Quality Manual

Xelon Corporation, the parent organization to eWarehouse, is a small business that started in 1991 and incorporated in California in 1992. The business is committed to striving for the following goals: Provide the client with the best possible product, quality and service. Build an environment where employees can truly enjoy their work and the quality of their working life. Maintain these standards while running a profitable operation that can look forward to sustained growth. These goals have been communicated and explained to all members of Xelon's organization. They are on-going and require continuous improvement in all areas of our operation. It is with these in mind that Xelon's system has been developed.

1.0 PURPOSE

The purpose of this manual is to demonstrate how Xelon complies with

• Client requirements,
• Mil-I-45208 inspection system requirements,
• Mil-STD-1686C and
• Mil-HDBK-263B Electrostatic Discharge Control Requirements.

1.1 SCOPE

All members of Xelon’s organization are empowered and are held accountable for their participation in quality control as described in this manual and Xelon procedures. Xelon encourages an atmosphere of continuous improvement in all areas of operation. This is done in part by collecting inspection and processing data in a systematic and objective fashion and applying statistical analysis where applicable. The Quality Assurance Department has the ultimate responsibility for compliance to this manual and to Xelon procedures. Xelon Quality Assurance performs internal audits on a random basis to assure that each department is complying with its responsibilities as specified in this manual. Quality Assurance collects data and issues internal reports on an as need basis. This is done at least on a semiannual basis. Reports are also issued in special cases where specific recurring problems have been cited.

2.0 REFERENCES

The following references form part of this document: Mil-I-45208 Inspection System Requirements Mil-STD-1686C Electrostatic Discharge Control Program Mil-HDBK-263B Electrostatic Discharge Control Handbook

3.0 REQUIREMENTS

3.1 CHANGE CONTROL

3.1.1 CLIENT PURCHASE ORDERS

Purchase orders and changes to purchase orders are treated in the same manner. Purchase orders and purchase order changes are received through the sales department. The Sales Department is responsible for reviewing and approving the order/change for contractual integrity including pricing, delivery, and other legal impacts. The order/change is routed to the quality manager for review and comments. The Quality Assurance Manager is responsible for determining the impact on quality planning, inspection, and test related issues. The Quality Assurance Manager reports the cost and schedule impact, if any, to the Sales Department to be communicated to the client to adjust the contract accordingly. Not until the client, sales department, and quality manager have approved the purchase order/change order will it be recorded and posted to the system for processing.

3.1.2 CLIENT DOCUMENTS

When the client furnishes drawings or specifications, the drawing or specification revision is to be kept with the clients purchase order for the life of the contract. Documentation supplied by the client is the property of the client, and Xelon does not maintain revision control over these documents.

3.1.3 GOVERNMENT DOCUMENTS

When required government documents are referenced on the purchase order, the latest revision of those documents are requested from our suppliers and upon receipt kept on file with the purchase order receiver.

3.1.4 XELON DOCUMENTS

Documents that are created by Xelon are revision controlled by Xelon unless otherwise specified by the purchase order. If a document created by Xelon becomes the property of the client as stated on the purchase order, then the client controls revision and change status.

3.2 CONTROL OF PROCUREMENT SOURCES

3.2.1 PURCHASE ORDERS

The following paragraphs apply to purchase orders written by Xelon to its vendors.

3.2.1.1 PACKAGING REQUIREMENTS

Any special packaging requirements are referenced on the purchase order. Special packaging requirements are defined as any that are specified by Xelon’s client or are determined necessary by Xelon to insure the safety and electrostatic protection of the material being shipped.

3.2.1.2 FLOW DOWN OF QUALITY ASSURANCE REQUIREMENTS

All requirements referenced on the client’s purchase order are flowed down to the vendor. If testing is required by the client’s purchase order, Xelon ensures that vendors’ Certifications of Conformance and testing are provided with each shipment of material. Quality Assurance is responsible for invoking quality requirements on each applicable purchase order. All purchases on Mil-I-45208 or Mil-STD-1686C contracts are subject to Quality Assurance approval. It is the purchasing agent’s responsibility to get concurrence from Quality Assurance before placing a purchase order.

3.2.1.3 SUPPLIER APPROVAL

The Quality Assurance Manager is responsible for the approval or disapproval of all suppliers. If a supplier is disapproved for cause, there may be corrective actions that would allow them to be re-approved. If these corrective actions are not met, or Quality Assurance determines that corrective action will not fix the problems, the supplier may be disqualified for a minimum of one year. At the end of the disqualification period, the supplier may solicit business from Xelon as a new unqualified supplier. If Xelon’s client requirements state Qualified Parts List (QPL) for components, only suppliers listed on the QPL may be used. The Quality Assurance is responsible for maintaining the approval of suppliers. It is the Purchasing Department’s responsibility to only use suppliers that are approved for the commodity being purchased. If Xelon’s client specifies a supplier who is qualified to supply a given commodity, then Xelon may purchase from that supplier without the supplier being approved by the Quality Assurance Manager.

3.2.2 RECEIVING INSPECTION

All client material purchase orders are inspected on a level 1 basis and a level 2 basis if noted specifically on the purchase order. The receiving inspection procedure (see appendix) defines the different levels of inspection. Programs that have Mil-I-45208 requirements and critical application parts of non-Mil-I-45208 programs will be inspected at level 2. Level 2 inspections often require special inspections based on the client’s specified requirements and foreseen problem areas. The Quality Assurance Manager determines additional inspection requirements upon review of the clients purchase order line items. It is the Quality Assurance Manager's responsibility to determine if the standard Receiving Inspection Sample Size (see appendix) meets the client’s purchase order requirements. The Quality Assurance Manager writes any additional client specific purchase order Quality Planning Documents as needed. The Quality Assurance Manager lists special inspections and additional sampling requirement provisions and is responsible for updating the client specific Quality Planning Documents based on feedback from receiving inspection.

3.2.2.1 CONFORMING MATERIALS

Materials that have been inspected and conform to the requirements of the purchase order are clearly marked and set aside for shipment to our clients. Materials are then normally prepared for shipment to our clients without going to stores. If tractability is not required on a particular shipment it becomes the clients responsibility to record the necessary information to trace material sources supplied by Xelon.

3.2.2.2 NON-CONFORMING MATERIALS

Materials that have been inspected and do not conform to the requirements of the purchase order are rejected with reasons noted on the receiving inspection record and are moved to a material review area. (Refer to Section 3.4)

3.2.2.3 RECEIVING INSPECTION EQUIPMENT CALIBRATION

Xelon Corporation is an independent distributor of electronic components and does not perform receiving, inprocess, final inspections or tests that require the use of calibrated equipment or tools. The functions performed by Xelon do not require the use of calibrated equipment and thus we do not require a written procedure to describe it.

3.3 MATERIAL CONTROL

3.3.1 EXPIRATION DATES

All material that is intended for shipment to clients is checked for material expiration dates. If a material date code exceeds the client purchase order limitations, the materials is shipped to a Mil-I-45208 Test/Inspection facility for re-certification if applicable. Applicable material that cannot be re-certified is returned to the original supplier. Material expiration dates and date code restrictions are verified to each client purchase order prior to packaging for reshipment.

3.3.2 CLIENT FURNISHED MATERIAL

Client supplied material is inspected to ensure it meets Xelon Corporations minimum quality standards and is then moved to segregated electrostatic controlled storage facilities until needed. All client supplied inventory remains the property of the client until utilized and is inventoried separately on Xelon’s computerized Inventory Control system. Usage and physical inventory amounts are reported to the client as required by individual contract.

3.4 MATERIAL REVIEW

Material found to be defective by receiving inspection and/or quality assurance, or is beyond purchase order date code parameters is moved to a non-conforming material area. This separate area is called the non-conforming material review area. The material remains in this area until a disposition is made. The Material Review Board consists of the President and the Quality Assurance Manager. Material Review Board meetings are held as soon as possible after material is removed from the receiving inspection area. Only one member of the Material Review Board is required to determine the disposition of defective product. The product must be dispositioned in one of the following methods:

3.4.1 SCRAP

Parts that are defective and cannot be economically returned to a supplier are scrapped and physically removed from the premises to ensure they are not shipped to other clients.

3.4.2 REWORK

Parts that have re-workable defects that will not de-grade the part are sent to a Mil-I-45208 rework facility for rework and repair if economically feasible. Parts that have been reworked must meet the same quality requirements as non-reworked parts and are subject to re-inspection after rework. All reworked material must be so identified and approved by the client prior to shipping the product.

3.4.3 USE AS IS

Parts that have been rejected due to in-house quality requirements, which exceed the client quality requirements, may be used only with a specific client release. All such material must be labeled as Use As Is per (specific client name) and be purchase order number referenced.

3.4.4 MATERIAL REVIEW - SUPPLIER

When material received from a supplier has been rejected, the following steps are taken: If the rejected item does not meet Xelon’s purchase order requirements but does meet the clients requirements, the parts may be dispositioned USE AS IS or RETURN TO SUPPLIER (for rework, replacement, or credit), or SCRAP: or If the rejected item does not meet Xelon’s purchase order requirements or client requirement, quality assurance may disposition the material RETURN TO SUPPLIER (for rework, replacement or credit), SCRAP, or MATERIAL REVIEW - CLIENT

3.4.5 MATERIAL REVIEW - CLIENT

When material is rejected for not meeting Xelon’s client’s requirements, the material may be subject to material review by the client. Otherwise the material is dispositioned as RETURN TO SUPPLIER, or SCRAP. All deviations and waivers are submitted to the client in writing and in accordance with the client’s procedures.

3.5 PRESERVATION, PACKAGING, AND SHIPPING

When material has passed incoming inspections (including proper Electro-Static Discharge (ESD) packaging requirements), it is prepared for shipment to our clients. Standard commercial ESD packaging practices are used unless special packaging is required as referenced on the client’s purchase order. All products are ESD packaged for protection against static, moisture, and minor impact. The shipping person is responsible for packaging the material in accordance with Xelon packaging procedures and special instructions called out on the client’s purchase order.

3.6 INSPECTION RECORDS

3.6.1 RECEIVING/SHIPPING RECORDS

All inspection records are under the control of the Quality Assurance Department. Physical inspection procedures are detailed so as to minimize error and kept on file at the local facility for a period of not less than five years. Client records with specific retention periods in excess of 5 years will be kept separate from other client files and will be stored for the minimum length of time noted on the client purchase order terms and conditions.

3.6.1 QUALITY ASSURANCE STAMP RECORDS

Quality Assurance personnel will be issued a Quality Assurance Stamp for use to approve documents and validate inspections performed. All stamps must be accounted for and returned when the employee is no longer authorized to perform quality audits. A log of issue dates, personnel assigned specific quality assurance stamp numbers, and receipt thereof signatures will be maintained by the Quality Assurance Manager. Should a stamp be lost or not returned the Quality Assurance Stamp number will be taken out of the approved list and no longer valid for inspection purposes for a period of not less than 12 months to ensure it is not being improperly used.

3.7 CORRECTIVE ACTION

Xelon must take prompt action to correct conditions which result or could result in the submission of supplies and services which do not conform to:

• The quality assurance provisions of the item specification,
• inspections required by the contract, and
• other inspections required to substantiate product conformance.

This may include correcting inadequacies in Xelon’s inspection system. Other reasons for corrective action are reoccurring non-conformance, costly scrap, or evidence of more serious underlying problems. A request for corrective action may be submitted to a department within Xelon, or to a supplier. Any person within Xelon may initiate a Corrective Action Request. Any one who receives a corrective action request must attempt to respond by the date given on the request. Even though the person who receives the request may not be responsible to implement or determine corrective action, it is important to respond so that the responsible party will be involved as soon as possible. The Quality Assurance Manager is responsible for keeping a log of outstanding Corrective Action Requests and for getting corrective actions resolved in a timely manner.

3.8 NON-COMPLIANCE

In cases of non-compliance to contract requirements discovered after shipment, Xelon Quality Assurance is responsible for the following: The client is to be notified in writing of the non-compliance. It is the client’s option to return the material (for replacement, rework, re-test, or credit), or to accept the material as is. The client’s response must be in writing in order to relieve Xelon of liability for that particular non-compliance. If the non-compliance was caused by inadequacies in Xelon’s inspection system, then the quality assurance department will issue a corrective action request and prompt action will be taken to correct the inadequacy.

4.0 APPENDIX

Attached are Xelon’s organizational chart, procedures, and forms, which are used to aid compliance of this quality assurance manual.

4.1 APPENDIX - XELON CORPORATION ORGANIZATION

4.2 APPENDIX - INSPECTION PROCEDURES

This procedure is to be followed by receiving/final/shipping inspection personnel. If circumstances are encountered which violate this procedure or make it impossible to follow, contact your supervisor or the appropriate authority. All material receipts should have a packing list with them. Some material receipts will also have certificates of conformance from the supplier or manufacturer. The receiving/shipping department must attach these items to the receiving inspection records.

4.2.1 RECEIVING, IN-PROCESS AND FINAL INSPECTION LEVELS

Receiving and final inspection levels one and the same and are performed at the same time as all material is ordered for specific client purchase orders and does not move into an inventory or stores warehouse location. All material that passes the incoming receiving process is then processed for immediate shipment to clients. There is no inprocess procedures as we do not change, alter, or modify the material received. All packing lists will have Xelon's Purchase Order referenced to identify the proper authorization to receive the items for client orders. Copies of open purchase orders are kept on file in finance department and may be retrieved upon receipt of goods.

The inspection level will be 0, 1, or 2. The inspection level will be level 1 for all electronic components received. Special quality assurance provisions may be listed on the purchase order that may or may not require a level 2 inspection. The receiving inspector is responsible for checking the received parts in accordance with the specifically noted provisions.

4.2.1.1 LEVEL 0 INSPECTION

Level ‘0’ is a visual inspection requirement only. Material with level ‘0’ inspection should be checked for quantity and visible damage. Minimal receiving inspection report is required. This level of inspection is reserved for incoming office supplies and non-critical use items. 1. Verify part number to purchase order. 2. Verify quantity to purchase order and packing slip. 3. Enter material part number on Xelon Purchase Order Form and initial.

4.2.1.2 LEVEL 1 INSPECTION CHECKLIST

Level ‘1’ is a standard commercial ESD inspection requirement. Parts with level ‘1’ inspection should be checked for quantity, visible damage, proper ESD packaging materials, date code conformance, and compliance with purchase order requirements. Receiving personnel are to ensure that all ESD procedures are followed while handling these materials.

Receiving inspection report is required.

• Verify part number to purchase order.
• Verify quantity to purchase order and packing slip.
• Inspect a sample size in accordance with the Receiving Inspection Sample Size table for defects.

The sample size used and the results of the inspection are to be entered on the incoming receiving inspection form. If parts look different from each other, you should try to see why they are different. Discrepancies are to be noted on the receiving inspection record and discrepant items segregated from the balance of the material.

Complete the receiving inspection record by manually entering the actual part number the material is labeled with on Xelon Purchase Order Form. If Certificate of Conformance is required by Xelon purchase order and provided, verify that it is signed and dated by the supplier. Attach Certificate of Conformance to receiving record and indicate its presence on the receiving records. If the Certificate of Conformance is not present then move the material to the Material Review Board area and notify purchasing of the defect.

If you have rejected parts, place the entire lot with the packing list, purchase order, and receiving inspection report in the Material Review/Non-Conforming Material Area. Do not remove from MR/Non-Conforming Material Area until disposition by MRB is complete. If you have no rejected parts, then initial incoming inspection record and prepare product for product assurance inspection by Xelon’s Quality Assurance personnel. Attach the purchase order receiving record to the packing list.

Quality Assurance personnel are to review the material to ensure that all items received are properly recorded on the receiving records and that the material is as called out and meets the clients purchase order requirements. Upon verification of the information the inspector will stamp the appropriate inspection box to indicate approval of the goods for shipment. Rejected items are placed on the MR/Non-Conforming Material Area for disposition. The shipping person then is to prepare the items for shipment to client utilizing the appropriate static control guidelines. Attach the receiving report to the packing list and sales order with the weight, dimensions, and shipping methods used noted on document and forward the completed packet to the finance department for invoicing.

4.2.1.3 LEVEL 2 INSPECTION CHECKLIST

Level ‘2’ is a MIL-STD-1686 ESD inspection requirement. Parts with level ‘2’ inspection must be checked for quantity, visible damage, proper ESD packaging materials, date code conformance, and compliance with purchase order requirements. Receiving personnel are to ensure that all ESD procedures are followed while handling these materials.

Receiving inspection report is required.

• Verify part number to purchase order.
• Verify quantity to purchase order and packing slip.
• Inspect a sample size in accordance with the Receiving Inspection Sample Size table for defects.

The sample size used and the results of the inspection are to be entered on the incoming receiving inspection form. If parts look different from each other, you should try to see why they are different. Discrepancies are to be noted on the receiving inspection record and discrepant items segregated from the balance of the material.

Complete the receiving inspection record by manually entering the actual part number the material is labeled with on Xelon Purchase Order Form Check for Manufacturers Certificate of Conformance, if required by the purchase order. Verify that it is signed and dated by the supplier. Attach the Certificate of Conformance to receiving report. If the Manufacturers Certificate of Conformance is not present then move the material to the Material Review Board area and notify purchasing of the defect.

If you have rejected parts, place the entire lot with the packing list, purchase order, and receiving inspection report in the Material Review/Non-Conforming Material Area. Do not remove from MR/Non-Conforming Material Area until disposition by MRB is complete. Review the client Purchase Order to see if any special inspections are required. If there are, then perform these inspections and note results on the receiving record. If the part has one or more defects, move the entire lot, the purchase order, and Manufactures Certificate of Conformance to the Material Review/Non-Conforming Material Area. Do not remove from MR/Non-Conforming Material Area until disposition by MRB is complete.

If you have no rejected parts, then initial incoming inspection record and prepare product for product assurance inspection by Xelon’s Quality Assurance personnel. Attach the purchase order receiving record to the packing list. Quality Assurance personnel are to review the material to ensure that all items received are properly recorded on the receiving records and that the material is as called out and meets the clients purchase order requirements. Upon verification of the information the inspector will stamp the appropriate inspection box to indicate approval of the goods for shipment. Rejected items are placed on the MR/Non-Conforming Material Area for disposition.

The shipping person then is to prepare the items for shipment to client utilizing the appropriate static control guidelines. Attach the receiving report to the packing list and sales order with the weight, dimensions, and shipping methods used noted on document and forward the completed packet to the finance department for invoicing.

4.3 APPENDIX - XELON CORPORATION FORMS APPLICABLE TO THE INSPECTION SYSTEM

• Static Control Procedure

• Xelon Purchase Order (Separate Attached Page)

• Corrective Action Request (Separate Attached Page)

• Corrective Action Log (Separate Attached Page)

• Material Review Board List (Separate Attached Page)

• ESD Wrist Strap Control Log (Separate Attached Page)

• Quality Assurance Stamp Number Control Log (Separate Attached Page)

• Receiving Inspection Sample Size Standards Category (Separate Attached Page)

4.3.1 STATIC CONTROL PROCEDURE

This procedure is to be followed by receiving/shipping inspection personnel. If circumstances are encountered which violate this procedure or make it impossible to follow the procedure, contact your supervisor or appropriate authority. All component level material received must be packaged in anti-static packaging materials.

4.3.2 PERSONNEL STATIC CONTROL REQUIREMENTS

All receiving/shipping and inspection personnel must wear an approved wrist ground strap connected to the anti-static table and foot mat in the receiving/shipping area and an approved anti-static lab coat. The anti-static mats are grounded to the nearest ground point in the building and are tested monthly to ensure adequate conductivity. All receiving/shipping and inspection personnel must check the adequacy of the anti-static wrist straps daily by verifying proper conductivity on the provided constant ground meter and record any failures on the posted inspection log. Absolutely no personnel are to enter the inspection area without training in all aspects of MIL-STD-1686 electrostatic discharge program. Absolutely no component material is to be removed from its shipping container by personnel unless these anti-static controls are observed.

4.3.2 INCOMING STATIC CONTROL REQUIREMENTS

Incoming component level material must be packaged in appropriate anti-static material. Absolutely no component material is to be removed from the receiving/shipping anti-static workstation unless it is protected with appropriate anti-static packaging materials. If you receive a shipment with inappropriate shipping material or material you are not sure it meets the anti-static control requirements of MIL-STD-1686 then place the entire lot with the packing list, and purchase order in the Material Review/Non-Conforming Material Area. Do not remove from MR/Non-Conforming Material Area until disposition by MRB is complete.

Suppliers who repeatedly do not follow Xelon’s purchase order anti-static requirements and practices will be required to file a corrective action report to maintain their status as a qualified supplier for Xelon Corporation.

4.3.3 PACKAGING MATERIAL REQUIREMENTS

New packaging materials are to be CFC free in the manufacturing process and in actual composition. Anti-static packaging materials are to be recycled whenever possible to reduce the waste associated with disposal in local landfills. Other non ESD packaging materials may also be recycled to reduce the waste associated with disposal in local landfills provided it is used as filler for non static sensitive components only.

4.3.4 PERSONNEL TRAINING REQUIREMENTS

All receiving/shipping and inspection personnel must participate in a quarterly ESD training program conducted by the Quality Assurance Manager. Training sessions will be a combination of videos, classroom instruction, and on the job MIL-STD-1686C Electrostatic Discharge Control requirements and techniques.

4.3.5 PROTECTED HANDLING AREAS

Handling of ESDS parts or assemblies shall not be performed anywhere other than in the designated ESD protected area by authorized personnel trained in the ESD procedures as outlined in MIL-STD-1686C

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