MAGNA GLOBAL SUPPLY CHAIN REQUIREMENTS
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MAGNA GLOBAL SUPPLY CHAIN REQUIREMENTS Revision 01-01-2021
MAGNA GLOBAL Table of Contents
SUPPLY CHAIN REQUIREMENTS SECTION CONTENT PAGE
As part of an increasingly competitive and This Global Supply Chain Requirements Manual 1. Introduction 1.1 – The Magna-Supplier Relationship 4
demanding industry, Magna has a diversified, defines Magna’s requirements on behalf of all 1.2 – Communication – Notification of Change 5
global supply chain that supports our global global manufacturing locations. There may be 1.3 – Continuity of Supply 6
operations and, ultimately, our OEM Customers. additional, customer/Division specific requirements 1.4 – Corporate Social Responsibility/Sustainability 6
Magna has implemented many changes over the that are also required at a Division level, which may
past few years, and we continue to evolve, in our be more detailed or stringent than requirements 2. Leadership & the Organization 2.1 – Supplier Qualifications 9
efforts to maintain our position as a world-class defined in the Global Supply Chain Requirements, 2.2 – Certifications 9
design, engineering and manufacturing company. and Suppliers are expected to comply with both 2.3 – Supplier Assessments 11
sets of requirements. Every attempt has been
We recognize that our supply chain is an integral made to ensure that requirements in this Manual 3. Operation- Design 3.1 – Defining the Scope 12
part of what we do, and we have committed to and requirements defined by a Division level & Development Planning 3.2 – Planning and Definition of Requirements 13
continue our efforts at standardizing many of document, are not in conflict. If such conflict 3.3 – Product Design and Development 13
our supply chain management processes and does in fact occur, you are expected to contact 3.4 – Tooling, Gauges & Test Fixtures 14
systems. As part of that effort, this Global Supply your local Division representative who will work to 3.5 – Process Design and Development 14
Chain Requirements Manual forms the basis of ensure resolution of that conflict. 3.6 – Product and Process Validation 15
our business relationship with our Suppliers. In 3.7 – Feedback and Assessment 16
addition to defining manufacturing, logistics and Our Suppliers are important to Magna, and we
quality requirements, this Manual also details will continue to strive to ensure a relationship of 4. Operation - Control Of Production 4.1 – Control of Fixtures & Test Equipment 17
necessary environmental, compliance and other mutual respect and benefit, and we thank you for 4.2 – Monitoring of Product & Process 18
sustainability requirements that have become your support. 4.3 – Non-conformance & Corrective Action 18
critical to the industry. 4.4 – Product or Process Change & Deviations 21
4.5 – Warranty 21
5. Operation – Control of Materials/Logistics 5.1 – General Requirements 23
5.2 – Packaging 23
5.3 – Labelling 24
5.4 – Materials Planning & Forecasting 25
5.5 – Transportation, Schedules & Routing 25
Tom Skudutis 5.6 – Border Security 26
COO Magna International
5.7 – FTA/Customs Compliance 27
5.8 – Documentation 27
5.9 – MMOG 28
6. Control of External Products & Services 6.1 – Supplier Performance Reporting 29
6.2 – Operational Rating Criteria 29
6.3 – Continuous Improvement 29
7. Glossary of terms 30
8. References 321. INTRODUCTION Division standards applicable to the Magna
operating Group(s) with which you conduct
2. All proposed material and/or process changes,
including any change in process or product
business. The quality and delivery requirements safety or critical characteristics.
defined herein are to be considered an addendum 3. All proposed changes, including:
to the Purchase Order and Terms & Conditions • Manufacturing location change
issued to all Suppliers and do not replace or • Tooling capacity change
alter the terms and conditions covered by these • Re-commissioning of tooling that has been
purchasing documents, the Statement of Work inactive for one year
1.1 THE MAGNA – (SOW) or warranty agreements. Suppliers are also
expected to comply with any terms and conditions
• Tooling refurbishment/replacement
• Proposed use of new manufacturing
SUPPLIER imposed on Magna, by the customer to whom the equipment
RELATIONSHIP final products are ultimately being shipped. • Tooling transfer (re-source)
4. Any potential manufacturing/quality issues,
This includes compliance with any specific forms including any change in Quality Management
Magna is committed to maintaining its position as
or documents specified by any Customer of Systems certification status (expiry, suspension,
a global leader within the automotive sector and
Magna. Suppliers to Magna are also expected to withdrawal or revocation).
we recognize the integral role that each supplier
manage their sub-tier Suppliers of products and 5. Any potential supply and/or capacity issues.
to Magna has in maintaining our position of
services to ensure compliance to the requirements 6. Changes to sub-Suppliers of raw material,
excellence in innovation, technology, cost, quality
defined within this manual, Magna Purchasing components or services.
and delivery.
The expectations, requirements and standards Terms & Conditions, Magna’s Supplier Code of 7. Information Technology (IT) or supporting system
defined within this manual are applicable to all Conduct and Ethics, the latest automotive industry changes that might impact production or
Magna is committed to a zero PPM strategy and
Suppliers providing materials, products and standards and any additional Customer or Division shipment of product to Magna.
expects all Suppliers to support this strategy and
services to any Magna manufacturing facility. specific requirements. 8. Organizational changes with the potential for
manage their own operations, similarly. Our intent is
This includes Suppliers of direct materials and, impact on manufacture or supply of product to
to establish strategic, long-term relationships with
as appropriate, indirect materials, packaging Magna.
our Suppliers, and it is incumbent on each supplier
materials and services (including containment, 9. Changes to ownership structure.
to maintain a position of cost leadership while
sorting and calibration services) with potential
impact on any product characteristics affecting
demonstrating a commitment to sustained quality, 1.2 COMMUNICATION – Suppliers will support all tests, validations, approvals
highest levels of service and a strong focus on
Magna’s Customer requirements. These
continuous improvement.
NOTIFICATION OF and submissions required as a result of product or
requirements also apply, in whole, to any supplier process changes, as directed by Magna. Suppliers
that is directed to Magna, by any OE Customer.
CHANGES cannot charge for samples or testing resulting
The requirements as detailed in this manual We will endeavour to make every effort to manage from supplier related or requested changes, unless
define basic requirements and are supplemental our supplier relationships with the highest degree It is critical that the relationship between Magna approved by Magna.
to requirements as defined within the latest ISO of integrity and professionalism, and we will ensure and our Suppliers be premised on open, effective
9001 and IATF 16949 Standards, and any specific that our decisions are based upon optimization of and proactive communication. The occurrence of Suppliers must be proactive in their communication
requirements as communicated by your procuring value to Magna and its stakeholders. We will not non-conforming product, unauthorized changes or with their Magna customers (Reference Section 4.4)
division. The latest version of this manual will allow any undue influence or inappropriate activity any related supply chain issues, present a risk to and all changes must be communicated to Magna,
be posted on the Magna website supplier portal to compromise those decisions. both Magna and to Magna’s customer(s), when not prior to proceeding with those changes. Failure to
(https://www.magna.com/company/suppliers) or communicated and managed effectively. These risks notify Magna of potential issues or changes will result
the ERFX portal (https://ERFX.magna.com), and This Supplier Manual outlines the fundamental also manifest themselves at the sub-tier Suppliers in internal elevation, as appropriate, and may result
the Magna Quality Platform – QPF (https://qpf. requirements for all Suppliers to Magna and sub-contractors that comprise the overall supply in notification of the issue to Magna’s customers. If
magna.com/). Suppliers must review any one of International’s global operations. The Quality chain. In order to manage these risks most effectively, necessary, a supplier’s ISO and/or IATF Registrar will
these sites on a regular basis to ensure they have Systems requirements have been aligned across all Suppliers must communicate as early as possible, be contacted and asked to conduct any necessary
the most recent version available. Suppliers must all our global manufacturing sites, to the greatest the following: investigations or assessments. In the absence of
have access to ERFX (https://ERFX.magna.com) extent possible. In addition to the requirements 1. Any pending or potential issue which the proactive communication of potential changes,
and to QPF (https://qpf.magna.com/). defined in this document, there may be additional supplier has identified. any costs incurred by Magna as a result of late
4 Magna Global Supply Chain Requirements – Revision 01-01-2021 5notification or insufficient lead time, from the supplier,
and requirements covering corporate social having the objective of achieving certification Magna expects our Suppliers and their sub-tier
will be the responsibility of the supplier and will be
responsibility/sustainability, status. In support of managing impact on the Suppliers, as appropriate, to register and comply
charged to the supplier, as appropriate. Continued environment, Suppliers should be monitoring with all applicable reporting requirements that are
non-compliance may lead to loss of business.
LEGAL COMPLIANCE & ETHICAL BEHAVIOUR and optimizing greenhouse gas emissions, water applicable to their products and processes.
consumption and emissions of volatile organic
We expect that our Suppliers will always act compounds (VOCs), particulate matter and ozone RESPONSIBLE SOURCING OF RAW MATERIALS
with integrity by obeying the letter and spirit of depleting substances.
laws, regulations, standards and Magna policies The automotive parts we produce involve the use
1.3 CONTINUITY OF that apply to them, regardless of where they do In support of sustainability initiatives we of several minerals and other raw materials. We are
SUPPLY business, including: encourage our Suppliers to effectively manage, committed to ensuring that the materials used in
• Antitrust and Competition Laws monitor and optimize energy consumption our parts have been sourced responsibly – that is,
• Anti-bribery laws through an effective energy management they do not originate from conflict-affected areas.
Suppliers are required to have well defined business • Gifts & Entertainment limits or prohibitions program. We encourage Suppliers to consider Responsible sourcing of raw materials is key to
contingency plans in place to ensure continuity of • Sanctions and Export Control Laws using ISO 50001 as a guideline to an effective ensuring that Magna and its Suppliers are able to
supply in the event of disruption to their operations • Responsible sourcing, including prohibitions energy management standard, however meet its commitments to respect human rights,
and/or supply of materials, as a result of man- on sourcing materials from areas of conflict certification is not mandatory at this time, unless as reflected in our Code of Conduct and Supplier
made events, natural disasters, utility or labour • Respect for Human Rights as directed by the jurisdiction within which Code of Conduct, respectively.
disruptions, equipment or logistics failures or • Diversity and Inclusion operations exist.
interruptions, or disruptions/attacks on information • Health & Safety requirements A growing number of regulations, emerging
technology systems. These contingency plans shall • Environmental Sustainability Magna, and its supply base, must meet all industry best practices, and OEM customers
be reviewed on a regular basis. Suppliers shall • Preventions of Conflicts of Interest requirements of End-of-Life Vehicle (ELV), require Magna to disclose the origin of various
immediately notify all Magna Divisions to which they • Protection of Magna Information and International Material Data System (IMDS), raw materials used in its products. Given the
ship product, the moment they become aware of Intellectual Property or, if applicable, that of Registration, Evaluation, Authorization and breadth and complexity of Magna’s supply chain,
any potential supply disruption. Magna’s OEM customers Restriction of Chemicals (REACH) and China we necessarily rely on our Suppliers for accurate
Automotive Material Data System (CAMDS) information about products supplied to Magna. I
Each Supplier to Magna shall identify an individual Suppliers must abide by the full requirements of directives. As required, Suppliers shall comply
from the Supplier’s manufacturing location, with the Magna Supplier Code of Conduct and Ethics with applicable standards on the classification, In order to accurately and completely meet
sufficient authority to assume responsibility for and should, in turn, also require that their Suppliers packaging and labeling of hazardous substances disclosure requirements related to raw materials
dealing with any product quality and/or delivery abide by the same requirements (https://www. and mixtures, including national implementations in our products, Magna expects and requires its
related issues that may impact Magna or Magna’s magna.com/company/Suppliers) . of the UN Globally Harmonized System (GHS), Suppliers to conduct appropriate due diligence to
Customers. The identified contact needs to be such as Regulation (EC) No 1272/2008 on enable the Supplier to provide information about
available at any time such issues arise. ENVIRONMENTAL RESPONSIBILITY the classification, labeling and packaging of product origin. Where necessary, this will require
substances and mixtures (CLP Regulation) and Suppliers to obtain such information from its own
Contact information shall be made available to the Magna’s objective is to be an industry leader in the Workplace Hazardous Material Information Suppliers as well.
Magna Division being supplied, or uploaded in the health, safety and environmental practices. We System (WHMIS). For all parts supplied to Magna,
appropriate database(s), as directed by Magna. are committed to environmental responsibility and including new or modified parts and spare parts, CONFLICT MINERALS
have many different programs designed to protect compliance to current legal requirements must be
our environment and manage critical resources ensured (e. g. REACH, GADSL). Under legislation which came into effect in
so as to sustain and replenish these resources 2012, manufacturers, including Magna, who
1.4 CORPORATE SOCIAL for future generations. We expect our Suppliers Correct and complete Material Data Sheets file certain reports with the U.S. Securities and
to show the same dedication and commitment to (MDS), that comply with Conflict Minerals Exchange Commission (SEC) must disclose
RESPONSIBILITY/ the environment and recommend certification to Guidelines, must be submitted in the IMDS whether products they manufacture, or contract
SUSTAINABILITY ISO 14001 environmental standards. ISO 14001 (International Material Data System) and/ to manufacture, contain conflict minerals that
certification is currently monitored, and Suppliers or CAMDS (China Automotive Material Data come from sources that support or fund inhumane
Magna is committed to being a responsible not currently holding environmental certification System), to prove compliance. For parts not treatment in the region of the Democratic Republic
corporate citizen. We expect our Suppliers to are encouraged to develop a plan of execution subject to PPAP, MDS must be submitted in of the Congo or an adjoining country.
adhere to the elements of Magna’s policies IMDS, upon request.
6 Magna Global Supply Chain Requirements – Revision 01-01-2021 7Currently, SEC requirements list Tin, Tantalum,
Tungsten and Gold (collectively, 3TG) as Conflict
Counterfeit product is defined as items that are, or
contain, unlawful or unauthorized reproductions, 2. LEADERSHIP &
Minerals. Other minerals may be added in the
future.
substitutions or alterations that have been
knowingly mismarked, misidentified or otherwise
misrepresented to be an original manufacturer’s
THE ORGANIZATION
Other jurisdictions, including the EU, are in part. Suppliers must have strict procurement
the process of implementing or considering policies in place to ensure traceability for all items
similar Conflict Minerals regulations. To ensure incorporated into their product. the supplier assessment and supplier sourcing
compliance with the SEC requirements, and any processes. Key performance metrics and
requirements implemented by other jurisdictions Supplier ratings are also communicated via these
in the future, Magna must request information databases.
regarding the use of conflict minerals, from any 2.1 SUPPLIER
appropriate Suppliers. Any Suppliers contacted
by Magna, are required to support Magna by
QUALIFICATIONS Suppliers to Magna must also meet key
operational, financial and quality criteria, which
accurately providing all requested data and reports combined determine a supplier’s status. These
in a timely manner. All direct material Suppliers must have a valid metrics are reviewed on a regular basis and assist
DUNS number as issued by Dun & Bradstreet in development of Magna’s overall purchasing
Additional information on conflict minerals and, as applicable by region, a valid VAT or HST strategies, while at the same time driving Magna’s
reporting can be found by clicking on either of number. DUNS numbers are validated by Magna, Supplier development processes.
these two links: http://www.aiag.org and misrepresentation could disqualify you from
http://www.conflict-minerals.com. Magna’s Policy Magna business. Suppliers of indirect materials
Statement on Conflict Minerals can be found at: and services may also require a DUNS number, as
https://www.magna.com/company/Suppliers directed by your procuring Division.
2.2 CERTIFICATIONS
REPORTING OF OTHER RAW MATERIALS Any Suppliers shipping to any Magna group must
be registered in both ERFX (https://ERFX.magna. A Supplier’s top management shall demonstrate
In addition to Conflict Minerals disclosure com) and QPF (https://qpf.magna.com/). Suppliers leadership and commitment to their quality
requirements above, heightened industry and registering in these databases must complete all management system, and they are ultimately
customer focus on responsible sourcing has information fields profiling applicable business accountable for the overall effectiveness of that
increased demand for transparency into the systems, commodity capabilities and identifying system. Top management is responsible to ensure
origins of other raw materials used in automotive key contact personnel. When registering in that risk-based thinking is evident and effective in
products. Currently, disclosure is being sought for ERFX, Suppliers will be required to register one all aspects of a Supplier’s management system. To
a number of other raw materials including: Cobalt, Quality contact, one Commercial contact and ensure this, management’s responsibilities should
Mica and Rubber. Disclosure regarding additional one Financial contact, at minimum. If a Supplier include:
raw materials may be requested or required in the has multiple manufacturing sites with applicable • Conducting contingency planning reviews
future. It is our expectations that such information unique DUNS identification, each manufacturing • Identify and support process owners
will increasingly become a prerequisite for DUNS site is required to register in the appropriate • Support and participate in the escalation
quotation by OEM customers, and Magna expects database. Suppliers are required to maintain process related to all safety relevant products
its Suppliers will conduct similar due diligence with information in the database to ensure it remains and processes
respect to additional raw materials as it requires current. At a minimum, data must be reviewed • Ensure achievement of customer quality targets
for 3TG. and, if necessary, updated at least annually. and performance requirements
• Implement corporate responsibility initiatives
COUNTERFEIT PRODUCT Maintaining current information is critical as these dealing with anti-bribery, code of conduct
global databases are accessible to all Magna and ethics and sustainability initiatives
Suppliers must ensure that there is no risk of buyers and quality personnel, worldwide. The (including Human Rights, Health & Safety and
counterfeit product being shipped to Magna. ERFX and QPF platforms are also used during Environmental sustainability)
8 Magna Global Supply Chain Requirements – Revision 01-01-2021 9as detailed within this manual. Assessments or
Magna’s goal is for all Suppliers of materials and safety representative for each applicable notification to Magna, for any potential impact to
reviews may be conducted from time to time in
services, producing or affecting direct production manufacturing location. Magna data or business.
order to ensure the on-going stability and viability
material, to become certified to IATF 16949.
of Magna’s supply base. All Suppliers, including
At minimum, all Suppliers of direct production Suppliers shall establish and maintain a With the ever-increasing dependence on electronic
Customer-designated or Customer-directed, are
material to Magna, must demonstrate conformity documented process to ensure identification systems and communications, and in recognition
expected to provide, upon reasonable notice,
to the latest IATF 16949 Standard, and to other of training needs and documentation showing of the ever-increasing threats to information
access to their facility as well as those of sub-tier
standards that might be directed by the procuring achieved competence levels for all personnel protection and security, all Suppliers are
Suppliers, as necessary. Following notification of a
Division(s) including, but not limited to VDA, performing activities affecting conformity to encouraged to become certified to ISO/IEC 27000.
requested assessment, Suppliers are expected to
ISO 17025, ISO 45001, ISO/IEC 27001, TISAX/ product and process requirements. This shall
acknowledge and respond to such request, within
TPISR, ISO 26262 and ISO 15504-5 Automotive include documented verification of competence Magna is working to be a leader in the area of
30 days. All appropriate measures will be taken to
SPICE, latest revision of IPC-A-610, latest for personnel conducting internal audits, including cyber/information security, and it is important
protect confidentiality of operational and financial
revision of DIN EN 61430 and ANSI/ESD S20.20. Quality Management System audits and applicable that all identified confidential information such
information.
Suppliers who are not certified to IATF 16949 CQI assessments. as, but not limited to, specifications, design and
must, as a minimum, be certified to the latest ISO engineering data and other critical information, is
Assessment results are intended for verification
9001 standard and comply with the “Minimum In addition to direct material Suppliers the managed and maintained in a secure environment.
of applicable ISO, IATF, VDA and applicable
Automotive Quality Management System scope of these requirements applies to Suppliers
Customer Specific Requirements and in no way
Requirements for Sub-Tier Suppliers” (Magna of subassembly, sequencing, sorting and re- TISAX (Trusted Information Security Assessment
reduce or negate responsibility to meet specific
MAQMSR – available at https://qpf.magna.com/). work (either on-site or at a remote location) and Exchange) (www.tisax.org) and TPISR (Third Party
regulatory, health and safety or other legal
services. Suppliers are expected to maintain the Information Security Requirements) (https://www.
requirements applicable to the Supplier.
Magna also encourages our Suppliers to work same level of quality and manufacturing controls, aiag.org/supply-chain-management/cybersecurity)
towards certification to ISO 45001 and ISO 14001. for the production of service parts and assemblies define industry standards for information security
Suppliers who are only certified to ISO 9001 may (i.e. for the full life of the program). This shall and establish assessment requirements to ensure
be subject to an annual management system include any service requirements transferred to any globally harmonized levels of information security.
audit, by a qualified Magna or 3rd party auditor. At alternate site, location or organization. Suppliers
a minimum, Suppliers who are not IATF certified, of service parts, components or assemblies must As determined by the nature and need for
will be required to complete an annual MAQMSR comply with the AIAG Service Parts Production protection of information and data, Suppliers shall
self-audit, available in the Audit Module in Magna’s Approval Process (Service PPAP). be able to demonstrate adequate safeguards
QPF system (https://qpf.magna.com ). Should and appropriate levels of information security. If
any existing certification expire, be revoked, or be Suppliers shall post, and update all applicable directed by Magna’s OE Customer, certification to
placed in suspension or probation, the Supplier certifications based on notifications received from TISAX or TPISR may be required. Specific cyber
must immediately contact every Magna Division to the ERFX system. security requirements will be directed by your
which the Supplier ships product, notifying them of procuring Division.
the change in certification status. Any suspension Failure to upload required or renewed certifications
in certification status must be reported to all will result in a penalty to your supplier scorecard
applicable Magna Divisions within 5 working days. and could impact future business.
2.3 SUPPLIER
Suppliers shall also maintain all required CQI CYBER AND INFORMATION SECURITY
Assessments, as defined by their processes (Ref.
ASSESSMENTS
http://www.aiag.org) and all applicable FMVSS Suppliers must have systems and procedures
Magna reserves the right to review and assess
Standards, including but not limited to FMVSS 302 in place to protect computers, servers, mobile
a Supplier’s financial, operational, information
(Flammability reporting) requirements, in support of devices, electronic systems, networks and data
and IT security, quality, environmental and
applicable OE Customer-specific requirements from any form of malicious attack.
Health & Safety systems, for the purposes of
(Ref. http://www.iatfglobaloversight.org/). CQI
validating compliance to standards established
Assessments need to be renewed on an annual Suppliers must have procedures in place, detailing
by applicable ISO, IATF, VDA 6.3 Standards, OE
basis, as determined by the latest date of response to any attempted or actual cyber-
Customer Specific Requirements or requirements
completion. Suppliers shall nominate a product attack. These procedures must include immediate
10 Magna Global Supply Chain Requirements – Revision 01-01-2021 113. OPERATION – DESIGN & Suppliers are expected to use all appropriate
tools in the product and process planning phase
• Historical quality data on previous designs or
revisions of the current part, or on similar parts
DEVELOPMENT PLANNING
including, but not limited to:
and manufacturing processes, shall be
• Geometric dimensioning & tolerancing (GD&T)
reviewed. Problem reports and corrective
• Design for manufacturing & assembly (DFMA)
actions, rework and scrap shall be reviewed to
• Design of experiments (DOE)
ensure inclusion of adequate controls to
• Simulation & Modelling
prevent recurrence of previous non-
• Failure Modes & Effects (FMEA)
Responsibilities shall be mutually agreed upon conformities.
• Finite Element Analysis (FEA)
prior to the start of any certification activity.
Suppliers will ensure that resources are available • Any campaign prevention data, or
The Supplier’s scope of planning will also ensure
and able to communicate effectively, to ensure government recall or technical service
that all capital and tooling budgets necessary to
3.1 DEFINING successful completion of all requirements to meet
defined program timing. It is also the responsibility
support the program, are approved and in place in
bulletin data shall be reviewed, if available.
THE SCOPE of Suppliers to ensure any sub-tier Suppliers for
time to meet timing requirements.
Suppliers shall work closely with Magna to
which they are responsible, also have sufficient ensure all processes are controlled adequately
Magna requires Suppliers to complete all advance resources assigned. so as to prevent the manufacture and transfer of
product planning and submission in full accordance defects. Process controls must be sufficient so
with the AIAG Advance Product Quality Planning Suppliers will develop timing and progress charts, 3.2 PLANNING & as to control failure modes identified through the
and Control Plan manual. Unless otherwise in a format as defined by the procuring Magna Process Failure Modes Effects Analysis (PFMEA).
directed and approved by your procuring Magna Division(s) and will maintain and review timelines on DEFINITION OF All related sub-tier documentation shall be
Division(s), all PPAP submissions shall be as per
Level 3 requirements, at minimum. As determined
a regular basis. REQUIREMENTS available for review, by Magna, upon request.
Special attention shall be given to all Customer
by Magna’s customer and upon request by Magna, The Supplier shall have a documented sourcing attach or interface points on the final product and
Suppliers must additionally meet submission process, for all sub-tier Suppliers affecting As part of their risk analysis, suppliers will work to critical processes such as heat treating, plating ,
requirements as per the current version of VDA2. customer requirements. The sourcing process shall with the appropriate Magna plant(s) to ensure coating, soldering, welding and appearance items.
include a risk analysis that takes into consideration definition of key program deliverables, including
Suppliers shall ensure a multi-disciplinary any available past performance data, overall risk at minimum:
approach is used throughout the product life analysis (commodity, geography, financial stability,
cycle, and most especially through the design technology, supply interruption, manufacturing • Definition of all customer expectations and
and development planning process. Suppliers capability, etc.) of sub-tier Suppliers. The risk government or legislative requirements
3.3 PRODUCT DESIGN
shall conduct all necessary and prescribed
activities to ensure clarity of all customer and
analysis shall also include an evaluation of the
sub-tier Supplier’s Quality Management System.
(e.g. FMVSS) related to product development & DEVELOPMENT
and approval, as well as serial launch and
Group-specific expectations as defined within Suppliers shall have similar requirements, as production. Customer requirements Suppliers with design responsibility must receive
Purchase Orders, Statement of Work etc. This defined in this document, in place for all sub-tier shall include all requirements of the Magna approval of all product design, test
includes activities and reporting related to Suppliers. Upon request from Magna, Suppliers applicable Magna plant(s) as well as all final and validation specifications, including CAD
design, testing, verification and/or validation and shall provide any relevant information impacting Customer and compliance expectations and specifications and transfer requirements. Suppliers
product conformance. Suppliers shall conduct upon product compliance or performance, requirements. with design responsibility shall ensure all personnel
and document detailed feasibility reviews to including full transparency through the applicable
with design responsibility are competent in all
ensure all technical, manufacturing, performance, sub-tier supply chain.
• Review of past warranty or field return issues applicable tools and techniques, as identified by
specification, certification (homologation) and
for any similar product design and/or the supplier. All deviations must be approved by
timing requirements can be supported. Suppliers As defined specifically by the Magna group or
application. Wherever possible, every Magna, in writing, in advance of implementation.
shall submit such feasibility reviews to Magna, Division involved, Suppliers must have the ability to
attempt to benchmark competitor products Supplier requests for deviations and engineering
upon request. In cases where product certification securely communicate CAD data, as required. The
shall be made. The warranty analysis shall approvals shall be documented and controlled
(homologation) is required, the Supplier is Supplier shall have adequate safeguards in place
include all sub-tier suppliers, where as per the requirements and documents of the
responsible for ensuring completion of all to prevent any improper use or communication of
appropriate. procuring plant(s).
homologation specifications and requirements. this data.
12 Magna Global Supply Chain Requirements – Revision 01-01-2021 13Suppliers with design responsibility must complete if necessary. Suppliers are responsible for the 10, or as defined by any unique requirements of process. Production Validation (PV) samples must
all appropriate Design Failure Modes Effects maintenance of all tooling, testing and inspection a Magna customer, the risk must be addressed come from the approved manufacturing process
Analysis (DFMEA), in compliance with latest AIAG equipment. Customer owned tooling, gauges through design action/controls or process and flow, unless specifically authorized in writing
standards and have them available for review and test fixtures must be identified as prescribed prevention and detection actions, regardless of by the procuring Magna Division. Final production
and Suppliers with design responsibility must by the customer, including identification with the Risk Priority Number (RPN). Suppliers are approval will require completion of all AIAG/VDA
receive Magna approval of all product design, appropriate asset tags, or similar identification. expected to have a strong focus on prevention, prescribed activities including component part
test and validation specifications, including CAD Final payment of tooling will be contingent upon as opposed to detection, and potential failure dimensions, material certifications (as defined by
specifications and transfer requirements. Suppliers verification of proper identification and completion modes identified through the Advance Quality procuring Division) and all approved supporting
with design responsibility shall ensure all personnel of PPAP as defined by AIAG PPAP or VDA2 Level Planning process must have appropriate error- documents, and any additional requirements
with design responsibility are competent in all 3 requirements. PPAP approval will not be signed proofing designed into the manufacturing process that may be defined by your procuring Magna
applicable tools and techniques, as identified by off without completion and signing of Magna to ensure capture and containment of product Division. Deviations required to be part of a PPAP/
the Supplier. All deviations must be approved by approved bailment documentation (including non-conformances. EMPB submission package, must be approved in
Magna, in writing, in advance of implementation. bailment receipts incorporating pictures of tooling, writing by the procuring Magna Division, prior to
Supplier requests for deviations and engineering gauges and test fixtures, and associated tagging Suppliers must ensure that enough floor space is PPAP submission. Unless otherwise specified by
approvals shall be documented and controlled or identification) reflecting the rights of Magna available to support all necessary manufacturing Magna, all level 3 requirements as detailed in the
as per the requirements and documents of the and its customer in goods, including tooling, and testing equipment. Once production approval AIAG PPAP Manual, or as agreed upon per VDA2,
procuring Division(s). which are placed in supplier’s care and custody. is received from Magna, any change to the must be met. If applicable, Suppliers must meet
At any time following notification to the supplier, manufacturing process must be communicated submission requirements according to VDA2
Suppliers with design responsibility must complete Magna reserves the right to complete an on- to Magna, prior to the change taking place. These specification agreed upon. Unless otherwise
all appropriate Design Failure Modes Effects site inspection of tooling owned by any Magna changes must subsequently be approved by approved in writing, by Magna, production
Analysis (DFMEA), in compliance with latest AIAG customer directly, or by Magna Payment terms Magna prior to implementation. approval will be contingent upon successful
standards and have them available for review and may differ within various Magna groups, and completion of run-at-rate production trials at the
approval by Magna. The supplier and Magna will suppliers need to make certain that they reference The Supplier will also develop necessary quoted rates, including low or high threshold
establish performance approval expectations for any applicable tooling purchase order(s) for actual packaging and labeling, as per the latest rates as defined by Magna, and using the
each phase including Engineering Validation (EV), payment schedule. Automotive Industry Action Group (AIAG) or VDA procuring Division’s process and form. Successful
Design Validation (DV) and Production Validation guidelines, or as defined by Customer or any run-at-rate must meet statistical capability
(PV) as defined by the procuring Division(s). applicable legal requirements. In the event that requirements as defined through technical, AIAG/
specialty handling or packaging is required, the VDA standards, or as approved by Magna. For
Data and results from EV, DV and PV testing shall 3.5 PROCESS DESIGN & appropriate Magna Division will communicate PPAP of new or modified parts, the Supplier
be used in the design and construction of test and requirements to the Supplier. must submit correct and complete Material Data
inspection equipment that will later control the DEVELOPMENT Sheets (MDS) in IMDS. The PPAP Warrant/Initial
manufacturing process. Sample Inspection Report must include the
As part of the advance planning process, version number and the ID number of the MDS
Suppliers must design and develop a 3.6 PRODUCT & PROCESS approved by Magna. Failure to comply may result
manufacturing process that will meet quoted in a delay of PPAP approval and subsequent
VALIDATION
3.4 TOOLING, GAUGES & production volumes and all quality requirements payment of tooling funds. For IMDS assistance,
as approved by Magna. The Supplier shall use a contact the IMDS Helpdesk at imds@magna.com
TEST FIXTURES multi-disciplinary approach for risk identification Prior to final production approval, the Supplier or the contact numbers listed within the IMDS
and mitigation in developing and improving shall validate all control documentation (FMEA, site at www.mdsystem.com. For assistance with
Tooling design and build is generally the plant, facility and equipment plans. Quality PCP, and PFD) to ensure the manufacturing the CAMDS system, contact the corresponding
responsibility of the supplier, however many planning documentation such as Failure Modes process is properly detailed and all measurement CAMDS support within the CAMDS site, at www.
Magna groups have developed detailed Tooling Effects Analysis (FMEA), Process Flow Diagram and control systems are identified and camds.org. Final approval will be determined
Standards to ensure suppliers manufacture tools (PFD) and Process Control Plan (PCP) must be implemented. The Supplier shall establish by the procuring Division. Suppliers are also
that will provide high quality parts throughout the developed, reviewed and approved by Magna appropriate production reliability/quality goals expected to develop and implement detailed
life of the tooling. These Tooling Standards will prior to production approval and launch. When along with disciplined corrective action processes launch readiness reviews.
be communicated to you via the procuring plant, a FMEA has a severity or failure mode of 9 or to drive improvement through the manufacturing
14 Magna Global Supply Chain Requirements – Revision 01-01-2021 15All product characteristics, as identified by
Magna or its OE Customer, affecting design,
3.7 FEEDBACK &
ASSESSMENT
4. OPERATION – CONTROL OF
manufacture, assembly, fit or function (including
future/subsequent processing), will be identified
and communicated by the procuring Magna As part of the production part approval process
PRODUCTION
Division. As part of the ultimate product and for all new and transfer product, Suppliers shall
process validation, Suppliers shall be required to develop an early product launch, or Safe Launch
establish, validate and maintain short and long containment plan. The process shall include the supplier’s facility and be traceable to the actual
term capability, as defined by Magna. Customer regular reviews of data collected as part of the identification information and to the appropriate
designated special characteristics, as identified containment checks, with appropriate controls standard (e.g. NIST). Calibration Services of
by Magna or its OE Customer, affecting safety or
compliance with regulations, must be validated
and corrective action implemented to address
all instances of non-conformance. Containment
4.1 CONTROL OF FIXTURES equipment must meet the requirements of the
latest released edition of ISO and/or IATF 16949
to have acceptable short and long term capability plans, results and corrective action must be & TEST EQUIPMENT standards.
and must be controlled through acceptable approved by Magna and available for review upon
statistical process control methods. As determined request. MONITORING INSPECTION, MEASURING, AND TEST
by Magna’s OE Customer(s) and as directed by EQUIPMENT RECORDS
your procuring Division, all FMEA items with a Early product containment must remain in place The Supplier must have a documented system in
severity score of 8, or higher, must be controlled until the production process is validated to be place to control, calibrate, and maintain the proper Records must include any revision information,
through appropriate error/mistake proofing. stable and approval is obtained from Magna. function and an accepted level of repeatability and traceable to the part revision level. External/
Unless otherwise specifically directed by your reproducibility of all inspection fixtures, measuring commercial/independent laboratory facilities
As dictated by IATF 16949 Customer Specific procuring Division, your early product containment / testing instruments and equipment. All customer- used for inspection, test or calibration services
Requirements, and unless otherwise directed by plan must remain in effect for the first 2000 parts, owned fixtures and test/inspection equipment by the supplier shall have a defined laboratory
Magna, Suppliers must complete annual revalidation or for the first 90 days of production (whichever is must be clearly identified in the manner prescribed scope that includes the capability to perform the
to the technical specifications and submission level more stringent). by Magna or by Magna’s customer. required inspection, test or calibration and must
as determined by their procuring Division(s). have evidence that the laboratory is acceptable to
Suppliers shall not proceed with shipments of UPDATING INSTRUCTIONS Magna or must be accredited to ISO/IEC 17025
In the absence of specific direction from Magna, production material without full PPAP approval, or national equivalent, by an accreditation
Suppliers must complete an annual revalidation unless an approved waiver, deviation or interim Operating instructions must be readily available body of the ILAC MRA (International Laboratory
and submit the ISIR/PSW to the procuring Magna approval has been granted in writing by Magna. at every inspection station with a standard, Accreditation Forum Mutual Recognition
Division. Any reduction in validation requirements Suppliers can only ship the volume of parts, or describing the proper methodology for use in Arrangement).
must support applicable OEM requirements and for the duration of time specified by the interim inspection. These instructions must include a
can only be at the direction of Magna. approval. reference to the standard, and revision level, and MEASUREMENT SYSTEM ANALYSIS
be approved by appropriate personnel. Whenever
Reference samples must be provided at no there is any change to the inspection procedure Gage and fixture Measurement System
cost, for any product requiring surface finish or that affects the use of the standard, or when any Analysis (MSA) must be performed as detailed
appearance requirements. These samples shall identification information is revised, the operating in the latest released edition of the AIAG
be taken from a production run made under serial instructions must be updated to reflect the current Measurement System Analysis Manual, and
production conditions. Suppliers shall provide the status. must meet the standards of the procuring Magna
number of samples required by Magna and all Division(s).
samples must be regarded as controlled samples, VALIDATION
along with approval signatures and expiry dates, RECORD RETENTION
if applicable. Samples will represent the minimal All measurement and test equipment must be
acceptance standards. calibrated annually, at a minimum, or at such Suppliers are expected to maintain applicable
greater frequency as established by the Supplier’s retention periods as specified in IATF 16949 latest
Measurement Systems Analysis (MSA) process. edition standard, unless subject to longer retention
The calibration record/certificate must be on file at periods in compliance with all applicable legal,
16 Magna Global Supply Chain Requirements – Revision 01-01-2021 17governmental or Customer specific requirements, obsolete material or material certification or other • Division sort of Supplier product at the Magna production, at a maximum. In the event of certain
pursuant to requirements communicated in writing failure modes. Nonconformance notices will also facility, until certified stock arrives commodity-based material, methods such as
by the procuring Magna Division(s). Records must be issued for materials/logistics noncompliance • Production line shutdown “dye lots” or steel coils will be acceptable. For
be stored in a location and/or environment that issues, such as over or under shipments, missed • Finished product sort and/or scrap of material approval of a traceability method exceeding 8
protects against inadvertent destruction. shipments, late deliveries, packaging issues and or • Any material transfer of nonconforming supplier hours, or one shift of production, the Division’s
required documentation (e.g. ASN) noncompliance product quality group must be contacted. The Supplier must
issues. The nonconformance process is typically • Quality Department time for problem ensure implementation and management of an
managed through the following procedure: investigation effective FIFO method of stock rotation in both the
4.2 MONITORING OF • Testing if required production and shipping process. The FIFO date
• Supplier will be notified of the concern, through • Any sort/rework charges incurred by Magna, used in determining stock rotation, must be the
PRODUCT & PROCESS the QPF system. All relevant containment either directly or via 3rd Party sort/rework manufacturing date of the material affected.
actions must be initiated immediately and • Related transportation expenses
Manufacturing process control must include remain in place until corrective action has • Any costs incurred by Magna for disruption of Failure to comply with traceability requirements may
a continuous monitoring of product/process been reviewed and approved by Magna. our customers, including costs associated with lead to rejection of material and issuance of non-
characteristics and of all key parameters Unless otherwise specified, initial response to sorting, rework, yard holds and applicable field conforming material reports. Traceability Records
influencing the manufacturing process. Appropriate the nonconformance must be completed actions shall be maintained and accessible for the life of the
statistical process control methods, or error- within 24 hours of notification. • Costs associated with the disposition/return of product, including Service, plus one year.
proofing, must be applied on all characteristics • Upon notification, the Supplier shall initiate unapproved or unauthorized material sent by
identified through the APQP process and as the Corrective Action Report (CAR) and any the Supplier Traceability record retention deviations are only
directed by your procuring Magna Division(s). other supporting documentation as directed • Costs related to unauthorized deviations permitted if approved in advance in writing from
Process parameters and product characteristics by the procuring Division(s). The initial CAR, • Costs incurred by Magna associated with your procuring Division(s).
subject to legislative safety, environmental and/ detailing root cause and corrective action must customer recalls or product failures, caused by
or emissions regulations must be documented in be submitted to the Magna procuring Division Supplier non-conformance CONTROLLED SHIPPING
control plans in compliance with Magna specific within 5 days, unless otherwise specified by
requirements and IATF 16949 requirements. Magna. Validation and closure will be These costs are charged to Suppliers specifically When directed by Magna, Suppliers may need to
determined by the procuring division to offset costs incurred by Magna and will vary certify product after a lot rejection has occurred.
Suppliers must validate compliance to product and • Suppliers shall assess the risk of any reported according to the Division and specific issue Two types of controlled shipping actions are usually
process requirements on a regular basis. This can non-conformance for potential impact at any involved. employed when this situation occurs:
be accomplished through layered process audits other Magna location, globally, that they ship • Supplier conducted sort and certification of
(Ref. CQI-8 LPA Guidelines), systems self-audits to. If such risk exists, they will immediately TRACEABILITY subsequent part shipments, and
or similar methods of verification. Records of such contact all affected Magna locations • Third party sorting and certification
audits shall be immediately available for review • Quality and delivery non-conformance will be The Supplier shall follow the traceability method
when requested by Magna. reflected in monthly supplier scorecards as determined by the procuring Magna Division All controlled shipping actions are the responsibility
• Suppliers are responsible to review their (e.g. date and shift of manufacture along with of the Supplier to coordinate and manage. Any
monthly scorecards, on-line, in ERFX sequential processing number). In some cases, third-party sorting, re-work, inspection and
the component may be critical enough so as to containment activity must be conducted by a
4.3 NON-CONFORMANCE Under-performing Suppliers may be escalated to warrant part identification; these instances will be Supplier that is designated or approved by Magna.
the Magna Top Focus Supplier process. Suppliers communicated through the appropriate quality Any third-party arrangements, not specifically
& CORRECTIVE ACTION will be expected to support any development and engineering groups unless superseded by the directed by Magna, must be reviewed and approved
activity that is part of this process. Costs related to procuring Division(s). by the procuring Magna Division(s). Continued part
Nonconformance notices will be issued upon the Top Focus process may be the responsibility of Traceability requirements on prototype production supply to Magna must meet released quantities and
discovery of defective product identified as a the Supplier, as appropriate. parts may be defined by Magna and must be without supply interruption.
result of, but not limited to line rejections, mis- supported by the Supplier.
labelling, incorrect packaging, testing failures, Suppliers will be responsible for all validated costs The Supplier and the Magna Division will agree
failed inspection results, customer concerns, for non-conformance issues, based on (but not A lot should contain a specific quantity of parts on the method to be used to identify all certified
warranty and/or customer returns, receipt of limited to) the following criteria: and should not exceed eight hours or one day of material.
18 Magna Global Supply Chain Requirements – Revision 01-01-2021 19SUPPLIER TOP FOCUS AND ESCALATION • Performance Monitoring of parts or duration of shipment. Requests must
PROCESS • Development activity with under-performing be made in advance and with ample time for
Suppliers implementation, if approved. Suppliers will be
required to build and maintain sufficient inventories
Escalation E-1 includes escalation to the Group/ of parts, as determined by Magna, to support any
Business Unit level and includes: changes and required approvals.
ROLES
(R) Responsible
(S) Support • Magna Top Focus Process
(I) Inform
- Plant Quality/Materials (R) - Monthly Risk Mgmt Report • Performance review & risk assessment across Suppliers are expected to effectively manage
Magna Supply Chain Management Process
Top Focus/Escalation Process
- Group SQA/D Leads (S)
- Regional SQA/D Leads (S)
- Top Focus Process
- New Business Hold E-2 all Magna Groups deviation expiry dates and must apply for any
- 6 Month rating remainsOEM Customers have stipulated that warranty
costs will be shared with their supply base. As 5. OPERATION – CONTROL OF
such, Suppliers will be expected to participate in
warranty activities including:
• Warranty returns reviews/analysis
MATERIALS & LOGISTICS
• Improvement actions
• Warranty cost responsibility
In support of lean and efficient business 3. Other (As directed by Magna)
When a Supplier’s component is implicated in a processes, Suppliers must be able to support Based on the information provided, Magna will
warranty, campaign or recall issue, with financial electronic data interchange via Standard or Web determine the Incoterms that will be used.
consequences to Magna based on Magna’s EDI. Acceptable message standards include VDA,
Customers’ warranty or recall policies, the Supplier ANSI and EDIFACT. Brokerage fees on all imported products are
must be prepared to accept these costs. The costs typically the responsibility of Magna, unless
for which a Supplier shall be responsible shall be otherwise indicated, by the procuring Division.
determined in accordance with Magna Purchase
Order Terms & Conditions, and as defined by 5.1 GENERAL
any Division specific Statement of Work (SOW)
REQUIREMENTS
REGARDING LOGISTICS 5.2 PACKAGING
or Statement of Requirements (SOR) or warranty
agreement.
PROCESSES Suppliers are required to adhere to Packaging
Guidelines as defined by the Magna Global
Suppliers shall design and manage their logistics Packaging and Shipping Manual, as well as all
processes to ensure quality and on time delivery of necessary AIAG/VDA Standards and Global
directed quantities to the location and at the times REACH requirements. The Magna guidelines can
specified by Magna. be accessed via the Magna website (www.magna.
com), ERFX Portal (https://ERFX.magna.com), QPF
In partnership with our Suppliers, Magna will work Portal (https://qpf.magna.com/) or from the Magna
to develop logistics planning that ensures: packaging representative. Special packaging
and labeling requirements, in support of specific
• Minimal complexity in logistics business Product Launch activity, may be requested by a
processes Magna facility. In the event that special packaging
• Maximum flexibility to support response to late is required, design and approval will be managed
changes in volume or timing of deliveries as part of our overall APQP Program Delivery
• Minimal inventories in the supply chain Process.
• Packaging designs support all handling and
loading requirements In preparation for product launch, production
• Just in time delivery that complies with packaging approval, as well as back up packaging
established delivery times approval must be obtained from the Magna
• Focus on continuous improvement procuring Division(s) prior to a line Run @ Rate.
• Timely communication of all potential supply
interruptions In order to ensure planned packaging optimizes
the cube utilization of the transport vehicle, the
Suppliers must be prepared to provide delivery Division assembly practices and lean operations,
costs based on: Suppliers are responsible to validate packaging
1. FCA (Free Carrier) design to these requirements if not directed
2. DDP (Delivered Duty Paid) differently by Magna. Approval must be submitted
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