general supplier requirements - arnon

HANDBOOK

GENERAL SUPPLIER

REQUIREMENTS

We provide industrial electrification and

automation as a service to our selected custom-ers – machine, equip-ment and system pro-viders in marine, mining, energy and renewables industries.

We are able to offer a unique portfolio of compe-tencies starting from sen-sor, instrument, and elec-trification level through automation systems and

remote connections to cloud services. Our aim is to be a true partner to our clients boosting their com-petitiveness.

To reach this goal our aim is also in long-lasting and well considered partner-ships with all our selected suppliers.

Sourcing and procure-ment team is responsi-ble for supplier relations management enabling the

best quality and total cost efficiency for our select-ed customers. Expertise has been built up through long-lasting partnerships and our own active re-search both with our cus-tomers and suppliers.

By following the general requirements for our sup-pliers, we can together achieve the level of coop-eration needed if we are to succeed in meeting the needs of our customers.

HARRI LAMMINENCEO, ARNON

[email protected]+358 50 063 8086

VILLE KOSKINEN PURCHASING MANAGER

[email protected]+358 50 470 3360

ART OF AUTOMATION 32 ARNON

MANAGEMENT RESPONSIBILITY

We require commit-ment to Arnon

Code of Conduct, full compliance to applica-ble national and interna-tional laws and respect for human rights in the spirit of internationally recognised ethical stan-dards.

Supplier shall be commit-ted to develop his business operations according to Arnon’s Supplier Require-ments in order to continue cooperation with Arnon. Some of these require-ments may not be appli-cable to all suppliers and these requirements may therefore be left out from the scope of the assess-ment. The compliance with Supplier Requirements will

be taken into consider-ation when making sourc-ing decisions.In order to meet Arnon’s requirements, the daily operational process and way of working shall be optimised for best per-formance. Arnon needs suppliers to support its operations and the needs of our customers. Fluent and streamlined process-es between the suppliers and Arnon enable con-tinuous improvement. In our supplier relations, we aim to establish long-term and constructive partner-ship. In regular meetings with the supplier, we agree upon development and ac-tivity plans and evaluate the fluency of the relation-ship.

The supplier shall sign a written commitment re-garding confidentiality/non-disclosure. All com-munications, information and/or data disclosed by Arnon, whether written, visual or oral, is confiden-tial. The supplier shall not disclose the confidential information of to anyone, shall not use it for any other purpose than the one determined, and shall keep the confidential infor-mation in confidence with the same degree of care as is used for its own confi-dential information and at least with reasonable care. The supplier shall comply with the specific require-ments of the applicable confidentiality/non-disclo-sure agreement.

Supplier’s management responsibility require-

ments are needed to provide a framework for successful business oper-ations.

The management shall be committed to Arnon Code of Conduct, full compliance to applicable national and international laws and re-spect for human rights in the spirit of international-ly recognised ethical stan-dards.

Clear business vision and strategy is needed in re-gard to further develop-ment of the company, understanding its current status and vision as to where it would like to be in the future is. Management

shall have a plan showing how it plans to achieve its vision and strategic objec-tives. The Supplier shall apply key performance in-dicators that are derived from appropriate strate-gic goals covering relevant business expectations. Management will use these indicators to monitor and review its performance as well as to initiate improve-ment actions.

The Supplier shall have an active customer sat-isfaction program based on delivery performance, customer ratings, custom-er surveys and interviews, etc. Management shall take actions based on the results of the program.

Management supports the Health and Safety, Environ-ment and Quality Manage-ment System by periodi-cally reviewing it to verify its continued effectiveness and suitability for future needs.

The Supplier shall also have on-going perfor-mance improvement pro-grams based on strategy elements, key performance indicators, quality and en-vironmental objectives, customer satisfaction pro-gram etc. This includes en-surement that employees have the required educa-tion, training and compe-tence for their position and tasks.

4 ARNONART OF AUTOMATION 5

ENVIRONMENTAL

MANAGEMENTEnvironmental man-

agement is needed to develop the manage-ment of environmental issues in supply chain and ensure the com-pliance of with Code of Conduct.

The Supplier shall be knowledgeable of envi-ronmental legislation and applicable regulations

and provide evidence of compliance with such regulations including an up-to-date, documented Environmental Policy in-cluding commitment to environmental protection, prevention of pollution, compliance with environ-mental legislation and continuous improvement.The Supplier shall have a documented and certified

Environmental Manage-ment System to ensure ef-fective planning, operation and control of environ-mental aspects. This Envi-ronmental Management System shall satisfy the re-quirements of ISO 14001 or other internationally recognised standard.

The Supplier shall com-ply with all applicable

laws and regulations, in-cluding competition, cor-porate governance, taxa-tion, financial disclosure, occupational health and safety, employee rights, environmental protec-tion and export control.

The Supplier shall certi-fy and ensure that the

Supply does not contain any hazardous material or substance in the basic material or in the compo-nents used in the supply.

The supplier shall certify and ensure that no Con-flict Minerals (3TG), includ-ing tin, tantalum, tungsten or gold originated in con-flict affected or high-risk areas, are procured or

contained in the supply, including those from its own suppliers.

The supplier shall confirm compliance with RoHS (Restriction of Hazardous Substances (2015/863/EU)) and REACH (Registra-tion, Evaluation, Authori-sation and Restriction of Chemicals).

COMPLIANCE

6 ARNON ART OF AUTOMATION 7

Risk management is needed to support the

achievement of compa-ny’s strategies and goals as well as to protect the continuity of the busi-nesses.

The Supplier shall have an up-to-date documented Risk Management Policy ensuring the active identi-fication, analysis, control and monitoring of business risks. The Supplier shall also take necessary actions in or-der to minimise probability

and/or impact of such risks or eventual effects if such risks materialize.

The Supplier shall have a documented Risk Manage-ment System to ensure ef-fective identification, analy-sis, control and monitoring of associated risks, including timely preventive actions for risk mitigation. The Risk Management System shall include risk categories such as strategic, financial, oper-ational, commercial, techni-cal, quality and schedule as

well as external categories such as location, natural hazards, export control and product liability.

The Supplier shall have a documented and imple-mented Emergency Proce-dure(s) including an evacua-tion and rescue plan.

The Supplier shall take occu-pational safety precautions throughout the organisa-tion for dealing with hazard-ous materials, noise, pow-ered-up equipment, etc.

by means of safety instruc-tions and appropriate safety devices; protective clothing, hearing protec-tors, etc.

The supplier shall en-sure that the organization complies with all relevant safety reg-ulations. Also full compliance of Arnon’s HSEQ (Health and Safety, Environment and Quali-ty) regulations and rules are required, when ven-dor is operating in Arnon’s premises or under Arnon’s

supervising. Evidence of such compliance shall be available when requested.

The Supplier shall have a documented Disaster Re-covery Plan (Business Con-tinuity Plan). The Plan shall establish the procedures and responsibilities to be used by the Management to guarantee business op-erations continuity and customer service follow-ing an interruption event.The Supplier shall have a documented and imple-

mented Security Proce-dure(s) covering buildings, employees, documents and data systems. The Supplier shall be able to provide evidence of the effectiveness of the proce-dure(s).

RISKMANAGEMENT


The Supplier shall have an up-to-date, docu-

mented Quality Policy. Management shall en-sure that the policy is communicated, under-stood and implemented at all levels within the organisation.

The Supplier shall have a documented Quality Management System to ensure effective planning, management and control of quality. This Quality Management System shall satisfy the requirements of the ISO 9001 or other

internationally recognised standard of the business area.

A description of the Sup-plier’s Quality Manage-ment System documents and their hierarchy shall be available to illustrate the structure of the sys-tem. The Supplier shall have a document control operation to create, check, approve, release, distrib-ute and delete quality sys-tem documents and data throughout the organisa-tion.

The Supplier shall have documented procedure for handling customer quality complaints. The Supplier shall have also database for storing the quality complaints. More-over, the Supplier shall have a system for notifying Arnon of potential quality problems.

The Supplier shall de-fine internal and external Quality Records.

These records shall cov-er both Quality Manage-ment System elements such as reviews, audits, meetings, etc., as well as material and product re-lated tests and inspection data. Agreed Quality Re-cords shall be available to Arnon upon request.

The Supplier shall perform all inspection and testing operations according to documented inspection and test flow charts with reference made to rele-vant documented proce-dures and test plans. The

Supplier’s inspection and test equipment used for verification and validation of product requirements shall be calibrated and maintained at defined intervals in accordance with appropriate plans, instructions and check sheets. The Supplier shall review these records reg-ularly and take corrective and preventive actions as required.

The Supplier shall per-form internal quality and environmental audits us-ing qualified auditors in

accordance with docu-mented procedures and active plans.

The Supplier shall have appropriate quality tools at relevant phases of the processes that facilitate performance manage-ment and control of the processes. Data shall be available to Arnon upon request.

QUALITYMANAGEMENT


Supplier management is needed to have ef-

ficient and successful cooperation with suppli-ers.

The Supplier shall have documented procedures for measuring and mon-

itoring external supply chain performance and have active performance improvement plans.

The Supplier shall select its suppliers and sub-contractors according to documented procedures

for identifying and evalu-ating potential suppliers of products as well as for selecting the suppliers. When appropriate, a sec-ond source policy shall be applied. Arnon also re-serves the right to audit Sub-Suppliers.

SUPPLIERMANAGEMENT

MATERIAL CONTROLMaterial control is

needed to ensure that right material is at the right place at the right time. The Supplier shall verify incoming ma-terials used for produc-tion for conformance to relevant specifications.

The Supplier shall have adequate material han-dling, storage, packing and delivery instructions to prevent safety hazard and material damage. Mate-rial usage shall follow the

first-in first-out principle. The Supplier shall have clear documented proce-dures for the control, han-dling and disposition of non-conforming products (scrap, rework). The Sup-plier shall have a system of manufacturing control used for the identification of products with regard to type, lot or serial number, and their status during all stages of production and test. The shipments con-taining finished products shall be labelled according

to relevant Arnon specifi-cations.

The Supplier shall have a system for ensuring fin-ished product traceability back to factory, date code and lot or serial number as specified by Arnon. The Supplier shall also have a system for identifying and tracing critical raw mate-rials back to the source. When appropriate, re-quirements traceability shall be implemented at the request of Arnon.


The supply process management is the

planning, implementing and controlling delivery process as efficiently as possible.

The supplier shall have a supply process, cover-ing all phases from order placement to product de-livery. The Supplier shall have a forecasting pro-cess including receiving of forecast, production planning and confirmation of forecast. The Supplier shall have documented procedures for measuring and monitoring internal and external supply chain performance (e.g. delivery accuracy) and have active performance improve-

ment plans. The Supplier shall also have a system for notifying Arnon of poten-tial short and longer-term delivery problems, e.g. ca-pacity shortages, delivery delays or end of life com-ponents. Changes to prod-ucts or systems (including changes to legal require-ments, processes or tech-nical specifications) deliv-ered to Arnon should be introduced in a controlled and coordinated manner.

The Supplier shall have a documented Product Lia-bility Procedure including recall process and clear-ly defined liability related responsibilities. Non-haz-ardous and safe materials and components shall be

used in products and their approval obtained from applicable authorities (e.g. CE, UL). The Supplier shall have Liability Insurance for finished components and products worldwide, with no exclusions for any geographic areas.

The Supplier shall have documented procedure for handling Arnon quali-ty complaints. Arnon may demand a specific root cause analysing system, to be used when a non-con-forming product or mate-rial has been detected. In such cases Arnon will issue a non-conformity report (NCR) with compensation-to the supplier.

SUPPLY PROCESS MANAGEMENT


ARNON GROUPHyllilänkatu 1533730 Tampere

Tel: 010 5265 000

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general supplier requirements - arnon

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