Nonconforming Products and Materials (DMDO) & Processes (ADR)
I. What are nonconforming products, materials, or processes?
II. What are DMDOs, ADRs, and OS&Ds?
A. What do DMDOs, ADRs, and OS&Ds look like?
III. Why are DMDOs, ADRs, and OS&Ds issued?
IV. What are the different types nonconformance paperwork, and what are my responsibilities for each type?
A. How will I receive a DMDO, ADR, or OS&D and from whom?
V. What are the different types of dispositions?
VI. What is a Corrective Action/Preventive Action (CAPA)?
VII. What do I have to do if a CAPA is requested?
A. Required Information on CAPA Form
VIII. What happens if I do not complete these forms on time?
IX. How does a DMDO affect my Right First Time (RFT) Score?
I. What are nonconforming products, materials, or processes?
A nonconforming product or material is any purchased product or raw material received by Amway that does not conform to the specifications or agreed upon standards.
For all nonconforming products or materials, a Defective Material Disposition Order (DMDO) will be issued to the Supplier and an investigation is initiated. For all supplier caused non-conformances, a Corrective Action/Preventive Action (CAPA) will be requested.
A nonconforming process refers to shipping, packaging, identification, or paperwork errors leading to a delay in product or material receipt. Such nonconforming processes lead to the issuance of an Arrival Defect Report (ADR) or an Over, Short, and Damaged Report (OS&D). For all supplier caused ADR errors, a Corrective Action/Preventive Action (CAPA) will be requested.
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II. What are DMDOs, ADRs, and OS&Ds?
A DMDO is generated when components, raw materials or products do not conform to established specifications or standards. This tool is used to notify internal and external parties of the issue. DMDOs may be written for non-conformances found during incoming inspection, production, or in market.
An ADR is generated when shipping, packaging, identification, or paperwork errors lead to a delay in product or material receipt. This tool is used to notify internal and external parties of the issue.
An Over, Short and Damaged (OS&D) report is issued to document miscounts and shipment damages on incoming shipments of products and materials. This tool is used to notify internal and external parties of the issue.
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A. What do DMDOs, ADRs, and OS&Ds look like?
Please refer to the examples below as guides to reading DMDOs, ADRs, and OS&Ds.
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III. Why are DMDOs, ADRs, and OS&Ds issued?
Why is a DMDO issued?
· A DMDO is issued to communicate a nonconformance internally (Amway) and externally (Suppliers)
· DMDOs allow the company to control or quarantine all non-conforming items
· DMDOs help ensure that the final agreed upon disposition is implemented
· DMDOs are used to measure and track conformance and quality history, so QA personnel can identify trends and areas for improvement
Why is an ADR issued?
· An ADR is issued to communicate failure to meet a shipping, transportation, or quality assurance documentation requirement, both internally (Amway) and externally (Supplier)
· ADRs are used to measure and track compliance history, so QA personnel can identify performance trends and areas for supplier improvement
Why is an OS&D issued?
· An OS&D is issued to communicate shipping discrepancies (overages or shortages) and damages, both internally (Amway) and externally (Supplier)
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IV. What are the different types of nonconformance paperwork, and what are my responsibilities for each type?
There are four different types of nonconformance paperwork: external incoming DMDO, external in-process DMDO, ADR, and OS&D. Please refer to the guide below for an explanation of why DMDOs and ADRs are issued and the supplier’s responsibilities in each scenario.
Please note: OS&Ds are handled with suppliers via Amway’s Warehousing and Global Procurement departments.
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A. How will I receive a DMDO, ADR, or OS&D and from whom?
Suppliers will be contacted regarding external incoming and external in-process DMDOs from their Supplier Quality Development (SQD) Representative or Supply Chain QA.
Suppliers will also be contacted for ADRs, but the contact can originate from the Quality Assurance, Transportation, or Procurement groups depending on the issue.
Suppliers will be contacted regarding OS&D’s via Amway’s Global Procurement department.
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V. What are the different types of dispositions?
There are six types of dispositions that require vendor action:
DMDO Type / Disposition / Description / Supplier ActionExternal Incoming or External In-Process / Release Under Deviation (RUD) / Disposition notice issued for products, raw materials, or components that do not meet specifications but are accepted by Amway "as-is" because they have minimum impact. / Complete CAPA
External Incoming or External In-Process / Return to Vendor (RTV) / Disposition notice issued for rejected products, raw materials, or components that will be returned to the supplier. / Complete Disposition Request Form; Complete CAPA
External Incoming or External In-Process / Scrap Vendor Expense (SVE) / Disposition notice issued for rejected products, raw materials, or components that will be scrapped at Amway and charged back to the supplier for payment. / Complete Disposition Request Form; Complete CAPA
External Incoming or External In-Process / Rework Vendor Expense (RVE) / Disposition notice issued for rejected products, raw materials, or components that will be reworked at Amway, but the charges will be forwarded to the supplier for payment. / Complete Disposition Request Form; Complete CAPA
ADR / N/A - No Financial Impact / Ex. Transportation: Supplier called our core carrier directly. Ex. Receiving Warehouse: Wrong info. on packing slip Ex. QA: Missing C of A / Complete CAPA
OS&D / Freight or Supplier Claim / Ex. Stock damaged during transit. Ex: PO Quantity does not match the sum of the case label quantities. Ex. PO quantity and case label quantities do not match actual count of product within case. / Damage--Freight Claim Authorization Quantity--CAPA
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VI. What is a Corrective Action/Preventative Action (CAPA)?
A CAPA is a supplier created action plan focused on preventing a non-conformance from recurring. The CAPA is created in response to a DMDO issued to communicate non-conforming material (or ADRs for non-conforming paperwork). CAPAs are required for all DMDOs and ADRs.
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VII. What do I have to do if a CAPA is requested?
If requested to provide a CAPA, suppliers will receive a CAPA form. The form will indicate what information is needed, and will include due dates for each step of your investigation. A final response, including a preventive action plan and verification of both corrective and preventive action effectiveness, is due within 30 days of initial CAPA request.
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A. Required Information on CAPA Form
There are 6 steps involved in filling out the CAPA form:
1. Acknowledge Receipt and Define Issue – The supplier is expected to acknowledge receipt of DMDO/ADR communication and CAPA request within 48 hours.
2. Containment – Describe the containment actions taken. Containment is required prior to any subsequent shipments and must occur within 48 hours.
3. Determine Root Cause – Designate what type of fundamental deficiency occurred (manpower, materials, methods, machine, environment) to cause the material/component defect. Identify the Quality System Escape Point(s) and determine root cause of the Quality System failure. Root Cause determination is due within 7 days.
4. Corrective Action – Describe the action(s) taken to correct the defective material and reduce both the rate of failure and the rate of escape. The supplier is expected to provide verification that corrective actions performed are effective in eliminating the non-conformity. The Corrective Action Plan is due within 7 days.
5. Preventive Action – Describe the action(s) taken to eliminate the cause(s) of failure and/or escape. The supplier is expected to provide verification that preventive actions performed are effective in preventing reoccurrence. The Preventive Action Plan is due within 30 days.
6. Recognize Team – Both the supplier and Amway will provide names and titles of the individuals involved in correcting and preventing DMDO/ADR issue(s).
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VIII. What happens if I do not complete these forms on time?
The timeliness of your CAPA response to DMDOs/ADRs affects your Supplier Segmentation standing with Amway, and could affect your Right First Time (RFT) score. While returning these forms on time and fully filled out will help, it would benefit your score more if neither DMDOs nor ADRs were issued. Completing corrective/preventive action investigations promptly helps to ensure future shipments will not be rejected for the same issue.
If you have additional questions, please contact your Supplier Quality Development (SQD) Representative.
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IX. How do DMDOs/ADRs affect my Right First Time (RFT) Score?
Each incoming Purchase Order Line is assigned a score of 100% or 0%. Any Purchase Order Line assigned a Supplier-related DMDO or ADR will be assigned a score of 0%. Suppliers are expected to maintain or exceed an overall RFT score of 99%. SQD Representatives will discuss a quality improvement plan with you if your RFT score falls below 99%.
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Version 3
Updated: April 2011