GM 1927-17

Supplier Quality & Development

Processes and Measurements Procedure

Rev 8.0
Mar 2019
1. General............................................................................................................................................. 3
1.1 Scope ............................................................................................................................................... 3
1.2 Purpose ............................................................................................................................................ 3
1.3 Terms and Definitions ...................................................................................................................... 3
1.4 Supplier Practical Problem Solving Records (SPPS) ..................................................................... 5
1.5 Supplier Requirements .................................................................................................................... 8
1.6 Customer Requirements ................................................................................................................ 10
1.7 SPPS Dispute Process .................................................................................................................. 11
2. Quality SPPS Records................................................................................................................... 12
2.1 References ..................................................................................................................................... 12
2.2 Terms and Definitions .................................................................................................................... 12
2.3 Quality SPPS type issuance .......................................................................................................... 13
3. Supply Chain .................................................................................................................................. 17
3.1 References ..................................................................................................................................... 17
3.2 Supply Chain SPPS definition ....................................................................................................... 17
3.3 Supply Chain Plant impact ............................................................................................................ 17
3.4 Supply Chain Cost Recovery ........................................................................................................ 18
4. Customer Care & Aftersales (CCA) - Quality................................................................................ 19
4.1 Terms and Definitions .................................................................................................................... 19
4.2 CCA - Quality SPPS record definition ........................................................................................... 19
5. CCA / Aftersales – Supply Chain .................................................................................................. 22
5.1 Terms and Definitions .................................................................................................................... 22
5.2 CCA – Supply Chain SPPS record definition................................................................................ 22
6. Controlled Shipping ....................................................................................................................... 24
6.1 References ..................................................................................................................................... 24
6.2 Terms and Definitions .................................................................................................................... 24
6.3 Controlled Shipping Entry .............................................................................................................. 24
7 Sourceability Report ...................................................................................................................... 30
7.1 Sourceability Calculations ............................................................................................................. 30
8 Cost Recovery................................................................................................................................ 33
9 Appendix ........................................................................................................................................ 37
9.1. Quality Severity Matrix: Weight factors ......................................................................................... 37
9.2. Supply Chain Metrics ..................................................................................................................... 37
9.3. CCA – Quality Metrics ................................................................................................................... 38
9.4. CCA – Supply Chain Metrics ......................................................................................................... 38
9.5. SPPS (Supplier Practical Problem Solving) System Status Definitions ...................................... 39
10. Revision History ............................................................................................................................. 41
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SUPPLIER QUALITY & DEVELOPMENT PROCESSES AND MEASUREMENTS PROCEDURE

1. General
1.1 Scope
This Procedure is an integral part of the Supplier Improvement Process (Quality, Supply
Chain). It applies equally to all suppliers and affiliated organizations who supply parts,
materials, equipment, or logistical services for production, pre-production, Customer Care
& Aftersales, and/or service to the customer (GM or in Joint Venture).

1.2 Purpose
This General Procedure defines the process, roles, responsibilities and requirements of:
• Supplier Practical Problem Solving records
• Total Cost related to supplier caused issues
• Supplier Measurements
• SPPS Records
• Severity Score
• Controlled Shipping

1.3 Terms and Definitions

1.3.1 SPPS
The SPPS (Supplier Practical Problem Solving) system is the system where SPPS records
are created by the customer and responded to by the supplier. Controlled Shipping records
are also managed in the SPPS system. SPPS (Supplier Practical Problem Solving) system
status definitions can be found in Appendix 9.5

1.3.2 Duns Number

A unique supplier identification number. It is used to identify a supplier contract location, i.e.
manufacturing, sales, ship-from, etc.

1.3.3 Issuing Location

A customer location issuing a SPPS.

1.3.4 Nonconformance
Product, material, or logistical service that does not conform to the customer requirements
or specifications. E.g. a deformed part, a missed shipment.

1.3.5 Nonconformity
A process which does not conform to a quality system requirement.

1.3.6 Suspect Material

Suspect Material is any material or product that may contain a defined nonconformance.

1.3.7 Production part approval process (PPAP)

The Production Part Approval Process (PPAP) defines requirements for production part
approval, including production and bulk materials. The purpose of PPAP is to determine if
all customer engineering design record and specification requirements are properly
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understood by the supplier and that the process has the potential to produce product
consistently meeting these requirements during an actual production run at the quoted
production rate.

1.3.8 Advanced product quality planning (APQP)

Advanced product quality planning (APQP) is the structured method of defining and
establishing steps necessary to assure that a product meets customer requirements.
1.3.9 CCA
Abbreviation used to refer to the GM Customer Care and Aftersales organization.

1.3.10 Sourcing Metrics

Supplier evaluation system that ranks each supplier manufacturing location in one of three
categories: green, yellow or red. The ranking criteria is based on formula defined in the
Sourceability Report.

1.3.11 Sourceability Report

A list of potential suppliers, with corresponding performance metrics, who have expressed
an interest in doing business with GM. Based on the performance metrics, the supplier will
be considered for new business.

1.3.12 Completely Knocked Down (CKD)

A process of shipping vehicles as unassembled units.

1.3.13 Export Controlled Compliance Numbers (ECCN)

ECCN Part number have ECCN in their Part description. Following under Export
Compliance legislation: No technical data to be documented in the SPPS record.

1.3.14 Metrics
SPPS selection details, including the those that influence the severity scores for SPPS
records. These include but are not limited to:
• Phase
• Customer Quality Impact
• Customer Impact
• Furthest Location in the Value Stream the Non-Conformance has Reached
• Primary Nonconformance
• Potential Safety Concern
• Nonconformance
• Plant Impact
• Secondary Nonconformance

1.3.15 e-SAP
This is the financial system that cost recovery information will be collected and debits will
be approved. Customer Issue Owners will input cost recovery information directly into the
e-SAP system, where SPPS only has one Cost Recovery Forecast field.

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1.4 Supplier Practical Problem Solving Records (SPPS)

1.4.1 Definition
A record issued in a standard format to:
• Quantify and describe problem(s) encountered by the customer
• Define the magnitude of the problem
• Identify the supplier by Duns code
• Identify the part number, if applicable
• Identify key customer contact(s) name and phone number
• Identify supplier that was contacted at or before issuance of record
• Identify the phase of vehicle/powertrain/component build (e.g. pre- production,
launch, current production), as applicable
• Quantify and request reimbursement for costs incurred due to the
problem(s) encountered
• Define status and material disposition
• Record Containment, Root Cause and Improvement activities to resolve this issue
• Record timing of updates to FMEA (Failure Modes and Effect Analysis)
and PCP (Process Control Plan) in the improvement activities.
• Identify how solution will be institutionalized across the supplier’s facility
• Identify where the defect was found (e.g. Audit, Final Assembly, etc.)
• Identify Tier 2 or directed buy supplier involved in issue, if applicable

SPPS records may be issued to the supplier, but are not limited, to address the following:
• Potential supplier initiated nonconformance
• Supplier-responsible:
- part or material nonconformance through the life of the part or material
- packaging nonconformance (e.g. labeling issues)
- Program Management issues (missed deadlines, etc..)
- Unauthorized changes
- Missed or late shipments, lack of communication for shipments, etc..
• Issues and concerns:
- with shipping of production parts or material to the customer
- related to the quality of service as described in the service contract

1.4.2 SPPS Record Issuance

1.4.2.1 SPPS
SPPS records should be issued in the Supplier Practical Problem Solving Systems (SPPS) by an
authorized customer representative. Typically, SPPS records are issued by the customer plant
representative immediately after verification that the supplier is responsible for the issue.

The language used on all SPPS records will be preferably English. Issuing Location or
Supplier must translate to English if requested.

In conformity with IATF 16949 § 8.4.2.4 SPPS records will be attributed to the Tier One
supplier and / or the logistics service provider.
In certain cases, depending on the contractual agreements between GM and tiered
suppliers (e.g. a directed-buy RASIC B supplier, CKD Supplier), a SPPS record can
be re- addressed to that tiered supplier.

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1.4.2.2 SPPS Type Selection
SPPS record types are limited to Quality, Supply Chain, CCA - Quality, CCA - Supply
Chain. SPPS Metrics for each type are specific to that type of SPPS record. Impact to the
Sourceability Report is partially based on the metrics entered for each SPPS.
• Quality – Quality issues found in our manufacturing operations
• Supplier Chain – Supply Chain issues related to our manufacturing operations
• CCA Quality – Quality issues found with Customer Care & Aftersales (CCA) parts
• CCA Supply Chain – Issues occurring in the Customer Care & Aftersales supply
chain
Only CCA facilities should be issuing CCA type SPPS records and only manufacturing
operations should be issuing Quality and Supply Chain type SPPS records

** Quality and CCA – Quality SPPS records require management approval for every one
issued. This is required to confirm the metrics selected and to confirm the Potential Safety
Concern designation**

1.4.2.3 Problem Identification

The issuing location must define, in sufficient detail, the problem being encountered.
The following information should be gathered prior to issuing the SPPS record:
• Problem Description and Method of Validation – describing what the customer is
seeing and how it was validated that this was a supplier issue. If the issuer cannot
confirm that the Supplier’s parts and/or process are out of specification, and that the
issue was not the fault of the Customer’s applicable process or tooling, then the
record will be issued as a Supplier Alert (see 1.4.2.4)
• Duns number
• Part number, or if no Part number exist or is available in SPPS then the NPN
Description can be used (No Part Number) – Part Numbers are highly recommended
• Person contacted at that Supplier. When creating the record in the SPPS system; if
the Person Contacted at Supplier field shows “Not Listed” this means that no one
from the supplier is in the system, nor will receive notification that an SPPS record
has been generated. It is the Issuing Location’s responsibility to contact the Supplier.
The Issuing Location should also document, in the Problem Description section of
the SPPS record, the name, phone number and e-mail of the person contacted at
the supplier.
• Manufacturing date of defect parts, or potential information for supplier to identify the
date(s) of manufacture – Quality/CCA Quality Only
• Potential of the issue to be a safety concern to the vehicle customer (see the GM
Vehicle Level Hazards list) – Quality/CCA Quality Only
• Phase of the vehicle build and part (Production, Launch, Pre-Production) - Quality
Only
• Customer Quality Impact (Direct Run Rate, GCA, etc) – Quality Only
• Customer Impact (Line Accumulation, Repeat Occurrence, etc..) – Quality Only
• The furthest location in the value stream that the nonconformance has reached (Not
installed, installed in sub-assembly, etc…) – Quality Only
• Classification of the CCA Quality Primary Nonconformance (Quality, Packaging,
Indirect Material, etc..) – CCA Quality Only
• Classification of the CCA Quality Secondary Nonconformance (Appearance
discrepancies, Assembly discrepancies. etc..) – CCA Quality Only
• Classification of the Supply Chain nonconformance (Packaging, Labeling, etc..) –
Supply Chain Only
• Classification of the Supply Chain plant impact (Single Incident, stock out, etc..) –
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Supply Chain Only
• Classification of the CCA Supply Chain Primary Nonconformance (Shipping, Indirect
Material, etc..) – CCA Supply Chain Only
• Classification of the CCA Supply Chain Secondary Nonconformance
(Transportation/Carrier discrepancies, Electronic Communication discrepancies,
etc..) – CCA Supply Chain Only
1.4.2.4 Verification of Responsibility
The issuing location must verify using appropriate expertise and resources (e.g. lab tests or
dimensional checks) necessary to verify that the nonconformance is the supplier’s
responsibility prior to issuing a SPPS record to the supplier, and should issue the SPPS
record to the supplier’s manufacturing Duns on contract. Prior to issuing the SPPS record, if
possible, the issuing location should contact the supplier (e.g. by telephone or e-mail), notify
the supplier of the problem, and discuss immediate containment actions if necessary.

The Issuing location must provide evidence such as part or photograph that supports that
the nonconformance is linked to an out of specs condition on the part or process. If
evidence is not available and/or if the issuer cannot confirm that the Supplier’s parts and/or
process are out of specification, and that the issue was not the fault of the Customer’s
applicable process or tooling, then the record will be issued as a Supplier Alert.

Whenever possible, the supplier is required to participate in identifying and verifying the
nonconformances.

The issuing location will keep the parts for supplier disposition for 2 working days from initial
contact. Supplier shall provide parts disposition during the initial response in SPPS. If no
response of the supplier is received within 2 working days, parts will be scrapped at the
expense of the supplier.
1.4.2.5 Supplier Alerts
A Supplier Alert may be issued by GM when requesting the assistance of the supplier in
determining:
• The cause of the issue
• Specifications surrounding the issue
• The responsibility of the issue
• The issuing location detects a slight drift within the tolerances of a part.

Supplier Alerts are created when the customer answers “No” to the question “Have you
confirmed the Supplier Parts and/or Process are Out of Spec AND it was not the fault
of Customer’s applicable process or tooling?”

There will be no impact to supplier metrics. By default, supplier needs to provide findings
within 15 days. If a response is not received from the supplier within 15 days, the
customer may still issue a Program Management SPPS.

In cases where during the root cause analysis of the nonconformance, supplier
responsibility has been determined, the Customer Issue Owner should change the
response of the “Have you confirmed the Supplier Parts and/or Process are Out of
Spec AND it was not the fault of Customer’s applicable process or tooling?” question to
“Yes”.

Supplier Alerts can be completed by the Customer and Supplier, but SPPS status will
never change from “Supplier Alert” unless the “Have you confirmed the Supplier Parts
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and/or Process are Out of Spec AND it was not the fault of Customer’s applicable
process or tooling?” question to “Yes”. The Supplier Alert will be Closed by the system
after 180 days from the SPPS creation.

1.5 Supplier Requirements

1.5.1 General
The supplier must promptly notify all the affected customer locations whenever they
suspect nonconforming products or material (may) have been shipped to a customer
location.

After confirmation of nonconforming parts in a customer plant, the plant shall issue an
SPPS record with “Supplier Initiated” selected as the Customer Impact. In the event there
are other customer plants using this part from this DUNS they will receive notification from
the system that an SPPS record has been issued. Since all receiving locations are listed in
the SPPS record, the Issuing Location should work with the Receiving Plants to ensure
that the Furthest Location in the Value Stream the Non-Conformance has Reached field
represents the worst case condition at the Customer Locations.

1.5.2 SPPS Monitoring

The supplier must access SPPS daily to check for any relevant SPPS activity.

1.5.3 Problem Identification

The supplier must provide proactive participation in problem identification if requested.

1.5.4 Initial Response (Required for all SPPS Types)

Within 24 hours of the issuance of the SPPS record, the supplier must provide an initial
response consisting of the following information:
• Immediate and ongoing containment actions to be taken by the supplier to
prevent further shipments of nonconforming parts or material. Containment
shall be extraordinary (non- standard production process), and temporary.
Containment will include data collection and analysis AND has to be agreed
upfront with the customer. In addition, Containment must remain in place until
customer approval.
• Identification of the certified material, visible (e.g. colored dot on part label)
• When appropriate, initiate rework or sorting as an immediate containment at
the customer location. Rework or sorting may be performed by the customer,
supplier, or a rework company at the supplier’s expense. Rework or sorting
will be agreed with the customer prior to implementation.
• Disposition (scrap or return) of the nonconforming parts or material at the
customer locations and in-transit. The supplier must analyze the entire
delivery chain to identify any suspect material at any customer location or in-
transit to the customer location(s).
• Date of the next shipment of conforming parts or material (guaranteed batch),
including how it will be identified. The identification procedure will be agreed
upon prior to shipment with the customer and will follow the logistic
requirements e.g. no glued labels on the container, EDI label needs to be
readable.
• Containment information must be supplied for the supplier location and all
customer locations listed in the SPPS record.
• Name and phone number of the supplier representative who is responsible for
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containment at each location.

If an initial response is not received from the supplier within 24 hours of SPPS issuance,
the Issuing Location may create an additional Quality Type SPPS record with “Program
Management” selected as the Customer Impact.

1.5.5 Problem Solving

The supplier must promptly complete appropriate problem-solving activities.

The SPPS system includes a Problem Solving Questionnaire to assist in identifying

Root Cause and Supplier Improvement Activities. All SPPS records require the
questionnaire to be completed in order to enter a Root Cause.

If the Customer Issue Owner has agreed, the supplier may answer the first question,
“Has GM agreed that this document is not required for this specific use?”, “Yes”, then
save the questionnaire and enter the Root Cause.

1.5.6 Supplier Improvement Activities

The supplier must provide completed Supplier Improvement Activities within 15 days of
issuance of the SPPS.
Supplier Improvement Activity (SIA) Requirements:
• An SIA is required for each of the three Improvement Activity Types; Protect,
Predict and Prevent (3 P’s)
• A BIQS element (the “Program Management” selection is for Program
Management SPPS records only) or MMOG-LE sub chapter is required for at
least one of each Improvement Activities, except where Protecting, Predicting
or Preventing did not fail and in that case the supplier may check the box
indicating that “I confirm, there is no Improvement Activity required for this
Improvement Type”
• A Site Read Across type is required for each BIQS element selected in the
Protect, Predict and Prevent Supplier Improvement Activity types.
• 3 P SIA types must include details of how the activity will Protect, Predict
and/or Prevent the issue from reoccurring
• Site Read Across Improvement Activities must detail how the solutions for that
BIQS element will be implemented across the supplier’s location
• SIA must detail the steps that will be/have been taken to verify that the
improvement activity is successful
• Details of the revised process Failure Mode and Effects Analysis (FMEA) and
Process Control Plan (PCP). Old and new RPN numbers. If no revisions were
made, then enter today’s date and make a note in the corrective action text
field indicating that no revisions were made to the FMEA or PCP.
• Identification of the responsible tier 2 supplier (directed-buy or not), if
applicable. This does not absolve the tier 1 supplier of any responsibility, but
rather documents where the issue may have originated.

NOTE:
If the Supplier Improvement Activities cannot be completed within 15 days the supplier
must request an extension which requires Customer Issue Owner agreement, Site Read
Across Improvement Activities extensions require Supplier Quality Duns Owner
agreement. Failure to obtain agreement for an extension may result in the Customer
Issuing Location or DUNS Owning SQE issuing an additional Quality Type SPPS record
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with “Program Management” selected as the Customer Impact.

The customer may identify missing or incomplete information when reviewing the SPPS
record. The customer will document the deficiencies by rejecting the SPPS record. The
supplier must respond to the rejected SPPS within 5 days. Failure to provide a response
within the SPPS system and within the allotted time, may result in an additional Quality
Type SPPS record with “Program Management” selected as the Customer Impact.

1.6 Customer Requirements

1.6.1 SPPS Closure

The SPPS record will be closed after the supplier has completed all Containment, Root
Cause and Supplier Improvement activities and the Customer Issue owner and SQE
have Approved and Verified. Any open Controlled Shipping activities must be closed.

The Customer Issue Owner is required to “Approve” the Protect, Prevent and Predict
Supplier Improvement Activity types within 30 days of the supplier entering the Actual
Completion Dates for the SIA. Supply Chain and CCA-Supply Chain SPPS records only
require Approval, Quality and CCA-Quality also require the customer to verify (see next
paragraph).

The Duns Owning SQE is required to “Verify” the Protect, Prevent, Predict and Site
Read Across Supplier Improvement Activity types upon their next supplier visit after the
Actual Completion Dates are entered for the SIA’s. If there is no SQE assigned to the
DUNS, this step will be the responsibility of the Customer Issue Owner.

Approving and Verifying the Supplier Improvement Activities should be based on, but is
not limited to:
• Review of the containment actions
• Review of the Problem Solving Questionnaire
• Review of the root cause
• Review details of the Supplier Improvement Activity
• Review of the supporting documentation in SPPS
• Review of the verification steps
• Review of the FMEA.
• Review of the RPN numbers.
• Review of corrective action break points.
• Confirmation that corrective actions were effective.

SPPS (Supplier Practical Problem Solving) system status definitions can be found in
Appendix 9.5

1.6.2 Corrections to an SPPS Record

If any information in an SPPS record, provided by a GM representative, is found to be
inaccurate, the issuing location MUST ensure that corrections are made. Corrections
may be made until all Supplier Improvement Activities are Approved (Verified for
Quality/CCA Quality). If the supplier contests any SPPS information, the issuing
location MUST assist in investigating the details and then correct the information, where
applicable.

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1.7 SPPS Dispute Process

1.7.1 General
The supplier may dispute the issuance of as SPPS record or specific information (e.g.
primary nonconformance or customer impact) contained in the SPPS record. To
dispute, after completing the Problem Solving Questionnaire (Quality/CCA Quality only),
the supplier must provide objective evidence, in writing, to the issuing location
demonstrating rationale for the dispute. Any request for change to as SPPS record due
to an error MUST be submitted within 15 days of issuance of the SPPS record.

1.7.2
If the issuing location and the supplier do not agree, and the supplier wants to pursue the
dispute further, they should be directed to the responsible Supplier Quality Manager.
The Supplier Quality Manager will contact the appropriate customer contact for
arbitration. The customer contacts for arbitration are (1) for Quality - Supplier Quality
Plant Support and (2) for Supply Chain - Supply Chain Management and (3) for CCA
Quality/CCA Supply Chain - CCA Management. The customer contacts for arbitration
will set up an arbitration meeting. Meeting attendees should include at minimum:
customer contact for arbitration, issuing location customer, supplier, and supplier quality
manager. The arbitrator will have the final decision which will be based on presented
data and the guidelines. Any changes to the SPPS record that are a result of the
arbitration will be made by the Customer Issue Owner’s Manager or SQ Manager.

1.7.3 Rescinding an SPPS record

At the end of the root cause analysis (including Problem Solving Questionnaire for
Quality and CCA Quality SPPS records), if the supplier demonstrates and GM agrees
that the supplier may not be responsible for the creation and non-detection of the
nonconformance, then GM should rescind the SPPS record. If the issue is deemed to
be design or engineering related, GM should issue a PRTS.

When rescinding the SPPS record because it was issued in error, do not check the
“Rescind - No Supplier Response” box. This will continue to apply the severity to the
Sourceability Report. The “Rescind - No Supplier Response” box should only be
checked when the record is being Rescinded because the Supplier has not responded.

SPPS records marked as Potential Safety Concerns cannot be rescinded unless the
Customer Issue Owner enters a SPPS Reference Number that is a duplication of the
issue and is marked as a Potential Safety Concern or a PRTS Reference Number that
has the reflects the same issue in PRTS where the Severity is marked and is marked a
“*S-Potential Safety”. If the SPPS record was incorrectly entered as a Potential Safety
Concern and has been confirmed by the manger, the SPPS will need to be declassified
through the SPPS Declassification process. Contact the [email protected] if
an SPPS has been confirmed by the manager as a Potential Safety Concern and needs
to be declassified.

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2. Quality SPPS Records

This chapter refers to all SPPS records impacting the BIQS Level GM Sourceability
Report and does not consider SPPS records written by CCA/Aftersales

Quality SPPS records should only be issued by personnel related to

Manufacturing Operations. Customer Care and Aftersales issues should be
documents in CCA – Quality or CCA – Supply Chain SPPS records.

2.1 References
The following documents are referenced in this chapter:
• Automotive Quality Management System Standard (IATF 16949)
• Packaging and Identification Requirements for Production Parts (GM1738)
• Shipping/Parts Identification Label Standard (GM1724)
• Potential Failure Mode and Effects Analysis, AIAG
• Advanced Product Quality Planning and Control Plan, AIAG
• Supplier Practical Problem Solving (SPPS) System, User Guide for SPPS Module
• Global Supplier Quality Manual (GM 1927)

2.2 Terms and Definitions

2.2.1 Third party provider
A company chosen and approved by the customer, working directly under the
responsibility of the supplier in ensuring product quality.
Activities eligible for Third party providers include, but are not limited to: Controlled
shipping level 2 inspection, sorting, rework.

2.2.2 Potential Safety Concern

Issues that can adversely affect the safety of the Vehicle Customer. The Issuer should
reference the GM Vehicle Level Hazards to determine if the issue has the potential to
be a safety concern for the vehicle customer.

2.2.3 Quality Performance Reports

Monthly performance charts that graphically display the data. Refer to Supplier
Performance Metrics (SPM) in Supply Power.

2.2.4 Yard Hold

A Yard hold is when a supplier nonconformity results in the customer placing the
customer’s yard and or the customers shipping yard on hold. All affected vehicles,
powertrains, or components in the customer control will have been held until risk
evaluation and or rework has been finalized. A yard hold is not based on whether
nonconforming product is found in the customer’s yard and/or the customers shipping
yard but on the necessity to hold the vehicle, powertrains or components.
2.2.5 Customer Impact
Definition for selections in the SPPS system for the Customer Impact field:
• Line Accumulation - Multiple scrapped parts have occurred
• Supplier Initiated - The supplier made the GM Plant aware of the issue
• Single Occurrence - One suspect part was found
• Multiple Occurrence - More than one suspect part was found
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• Repeat Occurrence - Break Point violation of the same issue within the
last 6 months. Does not matter how many parts.
• CS1 Break Point Violation - Issue that should be contained in CS1 was
found in the Plant. Does not matter how many parts.
• CS2 Break Point Violation - Issue that should be contained in CS2 was
found in the Plant. Does not matter how many parts.
• Unauthorized Change - Supplier changed the part without print, EWO, or
TWO
• Authorization
• Program Management – see 2.3.1
• SQ&D Support Cost – see 2.3.2

2.3 Quality SPPS type issuance

A Quality SPPS record should be issued when the customer has verified that
a nonconformance on a part was caused by the supplier manufacturing
process.
Nonconformances that may result in a Quality SPPS record include, but are not
limited to, dimensional discrepancies, appearance discrepancies, functional
discrepancies.
The following sections list some issues that Quality SPPS records would be
issued for (also see Appendix 9.1): Commented [BGS1]: Revise matrix

2.3.1 Program Management SPPS

A Program Management SPPS may be issued for a nonconformance that does not
result in part damage or does not affect the salability of the part.
Nonconformance’s that may result in a Program Management SPPS include, but are
not limited to the following:
• BTAB (Business Transfer Approval Board) management failure
• Engineering changes management failure
• Data submission issues (APQP)
• Non-responsiveness or lack of cooperation (ie. customer satisfaction issue)
• Subtier management (see 2.3.9)

A Program Management SPPS record is a subset of the Quality SPPS type. When
issuing, use the selections in the following fields:
Part Number: If not being issued to a specific part number, Check the “No Part
Number (only for non-standard parts)” box
NPN Description: Program Management
Customer Quality Impact: Part not received
Customer Impact: Program Management
Furthest Location in the Value Stream the Non-Conformance has Reached: Part not
received at customer location

In the Supplier Improvement Activities the supplier can select “Program Management”
as the BIQS Element.

2.3.2 SQ&D Support Cost (Supplier Quality use only)

An SQ&D Support Cost Program Management SPPS may be issued by GM Supplier
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Quality only.
This SPPS record is used to create a record in eSAP to recover cost spent by
Supplier Quality & Development including, but not limited to the following:
• Supplier requested training and/or assessments
• Support for quality issues related to SPPS records or Controlled Shipping

Other Customer location’s cost recoveries are initiated through the Cost Recovery
Forecast feature in SPPS. Each Customer Location identified can create their own
cost recovery.

An SQ&D Support Cost Program Management SPPS record is a subset of the Quality
SPPS type. When issuing, the select only the following fields:
Part Number: If not being issued to a specific part number, Check the “No Part
Number (only for non-standard parts)” box
NPN Description: SQ&D Cost Recovery
Customer Quality Impact: Part not received
Customer Impact: SQ&D Support Cost
Furthest Location in the Value Stream the Non-Conformance has Reached: Part not
received at customer location

2.3.3 SPPS for Bulk Material / Steel coils / Fluids

The following paragraph will explain the procedure for specific parts/material received
at Manufacturing Locations such as:
• Steel coils/blanks
• Bulk Materials for Product.
• Fluids (e.g. paint, coolant fluid)

Issues on parts shipped in bulk (fasteners, labels, clips, small stampings, etc.) or steel
coils/blanks or fluids will be counted using the following escalation process as long as
the issue did not impact GM manufacturing process and/or did not result in
vehicles/powertrain/components to be put on hold or reworked.
• For the first offense, from a supplier Duns, in the last 6 months, the issuer will
consider the issue as Single Occurrence.
• For the second offense with same issue, from the same supplier Duns, in the last 6
months, the issuer will consider the issue as Multiple Occurrence. The supplier
may also be placed in Controlled Shipping.
• For the third same offense with same issue, from the same supplier Duns, in the
last 6 months, the issuer will consider the issue as a Repeat Occurrence. The
supplier may also be placed in Controlled Shipping.

2.3.4 Line accumulations

Line accumulations are defined as unavoidable discrepancies or single cases of
commodities where only initial response is needed. These SPPS records will be
issued monthly per part or part group. It includes those parts that are scrapped in
customer lines due to internal defects in the part, not detectable by the supplier, and
which are revealed by the customer’s internal processes. The SPPS should be
entered in the system only after the full impact and the monthly quantity is available
to the issuer.

If the frequency of the re-occurring discrepant parts disturbs the customer’s

manufacturing process, the line accumulation SPPS record can be upgraded to
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a regular Quality SPPS with impact record according to the SPPS Severity
Matrix (Appendix 9.1).
2.3.5 Supplier-initiated SPPS
• The issuing location may categorize a SPPS as “Supplier-Initiated” if the
supplier notified the customer of a possible nonconformance prior to the
customer identifying/detecting the problem.
• The customer should enter the Furthest Location in the Value Stream the Non-
Conformance has Reached. The severity of the Supplier Initiated SPPS is
dictated this information (see Appendix 9.1)
• Costs incurred by the customer (e.g. sorting …) may still be charged to the
supplier.

2.3.6 Supplier Alert

A Supplier Alert may be issued by GM in case of:
• The issuing location requests support from the supplier for root cause analysis of a
nonconformance found in the customer’s production process / warehouse when
responsibility has not been established.
• The issuing location detects a slight drift within the tolerances of a part.
• Supplier Alerts are created when the customer answers “No” to the question “Have you
confirmed the Supplier Parts and/or Process are Out of Spec AND it was not the fault of
Customer’s applicable process or tooling?”

There will be no impact to supplier metrics. By default, supplier needs to provide findings
within 15 days. If a response is not received from the supplier within 15 days, the
customer may still issue a Program Management SPPS.
In cases where during the root cause analysis of the nonconformance, supplier
responsibility has been determined, the Customer Issue Owner should change the
response to the “Have you confirmed the Supplier Parts and/or Process are Out of
Spec AND it was not the fault of Customer’s applicable process or tooling?” question to
“Yes”.

2.3.7 Mislabeling
In case of mislabeling (identification error on the part itself) is detected on the
production line which could lead to a wrong usage of the part, following rule will be
followed:
• For the first offense of a supplier Duns, in the last 6 months, the issuer will classify
the SPPS as Multiple Occurrences. The supplier may also be placed in Controlled
Shipping.
• For the second offense of a supplier Duns, in the last 6 months, the issuer the
issuer will classify the SPPS as Repeat Occurrences. The supplier may also be
placed in Controlled Shipping

Note: Parts that are mislabeled and cannot be used in the GM facility will result in a
Quality SPPS being issued.

2.3.8 Unauthorized Change

A supplier changes their Manufacturing process or material without prior approval from
GM which subsequently impacts GM. An Unauthorized Change does not have to result
in a Plant Disruption. Examples of Unauthorized Change SPS records include, but are
not limited to:
• Changes to a manufacturing location
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• Material changes
• Tier 2 location changes
• Engineering changes without prior approval by GM

2.3.9 Sub tier management

A Program Management SPPS may be issued by GM Supplier Quality, when Tier 1
is ineffectively managing sub tier as following:
• Inefficient sub tier management capability
• Multiple SPPS records caused by sub tiers
• Weak control for sub tier changes
• Tiers program management issues including APQP milestones and capacity
issues.

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3. Supply Chain
This chapter refers to all SPPS records impacting the Supply Chain Rank on the
Sourceability Report and does not take into account SPPS records written by CCA /
Aftersales.

Supply Chain SPPS records should only be issued by personnel related to

Manufacturing Operations. Customer Care and Aftersales issues should be
documented in CCA – Quality or CCA – Supply Chain SPPS records.

3.1 References
The following documents are referenced in
this chapter:
• Supply Chain Requirements (GM1700 for GM)

3.2 Supply Chain SPPS definition

This section describes GM’s expectations from Suppliers when there is a (potential)
supply chain disruption to GM facilities.
The impact of a supply chain SPPS record is defined in Appendix 9.2 and will have a
direct, predefined impact on the Sourceability Report.

A Supply Chain SPPS record should be issued when the customer has
verified that a nonconformance on a part shipping, labeling and logistics
service and/or in the supplier-customer relationship was caused by the
supplier.
Nonconformances that may result in a Supply Chain SPPS record include, but are
not limited to, discrepancies or problems with:
• Packaging
• Label
• Shipping
• EDI
• Communication
If required for issue resolution, inspections, sorting and rework activities are carried out
under Supplier’s responsibility but can be checked by GM.

For further details of the nonconformities please refer to

Appendix 9.2. For all Supply Chain requirements please refer
to GM1700 (GM).

3.3 Supply Chain Plant impact

The plant impact is not limited to vehicle plant impact. It also does cover Powertrain
and or Component impact.
• Examples of Supply Chain SPPS events are:
• Single Incident
• Repeat Incident
• Stock Out
• Sequence Change
• Launch
• Incomplete Build
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• Production Downtime (line disruption)

3.4 Supply Chain Cost Recovery

Premium freight is to be covered by the party responsible for the failure in the amount it
occurred (See GM1700 for premium freight responsibilities). Cost recoveries other than
the premium freight cost will be documented in e-SAP Cost Recovery System.

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4. Customer Care & Aftersales (CCA) - Quality
This chapter refers solely to SPPS records written by the CCA / Aftersales organization
and their predefined impact on the Sourceability Report.

CCA – Quality SPPS records should only be issued by personnel related to

Customer Care and Aftersales facilities. Manufacturing operations issues
should be documented in Quality or Supply Chain SPPS records.
4.1 Terms and Definitions
4.1.1 COO – Country of Origin

“Country of Origin” means the country of manufacture, production, or growth of any article of
foreign origin entering the U.S.” Failure to comply with U.S. Country of Origin marking laws &
regulations will result in a debit for:
• All costs incurred in bringing goods into
• All costs to air freight additional materials to cover customer requirements while
nonconforming goods are brought into compliance with marking requirements
• Any fines, penalties, forfeiture actions taken by the U.S. Customs, as well as GM’s
costs to legally defend against such actions as result of

4.2 CCA - Quality SPPS record definition

This section describes GM’s expectations from Suppliers when there is a disruption to
GM Customer Care & Aftersales facilities.

A CCA – Quality SPPS records should be issued when the customer has verified
that a quality nonconformance was caused by the supplier and will have a direct,
predefined impact on the Sourceability Report.

Nonconformances that may result in a CCA - Quality SPPS record include, but
are not limited to, discrepancies or problems with:
• Labeling
• Packaging
• Quality
• Indirect Material
• Customer Satisfaction

If required for issue resolution, inspections, sorting and rework activities are carried out
under Supplier’s responsibility but can be checked by GM.

4.2.1 Labeling
A Primary Nonconformance of Labeling should be selected when the customer has
verified that the supplier did not provide COO Certification, correct COO Marking, or
label a part(s)/ container(s) correctly. Nonconformances include:
• COO Incorrect/Missing
• COO registration missing
• Labeling

4.2.2 Packaging
A Primary Nonconformance of Packaging should be selected when the customer
has verified that the supplier caused a packaging nonconformance which could
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result in part damage or affect the salability of the part.

Nonconformances that may result in a Packaging SPPS record include, but are not limited to:
• Container misappropriation
• Parts not packaged to specification for service

Supplier responsible package designs which do cause part damage or affect the salability
of the part will be issued as a CCA - Quality SPPS record. See 4.2.4 for related requirements.

4.2.2.1 Container Misappropriation

A Primary Nonconformance of Container Misappropriation should be selected
when the container does not function properly. These types of issues do not result
in part damage. Examples of nonconformances in this category that may result in
a SPPS record include, but are not limited to:
• Insufficient container close offs
• Swing arms not closing properly
• Parts not secured (improper hold)
• Part interference issues (dunnage)
• Inadequate part presentation
• Inadequate protection resulting in dirty or wet parts

4.2.2.2 Parts not packaged according specification

A Primary Nonconformance of Parts not packaged to specification for service
should be selected when there are part quality concerns resulting from the
container. These types of issues will ultimately result in part damage.
Examples of nonconformances in this category that may result in a SPPS
record include, but are not limited to:
• Jumbled parts
• Scratches on parts
• Warped / Deformed parts / Broken parts
• Packaging not according to specification (both bulk specification and/or individual
part specification)

4.2.3 Quality (CCA – Quality)

A CCA – Quality SPPS record with Quality as the Primary Nonconformance should be
issued when the customer has verified that a nonconformance was caused by the
supplier.

Nonconformances that may result in a CCA – Quality SPPS record, with Quality
selected as the Primary Nonconformance include, but are not limited to, discrepancies
or problems with:
• Appearance
• Assembly
• Dimensionally Out of Specification
• Fabrication

** Quality and CCA – Quality SPPS records require management approval for every one
issued. This is required to confirm the metrics selected and to confirm the Potential Safety
Concern designation**

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4.2.4 Indirect Material
A Primary Nonconformance of Indirect Material should be selected to document a
supplier responsible problem caused by a non- production supplier (tooling, equipment
repair parts, capital equipment, etc.) at the customer plant. This would include scheduled
work activities that cannot be completed due to the supplier’s failure to meet prior
delivery commitments.

4.2.5 Customer Satisfaction

A Primary Nonconformance of Customer Satisfaction should be issued when the
customer has verified that any other nonconformity, excluding pricing or other
commercial issues, was the result of a supplier’s action or inaction.

Nonconformances that can result in a Customer Satisfaction SPPS record include, but
are not limited to failures regarding:
• Failure to Meet Packaging Specification Submission Dates
• Shipped without PPAP Approval

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5. CCA / Aftersales – Supply Chain

This chapter refers solely to SPPS records written by the CCA / Aftersales
organization and their predefined impact on the Sourceability Report.

CCA – Supply Chain SPPS records should only be issued by personnel related to
Customer Care and Aftersales facilities. Manufacturing operations issues should be
documented in Quality or Supply Chain SPPS records.

5.1 Terms and Definitions

5.1.1 None at this time

5.2 CCA – Supply Chain SPPS record definition

This section describes GM’s expectations from Suppliers when there is a disruption to
GM CCA / Aftersales facilities.

A CCA – Supply Chain SPPS records should be issued when the customer has
verified that a quality or service nonconformance was caused by the supplier and will
have a direct, predefined impact on the Sourceability Report.

Nonconformances that may result in a CCA – Supply Chain SPPS record include,
but are not limited to, discrepancies or problems with:
• Shipping
• Indirect Material
• Customer Satisfaction

If required for issue resolution, inspections, sorting and rework activities are carried out
under Supplier’s responsibility but can be checked by GM.

5.2.1 Shipping
A Primary Nonconformance of Shipping should be selected when the customer has
verified that a shipping or scheduling- related nonconformity was caused by the
supplier.

Nonconformances that may result in a Primary Nonconformance of Shipping include, but are not
limited to:
• Noncompliance to schedule requirements
• Documentation noncompliance, i.e. missing or inaccurate shipping documents
• Nonconformity, or nonconformance caused by transportation carrier
• Nonconformity, or nonconformance caused by Logistical Service Provider
• Electronic communication issues or problems
• Premium shipment issues, i.e. prepayment, coordination, excessive use Schedule
responsiveness warning letter

5.2.2 Indirect Material

A Primary Nonconformance of Indirect Material should be selected to document a
supplier responsible problem caused by a non- production supplier (tooling, equipment
repair parts, capital equipment, etc.) at the customer plant. This would include scheduled
work activities that cannot be completed due to the supplier’s failure to meet prior delivery
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commitments.

5.2.3 Customer Satisfaction

A Primary Nonconformance of Customer Satisfaction should be selected when the
customer has verified that any other nonconformity, excluding pricing or other
commercial issues, was the result of a supplier’s action or inaction.

Nonconformances that can result in a Customer Satisfaction as the Primary

Nonconformance record include, but are not limited to failures regarding:
• Failure to Return Phone Calls
• Failure to honor promised corrective action
• Failure to supply documentation
• Failure to respond to SPPS records in a timely manner

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6. Controlled Shipping
6.1 References
The following documents are referenced in this chapter:
• Automotive Quality Management System Standard (IATF 16949)
• Packaging and Identification Requirements for Production Parts (GM1738)
• Shipping/Parts Identification Label Standard (GM1724)
• Supplier Practical Problem Solving (SPPS) System, User Guide for SPPS Module
• Global Supplier Quality Manual (GM 1927)

6.2 Terms and Definitions

6.2.1 Third Party Provider
A company chosen and approved by the customer, working directly under the
responsibility of the supplier in ensuring product quality.
Activities eligible for Third party providers include, but are not limited to: Controlled
shipping level 2 inspection, sorting, rework.

6.2.2 ESEP provider

A company chosen and approved by the customer for the Enhanced Supplier
Engagement Process.

6.3 Controlled Shipping Entry

6.3.1 General
Controlled Shipping is a demand by the customer that a supplier put in place an
additional, redundant 100%, inspection process at the supplier manufacturing location
to inspect for a specific nonconformance, while implementing a root cause problem
solving process. The data obtained from the additional inspection process is critical
as both a measure of the effectiveness of the secondary inspection process and the
corrective actions taken to eliminate the initial nonconformance.

Two levels of Controlled Shipping exist:

• Controlled Shipping - Level 1 includes a problem-solving process as well as an

additional inspection process. The supplier’s employees at the supplier’s location
enact the inspection process in order to isolate the customer from receipt of
nonconforming parts/material.
• Controlled Shipping - Level 2 includes the same processes as Controlled
Shipping Level 1, with an added inspection process by a third party representing
the customer’s interests specific to the containment activity. The third party is
selected by the supplier, approved by Supplier Quality, and paid for by the supplier.
Suppliers must select the third party from the approved listing maintained by
Supplier Quality.

The 3rd party or Supplier Quality representative will perform audits. The data
obtained from the 3rd party redundant inspection process as well as the audits are
critical as both measure the effectiveness of the secondary inspection process and
corrective actions taken to eliminate the initial nonconformance.

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In special cases, the Controlled Shipping - Level 2 inspection may be required to be
performed outside the supplier’s facilities at a facility deemed appropriate by the
customer and/or Supplier Quality.
6.3.2 Criteria for application for Controlled Shipping - Level 1 or 2
The customer makes the determination whether the supplier can effectively
correct the nonconforming material situation through the SPPS process and
isolate the customer from the problem. One or several of the following issues
may be considered for implementation of Controlled Shipping:
• Repeat SPPS records
• Breakpoint violations
• Supplier’s current controls are not sufficient to ensure conformance to requirements
• Duration, quantity, and/or severity of the problem
• Internal/External Supplier data
• Controlled Shipping Level 1 failures
• Quality Problem in the field (e.g. PRTS, Warranty, …)
• Supply Power bulletins

If the Supplier’s CS1 allows failures to still reach the customer then CS2 is to be
considered. Based on consideration of the above, the Plant Quality Engineering
Manager or SQE decides whether Level 2 would be appropriate.

CS2 may be applied on a broad basis whenever a safety/field action is result of a

Quality System failure.

6.3.3 Controlled Shipping – Process

6.3.3.1 Assessment
• Customer Issue Owner creates a CS1 in related SPPS record, documenting the
reason for the controlled shipping record – ie., nonconformances, observations at
the supplier, the supplier’s internal /external data, or other criteria for the
assessment.
• Customer Issue Owner contacts Duns Owning SQE to request CS2 be added to
existing SPPS record documenting reasoning for the assessment – ie.,
nonconformances, observations at the supplier, the supplier’s internal /external
data, or other criteria for the assessment.
• Customer Issue Owner or SQE create a CS1 or request a CS2 in related SPPS
record, documenting the reason for the controlled shipping record – ie.,
nonconformances, observations at the supplier, the supplier’s internal /external
data, or other criteria for the assessment.
• Customer Plant Quality Engineering Manager and SQE reviews the request /
documentation to ensure it complies with the criteria for application, and if
applicable, makes the decision to place the supplier in Controlled Shipping
Level 2.
• The SQE is responsible for entering CS2 into SPPS under existing SPPS
record. The GM Supplier Quality Manager & Development Manager is
responsible for confirming/authorizing the CS2 request in the SPPS system
• Purchasing, if requested, intervenes to support GM Supplier Quality if the supplier
is uncooperative in implementing CS and/or supplying a purchase contract number
for 3rd party provider per Customer’s requirements

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6.3.3.2 Entry and Implementation (Customer/SQ)
a) CS1:
• Verbally notifies the supplier (staff level) they are being placed in CS1 and a
confirmation letter will follow from the SPPS system.
• Sends via SPPS formal confirmation, Controlled Shipping Level 1 Entry letter,
addressed to the supplier’s Top Management.
• Shall conduct the CS1 Kick-off Meeting with the supplier (via conference call or
meeting).
• The Supplier will run the kickoff meeting (via conference call or meeting).

b) CS2:
• SQ Management, sends via SPPS system, formal confirmation Controlled Shipping
Level 2 Entry letter addressed to the supplier’s Top Management.
• Supplier Quality will host the kickoff meeting (via conference call or meeting). The
CS2 approved provider’s Lead Representative will run the call.

c) Kickoff Meeting Requirements:

• Team Members (minimum): customer, supplier, supplier quality and for CS2, the
approved CS2 provider. Additional members could include engineering, ESEP and
VAA providers.
• Agenda:
o Review the nonconformance that resulted in the CS entry.
o Exchange key contact information
o Review and approve the supplier’s (CS1) or 3rd Party (CS2) containment
process which includes:
• Location of the control CS activity
• Data collection utilizing an I-chart (GM1927-66)
• Communication back to Customer and SQE (including frequency)
• Control of nonconforming product
• Witness marking of parts and containers
• Establish boundary samples and/or specifications for
acceptance/rejection parts.
• Review role of CS 2 Lead Representative (CS2)
• Determine if Provider Quality Engineer (PQE) is required and
frequency of onsite visits (CS2)
• GM QE/SQE training verification. Confirmation CS2 inspectors are
fully trained and equipped to the approved work instructions within
5 days with an updated after 45 days; unless the supplier has exited
CS (CS2).
• Establish exit criteria for the CS. Exit criteria must:
o Include clear and measurable elements
o Be specific and relevant to the nonconformance issues to be addressed
o Require documentation to demonstrate corrective actions taken are
permanent o Remain constant for each nonconformance
o Include workshops if requested by the Customer
• Review and approve the supplier’s escalation/reaction plan for the containment
activity.
• Establish reporting due dates:
o Controlled Shipping Assessments, GM1927-52, within 5 days. Assessments are
performed by:
• CS1: supplier self-assessment or Supplier Quality
• CS2: CS2 provider self-assessment and Supplier Quality
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o Supplier Action Plan, GM1927-79, due within 7 days; supplier’s road map to
exiting Control Shipping within the time frame specified in the CS record.
• Kickoff team shall approve any/all changes, modifications to an existing CS and as
required, update the CS record in SPPS

d) Supplier/CS2 Provider:
• Ensure understanding of the nonconformance (s).
• Initiate containment immediately upon verbal notification, in order to protect the
customer. (Supplier)
• Return the confirmation reply as required (GM 1927-53) by Acknowledging through
SPPS. For CS2, provide a copy of the acknowledgement and purchase order to
the CS2 provider. (Supplier)
• Develop an escalation/action plan.
• Immediately establish a separate containment activity area that is acceptable and
approved by the customer and/or SQE
• Notify additional customer facilities that use the same part, inform them of the
nonconformance, and provide containment activities as necessary.
• Track breakpoints of nonconforming material with a containment worksheet. (Purge
pipeline of suspect material, i.e. at Customer’s facility, in transit and at all storage
locations.)
• Mark individual parts, material, and containers (traceable back to the inspector) as
agreed upon by Customer to identify parts certified for production.
• Provide proper layout, adequate lighting, instruction documents, space and tooling
• to perform Controlled Shipping.
• Commence the inspection activities and display the results in a public and visible
location.
• (CS 1) - Supplier perform a 100% inspection of all suspect nonconforming products
per the agreed upon process to ensure defect free parts are delivered to Customer.
• (CS 2) The 3rd Party Provider performs an additional redundant 100% inspection of
all suspect nonconforming products per the agreed upon process to ensure defect
free parts are delivered to Customer. CS2 is a separate and independent
inspection process from CS1.

e) Buyer:
• If requested, intervene to support GM Supplier Quality if the supplier is
uncooperative in implementing CS and/or supplying a purchase contract number
for 3rd party provider per Customer’s requirements.
• Notify Purchasing Manager if intervention is required.

6.3.3.3 Monitor and Check

Supplier does the following:
• Perform a redundant inspection of all suspect nonconforming products per the
agreed upon process and ensure defect free parts/material are delivered to
Customer.
• Determine and demonstrate the root cause to the customer/SQE
• Develop, implement and validate the permanent corrective actions, along with
improved process controls (i.e., error proofing, layered audits, setup checklists,
standardized work, operator training and certification program, etc.)
• Implement lessons learned by completing SIA Site Read Across.
• Conduct a daily management meeting at the CS location to review the results,
ensure the corrective actions taken are effective, and plan required changes.
• Update all applicable documentation, (i.e. Process Control Plan, PFMEA, Flow
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Diagram, and Standardized Work Instructions etc.).
• Document containment data and fast response in I-chart format (GM 1927-66)
• Communicate the action plan, inspection status, and results of problem resolution
activities to the Customer in a format and with a frequency agreed to by the
Customer representative.
• If the SPPS record has been written around a dimensional issue involving a PQC
(Product Quality Characteristic), KPC (Key Product Characteristic), or critical
measurement point, the data submission frequency shall revert to the frequency
defined in the Early Production Containment (GM 1927-28) plan for a period of 30
production days or until capability is re-established.
6.3.3.4 Verification for Exit
Controlled Shipping Exit Criteria:
Supplier does the following:
• Meet the defined exit criteria.
• Request exit from Controlled Shipping and provide supporting documentation and
assessments on performance and corrective actions to the appropriate SQE.

The SQE and Plant QE (optional QEM and Plant Support Lead) does the following:
• Conduct PCPA (Process Control Plan Audit), or other appropriate Quality Audit, if
applicable.
• Verify that the supplier has met all exit criteria. (May be performed by the 3rd
party.) The Supplier is removed from CS after all exit criteria are met and the
established time has expired without further nonconformances at the Customer
Assembly /Manufacturing Center or coming out of the Supplier’s process.
• Notify the supplier verbally that they have met the criteria and that they will be
removed from CS upon receipt of the CS exit letter
• Complete a CS exit checklist (GM 1927-54), as required, and issue a CS exit letter
via SPPS (GM 1927-58) to the supplier for official notification that they have met
the exit criteria.
• Verify the Supplier has a documented process control validation program in place
(such as job setups, setup error proofing, process error proofing, layered auditing,
operator training & certification etc.)
• Enter the exit information into SPPS.

The intent of the Controlled Shipping containment guidelines is to outline and

describe a rigorous process that insulates the customer assembly plant from the
receipt of nonconforming parts and material. The Controlled Shipping containment
guidelines are as follows:
• Containment area must be highly visible and properly lighted, equipped, etc.
• Containment area must have well defined efficient material flow including clearly
identified areas for incoming and outgoing parts/material.
• Rework will not be done in the containment area. All rework must go through the
CS1-2 process.
• Unless it is not feasible for the most effective containment, containment areas must
be independent of the supplier production process.
• Based on supplier’s performance, controlled shipping level, and exit criteria can be
revised by the kickoff team through written confirmation to the supplier, CS2
provider and updates in SPPS.
• Information boards (See 2.8.4.1) must prominently display nonconformances,
measures, action plan and status, and results of the containment activity.
• Charts must be updated on a daily basis and reviewed by top supplier
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management.
• Problem solving must be formal, data driven and documented.
• Containment operators must have available to them proper job instructions, quality
standards, boundary samples, tools, and equipment, etc.
• Operators must be properly trained.
• Preventive maintenance must be employed if required.
• CS1-2 containers must be rechecked if the container has been tampered with or
opened by non-certified inspector or other personnel.

6.3.3.5 Information Boards

Information boards should prominently display the following:
• Quality standards such as boundary samples, technical specifications, drawings,
etc.
• Nonconformance descriptions and resolution action plans (including the CS2 entry
letter, SPPS record, and Problem-Solving responses)
• Process Control Plan highlighted to show where in the process the nonconformance
occurred.
• Operator instructions, inspector instructions and training records.
• Trend charts and SPC charts, if applicable (I-Chart)
• Inspection Control Plan, Inspection Flow Diagram, and Inspection FMEA.
• The Control Plan Special Characteristics (CPSC) form for inspection item(s) (CS2
only).

6.3.3.6 Default Exit Criteria

Will be used when no other exit criteria is defined. The default criteria is listed below
and must be provided to the customer representative when requesting removal from
Controlled Shipping: a) Twenty (20) working days of data from the containment
activity, and a summary, which verifies that the normal production controls are
effective for controlling the discrepancies identified in the Controlled Shipping activity.
The time begins accumulating from the date of implementation of permanent
corrective action.
• Documentation showing the root cause was identified and verified
• Documentation indicating that corrective action was implemented and validated
• Copies of all documentation revised as required (control plan, FMEAs, process flow
diagram, operator’s instructions, etc.)
• Documentation indicating that every effort was taken to implement error proofing.
• Mandatory, a Read Across (documented on GM 1927- 69) on all SPPS records
indicated on the Controlled Shipping Letter or defined at the Kick- off meeting.

Note: Working day defined as a supplier’s production day for the part(s) in controlled
shipping. Each production day represents a Controlled Shipping inspection day.

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7 Sourceability Report
7.1 Sourceability Calculations
7.1.1 BIQS Level
The Quality performance of a supplier is based on the GM Built In Quality Supply-Based
(BIQS) level, which consists out of:
• Supplier Performance Metrics
o IATF 16949 Certification
o Number of Quality SPPS records (Launch and Production phase)
o Number of Field Actions
o Number of Major Disruptions
o Severity Score
7.1.1.1 IATF 16949 Certification
The IATF 16949 status is fed to General Motors directly from the IATF database.
SCMS downloads the data once per week. The certification status is based on the
DUNS number entered into the database for your certificate (multiples are
acceptable). Questions regarding your IATF certificate status should first be directed
to your IATF Registrar.
7.1.1.2 Quality SPPS records
The impact of a quality SPPS will be defined based on the Customer Impact and the
Furthest Location in the Value Stream the Non-Conformance has Reached. All SPPS
records issued in the last 12 months (6 Months for levels 1,2,3 and 12 months for level
4,5) will be used to calculate the BIQS Level in the Sourceability Report.
SPPS records will be counted toward the BIQS level based on the following criteria:
• SPPS records will be counted toward the BIQS level based on the following
criteria:
o Phase – Production, Launch
o Customer Impact – All except SQ&D Support Cost, Program Management, Line
Accumulation, Supplier Initiated that have not been installed or caused downtime
o Confirmed Quality Issue - Not a Supplier Alert

7.1.1.3 Field Actions

A special cause product deficiency in the field, with confirmed supplier responsibility,
that results in implementation of Extraordinary Warranty. Field Action records are
created and stored in the Supplier Certification Management System (SCMS).

7.1.1.4 Major Disruptions

Major Disruptions are based on the Customer Impact and the Furthest Location in the
Value Stream the Non-Conformance has Reached selections. See Appendix 9.1 for
Severity metric and identification of Major Disruptions.
Customer Impacts that include SQ&D Support Cost, Program Management, Line
Accumulation and Supplier Initiated that have not been installed or caused downtime are
not considered for Major Disruptions.

7.1.1.5 Severity Score

When a Quality SPPS record is issued to a supplier, the issuing location shall
accurately record the Customer Impact and Furthest Location in the Value Stream the
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Non-Conformance has Reached. The Severity Matrix will be used to determine the
severity score for the incident. Severity scores are based on severity matrix (see Appendix
9.1).

7.1.2 Supply Chain Rank

For supply chain performance each supplier is given a credit of 100 points. Every
nonconformance deducts defined and fixed number of points. For failure code and
failure weight please refer to the Appendix 9.2.

The impact of a supply chain SPPS record will be defined based on the Supply
Chain Plant Impact. The total sum of all SPPS records of the last 6 months will be
used to calculate the effect on the Sourceability Report.

7.1.3 CCA – Quality

For CCA / Aftersales performance each supplier is given a credit of 100 points. Every
SPPS record deducts defined and fixed number of points. Impact can lead to sources
being ranked red, or non-sourceable, on the Sourceability Report if they go below 75
points in the CCA/Aftersales Quality column. Each SPPS record a failure weight from
1.0 through 12.5 based on the failure code. (For failure code and failure weight
please refer to Appendix 9.3)

The total sum of all SPPS records of the last 6 months will be used to calculate the
effect on the Sourceability Report.

7.1.4 CCA - Service

For CCA / Aftersales performance each supplier is given a credit of 100 points. Every
SPPS record deducts defined and fixed number of points. Impact can lead to sources
being ranked red, or non-sourceable, on the Sourceability Report if they go below 75
points in the CCA/Aftersales Service column. Each SPPS record has a failure weight
from 1.0 through 12.5 based on the failure code. (For failure code and failure weight
please refer to Appendix 9.4)
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The total sum of all SPPS records of the last 6 months will be used to calculate the
effect on the Sourceability Report.

7.1.5 MMOG/LE
Global MMOG / LE ™ (Materials Management Operations Guidelines / Logistics
Evaluation) is a Supplier Self-Assessment Tool. Used by both supplier and GM and
providing comprehensive evaluation of supply chain performance and capability.

Suppliers are required to supply the MMOG/LE assessment per each supplier DUNS in
order to be eligible for new business nomination.

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8 Cost Recovery
8.1 Cost Recovery Process (applies to regions using e-SAP to
document cost recovery)

8.1.1 General
The customer uses the Cost Recovery process to recover costs incurred as a result
of a supplier’s nonconformance on issues occurring before vehicles are shipped to
commerce (in plant).

It is important that cost recoveries are created in a timely manner. This ensures
accuracy of costs and allows for timely resolution of cost recoveries. Initial
submission of a cost recovery line item shall be entered within 10 working days,
beginning the day after the issuance of the SPPS record. All cost details pertaining to
the cost recovery may not be known at the time that the cost recovery line item is
entered.

The creation of an SPPS shall be notification to the supplier that a cost recovery is
likely being entered.

The initial submission in eSAP should contain all known details with a brief
explanation of details to come, in the comments section of the Cost Recovery. In the
case that issues are still being contained and corrective actions are being taken, for
example, all cost details may not be known. Examples of these details include, but
are not limited to: man-hours, downtime, vehicles or units impacted and investigation
costs. These cost recovery details should be entered as soon as they are known, and
updated until the Cost Recovery is finalized.

The cost recovery line item will be determined complete when the Manager has
approved the Cost Recovery and the status has changed from “Pending Manager
Approval” to “Response Pending”.

8.1.2 Cost Limits and Restrictions

8.1.2.1 Total
Total ACTUAL/incremental costs will be determined by each initiating location

8.1.2.2 Man-hours
Man-hours shall be charged at the rate currently in effect at the location executing the
cost recovery.

8.1.2.3 Plant downtime

Downtime shall be recovered on all production and Pre-Production Operations (PPO)
lines, including, but not limited to, main lines, subassembly lines, buffer lines, feeder
lines, etc. Downtime instances can fall into two categories, characterized by the
significance of production time lost. Category 1 - Downtime or lost units can be made
up during the disrupted shift (i.e. no additional scheduling of the plant and no
premium time is required to make up lost units). Category 2 – Downtime or lost units
cannot be made up during the disrupted shift and requires additional production hours
to make up lost units. Both instances of downtime and related costs are addressed

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below.

8.1.2.3.1 Category 1 - Downtime made up during the disrupted

shift
The charge per minute of downtime is to recover the variable costs (variable plant
operating costs to include variable wages and benefits) which are being incurred
while the impacted line is not producing product. Downtime shall be charged at $900
USD per minute (US), $600 USD per minute (Canada), $200 USD per minute
(Mexico), and $600 USD (South America). Other regions or locations shall recover at
local plant calculated actual rates.

8.1.2.3.2 Category 2 - Downtime requiring scheduling of

additional production hours to make up lost units
(based on the GM Corporate M Schedule)
The charge per minute of downtime is to recover entire plant costs when straight time
production is not available to make up units lost during downtime instances.
Examples of these charges include variable wages, variable/fixed benefits, straight
time, utilities, outside contractors supporting overtime production, and overtime
premiums.
Saturday Overtime - Downtime shall be charged at $1,050 USD per minute (US),
$750 USD per minute (Canada), $350 USD per minute (Mexico), and $800 USD per
minute (South America). Other regions or locations shall recover at local plant
calculated actual rates.

Sunday Overtime - Downtime shall be charged at $1,200 USD per minute (US),
$900 USD per minute (Canada), $400 USD per minute (Mexico), and $1,050 USD
per minute (South America). Other regions or locations shall recover at local plant
calculated actual rates.

8.1.2.4 Stock-out Charges

Stock-out charges shall be assessed based on the man-hours expended to correct or
retrofit vehicles or units.

8.1.2.5 Premium Freight

Premium freight is to be covered by the party responsible for causing the issue in the
amount it occurred. Does not apply to Warranty Cost Recoveries.

8.1.2.6 Other Costs

Other costs associated with the impact of a nonconformance that results in additional
cost to the customer are eligible for a cost recovery request. These costs include, but
are not limited to the following:
• Expenses incurred by the customer for travel to the supplier location
• Re-billing of supplier responsible costs attributable to Quality Major
Disruptions
• Incidental laboratory, machining, reworks or retrofit costs
• Rescheduling of vehicle orders
• Direct Run Rate (DRR) impact costs
• Global Customer Audit (GCA) impact costs
• Delayed revenue impact attributed to holding vehicles in yards
• Customer’s Structural Costs associated to SPPS records
In such cases, these charges shall have complete supporting documentation.
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8.1.2.7 Costs that are ineligible

Costs that are ineligible for a cost recovery request include, but are not limited to, the
following:
• Excessive or unreasonable man-hours
• Cost of nonconforming scrap parts.

8.1.2.8 Manufacturing and Service Part cost recoveries

Manufacturing and Service Part cost recoveries, with no supplier response, can be
debited through the financial organization to the supplier after 15 working days from
issuance of cost recovery.

8.1.2.9 Cost recovery charges issued against GMNA Containerization

Cost recovery charges issued against GMNA Containerization are issued for the
purpose of tracking costs associated with returnable dunnage. GMNA is not a cost
center and has no funding allocated toward the payment of cost recoveries.

8.1.3 Cost Recovery Response

The supplier shall provide a response to any cost recovery request issued to them by
the customer within 15 working days of cost recovery issue date. If a supplier agrees
with the cost recovery and approves with the financial team, regardless of the dollar
amount, a debit will be initiated.

8.1.4 Appeal Process

The supplier may appeal a cost recovery request. To appeal, the supplier shall use
the following process.

If the supplier does not agree with the e-SAP Cost Recovery record as written, and
the supplier wants to pursue the appeal process, the appeal should be directed to the
Management at the issuing location and noted in the supplier’s response to the
financial team within 15 working days.

8.1.4.1 Appeal Process concluded within six weeks

The appeal process shall be concluded within six weeks from the date the cost
recovery was issued.

8.1.4.2 The supplier shall initiate any appeal within 15 working days
The supplier shall initiate any appeal within 15 working days of issuance of the cost
recovery request by contacting the Management at the issuing location initiating the
request and providing written objective evidence. Written objective evidence shall be
in the form of an E-Mail. Failure to reply or appeal within 15 working days may result
in an automatic debit of the cost recovery amount.

8.1.4.3 The supplier shall provide objective evidence

The supplier shall provide objective evidence that the charge is inaccurate. If the
customer and supplier agree on a revised cost, the cost recovery request shall be
amended by the issuing location and the revised amount shall be debited or invoiced
to the supplier.

If no agreement is reached between the customer and supplier, the supplier may then
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appeal to the customer purchasing buyer. The customer purchasing buyer will set up
a meeting with the supplier, customer and customer purchasing buyer. If the
customer purchasing buyer, customer and supplier agree on a revised cost, the cost
recovery request shall be amended and the revised amount shall be debited or
invoiced to the supplier. If no agreement is reached within six weeks of issuance of
the cost recovery request, and the customer has approved no extension, the original
cost requested may be debited or invoiced to the supplier. All Cost recovery requests
equal to or greater than US $50,000, where agreement between the issuing location
and the supplier cannot be reached, shall be approved by the requestor’s Purchasing
Director before debit to the supplier.

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9 Appendix
9.1. Quality SPPS Severity Matrix

9.2. Supply Chain Metrics

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9.3. CCA – Quality Metrics

9.4. CCA – Supply Chain Metrics

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9.5. SPPS (Supplier Practical Problem Solving) System Status Definitions

Knowing the status definitions are helpful when navigating this system. If a record goes through the
work flow without being receiving a Customer Assessment or Controlled Shipping, it will start with a
status of Issued, moving to Containing, then Analyzing, Planning, Implementing, and Approving. If
this is a Supply Chain record, after Approving the path will go to Closed. For Quality record, after
approving is Implementing SRA, then Verifying, then Closed.

Supplier Alert - SPPS record has been created by the Customer, but the Customer answered “No”
to the Have you confirmed the supplier parts and or process are out of spec and it is not the fault of
the customers applicable process or tooling question. The Customer is asking for help to determine
an issue. Supplier Alerts do not change status unless determined to be a Supplier issues and the
question answered “No” is changed to “Yes”.

Issuing - the SPPS record has been submitted into the workflow using the save button on the add
SPPS record screen by the Customer. The supplier has not responded to the SPPS record.

Containing - the Supplier has started the containment actions but has not yet completed the
Containment Action for all identified locations, including the Supplier location and all Customer
Locations for that SPPS Record. The status will change to Containing when a Supplier edits at least
one containment record.

Analyzing - containment actions have been completed for all identified locations, including the
Supplier location and all Customer Locations. This includes entering conforming material dates where
containment is needed.

Planning - the Problem Solving Questionnaire is completed with all required questions and the Root
Cause has been entered. The containment actions have been completed for all identified locations,
including the Supplier location and all Customer Locations, including conforming material dates where
containment is needed.

Implementing - Supplier Improvement Activities have been created with a minimum of at least one
Prevent, Predict and Protect Supplier Improvement Activity. The Problem Solving Questionnaire is
completed with all required questions and the Root Cause has been entered. The containment
actions have been completed for all identified locations, including the Supplier location and all
Customer Locations, including conforming material dates where containment is needed.

Approving (Supply Chain/CCA-Supply Chain) status for Supply Chain Improvement Activities have
been created with a minimum of at least one Prevent, Predict, and Protect Supplier Improvement
Activity. The Problem Solving Questionnaire is completed with all required questions and the entry of
the Root Cause is completed. The containment actions have been completed for all identified
locations including Supplier location and all Customer Plants including conforming material dates
where containment is needed. The record cannot have an open controlled shipping.

Approving (Quality/CCA-Quality Types) The Improvement Activities have been completed (Actual
Completion date) with a minimum of at least one Prevent, Predict and Protect Improvement Activity.
All Site Read Across Improvement Activities must have a minimum of Target Completion Date for
each BIQS Elements selected for the 3P Improvement Activity. The Problem Solving Questionnaire is
completed with all required questions and the Root Cause has been entered in the SPPS system.
The containment actions have been completed for all identified locations including Supplier location
and all Customer Plants, including conforming material dates where containment is needed. The
record cannot have an open controlled shipping.
To approve a Quality or CCA - Quality record it must have Management Confirmation.
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Implementing SRA (Quality/CCA-Quality Types only) - All 3P Supplier Improvement Activities

have been Approved and all Site Read Across Improvement Activities must have a minimum of
Target Completion Date entered for each BIQS Elements selected for the 3P Supplier Improvement
Activity. The Problem Solving Questionnaire is completed with all required questions and then the
Root Cause has been entered. The containment actions have been completed for all identified
locations, including the Supplier location and all Customer Locations, including conforming material
dates where containment is needed.

Verifying (Quality/CCA-Quality Types only) - All Site Read Across SIA’s have Actual Completion
Dates entered. All 3P Supplier Improvement Activities have been Approved. The Problem Solving
Questionnaire is completed with all required questions and the Root Cause has been entered. The
containment actions have been completed for all identified locations, including the Supplier location
and all Customer Locations, including conforming material dates where containment is needed.

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10. Revision History

Revision History – March 2019 Rev 8.0

Old Section New Section
Number/ Document Number/ Document
Number Number Section Description Change

Entire Document Entire Document Entire Document Rewrite of the entire document
for SPPS (Supplier Practical
Problem Solving) system.
Last document revision- Sep
2018, Revision 7.2

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