Annex 3 - Quality Assurance

1 Specification

1.1 All Goods must be defined by an agreed Specification with a unique identification
code.

1.2 The Goods delivered by the Supplier shall always conform to the quality and
other characteristics stated in the Specification agreed by the Parties.

1.3 The properties of the Goods shall, whenever possible, be defined with target
values and tolerances for each included property. The target value for each
property shall correspond to the value towards which the Supplier steers its
process and the tolerances shall specify the limits for every individual such
property.

Individual measurements shall be used for any analysis of the different

properties. This applies to the qualification of new materials, i.e. when setting a
new specification, as well as for the analysis of running production.

1.4 On delivery the Goods shall be marked with an identification of from which
production batch it comes. The Certificate of Analysis (CoA) / Certificate of
Conformity (CoC) shows the inspection results of a batch.

Supplier’s definition of a batch: [to be completed or remove the entire line if not
used].

1.5 Nothing in this Annex shall in any way limit or reduce the Suppliers liability under
the Agreement.

2 Control Plan for Product and Process

2.1 The Supplier shall develop and maintain a Control Plan for the purpose of
ensuring that all coming deliveries to ESSITY will meet the Specification.

2.2 The Control Plan lists the product and process characteristics monitored during
the manufacturing process, including measurement methods and necessary
reaction plans for deviant conditions.

2.3 The characteristics on the Control plan shall be identified through a risk
assessment (e.g. D- and P-FMEA).

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2.4 Control Plans shall be available for review upon ESSITY´s request. If a
translation into English of the documentation is needed, this shall be presented
within 10 working days.

2.5 Standard Control Plan elements are:

• Part/Process name: Identifies the part or process name.
• Machine/Device (in production): Describes the processing equipment for
each process step.
• Characteristic: Names the characteristic that is being measured.
• Specification: Identifies material and/or process specification, including
tolerances.
• Measurement techniques: Identifies the test equipment (or other
measurement system) that will be used.
• Control Methods: Describes how the operation will be controlled, e.g. work
instruction or industry standard.
• Sample size: Defines the number of samples measured.
• Sampling Frequency: Specifies how often measurements are conducted.
• Quality Record: States how the measurements are recorded.
• Reaction Plan: States what is done if the measurement does not meet the
Specification.

If there are requirements for annual legal classification or other regular testing,
that is not part of the daily production controls, these shall also be identified within
the Control plan.

3 Measurement System Analysis (MSA)

3.1 Measurement system analysis (MSA) is an experimental and mathematical
method of determining how much the variation within the measurement process
contributes to the overall process variability.

3.2 The capability of the measurement system must be established prior to any
statistical evaluation (Cp, Cpk, Pp, Ppk and Cpm).

4 Process Capability Studies

4.1 The Supplier shall perform Process Capability Studies which involves collecting
samples over a period of time to determine whether a process is in control and
consistently produces a product within the Specification limits.

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4.2 Sampling

4.2.1 A minimum of 125 individual measurements should be used for the calculation of
Process Capability and preferably the sampling should be divided in 25
subgroups of at least 5 individual measurements.

4.2.2 Individual samples for the analysis shall be collected during normal production
and the sampling intervals should be relevant to catch representative variations.

4.2.3 The process capability study should be focused on continuous data, unless
something else is agreed with ESSITY representative. Attribute data are not
acceptable for Process Capability analysis.

4.3 Requirement

4.3.1 Supplier’s manufacturing processes shall be controlled to maintain a Process

performance (Ppk) of at least 1.33.

4.3.2 If the required Ppk has not been obtained, Supplier shall notify ESSITY
immediately. The Supplier shall also present an action plan that describes
corrective actions to be implemented in order to ensure a Ppk of at least 1.33 for
further production.

4.4 Reporting

4.4.1 The Process Capability study should be documented and reported upon request
from ESSITY. Generally 6 months data will be required and the analysis should
be presented to ESSITY within 5 working days.

4.4.2 The Process Capability report shall include:

- Control chart(s)
- Histogram(s)
- Standard deviation(s), Cp, Cpk, Pp and Ppk.
- Cpm, for properties where a target has been specified.

4.4.3 Preferably the analysis should be presented to ESSITY as “Sixpack”. See

example below (here from the statistical software “Minitab”). If so required by
ESSITY, also the data behind the analysis should be provided.

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 Process Capability Sixpack
Xbar Chart Capability Histogram
LSL Target USL
UCL=603,049
602 S pecifications
Sample Mean

_ LS L 590
_
X=600,23 Target 600
600
USL 610
598
LCL=597,411
1 3 5 7 9 11 13 15 17 19 21 23 25 591 594 597 600 603 606 609

R Chart Normal Prob Plot

10 A D: 0,287, P : 0,615
UCL=8,83
Sample Range

5 _
R=3,87

0 LCL=0
1 3 5 7 9 11 13 15 17 19 21 23 25 595 600 605

Last 25 Subgroups Capability Plot

604 Within Within Overall
StDev 1,879 StDev 1,874
Values

Cp 1,77 Pp 1,78
600 Cpk 1,73
Overall Ppk 1,74
PPM 0,13 Cpm 1,77
PPM 0,12
596
Specs
5 10 15 20 25
Sample

5 Certificate of Analysis (CoA) or Certificate of Conformity (CoC)

5.1 At least 24 hours before the Goods arrive to ESSITY, the Manufacturing Plant /
IDC (International Distribution Center) shall receive the CoA /CoC of the delivery
by e-mail.

5.2 If agreed, between Supplier and the receiving Manufacturing Plant/IDC, the CoA
/CoC can be kept by Supplier, it being understood that Supplier shall present the
CoA within 24 hours from a request by ESSITY.

5.3 The CoA shall be in English and contain the following:

- Identification of the batch

- Production date

- Properties identified in the Specification.

Preferably the name and order of the properties in the CoA shall follow
the same name and order as in the Specification.

- Specification values, targets and tolerance limits

- Results of tests carried out. The result shall include:

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 - average values

- minimum and maximum values

- standard deviation and Cpk (if appropriate)

- number of samples.

- Approval by authorized function

5.4 The analysis shall be based on individual measurements and all values shall be
within tolerances.

5.5 The sampling shall be done in such a way as to be representative for the
complete batch.

6 Root cause analysis and Corrective actions

6.1 Root cause analysis.

A root cause analysis shall be performed by the Supplier and presented to ESSITY
in writing for all quality claims reported in order to avoid defects in future potential
deliveries.

For quality complaints considered as critical by ESSITY, an Eight Disciplines

Report (”8D Report”) or equivalent shall be made by the Supplier as described in
section 6.2 below. An 8D Report template, including brief instructions to each step
of the process, can be provided by ESSITY upon request. The report shall be
written in English and be presented in full to ESSITY.

The corrective actions related to a quality claim shall be presented to ESSITY

without delay and in accordance with the timelines set forth in section 6.3 below.

6.2 Methodology.

The 8D process is a structured problem solving methodology.

Following steps are mandatory:

• D0 Problem awareness: Identify the problem.

• D1 Establish team: Appoint team leader and team representatives.
• D2 Describe problem: Quantify the problem.
• D3 Contain symptoms: Define the interim corrective actions (ICA)
• D4 Find root cause: Define possible causes for “Why made?” and “Why
shipped?”
• D5 Identify permanent corrective actions: Choose, prioritize and verify
corrective actions.
• D6 Verify permanent corrective action: Plan, implement and validate the
selected corrective action.

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 • D7 Prevent recurrence: Determine improvements needed in systems and
processes to prevent recurrence. Documentation to be updated.
• D8 Recognize team / Close issue congratulate: Recognize individual and
group contributions.

6.3 Corrective actions.

Corrective actions are to be implemented by the Supplier without delay against

any nonconformity, both as short and long term actions.

Unless otherwise agreed, the implementation of short term actions (as described
in section 6.2 above under D0 – D3) by the Supplier are required within 24 hours
from reporting during working days. In addition, the Supplier must appoint, as a
minimum, a person responsible for product crisis management who shall have the
authority and means to implement immediately short term actions in case of critical
claims, including during weekends.

Planned long term actions (as described in section 6.2 above under D4 – D8) shall
be implemented by the Supplier within 14 days or as agreed with ESSITY. Upon
Supplier’s reasonable request, ESSITY will provide samples of the non-conforming
Goods and other reasonable information relating to the claim without undue delay.

7 The Suppliers undertaking in this Annex 3 in relation to quality supersedes any

previous Quality Agreements between the parties.

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