Valmet AutomotiveQuality Management

March 2015

Valmet Automotive March 20152

INTERNAL

Valmet Automotive

Management system approvals

Based on the company policies Fulfill the relevant quality,

environmental and safety standards as well as the specific requirements of customer

Process-oriented Core processes

- Product launch - Serial production

The quality system fulfils the following standards

- ISO/TS 16949:2009 (Quality) - ISO 14001:2004 (Environment) - OHSAS 18001:2007 (Safety)

The quality, environmental and safety systems are certified by a third party

March 2015

INTERNAL

3

Valmet Automotive

Management system approvals

March 20154

Quality:1995 ISO 90011999 QS-90002003 ISO/TS 16949

Environment:2001 ISO 14001

Safety:2012 OHSAS 18001

INTERNAL

Valmet Automotive

Quality objectives

The key targets are set and reviewed together with customer

Internal targets are set by the management based on the key targets

Action plans to achieve the targets Management monitors the achievement of the

targets and improvement plans Company management sets and reviews company-

level improvement projects Process owners set and review process-related

improvement projects

March 20155

INTERNAL

Valmet Automotive

Main process KPIs

FTOK (first time OK rate-%) Product audit (index, defect/car) Delivery accuracy (%) Productivity (h/car)

These main KPIs are base for our bonus-system.

March 20156

INTERNAL

Valmet Automotive

Quality audits System audits (internal)

- Effectiveness of the management system is systematically reviewed

- Management sets the plan and reviews the results and corrective actions

Process audits - To evaluate the effectiveness of the production process

and sub-processes - Based on an audit plan and done by experts from the

production departments - Reviews of audit findings and preventive and corrective

actions are managed by the production departments

Product audits - Performed by the quality department according to the

procedure of customer.- Performance of the product audit is secured with

monitoring audit.

COP audits- Done by authorities from different markets (China, Japan, ...)

March 20157

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Valmet Automotive

Management reviews Quality issues

March 2015

VA Management reviews

Management team - Target setting (goals and objectives)

Production management team

- Customer satisfaction- Follow-up of the target fulfillment- Steering of development projects

- Steering and reviewing the business line's/plant's operations

- Steering of the management system

Local department meetings

- Steering of the plant operations- Steering of continuous improvement projects

- Customer service- Follow-up of the target fulfillment

Production meetings

- Steering of the plant operations - Production conditions

- Customer service- Short term action

8

INTERNAL

Quality assurance in production

Valmet Automotive

Quality management

Quality control plan is the basis for the process control supported by work and inspection instructions

Team members on the line are responsible for the assembly and the quality of their work

Separate inspection stations after major production steps Final approval of the cars is performed according to the

standards and procedures

Quality reporting system provides immediate feedback of the quality for corrective actions

March 201510

Serial production control

INTERNAL

Valmet Automotive

Product audit Quality control points End of line tests Material laboratory analysis Online/offline (3D) mesurings Control of process parameters

Quality assurance plan Quality control plans FMEA Internal quality targets Operational & work instructions Preventive maintenance Production and material planning

Customer quality targets Product specifications Supplier part specifications The standards / Regulations

Management reviews Process audits System audits Quality cost report Quality-committee Quality improvement meetings

Action plans Problem solving process Improvement projects (8D, Six sigma) Change management Market feedback process Control of non-conforming products

Quality assurance during serial production

March 2015

Customer requirements

Process definitions

Quality control &

measurements

Continuous improvement

Quality management

11

INTERNAL

Valmet Automotive

Quality control stations

The purpose of the control activities is to prevent defects from advancing in the process and to ensure that the quality of the product is acceptable for the next process phase.

The inspections and tests which are carried out during the manufacturing process are documented in the quality control plans. With these inspections and tests the compliance of the product with customer requirements is verified.

After every main process phase agreed product characteristics are inspected in separate internal quality control stations to ensure that these conform to stated specifications

Feedback to production line according to the feedback process

March 2015

INTERNAL

12

Valmet Automotive

Process follow-up / analysis

Q-targets for each process (body, paint, assembly, material, design) Q-costs are reported at management meetings Problem analysis are done acc. 8D-method Weekly Q-improvement meetings, reporting with 8D Continuous improvement process SixSigma method in use (3 BB at Valmet) Q-Committee monthly meetings 3D measurements (off-line)

- 3 measuring units (DEA and Johansson)- 2 portable measuring units (Faro-arm)

On-line measurements at production line (body)

March 201513

INTERNAL

Valmet Automotive

Reaction priority1. Design change2. Process change3. Control

Production quality assurancePreventive & corrective actions in production phase

14

PFMEA- New product- Process change

Flow chart- New product- Process change

Control plan- New product- Process change- New control methods

Results/feedback- Production- Final audit- Customers

Operator instructions- New product- Process change- New control methods

Failure ranking list

March 2015

INTERNAL

Valmet Automotive

OnlineMeasuring

Station

Quality AuditBody

Metal & BodyappearanceInspection

ECInspection

PrimerInspection

Top coatInspection

Cpk-Values / Offline Measuring Station

Body shop Paint shop

ECOSLM 2InspectionECOS

PaintInspection

LM 3Inspection

Watertest

Wheel &Light

alignment

DeliverycheckDiagnosisECOSTest drive

UnderbodycheckDiagnosis

Roller test

Assembly shop

Product Audit

offline

LM 1Inspection

Final Insp.Paint

Production quality assurance

March 201515

INTERNAL

Valmet Automotive

Body shop / Quality conceptMercedes A-class manufacturing

16

ALUSTALINJA

InLine Mittaaminen OffLine Mittaaminen Adaptiivinen hitsausvalvonta Ultrani hitsauslaaduntarkastus OnLine liimakamerajrjestelm

ETUPLINJA

OffLine mittaus Adaptiivinen hitsausvalvonta Ultrani hitsauslaaduntarkastus OnLine liimakamerajrjestelm Liimauksen visuaalinen tarkastus

TAKAPLINJA

OffLine mittaus Adaptiivinen hitsausvalvonta Ultrani hitsauslaaduntarkastus OnLine liimakamerajrjestelm Liimauksen visuaalinen tarkastus Lyhytkaarihitsaus visuaalinen tarkastus Lyhytkaarihitsausmomenttitarkastus

SIS- JA ULKOSIVULINJAT

OffLine Mittaaminen Adaptiivinen hitsausvalvonta Ultrani hitsauslaaduntarkastusLiimauksen visuaalinen tarkastus Visuaalinen pintalaatutarkastus

VIIMEISTELYLINJA

Visuaalinen pintalaatutarkastus Ovien pulttien momenttitarkastus Luukkujen sovitemittaus Hitsaamon laadunmittaus (LM)

OVILINJA

OffLine Mittaaminen Adaptiivinen hitsausvalvonta Ultrani hitsauslaaduntarkastus Liimauksen visuaalinen tarkastus Visuaalinen pintalaatutarkastus Laserhitsaus - VISIR

KORILINJA

InLine Mittaaminen OffLine Mittaaminen Adaptiivinen hitsausvalvonta Ultrani hitsauslaaduntarkastus OnLine liimakamerajrjestelm

KESKILATTIALINJA

OffLine Mittaaminen Adaptiivinen hitsausvalvonta Ultrani hitsauslaaduntarkastus OnLine liimakamerajrjestelm Ksnhitsaus visuaalinen tarkastusKsnhitsaus momenttitarkastus

LUUKKULINJA

Valssauksen visuaalinen tarkastus OffLine Mittaaminen Adaptiivinen hitsausvalvonta Ultrani hitsauslaaduntarkastus Liimauksen visuaalinen tarkastus Visuaalinen pintalaatutarkastus Laserjuottamisen visuaalinen tarkastus

March 2015

INTERNAL

Valmet Automotive

Body shop / QualityGeometry measuring concept

ZB Heckboden

ZB Vorbau

ZB Hauptboden

ZB Unterbau

ZB Seitenwand IN RE

ZB Seitenwand IN LI ZB Seitenwand AU VST LI

ZB Seitenwand AU VST RE

ZB Fahrertr RE

ZB Fahrertr LI ZB Fondtr LI

ZB Fondtr RE

ZB Rckwandtr

ZB Z2.3ZB Z2.1

ZB Radeinbau VST RE ZB Stirnwand ZB Radeinbau VST LIZB Radeinbau LI

ZB Lngstrger VST HI LI

Quertrger LI

Quertrger RE

ZB Lngstrger VST HI RE

ZB Radeinbau RE

ZB Seitenwand AU LI

ZB Seitenwand AU RE

010A01005A01L 005A01R

025

305A01L

305A01R

570

630

245

340

320A

320A

325A

325A

425L 435L410R

410L 425R

435R

790745

530

530

530

530

ZB Radeinbau VO LI ZB Lngstrger LI

Lngstrger IN OB VO LI Lngstrger IN OB VO RE

ZB Radeinbau VO RE ZB Lngstrger RE002R01002L01001L01 001R01

003R01 003L01

= OffLine measuring= InLine measuring= Fit&flush measuring

March 2015

560

ZB Motorhaube

17

INTERNAL

Valmet Automotive

Paint shop process description and Quality controlsCONFIDENTIAL

Degreasingspray

Degreasingspray

Degreasingdip

Degreasingdip

RinsesprayRinsespray

Activationdip

Activationdip

Phosphatedip

Phosphatedip

Rinsedip

Rinsedip

RinsesprayRinsespray

Passivationspray

Passivationspray

Rinsedip

Rinsedip

RinsesprayRinsespray

EC ovenEC oven

DIW Rinsespray

DIW Rinsespray

UF Rinsedip

UF Rinsedip

UF Rinsedip

UF Rinsedip

UF Rinsespray

UF Rinsespray

CathodicimmersionCathodic

immersionRobot sealing/

SAMRobot sealing/

SAMManualsealingManualsealing

Sealing oven

Sealing oven

EC touch-up (dry)

EC touch-up (dry)

Off-linerepair

Off-linerepair

ManualwipingManualwiping

ManualsprayingManualspraying

ESTAapplication

ESTAapplication Back-upBack-up Flash-offFlash-off

Primeroven

Primeroven

Primer touch-up(Moist)

Primer touch-up(Moist)

Top coatoven

Top coatoven Flash-offFlash-off Back-upBack-up

Robotclear coat

Robotclear coat

Heatedflash-offHeatedflash-off

Recip.base coat

Recip.base coat

ESTAbase coat

ESTAbase coat

Manualbase coatManual

base coatManualwipingManualwiping

FinishingFinishing RatingOK / NOK

RatingOK / NOK

NOK lineNOK line

OK lineOK line

Spot repairSpot repair

SandingrerunnersSandingrerunners

To generalassembly

Frombodyshop

Audit2

Audit4

Audit1

Audit3

Pre-treatment

ECSealing

Base coat (WB)

Primer surfacer (WB)

Cavitytreatment

CavitytreatmentControlControl

Masking station

Masking station

Phosphatespray

Phosphatespray

RobotsealingRobotsealing

Sealing touch-upSealing touch-up

Clear coat

Off-linerepair

Off-linerepair

BS surface touch-up

BS surface touch-up

Cavity treatment

oven

Cavity treatment

oven

INTERNAL

March 201518

Valmet Automotive19

Quality concept Paint ShopPRETREATMENT

Random sample min 1 body/shift

Phosphate surface quality Phosphate coating weight EC surface quality EC layer thickness EC roughness

SEALING & SAM

Line check - All vehicles

Robot seams position Robot seams completeness

Quality Audit 1 (Random sample min 1 body/shift ) Body shop surface quality EC surface quality (body & paint) Seam sealant positioning Seam sealant completeness Seam sealant leak tightness Seam sealant optical appearance SAM positioning SAM completeness SAM film thickness

EC TOUCH-UP

Line check - All vehicles

EC surface quality SAM completeness Visible area seam sealant

KPIs-FTOK % EC-Quality Audit 1

PRIMER

Line check - All vehicles

Masking tape completeness Primer coat surface quality

Quality Audit 2(Random sample min 1 body/shift ) EC touch up quality Visible area seam sealant appearance Primer coat surface quality (body & paint) Masking tape positioning Masking tape completeness

KPIs-FTOK % Primer- Quality Audit 2

TOP COAT

Line check- All vehicles

Top coat surface quality Top coat appearance

Quality Audit 3 (Random sample min 1 body/shift)

Primer touch up quality Top coat surface quality (body & paint) Visual color assessment Colorimetry Film thickness (EC, primer coat, base coat and clear coat)

KPIs-FTOK % Top coat-- Quality Audit 3

PAINT SHOP FINISH

Line check - All vehicles

Top coat finishing quality

Quality Audit 4(Random sample min 1 body/shift)

Orange peel (LW, SW, DOI) Cavity wax completeness Optical appearance of the seam sealant in the visible area SAM completeness Paint surface defects Body shop surface quality

KPIs-FTOK % Paint Shop Finish-Quality Audit 4

March 2015

INTERNAL

Valmet Automotive

OS

TSE

NSOR

CAB

INET R.C.

UNIT 2

R .C .UN IT 1

ELEC

TRIC

CAB

INETS

HUOLT O

R. C.

U NI T 1EL EC TR IC C AB INE TS

Quality conceptAssembly shop

20

All vehicles

5 cars a day

defect/car

Quality audit

Check:- All cars- CPA-focus points, feedback from previous days/weeks

defect/car

line 7 Q-check

Audit 1

All vehicles

Check:-Line 1 and IP-preassys most important and safety-relevant assemblies

KPIsFTOK % & QC

Audit 2

All vehicles

Check:-Line 2 and Chassis-preassys most important and safety-relevants assemblies

KPIsFTOK % & QC

Audit 3

All vehicles

Check:-Line 3 and doors-preassys most important and safety-relevants assemblies

KPIsFTOK % & QC

Water test

All vehicles

Check:--Leaks- optical and manually

KPIsFTOK %

Roller test

All vehicles

Check:-drivability, functions, noises

KPIsFTOK %

Paint surface

All vehicles

Check:-damages, scratches, assembly marks

KPIsFTOK %

Test Drive

5% test track100% cobblestone drive

Check:-drivability, functions, noises

KPIsFTOK %

Line 8

All vehicles

Final inspectionCheck:-deliverable-chassis card OK-vehicle corresponds the order-delivery condition and cleanliness-final diagnose

KPIsFTOK %

Process flow

Process flow

Process flow

Process flow

All vehicles

All vehicles

Rework

All vehicles

5 % of cars

defect/car

High pressure water test

March 2015

INTERNAL

Valmet Automotive

Quality Assurance Plan Assembly shop

March 201521

Line 1 Quality Check 100%

Line 2 Quality Check 100%

Line 3 Quality Check 100%

Line 7Q-check defined points (CPA etc.)100%

Water Test 100%

Wheel alignment & Roller Test 100%

Paint surface inspection 100%

Test Drive (test track 5%, cobblestone 100%)

Extra Quality Check 5 cars

High pressure water test 5%Product Audit

2 cars/dayLine 8 100%

INTERNAL

Valmet Automotive

Measuring center

March 2015

INTERNAL

22

Valmet Automotive

Measuring center equipment

Coordinate measuring machines (CMM)- Dual arm machine with four movable measuring pallets

Measuring range X=6000 mm, Y=2797 mm, Z=2400 mm- Portal machines

Measuring range X=1500 mm, Y=1500 mm, Z=800 mm Measuring range X=700 mm, Y=450 mm, Z=350 mm

Other equipment- Spring testing gauges- Dial indicator gauge- Block gauges- Pressure calibrators- Length measuring machines

March 2015

INTERNAL

23

Valmet Automotive

Material laboratoryProvides services to all VAs departments. It gives support for monitoring processes of the paint shop and it helps introducing new materials into production. The laboratory also provides its expertise to different VAs projects as required. The main activities of the material laboratories can be divided following categories

- Surface treatment laboratory Alignment test programs for the new materials Acceptance tests for all base coats and clear coat batches (including e.g. color, mechanical properties) Climate and corrosion tests (e.g. according to VDA-standards)

- Chemical laboratory Process baths and sewage water analysis / monitoring Chemical managements (e.g. VAs MSDS register)

- Metal laboratory / Rubber and plastic laboratory Tensile strength tests, compression stress test (including textiles and plastics) Hardness measurements (Vickers, Brinell, Rockwell, Shore A, Shore D)

- Cooperation together Authorities Material suppliers - SQ activities, analysis / testing services Universities and research centers - e.g.

o Outotec , Research Center material technology and analytical laboratoryo VTT Technical Research Center analytical service (e.g. metal analysis and other problem solving)

March 2015

INTERNAL

24

Product quality

Valmet Automotive

Product quality improvement meetings

Product audit- Review of each car daily

Weekly product quality improvement meetings with management- Prio-issues from product audit- Task force teams for selected issues- Problem analysis are done acc. to 8D-method- Reporting with 8D-form

Weekly QM-meeting with all quality managers- Review of the results vs. internal targets and corrective actions

March 201526

INTERNAL

Valmet Automotive

Product audit process

27 March 2015

AuditR&D Prod.Prod. DeliveryDelivery

P

DC

A P

DC

A

Customersaudit process

Monitoring

Results

A/B/C-faults

Improvementpotential

Final audit

Ran

dom

sam

ple

1 %

Legal req., functions

Optical

Independent activity

Corrective actionsCorrective actions operationsCustomerInternal operationsSuppliers

Audit

INTERNAL

Valmet Automotive

Product audit action plan

March 2015

Perhaps Next WS visit Immediate

Disturbance Walk home failureComplaint

Optical Functional

Depends on the repair costs

Customerreaction

Type of defect

Delivery BlockDefect Analysis / Immediate Actions

ReworkStatistical

Actions

Quality Improvement

PotentialDefects

(Audit, Quality Measuring)Defect

weighting

Lega

lTe

st d

rive

inte

rrup

tion

Safe

ty

INTERNAL

28

Valmet Automotive

Handling of major and systematic defects

1. Defect added to body, paint or chassis card and issue reported verbally and in written format to the defect source.

2. Defect stopped and inspections & repair activities started. Sampling inspection of 25+25 cars. Delivery stop if defect found from already approved cars.

3. Root cause analysis and corrective actions to prevent the issue happening again. Analysis and actions reported to stakeholders.

4. Solution approval and additional actions if needed. Defect creator informed.

March 201529

Defect

1. Defect added to body, paint or chassis card

Defect founder

Area where the defect was caused

2. Defect stopped, inspection & repair

3. Analysis + corrective & preventive actions

Quality Manager 4. Approval and additional actions if needed

INTERNAL

Valmet Automotive

Market feedback

30 March 2015

Car owners Dealers OEM-customers

Warranty info Leasing cars Test reports Dealer reports JD Power Suppliers Audits

Researchcompanies

Press

Receive, summarise and inform

(contact person)

Define priority(task force)

Define root causeand responsibility

(task force)

Plan and implementcorrective actions

(responsible)

Verify and approvecorrective actions

(task force)

Reporting Reporting Customer satisfaction

INTERNAL

Valmet Automotive

Delivery stop process

This process is used, if there would be found a critical defect in the product audit, in the production or in case the legal requirement is not met.

Cars are blocked and deliveries to the harbour and further will be stopped until the corrective actions are done.

The decision for a delivery stop is done by QM / product quality.

By using this process it will be secured that all the possibly affected cars will be checked and reworked before delivery to the customer.

March 2015

INTERNAL

31

Valmet Automotive

Daily Information Flow at VA Production Depts

32

Production management

morning round

Production morning walk

Info

rmat

ion/

Supp

ort

Repo

rtin

g/Es

cala

tion

Daily at: 09:20-10:00 Participants: PRD-VP, PRD-D, QS, LOG,

FIN, PRD-C, MThemes: Volume, Quality, Productivity,

Availability of parts/materials,Escalation

Communication

Daily at: 07:00-08:50 Themes: Volume, Quality,

Productivity, Availability of parts/materials, Escalation

TL+ OPS: 07:10 - 07:40

TL+ SV, ENG: 07:40 - 08:10

SV+ PRD-D, LOG, SQ, M, QS, ENG: 08:20 - 08:50

AbbreviationsPRD-VP Director of Production PRD-D Department Director QS Quality representant LOG Logistics SQ Representant of Supplier Quality FIN Representant of FinanceENG Representant of Process EngrgPRD-C Representant of Prodn ControlM Representant of maintenanceSV Supervisor of a Prodn area TL TeamleaderOPS Operator on a station

OPS: 07:00 - 07:05

March 2015

INTERNAL