Cargotec
Supplier Requirements

2016-12-31
CSR V2.1

1 Management Responsibility...................................................................................................... 6
1.1 Business Plan .................................................................................................................... 6
1.2 Key Performance Indicators ............................................................................................... 6
1.3 Financial Stability ............................................................................................................... 6
1.4 Quality Management System ............................................................................................. 6
1.5 Management Review ......................................................................................................... 6
1.6 Resources.......................................................................................................................... 6
1.7 Code of Conduct ................................................................................................................ 7
2 Quality Management ................................................................................................................ 8
2.1 Internal & External records ................................................................................................. 8
2.2 Quality Planning ................................................................................................................. 8
2.3 Internal Audits .................................................................................................................... 8
2.4 Document Control .............................................................................................................. 8
3 Environmental .......................................................................................................................... 9
3.1 Environmental management .............................................................................................. 9
3.2 Environmental matters ....................................................................................................... 9
3.3 End-of-life treatment........................................................................................................... 9
3.4 International Material Data System (IMDS) Registration .................................................... 9
3.5 National & International Regulations .................................................................................. 9
3.6 Environmental impacts ....................................................................................................... 9
4 Risk Management .................................................................................................................. 10
4.1 Risk Plan.......................................................................................................................... 10
4.2 Contingency Plan ............................................................................................................. 10
4.3 Emergency Procedures.................................................................................................... 10
4.4 Safety Precautions ........................................................................................................... 10
4.5 Security ............................................................................................................................ 10
4.6 Confidentiality Agreement ................................................................................................ 10
5 Project Management .............................................................................................................. 11
5.1 Contract Review............................................................................................................... 11
5.2 Project Management planning.......................................................................................... 11
5.3 Resources and Contact person ........................................................................................ 11

5.4 Escalation process for Project Management .................................................................... 11
5.5 Change Management....................................................................................................... 11
5.6 IPR - Intellectual Property rights ....................................................................................... 11
5.7 Project Management handover ........................................................................................ 11
5.8 Prototype building ............................................................................................................ 12
6 Production .............................................................................................................................. 13
6.1 Process Flow Chart .......................................................................................................... 13
6.2 Customer Approval .......................................................................................................... 13
6.3 Work Instructions ............................................................................................................. 13
6.4 Maintenance .................................................................................................................... 13
6.5 Customer Tooling ............................................................................................................. 13
6.6 Control Plan ..................................................................................................................... 13
6.7 Continues Improvements ................................................................................................. 13
6.8 Rework ............................................................................................................................ 13
6.9 Root Cause Analyses....................................................................................................... 14
6.10 Releasing of Products .................................................................................................... 14
6.11 Measuring Equipment .................................................................................................... 14
6.12 Calibration of measuring equipment’s ............................................................................ 14
6.13 Testing in Process ......................................................................................................... 14
6.14 Incoming Inspection ....................................................................................................... 14
6.15 Managing Transportation ............................................................................................... 14
6.16 Product Audit ................................................................................................................. 14
6.17 Labelling and Quantity delivery ...................................................................................... 14
6.18 Identification ................................................................................................................... 15
6.19 Traceability .................................................................................................................... 15
7 Training .................................................................................................................................. 16
7.1 Education of Personal ...................................................................................................... 16
7.2 Competence Matrix .......................................................................................................... 16
7.3 Development Plans for Employees .................................................................................. 16
8 Product Development ............................................................................................................. 17
8.1 Product Development process ......................................................................................... 17

8.2 Design requirement’s ....................................................................................................... 17
8.3 Project planning ............................................................................................................... 17
8.4 Design Review ................................................................................................................. 17
8.5 Development Tools .......................................................................................................... 17
8.6 Control of Design Changes .............................................................................................. 17
8.7 R&D Capabilities & Innovation ......................................................................................... 17
8.8 Prototype building ............................................................................................................ 17
8.9 QA of Prototypes, ............................................................................................................. 18
9 Purchasing ............................................................................................................................. 19
9.1 Purchasing Process ......................................................................................................... 19
9.2 Purchasing Organization .................................................................................................. 19
9.3 Outsourced Services ........................................................................................................ 19
9.4 Outsourced & Assigned Products..................................................................................... 19
10 Cost Control ......................................................................................................................... 20
10.1 Cost improvement .......................................................................................................... 20
10.2 Continuous Improvements ............................................................................................. 20
10.3 Inventory Management .................................................................................................. 20
11 Warranty............................................................................................................................... 21
11.1 Warranty issues ............................................................................................................. 21
11.2 Warranty Claims ............................................................................................................ 21
12 Product Liabilities ................................................................................................................. 2212.1 Recall Procedure ........................................................................................................... 2212.2 Insurance ....................................................................................................................... 22
13 Logistic ................................................................................................................................. 23
13.1 Logistic support .............................................................................................................. 23
13.2 Integrated Planning System ........................................................................................... 23
13.3 Materials management ................................................................................................... 23
13.4 Lead-times and lot-sizes ................................................................................................ 23
13.5 Capacity planning .......................................................................................................... 23
14 Spare Parts .......................................................................................................................... 24
14.1 Deliveries ....................................................................................................................... 24

14.2 Availability ...................................................................................................................... 24
14.3 Quality............................................................................................................................ 24
15 Facilities ............................................................................................................................... 25
15.1 Layout & Material flow .................................................................................................... 25
15.2 House keeping ............................................................................................................... 25
15.3 Manufacturing Assurance............................................................................................... 25

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1 Management Responsibility
1.1 Business Plan
The Supplier shall have a clear business plan and a strategy to guide the future development of the company.
This plan shall be reflected in respective plans of business units, functions or equal. The plan shall include
objectives, targets, actions, responsibilities and schedules.
1.2 Key Performance Indicators
The Supplier shall define key performance indicators for SQDC (Safety, Quality as PPM, Deliveries andCost) as minimum, which will be used to monitor the company’s performance towards its strategic
objectives. These KPI shall be measurable towards the targets into the Business plan. Management shallreview these indicators on a regular basis and use the data to initiate improvement actions.
1.3 Financial Stability
The Supplier shall demonstrate a solid financial history.
1.4 Quality Management System
The Supplier shall ensure that the Supplier itself and all its production units minimum are certified according
to ISO 9001
1.5 Management Review
Management shall ensure the quality, environmental and risk management systems’ applicability andeffectiveness by regular reviews. The reviews shall lead to planning and implementing improvements.
1.6 Resources
Suppliers Management shall ensure availability of adequate resources. Employees shall have the required
education, training and competencies for their position and tasks. The supplier shall create and retain all
Certificates. These development plans shall support the fulfilment of the supplier’s business plan.

7 (25)
1.7 Code of Conduct
The Supplier shall have a documented code of ethics or a code of conduct. The supplier shall; respect
internationally accepted human rights; respect the freedom of association and the right to collective
bargaining, eliminate all forms of compulsory or forced labour, effectively promote abolition of child labourand eliminate discrimination in respect of employment and occupation
The Supplier shall also acquaint himself with Cargotec’s Code of Conduct.
The Supplier shall comply at all times with all applicable laws and regulations pertaining to, without
limitation, anti-money laundering, embargoes and/or sanction requirements as well as the US Foreign
Corrupt Practices Act and the UK Bribery Act, as may be amended. The Supplier shall accept specific anticorruption clauses to be included in the contract with Cargotec

8 (25)2 Quality Management
2.1 Internal & External records
The Supplier shall define internal and external quality records. Such as Internal audits, product audits, 8D
reports etc. Responsibilities to collect, store, maintain and delete such records must be explicitly defined.
These records shall consist of documents related to quality/environmental/risk management system reviews.
2.2 Quality Planning
The Supplier shall have a systematic Quality project planning process, such as the Cargotec Quality
Assurance Plan.
It shall be used to determine if all engineering design record and specification requirements are properly
understood by the supplier. The manufacturing process shall have the potential to produce products
consistently meeting these requirements on time.
2.3 Internal Audits
The Supplier shall conduct internal quality (System, Product, Project and Process) audits using qualified
auditors according to set procedures. Internal quality audits shall be planned and executed according to theplans. Audit results shall be a subject to regular reviews and respective corrective actions shall be taken
without unnecessary delay. These corrective actions’ effectiveness shall be verified.
2.4 Document Control
The Supplier shall have a document control system to create, check, approve, release, distribute and delete
quality system related documentation (Drawings etc.) and data throughout the whole organization. It shallalso include the Sub Supplier (Tier 2).

9 (25)

3 Environmental
3.1 Environmental management
The Supplier shall have a documented environmental management system. It shall be under regular reviewsand emphasize continuous improvement actions.
3.2 Environmental matters
The Supplier shall consider environmental matters during all phases of its product development process. Allreasonable efforts shall be made to eliminate or reduce hazardous contents from the product and its
manufacturing process.
3.3 End-of-life treatment
The Supplier shall have procedures for and evidence of recording the raw material content of its products,
Certificates and material data sheets.
3.4 International Material Data System (IMDS) Registration
When required the supplier shall obtain adequate knowledge and report into IMDS.

3.5 National & International Regulations
Supplier must provide documented compliance of National and International environmental legislations aswell as specific European Union legislations. Supplier must also continuously remain updated of changes,
news to the legislations.
3.6 Environmental impacts
The Supplier shall identify environmental impacts. It shall include, but not limited to, emissions to air, waterand soil. All impacts shall be monitored for continuous improvements.

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4 Risk Management
4.1 Risk Plan
The Supplier shall have an up to date risk plan. It shall promote effective identification, analysis, control,
prevention and monitoring of business risks. Management shall ensure that it is appropriately communicated,
understood and implemented throughout the whole organization. The plan shall include strategy, financials,
quality, operations, supply, logistics, technology, location, natural hazards and (trade) political risks.
4.2 Contingency Plan
Supplier shall have a Business contingency plan. Including Major disruptions, Fire, Production stop etc.
It shall guarantee business operations continuity and customer service in case of an interruption.
4.3 Emergency Procedures
The Supplier shall have appropriate emergency procedures including evacuation and rescue plans.
4.4 Safety Precautions
The Supplier shall have a process in place to manage health & safety at workplaces. Supplier shall
implement safety precautions throughout the whole organization for dealing with hazardous substances,noise, and equipment. Safety instructions and appropriate safety devices shall be in use.
4.5 Security
The Supplier shall implement security procedures covering buildings, employees, documents, IT systems andmovement of products. It shall also include measures to prevent unauthorized access to its IT systems.
Necessary precautions shall be implemented in form of fireproof cabinets, virus scans, up-to-date electronic
back-ups etc.
4.6 Confidentiality Agreement
The Supplier shall have a confidentiality agreement with all of its employees including temporary employees
and resident subcontractors.

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5 Project Management
5.1 Contract Review
The Supplier shall have a formal Project management review system to convert customer requirements into
Supplier’s internal requirements. The requirements referred to may be: Requirements specifically
documented in Cargotec specifications, purchase order, agreement, request for quotation or otherdocumentation
5.2 Project Management planning
The supplier shall have a project plan for its project management, with milestones included.
The plan shall cover important activities from RFQ to start of production.
5.3 Resources and Contact person
The supplier shall make sure that they have the right resources available for Project management, including
their responsibility. The supplier shall nominate contact person(s) to manage the relationship between
Cargotec and the Supplier. The contact persons shall have fluent skills in English.
5.4 Escalation process for Project Management
The supplier shall have a defined process for handling disruptions in the project plan, and inform Cargotec iftime plan will be affected.

5.5 Change Management
Contractual changes like engineering changes and changes related to customer requirements shall be
managed using Project Management Planning.
5.6 IPR - Intellectual Property rights
The supplier shall have a policy or procedure to protect 3rd party IPR (Intellectual Property Rights).
According to the policy the Supplier shall have a procedure within its Project Management system to assurethat no 3rd party IPR are included in deliveries to Cargotec without the right to do so.
5.7 Project Management handover
The supplier shall have an official handover process from project management to serial production. There
shall be an agreement between the project and production that they are ready to start serial production.

12 (25)

5.8 Prototype building
Prototypes shall be managed early in the supplier’s project management system. The plan shall clearly define
how and when a prototype shall be build.

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6 Production
6.1 Process Flow Chart
The supplier shall have a production process implemented according to an optimized plan. The process flow
shall ensure effective operation and control of the process. If any part of the process is subcontracted, thisshall be indicated in the process flow.
6.2 Customer Approval
The supplier’s process and materials including related changes shall be qualified and approved according to
set procedures by Customer. The records of process and material qualification shall be available to
Customer.
6.3 Work Instructions
The Supplier shall have work instructions, it shall include descriptions for each work station in the process.
6.4 Maintenance
The Supplier’s process equipment shall be qualified for the purpose. The equipment shall be underpreventive maintenance according to a specific plan. All records of maintenance shall be stored.
6.5 Customer Tooling
The supplier shall establish appropriate procedures for storing, inspecting and maintaining customer owned
tools, fixtures and jigs. All customers owned equipment must be labelled with “property of Cargotec”.
6.6 Control Plan
The supplier shall define a production control plan in order to keep the process under control. Respective
controls shall be established, for processing, assembly and inspection/testing with results recorded. The
control plan shall be available at the different work places and operators shall have been trained.
6.7 Continues Improvements
The Supplier shall use statistical methods and techniques to analyze process data for continuous
improvement. All records of all improvements must be stored.
6.8 Rework
The supplier shall define in-process rework and appropriate procedures for conducting it. Repaired and/or
reworked products shall be re-inspected.

14 (25)
6.9 Root Cause Analyses
The supplier must conduct root cause analyses for production and process failures.
All records must be stored.
6.10 Releasing of Products
Prior to releasing products for delivery the Supplier shall assure that the products confirms to Cargotec’s
requirements.
6.11 Measuring Equipment
The serial production supplier shall have all necessary measuring equipment’s to be able to measure andverify if the products comply with all customer requirements, stated on drawings and standards to be able tokeep an in-house process control.
6.12 Calibration of measuring equipment’s
The Supplier shall have a documented procedure for the calibration and certification of tools/equipment. Alldata from calibration and certification of inspection, measurement and test equipment must be stored.
6.13 Testing in Process
The Supplier shall conduct inspection and testing according to control plans. The records of testing andinspection must be maintained and stored.
6.14 Incoming Inspection
The Supplier shall have a procedure describing appropriate inspection of incoming materials. These
procedures shall include systems to ensure traceability of product if found unacceptable.
6.15 Managing Transportation
The Supplier shall establish methods and means for preventing damage to materials and products during
handling and transportation.
6.16 Product Audit
The Supplier shall conduct Product Audits at suitable intervals of the products while they are in stock.
6.17 Labelling and Quantity delivery
The Supplier shall pack and label the products appropriately prior to the delivery to avoid damage or loss. It
shall also be established controls and procedures to assure on-time and right quantity deliveries.

15 (25)
6.18 Identification
The Supplier shall have a documented procedure for ensuring that all products are identified to indicate theirconformance or non-conformance throughout all process steps
6.19 Traceability
The Supplier shall implement method for traceability of individual parts used in the final product throughout
all stages of the manufacturing process. When traceability of finished product is a specific requirement every
completed product or lot shall have a clear, well documented mean of identification. This identification shallbe recorded and retained as a quality record.

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7 Training
7.1 Education of Personal
The supplier shall continuously educate and train their personal/resources. All records of all training must be
stored.
7.2 Competence Matrix
The supplier shall have a procedure in place to define/monitor the competence skills the employees/resources
possess.
7.3 Development Plans for Employees
The supplier shall regularly conduct Personal Development Plans with all their employees.

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8 Product Development
8.1 Product Development process
The Supplier shall have a documented product development process to ensure effective planning, execution
and control of the product throughout its lifecycle.
8.2 Design requirement’s
The development process shall be based on the requirements identified during contract review.
8.3 Project planning
The supplier shall have a project planning tool. It shall clearly identify responsibility for engineering/designand development. Project shall be managed according to planned targets in terms of resourcing, scheduling,
product quality and costs.
8.4 Design Review
The Supplier shall perform formal design reviews to systematically analyze the progress of the productdevelopment activities and their output at certain milestones.
8.5 Development Tools
The Supplier shall validate all design and development tools including software. The tools used shall becompatible with ones used by Cargotec.
8.6 Control of Design Changes
The Supplier shall establish procedures to reliably manage, track and document changes in requirements anddesigns. The process shall include practices for documentation and version management. The Supplier shallinform Cargotec of all engineering changes.
8.7 R&D Capabilities & Innovation
The supplier shall have a strategy and plan for future technologies and innovation.
8.8 Prototype building
The Supplier shall be able to handle prototype building during the project phase in the project management.
Prototypes shall be provided to Customer according to a set time plan and effective manner.

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8.9 QA of Prototypes,
The supplier must verify that prototypes are produced so they are representing the technical documentation.
Records of verification must be available upon request.

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9 Purchasing
9.1 Purchasing Process
The Supplier shall have defined procedures to select and approve its suppliers. Supplier performance shall bemonitored on monthly basis on minimum QD (Quality and Deliveries) and targets shall be defined.
9.2 Purchasing Organization
The Supplier’s purchasing organization shall be aligned to support both continuous operations and productdevelopment to assure availability of quality, delivery and cost optimized material supply.
9.3 Outsourced Services
The supplier shall have procedures to ensure quality of outsourced services.
9.4 Outsourced & Assigned Products
The supplier shall have a procedure for Quality Planning, assurance and control of outsourced and assigned
products.

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10 Cost Control
10.1 Cost improvement
The supplier shall have continuous cost improvement programs. The programs shall be applicable forinternal cost improvements as well as for supply chain cost improvements.
10.2 Continuous Improvements
The supplier shall actively work to reduce waste to increase productivity.
The supplier shall have a procedure or program to identify waste and establish activity plans for
improvements.
10.3 Inventory Management
The Supplier shall actively manage its inventories to reduce unnecessary capital employed and to avoid
unnecessary cost related to obsolete materials or products.

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11 Warranty
11.1 Warranty issues
The supplier shall have a procedure for handling Warranty issues.

11.2 Warranty Claims
The Supplier shall have a corrective action process for warranty to evaluate customer claims22 (25)

12 Product Liabilities
12.1 Recall Procedure
The Supplier shall have a Product Liability Procedure including a recall process and defined liability related
responsibilities.
12.2 Insurance
The Supplier shall have liability insurance for finished products covering Cargotec’s market areas. The
minimum insurance limit shall be EUR 1.000.000.

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13 Logistic13.1 Logistic support
The Supplier shall have an established system and access to necessary service providers to supply bothproduction material and spare parts – if applicable – to Cargotec on a global basis
13.2 Integrated Planning System
Supplier shall use an integrated planning system for order management, materials requirements planning,procurement, ware housing and inventory management.
In order to reduce the administrative waste in his processes, supplier should have an adequate Electronic
Data Interchange (EDI) system in place.
13.3 Materials management
Supplier shall work according to First-In-First-Out (FIFO) principle.
Supplier should actively manage inventory accuracy by regularly stock takes.
13.4 Lead-times and lot-sizes
Supplier shall actively work on lead-times and lot-size improvements in supply chain, as part of continuous
improvement programs.

13.5 Capacity planning
Supplier shall have a tool for capacity planning. Tool must also include sub-suppliers, sub-contractors andraw-materials.

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14 Spare Parts
14.1 Deliveries
The Supplier shall be able to support spare parts deliveries directly to location assigned by Cargotec in small
quantities on short lead-times without a cost penalty.
14.2 Availability
The Supplier shall have a system to assure spare parts availability to Cargotec at reasonable cost throughout
the Cargotec spare part liability period.
14.3 Quality
The supplier shall have a procedure for Quality Planning and Assurance of spare parts.

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15 Facilities
15.1 Layout & Material flow
The Supplier’s manufacturing, testing, packing, storing and shipping shall have a clear layout to avoid
bottlenecks crated due to space constraints or unsuitable material or product flows.
15.2 House keeping
The Supplier’s facilities, equipment and tools shall be clean, well-organized and in a proper order.
15.3 Manufacturing Assurance
The Supplier shall ensure that all manufacturing and product development facilities have reliable sources ofelectricity, water, chemicals, gases etc.