ABG Supplier Portal: Business Requirements: Quality: DMDO

DEFECTIVE MATERIAL DISPOSITION ORDER (DMDO):

A Defective Material Disposition Order is the formal document notification applied to components or products that do not conform to established specifications or standards.

ABG utilizes the DMDO system to control or quarantine nonconforming items, to provide a means of communicating the issue within ABG and to the supplier, and to ensure that the final agreed upon disposition is implemented. By measuring and tracking conformance quality history, QA personnel can identify trends, qualification candidates, and areas for improvement.

External DMDO:

ABG purchased product does not meet current specifications/standards and ABG did not adversely affect the usability of the product before or after receipt. Steps in an External DMDO:

1. Product Non-conformance is found during receiving inspection and/or during manufacturing.

2. ABG will quarantine the non-conforming product. DMDO is created. Supplier is notified of the non-conformance. Supplier CAR is initiated. ABG Planning and Purchasing is notified of the non-conformance.

3. Supplier provides ABG with disposition (Scrap at Vendor’s Expense, Return to Vendor, or Rework).

4. DMDO is route to NTBU for disposition. If product is “Return to Vendor”, suppliers are required to provide freight information (such as carrier, carrier contact information, account number to bill the freight, etc.).

5. Once disposition has been made to the product, the DMDO is route to ABG Procurement for Charge Back input. Suppliers may be charged with a $200.00 DMDO Administration Fee.

6. DMDO is route to ABG QA for DMDO and Corrective Action closure.

Other Types of DMDOs:

1. OS&D DMDO (Over, Short and Damage): An OS&D is initiated by Receiving and Stores personnel whenever a shipment is received that is damaged or the actual quantity received does not match the supplier's and/or the carrier's shipping documents.

2. ADR DMDO (Arrival Defect Report) - If an inbound shipment is not in compliance with Access Business Group's Supplier Shipping Requirements, Receiving personnel will initiate an Arrival Defect Report.

Revision 4/8/2018 Page 1 of 2 ABG Supplier Portal: Business Requirements: Quality: DMDO

ABG Terminology:

1. Rejected/NTBU’d (Not to Be Used): Product contains non-conformances at or above the Acceptable Quality Level (AQL), or is deemed severe enough to affect use (functionally or aesthetically). Shipments can be either totally rejected or partially rejected, depending on the shipment and the severity.

2. The Final Disposition of NTBU’d stock is classified as one of the following:

 Rework Vendor Expense (RVE) — A DMDO disposition notice prepared by ABG indicating that rejected product, raw material, or component will be reworked at ABG and the charges will be forwarded to the supplier for payment.

 Rework ABG Expense (RAE) — A DMDO disposition notice prepared by ABG indicating that rejected product, raw material, or component will be reworked at ABG and charged to ABG.

 Scrap Vendor Expense (SVE) — A DMDO disposition notice prepared by Amway/ABG indicating that rejected product, raw material, or component will be scrapped at ABG and charged back to the supplier. ABG requires the supplier to provide a Return Material Authorization (RMA) #.

 Scrap ABG Expense (SAE) — A DMDO disposition notice prepared by ABG indicating that rejected product, raw material, or component will be scrapped at Amway and charged to ABG.

 Return to Vendor (RTV) — A DMDO disposition notice prepared by ABG that rejected product, raw material, or component does not meet specifications and is going to be returned to the source. ABG requires the supplier to provide a Return Material Authorization (RMA) #.

 Release Under Deviation (RUD) — An ABG Quality disposition status for product that does not match specification or quality standards but is approved for use by QA “as-is” following consultation with areas of responsibility/expertise, i.e. R&D, Marketing, Purchasing, etc. RUDs, depending on the rationale, warrant an investigation that leads to correction or improvement of the process and/or revision of the specification. An “immediate” RUD can be executed by QA without going through a physical rejection step or a normal RUD may be the resulting disposition following a rejection. All RUDs should be supported by written rationale.

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