HARLEY-DAVIDSON MOTOR COMPANY

(“H-D”)

SUPPLIER QUALITY MANUAL

pg. 0
 Table of Contents
HARLEY-DAVIDSON QUALITY POLICY .............................................................................................................. 2
PURPOSE ..................................................................................................................................................................... 2
SCOPE .......................................................................................................................................................................... 2
MANUAL LOCATION ............................................................................................................................................... 2
QUALITY SYSTEM REQUIREMENTS .................................................................................................................... 2
ADVANCED PRODUCT QUALITY PLANNING (APQP) .................................................................................. 3
PRODUCTION PART APPROVAL PROCESS (PPAP) ........................................................................................ 4
SAFE LAUNCH STRATEGY ................................................................................................................................. 4
SPECIAL CHARACTERISTICS ............................................................................................................................. 5
SUPPLIER PRODUCT OR PROCESS CHANGE NOTIFICATION ..................................................................... 6
NON-CONFORMING MATERIAL (NCM) MANAGEMENT ............................................................................. 6
PACKAGING AND LABELING ................................................................................................................................ 9
SUB – TIER SUPPLIER MANAGEMENT............................................................................................................... 10
SUPPLIER PERFORMANCE REPORTING ............................................................................................................ 10
CHARGE BACK ........................................................................................................................................................ 11
REVISION RECORD ................................................................................................................................................ 11

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 HARLEY-DAVIDSON QUALITY POLICY

“Customers for life…

Harley-Davidson values the deep emotional connection that is created with our customers through our products,
services and experiences. We are fueled by the brand loyalty and the trust that our customers place in us to deliver
premium quality and the promise of a fulfilling lifetime ownership experience. We exemplify this commitment by
embracing a culture of personal responsibility and stewardship for quality in everything we do.”

PURPOSE

The intent of the Supplier Quality Manual (this “manual”) is to define Harley-Davidson’s expectations and
supplier responsibilities in support of Harley-Davidson’s business strategy. The requirements in this manual extend
from new part development through part obsolescence – the lifecycle of a part.

SCOPE

Requirements specified in this manual apply to all suppliers that produce original equipment (OE) and parts
that are sold, directly or indirectly, to H-D. It is the responsibility of each Tier 1 Supplier to propagate these
requirements to their supply chain, including all Sub-Tier Suppliers, and ensure their compliance with this manual.
Nothing in this manual limits any of the rights or remedies of H-D under the Master Supply Agreement or other
supply contract between H-D and the Supplier.

MANUAL LOCATION

This manual is distributed via H-D’s Supplier web portal, Harley-Davidson Supplier Network (H-
[Link]) and may be updated and revised from time to time by H-D. Suppliers are expected to remain up to date
on H-D requirements by frequently visiting H-DSN. Printed copies of this manual are considered uncontrolled
documents; the version of this manual found on H-DSN at any point in time is the binding document. Questions
regarding this manual should be directed to your Current Product Supply Management contact.

QUALITY SYSTEM REQUIREMENTS

As a condition of doing business with H-D, Tier 1 Suppliers must have a current, certified Quality
Management System in place by an accredited registrar. This is typically certification to the ISO9001 or
IATF16949 standard(s). Suppliers who are not certified are expected to have a compliant Quality Management
System and be working toward certification. At the discretion of Harley-Davidson, a Supplier Systems Evaluation
may be conducted at the supplier to evaluate a supplier’s risk.
All Suppliers must comply with the Harley-Davidson quality expectations set forth in this section.
Suppliers are fully responsible for the quality of their products. In addition, Suppliers shall reference Automotive
Industry Action Group (AIAG) documents, including: Production Part Approval Process (PPAP), Failure Mode and
Effects Analysis (FMEA), Advanced Product Quality Planning (APQP), Measurement Systems Analysis (MSA),
and Statistical Process Control (SPC).
H-D reserves the right to conduct onsite audits of Suppliers from time to time to assure continuing
compliance with this manual and all quality and process documentation. H-D also reserves the right to conduct
onsite audits of a Supplier’s Sub-Tier Supplier(s) that produce H-D product. Suppliers shall require their Sub-Tier
Suppliers to allow these audits preferably with a representative from the Supplier in attendance.
Suppliers may be required to submit quality performance data upon request. Suppliers are also responsible
for assuring their Sub-Tier Suppliers’ PPAPs are approved and are under a controlled system of evaluation and
review. These records must be made available for H-D review when requested.

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 ADVANCED PRODUCT QUALITY PLANNING (APQP)

Harley-Davidson’s Product Development Methodology, known as “MX”, is a phase gate methodology that
ensures we Create, Design and Deliver Great Motorcycles. MX aligns to the APQP tools as defined by the AIAG.
H-D expects that your organization demonstrates competency in Advanced Product Quality Planning as part of its
Quality Management System. This includes the use of cross-functional teams, upfront planning, and quality tools
such as:

 Manufacturing Feasibility
 Identification of Key Product/Process Characteristics
 Process Flows
 Process/Design Failure Modes and Effects Analysis (P/DFMEA)
 Control Plans
 Measurement Systems Analysis (MSA)
 Statistical Process Control (SPC)
 Production Part Approval Process (PPAP)
 After Action Review (AAR)

Supplier shall incorporate and maintain the APQP results throughout the complete manufacturing process,
which includes:

 Work instructions
 Gages and Checking Aids
 Equipment design and maintenance program
 Testing strategies
 Material handling and storage
 Packaging, labeling, and shipping
 Facility layout and maintenance
 Employee training
 Sub-Tier Supplier control

The evidence of Advance Product Quality Planning shall be documented and provided to H-D upon
request. The graphic below demonstrates how MX meshes with APQP per AIAG.

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 PRODUCTION PART APPROVAL PROCESS (PPAP)

It is a requirement that our Suppliers follow proper Advanced Product Quality Planning methodology as
part of their Quality Management System. PPAP is an output of that methodology. The overall purpose of PPAP is
to ensure the Supplier understands H-D’s design record and specification requirements, as well as to determine if
the Supplier’s manufacturing process can consistently meet those requirements as demonstrated by an actual
production run.
Suppliers are required to comply with the current edition of the AIAG Production Part Approval Process
(PPAP) Manual. For additional requirements and expectations, refer to the PPAP Submission Guide, located in the
Doing Business with Harley-Davidson manual on H-DSN.
H-D requires an PPAP submission for new product and any process changes. Submission requirements
will be determined by an H-D representative and communicated via an PPAP Submission Checklist with applicable
elements.
The Supplier must notify H-D in advance in writing of any planned changes, whether part design, process
or site. Refer to the AIAG PPAP Manual, Section 3, Customer Notification and Submission Requirements for
additional submission requirements. The Supplier is required to obtain H-D’s written approval prior to proceeding.
A Product Deviation Notice (PDN) may be required if a change is in place prior to PPAP approval, refer to PDN
section of this Manual for further detail.
The Supplier shall provide a PPAP submission to H-D and must obtain written approval of that submission
from H-D in its discretion, before shipment of production quantities of product. Parts cannot be PPAP approved
without part drawings that are fully approved and authorized by H-D engineering. It is the Suppliers responsibility
to ensure they submit the latest authorized drawing revision. For questions on the latest authorized drawing
revision, contact your New Product Supply Management Analyst.
Tier 1 Suppliers are required to manage PPAP activities, submissions and approvals with their Sub-Tier
Suppliers. Sub-Tier Supplier PPAP submissions (including signed and approved Part Submission Warrant) must be
available for review upon request by H-D.
The Supplier is required to retain a copy of the approved PPAP documentation and master product samples
for each product in a manner that prevents document deterioration from Product Launch + 15 years after the last
production run. This documentation shall be made available to H-D upon request.

SAFE LAUNCH STRATEGY

To ensure a proper focus on part quality coming into launch, all suppliers are expected to have a safe
launch strategy in effect for any new product provided to Harley-Davidson. The supplier is responsible for the
creation and execution of this plan and should be striving towards a zero-defects mentality. Any late changes
(dimensions, material substitutions, etc) shall have increased verification as a segment of this plan. The safe launch
plan will cover at a minimum the requirements outlined below in alignment with the Harley-Davidson component
risk rating, but suppliers are encouraged to develop a more wholistic plan based on their specific commodity and
processes. Additionally, other items may be requested by the H-D team at any time. These may include and are
not limited to 3rd Party Inspection, Product & Process Assessment (PPA), VDA Assessment, or Run at Rate
Assessment.

One of the main tools used for the safe launch strategy is the Escalated Control Plan (ECP). ECP is a
documented launch control plan that is an additional control plan above and beyond the Supplier’s production
control plan. The ECP should take into consideration all known critical conditions of the part, as well as potential
areas of concern identified during the PPAP. The ECP will consist of additional controls and inspection audits, and
will factor in the production process (set-up, machinery, fixture, tooling, operation, material/components,
preventative maintenance, labor, and climate). If the requested escalated dimension is controlled at a Sub-Tier, the
Tier 1 is responsible for ensuring that the respective Sub-Tier completes that escalated inspection and submits the
data for reporting availability to the Tier 1.

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 The H-D project team and Supplier will mutually agree upon and develop the ECP, including timing,
required inspection frequencies, inspection methods, and exit criteria. As a recommended guideline, the ECP
should encompass a minimum of 30 days volume & 3 separate runs.

Any failures found within the ECP implementation must be communicated by the Supplier to H-D, and the
Supplier must follow the 8D process or approved equivalent to make Permanent Corrective Actions (PCA) to
address the failures. If non-conforming material is generated during the ECP period, the ECP must be restarted after
the PCA has been implemented and proven effective.

High Risk – Escalated Control Plan

 Must contain 100% Inspection on all special characteristics (KPC, SC, RC).
 Supplier and H-D to align on other dimensions to be checked and their escalated frequency.
 Inspection is to be done in a separate area (not in-line) and/or completed by a qualified inspector. If the
operator is also qualified as an inspector, they may complete the checks. A 3 rd party may also be used to
complete these inspections.
 All data to be provided to the H-D SQL (Supply Quality Lead) for review at an agreed upon cadence.

Medium Risk – Escalated Control Plan

 Must contain more frequent inspection of special characteristics (KPC, SC, RC).
 Supplier and H-D to align on other dimensions to be checked and their escalated frequency.
 Inspection may be done online or in a separate area and may be completed by a qualified inspector or an
online operator pending the operator has proper training on the inspection procedures requirement. A 3 rd
party may also be used to complete these inspections.
 All data must be retained and available upon request by H-D. In the event that there is a non-conforming
part that data is to be sent and discussed to the H-D SQL.

Low Risk – Escalated Control Plan

 Supplier and H-D to align on to be checked and their escalated frequency.
 Inspection may be done online or in a separate area and may be completed by a qualified inspector or an
online operator pending the operator has proper training on the inspection procedures requirement. A 3 rd
party may also be used to complete these inspections.
 All data must be retained and available upon request by H-D. In the event that there is a non-conforming
part that data is to be sent and discussed to the H-D SQL.

Any exception to the above needs to be reviewed and approved by the appropriate H-D Supply Quality Lead.

SPECIAL CHARACTERISTICS

Special Characteristics are defined as product and/or process parameters which can significantly affect
safety, regulatory compliance, and/or functions of H-D products. These Characteristics are identified by H-D
Engineering during the Advanced Product Quality Planning process using DFMEA and PFMEA principles.
Special Characteristics are marked with various symbols requiring specific levels of special controls and process
capability. At a minimum, Suppliers shall implement process controls for Special Characteristics as designated by
H-D. It is the responsibility of the Supplier to ensure and demonstrate the required level of process capability for all
Special Characteristics. Process capability shall be measured in accordance with the most recent edition of the
AIAG Statistical Process Control (SPC) manual.
Suppliers are responsible for proper communication, control and monitoring of Special Characteristics
requirements (where applicable) with their Sub-Tier Suppliers. The Supplier shall conduct ongoing SPC monitoring
of all identified Special Characteristics and shall collect and retain the SPC data on an ongoing basis, including
their continuous Process Capability (Cpk). The Supplier must make SPC data available to H-D upon request. In
addition, Suppliers with regulatory components must have compliance data available to H-D upon request.

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 H-D recognizes the following categories for Special Characteristics:

 Key Product Characteristics (“KPC”); Supplier must exhibit >1.67 Cpk

o Product attributes (i.e., features, dimensions, specifications) which, if exceeding the tolerance or
specification, could affect safe vehicle operation. KPC’s are designated on H-D drawings by a
closed diamond ( ).
 Key Control Characteristics (“KCC”); Supplier must exhibit >1.67 Cpk
o Process characteristics for which variation must be controlled to some target value during the
manufacturing process to ensure that variation of Key Product Characteristics or Significant
Characteristics do not exceed their defined tolerance or specification. KCC’s are designated on H-
D drawings by an open diamond ( ).
 Regulatory Characteristics (“RC”); Supplier must exhibit >1.67 Cpk
o Product process requirements (i.e., features, dimensions, specifications) which, if exceeding the
tolerance or specification, could affect compliance with government regulations or statutory
requirements. All RC’s are designated on H-D drawings by an inverted closed delta (▼).
o The “RC” symbol is also designated in instances where Conformity of Production (CoP) is a
requirement.
 Significant Characteristics (“SC”); Supplier must exhibit >1.33 Cpk
o Product and/or process features that do not affect safety or regulatory requirements but could create
an unacceptably high warranty condition or significant customer dissatisfaction. The symbol for an
SC will be in the form of an ellipse with the letters (SC) inside of it.

SUPPLIER PRODUCT OR PROCESS CHANGE NOTIFICATION

Supplier shall establish a Product and/or Process Change Notification System. Any proposed changes to
product or process, whether it is a tooling/fixture modification, equipment movement, change in gaging or
processing, relocation of production to other facilities or to a different Sub-Tier Supplier, or otherwise, require that
a Supplier provide written notice to H-D prior to implementation. Supplier is not permitted to move forward
without H-D’s written approval. The notice should include, at a minimum: part number; specifics of the change,
desired implementation date and build out plan for old inventory (under previous process). H-D will review the
nature of the proposed change and provide written guidance. In the event the change is approved by H-D, a new
PPAP submission is required unless H-D informs the Supplier otherwise in writing. Submission requirements will
be determined by an H-D representative and communicated via an PPAP Submission Checklist with applicable
elements. Changes cannot be made unless and until H-D in its discretion approves the submitted PPAP.
A Supplier may not ship product under a modified process or a changed feature until an H-D-approved
PPAP submission or PDN is in place. H-D and the Supplier will mutually determine the clean date for product
incorporating an approved modified process or feature. “Clean date” is defined as the shipment date and time of
product that is approved for production. This requirement is outlined in the current revision of the AIAG PPAP
Manual, Section 3, Customer Notification and Submission Requirements.

NON-CONFORMING MATERIAL (NCM) MANAGEMENT

Notification and Containment of Shipment

NCM is defined as parts that are defective in design, material or workmanship, or fail to conform to all
applicable H-D design record requirements. An NCM record will also be assigned to parts that are mislabeled on
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 their packaging or on the part itself from the Supplier. When a Supplier becomes aware it has shipped NCM, or
suspects it may have shipped NCM, the Supplier must notify H-D immediately in writing. The notification shall
include, at a minimum, the following:

 Part number
 Quantity shipped
 Nature of non-conformance
 Lot number
 Production date
 Shipment date
 ASN number of suspected non-conforming material
 Containment plan at Supplier location
 Recommended containment plan required at H-D
 Clean date of conforming product

The Supplier shall also communicate the same information to any H-D directed tiered relationships to
which the non-conforming material may have been shipped and used. Supplier is expected to immediately begin the
Corrective Action process as described below.
Parts Per Million (PPM) is the number of non-conforming units divided by the total number of units
shipped multiplied by one million. NCM parts will count against a Supplier’s PPM performance metric.
An NCM transaction is defined as the activity of collecting, validating, and systematically dispositioning
NCM in H-D’s inventory system. A single NCM transaction can be a single part or multiple quantities of the same
part number. Each NCM transaction will be recorded with a corresponding unique NCM number.

Corrective Action

Upon request from H-D, the Supplier shall investigate and report corrective actions for an NCM incident involving
product shipped to H-D via the 8 Disciplines (8D) or similar process. This process defines the key steps involved in
problem resolution, including containment of the problem, root cause analysis, problem correction, and problem
prevention. For suppliers in the U.S. and local Thailand Suppliers, are required to complete and submit the first 3
steps (step 3 is initial containment) of the 8D process within 48 hours of being notified by H-D. For Suppliers that
ship to the U.S and Thailand that are not local, the first 3 steps of the 8D process should be submitted within five
(5) days of being notified by H-D. 8D or similar documentation must be submitted by Supplier to the H-D
requestor. Root Cause Analysis information shall be provided to H-D by Supplier within 5 days of the initial sort
via the 4th D of the 8D process or similar.

Containment
In the event where a disruption in the production lines have been encountered and the cause is identified to be due
to a Supplier’s product, immediate containment is required. To maintain flow of good materials to the line, H-D
Supply Quality will initiate a sort using an in-house 3 rd party. This company will reach out to the Supplier’s
organization to determine plans for continued containment through sorting methods. This could be determined
from continued support by the H-D 3rd party or one of the Supplier’s choosing. Materials will need to be certified
within 48 hours after being notified of the non-conformance.
Upon notification of a containment event, Suppliers in the U.S. and local to Thailand, have 48 hours to
provide conforming product. For Suppliers that ship to the US locations or Thailand that are not local to those
countries, they have ten (10) days to provide conforming product. “Certified Material” is conforming product that
has been reviewed, measured, and inspected by the Supplier, meets design specifications and is not NCM. The
expected containment steps are described below:

1. Within 24 hours, the Supplier is required to communicate a containment plan to H-D.

2. Material already received by or shipped to H-D is to be sorted, at a location specified by the H-D
contact, by Supplier designated 3rd party or Supplier resource at Supplier’s expense.
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 3. Inventory at H-D will be sorted, but only in amounts necessary to identify enough conforming
material to meet H-D’s production needs until Certified Material is received from the Supplier;
Certified Material must be provided by Supplier as described in Controlled Shipment Level 1
below
4. Any additional parts in inventory at H-D will be shipped back to Supplier or a Supplier designated
location at Supplier’s expense.

Controlled Shipment Level 1 (CS1): Certified Material per Supplier Sign Off

 Supplier shall confirm that material is Certified Material by having a leader sign a certification
before material can be shipped to H-D.
o If NCM was Functional/Cosmetic: the signer must be Supplier’s Quality Manager.
o If NCM involved Mislabeling: the signer must be Supplier’s Shipping Manager.
 Supplier must provide Certified Material for 30 days beyond the implementation and sign- off of
the corrective action without recurrence of any NCM.
 After the 30 -day period, if there has been no recurrence of NCM, the Supplier will no longer need
to certify conformance before shipment.
 If any instance of NCM occurs within the 30- day period, the Supplier will be required to certify
future shipments via independent 3rd party sort certification (level CS2) as provided in the
following section.

Controlled Shipment Level 2 (CS2): Certified Material per Independent 3rd Party Sort
 Three (3) sorts within one (1) month out of any supplier plant requires CS2 containment.
 Formal H-D Corrective Action Request (CAR) will be issued.
 Material shall be inspected and certified in writing as being fully conforming and free from defects
by independent 3rd party (selected by Supplier) at Supplier’s expense before material can be
shipped to H-D.
 3rd party certification shall continue for a 30- day period.
 After the 30-day period, if there has been no recurrence of NCM, 3 rd party certification will not be
required prior to shipment.
 If any instance of NCM occurs within the 30- day period for the same defect, the Supplier will be
required to certify future shipments via H-D directed 3rd party sort certification.
 In addition, if any instance of NCM occurs within the 30- day period, Supplier’s management will
be required to formally present to H-D plant leadership ongoing action plans to resolve the issue
and identify ongoing containment strategy.

The NCM management provisions set forth above are in addition to, and do not limit, the rights and
remedies of H-D under the Master Supply Agreement or other supply contract between H-D and the Supplier
arising from delivery of NCM.

Product Deviation Notice

Any instance of shipment and use of product that is non-conforming requires approval from H-D. The
Supplier shall not ship such product unless and until it has sought and received approval from H-D via a Product
Deviation Notice (PDN). In these cases, the Supplier will need to notify H-D and provide supporting data as
requested by H-D to enable a decision on whether it should issue a PDN. This data may include, but not be limited
to, dimensional/test information, Control Plan, PFMEA, number of parts affected, clean date of complying product,
8D report, and action plan. The data will be analyzed and reviewed by H-D for its impact to motorcycle form, fit,
and function prior to approval/rejection. In the event a PDN is rejected, the affected parts will be treated as an NCM
per the provisions above.
PDN’s may be issued by H-D in its discretion for the follow instances:
 Cosmetic Non-Conforming
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 o Temporary substitution of a purchased or manufactured component that falls outside the cosmetic
standard, but which has been evaluated by H-D as having little to no negative effect on customer
satisfaction.
 NCM
o A temporary manufacturing condition that prevents producing components to the current design
specification, may include sort/rework action to bring back into specification.
 PPAP
o PDN issued to use a purchased part for which a new PPAP is not yet complete. The PDN covers a change
within the current revision PPAP until the new PPAP can be approved.
o When PPAPs are not approved prior to current production launch or a production level build event
(Product Validation, Pre-Production, Model Year launch), H-D will "authorize for shipment and
use” of product via a Product Deviation Notice (PDN).
 Duration of PDN will include allowance to ship and through use of product.
 The PDN will be approved prior to shipment of product.
 The Supplier will need to provide adequate data to show that the parts meet all
requirements.
 At minimum, supplier shall provide:
 A copy of the H-D design record to which the parts were produced.
 Process Control Plan that will be in use, until PPAP is approved.
 Dimensional results of sample parts, or full layout of 2 pieces, as directed by H-D.
 Test results as required by the design record.
 Features that are a KPC, RC, or SC must show to be statistically capable (i.e. 30-
piece attribute study) or utilize 100% inspection.
 Change Pilot
o Pilot builds of alternate designs/PPAP part verification prior to final change approval.
o Examples of changes include but are not limited to tooling, process, sub-tier, and/or specification
update.
PACKAGING AND LABELING

Labeling

Part quality, product integrity, production inventory and scheduling are highly dependent on accurate
labeling of all products shipped to H-D plants. It is critical that Suppliers comply with all of the specifications in
the Harley-Davidson Bar Code Requirements document located on H-DSN. Mislabeled product will be
considered as NCM and adversely affect a Supplier’s PPM performance. Mislabeling events will require an 8D or
similar process from the Supplier.

Returnable Packaging

Returnable packaging is designed and owned by H-D. Suppliers are expected to take reasonable care in the
use of all packaging provided. This includes ensuring containers are clean enough to ensure products being
packaged maintain the quality necessary for their specific application. This also includes identifying packaging that
is damaged or not suitable for use, segregating that packaging, and contacting your H-D Supply Chain
representative.
When H-D implements returnable packaging, Suppliers are provided documentation on the basic design
and package quantity, which should be used by Suppliers to develop back-up packaging for use if returnable
packaging is not available. Any time the use of expendable back-up packaging is being considered, approval from
H-D is required. It is the Supplier’s responsibility to have back-up expendable packaging available to ensure all
shipments are made on time and to ensure all packaging is in good working order, appropriately clean prior to use
to ensure safe transit, and the quality of parts is maintained.
Shortage of returnable packaging is not an acceptable excuse to miss scheduled shipments. Suppliers are
expected to submit their expendable packaging design information as part of any new returnable packaging launch
process initiated by H-D, on the forms provided by H-D.
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 Primary Expendable Packaging

When returnable packaging is not provided by H-D, it is the Supplier’s responsibility to develop
expendable packaging to ship products to H-D. The Supplier is responsible for ensuring the packaging will provide
adequate protection of the parts in support of our production requirements. In addition, the Supplier is required to
submit design information to H-D on the Expendable Packaging Sketch Form that will be provided by H-D
packaging engineering.
Please see the Packaging Requirements section on H-DSN for details and forms used for both returnable
and expendable packaging processes.

SUB – TIER SUPPLIER MANAGEMENT

Sub-Tier Suppliers have a tremendous impact on the quality of the final component. Whether they provide
raw materials, services or sub-components, their influence is so profound that it is critical for each of H-D’s
Suppliers to have a Sub-Tier Supplier management system in place.

Suppliers to H-D shall have established processes to manage their respective Sub-Tier Suppliers (regardless
of how directed). These processes shall include:

 Selection and evaluation of Sub-Tier Suppliers based on their capabilities to meet H-D quality, delivery,
cost, and service requirements.
 Ensuring adherence to APQP disciplines and PPAP submission requirements by Sub-Tier Suppliers.
 Providing ongoing Sub-Tier Supplier performance and periodic auditing with subsequent corrective
actions for identified gaps.

As an H-D Tier 1 Supplier, you are responsible for:

 Demonstrating effective management of Sub-Tier Suppliers through documented corrective actions and
verification activities and providing H-D with documentation of progress upon request.
 Maintaining an established system that tracks and reports the quality, delivery, cost and service
performance of your Sub-Tier supply base.
 Having a process in place to assure the Sub-Tier supply chain understands all design record dimensions,
specifications and requirements.
 Assuring that manufacturing processes throughout the Sub-Tier supply chain are capable of meeting all
design and capacity requirements.
 Managing, reviewing, and approving PPAP submissions from your Sub-Tier Suppliers.
 Ensuring that all requirements specified by this manual are cascaded to all affected Sub-Tier Suppliers.
 Ensuring all Sub-Tier Suppliers are compliant with all requirements specified by this manual.

H-D reserves the right to conduct onsite audits of a Supplier’s Sub-Tier Suppliers from time to time to ensure
that proper controls are in place throughout the entire value stream.

SUPPLIER PERFORMANCE REPORTING

Supplier performance is monitored by H-D based on key product development, quality, delivery, and cost
metrics. At a minimum, performance will be monitored for OE suppliers that are Strategic, Essential, and Leverage
and include H-D manufacturing sites in the USA and Thailand. Supplier reviews will be conducted for these
categories of Suppliers and if performance gaps are identified, the Supplier will be required to provide an action

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 plan to address the gaps. Performance data is available for Build to Order Suppliers and reviews may take place on
a case by case basis. Performance gaps that persist for multiple months could potentially result in new business
hold, being required to provide certified material (at supplier’s expense) and/or supplier exit. Questions related to
H-D’s overall supplier performance process can be directed to your Supply Base Analyst; discrepancies or
questions related to specific supplier performance data on H-DSN can be directed to your Supply Chain Analyst.

CHARGE BACK

Suppliers are responsible for the quality, on-time delivery, and reliability of the products they supply.
Supplied parts must be free from defects and meet all applicable specifications and H-D’s design and drawing
requirements.
Suppliers will be debited $20 USD per NCM transaction at the H-D facility from where the Purchase Order
or Scheduling Agreement originated. The Supplier shall also be held financially responsible for the costs, losses
and damages incurred by H-D arising from or associated with non-conforming product or late deliveries including,
but not limited to, the costs, losses and damages identified below:

 3rd Party sorting.

 Expedited freight.
 Rework.
 Replacement of defective material.
 Unplanned overtime.
 Other out of pocket 3rd party expenses paid by H-D (related to NCM processing).

This process will be executed on a per incident basis, with cumulative costs identified to the Supplier and
recovered through a debit memo.
If you have questions, please contact your Supply Chain and/or Current Product Supply Management
Analyst.

REVISION RECORD

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 Date Nature of Change

12/2016 Initial Revision

Added addendum.
- Additions were made for Containment, CS2, and Returnable Packaging.
11/2017 - Clarifications were made on CS1, Returnable Packaging, and Primary Expendable Packaging.
- Split out Intro paragraph into Purpose and Scope (no change to content).
Removed P&A from Approver List (P&A not in scope).
Incorporated addendum items into the manual and removed addendum attachment.
Annual Re-qualification, removed the following:
If you are a Supplier of any of the following Key Systems--Brake systems, Windshields, Grab Straps, and
Locksets--a full AIAG level 3 PPAP submission and approval per the Production Part Approval Process
(PPAP) section of this manual will be required on an annual basis per requirements above.
PDNs related to PPAP, added the following and removed redundant verbiage:
 When PPAPs are not approved prior to current production launch or a production level build event
(Product Validation, Pre-Production, Model Year launch), H-D will "authorize for shipment and use”
of product via a Product Deviation Notice (PDN).
 Duration of PDN will include allowance to ship and through use of product.
 The PDN will be approved prior to shipment of product.
 The Supplier will need to provide adequate data to show that the parts meet all requirements.
 At minimum, supplier shall provide:
o A copy of the H-D design record to which the parts were produced.
05/2018 o Process Control Plan that will be in use, until PPAP is approved.
o Dimensional results of sample parts, or full layout of 2 pieces, as directed by H-D.
o Test results as required by the design record.

Returnable Packaging, added the following:

 It is the responsibility of the supplier to ensure all packaging is in good working order and
appropriately clean prior to use to ensure safe transit and the quality of parts is maintained.

Key System Suppliers, removed the following:

 Removed the word “annual” for on-site QMS and process assessment and added “based on
performance”.
 Removed reference to SPE group.

Supplier Performance Reporting

 Updated verbiage to align with new supplier performance process.

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 Removed “Requirements” from Supplier Quality Manual.
Purpose
 Removed the word “Requirements” from Supplier Quality Manual.
Manual Location
 Removed reference to other information that can be found on H-DSN such as Forms, OE Scorecard,
Training, ect.
Quality Systems Requirements
 Added that suppliers must have current, certified QMS in place by an accredited registrar (typically
ISO9001 or IATF16949). Suppliers who are not certified must be working toward certification. An
SSE may be conducted at supplier to evaluate risk.
APQP
 Replaced “M9” with “MX”
 Updated Methodology graphic to include “MX” alignment
 Removed “M9 vs APQP” webinar statement
PPAP
 Removed drawings can be access on H-DSN.
 Added supplier can contact their New Product Supply Management Analyst if they have questions
on the latest authorized drawing revision.
 Updated the record retention for PPAP to align with the current H-D Records Retention Schedule.
Annual Re-Qualification
05/2020  Removed this section.
Pre-Launch Mitigation Strategy
 Regarding Escalated Control Plans, updated to reflect suppliers may be required to implement an
Escalated Control Plan (instead of will be required).
Special Characteristics
 Added suppliers with regulatory components must have compliance data available to H-D upon
request.
 Under RC, added the symbol is also designated in instances where CoP is a requirement.
Non-Conforming Material (NCM) Management
 Corrective Action: added 8D or similar process. Moved “Root Cause Analysis information shall be
provided to H-D by Supplier within 5 days of the initial sort via the 4 th D of the 8D process or similar”
from Containment to Corrective Action.
 Controlled Shipment level 2 (CS2): Certified Material per Independent 3 rd Party Sort: Added “for the
same defect” to “If any instance of NCM occurs within the 30- day period”.
Product Deviation Notice (PDN)
 Removed the word “Process” from “Product/Process Deviation Notice”.
 PPAP: Added “Features that are a KPC, RC, or SC must show to be statistically capable (i.e. 30- piece
attribute study) or utilize 100% inspection.”
Change Pilot
 Removed the word “Running” from Change Pilot to align with updated H-D PDN Work Instruction.
 Added: “Examples of changes include but are not limited to tooling, process, sub-tier, and/or
specification update”.
Packaging and Labeling

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  Labeling removed: “For further detail refer to H-DSN under Supplier Development
Information>Webinar” because it no longer exists.
Sub-Tier Supplier Management
 Updated verbiage to reflect “H-D reserves the right to conduct onsite audits of a Supplier’s Sub-Tier
Suppliers…”
Key System Suppliers
 Removed this section.
Supplier Performance Reporting
 Updated verbiage to align with global supplier performance process (included India and Thailand in
scope and updated segmentation categories).
Charge Back
 Updated to reflect the $20 NCM debit per transaction is completed “at the H-D facility from where
the Purchase Order or Scheduling Agreement originated”.
 Changed Supply Base to Current Product Supply Management Analyst.

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 General
 Removed references to “Harley-Davidson Bawal” or “India “ manufacturing location.
PPAP
 Removed submission levels and added statement “H-D requires an PPAP submission for new
product and any process changes. Submission requirements will be determined by an H-D
representative and communicated via an PPAP Submission Checklist with applicable elements.”

Pre-Launch Mitigation Strategy

 Added statement “Suppliers that have been identified by the H-D project team as presenting risk to
New Model Year build and/or launch may be required to implement additional measures including
but not limited to an Escalated Control Plan (ECP), 3rd Party Inspection, Product & Process
Assessment (PPA) or similar review, or a Run at Rate Assessment. Specific expectations of the
requirements will be communicated to the supplier by the H-D project team at the time that the need
is identified.”
Non-Conforming Material (NCM) Management

Corrective Action: added 8D or similar process. Moved “Root Cause Analysis information shall be
provided to H-D by Supplier within 5 days of the initial sort via the 4 th D of the 8D process or similar”
from Containment to Corrective Action.
4/20/2021  Controlled Shipment level 2 (CS2): Certified Material per Independent 3 rd Party Sort: Added “for the
same defect” to “If any instance of NCM occurs within the 30- day period”.
Containment
 Added statement “In the event where a disruption in the production lines have been encountered
and the cause is identified to be due to a Supplier’s product, immediate containment is required. To
maintain flow of good materials to the line, H-D Supply Quality will initiate a sort using an in-house
3rd party. This company will reach out to the Supplier’s organization to determine plans for
continued containment through sorting methods. This could be determined from continued support
by the H-D 3rd party or one of the Supplier’s choosing. Materials will need to be certified within 48
hours after being notified of the non-conformance.”
Product Deviation Notice (PDN)
 Removed the word “Process” from “Product/Process Deviation Notice”.
 PPAP: Added “Features that are a KPC, RC, or SC must show to be statistically capable (i.e. 30- piece
attribute study) or utilize 100% inspection.”
Labeling
 Added “similar process” to “Mislabeling events will require an 8D or similar process from the
Supplier”.
Charge Back
 Removed “Starting January 2017”

Replaced Pre-Launch Mitigation Strategy with Safe Launch Strategy

2/2022
 Updated all content within Safe Launch Strategy.

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