1. Quality Management: Mutually beneficial supplier relationships

2. 19 May 20162 Content 1 2 3 4 5 Background on Quality Requirements Quality Defined Background on Quality Requirements Quality Management Principles (ISO 9000) Understanding ISO 9001:2008 – Requirement for Quality Management System Quality Requirements as per Eskom QM58

3. 19 May 20163 Quality Requirements Background Eskom is an ISO 9001:2008 certified company; the certification is managed and monitored divisionally; Clause 7.4 of the ISO 9001 standard requires organization to have a process for managing suppliers or outsourced functions. The type of control applied depends on the complexity (risk rating) of the product/service outsourced; Eskom, as an SOE is governed by PPPFA, which requires that purchasing of outsourced product/services need to go out on open tender to allow transparent, equitable and fair selection of the suppliers; Stage 1 of the PPPFA process requires Functionality evaluation of which (SHEQ) Quality forms part thereof;

4. Eskom Definition of Quality 19 May 20164 Quality is : Conformance to Requirements 1. The performance standard for Quality is: Zero deviation from Requirements 2. Impact of the errors or deviations is measured as the : Cost of non-conformance

5. 19 May 20165 QM 58 QUALITY REQUIREMENTS Intention is to describe minimum quality requirements and define the quality criteria for the selection, evaluation, registration, monitoring, and auditing of suppliers. Eskom’s position is to partner with suppliers who fully demonstrate commitment to the development, implementation, and maintenance of a quality management system (QMS) that conforms to ISO 9001 The specification apply throughout Eskom Holdings Limited divisions, suppliers, and sub-suppliers and shall form part of all Eskom request for information (RFIs)/requests for quotation (RFQs)/request for proposal (RFPs) Quality Requirements as per QM 58

6. 19 May 20166 Copy of the ISO 9001 (Latest applicable revision) certificate The supplier shall submit a copy of the ISO 9001 (latest applicable revision) certificate. The QMS should drive all the supplier’s business management processes to ensure that all of Eskom’s requirements are fully met on a consistent basis. Ensure that: Product / Service Scoping on ISO certificate is defined and relevant Certificate by Approved and Authorized certification authority Certification Authority is has Recognized International Accreditation Validity (expiry date) of certificate Quality Requirements as per QM 58

7. Example of ISO 9001Certificate 7 Product / Service Scoping Validity (expiry date) of certificate Certificate by Approved and Authorized certification authority Recognized International Accreditation

8. 19 May 20168 Copy of an internal and external management system audit report The supplier shall submit copies of both internal and external management system audit reports. The audit reports must include: Non-conformity (NC) - Description of non-conformity to policy / standards / procedures or processes Corrective action (CA) – Defined requirements for reviewing nonconformities (including customer complaints) and determining the causes of nonconformities Preventive action (PA) - Actions to eliminate the causes of potential nonconformities in order to prevent their occurrence. Quality Requirements as per QM 58

9. 19 May 20169 Draft contract quality plan The supplier shall submit a draft contract quality plan. The plan must address the minimum requirements as per ISO 10005. Supplier identified the persons responsible for drafting the CQP/PQP Scope of CQP/PQP is complete, as description in the Works Information. Allow for acceptance of CQP/PQP by Employer (meeting of Quality objectives) Preliminary Management authority & responsibility Matrix submitted Index of Documentation to be loaded to the QMS Data-book. Control of Quality Records- process to complete, keep and dispose records Quality Requirements as per QM 58

10. 19 May 201610 Draft contract quality plan (Cntd) Resources- Quality department organogram of all QA & QC resources. Allow for Customer Requirement reviews / specifications adjustments Setup communication channel on quality issues (fixed contract meetings) Provide for Design reviews and development approval processes. Purchasing- Submit a list of all suppliers and subcontractors Production- Submit a list of items to be manufactured & to be refurbish items. Quality Requirements as per QM 58

11. 19 May 201611 Draft contract quality plan (Cntd) Describe Identification and traceability of items. Describe Procedures in dealing with Customer property Submit process & procedures for Storage and handling Supply draft Concession request for Non-conforming products Describe monitoring and measurement procedures Identify Inspection and testing equipment and calibration certificates Submitted Audit schedule and process for audit and supplier assesments. Quality Requirements as per QM 58

12. 19 May 201612 Quality Control plan (QCP) or Inspection and Test Plan (ITP) The supplier shall submit an example of an inspection and test plan (ITP) or quality control plan (QCP). The plan must address the minimum requirements as per ISO 10005. List products/processes that require special controls (e.g. welding, NDT,etc) QCP/ITP/checklists are well structured and designed per activity Index of all standards, specifications for all processes, products & materials. QCP has recorded a sequence of witness/verification points Proposed schedule of test and verification hold points recorded on QCP Quality Requirements as per QM 58

13. Example of Quality Control Plan 13 Approvals Intervention Points Method Controlling documentation Acceptance Criteria

14. 19 May 201614 More QM 58 Quality requirements The supplier shall submit a copy of the appointment letter and CV/resume of its quality management representative (QMR) The supplier shall submit copies (minimum three) of its customer satisfaction survey reports. The reports must not be more than two years old The supplier must provide evidence in the form of a proposal and/or assessment results of any recognised national or international business excellent model, should it exist NB: specific requirements per tender will be selected using the Quality Assessment Criteria document Quality Requirements as per QM 58

15. 19 May 201615 Post-Contract Award: Quality Requirements The supplier shall submit the following documents within 30 days after the contract date, prior to commencement of work, for acceptance by Eskom: The supplier shall complete a quality control plan and/or ITP(s) for review and acceptance by Eskom prior to the commencement of any work, inclusive of sub-contracted work, within 30 days after contract award Equipment lists and an indication of pressurised components and systems Method statements for works (describing how work will be executed) NB: these plans are to be compiled in line with Eskom’s requirements and will have to be discussed with, and approved by, Eskom prior to any work commencing

16. Thank you Questions?