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Standard Quality Plan

E_GuidelineTour_Perucchini_11_Layout 1 18/06/12 09:40 Pagina 1

General Index 1 Company profile page 3 2 Quality Highlights page 4-9 3 Purpose of the Standard Quality Plan page 9 4 Perucchini and Quality Assurance page 9 5 Duty responsibilities page 9 6 Checking of documents, data and records page 10 7 Training page 10 8 Order processing and customer service page 10 9 Research & Development page 10 10 Outsourcing and suppliers management page 10-11 11 Production page 11 12 Identification and traceability page 11 13 Control of goods owned by the customer page 11 14 Products preservation page 11 15 Checking of not conform products page 12 16 Monitoring and measurement page 12 17 Audits, statistic survey, corrective and preventive actions page 12 18 Flow chart of the standard production process page 13

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Perucchini Foundry

1 Company Profile Company Name Perucchini S.p.A. Registered Office: Omegna, Via 4 Novembre 318 VAT registration number: 00115480030 Commercial Register No. 54211 Headquarter: 28887 Omegna (VB), Via 4 Novembre 318 Corporate Purpose Production and sale of castings in cast iron and steel obtained with the full shell moulding process. Share Capital: €. 1.702.800 Company Property: private, 6 shareholders Board of Directors Dott. Crespi G. - President Ing. Carbonatto A. - Managing Director Sig.ra Perego A. - Director Consolidated Data Personnel: 120 Turnover 2011: 18,5 Mio/€ Perucchini Manufacturing Plant Omegna plant (VB) – Italy Covered area:12.000 sqm Production capacity: over 10.000 t/year (gross)

Production lines: - line 1 cast iron castings with manual pouring

2 medium frequency furnaces of 1.500 kg each

- line 2 cast iron castings with automatic robotized pouring 2 medium frequency furnaces of 2.500 kg each

- line 3 steel castings with manual pouring 1 medium frequency furnace of 500 kg

Plant for coated sands reclaiming and coating Efficient and modern hot moulding machines for the production of sand shells and cores Robotized deburring plant Hanger and tumble blast shot blasting machines

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Shell moulding castings

ISO 9001:2008 certification

2 Quality Highlights Quality Policy Perucchini is always intending to achieve and maintain its main targets according to the Constant Improvement philosophy. This leading principle must be followed up and integrated in the company working style for an ongoing growth of corporate activities. The guidelines to achieve these targets are:

• Guidance to the Customer Satisfaction, namely the development of effective and proactive relationships providing a Quality Service based on product conformity starting from technical and commercial requirements

• Cost reduction of quality defects caused by the incorrect application

of the Quality System; reduction of scraps and improvement of the efficiency of all activities in any Organization level by optimizing working methods and times

• Strict collaboration with suppliers, to get progressive and constant

improvements of the Quality level and of the competitiveness of overall costs

• Improvement of the sensibility, the team work attitude and the care of

Quality targets in every level of personnel. It is taken good care of human resources management by qualifying the personnel through specific training courses

• Computerization of the production process and individual workstation

throughout the company, in order to comply with requirements of traceability and production control

Quality and production requirements, design capabilities, Marketing activities and staff aspirations have to merge into a wide corporate project making persons aware of their responsibilities and more and more involved in a continuous growth of Perucchini. Quality System conforming to ISO 9001:2008 and achievement of ISO TS 16949 Certification In a more and more competitive global market, the Quality of the product plays a basic role in customers satisfaction and therefore in having a successful business. In a continuous improvement perspective, Perucchini applies, to the current quality system, the basics of the ISO-TS 16949 standards, with the target of obtaining the certification.

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Technical sessions

Hand-on training

Sharing of quality policy with all corporate levels The Quality policy and the most significant trend indexes are shared with all operating services and departments. The main goal is to maximize the involvement and participation of all company personnel in regards to Quality subjects. Everyone has the right and the duty to notify possible inefficiencies or nonconformities both of product and service. Each report will be always checked by services in charge; appropriate and corrective actions will be targeted and put in the field. Strong partnership with Customers and Suppliers Perucchini policy promotes strong partnership with customers and suppliers; close technical relationships with customers enable a deep knowledge of products and applications, thus developing products able to meet all the requirements and suitable for the relevant application. The partnership with suppliers builds up and promotes their involvement in the company policy of continuous improvement; therefore the supplier becomes an active partner in the process of growth and improvement of Quality standards. Personnel with high competence Perucchini invests a lot of resources in staff training at all corporate levels. The competence of staff plays a fundamental role to reach and maintain high quality standards over time and, in addition, to promote the policy of continuous improvement. The training courses are planned with reference to the Skills Matrices, that point out and relate the individual skill to the running working activity, so any possible gap can be easily filled. In addition specific training are scheduled and focused on new methodologies learning or on using of new working tools. Suppliers with certified Quality System For further higher quality assurance of the operations carried out on behalf of a third party, Perucchini suppliers have a certified quality system according to ISO 9001 or their own quality system aligned to ISO 9001 standards. All suppliers are approved through joint Audits carried out by Quality and Purchasing specialists and their status of Perucchini supplier is maintained by continuous monitoring of their trend indexes particularly the PPM (Parts-Per-Million) nonconformities. The evaluation of suppliers by Vendor Rating is issued every six months. Suppliers with underperforming VR index respect to Perucchini target are called to jointly define proper countermeasures to restore the targeted quality rating.

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Quality Software

Non-conformities analysis

Design Software

Software for functional check

Software for Quality Management Quality activities are managed by the support of a specific software, the IT solution is able to ensure the effectiveness of operations and greatly increase the efficiency of the corporate organization. The company adopts the ERP-SAP integrated system. The module relative to the quality activities (QM) consents to efficiently and precisely manage the internal dynamics concerning the quality aspects of the process. Furthermore, the integration with the other management modules allows a precise and exhaustive analysis of the data, providing a clear picture for the corresponding improvement actions. Punctual Analysis of Nonconformities, for a continuous improvement In Perucchini the nonconformities are split in three main groups:

- External nonconformities, reported by customers - Internal nonconformities, reported by departments or services - Nonconformities in material entrance, dependent on suppliers and

detected in acceptance

Each nonconformity is promptly investigated, checked and solved by applying corrective actions according to the methodology of the Problem Solving. The Quality service draws up the analysis of nonconformities quarterly; it is shared with all the company departments in charge, to jointly define and implement necessary and resolving actions. Specific design software Perucchini design service uses specific softwares, able to analyze the requirements of products just in the early development phase and to define all the relevant activities of the technical office.

- Top Solid Design: allows the use of the 3D vision to the aim of correctly design the feeding systems and analyze the geometries peculiarities; the main purpose is the creation of models that are then analysed through Magmasoft® pouring simulation software.

- Magmasoft: allows the analysis and the calculation of the fluid dynamics and of the thermodynamics of the pouring system and of the castings feeding; this consent to have a prevision of the areas at risk of defectiveness and, moreover, permits to optimize the process yields and the shells filling time.

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Magma Soft R&D Patterns Furnace

Significant equipments at the R&D department Perucchini R&D department is provided with instruments that allow the analysis of castings pouring conditions, in order to verify the productive quality and being able to simulate new process parameters. Besides, thanks to the experimental furnace of 50 kg it is possible to analyse and characterize innovative materials for future applications in shell moulding. The R&D activity plays a fundamental role in identifying functional limits and weak points of the product, allowing designers to work and focus on the improvement of Quality, Reliability and Performance standards.

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3D Measurement Machine Digital durometer Spectrometer

Electronical microscope Magnetoscope Fiber endoscope

Significant equipments at Quality Assurance department The Quality Assurance department is provided with state of the art machinery and equipment, that consent to verify the conformity of the components manufactured internally or by suppliers. The controls are defined according to the critical points of each component, and according to the supplier’s VR. The quality and sampling plans are managed dynamically according to the number of conformed supplies and they are set on two levels: normal or intensive. All suppliers are required to prove and state the results of their own inspections and tests. The QA dept is capable of supporting suppliers as well as the internal operational departments whenever specific instruments or customized inspection are required.

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PUMA automatic pouring line

Automatic pouring control

Deburring robot

State of the art and highly reliable production machines For in-house production of components, Perucchini uses the most advanced machines able to perform high productivity and capability and to grant high quality standards. Perucchini has been cooperating for several years with the leading manufacturers of foundry equipments (IMF, Mec-Ind, Euromac, SLS, SIR). Main features of the most important plants:

• Automized pouring robot • Automized deburring robot • Last generation medium frequency furnaces • Semiautomatic shells making machines • Plant for shell moulding sands reclaiming and resins coating

3 Purpose of the Standard Quality Plan This Quality Plan, edited in conformity to UNI ISO 10005 norm, shows the procedures carried out by Perucchini to comply with the quality requirements applied to the production of castings. The document has been deliberately issued in synthetic form and with general purpose contents because specific information are just included in the Quality Manual. Perucchini operates on customers commission. The operative modalities are described in the Quality Plan. If the contents of this document do not comply with the customers requirements, a registered copy of the Quality Manual could be required to the Perucchini Quality Assurance Service. This document is considered under “not controlled distribution”. 4 Perucchini and Quality Assurance Perucchini operates in accordance with a Quality System conforming to the UNI EN ISO 9001-2008 norm. This certification has been achieved in year 1998 by IGQ (Istituto Italiano Garanzia Qualità) certification body, through the issuing of the certificates no. 9829 and IT-5378. The next renewals have been achieved by IGQ until year 2008; starting from 2009 the renewals have been achieved by CSQ with certificates no. 9190.PRCC and IT-68433. The research of the continuous quality improvement of the castings supplied to its customers, lead the company to apply, to the current quality system, the basics of the ISO-TS 16949 standards, with the target of obtaining the certification. 5 Duty responsibilities Hereafter the relevant services of Perucchini organization that are responsible for the implementation of the Quality Plan: - ASQ: ensures that the activities required by the quality management system are planned, implemented

and controlled by monitoring their development - ASQ: determines the sequence and the interaction of processes related to the Quality Plan - ASQ: communicates requirements to all involved company services and divisions, subcontractors and

customers. Solves issues that might come out at interfaces among these groups - ASQ: double checks the results of performed audits - DGE: authorizes requests for dispensations from Perucchini Quality Management System procedures - ASQ: monitors corrective and preventive actions - DGE: reviews and approves changes to the Quality Plan or deviations from it DGE: General Management ASQ: Quality Assurance

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6 Checking of documents, data and records All Perucchini documentation is identified, registered, protected and preserved in accordance with qualified criteria conforming to UNI EN ISO 9001:2008 norm. All internal documentation is managed through specific procedures and specifications that define modes and responsibilities for their processing, coding, distribution and review. The responsibility of the external documentation management falls on the reference department who is in charge of the specific activities of management, registration and distribution. The external documents (norms, technical specifications of the customer) are registered in special lists drew up and updated periodically by QA dept. The data management is carried out by Perucchini both on paper and on data processing supports according to the running software used for management, design and usual practice and handled by the IT dept. The records are identifiable, traceable and preserved for a minimum of three years. The Quality reporting will not be disclosed to entities outside the company except for specific agreement with the end customer during the "contract review". The documentation management is instead different in case of ISO/TS, since all what concerns the products of the Automotive sector (registrations specified by the Customer included), must be filed for the product entire life plus one calendar year, if not differently specified by the Customer, and anyhow not less than 5 years (except different binding applicable dispositions). The quality documentations are divulged as per what aside illustrated. Quality reference documents: P-04-DGE, P-14-DGE 7 Training Staff training is handled at all company levels according to defined procedures and skills required for specific roles or functions. QA dept is responsible for the program management, training and refresh courses. Quality reference documents: P-02-DGE

8 Order processing and customer service All customer notes, specifications and purchase orders are analyzed and checked in the definition of the product requisites. Commercial (COM *), technical support-to-sales (ITEC) and technical dept. (TEC) are responsible for analysis and development of technical-commercial inquiries. Quality reference documents: P-03-DGE, P-08-DGE 9 Research & Development By project it is meant the elaboration, the analysis and the manufacturing of the toolings as well as the castings production. The products design is developed by two different services: technical office that is the responsible for components design; R&D that is responsible for procedures testing and products validation. The “Project” worked out by the technical dept. is approved by Marketing Dept. and General Management. The control and the validation of the project are carried out by submitting samples, representative of the series supply conditions, to the customer. Quality reference document: P-03-DGE 10 Outsourcing and suppliers management In order to maintain high quality rating of purchased components, Perucchini makes use of suppliers with quality system according to UNI EN ISO 9001-2008 or ISO TS 16949 or with own quality system aligned to ISO standard. Each supplier is qualified and constantly monitored through specific audits carried out by Perucchini QA and Purchase dept. specialists. The Suppliers Vendor Rating (VR) is issued every six months, in order to monitor suppliers performances in terms of quality of supplying, reliability of delivery terms, flexibility and technical support forwarded to Perucchini. Suppliers with underperforming VR index respect to Perucchini fixed target are called to jointly define proper countermeasures to restore the required quality rating. The PAP procedure (Product Approval Process), derived from Automotive PPAP, is also active for the verification and validation of products manufactured by new suppliers or by already approved suppliers in

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case of changes in their production process; with the achievement of the ISO-TS certification, the procedure will be integrated and updated so as to fully follow the PPAP AIAG procedure. The purchase orders are formalized on specific numbered forms, including the contract terms fixed in the relevant supplier’s contracts. Quality reference documents: P-05-DGE, P-06-DGE 11 Production The internal and external productions are managed through manufacturing and inspection cycles, worked out for all types of products according to defined procedures. The process management and control are directly carried out by the involved operative personnel according to procedural Control Plans integrated with proper Operating and Visual Instructions. In section 18 flow charts of the standard production process of Perucchini are reported. Quality reference document: P-08-DGE

12 Identification and traceability Perucchini keeps under control and records the unambiguous identification of the product by the assignment of an internal code also mentioned on the manufacturing tooling as well as on the correlated documents. The traceability is essentially based on two data: - Foundry Code - Production Batch (corresponding to the number of our internal job order) Them both are indicated on all the documentation concerning each specific casting. This makes it possible, starting from the production batch mentioned on the QUALITY CERTIFICATE issued after the final checking, to get back in the production process up to the shells making. If contractually requested by the Customer, the casting can be marked by cold imprinting on the part directly, or by a clock date stamp introduced in the tooling (cavity) so as to make the traceability more prompt. Quality reference document: P-07-DGE

13 Control of goods owned by the customer Shell-Moulding tooling: The toolings for the shells and the cores making are customer owned and are univocally identified. They are kept in appropriate stocks from which they are taken when the production has to be carried out. At the end of the production process, and before being put in the stocks again, they are carefully cleaned up and subjected to a quality check. Final check tooling: When required by the project, the dimensional control gauges or the coining and shearing tools customer owned, are kept in appropriate stocks from which they are taken when needed for the operations indicated in the technical specifications of the project. At the end of each production cycle they are carefully checked so as to verify their wear condition and the respect of the tolerances required by the project. Quality reference documents: I-29-PRO, P-10-DGE 14 Products preservation All the parts managed in the company are handled, stocked and preserved so as to conserve their quality and characteristics. The castings are usually packed in metallic boxes owned by Perucchini, to be returned, except different contractual agreements taken with the Customer. Quality reference document: I-10-PRO

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15 Checking of not conform products Specific areas for the segregation of nonconforming products are well marked in all production departments. The products nonconformities are always identified with coloured tags: red for material to be rejected; yellow for material to be checked and overhauled. The rejected product is quickly scrapped or returned to the supplier in order to prevent any possible misuse. The exceptionally accepted or repaired material is properly identified and managed to allow its traceability in any phase of production process. The analysis of nonconformities is handled through the Problem Solving methodology. The non-conformities procedures can be issued by any company dept. and they are always registered on specific forms according to defined procedures. QA dept. determines the method to manage the nonconformity and the activities needed to analyze the problem, the service in charge of the analysis and the action planning to prevent future occurrence. Quality reference document: P-12-DGE 16 Monitoring and measurement Process control is an effective and objective method to detect products nonconformities. Inspections and tests are carried out on three different phases basis. Acceptance sampling is done by the acceptance control dept. according to a sampling plan. Drawings/specifics of the casting, operative and visual instructions are adopted as reference documents. The sampling results are processed through SAP-QM, a specific software also able to issue effective and precise survey. On line controls performed by the production personnel based on control plans; they are supervised by the foreman and the Quality Control. On line controls are registered on specific department registers or via acquisition data software. Design drawings and manufacturing operational charts are used for such a purpose. Final tests are performed on all components by the testing operator and in accordance with the product test specification and with the Visual Instructions. The objective proof of the functional tests execution is granted by the presence of id labels. All the instruments used to control and test components are encoded and registered on specific master registration cards. Their suitability is constantly verified by the QA personnel employed in metrological laboratory through the relevant controls established in the same master registration cards. The instruments verifications are carried out by using primary samples SIT or by relying on external accredited laboratories. Quality reference documents: P-05-DGE, P-06-DGE, P-08-DGE, I-03-ASQ 17 Audits, statistic survey, corrective and preventive actions Quality audits are constantly carried out by the QA personnel both inside the Company structure and organisation as well as at the external suppliers. The results of the inspections are always registered on specific forms, that are integral part of the Quality system documentation. Statistical techniques are applied to constantly monitor the performances of the most significant indexes: - External nonconformities reported by customers - Internal nonconformities reported by departments or in-house - Nonconformities dependent on outsourcers and detected in acceptance - Controls and tests in acceptance and in production - Products’ overhauling - Customers claims - Delivery delays Quarterly the QA dept. draws up the non-conformity analysis in accordance with defined procedures. In order to raise awareness and involve personnel at any company levels, quarterly the survey charts of the most significant quality indexes are displayed in the relevant showcases present in all production areas. Corrective and preventive actions come out from the analysis of product or service nonconformities that are registered through internal and external nonconformity claims as well as from audits carried out by the Notified Body. The accomplishment and effectiveness of the engaged corrective action is planned and monitored in subsequent audits. Quality reference documents: P-13-DGE

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18 Flow Chart of the standard production process