This document provides an agenda for a supplier day meeting between Magna Donnelly and DaimlerChrysler. The agenda includes presentations on the voice of the customer from DaimlerChrysler, quality metrics and improvements at the Lowell plant, and Magna Donnelly's supply base expectations. It also includes time for questions and closing remarks. Supporting documents provide additional details on quality improvement plans, processes, and strategies being implemented at the Lowell plant to address quality issues, including fast response, control of non-conforming product, risk reduction, standardized operator training, and lessons learned.

1. 1CONFIDENTIAL
Agenda
9:00 – 9:05 Introduction Steve Binkowski
Magna Donnelly – EMNA Purchasing Director
9:05 – 9:35 Voice of The Customer Kevin Lange
* Forever Requirements DaimlerChrysler
* Supply Chain Expectations
9:35 – 9:45 DCX/Lowell Metrics Review Jim Bovee
Magna Donnelly – QA Manager, Lowell
9:45 – 10:05 Lowell Quality Improvements Jim Bovee
* Current Status Magna Donnelly – QA Manager, Lowell
* Recovery Plans
* Containment
10:05 – 10:35 Lowell QSB System Jim Bovee
Magna Donnelly – QA Manager, Lowell

2. 2CONFIDENTIAL
Agenda
10:35 – 10:50 BREAK
10:50 – 11:30 Magna Donnelly Supply Jay Updegraff
Base Expectations Magna Donnelly – EMNA SQA Director
11:30 – 11:50 Q & A
11:50 – 12:00 Closing Remarks Steve Binkowski
Magna Donnelly – EMNA Purchasing Director

3. CONFIDENTIAL 3
Voice of The
Customer
Kevin Lange
DaimlerChrysler

4. CONFIDENTIAL 4
Magna Donnelly
DCX Supplier Day
August 29, 2003

5. 5CONFIDENTIAL
Lowell Quality
Improvement Plan

6. 6CONFIDENTIAL
Current Status
These recent concerns have highlighted a deeper
systemic problem.
Our systems are not robust enough to prevent
defects from entering our process stream, being
created, or being passed to the next operation.
It has also indicated that we are slow in our
reactions.

7. 7CONFIDENTIAL
• An outside consultant firm is being brought in to provide
additional resources and skill sets to assist us in improving our
systems and behaviors. This firm will help us both with
problem identification and corrective action. They will be
onsite 24/7 throughout the improvement process.
• This firm will provide resources on each shift focusing on
systems, processes, materials, and behaviors.
Recovery Plan

8. 8CONFIDENTIAL
• The process champion has been identified as Vladan
Markovich, Vice President of Quality and Lean Sigma.
• A Senior Leadership Team has been established to monitor
performance, allocate resources and drive accountability.
This team will review progress onsite to assure on going
results are achieved.
• A SWAT Team comprising corporate, business unit and
divisional resources has been established. This team meets
daily to review the last 24 hours performance and progress
against an open issues list.
Recovery Plan cont.

9. 9CONFIDENTIAL
Process Audits of each DaimlerChrysler line including step by step
reviews of drawings, FMEAs, control plans, work instructions, process
specifications, etc.
• A team of our top seven process experts has been established (from
across Magna) to evaluate each DaimlerChrysler line including our
sub-suppliers for adequacy of system definition and conformance.
Program Date Representative Background
PT 7/14/2003 D. DeJong Magna Donnelly Process Quality
CS 7/16/2003 K. Adkins-Lopez Magna Donnelly Process Quality
RS 7/21/2003 J. Luis MDdM Process Quality
DR 7/23/2003 L. Pichot MD Spain Process Expert
KJ 7/28/2003 E. Estacio Tesma Black Belt
WJ 7/30/2003 M. Anderson Tesma Process Quality
Viper 8/4/2003 K. Adkins-Lopez Magna Donnelly Process Quality
TJ 8/6/2003 M. Baumgardner Intier Process Quality

10. 10CONFIDENTIAL
Quality Systems
Basics
Key Strategies

11. 11CONFIDENTIAL
Quality Systems Basics
 Introductions / Opening Comments
 Quality Systems Basics
 Fast Response
 Control of Non-Conforming Product
 Risk (RPN) Reduction
 Standard Operator Training
 Standardized Work
 Layered Audits
 Error Proofing Verification
 C.A.R.E.
 Lessons Learned

12. 12CONFIDENTIAL
Over 1100 Finished Goods
Part Numbers Produced for
3 Customers:
DaimlerChrysler
General Motors
Toyota

13. 13CONFIDENTIAL
Profit - Cost of Quality
Equation
0
Quality
Organization
CostProfit
Market
Price
Price
0
Cost
Company in
need of QSB
CostProfit
Cost of
Quality

14. 14CONFIDENTIAL
Key Strategies
 Fast Response First Reaction to An Issue
 Control of Non-Conforming Product (Labeling) Containment
 Risk (RPN) Reduction Did we know the risk existed? Error Proofed?
 Standard Operator Training Was the operator trained?
 Standardized Work Did the operator follow standardized work?
 Layered Audits Were leadership layered audits performed?
 Error Proofing Verification Was the Error Proofing verified?
 C.A.R.E. Was C.A.R.E. in place? (100% inspection
(Customer Acceptance & Review) for high risk items)
 Lessons Learned Capitalize on our successes, minimize mistakes

15. 15CONFIDENTIAL
QSB ENHANCES A QS 9000 QUALITY SYSTEM
QSB STRATEGY QS9000
FAST RESPONSE 4.14.3
CONTROL of
NONCONFORMING 4.13
PRODUCT
RISK REDUCTION 4.2.3.1
STANDARD OPERATOR 4.18
TRAINING
STANDARDIZED WORK 4.17 & 4.18
LAYERED AUDITS 4.18
ERROR PROOFING
VERIFICATION 4.14.1.2
C.A.R.E. 4.1.6
LESSONS LEARNED No reference

16. 16CONFIDENTIAL
• Fast Response
• Control of Non-Conforming
Product (Labeling)
• Risk (RPN) Reduction
• Standard Operator Training
• Standardized Work
• Layered Audits
• Error Proofing Verification
• C.A.R.E.
• Lessons Learned
KEY STRATEGIES
No Major Disruptions
No Quality Issues
+ 0 PPM’S
= World Class Quality
PPM GOALS to OEM
2002 = 25 PPM
2003 = 10 PPM
Supplier PPM to Lowell
2003 = 12,676 YTD

17. 17CONFIDENTIAL
Fast Response Process

18. 18CONFIDENTIAL
Fast Response
 Immediately Address Quality Failures
 External / Internal
 Defines Method of Displaying Important
Information
 Applies Discipline When Responding to
Issues
 Systematic Approach

19. 19CONFIDENTIAL
QUALITY ELEMENT: FAST RESPONSE
7:30 AM Daily
Quality Systems Review
Review previous day concerns
 Customer Concerns External
NCT’s, Spills, Pulls, Etc.
 Customer Concerns Internal
 Layered audit non-conformances
Prepare 8:45 a.m. agenda
Fast response
Tracking sheet
8:45 A.M. Daily Mgmt.
Review
Daily
Mfg Report Out
8-step, 7-step and
5-phase resolutions
Visual Tracking
(Safety #1, Quality 1.1)
Institutionalize
PFMEA/RPN Reduction
Control Plans
Layered Audits –Supervisor
Layered Audits/Leadership
#1 Safety
#1.1 Quality
 Customer Concerns External
NCT’s, Spills, Pulls, Etc.
 Customer Concerns Internal
 Layered audit non-
conformances

20. 20CONFIDENTIAL
Control of
Non-Conforming Product

21. 21CONFIDENTIAL
PURPOSE:
• Method used to ensure that product that does not
conform to specified requirements is:
- Prevented from unintended use
- Prevented from unintended installation
- Identified using consistent labeling
• Establish approved/consistent labeling process using
Visual Management (Stoplight) method.
 Red = Non Conforming (Unusable)
 Green = In-Process (Useable)
CONTROL OF
NON-CONFORMING PRODUCT

22. 22CONFIDENTIAL
REQ’D FOR NON-CONFORMING PRODUCT /
CONTAINERS (Scrap, Suspect, Rework, Finesse)
(scrap bins painted red do not require a tag)
ANY COLOR TAG FOR CONFORMING PRODUCT
IS ACCEPTABLE (except red or yellow)
RED NONCONFORMING PRODUCT TAGS SHALL BE USED TO IDENTIFY NONCONFORMING PRODUCT / CONTAINERS.
CONFORMING PRODUCT
IDENTIFICATION WILL BE ACCOMPLISHED THROUGH A VARIETY OF METHODS (e.g. IDENTIFICATION PLATES, SHIPPING
LABELS, PRODUCT COLOR
CODING, TAGS). ANY COLOR IDENTIFICATION IS ACCEPTABLE FOR CONFORMING PRODUCT (EXCEPT RED OR YELLOW) -
GREEN IS PREFERRED.
ORIGINATOR:
PART NUMBER:
PART DESC.:
QUANTITY:
DATE: DMN No.
COMMENTS:
IN PROCESS
MAGNA DONNELLY
ORIGINATOR:
SCRAP FINESSE
SORT NECESSARY
REWORK
DMN No.
PAINT ASS'Y MOLD
QTY.
DATE & TIME:
MAGNA DONNELLY
NON-CONFORMING
PART NO. COMMENT

23. 23CONFIDENTIAL
Risk Reduction Process
RPN REDUCTION PROCESS:
Reducing the risk of a
POTENTIAL QUALITY FAILURE
ERROR PROOFING PAST QUALITY FAILURES
Proactive
Reactive

24. 24CONFIDENTIAL
Potential Quality Failure
RPN Reduction Process
PURPOSE:
To reduce the risk of all production processes.
RESPONSIBILITY:
The site Manufacturing Engineer is responsible to drive
the PFMEA process, facilitate multi-disciplinary teams
(Project Engineer, Program Manager, Quality Engineer,
Mfg. Associate), and to coordinate RPN reduction
activities.

25. 25CONFIDENTIAL
RPN REDUCTION
PFMEA'S
PROCESS
LIST ALL
RPN'S
PARETO'S
OF RPN'S
OWNER
FOR EACH BUSINESS UNIT OR PRODUCT FAMILY
PERIODIC
REVIEWS
TO ASSURE NO
CHANGES
TOP ”5" LIST
ACTION
PLANS
TRACK
PROGRESS
MANAGEMENT
REVIEWS
PRIORITY ACTION
PLAN DEVELOPED
BY NATURAL
RPN OVER
IDEAL STATE
RPN
LESS THAN
IDEAL STATE

26. 26CONFIDENTIAL
Rating Criteria
LowellEngineer
CustomerPlant
Field
Example
10
Failure affects safe operation of vehicle
or may endanger operator.
Safety hazard to customer or operator.
9
Failure involves non-compliance with
Government Regulations
OBD II item.
Regulatory item.
8
Failure causes customer high degree of
dissatisfaction.
Customer Walk-home.
Field return. Durability issue.
7
Failure causes customer dissatisfaction.
May result in disruption to Assembly
Plant operation.
Dealer repair/rework (noise, vibration,
leaks, etc.)
Customer Assembly Plant return / pull
or major spill.
6
Major disruption to production line. Defect caught at Lowell Engineering
Final Test. Assembly Line heavy
rework.
5
Minor disruption to production line. Defect caught on Lowell Engineering
Assembly Line. Light rework or scrap.
4
Failure may cause inconvenience to
subsequent operation, minor rework.
Defect passed to next process.
3
Failure may cause slight inconvenience
to subsequent operation, minor rework.
Defect caught at subsequent operation
(in-line).
2
Failure may cause slight inconvenience
to operation, minor rework
Defect caught and corrected at
operation (In-station).
1 Customer will probably not even notice. No Effects.
Severity

27. 27CONFIDENTIAL
Occurrence
Rating Failure
Probability
IPTV PPM Cpk Example*
10 Very High > 500 > 500,000 < 0.33
9 Very High 333 333,333 > 0.33
8 High 125 125,000 > 0.51
7 High 50 50,000 > 0.67
6 Moderate 12.5 12,500 > 0.83 1 / Hour
5 Moderate 2.5 2500 > 1.00 1 / Shift
4 Moderate 0.5 500 > 1.17 1 / Day
3 Low 0.067 67 > 1.33 1 / Week
2 Very Low 0.0067 7 > 1.50 1 / Month
1 Remote < 0.00067 < 1 > 1.67 1 / Year
* Example is for total of 5,000 piece per day,
in a two-shift operation. Recalculate example
column for specific volumes.

28. 28CONFIDENTIAL
Rating Detection Criteria
Error-Proofed
Gaged
ManualInspection
Suggested Range of Detection
Methods
10
Almost
Impossible
Absolute certainty of non-detection. Cannot detect or is not checked
9
Very
Remote
Very low - controls will probably
not detect
Indirect check only
8
Remote Low - controls have poor chance of
detection
Visual inspection
7
Very Low Low - controls have poor chance of
detection
Double visual inspection
6
Low Moderate - controls may detect 100% Visual inspection by touching
the part. Manual gaging/testing
5
Moderate Moderate - controls may detect 100% Go-No-Go Gaging. Periodic
Gaging with Control Chart.
4
Moderately
High
Moderately High - Controls have a
good chance to detect.
Error proofing - Cannot accept at
next operation. Gaging on Setup /
First-Piece Check.
3
High High - Controls have a good
chance to detect.
Error Proofing - Cannot Pass part.
Automatic Gaging with stop.
2
Very High Very High - Controls almost
certain to detect.
Multiple layers of Error Proofing:
supply, select, install or verify.
1
Almost
Certain
Very High - Controls certain to
detect.
Error Proofing - Cannot Make Part.
Detection

29. 29CONFIDENTIAL
Standardized Operator
Training

30. 30CONFIDENTIAL
Standardized Operator
Training
PURPOSE:
The following requirements for operator training shall
be used to:
 Define the minimum training content for each operation
 Identify who in the organization will conduct training
 Establish required documentation and tracking methods
 Utilize a number of current operators / associates to train
employees, department transfers, bad habits, etc.

31. 31CONFIDENTIAL
Standard Operator Training for NEW employee's (Magna Donnelly - Lowell)
SupervisorTrainer/Mentor
DocumentControl/
Admin.Assistant
HumanResources
Identify Training
Requirements
(Permanent,
Temporary,
Weekend Warrior)
(1 Business Day)
1. Begin Phase III
Training
2. Post Operator
Instructions
Assign Trainer &
provide Trainee w/
Training Ticket
Verify
Completeness
Update Training
Ticket & return
Associate
Checklist
Complete Phase III
Training & verify
associate output
every 2hours
(1-2 days)
Store Training
Ticket
retain 1 month
Complete the
Training Ticket
No Yes
Complete Phase I
& Phase II
Training Plan and
provide Associate
w/training checklist
Enter new
hire in
"approved"
Training
Spreadsheet
Store
Associate
Checklist per
company
requirements
Associate carries
checklist until
training completed
(target = 5 days)
Administor
Screening/Basic
Skills Test

32. 32CONFIDENTIAL
Standard Operator Training for EXISTING employee's (new requirements, changes & on-going)
QualityEngineerSupervisor
DocumentControl/
Admin.Assistant
Manufacturing
Engineer
Update Operator
Instructions
Review against
APQP & Update
as needed
Sort current
"approved"
Operator
List, Verify
& Print
Training Matrix File:
1. select op # and
execute grey macro
button to delete
2. record change level
and date
3. save file
Operator
Instructions
Operator Training
List
(1 Business Day)
1. Deliver Training
2. Post Operator
Instructions
3. Communicate
1. Complete
Training Ticket
2. Sign/Deliver
Ticket
Update Training
Record
Store Training
Ticket
retain 1 month

33. 33CONFIDENTIAL
Standardized Work
(Methods & Sequence)
“Standardization is the road to continual improvement.”
W.E. Deming, July 15, 1992

34. 34CONFIDENTIAL
Standardized Work Provides a
Foundation For:
 A Lean Organization
 Identifying Value Added Tasks
 An Efficient Production Sequence
 Continuous Improvement
 Reduced Variation Within a Process
 Waste Reduction, Problem Solving and Quality
Control
 Auditing Operator Conformance to Work Instructions
(Layered Audit)
 Ensuring Operators are Consistently Performing the
Same Tasks and Procedures

35. 35CONFIDENTIAL
• Multi-disciplinary team(s)
(Manufacturing/Quality Engineer from
Assembly, Paint, Mold & Engineering)
shall identify and list all operations
to implement standardized work
- Customer Quality Concerns
- Necessity for a Defined
- Sequence or Method of work
- Off-line Rework
- High RPN
- Employee Flow-through
Multi Disciplinary team(s)
shall develop standardized
work and standardized
processes shall be posted
at the operation
Impacted employees and new employees
shall be trained in the use of Standardized
work (Standard Operator Training)

36. 36CONFIDENTIAL
Standardized Operations
Customer
Cycle Time Work
Sequence
Standard
Work-in-Process
TAKT TIME
Time in which a single
unit is to be produced
Operator
Movements
Minimum stock necessary
to do work in the same
sequence with the same
movements, every cycle
Standardized Operations
The Process

37. 37CONFIDENTIAL
Layered Audits

38. 38CONFIDENTIAL
Layered Audits
PURPOSE:
To verify compliance to the documented manufacturing / assembly
process, resulting in more disciplined processes and improved overall
quality.
REQUIREMENTS:
 Layered Audits shall be conducted for manufacturing and assembly of
high risk items at a minimum of once per shift.
 Frequency of Layered Audits based on production volume or level of risk
associated with process.
 Layered Audits supplement on-going control plan and job instruction
checks.
 A check list of high risk items to be verified during Layered Audits shall
be established.

39. 39CONFIDENTIAL
Error Proofing Verification

40. 40CONFIDENTIAL
Error Proofing Verification
PURPOSE:
To ensure error proofing devices used in
the manufacture and assembly of
product are functioning properly.

41. 41CONFIDENTIAL
Error Proofing Verification
PURPOSE:
 To ensure error proofing devices used in the manufacture and assembly of
product are functioning properly.
DEFINITIONS:
Error Proofing Device - (CAN NOT MAKE) – Devices which prevent the
manufacture or assembly of non-conforming product.
Error Detection Device – (CAN NOT PASS or CAN NOT ACCEPT) Devices which
prevent the transfer of non-conforming product (e.g. 100% in-line inspection
equipment).
 All error proofing devices with the potential to fail, wear, misalign, or otherwise
become out-of-adjustment shall be verified at a minimum of once per day.

42. 42CONFIDENTIAL
Error Proofing Verification
Verify Error Proofing Devices
Once per Day
Record Error Proofing Device
verification results with
immediate response to NC
Verification Results
to be reviewed by Site
Leadership
Develop Reaction Plans
to be followed when Error Proofing
Device fails Verification
Define
Error Proofing
Devices to be Verified and their
respective locations
• Master Document of Error Proofing devices, with
identification number and location
• Verification frequency
• Identify masters (Good/Bad) and defect being checked
Clearly defined reaction plan if device fails to detect
• When/if shut down when device fails to detect bad part?
• Containment plan? (100% Inspection, etc.)
• Are suspect parts rerun thru Error Proofing device?
• How/when is Error Proofing device repaired?
• Lot size of parts run between Error Proofing verification
• History of process to determine verification frequency
• How robust is the process?
• Develop Log of Error Proof Verification failures
with reaction plan to non-conformities
• Document as Lessons Learned
• Method for getting information to management
• Determine how information is to be displayed
>>>
>>>
>>>
>>>
>>>

43. 43CONFIDENTIAL
C.A.R.E.

44. 44CONFIDENTIAL
Customer Acceptance Review
& Evaluation
PURPOSE:
C.A.R.E. isolates customers from discrepancies, provides
information for rapid corrective action.
Identify Customer
Satisfaction Items
 Pass-Through Items
 Customer / Assembly Plant Feedback
 Warranty Issues
 Customer Used Features
 Past PR/R Issues
 High RPN Failure Modes
 Labeling
 Supplier Management Concerns
(such as Tier II changes, tool moves)

45. 45CONFIDENTIAL
Lessons Learned

46. 46CONFIDENTIAL
Lessons Learned
PURPOSE OF LESSONS LEARNED:
 To establish a process for capturing information that
will support continuous improvements to all
operations / processes.
 To prevent repeat mistakes allowing an organization
to capitalize on its successes.
 All documentation that will support continuous
improvement shall be entered into Lessons
Learned database.
 Organization shall establish a disciplined approach to
problem prevention using Lessons Learned.

47. 47CONFIDENTIAL
• Fast Response Tracking Sheets
• Monthly “Q”-Charts
• RPN Reduction Activities
• Past Quality Failures
• Layered Audits
• Pareto of Customer Concerns
• Error Proofing Verification
• Internal Quality Issues
• Training Records
• C.A.R.E.
• APQP Process
• Continuous Improvement Teams
• Problem Solving Methods
• Management Reviews
• Suggestion Programs
• Customer Feedback/Inputs
IDENTIFY
LESSONS
LEARNED

48. 48CONFIDENTIAL
DOCUMENT
LESSONS
COMMUNICATE
LESSONS
LEARNED
REVIEW
LESSONS
LEARNED
SYSTEM
• Lessons Learned Form
• APQP Checklist
• PFMEA
• Computer Form
• Post Forms
• Forms in notebook
• Shared drive or web site
• Company Newspaper
• Closed circuit TV
• Pocket cards
• Management Meetings
• Layered Audits
• PFMEA Development

49. 49CONFIDENTIAL
KEY STRATEGIES
• Fast Response
• Control of Non-Conforming
Product (Labeling)
• Risk (RPN) Reduction
• Standard Operator Training
• Standardized Work
• Layered Audits
• Error Proofing Verification
• C.A.R.E.
• Lessons Learned
No Major Disruptions
No PRR’S
+ 0 PPM’S
= World Class Quality
PPM GOALS to OEM
2002 = 25 PPM
2003 = 10 PPM
Supplier PPM to Lowell
2003 = 12,676 YTD

50. 50CONFIDENTIAL
Supply Base Expectations
Jay Updegraff
Director, EMNA SQA

51. 51CONFIDENTIAL
JU 1
Supplier Development
What does this mean to me?

52. 52CONFIDENTIAL
JU 2
Quality Delivery
Commercial Service
SourcingDecision
Supplier Performance Rating
System

53. 53CONFIDENTIAL
Supplier Performance Rating
System (SPRS)
 Web-based Supplier Scorecard Measuring
Success Rate of Meeting Expectations
 Password Access
 Standardized Tool for Supplier Measurement
Across Magna Donnelly NA
 Provides Supply Base with Quick Feedback for
Improvement Opportunities
 Appendix D in SQR Manual
(www.magnadon.com – suppliers – supplier
quality)

54. 54CONFIDENTIAL
Supplier Development Team -
EMNA
 Commodity Focus Across All EMNA
Plants
 Long Term Strategy Development for
Supply Base
 Supplier Selection
 Quality System Development
 Supplier Performance for Commodity

55. 55CONFIDENTIAL
Expectations of the Supply Base
DELIVERY
 100% On-Time Shipments
 Adherence to Release Quantities or
Min/Max Inventory Levels
 Decreasing Inventories in the Pipeline
 No Paperwork Defects

56. 56CONFIDENTIAL
SPRS – Key Element - Delivery
Delivery – 20% of Total Score
 Critical Delivery Occurrences
 Line Shortage / Downtime
 Early / Late
 Paperwork Defects
 Non-Compliance to Magna Donnelly Packaging and Shipping
Requirements Manual (www.magnadon.com – suppliers –
materials – P&SRM)
 Pack Slip Missing / Incorrect
 Missing Supplier Code / Bar Code / Lot Code
 Wrong Address

57. 57CONFIDENTIAL
Expectations of the Supply Base
Commercial
 Competitive Market-Based Pricing at
Launch
 Year-Over-Year Pricing Improvements
 VA/VE Implementation

58. 58CONFIDENTIAL
SPRS – Key Element -
Commercial
Commercial – 20% of Total Score
 Measures Participation and Support in
Meeting Cost Reduction Requirements
 Long Term Agreement (LTA)
Participation
 Market Competitiveness
 VA/VE Creativity and Support
 RFQ Responsiveness and Diligence

59. 59CONFIDENTIAL
Expectations of the Supply Base
SERVICE
 Proactive Involvement
 Participation in New Initiatives
 Development of Competencies
 Manufacturing
 Materials Management
 Product and Process Technology
 Speed / First to Market
 Creativity and Flexibility

60. 60CONFIDENTIAL
SPRS - Key Elements - Service
Service - 20% of Total Score
 Measures Level of Service Provided to MD
 Engineering/Design Support
 Technology Innovation
 Responsiveness To Requests
 Logistics Support
 Compliance to Magna Donnelly Supplier
Handbook (www.magnadon.com – suppliers
– materials – NAAO Supplier Handbook)
JU 11

61. CONFIDENTIAL 61
JU 3
QUALITY
 10 PPM
 APQP
 PPAP Inclusive of Run at Rate
 0 DCARs During Launch + 90 days
 On-Time Response to DCARs
 ISO9000 Registered, QS9000
Compliant
Expectations of the Supply Base

62. 62CONFIDENTIAL
SPRS - Key Elements - Quality
Quality - 40% of Total Score
 PPM Performance
 PPAP Performance
 MDCAR Performance
 Quality Systems Status

63. 63CONFIDENTIAL
How Do We Use the Data at MD?
 Supply Base is Stratified by
Commodity
 Stratification Used in Future
Sourcing Decisions
 Current Sourcing Reviewed for
Worst Performers

64. 64CONFIDENTIAL
How Do We Use the Data at MD?
SPRS score < 70 = New Business Hold
IMPACT: Potential Resource
No New Business without Sr. Mgt Approval
Supplier improvement plans required and reviewed with
Magna Donnelly Purchasing and Operations
SPRS score 70-79 = Probationary
IMPACT: No new sourcing without Director approval
Resourcing options explored
Supplier improvement plans required and reviewed with
Magna Donnelly Purchasing and Operations

65. 65CONFIDENTIAL
SPRS score 80-89 = Approved
IMPACT: Approved for new sourcing
supplier improvement plans required, self-
managed by supplier
How Do We Use the Data at MD?
SPRS score 90-100 = Preferred
IMPACT: Preferred source for new programs

66. 66CONFIDENTIAL
What we need you to do
 Personal Senior Leadership Engagement
 Contain Quality Issues In Your Plant
 Rigorous Commitment to Defect
Prevention via Mistake Proofing and
Process Control
 Early Warning to Lowell Facility
 Rapid Problem Resolution, Speed /
Urgency

67. 67CONFIDENTIAL
What We Need You to Do
 Conduct Detailed Process Audits for Materials with Quality
Issues
 Highlight and Address Process Deficiencies
 Highlight and Address Quality System Deficiencies
 Implement Containment Procedures to Protect the Lowell
Facility Until Deficiencies are Permanently Corrected and
Verified

68. 68CONFIDENTIAL
What We Need You to Do
 Conduct Detailed Process Audits for Materials
with Quality Issues
 Data Driven – Use Facts to Assess Root Causes
 standard work, control plans, measurement system,
boundary samples, training, process set-up/parameter
control , preventative maintenance, incoming materials

69. 69CONFIDENTIAL
What We Need You to Do
 Highlight and Address Process Deficiencies
 Make Results Visible to Management Team
 Assign Resources and Track Progress
 Utilize Mistake Proofing Where Possible to Ensure
Continued Success

70. 70CONFIDENTIAL
What We Need You to Do
 Highlight and Address Quality System Deficiencies
 Quality System Procedures
 Work Instructions
 Training
 APQP – Control Plan Development, FMEA, Design Review, etc.
How could this have been prevented?

71. 71CONFIDENTIAL
What We Need You to Do
 Implement containment procedures to protect
the Lowell facility until deficiencies are
permanently corrected and verified
 Work cell containment – first line of defense
 3rd Party Containment – independent audit/certification of
product where work cell containment is not effective
 Final Product/Dock audits - layered audit to ensure
containment process is effective

72. 72CONFIDENTIAL
Follow Up to Today’s Meeting
 Supplier Development Engineer Process Audits and
Review of Supplier Internal Audits and Containment
Activities
 Initial Reviews to Be Completed by End of September
2003.
 Magna Donnelly SDE’s Will Contact Top Focus
Suppliers, first week of September, 2003 to establish
review dates.

73. 73CONFIDENTIAL
Follow Up to Today’s Meeting
 Quality Improvement Plan Management
Reviews
 SPRS Business Reviews

74. 74CONFIDENTIAL
Closing Remarks