Copy Exact Training For SMC Suppliers Created by: SMC Corporation of America – Noblesville 10100 SMC Blvd Noblesville, IN 46060 Marc Godwin QAD 7.4.1B Rev.A 8/09/2013 1 1

To: SMC Suppliers The following information is presented to provide suppliers the understanding and the need for a strict process and design control for products purchased by SMC under “Copy Exact” requirements. The “Copy Exact” requirement has been driven by SMC’s customers and the flow down of this requirement to sub-tier supplier is mandatory for eliminating quality excursions. SMC’s Copy Exact Requirements are defined in the SMC Quality Assurance Supplier Manual. QAD 7.4.1B Rev.A 8/09/2013 2

What Is Copy Exact? It ensures that identical tools perform identically upon installation for our customers without the need for any additional adjustment or tuning. Parts are “Build to Print” - any deviations from the drawing or process changes must be approved in advance. QAD 7.4.1B Rev.A 8/09/2013 3 3

Approach: Supplier Compliance Design Control and Change Management focus Reiterate existing Supply Agreement expectations as defined in SMC’s Quality Assurance Supplier Manual Establish communication for all Copy Exact issues Emphasize accountability Training QAD 7.4.1B Rev.A 8/09/2013 4 4

How do I know if the products I supply to SMC require Copy Exact compliance? If your company have been sent this training material, your company has been confirmed as supplying product to SMC that falls under the Copy Exact requirements. QAD 7.4.1B Rev.A 8/09/2013 5

When does Copy Exact Take Effect? When SMC receives and accepts your first article report with your accompanying certification of compliance or first shipment where applicable. QAD 7.4.1B Rev.A 8/09/2013 6

Why is Copy Exact Critical? Many of SMC’s customers are in the medical equipment and microelectronic wafer processing industries. Defective components can cost our customers losses in the millions of dollars with effect of the potential of loss of business to SMC. Our customers demand this. QAD 7.4.1B Rev.A 8/09/2013 7

What is a Copy Exact “Violation”? When a supplier makes an uncontrolled and/or undocumented change from the drawing or to the manufacturing process of a part without prior SMC/Customer approval, a Copy Exact VIOLATION is deemed to occur. QAD 7.4.1B Rev.A 8/09/2013 8 8

Copy Exact Violation (cont.): Supplier’s Subcontract Change A supplier shall not change the established subcontractor for components, processes or completed / substantially completed items supplied to SMC without prior notification and approval. QAD 7.4.1B Rev.A 8/09/2013 9 9

Manufacturing Process Elements 5M’s + 1 E: The “5 M’s”. Methods. Machines. Material. Manpower (Untrained personnel). Measurement. 1 E Environment. No changes are to be made to these elements without prior approval. QAD 7.4.1B Rev.A 8/09/2013 10

How to ensure products delivered are Copy Exact? Establish series of well defined steps that repeatedly produce a part within an agreed to specification Any uncontrolled process step is inadequate and will have impact on copy exact product. “Copy exact” in everything that is produced, do not change anything (5M+E) without prior notification and approval. Key parameters (on the part, on the tool set,..) are routinely measured and SPC maintained (if required by SMC). The parts produced are within the UCL and LCL (upper & lower control limits) There are well defined responses when there is any deviation in an SPC parameter Parameter impacts are understood for control parameter changes Measurement tools are calibrated according to set standards Adequate preventive maintenance is determined. Determine tool wear behavior and identify yield improvements. A good POR is one that is mind numbingly boring in that the product it produces looks the same, feels the same, performs the same, is everything the same….over and over and over and…..over again. We don’t pretend to be Intel – nor do we want to be! - but the philosophy of their “copy exact” program is the same we wish to implement with controlled PORs. How does one know that the process remains under control? By constantly monitoring both the end product (part) itself AND the control variables inherent in the process Just as important are the calibration and maintenance needs of the equipment used in producing the end product (part). These must be clearly defined in the POR. Anyone know yet what 5M+E is? And it all starts with… QAD 7.4.1B Rev.A 8/09/2013 11 11

How does a supplier notify SMC of a proposed Copy Exact change? The instructions and form are included in your SMC Quality Assurance Supplier Manual. QAD 7.4.1B Rev.A 8/09/2013 12

Copy Exact Non-compliance Examples Some Actual Case Examples…… QAD 7.4.1B Rev.A 8/09/2013 13

Non-compliance Example Machine Change: Supplier changed from milling machine A to another milling machine B in order to meet a production schedule. Resulting Impact: The components which arrived had numerous leak/sealing issues on the manufacturing floor and upon closer inspection it was noted that machine B was a different make/model than machine A. Once the specs for the milling machines were compared, it was noted machine B could not produce to the same tolerances as A, resulting in the original leak/sealing issue. QAD 7.4.1B Rev.A 8/09/2013 14 14

Short-Term Containment Long-Term Containment Non-compliance example – Material Change Problem Statement Windows failed at several customers for high particles Root Cause Supplier used wrong material Material shortage of as specified material resulted in substitution of a different higher grade material. Not approved prior to implementation. Short-Term Containment All windows were screened for correct material. World wide purge/recall of all effected parts. Long-Term Containment Supplier improved their material tracking process. All parts are now traceable to boule number and original raw material supplier P.O. 100% secondary inspection performed at final clean prior to delivery. In this case, the supplier, when faced with a shortage of specified material, went with a different supplier of what they believed to be “even better” raw material. The results were disastrous as particle counts went through the roof. Liability Cost Supplier ~$100K Customer $1.3M+ QAD 7.4.1B Rev.A 8/09/2013 15 15

Short-Term Containment Long-Term Containment Non-compliance example – Design Change Thermal Control plate, side A Thermal Control plate, side B Problem Statement High particle count in chamber Root Cause Supplier increase chamfer around Helicoil in improve manufacturing yield. Increased chamfer allows gasses to flow past fasteners transporting loose particles to the wafer. Notification submitted after implementation and rejected. Large chamfer allows gas to flow between side A and side B transporting trapped particles from the helicoil Add a picture Short-Term Containment Deviation OK to build ”as is” until DOE is complete Long-Term Containment New part number created to evaluate tools requiring small chamfer. In this example, the supplier was experiencing yield issues on their line in mating the helicoil to the rest of the assembly. Their solution was to change the chamfer which did improve their yield but resulted in excessively high particles within our chamber at the customer site. Particularly galling about this transgression is that the supplier attempted to cover its tracks AFTER implementing the change by submitting an ECR …it was rejected for lack of sufficient data related to possible process shifts. Shortly thereafter the alarms went off at the customer site. Liability Cost $140,000 investigation, including DOE 2 months Customer could have lost $$ and chargeback to supplier. QAD 7.4.1B Rev.A 8/09/2013 16 16

In summary, Copy Exact means: No changes are to be made to the established process or subcontract supplier without SMC approval once the First Article or first shipment has been accepted by SMC. QAD 7.4.1B Rev.A 8/09/2013 17

The Bottom Line... Copy Exact requires coherent change management. Copy Exact violations can cost any one of our customers millions of dollars $$$. Conformance to Copy Exact standards enhances SMC’s customers’ business results, productivity & satisfaction, and therefore our FUTURE BUSINESS. QAD 7.4.1B Rev.A 8/09/2013 18 18

Copy Exact In Review Copy Exact is a change control process that provides for advance notification and/or approval prior to making a change. Copy Exact applies to all SMC products where a business decision has been made to do so. Copy Exact is based on the unambiguous and maintained reference configurations. Copy Exact is affected by process controls and the 5M+E. A “violation” occurs when a supplier makes an uncontrolled and/or undocumented change. 1. 2. 3. 4. 5. QAD 7.4.1B Rev.A 8/09/2013 19 19

Thank-you for reviewing this training. Please document all personnel who have reviewed this training in your company and keep in your training records. SMC may periodically request documented evidence of the training completion as necessary. If you have any questions or concerns, please contact: Craig Nagahori – Purchasing Manager Noblesville - (317) 688-0556 Terry Moody – Quality Engineer Noblesville - (317) 688-0625 Mark Miller – Quality Manager Noblesville - (317) 688-0525 QAD 7.4.1B Rev.A 8/09/2013 20 20