TDK Europe: Quality and Environmental Assurance

1. TDK Europe: Quality and Environmental Assurance Claim handling system 20/06/07

2. TDK business Activity: TDK is dealing in a Buy and Sell model: -We purchase goods mostly in Far East and Middle East area -Goods are mostly Optical discs products (CD-R, DVD’s) but also electronic equipments such as Speaker systems, headphones sets, USB devices as well as Batteries and accessories.

3. TDK business Activity: TDK is performing Repackaging activities at Bascharage facility -TDK can repack any kind of product. Promotional items, specific packing or palletizing. Those customized packaging are done in our facilities.

4. TDK QA activities Activity: we do -Product evaluation and homologation process -Manufacturing Lines evaluation -OQC report analysis -Receiving inspection -Supplier’s audit During those various product evaluation phases, problems are sometime encountered: claim has to be addressed to the supplier.

5. Claim to supplier handling TDK has developed its own database so called the “Non conformity database” on Lotus Notes. This database allows: -to issue “DQR” (Defect Quality Report) -to issue “Special go” -to issue “QPR” (Quality Problem Report) -in ISO 9001 environment, it allows to handle AFU’s (Audit Follow Up)

6. Non Conformity Database Several kind of documents and Processes can be driven through the Non Conformity database. Let’s proceed a DQR and follow the different steps and phases. The DQR initially developed as a tool for Manufacturing Process can easily be used in a Buy and Sell model company.

7. DQR report: phase 1 Phase 1: the DQR is issued: -Problem description -Responsible -Concerned Product and Quantity

8. Phase 2: WH confirm quantity -product from another delivery might be concerned -purpose: define the exact lot size DQR report: phase 2 Time frame is fixed. In case of delay, notification Emails are generated

9. DQR report: phase 3 Phase 3 : WH has confirmed quantity and DQR approved by Issuer’s Manager Quantity is revised based on lot size confirmation by W/H

10. DQR report: phase 4 Phase 4 : QA Dept is informed and take decision about product usage or rejection

11. DQR report: phase 5 Phase 5 : Once QA decision is taken, Purchasing Dept is now in charge of DQR coordination. Two steps: 1.technical 2.Financial Purchasing Dept inform the Supplier, who has to give feedback

12. DQR report: phase 6 Phase 6 : A mail is sent to the responsible supplier in order to get technical feedback

13. DQR report: phase 7 Phase 7 : the responsible supplier returns his technical comments(cause + CAR) to TDK and TDK QA approves it

14. DQR report: phase 8 Phase 8 : Product cannot be sold. A financial compensation process is launched. A credit note is issued . All related concerned cost to TDK can be indicated

15. DQR report: phase 9 Phase 9 : A mail is generated to the responsible supplier for CN processing

16. DQR report: phase 10 Phase 10 : The Credit Note is accepted and settled by the supplier

17. DQR report: phase 11 Phase 1 : The Credit Note being settled, product can be either: -trashed or -returned Once done, products are removed in the ERP system, DQR is closed by QA Dept

18. DQR continous follow up Analysis are possible. In the database, sorting is possible by: -supplier -Product category -date -status…. The status of DQR Process can be checked or reviewed at any time by people having access to the database Each steps are described and status visible

19. As a result of close communication and follow up of our suppliers: -25 to 30 millions discs are purchased monthly -5% of delivered lots are controlled -3 DQR’s in average are generated per month -Claim ratio is below 10 ppm