SUPPLIER ASSESSMENT REPORT - V-Trust report - Factory Audit.pdfFounded in 2000, XXX Digital Technology Co., Ltd is a manufacturer of LED/LCD/PLASMA TV, which was invested by XXX Plastic

Supplier Assessment Report

Report No .: G093833VTR-QR-CZ-RF-002 V6.3

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Address: 1410-1411 West Tower, Poly World Trade Centre, 1000 Xingang Road E., Guangzhou, China Tel: +86-20-89089938 Fax: +86-20-89089025 E-mail: [email protected] Website: www.v-trust.com

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SSUUPPPPLLIIEERR AASSSSEESSSSMMEENNTT RREEPPOORRTT

Audit Type : Initial Audit

Report No.: G093833

Client: XXX

Supplier: XXX Digital Technology Co., Ltd

Audited Factory: XXX Digital Technology Co., Ltd

Auditor: Frank Fang

Audit Date: 22 September 2012

GENERAL OVERVIEW

Fields Score / 10 Weight / 10 Weighted Score

1 Factory Profile 9 10 90

2 Human Resource 8 8 64

3 Foreign Trade Capacity 8 6 48

4 Production Capability 9 10 90

5 Quality Control 9 10 90

6 R & D 8 6 48

7 Special Requirements from Customer NA NA NA

Total: 51 50 430

Final Score: [Total weighted score / (10＊Total weight)] 86/100

REMARK

Basic Remarks:

1. Founded in 2000, XXX Digital Technology Co., Ltd is a manufacturer of LED/LCD/PLASMA TV, which was invested by XXX Plastic Product Co., Ltd (shared 62.4%) and XXX Technology PIE Ltd (shared 37.6%). XXX had 300 workers with 50injection machines, and it was sub-factory of XXX to produce the plastic part of TV.

2.

There ARE 4 assembly lines in the factory; the daily capacity per line depend on the size and complexity of product. Please refer to the below data of capacity.

size available lines

hourly

capacity

daily

capacity

#1 #2 #3 #4 total set/hour 7.5hours



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lines

15" 1 1 1 1 4 60 1800

21" 1 1 1 1 4 60 1800

24" 1 1 1 1 4 60 1800

26" 1 1 1 1 4 60 1800

32" 0 1 1 1 3 48 1080

39" 0 0 1 1 2 40 600

40" 0 0 1 1 2 40 600

42" 0 0 1 1 2 40 600

47" 0 0 1 0 1 30 600

50" 0 0 1 0 1 30 220

55" 0 0 1 0 1 25 180

60" 0 0 1 0 1 20 150

3. The factory can develop new product according to client’s requirement and sampling time is about 7days.

Strength Remarks:

4. The factory had established a complete quality control system.

5. The whole factory is clean and well-organized.

Weakness:

6. Training system is not complete: No pre-hire testing records for workers were kept by the factory. No training record and personnel certified record for the QCs were kept.

7. The order achievement record showed that only 62% of the order was on-time delivery, but no delay analysis and corrective actions plan record was found.

8. No written systematic process and daily capacity record to manage and ensure on-time delivery.

9. No clearly segregated area for the non-confirming raw material in the warehouse.

10. No label on the approved sample.

Suggestion:

11. The pre-hire testing record for workers should be kept.

12. The on-time delivery rate should be improved and the analysis and corrective action plan for delay should be made.

13. The systematic process to manage the on-time delivery should be completed.

14. The training record and personnel certified record for QCs should be kept.

15. The non-confirming material should be clearly segregated in the warehouse.

16. The approved samples provided by client should be well identified.

@Photos1

\



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CONCLUSION

86/100

Approved by: Andrew Chiang, Operation Manager

Auditor & Report Reviewer:

Auditor(s): Frank Fang Report Reviewer: Michael Jiang

General audit approach: Within the scope of the 3rd party audit, the auditors observed processes in the various departments of the company in order to gain an understanding of the overall operation. The auditors verified the processes in the company for conformity with the ISO 9001:2008 and the customer criteria. This verification was performed on a sampling basis; by interview the workers, review of the corresponding documentation, and observation of the individual processes. *Refer to V-Trust Work Instruction: VTR-WI-CZ-9508 V-Trust’s Disclaimer: The report reflects our findings for the particular factory in concern on the date of our service only. This report does not certify, confirm or imply: a) compliance with any government, industry or association regulations or standards, unless stated otherwise; or,) the quality of any specific products manufactured by the factory/sellers/suppliers; or, c) the shipment of any specific products. This report does not discharge or release the factory/sellers/suppliers from their commercial, legal or contractual obligations with buyers in respect of products manufactured by the factory/sellers/suppliers. Our services, including reports and certificates, are subject to the General Conditions of Service of V-Trust which have been sent to your company. They can be resent upon written request. This report cannot be partially copied.

Please find our audit details from next page (Section 1 – 7).



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SSeeccttiioonn 11 FFaaccttoorryy PPrrooffiillee

1.1 Legal Validity

Does the company have a valid business

license? Yes No Registration Number: 33020040001XXXX

Year of established: December 18th, 2000 Valid Date: December 17th, 2050

Registered address: XXX Cixi City, Zhejiang Province, China

Actual address: XXX Cixi City, Zhejiang Province, China

Is the annual review done by local authority

(Industrial & Commercial Bureau)? Yes No Last reviewed in year: July18th, 2012

Registered capital: 1,835,000 USD

Name of legal representative: XXXX

Business scope:

Item: television, RFID, Electromagnetic furnace, DVD, Computer, Plastic, mould, hardware, auto accessories.

Import & export business: Yes No

1.2 Basic Information

Contact Person: XXX Tel. number: 86-574-63459XXX

E-mail: [email protected] Fax number: 86-574-63459XXX

Homepage: www.XXX. com. cn

Company type: Manufactory Foreign Trading Combined

Type of ownership: Private Owner Public Company Joint Venture

Stated Owned Sole Proprietorship Other

Supplier & Assessed Company

Relationship: Wholly Owned Shareholder/Partner Capacity Contract

Products Manufactured: LED/LCD/PLASMA TV

1.3 Company Building Information

According to: Land Certificate Real Estate Certificate Lease Agreement

Factory Officer Claimed + Actually Observed

Total building size (㎡) 30000

Number of buildings: 3 Office area (㎡): 10000



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Production area (㎡): 8000 Warehouse area (㎡): 12000

1.4 Transportation

Vehicle quantity: Cars:5 Trucks:

Nearest Sea Port (How many kilometers from factory): Sea port: Ningbo Distance (km): 80

Nearest Airport (How many kilometers from factory): Airport: Ningbo Distance (km): 60

1.5

Public power supply connected? Yes No

Frequent power outage in the area?

(How many days per week if power outage?) Yes No

Whether factory have electric power generator?

(How many KW if there is electric power generator?) Yes No

Whether the electric power generator can support

production? Yes No

Remark:

1. Founded in 2000, XXX is a manufacturer of LED/LCD/PLASMA TV, which was invested by XXX Plastic Product Co., Ltd and XXX Technology PIE Ltd. XXX had 300 workers with 50injection machines, and it was sub-factory of XXX to produce the plastic part of TV

Score: 9



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SSeeccttiioonn 22 HHuummaann RReessoouurrccee

2.1 Organization Chart

Does the Organizational Chart have defined roles and

responsibilities? Yes No Pending

Does the job descriptions for each of the positions are

established on file? Yes No Pending

2.2 Employee Details

Department According to Factory Actual Finding

Administration Dept. 45 45

Sales Dept. 40 40

Financial Dept. 15 15

Production Dept. 200 200

Engineering Dept. 20 20

Quality Dept. 20 20

Others. 10 10

Total: 350 350

Chairman

Warehouse Quality

department

Technology

department

Chairman

assistant

Production

department

Sale

department

Finance

department

Purchase

department

R&D

department



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2.3 Main Person in Factory

Position Name Education Year (s) in current

company

Legal Representative /Owner XXX EMBA 12

General Manager XXX EMBA 4

Factory Director XXX EMBA 4

Sales Manager XXX EMBA 12

Production manager XXX College 10

QC manager/supervisor XXX College 8

Does the factory conducts & record on-job training for all

personnel or conducts pre-hire testing of skilled workers prior to

hiring?

Yes No Pending

Remark:

1. No pre-hire testing records for workers were kept by the factory.

Score: 8



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SSeeccttiioonn 33 FFoorreeiiggnn TTrraaddee CCaappaacciittyy

3.1 Export Overall Situation

Noexport license? Yes No Enterprise code: 3320930XXX

When does the company first time

get the export license? February 21, 2001 Export license valid period: February 25, 2014

The number of foreign trading staff

with relevant trading experience:

Total 20 staff: within 1 year staff 2-5 years 12 staff

5-10 years 8staff over 10 years staff

The language freely used by

foreign trade staff: English Others:

Overseas agent: /

Acceptable quotation: FOB CIF

Acceptable payment type: L/C T/T

3.2 Products and Markets Distribution

Annual turnover of last year: 45 million USD

Main products Main customers name Market location/country % of Total Business

Volume of last year

LED/LCD/PLASMA TV

XXX China 30

XXX USA 20

XXX Italy 10

XXX Iran 10

Other Middle East 30

Remark:

1. The order achievement record showed that 62% of the order was on-time delivery, but no delay analysis and corrective actions plan record was found.

Score: 8



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SSeeccttiioonn 44 PPrroodduuccttiioonn CCaappaabbiilliittyy

4.1 Production Capability

Operating hours: 8hours No. of shifts: 1

Low season: January to May Peak season: June to December

Name of production line/step

No. of workers

Monthly QTY (pcs)

Comments

Metal part punching 40

20000-30000

Please refer to the below capacity data

Assembly 200

4.2

Raw materials

Material name Supplier name Lead time (days) Location / Country of origin

Display Samsung, LG 15-20 Korea,

Main board XXX 15 Guangzhou, Shenzhen City

Drive board XXX 10-12 Shanghai City, Shenzhen City

Power XXX 10-15 Shenzhen City, Beijing City, Ningb

City

Remote controller XXX 12-20 Suzhou City, Xiamen City,

Hangzhou City

Cord XXX 12-15 Ningbo City

Speaker XXX 12-14 Shaoxing City, Jianying City,

Shenzhen City, Shanghai City

Screw XXX 7-12 Haimen City

EPE XXX 5-10 Shangyu City



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Structural part XXX 15 Suzhou City, Dongguan City,

Guangzhou City, Taicang City

Display wire XXX 10-13 Hangzhou City

Label XXX 3 Cixi City, Taizhou City

Battery XXX 3-5 Ningbo City, Dongguang City

Sub-contracting Yes No

Production step Supplier name Lead time (days) Location / Country of origin

/ / / /

4.3 Production Process

Production flow chart for general product

1 2

Metal board cutting Metal board cutting

3 4

Metal board punching Metal board punching



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5 6

IQC room Assembly line

7 8

Assembly line Assembly line

9 10

Assembling Assembling



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11 12

Inspection on line Packing

13 14

IPQC room Frist article inspection room

15 16

Final product inspection Final product inspection

@Photos3



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4.4 Machine List

Main production machine list

Picture Machine name Amount Use of state

Board cutting

machine 1

In use Idle

Repairing Out of control

Punch 40 In use Idle


Assembly line 4(one line

vacant)

In use Idle


@Photos5



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4.5 Production Lead Time from Receipt of PO

Item/model Quantity (pcs) Lead time Comments

2160 35days The daily capacity for 32” is 1080pcs and the

material preparing time is about 25-30days.

Remark:

1.

There were 4 assembly lines in the factory the daily capacity per line depend on the size and complexity of product. Please refer to the below data of capacity.

size

available lines hourly

capacity

daily

capacity

#1 #2 #3 #4 total

lines set/hour 7.5hours

15" 1 1 1 1 4 60 1800

21" 1 1 1 1 4 60 1800

24" 1 1 1 1 4 60 1800

26" 1 1 1 1 4 60 1800

32" 0 1 1 1 3 48 1080

39" 0 0 1 1 2 40 600

40" 0 0 1 1 2 40 600

42" 0 0 1 1 2 40 600

47" 0 0 1 0 1 30 600

50" 0 0 1 0 1 30 220

55" 0 0 1 0 1 25 180

60" 0 0 1 0 1 20 150

2. No written systematic process and daily capacity record to manage and ensure on-time delivery.

Score: 9



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SSeeccttiioonn 55 QQuuaalliittyy CCoonnttrrooll

5.1 Quality Control System

Quality Manual: Yes No QC manager/supervisor: XXX

Standard: GB2828.1-2003 Sample level: Level II

FQC AQL: Critical: 0 Major: 1.5 Minor: 4.0 Other: /

Is there an independent Quality Department? Yes No Pending

Is there effective incoming quality control system? Yes No Pending

Is there effective in process quality control system? Yes No Pending

Is there effective quality control before shipment? Yes No Pending

Who does the QC/QA Manager /Supervisor report to? General manager

5.2 Certification

ISO series:

Yes (name) : ISO9001, ISO14001,

Certificate no.: ISO9001:00111Q211448R1M/XXXX; ISO14001:00111E22131R1M/XXXX;

Issued by: China Quality Certification Center

Period: December 9th, 2011 to December 8th, 2014

Product certificate: Yes (name) : UL, CE

Others: No

5.3 Supplier Management

Does the company establish and implement an effective

suppliers’ assessment procedure? Yes No Pending

Does the company have an updated list of approved suppliers? Yes No Pending

Does the company keep its Supplier Assessment Reports? Yes No Pending

5.4 QC Details

Position Supervisor (name) No. of Inspectors

IQC (Incoming Quality Control) XXX 7

IPQC (Input Process Quality Control) XXX 3



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FQC (Final Quality Control) 8

OQC (Outgoing Quality Control)

QA (Quality Assurance) XXX 1

QE (Quality Engineer) XXX 1

Total: 20

Does any record or evidence show that there is a formal

internal training program for all quality control (QC)

personnel?

Yes No Pending

Are the factory's Q.C. personnel certified before they perform

their job? Yes No Pending

Are there adequate, clearly written criteria/instructions with

proper accept/reject criteria available as guidelines to

inspectors?

Yes No Pending

5.5 Customer Complaint Handling

Independent Dept. Sales Dept. Production Dept. Quality Control Dept.

Production Dept. Others:

Is customer feedback, including complaints, clearly recorded

and maintained? Yes No Pending

Does the factory have a formal process for handling customer

complaints and in place? Yes No Pending

Do records show that the corrective and preventive actions are

properly conducted and monitored to show effectiveness? Yes No Pending

Remark:

1. The factory had established complete quality control system.

2. No training record and personnel certified record for the QCs were kept.

3. No clearly segregated area for the non-confirming raw material in the warehouse.

Score: 9



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SSeeccttiioonn 66 RR && DD

6.1 Engineering

Design department: Yes, engineer quantity: 20 No engineering department.

Production design: Yes, can design new item No, but according to client's requirement

Own brand: Yes: Boigle No own brand

Own patent: Yes: No own patent

Is there an adequate and formal system for receiving and applying

drawings, procedures, design change, etc. correctly? Yes No Pending

6.2 Sampling

New mold making: Yes, lead time: 30days No mold making

Sample making: Yes, lead time: 7days No sample making

Is there any procedure or standard for sample making? Yes No Pending

Do any records or evidence show that approved samples are well

labeled and under controlled? Yes No Pending

6.3 Test Equipment

Test equipment list

Picture Equipment

name Amount Use of state

AFG 2 Calibrated Not calibrated

Out of control



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PS3 2 Calibrated Not calibrated

Out of control

chromo-therm

ometer 4

Calibrated Not calibrated

Out of control

Signal

generator

(K8278,K8256,

K8268)

3 Calibrated Not calibrated

Out of control

Oscillometer

(Tektronix) 2

Calibrated Not calibrated

Out of control



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Signal

generator

(FLUKE

54200)


Out of control

Anamorphoser 1 Calibrated Not calibrated

Out of control

Caliper 5 Calibrated Not calibrated

Out of control

Hi-pot tester 3 Calibrated Not calibrated

Out of control



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Earth

continuity

tester


Out of control

Remote

controller

tester


Out of control

High-temperat

ure Aging

room


Out of control

Remark:

1. The factory can develop new product according to client’s requirement and sampling time is about 7days.

2. No label on the approved sample.

Score: 8



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SSeeccttiioonn 77 CClliieenntt’’ss SSppeecciiaall RReeqquuiirreemmeenntt

SPECIAL REQUIREMENT FROM CLIENT

No special requirement from client

@End

SSeeccttiioonn 88 RReellaatteedd PPhhoottooss

General pictures

Factory gate Factory internal view

Office building Offices view



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Sale department Technology department

R&D department Sample room

Punching workshop Mould area



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Warehouse office Foam warehouse

Finished product warehouse LCD/ LED warehouse

Inspection area Accessories warehouse



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Electronic warehouse Assembly workshop

Finished product warehouse Generator

NIL

Generator NIL

Documentation



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Business license Company code

Tax register Export license

Joint venture approved certificate Land certificate



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ISO9001:2008 ISO14001;2004 certificate

UL certificate CE certificate

Quality manual Quality organization



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Machine maintenance plan Machine maintenance record

Machine maintenance record SJ standard

QA operation instruction Finished product inspection regulations



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Order assessment record Workflow management policy

FQC inspecting record FQC inspecting record

Third party inspection record 8D report



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IQC inspection instruction IQC record

IQC record IQC record

First article inspection record IPQC record



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IPQC record IPQC record

Product realizing procedure Sample record

Calibrated report for the tester Customer complaint handling procedure



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Customer complaint record Repairing record for customer complaints

Order finished rate statistic Order finished rate statistic

Job description Job description



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Working instruction at each position Outgoing record for material

Material label Material label

Finished product label Product trace label on assembly line



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Qualified supplier list Supplier assessment record

@Photos2

************************************************ This is The End of the Report *************************************************** The above reflects our findings for the particular factory in concern on the date of our service only. This report does not certify, confirm or imply: a) compliance with any government, industry or association regulations or standards, unless stated otherwise; or,) the quality of any specific products manufactured by the factory/sellers/suppliers; or, c) the shipment of any specific products. This report does not discharge or release the factory/sellers/suppliers from their commercial, legal or contractual obligations with buyers in respect of products manufactured by the factory/sellers/suppliers. Our services, including reports and certificates, are subject to the General Conditions of Service of V-Trust which have been sent to your company. They can be resent upon written request. This report cannot be partially copied.

SUPPLIER ASSESSMENT REPORT - V-Trust report - Factory Audit.pdfFounded in 2000, XXX Digital Technology Co., Ltd is a manufacturer of LED/LCD/PLASMA TV, which was invested by XXX Plastic

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