gauges in the event of an interruption in delivery. In this case,
BILSTEIN shall be entitled to reimburse the PARTNER for the portion of the costs of the tools, devices and
gauges which have not yet been amortised. Upon reimbursement of costs, BILSTEIN shall acquire full
ownership.

12.6 Tool Insurance

The PARTNER is responsible to ensure that subsidized tools are sufficiently insured against:
• fire, explosion
• theft
• storm
• water damage
• etc.
and must unasked offer evidence of this.
TOOLS 42

12.7 Liability
The PARTNER is liable for all defects, damages, modifications or deterioration of tools. The PARTNER’s liability is
not applicable if the defects, damages, modifications or deterioration of tools are due to force majeure. The
PARTNER has to ensure that the tools can not cause personnel or property damages. The PARTNER releases
BILSTEIN from such damage claims.
SUPPLIER PERFORMANCE RATING (SPR) 43

13. SUPPLIER PERFORMANCE RATING (SPR)

BILSTEIN regularly carries out an evaluation of its supplier base in the form of the Supplier Performance Rating
(SPR). The evaluation is based on the four fields of quality, logistics, purchasing and project management.
Starting from a starting basis, points (PS - Performance Score) can be gained or lost, which are then combined
into an overall key figure for recording the supplier performance. Depending on the total key figure achieved, the
PARTNER is classified into a performance group (Excellent, Good, Suitable, Poor, NBH).

To ensure the quality of the components/modules, BILSTEIN aims to ensure that the PARTNER produces the
components/modules at a production site rated "A" (VDA 6.3). If the quality capability of the PARTNER's
production/development site is or will not be rated "A" at the time of award or at a later date, the PARTNER must
qualify the production/development site concerned in such a way that an A rating is achieved. A "C" rating leads
to a New Business Hold.

If systematic weaknesses in the PARTNER's processes or at the PARTNER / BILSTEIN or PARTNER / sub-supplier
interfaces are identified during the supplier assessment (product development process, series supply or spare
parts supply), BILSTEIN reserves the right to implement a DRIVE (Deviation, Risk, Improvement, Verification,
Excellence) supplier development programme together with the PARTNER: If the PARTNER is classified in the
Poor or NBH performance groups, participation in the DRIVE development programme is mandatory.
This does not affect the PARTNER's obligation to take the initiative. BILSTEIN's supplier management team will
have an accompanying function to support the PARTNERS in individual activities.

BILSTEIN reserves the right to pass on to PARTNER any expenses incurred within the framework of the DRIVE
Supplier Development Programme.
APPENDIX 44

14. APPENDIX
14.1 Cited Standards
• DBL 8585 Negative materials list (Daimler AG specification)
• DIN EN ISO 14001 Environmental requirements
• DIN EN ISO 9001 QM System requirements
• ISO Guide 17025 Laboratory services
• IATF 16949 QM System requirements (until 14.09.2018 ISO/TS 16949 alternatively valid)
• IATF 16949 Customer Specific Requirements (CSR)
• IATF 16949 Sanktionierte Interpretationen (SI)
• IATF 16949 Frequently Asked Questions (FAQ)
• VDA 2 Supplies quality assurance
• VDA 4.3 APQP
• VDA 6.1 QM-System audit
• VDA 6.3 Process audit
• VDA 6.4 Systems audit production materials
• Customer Specific Requirements e.g. MB Special Terms; Formel Q-Konkret; Formel Q-Capability; Formel Q-
New Parts Maturation-Grade; Porsche Q-Specifications; JLR JLRQ Manual; JLR JLRQ Manufacturing Site
Assessment;

(for cited standards the latest version will be the relevant version, unless otherwise agreed)

14.2 List of abbreviations

AAV Altautoverordnung
AIAG Automotive Industry Action Group
APQP Advanced Product Quality Planning
ASN Advanced shipment notice
BME Federal Association for Materials Management, Purchasing and Logistics e.V.
Bulk Material Mass-produced goods, standard or similar part, mostly as bulk
CAD Computer Aided Design
CC Critical characteristics
CIP Continuous Improvement
COP Conformity of Production
CSR Customer Specific Requirements
CQI Continuous Quality Improvement
DBL / DCL DaimlerChrysler delivery-specification
DFMA Design for manufacturing and assembly
DoE Design of Experiment
DVTP Design Validation Test Plan
ISIR Initial Sample Inspection Report
FEA Finite Element Method
FiFo First in - First out
FMEA Failure Mode Effect Analysis
i.O. Conforming
APPENDIX 45

IMDS International Material Data Sheet

KVP Continuous improvement process
MSA Measuring system analysis
n.i.O. Non conforming
PPAP Production Part Approval Process
ppm parts per million
QG Q-Gates Quality Gates
QM Quality Management
QSV Quality assurance agreement
REACH Registration, Evaluation, Authorization and Registration of Chemicals
RPZ Risk assessment key figure
SC Significant characteristics
SPC Statistical process controlling
VDA Association of German automotive manufacturers
WA Goods outgoing / shipping area
WE Goods incoming / receipt of goods
8-D Report systematic tool for root cause analysis
GADSL Global Automotive Declarable Substance List
TVL Consignment Warehouse

14.3 Release history of the „Supplier performance schedule”

Initial Release
Release 0 February 2001
Release 1 September 2002
Release 2 January 2004
Release 3 January 2007
Release 4 January 2011
Release 5 April 2014
Release 6 July 2014
Release 7 December 2014
Revision 01 in the BDMS May 2017
Revision 02 in the BDMS May 2019

After the migration of the Supplier performance schedule into the BDMS all revisions in the future will be
controlled in this system.
Components Technology
Business Unit Damper

Thyssenkrupp Bilstein GmbH

Herner Str. 299
44809 Bochum, Deutschland
P: +49 / 2333 / 791 - 0
F: +49 / 2333 / 791 - 4900
[email protected]