Supplier Quality Requirements Manual
Amway North America Operations 2011 Edition
Table of Contents
Page 1.0 Welcome To Amway ...... 1 2.0 Scope ...... 2 3.0 Communication ...... 2 3.1 Supplier Portal ...... 2 3.2 Supplier Contact Information ...... 2 3.3 Supplier Analytics ...... 2 4.0 General Supplier Quality Requirements/Expectations ...... 2 4.1 Quality System Requirements ...... 2 4.2 Product Requirements ...... 3 4.3 Specification Requirements ...... 3 4.4 Document Requirements ...... 3 4.5 Regulatory Requirements ...... 4 4.6 Packaging & Package Security Requirements ...... 7 4.7 Labeling & Lot Traceability Requirements ...... 7 4.8 Shelf Life and Inventory Control Requirements ...... 7 4.9 Change Control/Request Requirements ...... 7 4.10 Shipping Requirements ...... 8 4.11 Communication Requirements ...... 8 4.12 Metrics Requirements ...... 8 5.0 Becoming an Amway Supplier ...... 8 6.0 Non-Conforming Product ...... 9 6.1 Defective Material Disposition Order ...... 9 6.2 Corrective Action/Preventive Action ...... 10 7.0 Performance Measures/Metrics ...... 11 7.1 Measures ...... 11 7.2 Metrics ...... 11 8.0 Glossary ...... 13 9.0 Appendix & References ...... 15 9.1 Amway’s Quality Assurance Key Elements & Descriptions ...... 15
1.0 Welcome to Amway Amway is one of the world’s largest direct selling companies. Founded in 1959, and headquartered in Ada, Michigan, USA, Amway offers consumer products and business opportunities in more than 80 countries and territories worldwide. The company also provides product development, manufacturing and logistics services through its Amway Operations and Alticor Corporate Enterprises divisions. Amway and its family of companies have more than 14,000 employees globally, and help more than 3 million people own and operate their own independent businesses in more than 80 countries and territories around the world. Some 450 unique, high-quality products carry the Amway name in the areas of nutrition, wellness, beauty and home care. Nutrilite™ supplements and Artistry™ skin care and cosmetics are the company’s flagship brands. In 2010, Amway’s parent company, Alticor Inc., reported global sales of $9.2 billion. With facilities in Michigan, California, Washington, Brazil, Mexico, Vietnam, Europe and China, Amway Operations serves the business-to-business market with sourcing, quality assurance, product development, manufacturing, and logistics services through a diverse portfolio of leading wellness, body & beauty, and home care products. Amway Operations also operates farms in Lakeview, California and Trout Lake, Washington, as well as international farms in Mexico and Brazil. As an existing or potential new supplier to Amway, you play a critical role in our quality processes. This manual contains information to assist your company in establishing a successful partnership with us by identifying our quality requirements and expectations. We value each of our suppliers as part of our team. Thank you for your support in providing safe, high-quality products to our customers and consumers.
1 2.0 Scope The requirements and expectations contained herein are applicable for those distributors and manufacturers supplying into Amway NA (North America) Operations. 3.0 Communication We encourage and expect open and active communication with our suppliers. By working together and establishing open lines of communication, we can achieve our mutual goals. 3.1 Supplier Portal The supplier portal, located at http://supplier.amway.com, is a dedicated supplier website designed to provide up-to-date requirements, guidelines and business intelligence reporting for Amway NA Operations. Throughout this manual, you will see references to the portal, directing you to forms and links which will provide you with more specific information regarding our requirements. If at any time you have questions, please contact your Amway Procurement Representative or Supplier Quality Development (SQD) Representative. An SQD organizational chart is located on the supplier portal under Business Requirements > Quality > Contacts. 3.2 Supplier Contacts In order to maintain current contact information for our suppliers, we request you submit to your Amway SQD Representative and Technical Regulatory Analyst a name, phone number, and email address for the Primary Quality contact and Technical/Regulatory contact for each applicable manufacturing site supplying products or materials to Amway NA Operations. Supplier Order/ Sales/Customer Service contact information should be submitted to your Amway Procurement Representative. If you are unsure of who to contact, please reference the Item Buyer and SQD contacts in Supplier Analytics, our business intelligence system (under the Item Information tab). 3.3 Supplier Analytics Supplier performance information is available through Supplier Analytics. Suppliers are expected to monitor their own performance information and discuss performance data with their Amway Procurement Representative. Contact your Amway Procurement Representative for access to this system. 4.0 General Supplier Quality Requirements/Expectations Amway desires to partner with you to provide world class quality products to our consumers. We expect all suppliers to actively and continuously drive quality improvements that will support the prevention of non-conforming material. In order for us to assist suppliers in meeting these goals, we expect you to engage in the process and meet certain requirements and expectations, as outlined in the pages that follow. 4.1 Quality System Management Requirements s 0OSSESS AND FOLLOW AN INTERNAL AUDIT PROGRAM s !SSESS INTERNAL QUALITY SYSTEMS WHICH AT A MINIMUM MEET !MWAYS 1UALITY !SSURANCE +EY %LEMENTS 1!+% AS REFERENCED IN THE !PPENDIX 0LEASE NOTE SUPPLIERS CAN EXPECT !MWAY TO CONDUCT ON SITE AUDITS ACCORDING TO !MWAYS 1!+% AS referenced under Supplier Quality Assurance Capability Assessments in the Performance Measures/ Metrics section of this manual.
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2EFERENCE THE SUPPLIER PORTAL FOR ADDITIONAL REQUIREMENTS 4.2 Product Requirements s 0ROVIDE PRODUCTS MANUFACTURED FROM STATISTICALLY STABLE PROCESSES and which meet product and shipping specifications for Amway NA /PERATIONS s !DHERE TO ALL !MWAY .! /PERATIONS "USINESS 2EQUIREMENTS LOCATED at http://supplier.amway.com, including specific shipping, quality, technical regulatory, accounts payable, engineering, specification, E"USINESS AND PROCUREMENT REQUIREMENTS 4.3 Specification Requirements s 0OSSESS THE LATEST SPECIFICATIONS FROM !MWAY AND DISTRIBUTE THOSE SPECIFICATIONS TO THE PROPER departments. Every Purchase Order (PO) contains reference to the proper specification to be UTILIZED )F THE 3+5 OR THE SPECIFICATION REVISION DATE ON THE 0/ IS NOT ALIGNED WITH THE !MWAY specifications in your possession, or you cannot locate them on the PO, contact your Amway 0ROCUREMENT 2EPRESENTATIVE s %NSURE SPECIFICATION RANGE ALIGNMENT BETWEEN !MWAY AND SUPPLIER SPECIFICATIONS #ONTACT YOUR Amway Procurement Representative if not in alignment (or if additional information is needed to ENSURE ALIGNMENT s 2EFERENCE !MWAY #ONFORMANCE #HECKLISTS AND APPLICABLE STANDARDS FOR FINISHED GOODS AND COMPONENTS s !DHERE TO AGREED UPON STANDARDS AND SPECIFICATIONS 4.4 Document Requirements As a global company, we require our suppliers to provide us with certain documents. Specific document requirements can be found on the supplier portal under Business Requirements > Technical Regulatory Affairs and Business Requirements > Quality, as well as within Amway specifications. When providing documentation for raw materials, please include your Trade Name/ Chemical Name as well as the Amway Raw Material number if available. 7HEN PROVIDING DOCUMENTATION FOR FINISHED GOODS PLEASE INCLUDE THE !MWAY 3+5 NUMBER IF AVAILABLE 4.4a Document Types 1. Provide necessary certificates/documents including, but not limited to, the following: s 1UESTIONNAIRESEX &ORM s 3TATEMENTSEX 3TATEMENT OF NON IRRADIATION s #ERTIFICATIONSEX #ERTIFICATE FOR -ELAMINE !BSENCE RD PARTY 1UALITY 3YSTEM !UDIT #ERTIFICATE s #ERTIFICATESEX # OF ! (ALAL +OSHER s 0ROCESS $OCUMENTSEX 00!0S -ANUFACTURING &LOW #HARTS 4.4b Documentation Compliance 1. In order to remain in compliance with our requirements, certificate updates should be sent to the appropriate Technical/Regulatory Analyst when certification status changes occur (reference Business Requirements > Technical Regulatory Affairs > Contacts). Documents are required to be updated every three years, in accordance with Amway’s record-keeping practices, for quality assurance. 2. All suppliers shall provide a copy of their most recent third party audit report, including any findings, from an accredited 3rd party Registrar or certification body (ISO/RAB, GMA-SAFE, SGS, Silliker, NSF, TGA, FDA) to [email protected] and to their Amway SQD Representative. 3
2EFERENCE THE SUPPLIER PORTAL FOR ADDITIONAL REQUIREMENTS 2EFERENCE !MWAY SPECIFICATIONS FOR ADDITIONAL REQUIREMENTS CONTACT YOUR !MWAY 0ROCUREMENT 2EPRESENTATIVE FOR THE most current specs). 3. When indicated as a requirement on the Amway specification, hardcopy C of A’s, C of C’s and C of M’s are required to accompany every lot shipped to Amway, and should be attached to the shipping documents. These certificates are also required to be faxed or emailed to the appropriate Quality Assurance (QA) department prior to shipment. Reference Business Requirements > Quality > Certificate of Analysis and Business Requirements > Quality > Certificate of Conformance/ Manufacturing for fax numbers, email addresses, and proper formatting. 4. Complete a Supplier Self Assessment Form (located on the Supplier Portal under Business 2EQUIREMENTS 1UALITY &ORMS 4.5 Regulatory Requirements As a global company with products in over 80 countries and territories, we must adhere to the rules and regulations for each market. Please refer to Amway product and material specifications for details regarding additional requirements including, but not limited to, the following: 4.5a Nutrition Raw Material and Regulatory Requirements s &$! &OOD 3AFETY -ODERNIZATION !CT All products and materials supplied into Amway NA Operations must meet the regulations and requirements of the FDA Food Safety Modernization Act. Suppliers are expected to develop and follow their OWN (AZARD !NALYSIS #RITICAL #ONTROL 0OINT PROGRAM s 2ESTRICTED AND $ISALLOWED )NGREDIENTS All products and materials supplied into Amway NA Operations must meet current regulations/requirements for restricted and disallowed ingredients per Amway specifications. Contact your Amway Procurement Representative if you have QUESTIONS s C'-0 FOR $IETARY 3UPPLEMENTS Distributors and Raw Material Manufacturers who provide raw materials to our Nutrilite™ division must comply with Food cGMPs; however, Dietary Supplement cGMP compliance is strongly recommended. Additional dietary supplement guidance may be found on the Standardized Information on Dietary Ingredients (SIDI) website: http://www.crnusa.info/SIDI/index.html. As part of Amway’s Risk Minimization Program, an Amway Procurement Representative or SQD Representative may request Technical Regulatory records to support your compliance level. s .UTRI#ERT 0ROGRAM Amway desires to use functional botanicals from organically farmed and socially sustainable sources. For those sources purchased from suppliers (and not our own certified farms), we have developed the NutriCert Auditing program. The NutriCert program ensures our global agricultural suppliers meet Nutrilite’s triple-bottom-line standards. Nutrilite’s founder, Carl Rehnborg, set the bar high for quality farming with his Nutrilite Sustainable Farming System (NSFS) practices. It was precisely those quality farming practices that led to the development of quality nutrients and supplements. NutriCert has been founded as the vehicle to ensure Carl’s legacy. The guiding principles of our NutriCert standards are based on common NSFS elements familiar to all sustainable and certified organic farms: Encourage Diversity, Build Soil, Don’t Contaminate, %NSURE 4RACEABILITY AND "UILD A (EALTHY 3OCIAL %NVIRONMENT
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2EFERENCE THE SUPPLIER PORTAL FOR ADDITIONAL REQUIREMENTS 2EFERENCE !MWAY SPECIFICATIONS FOR ADDITIONAL REQUIREMENTS CONTACT YOUR !MWAY 0ROCUREMENT 2EPRESENTATIVE FOR THE most current specs). Suppliers of botanical ingredients may be subject to the NutriCert auditing program at the farm (source) location. Discussions regarding the complete botanical supply chain and the NutriCert policy, standards and auditing procedures - are the first steps of cooperation with our program. Farms are scored based upon compliance to NutriCert standards, and are certified accordingly. NutriCert certification status is integral to Amway Global Procurement sourcing strategies and considerations. Now, more than ever, trusted botanical suppliers who demonstrate a willingness to provide organically grown raw materials are of great value. s .ON )RRADIATION 0OLICY Raw materials or products that have been irradiated or treated with ethylene oxide are prohibited. The following statement is required on CoAs or on signed company letterhead and must accompany incoming shipments: “This raw material (including all sub components such as additives or excipients, and the origin feed stock) has not been subjected to irradiation or ethylene oxide treatment.” s 2ESIDUAL 3OLVENTS 3UPPLIERS MUST ADHERE TO )#( AND 530 GUIDELINES FOR RESIDUAL SOLVENTS s !MWAY REQUIRES REPORTING OF ANYALL SOLVENTS INCLUDING WATER USED IN THE PROCESSING OF ANY FINISHED Botanical/material that Amway Nutrilite purchases (from origin feed stock to finished material). s !MWAY REQUIRES REPORTING OF ANYALL SOLVENTS INCLUDING WATER IN ANY PROCESS STEP INCLUDING BUT not limited to: preparation, actual extraction, and clean-up of the material produced). s 4O DESCRIBE EACH PROCESS STEP !MWAY REQUIRES THE PROVISION OF A 0ROCESS &LOW $IAGRAM describing all process steps from Feed Stock through Finished Product. s 0ROCESS &LOW $IAGRAMS MUST BE DESCRIPTIVE ENOUGH TO INCLUDE ANY 2ESIN 4ECHNOLOGY #HEMICAL Stripping, and/or special Clean-Up processes utilized. s &OR SOLVENT DISCLOSURES PROVIDED THE ORDER OF LISTING SHALL BE CHRONOLOGICAL BY PROCESS STEP AND must clearly define the full Chain of Custody. s .ON '-/ 0OLICY All ingredients for Amway branded products will be non-GMO or Identity Preserved (IP) with a recombinant DNA threshold of 0.9% with the exception of flavors, and subcomponents with no function or presence in the final formula. Suppliers of ingredients where GMO crops exist will be required to provide chain of custody to substantiate GMO status. Definitions and requirements for GMO Free, Identity Preserved (IP), PCR Negative, and GMO Suspect materials can be found on the supplier portal under Business Requirements > Technical & Regulatory Affairs > Nutrilite Global GMO Policy. s *APAN &OOD !DDITIVES 2EGULATIONS Materials or products destined for the Japanese market will need to abide by these regulations, and may be subject to Japan Import Testing (JIT). If prohibited materials are naturally occurring, please provide documentation. Contact your Amway Procurement Representative or SQD Representative for specific information, and refer to Amway product specifications for requirement status. s #)1 #HINA )MPORT AND 1UARANTINE Materials or products destined for the Chinese market may be subject to CIQ (China Import and Quarantine). Regulations may include, but are not limited to, the following: 1. Raw materials must meet National Standard requirements or receive pre-approval prior to import. 2. Full disclosure of the manufacturing process, including process flow diagrams, is required. 3. Specific requirements related to resin extraction technology must be met. 5 B $URABLE 'OODS 2EGULATORY 2EQUIREMENTS s 2ESTRICTED 3UBSTANCES 2O(32%!#(0ROP Materials, products or components for use in electrical/ energy using appliances must meet the current REQUIREMENTS FOR 2O(3 COMPLIANCE 7HILE SUBJECT TO EXPANSION THE CURRENT LIST OF 2O(3 INCLUDES LIMITS FOR LEAD 0B CADMIUM #D MERCURY (G CHROMIUM #R 0""S AND 0"$%S )N TERMS OF 2%!#( THE MATERIALS PRODUCTS or components must be in accordance with Annex XVII IN TERMS OF 3UBSTANCES OF 6ERY (IGH #ONCERN 36(# Materials, products or components must be compliant with California Proposition 65 requirements and limits. s %LECTRICAL 3AFETY Where applicable, products and/or components must meet and/or be certified and/or recognized in accordance with electrical safety standards. This includes the appropriate IEC and/or UL standards. Appropriate documentation in the form of test reports or certificates from authorized test houses or certifiers is an expectation. s %LECTROMAGNETIC #OMPATIBILITY %-# Products and/or components must meet the appropriate EMC limits in accordance with current FCC, IEC, EN, VCCI standards, where applicable. Appropriate documentation in the form of test reports or certificates from authorized test houses or certifiers is an expectation. s -ATERIAL 3AFETY Where applicable, materials, products or components intended for use in drinking water treatment applications must meet current NSF/ANSI requirements for material safety. Suppliers should be prepared to disclose material formulation information directly to NSF International Toxicology 3ERVICES !DDITIONALLY PRODUCTS MUST MEET CURRENT *APAN -(,7 REQUIREMENTS FOR ARTICLES IN CONTACT with foods and the EU requirements for materials in contact with foods. Materials, products or components must be compliant with California Proposition 65 requirements and limits. C (OME #ARE 2EGULATORY 2EQUIREMENTS The supplier shall provide documentation, where applicable, such as listing of their material on INVENTORIESLISTS TO INCLUDE BUT NOT LIMITED TO 43#! #%2#,! 3!2! 2%!#( $OMESTIC 3UBSTANCES List (Canada), and Inventory of Existing Chemical Substances (China). 4.5d Cosmetic/Beauty/Personal Care Regulatory Requirements The supplier shall provide documentation, where applicable, citing compliance with the US Code of &EDERAL 2EGULATIONS THE %UROPEAN #OSMETICS $IRECTIVE %%# AND THE (YGIENIC 3TANDARD FOR #OSMETICS PUBLISHED BY THE -INISTRY OF (EALTH OF THE 0EOPLES 2EPUBLIC OF #HINA !S APPLICABLE STATE WHERE THE MATERIAL MAY APPEAR ON A PUBLISHED LISTINVENTORY INCLUDING BUT NOT LIMITED TO 2%!#( Domestic Substances List (Canada), and Inventory of Existing Chemical Substances (China). E 2%!#( 2EGULATION ON 2EGISTRATION %VALUATION !UTHORISATION AND 2ESTRICTION OF #HEMICALS Amway routinely ships products and raw materials into the European Union. In 2013, certain specified materials which are imported into the European Union (above a designated volume) will be considered reportable under this chemical inventory regulation. The Amway Regulatory Affairs Department may contact you for more information in regards to the status of your materials and 6 COMPLIANCE WITH 2%!#( REQUIREMENTS 4.6 Packaging & Package Security Requirements 0ROVIDE PROPERLY PACKAGED MATERIALS AND PRODUCTS PER !MWAY SPECIFICATIONS 4AMPER %VIDENT 0ACKAGING 2EQUIREMENT To ensure product integrity and guard against the possibility of adulteration, Amway requires TAMPER-EVIDENT seals and features on all raw material, chemical, and component packaging forms. Examples of Compliance s #OMPONENTS"OXES PROPERLY AND SECURELY SEALED WITH TAPE OR GLUE NO METAL STAPLES s 2AW -ATERIALS AND #HEMICALS DRY POWDERS 3UPER SACKS ARE TIED UP AND THEN zip-tied. Seal integrity (for paper sacks) is self-evident by its very nature. s 2AW -ATERIALS AND #HEMICALS LIQUIDS RESINS $RUMS AND TOTES ARE SECURED WITH bung covers, zip-ties, etc. Pails are fitted with lids having tamper-evident tear tabs (and/or zip- ties). Tankers and Rail Cars have C-TPAT-compliant safety seals at each opening. This Amway requirement has been traditionally enforced for all API’s (active pharmaceutical ingredients), excipients, and NMI’s (non-medicinal ingredients), as well as tankers and rail cars subject to the US Government’s C-TPAT program. &OR ALL OTHER MATERIAL ANDOR PACKAGING TYPESthe compliance date for enforcement will be September 1st, 2011. Non-conforming shipments will be subject to rejection (DMDO) and/or ADR (Arrival Defect Report) issuance. 4.7 Labeling & Lot Traceability Requirements Provide properly labeled materials and products per Amway specifications and shipping REQUIREMENTS INCLUDING MANUFACTURING TRADE NAMES FOR RAW MATERIALS AND CHEMICALS 4.8 Shelf Life and Inventory Control Requirements Amway seeks to provide our consumers products of the highest possible quality. As such, product age and freshness is an important part of that commitment. s -ATERIALS RECEIVED BY !MWAY WILL HAVE AT LEAST OF THEIR 3HELF ,IFE REMAINING AT TIME OF RECEIPT s )N SOME SITUATIONS !MWAY MAY HAVE THE ABILITY TO QUICKLY SCHEDULE AND PROCESS MATERIALS WHEN remaining Shelf Life is less than 50%. In cases where suppliers cannot meet this guideline to fulfill open orders, we expect suppliers to gain the Prior Approval of their Item Planner and/ or Item Buyer, and document this agreement on the Supplier’s Certificate of Analysis (to avoid rejection at Incoming Inspection). s !MWAY CURRENTLY HAS A 3HELF ,IFE GUIDELINE FOR MATERIALS WITH A FINAL DESTINATION OF )NDIA With the exception of market-specific item specifications, our suppliers cannot possibly know the final destination of their materials (besides the US). In these cases, Amway Item Planners will communicate to suppliers, at (or prior to) order placement, these higher Shelf Life needs. 4.9 Change Control/Request Requirements s 3UPPLIERS ARE REQUIRED TO MAINTAIN AND DEMONSTRATE CHANGE CONTROL THROUGH DOCUMENTATION validation, control, and lot traceability including, but not limited to, the following categories: 1. Changes in sub-suppliers 2. Design/Formulation: Any change in materials used or composition of raw material(s) 3. Processes: Any change to the manufacturing processes or equipment 4. Facilities: Moving to a different facility, or adding lines to or changing lines within a current facility 5. Trade Name or INCI (International Nomenclature of Cosmetic Ingredients) name changes 6. Test Method changes 7
2EFERENCE THE SUPPLIER PORTAL FOR ADDITIONAL REQUIREMENTS 2EFERENCE !MWAY SPECIFICATIONS FOR ADDITIONAL REQUIREMENTS CONTACT YOUR !MWAY 0ROCUREMENT 2EPRESENTATIVE FOR THE most current specs). s !LL SUCH CHANGES SHALL BE COMMUNICATED TO !MWAY WITH ADEQUATE ADVANCE NOTICE GIVEN TO allow for any necessary analytical/reliability/market registration/stability/panel testing to be performed. Please be sensitive that some changes may take up to 2 years to implement. s 7RITTEN APPROVAL OF ALL CHANGES PER ABOVE MUST BE OBTAINED FROM !MWAY PRIOR TO IMPLEMENTATION Please reference Business Requirements > Quality > Notification of Process Change on the supplier portal for additional information. 4.10 Shipping Requirements s 3HIP MATERIALS PRODUCED AT APPROVED MANUFACTURING FACILITIES ONLY UNLESS PRIOR AUTHORIZATION HAS BEEN obtained from your SQD representative to ship from an unapproved manufacturing location. A copy of the authorization must accompany the Certificate of Analysis for each lot shipped from the unapproved manufacturing location. 4.11 Communication Requirements s -AINTAIN GOOD COMMUNICATION s 3HARE BEST PRACTICES s 3HARE DATA FOR REDUCED TESTINGINSPECTION CONSIDERATION s &OCUS ATTENTION ON AUDITS AND FOLLOW UP ACTIONS s &OCUS ON CONTINUED QUALITY IMPROVEMENT s (AVE EFFECTIVE AND TIMELY PROCESSES IN PLACE TO IMPLEMENT CORRECTIVE ACTIONS AND QUALITY IMPROVEMENTS 4.12 Metrics Requirements s -AINTAIN A ROLLING MONTH 2IGHT &IRST 4IME 2&4 1UALITY 2ATING !VERAGE OF OR HIGHER PER the Performance Metric section of this manual. If the RFT Quality Rating Average is below 99%, suppliers may be asked to provide short and long-term improvement plans to improve their performance. 5.0 Becoming an Amway Supplier Becoming an Amway Supplier is a three step process as illustrated below:
4ECHNOLOGY #APABILITY 0ERFORMANCE Risk Screening Assessment Evaluation
Prospective Supplier/ Sourcing Training Technology Decision Identified
System Set Trials
Supplier Audits Begin Qualification PO’s Initiated
Capability Data Review Probationary Trial Period
8 Technology Financial Risk Assessment/ & Operational Formal Sampling Capability Segmentation Assessment New suppliers may become qualified and approved for use in our supply chain through the following 3 elements: s 4ECHNOLOGY AND 2ISK 3CREENING s #APABILITY !SSESSMENT s 0ERFORMANCE %VALUATION If Amway expresses interest in qualifying you as an approved source, you may be asked to: s 0ROVIDE COMPLETE CONTACT INFORMATION FOR THE FACILITY AND PRODUCT BEING QUALIFIED s 0ROVIDE CUSTOMER REFERENCES IN THE COMMODITY AREA OF INTEREST s !GREE TO AND SIGN AN !MWAY INITIATED TWO WAY #ONFIDENTIALITY $ISCLOSURE !GREEMENT #$! s #OMPLETE A COMPREHENSIVE 3UPPLIER 3ELF %VALUATION LOCATED ON THE 3UPPLIER 0ORTAL UNDER Business Requirements > Quality > Forms) s 0ROVIDE ALL REQUESTED DOCUMENTATION REGARDING YOUR FACILITY ANDOR PRODUCT BEING QUALIFIED s "E OPEN TO HOSTING A COMPREHENSIVE AUDITASSESSMENT VISIT WHERE ONE OR MORE !MWAY REPRESENTATIVES will evaluate your facility, technology, and quality systems (see sQAC in section 7.2.4) s 0ROVIDE CAPABILITYSTATISTICAL QUALITY CONTROL 31# DATA AS REQUESTED BY !MWAY REPRESENTATIVES s #OMPLETE THE PRESCRIBED TRAININGON BOARDING AS DIRECTED BY YOUR !MWAY REPRESENTATIVES 6.0 Non-Conforming Products and Materials Our Incoming Quality Assurance labs perform product and material inspections per ANSI/ASQ Z1.4. Your control plan directed sampling (for Incoming, In-Process, and Finished Good inspections) should fully align with all significant characteristics listed on the Amway specification, per the following Acceptable Quality Levels (AQL): s FOR #RITICAL .ON #ONFORMANCES s FOR -AJOR .ON #ONFORMANCES s FOR -INOR .ON #ONFORMANCES Should your product or material fail to pass incoming inspection, we will issue a Defective Material Disposition Order (DMDO). DMDOs are typically communicated via email from either the Incoming Quality Assurance group or your Supplier Quality Development (SQD) Representative. $EFECTIVE -ATERIAL $ISPOSITION /RDER $-$/ Amway defines non-conforming product as any Amway purchased product or raw material that fails to meet specifications and agreed upon standards. All non-conforming products or materials are identified by a DMDO (Defective Material Disposition Order). The DMDO allows for: s #ONTROL OR QUARANTINE OF NON CONFORMING PRODUCTS AND MATERIALS s )NTERNAL !MWAY AND EXTERNAL 3UPPLIER COMMUNICATION OF THE NON CONFORMANCE s ! MEANS TO ENSURE THE FINAL AGREED UPON DISPOSITION IS IMPLEMENTED s -EASURING AND TRACKING OF QUALITY HISTORY TO IDENTIFY TRENDS AND AREAS FOR IMPROVEMENT
There are four types of DMDOs that can be issued against a supplier: s %XTERNAL )NCOMING ISSUED FOR PRODUCTS FOUND TO BE OUT OF SPECIFICATION AT THE TIME OF RECEIPT AT our warehouse. s %XTERNAL )N 0ROCESS ISSUED FOR PRODUCTS FOUND TO BE DEFECTIVE OR NOT WITHIN SPECIFICATIONS after they have passed incoming inspection. Amway reserves the right to reject and return any defective material discovered at any point during or after the manufacturing process, including entire lots/batches, a percentage of a lot/batch, and/or line fall out. 9 s !RRIVAL $EFECT 2EPORT !$2 ISSUED FOR INBOUND SHIPMENTS THAT ARE NOT IN COMPLIANCE WITH !MWAYS Supplier Shipping, Transportation, Quality, and Packaging Requirements. s /3$ /VER 3HORT AND $AMAGED INITIATED BY 2ECEIVING PERSONNEL WHENEVER A SHIPMENT IS received damaged or the actual quantity received does not match the supplier’s (and/or carrier’s) shipping documents or master shipper/case label quantities. The following table illustrates the supplier actions required based on DMDO type and disposition.
DMDO Type Disposition Description Supplier Action Disposition notice issued for products, External raw materials, or components that Incoming Release Under do not meet specifications but are Complete CAPA or External Deviation (RUD) accepted by Amway “as-is” because In-Process they have minimum impact.
External Disposition notice issued for rejected Complete Disposition Incoming Return to products, raw materials or components Request Form; or External Vendor (RTV) that will be returned to the supplier. Complete CAPA In-Process Disposition notice issued for External rejected products, raw materials, or Complete Disposition Incoming Scrap Vendor components that will be scrapped Request Form; or External Expense (SVE) at Amway and charged back to the Complete CAPA In-Process supplier for payment. Disposition notice issued for External rejected products, raw materials, or Complete Disposition Incoming Rework Vendor components that will be reworked Request Form; or External Expense (RVE) at Amway, but the charges will Complete CAPA In-Process be forwarded to the supplier for payment. Ex. Transportation: Supplier called N/A - No our core carrier directly Ex. Receiving ADR Financial Complete CAPA Warehouse: Wrong info. on packing Impact slip Ex. QA: Missing C of A Ex. Stock damaged during transit Ex. PO Quantity does not match the $AMAGE&REIGHT Freight or sum of the case label quantities. OS&D Claim Authorization Supplier Claim Ex. PO Quantity and case label quantities do not match actual count 1UANTITY#!0! of product within case.
Please refer to the supplier portal for a guide on reading DMDOs (Business Requirements > Quality > Nonconforming Products & Materials). Disposition Request Forms are available on the supplier portal (Business Requirements > Quality > Forms). #ORRECTIVE !CTION0REVENTIVE !CTION #!0! A Corrective Action/Preventive Action (CAPA) is a supplier created action plan focused on preventing a non-conformance from recurring. The CAPA is created in response to a DMDO (Defective Material Disposition Order) issued to communicate non-conforming material or an ADR (Arrival Defect Report) issued to communicate shipping, packaging, identification, or paperwork errors that lead to a delay in material or product receipt. CAPAs are required for all DMDOs, and must include the following steps: 3TEP !CKNOWLEDGE 2ECEIPT AND $EFINE )SSUE–The supplier is expected to acknowledge receipt of DMDO/ADR communication and CAPA request within 48 hours. 10 3TEP #ONTAINMENT–Describe the containment actions taken. Containment is required prior to any subsequent shipments and must occur within 48 hours. 3TEP $ETERMINE 2OOT #AUSE–Designate what type of fundamental deficiency occurred (manpower, materials, methods, machine, environment) to cause the material/component defect. Also, identify the Quality System Escape Point(s) and determine root cause of the Quality System failure. 3TEP #ORRECTIVE !CTION–Describe the action(s) taken to correct the defective material, reduce the rate of failure, and reduce the rate of escape. The supplier is expected to provide verification that corrective actions performed are effective in eliminating the non-conformity. 3TEP 0REVENTIVE !CTION–Describe the action(s) taken to eliminate the cause(s) of failure and/ or escape. The supplier is expected to provide verification that preventive actions performed are effective in preventing recurrence. 3TEP 2ECOGNIZE 4EAM–Both the Supplier and Amway will provide names and titles of the individuals involved in correcting and preventing DMDO/ADR issue(s). !CKNOWLEDGEMENT OF #!0! REQUEST AND CONTAINMENT ARE DUE WITHIN HOURS OF RECEIPT AND ARE required prior to any subsequent shipments. Root Cause determination and a Corrective Action 0LAN ARE DUE WITHIN DAYS OF RECEIPT OF THE #!0! REQUEST ! 0REVENTIVE !CTION 0LAN INCLUDING VERIFICATION OF BOTH CORRECTIVE AND PREVENTIVE ACTION EFFECTIVENESS IS DUE WITHIN DAYS OF INITIAL CAPA request. A CAPA guide is available on the supplier portal at: Business Requirements>Quality>Forms 7.0 Performance Measures/Metrics Amway has a team of Supplier Quality Development (SQD) Representatives focused on partnering with key suppliers to drive mutually beneficial improvements in quality, consistency, and service. This is accomplished through: s #LEARLY DEFINED SPECIFICATIONS AND QUALITY EXPECTATIONS FOR MATERIALS s -EASUREMENT AND ANALYSIS OF SUPPLIER PERFORMANCE AGAINST EXPECTATIONS s $EVELOPMENT OF CONTINUOUS IMPROVEMENT PLANS s )MPLEMENTATION OF EFFECTIVE CORRECTIVE AND PREVENTATIVE ACTION PROCESSES s 6ERIFICATION OF CAPABLE QUALITY CONTROL SYSTEMS AND PROCESSES 7.1 Measures Our SQD program measures supplier quality performance and continuous improvement as follows: s 1UALITY OF )NCOMING 3HIPMENTS 2IGHT &IRST 4IME SCORE FROM 3UPPLIER !NALYTICS 3CORECARD s 1UALITY OF 3YSTEMS AUDIT SCORE s 2ESPONSIVENESS TO 1UALITY )SSUES s %FFECTIVENESS OF #ORRECTIVE AND 0REVENTIVE !CTIONS 7.2 Metrics 7.2.1 Supplier Scorecard The Supplier Scorecard measures supplier performance using key supply chain metrics, and is used to determine whether a long or short term relationship will be sought with the supplier. Scorecards are available on the supplier portal in the Supplier Analytics section. Contact your Procurement Representative to set up access, as this section is password protected. For more detailed information on the elements of the Supplier Scorecard, please review the Supplier 3CORECARD (ANDBOOK LOCATED ON THE SUPPLIER PORTAL UNDER 3UPPLY -ANAGEMENT 0ERFORMANCE Evaluation. Additional questions should be directed to your Amway Procurement Representative. 11 7.2.2 RFT (Right First Time) The RFT metric measures a supplier’s ability to meet agreed-upon specifications and requirements. Each incoming Purchase Order Line is assigned a score of 100% or 0%. Any Purchase Order Line assigned a Supplier-related DMDO or ADR will be assigned a score of 0%. Suppliers are expected to maintain or exceed an overall RFT score of 99%. In addition to CAPA requests for individual failures, SQD Representatives will require a Supplier Quality Improvement Plan from suppliers with RFT scores < 99%. RFT = 1- Total PO lines with at least one Supplier Related DMDO or ADR Score ()Total PO lines received
7.2.3 sQAC (Supplier Quality Assurance Capability Assessment)2EADY FOR 5SE END OF *UNE Amway utilizes Supplier Quality Assurance Capability Assessments to s (ELP SUPPLIERS DEVELOP AND IMPLEMENT ADEQUATE 1UALITY !SSURANCE #APABILITY s (ELP !MWAY RESOURCES ASSESS THE RISK TO !MWAY OF USING MATERIAL FROM A SUPPLIER s )MPROVE !MWAY DECISION MAKING RELATIVE TO SUPPLIER QUALIFICATION CERTIFICATION AND IMPROVEMENT Amway reviews 20 key elements when performing audits and Supplier Quality Assurance Capability Assessments. These 20 key elements and their descriptions are included in the Appendix of this manual. Please reference the Supplier Quality Assurance Capability Assessment tool located under Business Requirements > Quality.
12 8.0 Glossary
ADR Arrival Defect Report; issued for inbound shipments not in compliance with Amway supplier shipping, transportation, quality, and packaging requirements. AQL Acceptable Quality Levels cGMP Current Good Manufacturing Practices CAPA Corrective Action Preventive Action CDA Confidentiality Disclosure Agreement CERCLA Comprehensive Environmental Response, Compensation, and Reliability Act CIQ China Import and Quarantine C of A Certificate of Analysis; summarizes testing performed on referenced product/material demonstrating its acceptance against the specifications. C of C Certificate of Compliance; a declaration from a non-consumable item supplier stating the referenced product/material meets all requirements, standards, and/or specifications. C of M Certificate of Manufacture; a declaration from a finished good supplier indicating whether any deviations were made to the process or formula laid out in the specifications. Corrective Action Supplier created action plan focused on containing non-conforming material and determining root cause and immediate resolution of issue. DMDO Defective Material Disposition Order; used to identify and communicate non-conforming products or materials which fail to meet specifications and agreed upon standards. External Incoming DMDO Issued for products found out of specification at time of receipt. External In-Process DMDO Issued for products found defective or out of specification after passing incoming inspection; may be discovered at any point during or after the manufacturing process. GMO Genetically Modified Organisms
13 INCI International Nomenclature of Cosmetic Ingredients JIT Japanese Import Testing OS&D Over, Short, and Damage; issued by receiving personnel for shipment received damaged or for quantity discrepancies between the actual quantity received and what is documented on the shipping papers or master shipper/case labels. PO Purchase Order Preventive Action Supplier created action plan focused on preventing a non-conformance from reccurring. QAKE 1UALITY !SSURANCE +EY %LEMENTS REACH Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals RFT Right First Time RUD Release Under Deviation; products/materials that do not meet Amway specifications but are accepted “as-is” due to minimum impact. RTV Return to Vendor; disposition notice issued for rejected products/materials that will be returned to the supplier. RVE Rework Vendor Expense; disposition notice issued for rejected products/materials that will be reworked at Amway but charges will be forwarded to the supplier. Root Cause Fundamental deficiency that caused the non-conformance to occur SARA Superfund Amendments and Reauthorization Act SIDI Standardized Information on Dietary Ingredients SQD Supplier Quality Development SVE Scrap Vendor Expense; disposition notice issued for products/materials that will be scrapped at Amway and charged back to the supplier for payment. TSCA Toxic Substances Control Act 14 9.0 Appendix & References !MWAYS 1UALITY !SSURANCE +EY %LEMENTS 1!+% $ESCRIPTIONS 1. Leadership Senior site management must give personal leadership and define the requirements to encourage a quality culture. Individuals and teams should be judged and rewarded for delivering quality product on time as well as preventing issues. 2. Training All facilities are staffed with a sufficient number of trained and qualified personnel to ensure that quality materials are produced and distributed. The training is job specific and includes the relevant details of Quality Assurance and Company Policies. "UILDING &ACILITIES %QUIPMENT $ESIGN )NSTALLATION -AINTENANCE All buildings and equipment are designed to encourage compliance with good quality procedures. Layouts provide sufficient space and direct product flow to help prevent mix-ups. Design and construction facilitate easy cleaning, sanitization, preventive maintenance, accurate process measurement capability, and other protection from weather, pests, and other sources of contamination. 4. Technical Standards Specifications and standards form the foundation of any Quality System. Operating limits are set to ensure compliance with specifications and Regulatory requirements. Once proper limits are set, they are rigorously followed. Systems are in place to ensure that only up-to-date specifications and standards are in use. 5. Written Procedures In order to achieve consistency of product quality, work processes must be reproducible. The key to achieving this reproducibility is well written and consistently followed procedures. Procedural change control is managed according to defined and documented procedures. 6. Validation/Verification Products, methods, processes, software, production systems, procedures, and test methods are validated where appropriate to ensure they are capable of consistently achieving their desired results. Where validation is required, there should be a written procedure specifying which process and procedures required validation and the nature and scale of validation. (OUSKEEPING 0EST #ONTROL 3ANITIZATION (YGIENE All potential sources of contamination, whether biological, chemical, or physical, are identified and controlled. The front line of defense is always good, basic housekeeping and maintenance. Where products are susceptible to microbial contamination, regular microbiological monitoring is carried out. 8. Material Control The quality of raw materials, packing materials, and components is important to the final quality and integrity of products. Starting materials are purchased from approved suppliers according to approved specifications. In R&D, starting materials are those materials used in laboratory and pilot plant facilities. Starting materials must be controlled upon receipt, during storage, and in use. 9. Manufacturing Operations The quality of the making operation largely determines the quality of the final product. Making operations consistently produce high quality product when they convert approved starting materials into finished product using properly specified procedures. 10. Packaging Operations Effective package design and packing line performance establishes adequate product protection (e.g. damage, identity, contamination, etc.) Lot coding and expiration dating are critical for product 15 traceability and, in some cases, for meeting legal requirements. Packing operations consistently produce high quality packages when they convert approved starting materials into finished packages using properly specified procedures and equipment. 3TORAGE &INISHED 0RODUCT (ANDLING Effective handling and distribution operations help ensure high quality product by preventing product damage due to the environment, improper handling, or excessively long storage periods. 12. Laboratory Control Professional laboratory operations are critical to the successful control of production. Laboratories must have adequate facilities, instrumentation, analytical methods, procedures, record keeping, and qualified personnel to ensure that product quality decisions are based upon sound data. 13. Process Control Effective Process Design and Control will consistently deliver high quality product at the lowest POSSIBLE COST +EY CHARACTERISTICS OF BOTH THE PRODUCT AND THE PROCESS MUST BE CONTROLLED TO achieve consistent quality. )N 0ROCESS AND &INISHED 0RODUCT 2ELEASE #ONTROL To ensure that only quality products are delivered to customers, good control is established over the release of product, shipping practices, inventory control, and returned goods. Robust systems ensure that products released for shipment meet all finished product specifications. There is a system for handling deviations. There also is a system for retrieving product in case a serious problem is identified after a product has been shipped. 15. Records Thorough documentation is good science, makes good business sense, and for some businesses, is a legal requirement. Records enable us to investigate complaints, spot trends, make product improvements, establish a paper trail for research, and maintain the ability to retrieve product should that ever be necessary. Accuracy and timeliness are critical parameters for a useful records system. 16. Internal Audits An Internal Audit Program is an effective tool used to ensure the quality of our products and compliance with corporate and government regulations. A well functioning internal audit program identifies and corrects in a timely manner any deficiencies present in the site’s quality system and causes permanent systemic solutions to be implemented. 17. Customer Learning & Response Customer and consumer complaints are a significant source of information concerning the design and perceived performance of products. It is essential that all information received in the complaint system is recorded accurately and acted upon promptly. When reported, problems must be investigated to determine if products not complying with specifications or presenting a risk to the consumer have been distributed. Complaints can also be an important source of product improvement ideas. 18. Quality Metrics Tracking & Improvement Measurement, tracking and improvement of results are a key Total Quality principle. We know how systems are performing so that priorities and improvement efforts can be established and tracked. Each operation in R&D and product supply establishes results tracking systems for their key Quality Assurance systems to paint an accurate picture of the current state and identify needs for improvement. 19. Accountability for Suppliers Each Amway supplier retains primary responsibility for the quality for any sub-supplier they use. This +EY %LEMENT IS INTENDED TO BE USED TO EVALUATE HOW WELL ORGANIZATIONS MANAGE THE SUPPLIERS FOR whom they are responsible. 20. Safety & Security Facility management is expected to communicate requirements for workplace health and safety to its 16 employees. Adequate and compliant safety training is supplied and documented. Controlled access to facilities and to sensitive areas is restricted to qualified individuals. Systems need to be in place to adequately protect materials and prevent product diversion. Processes are necessary to protect proprietary information and protect the security and reputation of the Amway business.
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