F0201360:21 Created by: C. Dirr Page 1 of 35 pages Version: 2013-08-23

SUPPLIER MANUAL General requirements for MR suppliers

F02258:06 Created by: Dr. T. Hölzl Page 2 of 35 pages Version: 11.07.2019

Table of contents

1 Introduction ................................................................................................................................... 4

1.1 Introduction ....................................................................................................................................... 4

1.2 Collaboration...................................................................................................................................... 4

1.3 Procurement phase model ................................................................................................................ 5

1.4 Scope .................................................................................................................................................. 5

2 Supplier selection ........................................................................................................................... 6

2.1 Supplier selection ............................................................................................................................... 6

2.2 Purchasing terms and conditions ....................................................................................................... 6

2.3 Supplier self-assessment .................................................................................................................... 6

2.4 Interfaces ........................................................................................................................................... 6

2.5 Requirements for the supplier's management system ...................................................................... 6

2.6 Substances (RoHS, REACH, DFA) ........................................................................................................ 7

2.7 QAA – Quality assurance agreement ................................................................................................. 7

2.8 Feasibility assessment ........................................................................................................................ 8

2.9 Potential analysis based on VDA 6.3 .................................................................................................. 8

3 Creating the product and process ................................................................................................... 8

3.1 Product development through suppliers ........................................................................................... 8

3.2 Process development through suppliers ........................................................................................... 8

3.3 Preliminary quality planning .............................................................................................................. 8

3.4 Supplier audit ................................................................................................................................... 10

3.5 Production part approval process (PPAP) ........................................................................................ 10

4 Guaranteeing supplier reliability in series production ..................................................................... 13

4.1 Series delivery .................................................................................................................................. 13

4.2 Provided production and test equipment ....................................................................................... 13

4.3 Request for concession .................................................................................................................... 13

4.4 Change management / PCN (product change notification) ............................................................. 14

4.5 Repair requests ................................................................................................................................ 15

4.6 Claims resulting from quality defects .............................................................................................. 15

5 Continuous improvement process (CIP) .......................................................................................... 18

5.1 Supplier assessment ........................................................................................................................ 18

5.2 Business reviews .............................................................................................................................. 19

5.3 Setting goals and controlling ........................................................................................................... 19

5.4 Quality improvement projects ......................................................................................................... 19

F02258:06 Created by: Dr. T. Hölzl Page 3 of 35 pages Version: 11.07.2019

6 Logistics requirements ................................................................................................................... 20

6.1 Scope of validity ............................................................................................................................... 20

6.2 Information and communication ..................................................................................................... 20

6.3 Packaging ......................................................................................................................................... 24

6.4 Shipment and transport ................................................................................................................... 27

6.5 Logistical shipment errors ................................................................................................................ 29

6.6 Exception regulations ...................................................................................................................... 29

6.7 Deviating regulations for deliveries to Messko GmbH ....................................................................... 30

7 Systems ........................................................................................................................................ 31

7.1 Abbreviations ................................................................................................................................... 31

7.2 Links ................................................................................................................................................. 33

7.3 Appendix .......................................................................................................................................... 34

8 Revision history ............................................................................................................................. 35

F02258:06 Created by: Dr. T. Hölzl Page 4 of 35 pages Version: 11.07.2019

1 Introduction 1.1 Introduction

As a manufacturer of high-quality tap changers and voltage regulators used throughout the world, our top priority is to meet all our customers' expectations, such as ensuring a long service life (> 30 years) and to provide complete reliability. MR – two letters recognized as a seal of quality among experts. MR sets the standard for reliable products because we build products that stand the test of time! Our employees use their expert knowledge, high level of education and work with the utmost care characteristic of MR to ensure that this standard is met in everything that they do. We implement strict standards starting in the supplier selection stage to ensure uncompromising quality. Suppliers who produce parts for us have to meet the highest standards from the outset. Of course, we follow this same benchmark within MR. It goes without saying that our quality management is certified in accordance with DIN ISO 9001. Of course, we also use an environmental management system certified in accordance with DIN ISO 14001 and a health, safety and environment system in accordance with OHRIS that we continue to develop. We depend on reliable, quality-conscious suppliers as partners so that we can meet the high expectations of our customers now and in the future. These partners support us in the following ways:

Consistent compliance with a ZERO-DEFECT strategy

Maximum dedication

Maximum flexibility

100% on-time delivery

1.2 Collaboration

This manual provides information on the general requirements that

Maschinenfabrik Reinhausen GmbH Reinhausen Power Composites GmbH Messko GmbH

and its associated companies place on its suppliers and partners for various phases of product development, all the way through to the series launch, and lays the groundwork for good, successful collaboration. Openness must be practiced by all parties in all collaborative phases. This requires compliance with strict confidentiality standards (intellectual property protection, patents, etc.). As a supplier for Maschinenfabrik Reinhausen GmbH, you must guarantee that your deliveries comply with the agreements, drawings, standards and specifications. This helps us ensure that our quality requirements are met and maintained over the long term and that we achieve the stipulated quality objectives. The exchange of information required to achieve these objectives must be conducted over secure communication channels (such as Pool4Tool, encrypted e-mails, etc.).

F02258:06 Created by: Dr. T. Hölzl Page 5 of 35 pages Version: 11.07.2019

1.3 Procurement phase model

In the supplier process, Maschinenfabrik Reinhausen works according to the MR phase model. This model depicts all processes relevant to the supplier interface.

Fig. 1: Collaborative phases

The details of the individual process phases are presented later in this document.

1.4 Scope

This manual applies to all production materials ordered by MR. The production material group is basically divided into three subgroups (commodities):

Fig. 2: MR commodity structure

The requirements for suppliers and product qualification may differ between the individual commodities. Information on the procurement of infrastructure material is not covered in this manual.

Production

material

Metals

Plastics

Electromechanical systems /

electronics

F02258:06 Created by: Dr. T. Hölzl Page 6 of 35 pages Version: 11.07.2019

2 Supplier selection

2.1 Supplier selection

The purchasing department—in close cooperation with quality management, logistics, development and production—is in charge of selecting suppliers for production material. In addition to technical, economic and logistical factors, the supplier's quality capability is the main selection criterion for supplier selection.

2.2 Purchasing terms and conditions

The General Terms and Conditions of the REINHAUSEN Group (always in the respective the current revision) applies to purchases. If necessary, these terms and conditions can be requested from the responsible buyer or downloaded online at http://www.reinhausen.com/.

2.3 Supplier self-assessment In the supplier self-assessment, the supplier summarizes all the most important information about its company for the first general assessment. Before starting an inquiry, the fully completed form “Supplier questionnaire” has to be submitted to the MR. You can find the form in the MR download center at http://www.reinhausen.com/ in section “Supplier” under the item “Supplier questionnaire” and it will be sent to potential suppliers during the initial contact. The completed form has to be sent back to the requesting purchaser. Preferably the information is directly submitted to the suppliers’ portal Pool4Tool by the supplier. You can find a description of the portal in the download center listed above.

2.4 Interfaces The names, functions, e-mail addresses and phone numbers of the responsible contact partners of the supplier in all relevant subject areas must be reported in writing, including the representatives, and stored as a supplier profile in the Pool4Tool supplier portal. The responsible strategic supplier managers, strategic buyers and materials requirements planners all function as MR contact partners. Changes to a supplier's scope of responsibility must be reported immediately.

2.5 Requirements for the supplier's management system

A management system serves as the basis for collaboration with suppliers. This system's function has to be certified in accordance with one of the following standards and specifications.

Quality management system (QMS): ISO 9001 [otherwise, according to the supplier's industry: VDA 6.1 or ISO/TS 16949 (automotive industry), DIN EN 9100 / AS 9100 (aerospace), ISO 13485 (medical devices), TL 9000 (telecommunication) etc.] (in the respective valid version). MR also expects to receive documentation for an environmental management system and occupational safety management system. Environmental management system (EMS): ISO 14001 [alternatively: EMAS, participation in an ECOPROFIT program (http://www.oekoprofit.com/company-aut.html, https://en.wikipedia.org/wiki/EcoProfit), Responsible care (ICCA initiative) etc.] (in the respective valid version).

F02258:06 Created by: Dr. T. Hölzl Page 7 of 35 pages Version: 11.07.2019

Occupational safety management system (OSMS): OHSAS 18001 [alternatively: OHRIS, SCC, ASCA, ILO OSH guideline, LASI guideline or documentation of an effective OSMS through Berufsgenossenschaft Holz und Metall (German trade association for woodworkers and metal workers) "Gütesiegel Sicher mit System" occupational safety management system (in the respective valid version). Copies of each current certificate have to be uploaded to the supplier portal by the supplier. Changes to or revocation of certificates must be reported to MR immediately. MR is authorized to inspect the documents listed below for information on the management system: - Specifications and certificates as well as quality data related to products purchased by MR - Specifications and certificates as well as quality data connected to the management system - Process descriptions, work instructions and user instructions, insofar as these apply to the planning

and creation of products purchased by MR The supplier alone is responsible for the suitability, appropriateness, efficiency and reliability of management systems, except for those that MR approves as part of the initial sampling of processes and of products purchased by MR. This applies in particular to organizational and technical measures related to quality planning and control. The supplier shall undertake to manufacture and inspect the products purchased by MR in accordance with the rules in its management system. Information Security Management System (ISMS): ISO/IEC 27001

2.6 Substances (RoHS, REACH, DFA) The supplier shall confirm towards MR to comply with the specifications in the 2011/65/EU DIRECTIVE OF THE EUROPEAN PARLIAMENT AND EUROPEAN COUNCIL of 8 June 2011 on the restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS), the Ordinance on the restriction of the use of certain hazardous substances in electrical and electronic equipment (ElektroStoffV) of 19 April 2013 and Regulation (EC) No. 1907/2006 of the European Parliament and European Council of 18 December 2006 on the registration, evaluation, authorization and restriction of chemicals (REACH) in their current form. In particular, he shall undertake to comply with the listed restrictions that pertain to the use of substances of very high concern, restricted substances and prohibited substances and immediately notify MR in the event of the use of substances governed in these directives. For this reason, he asserts that the following substances are not to exceed maximum use levels: mercury (Hg), chromium (hexavalent, Cr(Vl)), lead (Pb) and PBBs, PBDEs (polybrominated biphenyls and diphenyl ethers) 0.1% and cadmium (Cd) 0.01%, each of which with respect to the homogenous individual material. Also 0.1% for DEHP, BBP, DBP, DIBP as of 22 July 2019. He also asserts that his company avoids use of any conflict minerals (cassiterite, columbite-tantalite, wolframite and gold ore) that originate from the Great Lakes region in East Africa in accordance with the "Dodd-Frank Act (DFA)". He asserts that he shall comply with the IEC 62474: 2013-05 standard, which defines the requirements, content and format of data exchange for material declarations within the supply chain.

2.7 QAA – Quality assurance agreement The purpose of a QAA concluded between a supplier and MR is to ensure the quality required by MR starting in the planning and development phases, to define the interfaces between the supplier and MR and to promote close, smooth cooperation between the two parties. The QAA is used to create rules that apply to both parties, that are aligned with cross-manufacturer quality assurance measures and are not intended to put a contractual partner at a disadvantage. The supplier agrees to conclude a quality assurance agreement with MR.

F02258:06 Created by: Dr. T. Hölzl Page 8 of 35 pages Version: 11.07.2019

2.8 Feasibility assessment You can find the Feasibility assessment form in the Pool4Tool supplier portal and in the download center on the MR website. This document clarifies the feasibility of implementing MR requirements. This form constitutes the minimum requirements. Upon request from MR, this form has to be filled out truthfully and confirmed in writing for MR. A positive feasibility assessment is the prerequisite for commissioning a supplier.

2.9 Potential analysis based on VDA 6.3 The potential analysis is used to prepare the contract decision for potential suppliers, especially in awarding contracts for technically sophisticated or newly developed products. MR uses this analysis to assess the basic quality capability of potential suppliers as part of an on-site audit at the supplier's facility. The goal of this initial audit is to assess the basic suitability of business and manufacturing processes.

3 Creating the product and process

3.1 Product development through suppliers Suppliers that conduct product development for MR have to create a project plan that outlines all relevant technical, scheduling, financial and qualitative aspects of the project. The project plan contains all phases of product and process development, including assessment, verification and validation in the respective project phases. This project plan utilizes milestones and must be legally defined in a collaborative effort between the supplier and MR. It can only be modified by way of mutual agreement between both parties. The supplier must submit a monthly APQP (advanced product quality planning) report to MR. A report template is available in MR's download center. Details on the advanced product quality planning & control plan (APQP) in use internationally can be found at AIAG website.

3.2 Process development through suppliers In the development phase, an agreed-upon, carefully planned production process ensures the quality and reliability of a technical product. MR understands this to mean a systematic workflow in accordance with APQP or a comparable product development process.

3.3 Preliminary quality planning The objective of preliminary quality planning is to identify all determining factors relevant to product quality, to reduce risks related to the product and process and to plan the test steps proven to be suitable to ensure the required product quality. At a minimum, the process steps listed below must be documented. Exceptions must be submitted in writing to the responsible MR supplier manager for approval and include a conclusive rationale.

3.3.1 Inspection planning In addition to specification documents such as drawings, company standards, specifications and

datasheets, MR must also take into account the results of risk analysis (FMEA) and past production experience with similar products as part of inspection planning. The dimensions and product properties vital to functionality and safety are the top priority in this process. The result of the inspection planning must be added to the sampling documents in the form of an inspection plan.

F02258:06 Created by: Dr. T. Hölzl Page 9 of 35 pages Version: 11.07.2019

3.3.2 Measurement system analysis Unless otherwise agreed with the supplier manager, the suitability of the measuring and inspection equipment used must be documented with statistics in a measurement system analysis for each piece of equipment. Depending on the inspection process, this measurement system analysis must also be documented using DIN V ENV 13005, GUM or methods from MSA1 or, if an inspector suggests it, methods from MSA2.

The target metrics (cg, cgk, %R&R) are defined in Table (1), but differing values can be defined in an

agreement between the supplier and responsible MR supplier manager in individual cases.

Metrics for inspection system suitability

Target value

Cg >1.33

Cgk >1.33

%R&R <10% fully capable, <20% capable in certain circumstances

Table (1)

The MSA manual can be found on the AIAG website and VDA Volume 5 Capability of Measuring Systems on the QMC website.

3.3.3 Testing scopes

Sampling procedures should be based on the standardized sampling plans in accordance with - ISO 2859-1 Sampling by Attributes (out of date) => ISO 28590:2017 - ISO 3951-1 Sampling procedures for inspection by variables .

3.3.4 Test documentation

After initial sampling is completed successfully, the test results from the initial products/batches listed by part number/batch number and inspected in accordance with the inspection plan must be sent to MR together with the goods. Material test certifications must always be created separately for individual delivery batches and sent with the batches right away if requested by MR in the purchase order text. Maschinenfabrik Reinhausen GmbH: cpppruefzeug@reinhausen.com Reinhausen Power Composites GmbH: rpc.certificate@reinhausen.com Messko GmbH: not available

3.3.5 Statistical process control (SPC) In series production, the supplier must prove the process capability of the product properties defined on the drawing or in product meetings through suitable statistical process control (SPC) procedures. This has to be used for the duration of the product lifecycle so that it is possible to respond quickly to process failures. A suitable control chart must be selected by the supplier based on the character of the variables (quantitative or attributive), the sampling scope and the number of units produced per shift. At a minimum, the capability values must contain the following limit values:

Capability index Requirement for safety/approval-relevant characteristics

Requirements for other inspection characteristics

Machine capability Cmk ≥ 2.00 Cmk ≥ 1.66 Process capability Cpk ≥ 1.66 Cpk ≥ 1.33

F02258:06 Created by: Dr. T. Hölzl Page 10 of 35 pages Version: 11.07.2019

3.3.6 Quality records and retention periods Types of documents: The supplier must store the following specification documents and quality

recordings related to the implementation of quality assurance measures in a suitable location and keep them available (including reading devices): - Drawings and other specifications (including outdated release versions) - FMEA (including outdated release versions) - Product and process approval documents (ISIR, process chart, inspection plan, etc.) - Material analysis certificates - Test reports for series production - Tracking documentation

Archiving media: Original paper documents or on a data carrier connected to fraud-proof and tamper-proof document management systems.

Retention periods: At least 30 years, unless otherwise contractually agreed or unless longer periods

are stipulated by law or elsewhere. Once the retention periods have elapsed, MR contact partners must be contacted to arrange ongoing storage of the drawings/documents listed above. The reading devices that may be required for this process must be agreed upon between both parties.

3.4 Supplier audit Before a supplier or product receives a release for series production, MR can require that an audit takes place. MR expects that its suppliers and their sub-suppliers are prepared to show MR the efficiency of their QM systems during an audit. For this purpose, MR will be granted access to all operational facilities and be provided with a technically qualified employee for support. This also applies to clients of MR along with MR.

Over the course of product development and in case of need, MR retains the right to take the following actions:

System audits based on DIN ISO 9001 (always in the latest version) and/or a

process audit and/or process acceptances based on the VDA 6.3 in Factory equipment of the supplier and its sub-suppliers.

Before an audit or the like is conducted, the supplier will be informed accordingly. Other arrangements that deviate from this general rule may be reached by mutual agreement in individual cases. If any deficiencies are identified during such an audit, the supplier must demonstrate having remedied them. In addition, the supplier will create action plans and MR will approve them. It is necessary to process the measures specified in these in a timely manner and to report to MR when they have been completed along with proof of efficiency.

3.5 Production part approval process (PPAP) 3.5.1 Purpose

Before parts or assemblies are allowed to be delivered in series production, the supplier must produce proof that the requirements agreed upon in drawings and specifications are met and that written approval for the product has been submitted to MR by the supplier's responsible manager. This also requires proof of process-capable production based on the defined product characteristics, a capacity assessment with sufficient reserves, the use of suitable and capable test equipment as well as complete initial sampling of one or more parts per nest (nest ID required) from the first series production with all associated documents. MR will provide corresponding forms on its download portal (Initial sample inspection report, Initial sample label). Suppliers are allowed to use their own forms, insofar as their contents correspond to those of the MR template.

F02258:06 Created by: Dr. T. Hölzl Page 11 of 35 pages Version: 11.07.2019

3.5.2 Sampling standards MR accepts sampling standards based on VDA volume 2 (see Homepage of the VDA) or, alternatively, PPAP (see Homepage of the AIAG). Standard for this is submission level 2 in accordance with VDA volume 2 or submission level 3 in accordance with PPAP. The scope of sampling can be adjusted in consultation with the supplier's responsible manager. A test plan, flow chart and stamped drawing with assignment of measured values are always required for full sampling. In the case of re-sampling or basic sampling, it is necessary at least to send a cover sheet with a corresponding note. In the case of details requiring an agreement between the supplier and MR, such as the level of detail of tests, required documents, test equipment capability and confirmation that the legal requirements have been met, agreements must be made in writing with the supplier's responsible manager. If there are no written agreements, then the submitted documents for the initial sampling of the supplier shall be valid as a suggestion for the scope of sampling. Then MR will decide whether these are appropriate and sufficient, or whether additional documents and proof are required.

3.5.3 Initial sample testing

Initial sample testing is used for new parts, technical changes to products and changes in production processes. MR will determine on its own whether to do complete testing of initial sample parts that have been sent in or to accept the supplier's information without doing its own testing. If no countertest is done, the supplier's information in connection with MR's specification documents shall be valid as the legal basis for any subsequently identified deviations. Initial sample testing can also be required in the series for requalification tests of process and product. This is the case, for example, if no active order occurs within 24 months.

The process is always valid for material products (systems, modules, parts, components) that are used in MR as:

Production parts,

Service or spare parts,

Semifinished products / raw materials,

Production materials and operating materials that become a product component (such as paints, liquid sealants, adhesives, oils, brake fluid, etc.).

This does not refer to investment goods such as production systems, and process materials (lubricants, auxiliary materials and operating materials, etc.) Unless the supplier and MR have reached an agreement otherwise, performance of the PPAP will be omitted for standardized products (such as DIN parts, liquids according to DIN or SAE). Sufficient for this is a cover sheet sampling with confirmation from the supplier that the products/parts satisfy the corresponding standards. The countertest by MR is only an identification of type, for example, for comparing the MR material number and supplier article number. Increased requirements, such as special product characteristics or maximum permitted deviation quotas, must be specified individually. Parts with modified or individual specifications no longer fall under the term standard parts. Initial sample testing is to be documented on the initial sample test report form specified by MR in accordance with VDA volume 2, which can also be retrieved at the MR download center. Initial sampling also includes the documentation and proof of suitability of the packaging. A blank form for this can be called up at the MR download center. Services and software can be taken into account as part of the functional tests within the PPAP of the products. A detailed procedure for designing the processes and projects for development and acceptance of software-specific systems is described in VDA volume 13.

F02258:06 Created by: Dr. T. Hölzl Page 12 of 35 pages Version: 11.07.2019

3.5.4 Release volume

The production process and product release includes:

Products in accordance with initial sample testing and the

associated manufacturing processes, which have been documented in the initial sampling documents and/or approved through audits.

Changes to the product or production process by the supplier must always be agreed upon with MR.

3.5.5 Representative sampling

In the case of part families that are not tool-specific (similar parts, which differ only in the details), representative sampling can be carried out after an agreement with the MR supplier manager. The most complex representative of this part family is comprehensively sampled during this; the other articles of this part family are sampled with a cover sheet sampling, which must include a reference to the representative article. This procedure reduces the time and expense required for the supplier as well as for MR.

3.5.6 Release status Testing of initial samples can yield the following results:

Finding of the MR initial sample testing

Consequences

Acceptance The deliveries of the products are approved in accordance with the request for delivery.

Acceptance as an exception Delivered parts are accepted as exceptions. Delivery of products that do not meet the complete scope of sampling is permitted only for a limited time or quantity (deviation permit). The supplier is provided with and must adhere to the requirements. Re-sampling (of the remedied deviations) is required.

Rejections The delivery of products is not permitted. Re-sampling is required.

Details concerning re-samplings must be agreed upon with the supplier manager responsible for quality

assurance.

3.5.7 Shipping of initial samples

Initial samples and initial sample test reports (ISIR link) must be submitted to the supplier's manager responsible for quality assurance of the commissioning factory of the client. Initial sample test reports are to be sent in electronic form (e.g. as a PDF file) as an e-mail to the address Maschinenfabrik Reinhausen GmbH Erstmusterpruefbericht@reinhausen.com Reinhausen Power Composites GmbH RPC.Erstmusterprüfbericht@reinhausen.com

Messko GmbH Erstmusterpruefbericht@messko.com To ensure correct assignment of the e-mail, the subject line has to include the following information: MR material number – MR designation – Order number.

Initial sampling is completed when the responsible supplier manager signs the release on the initial

sample cover sheet.

3.5.8 Packaging of initial samples Packaging of initial sample parts is defined and approved in consultation with the supplier manager responsible for quality assurance. Both the delivery note and the packaging for parts is provided with the note "initial sample".

F02258:06 Created by: Dr. T. Hölzl Page 13 of 35 pages Version: 11.07.2019

Initial sample packages are only allowed to contain initial samples of one article number and must be packaged separately. This excludes delivery in one container with series parts. The delivery note has to be affixed on the outside of the package.

3.5.9 Labeling of initial samples Packages with initial sample parts must be labeled with a Initial sample label, which has to contain at least the following information:

Supplier name

Article number

Index status

Number of sample parts

Recipient (supplier manager responsible for quality assurance) Measured or tested parts contained therein must be clearly labeled as such, if necessary (for larger or symmetric parts) on both sides to prevent parts from getting mixed up during installation tests. In the case of multiple tools, each nest has to be labeled.

4 Guaranteeing supplier reliability in series production

4.1 Series delivery

The supplier must ensure that it is using an MR production part approval process (PPAP). Suppliers must deliver only fault-free products to MR at all times. The supplier must submit corresponding data, information and experience in continuous product improvement and production optimization so that MR can assess the quality performance in series production.

4.2 Provided production and test equipment The supplier must integrate any production and testing equipment, including other fixtures and devices, that MR provides to it as part of rendering deliveries into its management system and its own production and testing equipment.

4.3 Request for concession

4.3.1 Defective products that the supplier deems to be suitable for proper use. If the supplier determines that the produced product does not meet the requirements in the drawings/specifications prior to delivery of parts to MR, but after further careful assessment decides that it seems suitable for proper use by MR and the supplier intends to send such products to MR, a written Request for concession/special release must be sent to the responsible supplier manager via the Pool4Tool supplier portal. Upon receipt of a request for concession/special release, MR checks whether the production error or deviation from the target quality is expected to cause a loss in quality and whether it is possible to continue to use this product. If MR determines this to be the case, it provides the supplier with a written explanation approving the product for delivery. The supplier must label the reworked goods with the MR-approved request for concession/special release for delivery. The request for concession/special release constitutes a temporary exception that is time-limited and restricted in quantity and does not release the supplier from the obligation to analyze and eliminate the cause of the deviation. The cause of the deviation must be determined, confirmed using effective measures and documented in the request.

F02258:06 Created by: Dr. T. Hölzl Page 14 of 35 pages Version: 11.07.2019

4.3.2 Defective products that the supplier wishes to rework prior to delivery If the supplier identifies defective products during a production process or final inspection that it deems could be put in an OK condition through rework, the supplier must notify the responsible MR supplier manager in writing and include a detailed description of the nature and scope of the rework process using the Request for concession/special release form as described under Item 4.3.1 (assuming the rework has not already been stipulated and characterized in the series process). The affected products may only be reworked with prior approval from the responsible MR supplier manager. The supplier must label the reworked goods with the MR-approved Request for concession (subitem in the Special release menu) for request for concession/special release for delivery.

4.4 Change management / PCN (product change notification)

4.4.1 Changes to parts Under some circumstances, changes to parts may have consequences that the supplier cannot foresee.

The specific use of purchased parts in the high-voltage area at MR may pose a risk to life and limb due to voltage discharge properties that non-professionals would not consider. Therefore, change management at MR is subject to a particular duty of care. For this reason, MR has defined which changes to parts and processes must be reported and which have to be approved by MR. This also applies to subsuppliers.

Changes not requiring notification

- Personnel changes - Changes to process parameters within a defined process window in accordance with

process approval - Changes to machines, equipment, production systems, test equipment of the same type,

performance, etc. without the potential of affecting product quality - Maintenance changes (replacement parts) - Additional quality tests, e.g. process inspection (outgoing goods inspection) - Additional visual inspections due to new defects (not yet listed in the error catalog)

Changes requiring notification

- Replacing machines with machines of a better type with higher performance without any foreseeable effect on product quality

Changes requiring approval

- Changes to machines, equipment, production systems, test equipment, production locations with the potential of affecting product quality

- Change to process parameters with the potential of affecting product quality - Change to testing parameters and testing methods - Change to the (raw) material - Change in material supplier/service provider - Process sequence change (process flow) including test steps

This specification must always be observed. Due to the specific use of parts at MR, this is required to protect MR from claims for damages, which may also have legal consequences for subsuppliers.

4.4.2 Changes to parts upon request of the supplier Sometimes a situation arises in which changes to series production parts are required for certain

reasons, technical or otherwise. Such changes must always be approved by the person responsible for parts at MR prior to delivery to MR. MR has defined a change process for this precise purpose. It must followed to the letter. The supplier must always submit the change request in writing prior to implementation using the product change notification (PCN) (Link) form in the download center or, preferably, under the PCN item of the Special releases menu in the Pool4Tool supplier portal. The supplier may only implement approved changes.

Approved changes to parts must be presented to the responsible MR supplier manager in the form of a

re-sampling. Changed parts cannot be delivered until they have been approved.

F02258:06 Created by: Dr. T. Hölzl Page 15 of 35 pages Version: 11.07.2019

4.4.3 Changes to parts due to an MR request

Changes to parts may also be required due to the needs of MR processes. The request is usually submitted in the form of a modified part drawing, company standard or specification. Then the supplier has the opportunity to evaluate the change and submit an updated quotation.

4.4.4 Product history To determine that the problems have been caused by product changes, the supplier must maintain a

list of all product-related and process-related changes that relate to the respective part delivery. For this process, MR recommends using a product history form.

4.5 Repair requests If a defect is found that falls within MR's scope of responsibility, the supplier decides whether to carry out a repair or rework. A quotation is obtained before the supplier commissions repair or rework. If the repair or rework is economically viable, MR submits a repair request. The affected parts are sent to the supplier with the request. Repaired or reworked purchased parts may only be delivered back to the customer with uniform labeling and in accordance with the previous information. Every time goods are received, MR checks that the requirements have been fulfilled before a repaired or reworked part is permitted to enter the production phase.

4.6 Claims resulting from quality defects 4.6.1 Claim due to the presence of quality defects

If quality defects are present in the delivered products, MR shall notify the supplier of the nature of the issue immediately using a complaint form sent via e-mail or, preferably, via the Pool4Tool supplier portal. MR shall provide notification of any costs incurred. Defective parts are removed from the production process to prevent further processing. MR takes into account the criticality of the defect to determine the affected quantity and expected economic effects (such as an impending production stop, damages for MR customers) to determine what additional steps need to be taken.

The following scenarios are possible:

The defective parts are collected at MR and sent back to the supplier in accordance with the internal processes.

The stock at MR is sent back to the supplier to separate out the defective parts.

The supplier is requested to inspect the stock at MR to ensure that defect-free parts are provided. This can be accomplished by assigning the supplier's employees to this task or commissioning an MR-approved service provider (see 4.6.6).

If there is an impending stop to production, MR reserves to right to screen for defective parts or to rework the defect to prevent a production stop. The supplier is notified of such occurrences as soon as possible.

MR and the supplier collaborate to determine the best approach. Supplying the MR production team and MR customers with defect-free parts is always the top priority. Every possible response is carefully considered with respect to the required work and resulting costs.

F02258:06 Created by: Dr. T. Hölzl Page 16 of 35 pages Version: 11.07.2019

4.6.2 Sending back defective parts and parts for rework MR actively sends back return shipments (parts for rework, samples, etc.) within 2 business days.

Time-critical parts are actively sent on an individual basis. The supplier receives an order for the repeat shipment. This order number must be clearly marked on the delivery note of the reshipped goods.

Complaint sample (NOK parts for quality report) up to a value of €50 are not sent back automatically. If the supplier would like the parts to be sent back for a visual inspection or to perform a failure analysis,

the supplier must submit a request to the supplier manager. The supplier manager can also decide that it is necessary to send back the parts for analysis due to the defect pattern.

4.6.3 Process of MR complaints by the supplier In the following cases, MR expects a more comprehensive complaint processing procedure in the form

of an 8D report to promote a long-term solution to a problem:

Defect complaint from an MR customer

Potentially critical effect on product function

Problem with new appearance

A systematically recurring defect that cannot be attributed to the limits of the underlying manufacturer technology

Quality disturbance value with increased defect costs (part costs plus process costs)

Explicit request from an MR supplier manager MR uses the Pool4Tool supplier portal to request processing of the standardized items listed in the 8D report. Depending on the priority of the claim ("high" or "standard"), the following periods apply at MR unless otherwise specified in a separate QAA (quality assurance agreement):

Report Contents Response period

Priority High

Priority Standard*

0 Confirmation of receipt 24 h 2 d

3D Immediate actions 36 h 3 d

4D Root cause analysis 48 h** 5 d

6D Proof of the effectiveness of corrective measures

10 d 10 d

8D Final report 14 d 21 d *Response times in hours (h) or business days (d), preset in Pool4Tool **Have the supplier send initial results The methods for complaint processing are evaluated and complaint processing is evaluated with respect to compliance with deadlines. This assessment is part of the annual supplier assessment. When processing complaints in an 8D report, MR endeavors to achieve the following objectives:

Structured approach to a systematic analysis and resolution of complaints as well as prevention of future complaints.

Repeated faults must be prevented through long-term implementation of corrective and preventive measures.

The actual cause must be determined and documented.

MR must be notified of the processing status. Traceable, analyzable documentation should be created and archived during the defect removal process.

The supplier must enter the content of the 8D report into the provided fields in the Pool4Tool supplier portal.

F02258:06 Created by: Dr. T. Hölzl Page 17 of 35 pages Version: 11.07.2019

4.6.4 Product labeling and tracking The purpose of the product label is to track the product to provide the most efficient means of keeping the number of potentially affected products to a minimum if a defect is identified. The supplier must label the products themselves and the smallest packaging unit to enable unique tracking of the respective products or batches based on their respective production time and location, process parameters, test results or test certificates and batches of the (raw) materials used. In cases in which it is not technically possible or would not serve a purpose for the supplier to label the products (or the costs would be disproportionate), the supplier most notify MR of this situation and provide a rationale for not labeling the products. The labeling must be designed such that it is legible over the long term. The specifications from the drawings and technical delivery conditions, insofar as they are defined, also apply with respect to product labeling.

This applies in particular to software and software-containing hardware. There must also be a unique version code here. The supplier must be able to clearly identify the respective software version of his software components via this version code In case of defect identification by MR or the supplier itself, the supplier shall track which of the parts that have already been delivered or are still in transit are likely to have similar or identical defects due to logical considerations (e.g. identical basic material batch, identical production batch) and provide this information to MR in an organized format. The MR supplier is advised to define an appropriate tracking process in its own interest to prevent unnecessary screening and inspection costs.

4.6.5 Regulations governing rework and screening inspections If defects are identified on the parts at a later stage in the value creation process (part processing, assembly) and they can be eliminated through rework or substantially separated out, the following rule applies: 1. MR notifies the supplier right after discovering a defect. In the process, the options available for

ensuring the provision of parts for MR assembly are presented. 2. Below are some possible options that MR may provide to its suppliers:

The supplier sends employees to work at MR, who screen the affected stock or perform rework to ensure that specification-compliant parts are passed to the assembly lines.

The supplier commissions a service provider to conduct screening or rework tasks on its behalf. The supplier remains responsible for these tasks. The supplier commissions MR with carrying out all screening or rework tasks at the expense of the supplier. In this case, the supplier must confirm the assumption of incurred costs in writing.

MR weighs the possible options carefully. Continuously supplying parts to MR assembly lines is a top priority to keep potential claims for damages low.

4.6.6 Approved service providers for rework and screening inspections The following external service providers are approved: Maschinenfabrik Reinhausen GmbH und Reinhausen Power Composites GmbH

Redi-Control Formel D http://www.redi-group.com

Messko GmbH Fa. NIS Saarlouis GmbH info@bis-saarlouis-gmbh.de

http://www.formeld.com Fa. DS-qualitätsservice dirk.stelzer@ds-qualitätsservice

The supplier is in charge of commissioning external service providers. MR can play a supporting role in this process. However, this requires that the supplier submit a written confirmation of cost coverage.

F02258:06 Created by: Dr. T. Hölzl Page 18 of 35 pages Version: 11.07.2019

The supplier is always responsible for defining the scope of screening and rework tasks. The supplier is also responsible for coordinating the necessary tasks with MR (usually through a request for concession/special release) that leads to approval by MR. Other claims from MR relating to the presence of defects shall remain unaffected by this provision.

4.6.7 Labeling inspected and reworked parts If defective parts are sent back to the supplier for rework and/or screening, the supplier must ensure that these parts do not get mixed in with other batches. These parts must be labeled as "blocked" and stored in quarantine storage until the rework phase. Performance of rework must be coordinated with MR (deadline, process, inspection, risk assessment, etc.). Reworked or screened parts must be labeled after consulting with MR. Depending on the assembly situation at MR, the labels can be stamps, adhesive labels or colored markings on each part. However, they always have to be attached to each delivery container. When reshipping reworked parts, they must be kept separate from series parts.

5 Continuous improvement process (CIP)

5.1 Supplier assessment Objective KPIs from the areas of logistics, procurement and quality management are determined to rate suppliers. Each of the respective areas also includes a subjective rating of collaboration with the respective contact partners. All of the ratings are combined with different weightings to calculate an overall grade. The objective supplier rating includes, but is not limited to, the following criteria:

Compliance with deadlines

Adherence to quantity stipulations

Quality rate (number of complaints/number of received goods)

ppm rate1

Reimbursement for claim costs

Defect costs

Process capability

Certification status of the quality management, environmental management and occupational safety

management systems

Presence of a signed QAA

Results from the quality audits

Complaint processing assessment

1 Number of defects measured in parts per million (ppm), e.g. 1,000,000 x (the number of defective parts) / (the number of delivered parts).

F02258:06 Created by: Dr. T. Hölzl Page 19 of 35 pages Version: 11.07.2019

Cooperation before/during sampling

5.2 Business reviews

Once a year, a meeting is held with management employees from selected strategic suppliers. The

business relationship and supplier performance are discussed at this meeting. The purpose of this meeting is to set objectives with actions, deadlines and delegated responsibilities.

5.3 Setting goals and controlling

5.3.1 ppm quality goals Regardless of the supplier's obligation to deliver defect-free parts, the supplier will follow a continuous improvement process CIP for systematic detection and removal of defect sources for the purpose of achieving the zero defect objective. As part of the CIP, the supplier will take the necessary measures to reduce the ppm rate year by year. Where necessary, the ppm target values are coordinated between the supplier and MR and all values are specifed by MR for each product group. The supplier can ask the responsible MR supplier manager about the ppm target values relevant to it and can adjust them based on the specific situation after consultation with MR. The target ppm values should be both challenging and realistic.

5.3.2 ppm controlling

The supplier must carry out regular measurements of the actual quality level (ppm rate, complaint rate) compared to the target values, irrespective of any measurements carried out by MR. The supplier sets up a suitable monitoring system for this purpose. If the ppm targets are not reached, the supplier must design and implement suitable measures. MR is authorized to monitor these measures and to demand improvements if necessary. MR can request that the supplier test and assess quality performance and demand additional actions in the following cases: a. Stipulated ppm target values are repeatedly exceeded b. There are recurring defects causing disruptions at MR c. There are disturbance values with an effect on MR customers or a significant economic impact or relevance to safety d. All other significant deteriorations in quality performance especially those that have effects on MR customers. The supplier stipulates these actions in writing in an action plan and they must be carried out on schedule. If necessary, the supplier must add additional actions to this action plan to achieve the stipulated objectives.

5.4 Quality improvement projects Continuous improvement must be a component in the quality strategy of all suppliers. MR expects active supplier cooperation in the continuous improvement of workflows, processes and products, with the goal of continuously improving the entire system. If quality objectives are not achieved, or there are deteriorations in quality, recurring defects or high quality costs (defect costs), MR can request that a quality improvement project (e.g. lean manufacturing project, Six Sigma project) be carried out.

F02258:06 Created by: Dr. T. Hölzl Page 20 of 35 pages Version: 11.07.2019

6 Logistics requirements

6.1 Scope of validity The MR logistics manual must be observed for all deliveries. It supplements the contractual agreements. This affects the following locations:

Maschinenfabrik Reinhausen GmbH Reinhausen Power Composites GmbH

Messko GmbH

6.2 Information and communication

6.2.1 Contacts Topic

MR

RP

C

Mess

ko

Contact

Department

Phone

Incoming goods, Receipt of goods

x

x

x

Wismer Artem A.Wismer@reinhausen.com Sigmund Kraus S.Kraus@messko.com

Incoming goods logistics

+499414090-2965 +49617716398-53

Shipping company (Dachser) Shipping company

x

x

x

Hierstetter Markus M.Hierstetter@reinhausen.com Schmidt Robert R.Schmidt@messko.com Christine Stadler C.Stadler@reinhausen.com

Production logistics Production logistics Messko Export Reinhausen Power Composites

+49941 4090-9165 +4961716398-88 +499414090-2811

Logistics manual in general

x

x

x

Seyler Benedikt B.Seyler@reinhausen.com Schmidt Robert R.Schmidt@messko.com

Order processing center, Production Production logistics Messko

+49941 4090-2881 +4961716398-88

Quality

x

x

x

Hein Marc M.Hein@reinhausen.com Matthias Meier M.Meier@reinhausen.com Dirk Kretschmar Dirk.Kretschmar@messko.com

Supplier Management Supplier Management Supplier Management

+49941 4090-4336 +499414090-2438 +4961716398-626

IT-Security

x

Thilo Böhm security.ism@reinhausen.com

MR-CERT

+49941 4090-4075

F02258:06 Created by: Dr. T. Hölzl Page 21 of 35 pages Version: 11.07.2019

6.2.2 Order process and data exchange

Individual orders: Individual orders contain the scheduled demand and the previously agreed-upon prices. They are usually communicated to the supplier via e-mail, fax or EDI. In the case of schedule deviations, the supplier is obligated to inform MR immediately. If the supplier cannot accept the specified conditions, the supplier must contest them in writing.

Delivery schedule: This is agreed upon by MR and the supplier within what is called the LPA contract. The LPA contract represents an extension of the framework purchase agreement. This part of the LPA contract defines the amounts to be delivered in what period of time and at what price. In addition, RDs are regularly communicated, which indicate to MR the exact demand for parts with fixed deadlines. This must be contested in writing within 2 business days. If that does not occur, the RDs shall be directly binding for the supplier.

Insofar as there is a data exchange between MR and the supplier by means of EDI, the following transmission formats are currently valid for MR:

VDA4905 – Transmission of request for delivery VDA4913 – Transmission of delivery note and transport data EDIFACT ORDERS – Transmission of order EDIFACT DESADV – Transmission of shipping notification EDIFACT INVOIC – Transmission of the invoice

Moreover, in the future the supplier will be able to request the following connection options: EDIFACT DELFOR – Request for delivery EDIFACT ORDCHG – Order change EDIFACT ORDRSP – Order confirmation VDA 4906 – Invoice VDA 4908 – Credit Advice To enable selection of a connection option, the supplier must completely fill out the EDI questionnaire "Recording of the requirements for electronic data interchange (EDI) with Reinhausen GmbH". Additional individual details are agreed upon between the two parties in the EDI framework agreement.

6.2.3 Preview and inventory planning

Planning preview Following prior consultation, MR shall provide the supplier with non-binding order information over a period of up to 18 months. That enables the supplier to conduct preliminary planning of future needs. Capacity planning Insofar as a quantity contract / LPA contract has been made, the supplier is obligated to perform a regular comparison of the delivery schedule requests by MR and the supplier's available capacity. In the event of any irregularities, the responsible MR logistics partner must be notified immediately. The obligation of the supplier also includes reserving an appropriate amount of additional capacity above the amount defined in advance in order to compensate for demand fluctuations and to ensure 100% supply reliability. Safety stock2 By means of scheduling agreed upon with MR, and at its own expense and risk, the supplier shall ensure that a safety stock is continuously kept in reserve, provided that a corresponding agreement about this was made within the quantity contract / LPA contract. MR reserves the right to examine this minimal stock by performing random sampling.

2 6.2.3 variation Messko

F02258:06 Created by: Dr. T. Hölzl Page 22 of 35 pages Version: 11.07.2019

The supplier shall undertake to provide the responsible planner/purchaser with a stock overview in the form of an Excel table by the 5th of each month. This must include the following information:

Article number of the supplier

Article number of MR

Required safety stock

Actual safety stock

Reason for deviation (including information on the date by which it will be corrected)

Agreed-upon remaining quantity

If the safety stock drops below the agreed-upon amount, the supplier shall undertake to report this immediately to MR in text form, including specification of the extent and cause of the shortage as well as the estimated time needed to reach the continuous minimal stock again.

6.2.4 Analysis instruments

Adherence to deadlines The supplier's adherence to deadlines will be measured continuously and evaluated by MR internally each month. Any deviations identified during this process will be sent from the purchasing department to the supplier each month. This evaluation takes the following form:

F02258:06 Created by: Dr. T. Hölzl Page 23 of 35 pages Version: 11.07.2019

As the example of John Smith, Inc. shows, the supplier should seek to improve adherence to deadlines until exact-day delivery is achieved.

Logistics process analysis MR reserves the right to carry out an on-site process analysis for select suppliers. This entails, for example, assessing and analyzing the material flow, production planning, safety stocks and contingency plans using an evaluation sheet. In addition, if necessary, open topics in this regard can be discussed and new ideas can be proposed.

6.2.5 Delivery frequencies After consultation with the supplier, MR will specify a suitable delivery frequency. The supplier is allowed to deviate from the specified frequencies only with prior approval from MR. If appropriate, MR and the supplier should agree upon fixed delivery days.

6.2.6 Guaranteeing supplier reliability in series production

The requirements of the "Guaranteeing supplier reliability in series production" shall apply in the respectively valid version.

F02258:06 Created by: Dr. T. Hölzl Page 24 of 35 pages Version: 11.07.2019

6.3 Packaging

6.3.1 Packaging function3

Logistics packaging functions

Background

Quality assurance function

To preserve the quality of the parts, the following component sensitivities of the products must be taken into consideration:

Temperature sensitivity

Corrosion sensitivity

Surface sensitivity

Shock sensitivity

Light sensitivity

ESD sensitivity

Demagnetizability

etc.

Transport function

Prior to transport, the packaged goods must first be put in a condition suitable for transport. This ensures optimum protection against sliding, vibration and changing ambient conditions.

Handling function

Combining packaged goods and wrapping them for transport are made easier.

Environmental function

Non-reusable packaging must consist of recyclable materials.

Storage, provisioning and order picking function

Suitable packaging must be used to ensure optimum distribution and storage of the goods within the logistical supply chain.

Integration function

Valid pool systems should be used across Europe to create a more efficient packaging and transport system. Standardized packaging serves as the basis for this process. Chapter 6.3.3 Packaging planning

Important requirements:

To ensure that the abovementioned functions are present, pallets and containers must conform to UIC Standard 435-2/-3 and must be in a defect-free state (e.g. clean, functional and safe).

As a general rule, only one material number may be included in a load carrier / package. Mixed shipments in one load carrier / package are not permitted! Different batches that require labeling within one material number have to be sent in separate load carriers / packages.

Material numbers consisting of two or more parts must be clearly identifiable as one part or one set: These piece by piece pre-assembled units have to be equipped with the appropriate labelling or marking.

The transport goods must not be suspended above the transport equipment!

Transport container: Only plastic straps may be used to secure packaged goods and containers. Edge protection is also required.

6.3.2 Non-reusable/reusable packaging4 Standard reusable packaging for pool load carriers is coordinated between the supplier and MR. The packaging must provide optimum protection of parts. The container fill quantities/types are defined on the material number level for MR-specific reusable packaging. Only deliveries that ensure strict compliance with the specifications are permitted. Packaging for special containers/transport equipment must be coordinated separately in the Packaging datasheet.

3 6.3.1 Variation Messko

4 6.3.2 Variation Messko

F02258:06 Created by: Dr. T. Hölzl Page 25 of 35 pages Version: 11.07.2019

The following regulations are generally applicable when using MR-specific reusable packaging (SLC/LLC/special LC), standard MW packaging (pool LC) and non-reusable packaging from the Regensburg locations of Maschinenfabrik Reinhausen GmbH.

Load carrier/packaging

Properties

Pool load carrier

Europallet: 1200 mm x 800 mm x 150 mm

In accordance with UIC 435-2 Lattice box pallet: 1240 mm x 835 mm x 970 mm

In accordance with UIC 435-3

MR-specific load carriers (SLC/LLC/special LC)

The container overview in the MR download center includes detailed information on these carriers.

LLC (transport container)

Storage bins (stackable containers):

Stabile film packaging / use of a wooden stacking frame for securing the containers

The stackable containers must be sealed with a cover

The top layer must be covered

Euro bins:

Pallet cover required

Segregated stacking

Containers for an order item must be combined into one packaging/transport unit

Delivery on europallets

Max. total height of the transport unit is 800 mm

Never use adhesives on load carriers

(reusable containers)

Non-reusable straps for securing packages must only be

made from plastic

The use of metal straps is possible only after

consultation with MR

The max. weight is 15 kg, except for EU4 containers 20 kg

Non-reusable packaging

Ideally, environmentally friendly packaging materials

should be used (ISPM Standard No.15)

Non-reusable packaging materials (cardboard, film/VCI

bags, flat pallets, etc.) have to be procured by the supplier

The max. weight of a packaged good is 15 kg

6.3.3 Packaging planning The packaging concept is defined in collaboration with the responsible internal positions at MR and the supplier. The supplier is responsible for selecting packaging material of sufficient quality and arranging the packaging for its intended purpose. It must be adapted to suit the expected transport equipment, storage equipment and means of transport, as well as the environmental influences, and provide sufficient protection from damage and dirt. If it is necessary to make a change to the packaging (e.g. due to a workflow change, index change), the supplier must actively notify MR and receives a specification from MR. Prior to series delivery, a Packaging datasheet completely filled out by the supplier must always be sent to MR for complex or reusable packaging. Cost assumption The packaging costs constitute a substantial portion of the logistics costs. The individual costs for packaging must be reported separately in the quotation. Unless otherwise stipulated, packaging costs only include costs for all packaging used without the handling costs.

F02258:06 Created by: Dr. T. Hölzl Page 26 of 35 pages Version: 11.07.2019

If the defined packaging is not followed due to supplier error, MR reserves the right to charge the supplier for the resulting additional costs, including repackaging costs.

6.3.4 Empty management5 The following definitions apply to MR-specific reusable packaging (SLC/LLC/special LC). In this case, suppliers within Germany are able to provide this packaging and these containers. MR shall bear the freight costs for empty provisioning. Requesting load carriers Requests to use any load carriers owned by MR must be submitted using the request form, which is available for download in the MR download center. Required accessories (covers/special transport equipment/inlays) must be requested using the respective material number in addition to the container. New acquisition MR alone is responsible for acquiring new load carriers and activating them. Use Since reusable packaging is intended only for transport between the supplier and MR, packaging is usually provided to the supplier only for a maximum period of 3 weeks. Property of MR must not be used for storage or production by the supplier. Empty request The supplier must commission provisioning of the required reusable packaging in writing using the standard form (MR standard container request form) no later than 3 business days before the goods shipping date for the empties (See workflow for the empty request). Costs for special transport resulting from Empty requests that are not submitted on time shall be borne by the supplier. Complaints The supplier must notify MR of complaints of any kind in writing within 5 business days after receipt of the goods. Complaints submitted after this time will not be given consideration. Automated empty request MR reserves the right to implement an automated empty request via a web-based program at a later date. Functionality and maintenance The supplier ensures that parts are only shipped in clean, dry, defect-free and functional, reusable packaging. MR alone is responsible for maintaining and repairing reusable packaging. The resulting costs are allocated according to the costs-by-cause principle. If MR has to repackage goods from dirty or damaged load carriers, the associated costs can be passed onto the party that caused the dirt or damage. Account reconcilement When using reusable containers/packaging, separate loading equipment accounts must be created for MR. The supplier shall undertake to use the transport equipment supply note number for loading equipment to post all incoming and outgoing goods via this account. When recording incoming and outgoing goods, it does not matter if the empties are replaced directly or using interconnected carriers. Interconnected/stored containers should already be posted to the account so that the starting inventory can be correctly specified. Both MR and the supplier shall undertake to continuously manage inventory for the reusable containers/packaging in use. The container postings at MR must be compared once a month with the loading equipment accounts of the supplier and corrected if necessary. The supplier must raise any related complaints within 4 weeks after receipt of the account closing documents. Stock difference If there is a stock difference, MR reserves the right to offset the stock shortfall with a credit item.

5 6.3.4 Variation Messko

F02258:06 Created by: Dr. T. Hölzl Page 27 of 35 pages Version: 11.07.2019

6.3.5 Marking and labeling The supplier ensures that all packages and containers are marked with a valid product label. The content of the labels must correspond to the regional industrial standard and the pertinent details must be coordinated with the MR customer plant. The labels must always be attached such that they are easily visible and accessible without needing to rearrange the packaging units. Adhesive labels must not be attached to load carriers. Labels must be attached using the insert fixtures. The supplier must remove its own label prior to delivery without leaving behind any residue. Labels from MR must not be damaged or removed.

- Article number of MR - Article name - Quantity - Purchase order number - Weight - Lot - If applicable: Expiring date

The processes and guidelines outlined in 3.5.7 through 3.5.9 and 4.6.4 through 4.6.7 apply to shipment of initial sample parts and reworked goods.

6.4 Shipment and transport

The delivery of goods to all locations must be carried out in accordance with the following regulations.

6.4.1 Delivery terms

Freight collect delivery6 Commissioning of transport when using freight collect delivery terms (Incoterm 2010: FCA and EXW) must be carried out by the supplier at the facility of the forwarding agent approved by MR. This depends on the weight and, as such, is also required for shipments under 31 kg. Potential additional costs due to commissioning non-approved forwarding agents must be borne by the supplier. The supplier must correctly determine the gross weight and load equipment weight of the shipment. If MR incurs additional costs due to incorrect weight specifications, MR reserves the right to pass these costs onto the supplier. Free delivery The supplier can determine the delivery method for all deliveries sent to MR free of charge. The delivery date specified by MR must be observed. The goods must be loaded in a way that rear unloading at the MR is possible.

6.4.2 Notification7

The provisions outlined under "Procurement logistics" in the MR download center apply to notification of deliveries sent under freight collect conditions. Link: Procurement logistics_MR

6.4.3 Transport documents A delivery note in accordance with VDA DIN 4994 (see 7.3 Appendix) must be included with each delivery. This note must be clearly visible in a delivery note pocket on the product.

6 6.4.1 Variation Messko 7 6.4.2 Variation Messko

F02258:06 Created by: Dr. T. Hölzl Page 28 of 35 pages Version: 11.07.2019

6.4.4 Delivery times for goods8

Hours for the goods receiving department: Monday through Thursday from 6:30 am – 3:30 pm and Friday from 06:30am – 01:00 pm Or deliveries after 3:30 pm with prior appointment. Any changes to the delivery times implemented by MR are labeled in advance on the outgoing orders:

“Our goods receiving dept. is closed at weekday, YYYY/MM/DD”

6.4.5 Loading and unloading Loading: At the customer (MR) / supplier

Consec. No.:

Description

1 When shipping goods, they are loaded onto the transport equipment provided by the logistics service provider or by the supplier during the procurement process (unless otherwise specified).

2 The contractor must ensure that the transport personnel secure the load in accordance with the legal guidelines (§ 22 StVO, German Road Traffic Regulation).

3

After loading is complete and the load has been secured, the transport papers (delivery note, pallet notes, etc.) are handed over to the transport personnel. It is important to note that the transport personnel alone are responsible for filling out all papers (such as a bill of lading) that are required for performing commercial road haulage.

Unloading: At the customer (MR) / supplier

Consec. No.:

Description

1 When receiving goods, they are unloaded from the provided transport equipment provided by the logistics service provider or by the supplier (unless otherwise specified).

2

After the transport personnel arrive and register at the goods receiving department, the contractor must ensure that they remove the load securing devices and place the transport equipment in the area/room specified by the contractor/supplier such that it is freely accessible.

3 After unloading the delivered goods, visually inspecting them and checking their identity, the acknowledged freight documents ("clean receipt" or comment describing damage) are handed over and the service provider is checked out.

6.4.6 Hazardous goods

The legal provisions in legislation pertaining to hazardous substances and goods apply to materials that must be classified as hazardous substances and/or hazardous goods. MR reserves the right to coordinate special provisions with the supplier other than those already mentioned. Packaging / transport Hazardous substances must be packed in an upright position in a permitted container. Frost-sensitive hazardous substances must be packed in suitable packaging to protect them from frost damage. During transport, frost-sensitive hazardous substances must not be subjected to any weather influences.

8 6.4.4 Variation Messko

F02258:06 Created by: Dr. T. Hölzl Page 29 of 35 pages Version: 11.07.2019

Labeling Labeling must be carried out in accordance with the German Hazardous Substances Ordinance. Every material and packaging unit (e.g box) must be labeled with a hazard symbol and and a hazardous substance number.

6.4.7 Insurance / liability

MR waives forwarding company insurance coverage. MR concludes a transit insurance policy covering all shipments. The contractor shall be liable as stipulated by the law. The most recent version of Incoterms shall be treated as as the basis for the delivery terms.

6.5 Logistical shipment errors

The following items are considered logistical errors (this list is not exhaustive):

Incorrect shipment

Mixed shipment

Quantity difference

Incorrect packaging

Incorrect labeling

Transport damage

Document errors

Time-delayed delivery

Wrong version (Software / Hardware)

If the supplier is made aware of a change in the delivery date in advance, regardless of the type of logistical error, the supplier must notify MR of this 3 business days before the promised delivery date. Logistical delivery errors are incorporated into the supplier performance assessment.

6.6 Exception regulations

A deviation from the guidelines described in the MR logistics manual is permitted only if coordinated with MR in advance. In the case of non-compliance with the provisions stipulated in the MR logistics manual, MR reserves the right to pass on the costs to the supplier. The software must be encrypted during the entire transport from supplier to MR. MR must have the ability to ensure the integrity of the software (e.g., via a hash or better via a digital signature)

F02258:06 Created by: Dr. T. Hölzl Page 30 of 35 pages Version: 11.07.2019

6.7 Deviating regulations for deliveries to Messko GmbH

6.2.4 The supplier shall, after prior agreement within a quantity contract, provide for the provision of a safety stock. Equivalent regulations of the supplier manual regarding LPA contracts are not applicable at Messko GmbH.

6.3.1 The packaging of the delivered goods is basically freely selectable by the supplier, provided no individual agreements have been made about it.

6.3.2 In addition to the listed load carriers and packaging, delivery in "BITO small load carriers" is possible.

6.3.4 The regulation does not apply to Messko GmbH

6.4.1 In the case of non-free delivery, deviations of the regulations from 6.4.1. be discussed with the responsible purchaser and logistics manager and fixed in writing.

6.4.2 The regulation does not apply to Messko GmbH

6.4.4. Opening Hours: Monday to Thursday from 7:15 to 16:00, Fri from 07: 15-12: 30. By prior arrangement, a delivery after 16:00 clock is possible.

F02258:06 Created by: Dr. T. Hölzl Page 31 of 35 pages Version: 11.07.2019

7 Systems

7.1 Abbreviations 5-Why 5-Why methods, quality management methods for determining cause and effect AIAG Automotive Industry Action Group

APQP Advanced product quality planning; continuous project management for product and quality planning

ASCA Arbeitsschutz und Sicherheitstechnischer Check in Anlagen (occupational and general safety check-in systems)

CIP Continuous improvement process Cm/Cp Machine / process capability index (tolerance with respect to the distribution) Cmk/Cpk Critical machine / process capability index (tolerance with respect to positional

distribution) DFA Dodd-Frank Act DIN Deutsches Institut für Normung (German Institute for Standardization) DmbA Dokumente mit besonderer Archivierung (documents requiring special archiving) DS Delivery schedule EDI Electronic Data Interchange EDIFACT Electronic Data Interchange For Administration, Commerce and Transport EMAS Eco-Management and Audit Scheme EMS Environmental management system

ELIA Employers' liability insurance association ESD Electrostatic discharge EXW EX works FMEA Failure mode and effects analysis FCA Free carrier ICCA International Council for Chemical Associations IMDS International Material Data System ILO OHS International Labour Organization, Occupational Safety and Health IEC International Electrotechnical Commission Ishikawa This type of cause-effect diagram depicts causal relationships ISO International Organization for Standardization ISPM International Standards for Phytosanitary Measures ISIR Initial sample inspection report LASI Länderausschuss für Arbeitsschutz und Sicherheitstechnik (Commission for

Occupational Safety and Safety Engineering of the German Federal States) LC Load carrier LLC Large load carrier MCS Machine capability study MR Maschinenfabrik Reinhausen MSA Measurement system analysis NR Non-reusable OHRIS Occupational health and risk management system OHSAS Occupational Health and Safety Assessment Series

OSMS Occupational safety management system PCN Product change notification PPAP Production Part Approval Process ppm Parts per million PCS Process capability study PDS Packaging data sheet PPF Produktionsprozess- und Produktfreigabe, German version of the Production Part

Approval Process in accordance with VDA Volume 2 PQP Preliminary quality planning PSW Part submission warrant, sampling in accordance with QS 9000 QMS Quality management system QAA Quality assurance agreement REACH Provision (EC) No. 1907/2006 of the European Parliament and European Council

from 18 December 2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals

RD Request for delivery

F02258:06 Created by: Dr. T. Hölzl Page 32 of 35 pages Version: 11.07.2019

RoHS Directive 2011/65/EU of the European Parliament and European Council from 8 June 2011 on the restriction of the use of certain hazardous substances in electrical and electronic equipment

RU Reusable SCC Safety Certificate Contractors SLC Small load carrier SPC Statistical process control Special LC Load carriers that do not correspond to MR standard containers or conventional pool

load carriers; such as special plates, inlays, etc UIC Union internationale des chemins de fer (International Union of Railways) VCI Volatile corrosion inhibitor VDA Verband der Automobilindustrie (German Association of the Automotive Industry) VDA 6.3 Verband der Automobilindustrie Volume 6 Part 3 Process audit

F02258:06 Created by: Dr. T. Hölzl Page 33 of 35 pages Version: 11.07.2019

7.2 Links

MR download center General Terms and Conditions of the REINHAUSEN Group Supplier survey Feasibility assessment Initial sample inspection report Initial sample label Product change notification (PCN) Request for concession/special release Pool4Tool Procurement logistics_MR Empty requests Packaging datasheet PPAP (AIAG) PPF (VDA) APQP (AIAG) MSA (AIAG) http://www.formeld.com http://www.redi-group.com http://www.oekoprofit.com/company-aut.html, http://de.wikipedia.org/wiki/Ökoprofit Responsible care ICCA initiative EMAS OHRIS SCC ASCA ILO OSH guideline LASI guideline Berufsgenossenschaft Holz und Metall (German trade association for woodworkers and metal workers) "Gütesiegel Sicher mit System" occupational safety management system

F02258:06 Created by: Dr. T. Hölzl Page 34 of 35 pages Version: 11.07.2019

7.3 Appendix

Delivery note in accordance with DIN 4994

F02258:06 Created by: Dr. T. Hölzl Page 35 of 35 pages Version: 11.07.2019

8 Revision history

Revision Revised chapter

Description of the revision Author

No. Date

1 2013-09-11

Newly created supplier manual C. Dirr

2 2013-12-13

Revised C. Dirr

3

2016-08-25

All Integration of the logistics manual and references to the Pool4Tool supplier portal

Dr. Th. Hölzl

4 2018-04-05

All Revision/supplement Messko/RPC

Chr. Helmberger

5 2019-07-11

All Integration ISM Security Chr. Helmberger