This Quality Management System Manual describes the quality systems and procedures in use at Wright Distribution Centers, Inc. and reflects the quality standard – Quality Management Systems - Requirements: ISO 9001-2000.

Comments concerning this Quality Management System Manual are welcome. They should be sent to Wright Distribution Centers, Inc., attention the President at P.O. Box 817, Lima, Ohio 45802.

OUR COMPANY

Wright Distribution Centers, Inc. began operations in 1970 as a public warehouse storing and handling general commodities. These commodities included tires, fertilizer, machinery, aluminum cans, bus parts and agricultural chemicals. During the 1980’s, we became more of a landlord by leasing space to manufacturing companies and specializing in agricultural chemical distribution. We leased out 250,000 square feet and used 120,000 square feet for public warehousing.

In the 90’s, Wright Distribution Centers, Inc. has become a specialty warehouse distributing agricultural which occupies approximately 150,000 square feet of storage and generates 65% of our total income. General commodity storage provides the other 35% of the income and approximately 100,000 square feet.

A trucking operation was established in 1996 to offer the warehouse customers transportation services. Wright Distribution Transport, Inc., is an interstate, common carrier for hire. The warehouse customers account for 50% of the total transportation income.

THE PROCESS APPROACH

The Process Approach is the critical difference between the ISO 9001:2000 and the previous two editions of the ISO 9001 Standards. The Process Approach demands that each functional unit identifies, understands, documents, measures and improves their processes.

This quality management system and Wright Distribution Centers, Inc. fully embrace the Process Approach philosophy.

QUALITY MANAGEMENT SYSTEM MANUAL

1 SCOPE

This Quality Management System Manual specifies quality management system requirements in use at Wright Distribution Centers, Inc. to ensure customer satisfaction by preventing nonconformity at all stages and by ensuring continual improvement by using the Process Approach management system in accordance with ISO 9001:2000.

2 NORMATIVE REFERENCE

This Quality Management System Manual through reference to Quality System Procedures, Work Instructions, and ISO 9001:2000 standards reflects the quality system in use at Wright Distribution Centers, Inc. All Quality System Procedures, Work Instructions and ISO 9001:2000 Standards are subject to revision and the most recent editions of these documents are indicated below:

ISO 9000-2000

ISO 9001-2000

ISO 9004-2000

QMSM-9001-2003/B

QSP-001 to QSP-020

Work Instructions (WI-001 – WI-002)

3 DEFINITIONS

For the purpose of this Quality Management System, the definitions given in ISO 9000:2000 and the following definitions apply:

3.1 Product - The product is the act of providing a service of third party warehousing and distribution services to the clients of Wright Distribution Centers, Inc.

3.2 Material - The material is the goods, customer’s products, material and all other items received, packaged, shipped, stored transported or processed by Wright Distribution Centers, Inc. for the customer.

4 QUALITY MANAGEMENT SYSTEM

4.1 General Requirements

The Executive Management at Wright Distribution Centers, Inc. considered input from its customers and staff that resulted in developing a quality management system in accordance with the ISO 9001:2000 Quality Model.

The quality system documentation is structured as follows:

a) Quality Management System Manual (QMSM-9001-2003/B) defines the outline structure of the quality system while serving as a permanent reference in the implementation and maintenance of the system.

b) Quality System Procedures (QSP) Quality documents coordinating different activities and supporting the Quality Management System Manual (QMSM-9001-2003/B).

c) Work Instructions (WI). Quality documents which define operational processes and ensure that the processes are approved, and under control by monitoring and analyzing measurable criteria.

Quality Documentation Diagram

4.2 DOCUMENTATION REQUIREMENTS

4.2.1 General

The ISO Facilitator shall ensure that each functional unit will identify the processes needed for the quality management system and their application throughout the organization. The processes shall be documented on Work Instructions (WI) and will show the sequence and measurement criteria of the processes.

Each identified process shall include measurable criteria and verification methods for monitoring the processes to ensure that the output meets the customer, and regulatory and statutory requirements.

The results of the continuous verification of the processes will be the basis for quality improvement by establishing quality objectives at each Management review meeting (ref. 5.6)

The Quality Management System Procedure QSP-005 describes the methods for Work Instruction preparation, review, approval, and final issue.

4.2.2 Quality System

The ISO Facilitator is responsible to identify issue, approve, and ensure implementation of the quality management system documents (Quality Policy, Quality Objectives, Quality Management System Manual, Quality System Procedures and Work Instructions) in accordance with ISO 9001:2000, customer requirements, statutory requirements and regulatory requirements.

The ISO Facilitator is responsible for the implementation of a document control system that will ensure the quality system is properly maintained.

The quality system will document the methods for dealing with the customers, subcontractors and suppliers.

The ISO Facilitator and the quality functional unit will ensure that all the employees are familiar with the Quality System Procedures and understand their responsibilities with regard to quality issues. The Quality System Procedures are available to all the employees.

The ISO Facilitator, Operation Manager and Transport Operations Manager are responsible to review the quality system to ensure that it has been effectively implemented (ref. 5.6).

The Quality Management System Procedure QSP-005 describes the methods for documentation preparation, review, approval, control and final issue.

4.2.3 Control of Documents

4.2.3.1 General

The ISO Facilitator is responsible to establish and maintain documented procedures to control all documents and data that relate to the quality system, customer specifications and standards. The ISO Facilitator is responsible to manage the revisions, approvals and distribution of the quality documents.

4.2.3.2 Document and Data Approval and Issue

The ISO Facilitator shall establish and maintain control over the following quality records:

Forms - List of all forms in use by Wright Distribution Centers, Inc. as required by the quality system including the form description, form number and latest revision, filing location, issue and approval responsibilities and authorities, and retention information both current and storage.

Standards & Specifications - List of all customer or regulatory specifications/standards available at Wright Distribution Centers, Inc. including the standard/specification identification and latest revision, location and address of organization to obtain the latest revisions.

Quality System Documents- List of all Quality System Procedures, and Work Instructions in-process of being written and Work Instructions and Quality System Procedures issued and approved including the author, person who reviewed and approved the Quality System Procedure or Work Instruction, revision, approved date, issued to, and the functional unit(s) that the Quality System Procedure or Work Instruction applies to.

Computer Data - All computer data shall be backed-up daily and the backed-up files stored in an off-site storage facility.

The ISO Facilitator is responsible to ensure that all documents and data in use at Wright Distribution Centers, Inc. are current and that obsolete documents and data are removed from the quality system intranet/internet site.

The Quality Management System Procedure QSP-005 describes the procedures used by the quality functional unit to control documents and data.

4.2.3.3 Document and Data Changes

Changes or revisions to approved documents shall be reviewed and approved for adequacy by authorized personnel prior to issue. A master list identifying current revision status of documents shall be established and maintained by the ISO Facilitator.

All individuals who work with the controlled company quality documentation will be notified by a document issue notice of documentation changes. The document issue notice will clearly define the change(s) being implemented and the reason for the change.

The ISO Facilitator will control all changes to the quality documents.

The Quality Management System Procedure QSP-005 describes the procedures for Documents and Data Control.

4.2.3 Control of Records

Wright Distribution Centers, Inc. shall establish and maintain control of appropriate quality records (including electronic data) to demonstrate conformance of the finished product to specified requirements and the effective operation of the Quality Management System.

The ISO Facilitator will ensure the proper identification, collection, indexing, access, filing, maintenance and disposition of quality records, specifications and standard is maintained current.

All quality records shall be legible and shall be filed in a manner that they are readily retrievable in an environment that prevents damage, deterioration and loss. All quality records shall be retained for a minimum period of one year in the active files and in storage for an additional 3 years (4 years total) unless otherwise stated in the applicable Quality System Procedure or Work Instruction.

Where agreed contractually, the quality records shall be made available for evaluation to the customer or the customer’s representative for an agreed period.

The Quality Management System Procedure QSP-016 describes the procedures used to control the quality records.

5.0 MANAGEMENT RESPONSIBILITY

5.1 Management Commitment

The executive management is committed to establishing the quality policy (see 5.3), ensuring that the quality policy is communicated throughout the organization (see 5.5.3) and to ensure that quality objectives are established and achieved (see 5.4.1).

5.2 Customer Focus

The Executive Management at Wright Distribution Centers, Inc. is committed to customer satisfaction. The customer’s needs and requirements will always be satisfied and our focus is to enhance customer satisfaction by implementing the Process Approach towards quality management.

Wright Distribution Centers, Inc. follows the “Plan 4 Do 4 Check 4 Act” management approach as outlined in ISO 9001:2000 (ref. par. 7.2.1 and 8.2.1).

PLAN: identify the objectives and processes required for delivering results in accordance with the customer’s requirements;

DO: implement the processes;

CHECK: monitor and measure processes and product against policies, objectives and requirements and report the results;

ACT: take immediate action to continually improve process performance

5.3 QUALITY POLICY

The employees of Wright Distribution Centers, Inc. are committed, in a positive and courteous manner, to provide reliable distribution, transportation and value added services to our customers while maintaining a safe work environment at an acceptable return on investment.

We are committed to inspect, count, track and service promptly and efficiently all inbound and outbound shipments for our customers based on safe handling procedures as outlined by our customers’ specifications. We have established a company motto of “RECEIVE IT WRIGHT, STORE IT WRIGHT, and SHIP IT WRIGHT”. We will set up training based on this philosophy. To realize this commitment, we will achieve, and maintain, certification to the ISO 9002 standard.

Wright Distribution Centers, Inc. will continually provide our customers with solutions to improve inventory control through electronic data interchange, upgrading our facilities and equipment to make our operation safe for the individual and the environment. These goals will be measured by customer research and total quality management techniques.

All of our employees will have equal opportunity and be treated with fairness and respect. We will provide a safe and healthy work environment. Our employees will be encouraged to promote a team effort that inspires creativity and personal growth for the benefit of the company and our customer. The training required to achieve and maintain the Company’s quality standards will be identified and provided to all individuals.

5.4 PLANNING

5.4.1 Quality Objectives

The quality objectives shall be established, reviewed, and monitored for all relevant functions in the management review meeting (ref. 5.6).

Quality objectives shall be established by analysis and shall be monitored, reported and revised, if necessary in accordance with QSP-020.

5.4.2 Quality Management System Planning

Quality planning is required on all new customers and on changes to existing customer requirements. The “Quality Plan” consists of various documents and procedures to ensure that the specified requirements for a customer contract are met. The “Quality Plan” consists of the following documentation:

Quality System Procedures – Prepared by the ISO Facilitator with input from the warehouse and customer service staff and approved by the President. The Quality System Procedures describe and coordinate different activities with respect to the quality system and support the Quality Manual (See Annex A).

Work Instructions - Prepared and approved by the ISO Facilitator with input from the warehouse and customer service staff. The Work Instructions provide the employees with flowcharts for each process that clearly demonstrates how to perform the process, responsibilities, authority and are in accordance with quality system procedures.

The Quality Management System Procedure QSP-005 describes how to prepare Quality System Procedures and Work Instructions

All services being performed must have all of the documents that form part of the “Quality Plan” issued and approved. The President, ISO Facilitator, the Warehouse and Transport Operation Managers are responsible to review the “Quality Plan” and ensure it is complete before Wright Distribution Centers, Inc. can start work on any new contract.

The Quality Management System Procedure QSP-009 describes the methods for Process Control.

5.5 RESPONSIBILITY, AUTHORITY AND COMMUNICATION

5.5.1 Responsibility and Authority

Organizational Chart

5.5.1.1 Sales & Marketing

Sales & Marketing performs the following activities: market research, sales, contracts, customer relations, advertising and promotion.

The President has executive responsibility and is responsible for the operation of the Sales and Marketing organizational unit.

The President has authority to:

· establish selling prices on tenders, quotations, and price

· approve promotional material, travel, and other marketing related

· approve nonconformity dispositions

· approve marketing strategies

· design marketing brochures and marketing material

· service customers in accordance with the Wright Distribution Centers, Inc.’s policies

The President interrelates with the other organizational units in the following manner:

· Quality Assurance - provides input into contract review; communicates customer quality issues and concerns.

· Transportation services - - provides input into contract review; communicates customer quality issues and concerns.

· Finance and Administration - communicates pricing information and budget requirements for the Sales and Marketing organizational unit.

· Operations - communicates scheduling requirements, customer and amendments to contracts (see 4.3.5).

5.5.1.2 Finance and Administration

Finance and Administration performs the following activities: managerial accounting, purchasing, human resources, order entry and related secretarial assistance.

The Administrative Operations Manager has executive responsibility and is responsible for the operation of the Finance and Administration organizational unit.

The Administrative Operations Manager has authority to:

· approve purchases which do not exceed $ 2,500.00. The Administrative Operations Manager shall consult with the President for purchases which exceed $ 2,500.00

· manage the Finance and Administration personnel

· establish and implement employee training requirements for Finance and Administration

· determine and approve personnel requirements including the preparation and maintenance of current Position Profiles for Finance and Administration

· manage the allocations and reporting of company funds under the direction of the President

· establish, implement, and maintain standard financial and managerial accounting systems in accordance with generally accepted accounting principles

The Administrative Operations Manager interrelates with the other organizational units in the following manner:

· Quality Assurance - communicates on credits resulting from nonconformities and on costs associated with quality and quality budget requirements.

· Transportation Services - communicates on Transportation Services budget requirements.

· Operations - communicates on Operations budget requirements.

· Sales and Marketing - communicates on pricing information and budget requirements.

The Finance and Administration personnel have authority to process and perform their duties in accordance with the applicable Position Profile under the management of the Administrative Operations Manager.

5.5.1.3 Operations

Operations performs the following activities:, proper processes, process control, material inventory and control, receiving and shipping, packaging, employee and process safety, monitoring of all operations activities in conformance with the Wright Distribution Centers, Inc.’s quality system as documented in the Quality Assurance Manual, Quality System Procedures and Work Instructions.

The Operations Manager has executive responsibility for Operations organizational unit.

The Operations Manager has authority to:

· approve Operations’ purchasing requests which do not exceed $ 2,500.00. The Operation Manager shall consult with the President for purchases which exceed $ 2,500.00

· approve operations work instructions and nonconformity dispositions

· establish and implement safety precautions and safety equipment as required Occupational Health and Safety Regulations

· manage the Operation personnel

· establish and implement employee training requirements for Operations

· determine and approve personnel requirements including the preparation and maintenance of Position Profiles for the Operations personnel

· ensure that all employees work in conformance with the quality system as documented in the Quality Assurance Manual, Quality System Procedures and Work Instructions

The Operations Manager interrelates with the other organizational units in the following manner :

· Quality Assurance - adherence to the quality system and communication of quality or operations problems, nonconformities, corrective and preventive actions; reviewing of Work Instructions for technical accuracy.

· Transportation services – assist in truck loading and unloading

· Sales & Marketing - communicates discusses customer feedback and concerns.

· Finance and Administration - Communicates Operations budget requirements.

All Operations Personnel have the authority and are encouraged to suggest methods to improve their working environment, the processes, the products, the safety and the procedures in use.

All Operations Personnel have the responsibility to perform their duties in accordance with their Position Profile and the quality system documented through the Quality Assurance Manual, Quality System Procedures, and Work Instructions.

5.5.1.4 Transportation Services

The Transportation Services organizational unit is responsible for transportation of customer material in accordance with customer’s contracts.

The Transport Operations Manager has executive responsibility and is responsible for the operation of the Transportation Services organizational unit.

The Transport Operations Manager has authority to:

· approve Transportation Services purchasing requests for the Transportation Services that do not exceed $ 2,500.00. The Transport Operations Manager shall consult with the President for purchases that exceed $ 2,500.00.

· manage the Transportation Services personnel.

· establish and implement employee training requirements for Transportation Services.

· determine and approve personnel requirements including the preparation and maintenance of Position Profiles for the Transportation Services personnel.

· establish and implement proper methods and processes together with the Operations Manager.

The Transport Operations Manager interrelates with the other organizational units in the following manner:

· Operations – communicates warehouse assistance requirements for loading and unloading

· Quality Assurance - Communicates dispositions on nonconformities, provides technical support to the Quality Assurance and works together to establish technically correct Quality System Procedures.

· Sales & Marketing - Communicates, customer requirements, marketing information, and provides technical support to clients when requested by Sales and Marketing.

· Finance and Administration - Communicates Transportation Services budget requirements.

5.5.1.5 Quality Assurance

Quality Assurance is responsible for quality management and administration, inspection and testing, measuring and testing equipment, supplier/subcontractor control, preparation and revision to the quality-system documentation and the company-wide adherence to the quality system as documented in the Quality Assurance Manual, Quality System Procedures and Work Instructions.

The ISO Facilitator has the responsibilities described in ISO9001:2000 for the Management Representative and has executive responsibility and is responsible for the operation of the Quality Assurance organizational unit.

The ISO Facilitator has the authority to:

· approve Quality Assurance purchasing requests which do not exceed $ 2,500.00. The ISO Facilitator shall consult with the President for purchases which exceed $ 2,500.00

· ensure that the quality system is implemented and maintained in accordance with the Quality Assurance Manual, Quality System Procedures and Work Instructions

· approve Quality System Procedures, supplier/subcontractor evaluation reports, vendors lists, and disposition of nonconformities which do not involve technical changes

· manage the Quality Assurance personnel

· establish and implement Quality Assurance employee training requirements

· determine and approve personnel requirements including the preparation and maintenance of Position Profiles for the Quality Assurance personnel

· approve Quality Plans

· approve Inspection Plans

· approve Certification and Inspection Reports

· approve Instrument Calibration Procedures

· approve Corrective and Preventive Action Requests

· approve Internal Audit Reports

· approve Statistical Data Reports and procedures

· approve Process Work Instructions

The ISO Facilitator interrelates with the other organizational units as follows:

· Transportation Services - processes nonconformity reports for Transportation Services disposition, communicates quality issues and data, exchange ideas and provides input into Quality System Procedures revision.

· Operations - adherence to the quality system and communication of quality or operations problems, nonconformities, corrective and preventive actions.

· Sales & Marketing - Communication of customer problems and feedback, corrective action approvals when required by the customer, and technical support with respect to quality issues.

· Finance & Administration - Communication of approved vendors to Purchasing, communication of quality issues to Purchasing to be communicated to suppliers; technical support to Purchasing with respect to supplier quality aspects.

The Quality Assurance personnel have the authority to issue for approval inspection reports and product certification reports.

The Quality Assurance Personnel have the responsibility to perform their duties in accordance with the quality system which is documented in the Quality Assurance Manual, Quality System Procedures, Work Instructions and their Position Profile.

All Wright Distribution Centers, Inc.’s Personnel have the authority to immediately stop a process which is determined to be nonconforming and report the nonconformity to the Quality Assurance organizational unit (see QSP-013).

5.5.2 Management Representative

The President is ultimately responsible for the implementation of the quality system and quality policies at Wright Distribution Centers, Inc.

The ISO Facilitator appointed by the President as the Management Representative and shall have defined authority as defined in paragraph 5.5.1.5. In addition, the ISO Facilitator shall have authority to:

· Report directly and immediately to the President on any quality issues which can not be resolved by standard management practices within the organizational units.

· Report on the performance of the quality-system to the management for review and as a basis for improvement of the quality system (see paragraph 4.1.3).

5.5.3 Internal Communication

The President shall ensure that communication between management and employees is maintained and effective in order to meet the Quality Objectives and Quality Policy.

The Quality Management System Procedure QSP-002 describes the internal communication in detail.

5.6 MANAGEMENT REVIEW

5.6.1 General

The executive management (see par. 5.5.1) shall meet at least twice a year to review the quality system to ensure its continuing suitability and effectiveness in satisfying the quality policy and objectives.

Records of the management review shall be maintained including all resolutions. The ISO Facilitator shall be responsible to follow-up on all resolutions to ensure that they have been adopted, implemented and are effective.

The Quality Management System Procedure QSP-001 describes the management review in detail.

5.6.2 Review Input

The input to the management review meeting shall be:

· Results of Internal and External Audits;

· Customer complaints, feedback, and customer evaluations;

· Process measurable criteria and the process performance;

· Effectiveness of the preventative and corrective actions;

· Review previous management review decisions and actions;

· Future organizational changes that may have an effect on the quality management system;

· Review of the Security System;

· General recommendations for improvement.

5.6.3 Review Output

The management review meeting shall have outputs in the following manner:

· Actions to improve the overall effectiveness of the quality management system including action completion dates and responsibilities for executing the actions;

· Actions to improve the overall performance of processes within the organization to improve warehousing and distribution services related to the customer’s requirements including action completion dates and responsibilities for executing the actions (quality objectives);

· Actions to ensure that the required resources are available to effectively execute the actions resulting from the management review meeting.

6.0 RESOURCE MANAGEMENT

6.1 Provision of Resources

The executive management (see par. 5.5.1) shall have a Resource Evaluation meeting semi-annually.

The Resource Evaluation meeting will review each organizational unit’s immediate, short-term and long-term resource requirements and shall identify the employee training requirements, warehouse operations, maintenance, and testing equipment requirements, instrumentation, computer software/hardware, and security requirements required to effectively implement the quality system and Wright Distribution Centers, Inc.’s policies. Consideration shall also be given to obligations resulting from laws, regulations, rules, statutes and other obligations such as protection of the environment, health, safety, security, and conservation of energy and natural resources.

The ISO Facilitator shall ensure that the required resources are obtained and implemented effectively by assigning action items to the applicable personnel and by follow-up verifications.

The Quality Management System Procedure QSP-001 describes the resource evaluation in detail.

6.2 HUMAN RESOURCES

6.2.1 General

Employee training is an integral part of the quality system at Wright Distribution Centers, Inc. Training shall be identified by each manager for all employees, summarized and reported in the Resource Evaluation meetings (see 6.1).

6.2.2 Competence, Awareness and Training

Employees performing warehousing operations, lift truck operation, CPL driving, customer service, final inspection, and other test activities shall have appropriate experience and/or training; including any necessary qualification for specific assigned tasks.

Employees performing specific assigned tasks shall be qualified on the basis of appropriate education, training and/or experience, as required. New personnel shall be provided immediate training and indoctrination to the quality system so that they are aware of the relevance and importance of their activities and how they contribute to achieve quality objectives, management policies, safety procedures, and shall be assigned the necessary tools required to perform the assigned tasks.

The ISO Facilitator shall evaluate the effectiveness of the training programs established and report the results in the Resource Evaluation meetings (see 6.1).

Records of all personnel training shall be maintained by ISO Facilitator at each plant including each employee’s training history prior to starting at Wright Distribution Centers, Inc.

The Quality Management System Procedure QSP-018 describes the training in detail.

6.3 INFRASTRUCTURE

The ISO Facilitator will lead an Environment/Infrastructure Team who shall determine the buildings, workspace, equipment, hardware and software required to meet quality objectives.

The Environment/Infrastructure Team shall ensure that buildings, workspace, hardware, equipment and software are available, maintained and appropriate to meet the quality objectives and quality policy.

The Quality Management System Procedure QSP-004 describes the determination and maintenance of the infrastructure in detail.

6.4 WORK ENVIRONMENT

The ISO Facilitator will lead an Environment/Infrastructure Team shall determine the most effective work environment required to ensure that the warehouse and distribution services meet the customer’s requirements.

The Warehouse Operations Manager shall establish a maintenance schedule for all lift trucks (see QSP-009).

The Quality Management System Procedure QSP-004 describes management of work environment in detail.

7.0 PRODUCT REALIZATION

7.1 Planning of Product (warehousing and distribution) Development

Wright Distribution Centers, Inc. does not perform any design activities. The President is responsible for sales and marketing and shall ensure that each new or revised customer contract is reviewed prior to acceptance and that Wright Distribution Centers, Inc. has the necessary resources and quality plan to execute the contract in accordance with the customer’s requirements.

7.2 Customer-Related Processes

In the warehousing and distribution industry, a tender, contract or purchase order is the master document that is signed and/or agreed upon with the customer for a period of time. At Wright Distribution Centers, Inc., this document is referred to as the Contract and Rate Quotation and usually has a lifetime of more than two years (unless a price increase is issued). The Contract and Rate Quotation outlines the daily working relationship, terms and specifications required between Wright Distribution Centers, Inc. and their customer. Each batch of material received, stored, processed and dispatched is in accordance with an approved Contract and Rate Quotation. Therefore, many shipments of material received, processed and dispatched over time may be under one Contract and Rate Quotation.

7.2.1 Determination of Requirements Related to the Warehousing and Distribution Services

Contracts shall be reviewed by the President prior to acceptance. The President is responsible to establish and maintain procedures for the coordination of these activities.

The President shall be responsible for ensuring that all requirements for the Contract and Rate Quotation or revisions to the Contract and Rate Quotation are reviewed upon receipt and also prior to confirming order acceptance with the customer.

Each Contract and Rate Quotation shall be reviewed to determine if specific requirements exist for commercial, technical, functional, specification, documentation, quality, regulatory, Security, and other certification issues.

The Quality Management System Procedure QSP-003 describes in detail the procedures for contract review.

7.2.2 Review of requirements related to the Warehousing and Distribution Services

A review of the requirements related to the Warehousing and Distribution Services shall ensure that the customer’s requirements are defined and that if the Contract and Rate Quotation is different from previous contracts, that the different elements are resolved to ensure that Wright Distribution Centers, Inc. has the ability to meet the Contract and Rate Quotation requirements.

If quotation or contract problems are encountered, the President will notify the customer and assist in resolving the issues prior to accepting the order.

Where warehousing and distribution requirements are changed, Wright Distribution Centers, Inc. shall ensure that relevant documents are amended and that relevant personnel are made aware of the changed requirements.

Contracts shall be processed according to the two types of warehousing and distribution services offered by Wright Distribution Centers, Inc.:

Standard is a warehousing and distribution service that is presently offered and is covered under the present quality plan (QMSM-9001-2002, QSP-001 to QSP-020 and WI-001 to WI-002).

Non-Standard is a new request or revision to an existing warehousing and distribution service that is not covered by the present quality plan (QMSM-9001-2002, QSP-001 to QSP-020 and WI-001 to WI-002).

7.2.3 Customer communication

Standard Contract and Rate Quotation shall be prepared, review and approved by the President.

Non-Standard Contract and Rate Quotation shall be prepared by the President with input from the ISO Facilitator, Warehouse Operations Manager and Transport Operations Manager. The review of the Contract and Rate Quotation shall be accomplished by a Contract Review meeting which shall be chaired by the President. The President shall initiate the Contract Review meeting when required. The Contract Review meeting shall identify the required quality elements, equipment, employee skills, inspection requirements, warehousing and distribution processes and special OSHA, Security and other certification requirements necessary to conform to the request for quotation (customer specifications). The Contract Review meeting will determine the acquisitions (if necessary) required so that Wright Distribution Centers, Inc. is capable of providing the required warehousing and distribution services in conformance with the request for quotation (customer specifications).

7.2.4 Records

Contract and Rate Quotations and records of the Contact Review meetings shall be maintained in current file for one year and in storage for an additional 3 years (4 years total) unless otherwise specified in the applicable contract, QSP or WI (see QSP-005).

The Quality Management System Procedure QSP-003 describes in detail the procedures for contract review.

7.3 RESEARCH AND DEVELOPMENT, R & D (DESIGN)

Wright Distribution Centers, Inc. does not manufacture or design any products. Wright Distribution Centers, Inc. is a service oriented organization that provides warehousing and distribution services to their customers in accordance with their customer’s warehousing and distribution requirements. Wright Distribution Centers, Inc. does not design new services or methods for warehousing or distribution.

Therefore, the ISO 9001:2000 element 7.3 – Design is excluded from the Quality Management System at Wright Distribution Centers, Inc.

7.4 PURCHASING

7.4.1 Purchasing Process

The ISO Facilitator is responsible to establish and maintain procedures to control and ensure that purchased product and services conform to specified requirements.

All subcontractors and suppliers shall be selected based on price, service, history and relations with Wright Distribution Centers, Inc., delivery and other relevant information.

The Quality Management System Procedure QSP-006 describes the procedure for performing Supplier/ Subcontractor evaluations.

The ISO Facilitator shall establish and maintain a list of approved suppliers (see QSP-006).

7.4.2 Purchasing Information

Purchase Requisitions shall contain data clearly describing the product ordered, subcontracted services, delivery procedure, incoming testing requirements and delivery date. Subcontracted services include, pest control, maintenance and repair, calibration services, and other subcontracted services that have a direct effect on the quality of warehousing and distribution services provided by Wright Distribution Centers, Inc.

The Quality Management System Procedure QSP-006 describes the procedures used by Purchasing.

7.4.3 Verification of Purchased Product

7.4.3.1 Organizational Verification at Supplier

When Wright Distribution Centers, Inc. proposes to verify product or services at the supplier’s premises, the supplier shall be verbally notified at the time the order is placed including the verification arrangements and verification procedures, specifications and criteria to be used during the on-site verification process.

7.4.3.2 Customer Verification at Supplier

When specified in a contract, the customer shall be afforded the right to verify at any one of Wright Distribution Centers, Inc.’s subcontractor’s premises that the subcontracted service or product conforms to the customer’s specified requirements.

Verification by the customer in this manner shall not absolve Wright Distribution Centers, Inc. of the responsibility to provide acceptable warehousing and distribution services, nor shall it preclude subsequent rejection by the customer. Such verification shall not be used by Wright Distribution Centers, Inc. as evidence of effective quality control or acceptance of the product or service from the subcontractor.

7.5 WAREHOUSING AND DISTRIBUTION PROVISIONS (PROCESS CONTROL)

7.5.1 Control of Warehousing and Distribution Provisions

Process control of the warehousing and distribution activities during the operation stages shall be obtained by having an approved Quality Plan and by using the Pick Ticket and Work Order to provide instructions for each picking, packing, value added processing, shipping operation and inspection step, and by having approved Work Instructions for each process where applicable.

In addition to the above, and where appropriate, Statistical Techniques shall be used to maintain process capability and continuous improvement (see paragraph 4.20).

Controlled conditions shall also include the following:

1. Documented procedures defining the manner of operations (see QSP-005);

2. Compliance with reference standards/codes, quality plans, and/or documented procedures (see QSP-009);

3. Environmental and Infrastructure (see QSP-004)

4. Monitoring and control of processes and equipment (see QSP-009);

5. The approval of processes and equipment (see QSP-009);

6. Criteria for workmanship (see QSP-009);

7. Suitable testing, inspection, examination, and audit programs at appropriate stages (see QSP-009 and QSP-017);

8. A documented procedure for revisions to quality plans (see QSP-005);

9. Suitable maintenance of equipment to ensure continuing process capability (see QSP-009);

10. Statistical Techniques for processes where the results cannot be fully verified by subsequent inspection and testing of the product (see QSP-020);

11. Employee skills and training established and maintained (see QSP-018);

12. Records maintained for qualified processes, equipment and personnel, as appropriate (see QSP-016);

13. Establishing Quality Objectives for improvement (see QSP-020)

The Quality Management System Procedure QSP-009 describes the Process Control in detail.

The ISO Facilitator and the Warehouse Operations Manager are responsible to ensure to establish and maintain procedures for warehousing and distribution activities as described above.

7.5.2 Validation of Processes for Production and Service Provisions

The ISO Facilitator will establish work instructions for validating warehouse and distribution processes when the final output can not be measured. Validation of processes shall include defined process approval criteria, approval of equipment and qualified operators, use of specific methods and procedures, quality records and when required, re-validation procedures.

The Quality Management System Procedure QSP-009 describes the procedures for Validation of Processes for Production and Service Provisions.

7..3 Identification and Traceability

The ISO Facilitator shall maintain an effective system that will ensure that all materials processed by Wright Distribution Centers, Inc. shall be identified with a number that is unique for the kind, class or grade of the material.

All incoming materials that are incorporated into the final product (materials to be processed by Wright Distribution Centers, Inc.) and are received with serial number(s) or lot/batch number(s) identifications shall be recorded upon receipt and traceability maintained to the final material’s serial number when required by customer contract.

The warehouse and customer service shall be responsible to ensure traceability is maintained during the processing.

If a material loses its identity during processing, or inspection/testing, it shall be put on hold until the applicable organizational unit recovers traceability. A Nonconformity Report shall be initiated immediately (see QSP-013).

The Quality System Procedure QSP-008 describes the procedures used to provide product identification and traceability.

The ISO Facilitator is responsible to establish and maintain procedures for maintaining inspection and test status of material throughout processing and, when required by contract, delivery.

The inspection and test status of the customer’s material will be identified by suitable means, which indicate the conformance or non-conformance of the material with regard to the inspection and tests performed:

Ü Tags

Ü Markings

Ü Stampings

Ü Receiving Forms

Ü Pick List

Ü Inspection Documentation

The inspection acceptance status shall be identified on the material and/or on the Pick Ticket/Work Order at any stage of processing, inspection, and storage and shall be maintained, as documented, throughout the life cycle of the material within Wright Distribution Centers, Inc. This is to ensure that only material that has passed the required inspections and tests are dispatched.

The warehouse and customer service personnel are responsible to ensure that the inspection and test status of material shall be maintained.

The Quality System Procedure QSP-012 describes the method in use to identify the inspection and test status in detail.

7.5.4 Customer Property (CSP)

The ISO Facilitator is responsible to establish and maintain procedures for the control, verification, use, storage and maintenance of customer supplied material.

Materials supplied to Wright Distribution Centers, Inc. by the customer to be incorporated into the product (such as pallets, packaging material or inspection gauges to be used in the process), or equipment to be used for processing (computer, printing or scanning equipment) shall be inspected upon receipt and documented in a customer material log.

Any CSP that is lost, damaged or otherwise unsuitable for use shall be recorded and reported to the customer.

The Quality System Procedure QSP-007 describes the procedures for handling customer-supplied product.

7.5.5 Preservation of Product

7.5.5.1 General

The ISO Facilitator and the Warehouse Operations Manager are responsible to ensure that procedures for handling, storage; packaging, preservation, and delivery are available and implemented (see QSP-015).

It is the responsibility of the Warehouse Operations Manager and Warehouse Personnel to ensure that the Work Instructions for handling, storage, packaging, preservation and delivery are implemented correctly.

7.5.5.2 Handling

The Quality Management System Procedure QSP-015 shall include procedures for handling product that will prevent damage, contamination or deterioration.

7.5.5.3 Storage

Storage and stock areas shall be designated to prevent damage or deterioration/contamination of material, pending use or delivery and appropriate methods for documenting the authorized receipt and dispatch of material shall be stipulated in QSP-015.

Customer Supplied Product shall be identified, stored, and shipped in a manner consistent with the Quality System requirements (see QSP-007, QSP-008 and QSP-015).

7.5.5.4 Packaging

The Quality System Procedure QSP-015 shall include procedures to control the packing, packaging, and marking processes to the extent necessary to ensure conformance with the customer requirements.

7.5.5.5 Preservation

The Quality System Procedure QSP-015 shall include procedures for preservation and segregation of material to ensure conformance with the customer requirements.

7.5.5.6 Delivery

The Quality System Procedure QSP-015 shall include procedures for the protection of the material after final inspection and test. When contractually specified, this protection shall be extended to include delivery.

7.6 CONTROL OF MONITORING AND MEASUREMENT DEVICES

7.6.1 General

The ISO Facilitator shall establish and maintain procedures to control, calibrate, and maintain inspection, measuring and test equipment (including test software) used by Wright Distribution Centers, Inc. to demonstrate the conformance of product or services to specified requirements. Inspection, measuring, and test equipment shall be used in a manner that ensures that the measurement uncertainty is known and is consistent with the required measurement capability.

However, at the time this manual was approved and issued, Wright Distribution Centers, Inc. had no inspection, measuring and test equipment (including test software) presently in use. However, this element is part of the quality management system at Wright Distribution Centers, Inc. and will be followed in the case that a new contract requires the use of inspection, measuring and test equipment (including test software).

The Quality System Procedure QSP-011 describes the calibration and control procedures for the Inspection, Measuring and Test Equipment.

7.6.2 Control Procedure

The Warehouse Operations Manager will determine measurements to be made and the accuracy required. The appropriate inspection, measuring and test equipment will be selected based on its capability to produce the necessary accuracy and precision.

Measuring and test equipment, used in the warehousing and distribution activities shall be controlled, calibrated and maintained as described in this section.

Where the availability of technical data pertaining to the inspection, measuring and test equipment is a specified requirement, this data will be made available, when required by the customer or the customer representative. This will be to verify that the inspection, measuring and test equipment is functionally adequate.

The ISO Facilitator shall establish a log of the controlled measuring and test equipment.

The ISO Facilitator will define the process employed for the calibration of inspection, measuring and test equipment, including details of equipment type, unique identification, location, frequency of checks, check method, acceptance criteria and the action to be taken when results are unsatisfactory.

The ISO Facilitator will assess and document the validity of previous inspection and test status results when inspection, measuring and test equipment is found to be out of calibration.

The ISO Facilitator will ensure that the environmental conditions are suitable for the calibrations, inspections and tests being carried out.

The ISO Facilitator will ensure that the handling, preservation and storage of inspection, measuring and test equipment is such that the accuracy and fitness for use are maintained.

The ISO Facilitator will ensure that a method is put in place to safeguard inspection, measuring and test facilities, including both test hardware and test software (if applicable), from adjustments which would invalidate the calibration setting.

Measuring and test equipment shall be calibrated at intervals specified in the calibration procedure.

Calibration shall be traceable to national standards where such exist or to the accepted values of physical constants where national standards do not exist.

As a minimum, the identification of the equipment or records traceable to the equipment shall specify the date calibrated and when the next calibration is due.

Records of calibration shall be maintained on file.

Any inspection, test or measuring equipment found out of calibration, failed in operation or showing evidence of physical damage that affects its accuracy shall be removed from service.

At a minimum, handling, storage and preservation of measurement standards and measuring equipment shall be in a manner that will not affect the calibration or condition of the equipment.

8.0 MEASUREMENT, ANALYSIS AND IMPROVEMENT

8.1 General

The ISO Facilitator is responsible to establish and maintain documented procedures for all inspection and test activities in order to verify that the specified requirements for the warehousing and distribution services are met. These inspection and test procedures shall be detailed in the Quality Plan.

The Quality Management System Procedure QSP-010 describes the inspection and testing.

8.1.1 Identification of Need

When required, the ISO Facilitator shall be responsible to evaluate the scope of the company’s operations, identify the variables that affect the quality of the warehousing and distribution services and establishes statistical methods for controlling and verifying the process capability and characteristics.

8.1.2 Procedures

The ISO Facilitator with input from the Warehouse Operations Manager and Transport Operations Manager shall be responsible to establish a Quality System Procedure for the application of statistical process control including reporting, evaluation and corrective action procedures, responsibilities and authorities.

The Quality Management System Procedure QSP-020 describes the Statistical Techniques in use by Wright Distribution Centers, Inc.

8.2 MONITORING AND MEASUREMENT

8.2.1 Customer Satisfaction

Wright Distribution Centers, Inc. shall monitor customer satisfaction and use this measurement as one of the indicators of total quality performance at Wright Distribution Centers, Inc. Customer satisfaction shall be reviewed in the Monthly Quality Assurance Meetings (ref. Par. 5.6). The President and ISO Facilitator shall be responsible to evaluate customer perception of Wright Distribution Centers, Inc. The President and ISO Facilitator shall also be responsible to evaluate customer concerns, customer complaints and corrective actions resulting from customer returns and report these results in the Management Review meeting (see QSP-001 and QSP-019).

The Quality Management System Procedure QSP-019 describes the methods for measuring Customer Satisfaction.

8.2.2 Internal Audit

The ISO Facilitator and the Lead Internal Auditor are responsible to establish and maintain procedures for planning and implementing internal quality audits to verify whether quality activities and related results comply with planned arrangements and to determine the effectiveness of the quality system.

The Lead Internal Auditor shall schedule Internal Quality Audits on the basis of the status and importance of the activity to be audited. Personnel independent of those having direct responsibility for the activity (area) being audited shall carry out these Internal Quality Audits.

Audit results shall be recorded in an audit report and any corrective actions required should be processed and brought to the attention of the personnel having responsibility in the organizational unit audited.

The personnel responsible for the area shall take timely corrective action on deficiencies and non-conformities found during the audit.

The Lead Auditor or assigned auditor shall follow-up on the corrective action(s) resulting from the Internal Quality Audit to verify and record the implementation and effectiveness of the corrective action taken.

The results of the internal quality audit and the records of the follow-up verification of the corrective actions (if any) issued after the internal quality audit shall be reported in the next Monthly Quality Assurance Meeting by the ISO Facilitator.

The Quality Management System Procedure QSP-017 describes the Internal Quality Audit in detail.

8.2.3 Monitoring and Measurement of Warehouse and Distribution Processes

Wright Distribution Centers, Inc. shall establish suitable methods for monitoring and when applicable measurement of quality management processes. These methods shall include internal audits (ref. Par. 8.2.2), customer satisfaction (par. 8.2.1) and the evaluation of processes (par. 7.5.1).

The Quality Management System Procedure QSP-020 describes the Monitoring and Measurement of Processes.

8.2.4 Monitoring and Measurement of Warehouse and Distribution Services

Wright Distribution Centers, Inc. shall inspect and measure the warehousing and distribution performance throughout the processes to ensure conformance to customer requirements.

The Quality Management System Procedure QSP-010 and QSP-020 describes the procedures for inspection and testing and statistical monitoring.

8.2.4.1 Receiving Inspection and Testing

All incoming material shall not be processed, used or released to inventory storage or to any customer until the material has been inspected and accepted by the warehouse incoming inspection. The inspection and shall be performed in accordance with documented quality system procedures and work instructions.

All non-conforming materials shall be processed as described in QSP-013, Nonconforming Product.

Where incoming material is released for urgent operations purposes prior to verification, it shall be positively identified and recorded in order to permit immediate recall and replacement in the event of nonconformity to the requirements specified on the inspection plan/inspection documents is determined to exist.

8.2.4.2 In-Process Inspection and Testing

The ISO Facilitator is responsible for the preparation of In-Process Inspection plans/Inspection Documents and shall determine the amount and nature of the inspection of specific products and/or processes based upon the customer specifications and Quality Plan (see QSP-010)

a) In-process inspections shall be performed in accordance with inspection plans/inspection documents and the instructions called out for on the Pick Ticket or Work Order.

b) In all in-process inspections, the material must be held at the applicable in-process inspection step until the required tests, inspections, verifications and reports are complete (except when material is released under positive-recall (see paragraph 8.2.4.1). Release under positive-recall shall not preclude the activities outlined in 8.2.4.2 a).

8.2.4.3 Final Inspection and Testing

All materials shall be final inspected in accordance with the Quality Plan and Final Inspection Plan/Inspection Documents. Records of the Final Inspections shall be maintained as objective evidence of conformance of the materials to the specified requirements.

The Final Inspection Plan/Inspection Documents shall include verification that all operations steps and in-process inspections have been completed in accordance with the Pick Ticket or Work Order.

No material shall be dispatched until all the activities specified in the Quality Plan and Final Inspection Plan/Inspection Documents have been satisfactorily completed and objective evidence and reports are available and authorized (see QSP-010).

8.2.4.4 Inspection Test Records

The following records shall be completed and approved prior to the material being dispatched:

Pick Ticket: Reviewed by the Final Inspector/ Warehouse Employee for completeness and accurate reporting of all required data and supporting documentation.

Work Order: Reviewed by the Final Inspector/ Warehouse Employee for completeness and accurate reporting of all required data and supporting documentation.

Where a material or the material’s supporting documentation fail to pass any inspection and/or verification, the procedure for control of nonconforming product shall apply (see QSP-013).

8.3 CONTROL OF NONCONFORMING PRODUCT

The ISO Facilitator is responsible to establish and maintain procedures to ensure that processes or material that does not conform to specified requirements is prevented from unintended use. This control shall provide for identification, documentation, evaluation, segregation (when practical), disposition of nonconforming material or process, and for notification to the functions concerned.

8.3.1 Review and Disposition of Nonconforming Product

It is the responsibility of the ISO Facilitator to ensure the processing of nonconforming products is processed in accordance with the requirements of Quality Management System Procedure QSP-013 - Control of Nonconforming Product.

It is the Responsibility of the ISO Facilitator, the Warehouse Operations Manager, Customer Service Personnel or Transport Operations Manager to approve the disposition of nonconforming product in accordance with the requirements of Quality Management System Procedure QSP-013 - Control of Nonconforming Product that shall include one of the following dispositions:

a) Rework to meet the specified requirements,

b) Accepted with or without concession,

c) Re-graded for alternative applications,

d) Rejected and scrapped/returned to origin.

When required by contract, the proposed use or repair of materials that does not conform to specified requirements shall be reported for concession to the customer or customer’s representative. The description of the nonconformity that has been accepted and any repairs shall be recorded to denote the actual condition.

Repairs and/or reworked materials shall be re-inspected in accordance with the quality plan and/or the inspection plan.

The Quality Management System Procedure QSP-013 describes the procedures for Control of Nonconforming Product.

8.4 ANALYSIS OF DATA

Wright Distribution Centers, Inc. shall establish suitable methods for analyzing quality management processes. The information input shall be generated from internal audits (ref. Par. 8.2.2), customer satisfaction (par. 8.2.1) and the evaluation of processes (par. 7.5.1).

The Quality Management System Procedure QSP-020 describes the Analysis of Data

8.5 IMPROVEMENT

8.5.1 Continual Improvement

Through the use of corrective and preventive actions, nonconformance, the quality objectives, the quality policy, analysis of data, inspection, testing and validation results, Wright Distribution Centers, Inc. shall continually improve the effectiveness of the quality management system.

8.5.2 Corrective Action

Corrective shall be decided upon by the applicable Manager or Supervisor, ISO Facilitator or in a Monthly Quality Assurance Meeting (see QSP-013) chaired by the ISO Facilitator. The Monthly Quality Assurance Meeting may be held by telephone when necessary. The ISO Facilitator may also call in additional employees to provide input or expert information, when determined necessary. Any corrective action taken to eliminate the causes of actual or potential nonconformities shall be to a degree appropriate to the magnitude of problems and commensurate with the risks encountered.

The Team Leader of each functional unit shall be responsible to implement the corrective or preventive action decided upon which is within the scope of their functional unit and limit of their responsibilities.

The ISO Facilitator is responsible to monitor the implementation of the corrective and preventive actions.

The ISO Facilitator shall record any changes to documented procedures resulting from corrective or preventive action.

The Quality Management System Procedure QSP-014 describes the procedures for Corrective and Preventive Actions.

8.5.2.1 Corrective Action

Wright Distribution Centers, Inc. shall:

A) Investigate non-conformities that have been identified from the analysis of warehousing and distribution processes, final inspection and test reports, internal audits, and customer complaints;

B) Determine, implement, and document appropriate corrective actions on the non-conformities;

C) Ensure that relevant information on the actions taken is submitted for management review.

The ISO Facilitator and the quality functional unit shall ensure that the corrective action process is implemented and effective at correcting repetitive nonconformities, customer complaints, internal and external audit observations and corrective actions, and preventative corrective actions.

Wright Distribution Centers, Inc. shall document the implementation of the corrective and preventive action, (see QSP-014).

Non-conformity Reports shall be analyzed by the ISO Facilitator to identify significant re-occurrences or trends and shall be reported for management review.

8.5.3 Preventive action

The Quality Management System Procedure QSP-014- Corrective and Preventive Action includes provisions for:

A) The use of appropriate sources of information (such as processes and work operations which affect warehousing and distribution quality, concessions, audit results, quality records, statistical process control data, and customer complaints) to detect, analyze, and eliminate potential causes of non-conformities;

B) Determination of the steps needed to deal with any problems requiring preventive action;

C) Initiation of preventive action and application of controls to ensure that they are effective;

D) Confirmation that relevant information on actions taken is submitted for management review.

The ISO Facilitator shall review all suggestions submitted.

All Corrective and Preventive Actions undertaken will be monitored by the ISO Facilitator to verify their implementation and effectiveness.

ANNEX A

Quality System Procedures Index

Management Responsibility	QSP-001
Internal Communication	QSP-002
Contract Review	QSP-003
Work Environment and Infrastructure	QSP-004
Document and Data Control	QSP-005
Purchasing	QSP-006
Customer Supplied Material	QSP-007
Product Identification and Traceability	QSP-008
Process Control and Maintenance	QSP-009
Inspection and Testing	QSP-010
Calibration	QSP-011
Inspection and Test Status	QSP-012
Nonconforming Product	QSP-013
Corrective and Preventative Action	QSP-014
Handling, Storage; Packaging, Preservation and Delivery	QSP-015
Control of Quality Records	QSP-016
Internal Audits	QSP-017
Training	QSP-018
Customer Perception	QSP-019
Statistical Techniques and Management Analysis of Data	QSP-020

ANNEX B

Work Instructions Index

Inbound Warehouse	WI-001
Out Bound Warehouse	WI-002