supplier quality requirements manual - luminar tech

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SUPPLIER QUALITY REQUIREMENTS MANUAL Luminar Supplier Quality Requirements Manual, Rev J QMS-PP-0052 Supplier Quality Requirements Manual Revision K March 2021 DocuSign Envelope ID: 7279CA4D-E2A9-40CA-97BF-0AFA9DFE3809

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Page 1: Supplier Quality Requirements Manual - Luminar Tech

SUPPLIER QUALITY REQUIREMENTS MANUAL

Luminar Supplier Quality Requirements Manual, Rev J QMS-PP-0052

Supplier Quality Requirements Manual

Revision K

March 2021

DocuSign Envelope ID: 7279CA4D-E2A9-40CA-97BF-0AFA9DFE3809

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GLOBAL SUPPLIER QUALITY REQUIREMENTS MANUAL

Luminar Supplier Quality Requirements Manual, Rev K QMS-PP-0052

pg. 1

TABLE OF CONTENTS

1. INTRODUCTION 3

1.1. Scope 3

1.2. Quality expectations 3

1.3. Document revision control 3

1.4. Reference quality manuals and standards 3

1.5. Quality Management Systems 3

1.6. Conflict of terms

1.7. Environmental compliance

3

4

1.8. Conflict Minerals Policy

1.9. Health and Safety Management Systems

4

4

1.10. Cascading and executing OEM requirements 4

2. LUMINAR SUPPLIER QUALIFICATION 5

2.1. Process 5

2.2. Request for Quote (RFQ) 5

2.3. Approval status 5

3. ADVANCED PRODUCT QUALITY PLANNING (APQP) 6

3.1. Requirements 6

3.2. Documentation and communication 6

3.3. Project sample and build phases 6

4. CAPABILITY AND CAPACITY VERIFICATION 7

4.1. Run @ Rate 7

4.2. Failure Mode and Effects Analysis (FMEA) 7

4.3. Control plan 8

4.4. Traceability 8

4.5. Measurement System Analysis (MSA) 8

4.6. Capability 8

4.6.1. Special characteristics 8

4.7. Capacity 9

4.8. Packaging and labeling 9

4.9. Embedded software requirements 10

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4.10. Supplier request for drawing change 10

4.11. Supplier request for process change 10

5. PRODUCTION PART APPROVAL PROCESS (PPAP) 11

5.1. Requirements 11

5.2. Safe Launch Plan (SLP) 11

5.3. Team feasibility commitment 11

5.4. Part conditions requiring PPAP 11

5.5. PPAP submission 12

5.6. PPAP approval 13

6. SUPPLIER QUALITY PERFORMANCE 13

6.1. Performance evaluation 13

6.2. Supplier Quality Scorecard 14

6.3. Non-Conforming Report (NCR) 14

6.4. NCR review request 15

6.5. Supplier request for part concession 15

6.6. Request for Corrective Action (RCA) 15

6.7. Delivery performance 16

6.8. Cost of poor quality 16

6.9. Supplier development and escalation 17

7. GLOSSARY AND REFERENCES 19

7.1. Glossary 19

7.2. References 20

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pg. 3

1. INTRODUCTION

1.1. Scope

This manual defines general and customer-specific requirements for external providers

(suppliers) of production parts, materials, or services to Luminar Technologies, Inc

(Luminar).

Manufacturers and distributors of off-the-shelf parts are expected to accept the quality

requirements outlined in this manual as well.

Agreement to the requirements in this manual is part of request for quote (RFQ) response

for all suppliers.

1.2. Quality expectations

At Luminar Technologies, we maintain the highest standard of quality for our products

and services to ensure complete customer satisfaction.

Luminar recognizes that the goal of achieving outstanding quality and performance of our

products and services would not be possible without the excellent collaboration of our

suppliers.

It is expected that suppliers use this manual as the minimum requirements to meet in

supporting production of automotive-grade, world-class products and services.

1.3. Document revision control

The effective date for this Supplier Quality Requirements Manual is March 12, 2021. It

supersedes previous Luminar Supplier Quality manuals. Please check with Luminar

Supplier Quality to ensure the latest copy is being used.

1.4. Reference quality manuals and standards

Reference materials for ISO 9001, ISO 14001, PPAP, APQP, FMEA, MSA, ISO/TS 16949,

IATF 16949, VDA 6.3 and others in their latest edition are to be used as applicable. These

are available from the Automotive Industry Action Group site www.aiag.org.

1.5. Quality Management Systems

Suppliers are required to hold a valid IATF 16949 certificate approved by an IATF-

accredited certification body. As a minimum, suppliers must have ISO 9001 with plans

for implementing IATF, unless specifically exempted by Luminar. Supplier management

of sub-tier requirements are defined on section 8.4 of the IATF standard.

1.6. Conflict of terms

In the event of any conflict between this Supplier Quality Manual or any executed

Purchase Order between Luminar and Supplier, the terms of the Purchase Order shall

prevail.

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1.7. Environmental compliance

Products & Services supplied to Luminar are expected to meet the requirements of

country, federal, state, and local environmental regulations. The list below includes some

of the regulations; however, compliance is not limited to these

a. REACH (Registration Evaluation Authorization and Restriction of Chemicals), most

current regulation.

b. RoHS (Restriction of Hazardous Substances) latest directive.

c. WEEE (Waste Electrical and Electronic Equipment) latest directive.

Luminar encourages all Tier 1 production suppliers to be certified according to the ISO

14001 standard or the European ‘Eco-Management and Audit Scheme’ (EMAS) standard

for Environmental Management Systems (EMS) to ensure continuous improvement on

Suppliers Environmental Performance.

1.8. Conflict Minerals Policy

As required by the Conflict Materials provisions of the Dodd-Frank Wall Street Reform

and Consumer Protection Act, HR 4173, Section 1502 (Conflict Minerals Act), Luminar

Technologies is committed to ensure that their materials supply chain do not contain

conflict minerals that directly or indirectly finance, or benefit armed groups in the

Covered Countries.

Luminar expects our suppliers to demonstrate transparency by establishing a conflict

minerals policy consistent with this Conflict Minerals Policy Statement, and to exercise

due diligence to ensure that minerals from the conflict region do not enter our supply

chain. Suppliers are encouraged to produce reliable certificates of origin for all material

that might possibly originate in conflict areas or adjacent countries.

1.9. Health and Safety Management Systems

Health and Safety measures are non-negotiable when supplying parts and services to

Luminar. Suppliers are encouraged to obtain the Occupational Health and Safety

Assessment Series (OHSAS) 18001 certification, ISO 45001 Occupational Health & Safety

Management System certification, or must demonstrate having a working Health &

Safety Management System at their facility.

1.10. Cascading and Executing OEM Requirements

Luminar Technologies provides its technologies to various on- and off-highway OEMs.

OEMs may have commercial requirements requiring cascading and executing throughout

the entire Luminar supply chain (e.g., Sustainability, Product Safety, Annual

Requalification, etc.).

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2. LUMINAR SUPPLIER QUALIFICATION

2.1. Process

Potential suppliers to Luminar must pass a risk assessment by supplier quality and close all findings to Luminar’s Supplier Quality satisfaction. This assessment is specific to the intended manufacturing site. The qualification process includes:

a. Completion of supplier self-assessment based on AIAG’s CQI-19 questionnaire. Answers are to include references to documented evidence.

b. Completion of an on-site risk assessment audit or Supplier Readiness Review (SRR) to evaluate quality management systems. The score must result on low risk with no major findings. If the audit results in a score of medium risk, the supplier is required to provide a corrective action plan until all risks are addressed. A high-risk score disqualifies the proposed site.

c. Supplier submits a written agreement of this Supplier Quality Manual.

d. Supplier submits a written agreement of non-disclosure to protect Luminar’s intellectual property, and code of conduct for ethical business practices.

The level of scrutiny will be dependent upon the site’s QMS maturity and their quality

certifications. Approved suppliers will be added to Luminar’s approved supplier list and

given a unique supplier code.

2.2. Request for Quote (RFQ)

Approved suppliers will receive engineering drawings and specifications from Luminar

Purchasing with each RFQ. Each submission will be revision-specific and indicating the

suppliers understanding of the requirements of the print. Any conflict is to be resolved

prior to issuing of PO or commencing production.

2.3. Approval status

Supplier approval is site-specific and non-transferable to other supplier facilities. Some

suppliers will need to maintain qualification on annual basis. Luminar reserves the right

to revoke approval status to suppliers under some of the following causes, including (but

not limited to):

a. Poor performance, loss of quality certification, or business hold (see section 6.9)

b. Facility closure or acquired by new ownership

c. No purchasing activity for 18 months or longer

d. Increase in facility risk

Suppliers must proactively notify Luminar of any changes in the business environment

that may affect approval status as described above.

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3. ADVANCED PRODUCT QUALITY PLANNING (APQP)

3.1. Requirements

For significant new project or product launch, Luminar requires suppliers to use APQP as

outlined by the AIAG. APQP contains the 5 phases noted on page 6 and culminates with

an approved Production Part Approval Process (PPAP).

Suppliers are to submit APQP documentation for review or allow review of APQP

progress on-site by Luminar.

3.2. Documentation and communication

Luminar will provide suppliers with an APQP workbook or may allow supplier to use their

own. APQP updates are expected on periodic basis as agreed upon by both parties, unless

there is a significant change in status that requires an immediate update.

3.3. Project sample and build phases

During the APQP build phases, Luminar will request sample submissions leading up to an

approved PPAP. This is a stage-gate process in which the samples must meet criteria and

A

B

C

D

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supplier must address any non-conformities prior to advancing to the next sample type

and within the timeframe of the build phase.

Term Requirements Approval process Sa

mp

le T

ype

A sample

Samples suitable for concept studies as prototypes. No requirements on supplier manufacturing process, but parts must meet specification.

Safe-Launch Plan

B sample Samples suitable for functional and durability testing. Manufacturing process production intent, but tools can be in prototype stage.

Safe-Launch Plan

C sample Samples suitable for field trial validation. Supplier manufacturing process and tools production intent.

SLP or PPAP

D sample Samples suitable for series production. Supplier process is final series process. PPAP approved.

PPAP

Bu

ild P

has

es Engineering

Validation (EV) Production trial run: A & B samples may be prototype tooled.

Safe-Launch Plan

Quality Validation (QV)

Production run: C samples must be production tooled.

SLP or PPAP

Volume Validation (VV)

Production run at rate: D samples must be from production process and PPAP approved.

PPAP

Job 1 or SOP Start of series production.

4. CAPABILITY AND CAPACITY VERIFICATION

4.1. Run @ Rate

Suppliers are required to demonstrate both process capability and installed capacity via

a Run at Rate (R@R) analysis. The R@R should consist of a statistically significant number

of consecutive parts, unless explicitly stated otherwise by Luminar. The R@R should be

conducted at the approved production site using final production process, production

materials and production operators. Results will be noted on PPAP documentation if

level 3 or captured on the Luminar R&R document for a level 5. All aspects on the R&R

requirements must be fulfilled successfully.

4.2. Failure Mode and Effects Analysis (FMEA)

As part of PPAP, the supplier must perform a PFMEA to quantify risk for new or modified

processes; DFMEA would be first if the supplier is design responsible. See the AIAG

Potential Failure Mode and Effects Analysis manual for reference.

4.2.1. Revision of FMEAs will be required as well as part of any corrective action that is

issued to the supplier.

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4.3. Control Plan

Following the creation or modification of the FMEA, the supplier must implement and

maintain control plans with a clear link to the special characteristics and RPNs noted on

the FMEA. These control plans should also link to corresponding work instructions. Use

of error-proofing devices on special characteristics and proper reaction plans are of

emphasized importance to Luminar.

4.4. Traceability

The supplier must be able to maintain the ability to trace manufactured product for

Luminar either by individual part marking or a method for lot identification. This

requirement applies to supplier’s sub-tiers and raw materials. There may be special

traceability requirements for safety-critical components.

4.5. Measurement System Analysis (MSA)

As referenced on the control plan, suppliers are required to document MSAs for all

measuring and test devices to ensure their suitability.

4.5.1. Acceptable limits for MSAs:

Percentage Repeatability & Reproducibility (%R&R)

Less than 10% Acceptable

Between 10% and 30% Contact Supplier Quality

Greater than 30% Unacceptable

4.6. Capability

Capability indices indicate the ability of the process to produce parts with consistent

quality. With the goal of zero defects and risk mitigation, the supplier must demonstrate

proper capability for features that Luminar Engineering has designated as special

characteristics on the drawing. If supplier is design-responsible, they must obtain

approval from Luminar on their designation of special characteristics. AIAG PPAP manual

for initial process studies and quality indices.

4.6.1. Special characteristics. Upon identification or determination of product’s special

characteristics, the supplier must:

a. Identify the corresponding processes that affects the special characteristics.

b. Assess manufacturing and measuring feasibility.

c. Document proper severity rankings on FMEA and establish heightened

controls on the documented control plan.

d. Specify SPC method and frequency.

e. If current process is not capable, the supplier must inform Luminar and

conduct 100 percent inspection until capability is confirmed, per table below:

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Critical Characteristics

Significant Characteristics

Acceptable process capability

Cpk ≥ 1.67 Cpk ≥ 1.33

Process under statistical control, normally distributed

• Periodic process verification

• On-going SPC • Ppk analysis annually

• Periodic process verification • On-going SPC • Compliance to capability

requirement Process not under statistical control or capability not achieved

• Electronic or automated error-proofing device

• Effectiveness verified once per shift

• Plan for getting process under control and achieve capability

• 100% inspection • Plan for getting process under

control and achieve capability

f. Follow added handling requirements for any pass-through characteristics

while ensuring on a continuous basis that capability requirements are being

met. These may have additional customer-specific requirements on handling.

g. Continue to monitor capability for special characteristics throughout the life

of the product.

h. Conduct and document capability studies annually, as a minimum.

4.7. Capacity

During the R@R, the supplier must demonstrate enough installed capacity to fulfill

Luminar’s product volume and be able to absorb fluctuations in demand. Luminar

requires demonstrated capacity to fulfill up to 120% of demand. The factors involved in

achieving such capacity are:

a. Number of machines, processes, and employees.

b. Demand from other customers on same production line.

c. Available production time from shifts, planned breaks and maintenance.

d. Time restrictions by changeovers, start-up time, scheduled down time.

e. Equipment availability, unscheduled downtime, and rework / scrap.

The supplier is to establish an action plan to meet Luminar’s volume demand and

implement actions prior to the R@R being accepted.

4.8. Packaging and labeling

As part of the PPAP submission, suppliers are required to develop and validate packaging

methods that ensure the quality and integrity of the product. Only PPAP-approved

package may be used. All finished products must also meet the requirements for proper

labeling as approved by Luminar.

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4.9. Embedded software requirements

For any products with embedded software, the supplier must include and maintain a

complete set of software design documentation in the design record for the product.

Some aspects to consider include, but not limited to

a. Documenting field software updates and tracking over-the-air updates.

b. Management and record version control of software development tools.

c. Use of an automated Commercial Configuration Management Tool.

d. Diagnostic and programming tools under version control.

e. Traceability and version control of safety requirements.

f. Development process been assessed or audited through either ASPICE or CMMI by

a certified assessor.

g. Ability to support factory and service programming and diagnostic capabilities.

h. Conduct or participate in Hazard Analysis and Risk Assessment (HARA) per ISO

26262.

For comprehensive list of requirements, consult with Luminar Supplier Quality Manager.

4.10. Supplier request for drawing change

Suppliers should contact Luminar product engineering to request an Engineering Change

Request (ECR) for any recommended print revisions. Supplier ECRs are to be submitted

as early possible to avoid delays in PPAP schedules, and preferably submitted along with

quotation.

Supplier ECRs are effective immediately upon Luminar approval. Supplier ECRs for

dimensional or tolerance changes submitted post contract must include a capability

study of the characteristic(s) in question indicating what can be achieved, in terms of

Cpk, with the requested change(s).

4.11. Supplier request for process change

Whenever there may be a need for a supplier-initiated change affecting the PPAP –

approved supply chain or manufacturing process, the supplier is required to submit a

request for change. The change may be temporary or permanent. The conditions for

process change submission are identified in the latest AIAG PPAP manual under section

3 – customer notification and submission requirements. Changes include, but may not

be limited to:

a. Changes to the supply chain

b. Equipment layout change

c. Added equipment or tooling

d. Changes of manufacturing location

e. Changes to raw materials

f. Part processing changes

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Luminar Supplier Quality will review and coordinate the change request with the

appropriate Luminar groups to evaluate the change and obtain complete concurrence.

Changes may not be implemented until fully approved by Luminar. Failure to comply with

this requirement may result in revocation of the existing product PPAP and escalation.

5. PRODUCTION PART APPROVAL PROCESS (PPAP)

5.1. Requirements

In accordance with the Production Part Approval Process Manual published by the

Automotive Industry Action Group (AIAG), Luminar’s part qualification for C-sample and

beyond requires PPAP submission and approval. All tier-1 suppliers are required to

document PPAP deliverables and samples as applicable to request approval, which is

given via the signing of the part submission warrant (PSW). Unless otherwise explicitly

indicated by Luminar, no part shipments can be made for C-sample and beyond unless

they are PPAP – approved.

5.2. Safe Launch Plan (SLP) In accordance with IATF 8.3.4.3, Luminar requires a documented safe launch plan for

prototypes of new parts. This SLP is to heighten the control of potential non-conformities

for A & B samples prior to PPAP and include exit criteria for first shipments after D sample.

All EV samples are to be 100% inspected, labeled, and serialized for proper traceability.

Suppliers are to focus on special characteristics when creating the SLP, so that all critical

and significant characteristics have increased inspection leading up to the

implementation of error-proofing devices. The process should gradually move from

defect detection to error prevention.

Any non-conformities found during the SLP period must be addressed via a documented

corrective action leading up to a more robust manufacturing process. Luminar supplier

quality may define additional SLP requirements based upon quality performance during

the SLP period.

5.3. Team feasibility commitment

Luminar requires Suppliers to conduct and complete a Team Feasibility Commitment prior

to initiating Production Part Approval Process. See Appendix D of AIAG APQP Manual.

5.4. Part conditions requiring PPAP

a. Initial submission

b. Change to optional construction or material

c. Engineering change

d. Sub-supplier or material source change

e. Tooling Transfer, Replacement, or Refurbishment, or additional

f. Change in Part Processing

g. Correction of Discrepancy

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h. Parts Produced at Additional Location

i. Tooling Inactive > than 1 year

5.5. PPAP submission

Luminar Supplier Quality will request PPAPs via the checklist from our QMS. This will

define the elements and documentation required for submission, as well as the due dates.

PPAP due dates must be met; any delays must be notified to Luminar Supplier Quality

ahead of time along with a committed new submission date. Please refer to the table on

page 12 for PPAP requirements and submission levels.

PPAP is required for all Tier-1 Supplier facilities providing production parts or production

materials. Specific submission requirements are determined by the PPAP level (1-5)

requested and are defined in the AIAG manual. Default submission level is 3, but Luminar

reserves the right to assign PPAP levels as needed.

REQUIREMENTS

SUBMISSION LEVELS

Level 1 Level 2 Level 3 Level 4 Level 5

1

Design Records R S S * R

-For Proprietary Components/Details R R R * R

-For All other Components R S S * R

2 Engineering Change Documents if any R S S * R

3 Customer Engineering Approval, if required R S S * R

4 Design FMEA (If Supplier is responsible for Design R S S * R

5 Process Flow Diagram R S S * R

6 Process FMEA R S S * R

7 Control Plan R S S * R

8 Measurement System Analysis Studies (MSA) R S S * R

9 Dimensional Results S S S * R

10 Material/Performance/Test Results R S S * R

11 Initial Process Study (SPC) R S S * R

12 Qualified Laboratory Documentation R S S * R

13 Appearance Approval Report (AAR) if applicable S S S * R

14 Sample Product R S S * R

15 Master Sample R R R * R

16 Checking Aids R R R * R

17 Records of Compliance Customer Specific Requirements R R S * R

18

Parts Submission Warrant (PSW)-Tier 1/Tier 2 Suppliers S S S S R

Bulk Material Requirement Checklist R R R R R

S= The Supplier shall submit to Luminar and retain a copy of records.

R= The Supplier shall retain at appropriate locations and make readily available to Luminar upon request.

* = The Supplier shall retain at appropriate locations and submit to Luminar upon request.

Other PPAP submission conditions include

a. Supplier to submit samples and dimensional reports for each tool cavity. A CTQ

scorecard is required for critical and significant dimensions.

b. Sample shipments must be clearly identified as “PPAP samples”, to prevent the

samples from being mixed with production material or being otherwise

misdirected. Minimum of 5 pcs per tool/cavity/mold.

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c. PPAP shall be submitted to the Supplier Quality Manager. Suppliers are expected to

complete and retain all PPAP documentation.

d. Luminar Supplier Quality will establish a PPAP submittal date based on quoted or

otherwise agreed to lead times. The supplier is to submit PPAP complete, accurate,

and on time as part of their quality performance.

5.6. PPAP approval

Luminar will approve PPAP submission via the signing of the part submission warrant.

PPAP evaluation may result in either:

a. Approval. All documents and samples meet requirements. Part is approved for use

in production.

b. Rejection. The submitted documents and/or parts do not meet requirements.

Supplier is to re-submit PPAP altogether.

c. Other / interim approval. Some documents are incorrect or incomplete, or parts

needed further processing before meeting specification. Luminar Supplier Quality

may issue a concession for the requirement for a limited time. The part will be given

an interim approval PPAP status, so that the part is considered acceptable for

production for the duration of the concession or until re-submission. The supplier is

required to correct the non-conformance and resubmit the PPAP prior to expiration

of the concession. The reasons for the interim approval must be noted on the PSW.

The PPAP may be moved to approved status at the end of the concession period with

an accepted re-submission.

PPAP approval first-pass yield (FPY) will be part of the supplier’s scorecard for quality

performance.

6. SUPPLIER QUALITY PERFORMANCE

6.1. Performance evaluation

In alignment with IATF 8.4.2.4, Luminar measures quality performance for each supplier

facility, as defined by a unique supplier code. Performance is evaluated for the following,

as applicable:

a. Non-conforming parts-per million (PPM).

b. Number of NCRs leading to line disruptions.

c. Aging of corrective action request responses.

d. On-time delivery and premium freight.

e. PPAP on-time submission and approval FPY.

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Luminar Supplier Quality will inform suppliers of their performance on as needed basis

but will engage those whose performance is not up to minimum standards for escalation

and a collaborative improvement plan.

6.2. Supplier Quality Scorecard

Luminar Supplier Quality will track supplier performance as noted on 6.1. This

performance will classify the supplier from outstanding to unsatisfactory and is based on

the requirements of the automotive industry. Luminar Supplier Quality will modify the

quality goals as required by Luminar Management and notify suppliers of the revised

goal.

Please refer to the following table for Luminar supplier rating system. These metrics are

tracked as 12-month rolling.

Metric Outstanding Satisfactory Substandard Unsatisfactory

PPM Zero Less than 100 100 – 500 More than 500

Number of RCAs 0 1 – 3 4 – 5 5 or more

Response time to RCAs

N/A Under 20 days 21 – 30 days More than 30 days

PPAP on-time 100% 99% - 98% 97% - 90% Less than 90%

PPAP FPY 100% 99% - 98% 97% - 90% Less than 90%

OTD 100% 99% - 96% 95% - 90% Less than 90%

Premium freight occurrences

0 1 – 4 5 – 8 9 or more

6.3. Non-Conforming Report (NCR)

All parts supplied to Luminar must meet requirements for fit, form, and function. Quality

requirements also apply to packaging, labels, and shipping documentation. If a part is

found to be non-conforming, Luminar quality will issue a non-conforming report (NCR)

and request disposition from the supplier. The supplier will be given 24 hours for

acknowledgement and containment as needed, and 3 days to provide the RMA to

disposition the failed part(s). The disposition could be

a. Return to vendor (RTV). The supplier issues and RMA and carrier account for Luminar

to ship the failed part(s) back.

b. Scrap. The supplier acknowledges the non-conformity and chooses for Luminar to

scrap the part(s) onsite at supplier’s cost.

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Any NCR created against a supplier will impact their PPM performance. The supplier is

required to analyze any part non-conformities and provide the results with root cause

and corrective actions back to Luminar Supplier Quality.

6.4. NCR review request

Once the supplier analyzes the returned part(s), if they disagree with the non-conformity,

they may request an NCR review to reverse the PPM impact and remove their liability

from further consequences. This request may be either because the part was found

within specification (fit, form, and function) or because the non-conformity was a

consequence of handling or other factors outside of the supplier’s control.

The supplier is to submit all evidence supporting their analysis results, such as

dimensional reports, material certifications, lot release records, and other applicable

data. Luminar Quality and Supplier Quality will consider the evidence presented and

either accept the review (NCR removed) or reject the review (NCR stands).

6.5. Supplier request for part concession

A concession is a temporary deviation from the approved part or process requirements.

Suppliers are to submit a formal request with a specified number of parts affected. Parts

affected by the concession may not ship until approved and are to have specific

traceability.

6.6. Request for Corrective Action (RCA)

As an escalation to an NCR, Luminar will issue a request for corrective action to the

supplier when non-conformities are identified and any of the conditions below take

place, included but not limited to

• The quality issue caused a safety concern

• The NCR led to a production shutdown

• The non-conformity was reported by a Luminar customer

• The quantity of rejected parts is significant (above 5% of a regular shipment)

• Repeat non-conformity

The supplier is required to document and report on the actions taken via the Luminar

corrective action template (8D) as follows:

a. Containment – Luminar and our customers need to be immediately protected

from the quality concern and their impact. Containment is to be started

immediately. The supplier is responsible for developing and communicating

containment inspection instructions to Luminar, their onsite representatives, or

3rd party. Luminar may need to start containment at supplier cost.

b. If the quality concern is believed to have escaped to Luminar customers’ vehicles,

the supplier must initiate containment at our customer’s facilities within the

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necessary timeframe indicated by Luminar given the type and risk of issue, but not

to exceed 24 hours.

c. If the quality concern originated at a sub-tier, the supplier must extend their

containment efforts as appropriate.

d. Supplier executes rework/replace of affected parts as required to maintain

production. This rework must be performed by qualified personnel or a third-party

on contract to the supplier that has been approved by Luminar Quality.

e. Clean point identification and execution is expected within 24 hours at supplier

and all Luminar and our customer facilities that may have been affected.

f. Root cause analysis is due within three business days. This applies for occurrence

and non-detection.

g. Corrective Action Plan is expected within ten business days. The plan will need to

be approved by Luminar Supplier Quality so that technical actions are

implemented, and not just behavioral.

h. Implemented corrective actions are expected within 20 business days. This

includes proof of effectiveness via statistical data, revised FMEA, and other

applicable evidence.

Delays on expected RCA responses must be communicated to Luminar Supplier Quality.

Late responses will impact the supplier’s performance scorecard. Supplier is responsible

for all costs associated with validating and implementing corrective actions. Luminar

requires suppliers implement corrective action as required to their sub-tiers.

6.7. Delivery performance

Suppliers are to ship the contracted quantities of quality product so that parts arrive in

Luminar on time according to the delivery schedule. Any premium freight resulting from

late shipments or quality disruptions are the responsibility of the supplier. Luminar will

include OTD and instances / cost of premium freight as part of the suppliers’ scorecard,

as applicable.

6.8. Cost of poor quality

On any instance of a supplier failing meet Luminar’s quality requirements, direct costs

incurred by Luminar that are associated with the will be charged back to the supplier. It

is expected that both parties collaborate to minimize expenses. Upon an NCR

notification, the supplier is responsible for issuing an RMA within three business days or

reject lots may be scrapped and debited to the supplier. Some instances of cost of poor

quality is listed below. This list should not be construed as exhaustive:

a. Sorting, rework, line disruption

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b. Premium freight

c. Cost of increased inspection

d. Excess inventory

e. Correcting misidentified parts

f. Shipping documentation errors

g. Downtime, overtime, repeat testing

h. Additional manpower

i. Line changes due to material availability

j. Equipment breakage

k. Associated material losses

l. Rework at customer premises, travel, and manpower

m. Replacement of material at customer location

n. Reimbursement of charges from customer, warranty costs.

Suppliers are expected to work directly with Luminar’s approved 3rd-party sorting

company as applicable per 6.6a above.

6.9. Supplier development and escalation

Luminar expects all suppliers to continually improve their quality performance. Luminar

Supplier Quality will recognize outstanding suppliers and collaborate with those suppliers

needing quality performance improvement as needed.

Suppliers are continuously evaluated to ensure performance meets expectations. Per

scorecard on section 6.2, suppliers which fall under “Substandard” category on any

metric will need to provide Luminar Supplier Quality with an improvement plan

containing the following

a. Effective containment plans

b. Root cause analyses

c. Permanent corrective actions and implementation timing

d. Glide path - predicted future performance

The timeframe for the metric to improve to “Satisfactory” is 3 months from the baseline.

Luminar Supplier Quality may extend this period at our discretion based on progress

made by supplier. However, if the supplier fails to improve the quality and/or delivery

performance, Luminar may escalate to a controlled shipping procedure, notification to

ISO/IATF registrar, and up to business hold depending on the criticality of the infractions.

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Luminar’s Global Supplier Requirements Manual approval:

_________________________________

Pavel Tabares, Supplier Quality Manager

_________________________________

Lonnie Bernardoni, VP of Supply Chain

_________________________________

Mark Southerland, Director of Quality

_________________________________

Scott Faris, Chief Business Officer

_________________________________

Anthony Cooke, VP for Policy and Regulation

Substandard

• RCA

• Supplier's quality management presents glide path

Unsatisfactory

• RCA ineffective / repeat occurrence

• Supplier's plant management presents glide path

Critical

• Failure to improve

• Controlled shipping

• Supplier's executive team meets with Luminar executives

• ISO/IATF Registrars notified

Business hold

•Cancel POs

•Begin supplier business exit

Escalation Process

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7. GLOSSARY AND REFERENCES

7.1. Glossary

These are some of the acronyms and terms that may be referenced to in this manual.

Please see IATF 16949 section 3.1 for terms and definitions for the automotive industry.

8D 8 Disciplines; a problem-solving method

AIAG Automotive Industry Action Group

APQP Advanced Product Quality Planning

ASPICE Automotive Software Performance Improvement and Capability

dEtermination

Capacity The ability of a production line to meet customer demand

Capability The ability of the produced part to meet all special characteristics

Concession The IATF term for a temporary deviation from previously approve product

or process

Cpk Process Capability Index

CTQ Critical to Quality

DFMEA Design Failure Mode & Effects Analysis

ECR Engineering Change Request

EDI Electronic Data Interchange

ERP Enterprise Resource Planning

FIFO First-In, First-Out

FMEA Failure Mode & Effects Analysis

FPY First-Pass Yield

GR&R Gage Repeatability & Reproducibility

HARA Hazard Analysis and Risk Assessment

IA Interim (PPAP) Approval

IATF International Automotive Task Force

IMDS International Material Data System

ISO International Standards Organization

MSA Measurement System Analysis

Master part A known-good unit with expected testing results

NCR Non-Conforming Report

NIST National Institute of Standards and Technology

NTF No Trouble Found. The failure mode by customer could not be replicated.

OEE Overall Equipment Effectiveness

OSHA Occupational Safety and Health Administration

OTD On-Time Delivery

PFMEA Process Failure Mode & Effects Analysis

PPAP Production Part Approval Process

Ppk Performance Analysis Index

PPM Parts Per Million

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PSW Part Submission Warrant

QV Quality Validation

R@R Run at Rate

RCA Request for Corrective Action

REACH Registration, Evaluation, Authorization and Restriction of Chemicals

RFQ Request For Quote

RoHS Restriction of Hazardous Substances

RMA Return Material Authorization

RPN Risk Priority Number

RTV Return To Vendor

SLP Safe-Launch Plan

SPC Statistical Process Control

SRR Supplier Readiness Review. Luminar’s on-site supplier risk assessment.

VV Volume Validation

WEEE Waste Electrical and Electronic Equipment

7.2. References

The following documents are intended to support the Luminar Supplier Development

Process. If there are any questions, please contact your respective Purchasing Contact.

All reference material can be purchased through the Automotive Industry Action Group

(AIAG) website at www.aiag.org.

• ISO9001:2015 Quality Management System

• IATF16949:2016 Automotive Quality Management System Standards

• Advanced Product Quality Planning & Control Plan (APQP), Current Edition

• Potential Failure Mode and Effect Analysis (FMEA), Current Edition

• Measurement Systems Analysis (MSA), Current Edition

• Production Part Approval Process (PPAP), Current Edition

• Statistical Process Control (SPC), Current Edition

• GP-9 GM Run @ Rate

• CQIA-19 Sub-Tier Supplier Management Process

Other pertinent information can be found on the following websites:

• AIAG: Automotive Industry Action Group www.aiag.org

• ANSI: American National Standards Institute www.ansi.org

• VDA: Verband der Automobilindustrie e. V. www.vda.de

• IATF: International Automotive Task Force www.iaob.org

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