Crayola Global Supply Chain Quality Requirements Global Supply Chain Quality Requirements Revision 1 PDF

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Crayola Global Supply Chain Quality Requirements Global Supply Chain Quality Requirements Revision 1 February 2014 Crayola Global Supply Chain Quality Requirements Dear Supplier Partner, In 1885 Edwin Binney and C. Harold Smith formed a partnership to produce a variety of products, including pigment...

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Crayola Global Supply Chain Quality Requirements

Global Supply Chain Quality Requirements

Revision 1 February 2014

Crayola Global Supply Chain Quality Requirements

Dear Supplier Partner, In 1885 Edwin Binney and C. Harold Smith formed a partnership to produce a variety of products, including pigments, slate pencils and chalk. In 1903, the company produced the first wax crayon and coined the name Crayola. More than 110 years later, Crayola, LLC is still providing products that delight children and inspire their limitless creativity. Product safety and quality are central to our brand equity and are the reason parents and caregivers trust Crayola to provide creative experiences for the children they care about. The mission of the Crayola Global Quality organization is to ensure, through Quality Planning and Execution, that all Crayola products deliver the desired consumer experience. Our Global Quality Assurance approach is a collaborative effort between quality professionals in our corporate offices as well as on the ground around the world. We consider our suppliers to be critical partners in this effort. We are committed to work together respectfully to meet our common goal of delighting consumers and we expect our supplier partners to act with integrity in this spirit of collaboration. This revision of Crayola’s Global Supply Chain Requirements builds on our learning since the original document was distributed in 2012. Key changes include: • • • • • •

Expanded expectations for Preventive/Planned Maintenance, particularly careful monitoring of tool life (Section II.F.) Requirements for managing high risk materials such as chemicals (Section III.B.) Clearer definition of Ethical Standards requirements for subcontractors and suppliers producing Crayola branded materials such as packaging (Appendix A1.4). Updated product safety and regulatory requirements to reflect changes in legislation globally (Appendix A2, A8, A15, A16, A17 and A18). Expanded wood and paper sourcing requirements (Appendix A10). New CPSIA requirements, including Production Test Plan (Appendix A15)

Please review all of this information carefully. Working together, we can continue to build the Crayola brand worldwide while staying true to the vision of our founders. Thank you for your support and cooperation.

Bonnie J. Hall Vice President Global Quality and Continuous Improvement

Crayola Global Supply Chain Quality Requirements Page #

I.

Management/Organization A. Management Commitment B. Integrity C. Defined/Documented Organization D. Business Continuity Planning E. Independent Quality Assurance/Quality Control Function F. Internal Audit/Quality System Review G. Employee/Operator Training

3-4

II.

Process Control A. Process Control Methods/Risk Assessment B. Documentation Control C. Sourcing Materials and Services D. Inventory Control E. Change Control/Change Management F. Preventive/Planned maintenance G. Record Retention

5-6

III.

Quality Assurance/Quality Control A. Incoming/In-process Quality Assurance/Control B. High Risk Material Management C. Finished Product Quality D. Pre-Shipment Inspections E. Plant Sanitization F. Calibration System G. Corrective Action/Preventive Action H. Product Recall/Crisis management

7-10

IV.

Product Safety/Product Integrity A. Product Compliance B. Date Coding C. Foreign Object Control D. Glass Control E. Sharp Tools Control F. Pest control G. Control of Restricted Substances

11

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Crayola Global Supply Chain Quality Requirements Page #

V.

Continuous Improvement

12

VI.

Systems certifications

13-14

A. Ethical standards

B. Quality Management System C. Global Security Verification D. Environmental Management/Responsible Sourcing E. Licensor Manufacturing Agreements

Appendices A1. A2. A3. A4. A5. A6. A7. A8. A9. A10. A11. A12. A13. A14. A15. A16. A17. A18.

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Crayola global supply chain code of conduct Crayola global product safety and regulatory requirements Crayola Plant Sanitization process Supply Chain Security Quality planning in the product development process Sample Submission for QA Testing and Evaluation Product and Packaging Traceability Control Electronic and Electrical Products QA requirements Cut and Sewn Products QA requirements Wood and Paper requirements Raw Materials Supplied to Crayola Manufacturing Contract manufacturing Direct import shipments of finished goods Distributor Requirements – including local market compliance Compliance with the US Consumer Product Safety Improvement Act Compliance with the EU Toy Safety Directive Compliance with CCPSA Compliance with NOM

15-20 21-32 33 34 35-36 37-39 40-44 45-46 47-52 53-54 55-56 57-58 59-60 61-64 65-66 67-71 72 73

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Crayola Global Supply Chain Quality Requirements I.

Management/Organization A. Management Commitment The organization’s top leadership must foster a culture of quality and customer focus.

B. Integrity Crayola expects all its business partners to act with responsibility and integrity. All suppliers are required to establish and enforce an integrity policy that clearly outlines their standards of business conduct. All business activities must be handled in fairness and with transparency. No money or favor should ever be offered or requested in exchange for unfair advantage. Crayola employees are required to take personal responsibility for ethical conduct by complying with the letter and the spirit of applicable laws, rules and regulations; performing with professionalism, respect, honesty, fair dealing and accountability; and by doing everything in our power to prevent unethical activity by voicing concerns, asking questions and reporting potentially unethical situations. Crayola and our customers have strict ethical policies that govern our interactions with suppliers and customers. Suppliers should consult with Crayola management on any suspected violations.

C. Defined/Documented Organization The supplier will have a clearly defined organization with adequate staffing to accommodate the activities necessary to supply quality product to Crayola. The organization will be documented on an organization chart or similar document.

D. Business Continuity Planning Suppliers should have a business continuity plan that provides for continuing operations in the event of an interruption caused by natural or man-made incidents. Such incidents include fires, earthquakes, floods, vandalism, supply chain interruptions, or other loss of use of critical infrastructure. Business continuity plans will include the supplier’s analysis of potential disruptions, plans to recover from the potential disruption, and periodic review of the plan to ensure currency.

E. Independent Quality Assurance/Quality Control function Suppliers must have an independent Quality Assurance/Quality Control organization, responsible for executing the suppliers’ QA/QC program. Suppliers must have a Quality manual that documents their quality system.

F. Internal Audit/Quality System Review Suppliers must have an established process to verify the effectiveness of process and management controls. Typically this would be accomplished through a comprehensive internal audit process, including management review.

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Crayola Global Supply Chain Quality Requirements G. Employee/Operator training Suppliers will have an adequate employee training program established to ensure that personnel are trained and qualified to perform essential tasks. All employees must be trained and competent in all relevant instructions and quality procedures. Records of training, including attendance, must be documented and kept on file.

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Crayola Global Supply Chain Quality Requirements II.

Process Control A. Process control methods/risk assessment Suppliers must have a documented method of controlling production from sourcing of raw materials through shipment of finished product. Process control methods must be adequate to ensure compliance to all applicable safety, legal, and product quality requirements. The supplier’s system of process control must be documented, controlled and audited by trained personnel.

B. Documentation control The supplier must have a system in place to control, approve and issue process technical documentation – including drawings, specifications, and bills of materials that support the production of Crayola items. The process should ensure that only the current document revision is available to be accessed. A system to review controlled documents, including policies and procedures must be established. This system will include controls needed to ensure that internal documents that control compliance to customer requirements are updated as required. The system should include a minimum review frequency.

C. Sourcing materials and services The supplier must have a process in place to ensure that Crayola material specifications are accurately communicated to the suppliers’ sources of materials and components. The supplier must have a process to qualify raw materials and components to ensure that using alternate sources of supply does not compromise the quality, safety, or integrity of the product. Subcontracting production or labor without prior written consent of Crayola is strictly prohibited. Suppliers are responsible for ensuring that all approved subcontractors are in compliance with Crayola Global Supply Chain Quality Requirements, including ethical standards and product specifications.

D. Inventory control The supplier must have a system to manage shelf life items. There should be evidence that an effective inventory management (FIFO) system is in place. Supplier factories will have an effective system to segregate defective material (finished goods, raw materials, components and work-in-process) from acceptable material. There will be effective controls to prevent defective material from being integrated with acceptable material. Storage of materials must prevent contamination, damage, or deterioration. Supplier factories must have an effective method to account for Crayola supplied or Crayola specified ingredients, raw materials, and components. Significant inventory discrepancies will be investigated, with root cause identified and corrective action(s) implemented.

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Crayola Global Supply Chain Quality Requirements E. Change control/Change management Crayola products will be tested at launch, in accordance with the established Product Safety Turnover document (included in the Design Turnover Document), to ensure they comply with all applicable product safety regulations and standards. All changes in product design, manufacturing process, or sourcing of materials/component parts must be reported to Crayola. No change may be implemented prior to Crayola approval.

F. Preventive/Planned Maintenance The supplier must have an effective facility maintenance program, including a preventive maintenance schedule and adequate documentation of demand maintenance activity. Since worn or poorly maintained production tooling can result in product quality and safety issues, careful attention must be paid to ensure all tools, but especially injection molds, are in good working condition. All injection tooling must be built to last for a minimum number of cycles, as specified by Crayola Operations Engineering, and a mechanical counter must be in place to record usage. Suppliers are required to inform Crayola when injection tooling reaches 80% of its designated cycle life so it can be inspected and plans for replacement can be developed, if necessary. The following records must be maintained and available for inspection: 1. Tooling repair history 2. Tooling cycles record over time 3. Routine maintenance history The destruction of any production tooling owned by Crayola must be approved by Crayola and the destruction documented and witnessed.

G. Record retention Records documenting the safety and quality compliance of product produced for Crayola must be maintained for 10 years from date of creation, unless otherwise approved or directed by Crayola Global Quality Assurance.

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Crayola Global Supply Chain Quality Requirements III.

Quality Assurance/Quality Control A. Incoming/In-process quality assurance/control The supplier will have a system in place to effectively ensure that all materials and components used to create products for Crayola meet all supplier and Crayola requirements for that material.

B. High Risk Material Management Some materials by their nature introduce more risk into the manufacturing process. Chemicals, in particular, are receiving much greater scrutiny in the marketplace and their use requires a special set of skills to ensure both product and worker safety. Any Crayola supplier working with chemicals or formulations must have a comprehensive chemical safety management plan that addresses proper storage and handling as well as appropriate controls to ensure safe use. Pigments and colorants are a special set of chemicals that must be carefully controlled. Pigments used to produce Crayola products must be tested by lot by an entity other than the primary manufacturer (e.g. toll processer, third party laboratory, etc.) prior to use to ensure heavy metal contamination does not exceed Crayola requirements. XRF or HD-XRF is recommended. Finished product suppliers producing crayons or chalk must source their dry color/pigment through Crayola. Recycled materials, particularly resins, also have risk of contamination associated with them. Crayola does not permit the use of post-consumer recycled resin in our products. Post-industrial recycled resin is permitted when the source is well known and tightly controlled. Crayola must approve the use of recycled resin in our products. In the event this approval is received, the materials must be tested by lot prior to use per QCI-00-090.

C. Finished product quality It is never acceptable to ship defective material to Crayola without prior authorization from the Crayola QA team. In the event that Crayola authorizes a supplier to ship material that does not comply with all Crayola product requirements, that authorization will be provided on a Temporary Deviation Notice authorized by Crayola Global Quality Assurance.

D. Pre-shipment Inspection It is Crayola's Policy that the first shipment of a new product or from a new supplier must undergo a preshipment inspection in accordance with these guidelines. The logistics of this inspection may vary based on region or supplier history. Based on the results of the first pre-shipment inspection, previous supplier history, or perceived risk associated with a product, Crayola may require that subsequent shipments be inspected as well. Crayola may, at its discretion, conduct the actual inspection using Crayola/Hallmark personnel, retain a third party firm, or authorize the supplier to conduct the inspection. If the products are being shipped via the Direct Import Process, the FOB customer may also require their own inspection.

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Crayola Global Supply Chain Quality Requirements It is the responsibility of the supplier to ensure a pre-shipment inspection is carried out well in advance of the shipment window in case remedial action is required. If the supplier is authorized to self-inspect, the inspection must be carried out by qualified individuals independent of the production staff. Suppliers in China shall liaise with CHK PI department and suppliers in South East Asia shall liaise with Premium Deluxe Designs Limited to ensure that the agreed date for an inspection is adhered to. Failure to do so will result in the charges being passed to the supplier. Final inspection must be carried out when a minimum of 90% of the shipment has been manufactured and products are packed into shipping cartons. The inspection shall be carried out based on an approved Inspection by Attributes sampling protocol (BS6001, Military Standard 105, or ANSI/ASQ Z1.4). The AQL's applied will be as follows unless otherwise stated:

Critical Major functional Major visual Minor

0% 0.4% 1.5% 4.0%

Definitions and examples of these defects are given below. Critical Defects -- AQL= 0. Any defect related to the safety of the product. All product MUST COMPLY. Examples would include drop test failures which liberate small parts in product for children under 3, failure to comply with CPSIA standards, etc. Major Functional Defects -- AQL=0.4 Any defect that causes the product not to function. Examples would include dry markers, broken crayons, motors that don't function, etc. Major Visual Defects -- AQL=1.5 Any defect which seriously affects the item's appearance or produces significant final assembly problems (component or WIP). Examples would include incorrect assortments, significant printing issues on package, etc. Minor Defects -- AQL= 4.0 Any defect which moderately detracts from the final product appearance, limits functionality, or causes slight production problems (component or WIP). Examples would include small voids in crayon points, minor blemishes on marker barrels or packaging, etc. The definitions of defect types and the examples shown are not a comprehensive list and products may be inspected for further parameters and defects that are not listed. NOTE THESE DEFECT DEFINITIONS AND AQL REQUIREMENTS APPLY TO ANY SHIPMENT OF CRAYOLA PRODUCTS AND SHIPMENTS MAY BE REJECTED BASED ON THESE REQUIREMENTS.

Functional testing is also carried out as part of the inspection to ensure that the product is fit for purpose. Pre-shipment inspection for every 1st shipment to Crayola should include screening to verify compliance to heavy metal requirements (XRF or wet chemical analysis) All samples for inspection must be selected at random by the inspector.

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Crayola Global Supply Chain Quality Requirements The final inspection result will be reported as follows: PASS - number of defects does not exceed the AQL's and product matches the approved production sample. HOLD - the approved production sample is not available and the number of defects does not exceed the AQL's. A product may also be reported as "HOLD" if the inspected items are different to the approved production sample. FAIL - if the number of defects exceeds the AQL's or if inspected items are different than the approved sample. Any rework must be conducted over 100% of production to ensure that all potential occurrences of the defect are corrected where possible or removed and destroyed where not. No products can be shipped until inspections are completed and approved by Crayola's Global QA Team. Documentation of pre-shipment inspections results will be maintained by the factory and provided to Crayola LLC upon request.

E. Plant Sanitization Crayola products that contain liquids, gels, or putties (including modeling compounds) must meet the requirements of USP 61 and European Pharmacopoeia 7th edition (2011). Supplier developed formulations must also meet the requirements of USP 51 and European Pharmacopoeia 7th edition (2011). Supplier facilities that produce or process Crayola products or formulations that contain a preservative system must meet Crayola’s minimum standards for plant sanitization in...