Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

Carl Zeiss IMT Corporation 6250 Sycamore Lane North Minneapolis, MN 55369

IMS Integrated Management System

Headquarters Carl Zeiss IMT Corporation 6250 Sycamore Lane North Minneapolis, MN 55369

Michigan Technical Center Carl Zeiss IMT Corporation 6826 Kensington Road Brighton, MI 48116

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

Table of Contents 1. 2. 3. 4. 5. HISTORY & PRODUCTS ................................................................................................................................ 3 ORGANIZATION & CZ RELATIONSHIP ................................................................................................... 4 POLICIES .......................................................................................................................................................... 5 REGISTRATIONS AND ACCREDITATIONS .............................................................................................7 PROCESS ORIENTATION & PROCESS MAPS..........................................................................................8 5.1. MANAGEMENT PROCESSES .......................................................................................................................... 8 5.1.1. Strategic Business Plan ....................................................................................................................... 8 5.1.2. Management Review ............................................................................................................................ 9 5.1.3. Internal Audits ..................................................................................................................................... 9 5.1.4. Human Resource Management.......................................................................................................... 10 5.2. BUSINESS PROCESSES ................................................................................................................................ 10 5.2.1. Marketing ........................................................................................................................................... 10 5.2.2. Concept and Development ................................................................................................................. 11 5.2.3. Sales ................................................................................................................................................... 11 5.2.4. Planning & Material Control ............................................................................................................ 11 5.2.5. Production .......................................................................................................................................... 12 5.2.6. Applications & Projects ..................................................................................................................... 12 5.2.7. Field Service ...................................................................................................................................... 12 5.3. SUPPORTING PROCESSES ........................................................................................................................... 12 5.3.1. Purchasing ......................................................................................................................................... 12 5.3.2. Health, Safety, and Environment ....................................................................................................... 12 5.3.3. Document and Record Control .......................................................................................................... 13 5.3.4. Identification and Traceability .......................................................................................................... 13 5.3.5. Product and Inspection Status ........................................................................................................... 13 5.3.6. Control of Non-Conforming Material ............................................................................................... 13 5.3.7. Corrective and Preventive Action ..................................................................................................... 14 5.3.8. Continuous Improvement ................................................................................................................... 15 5.3.9. Calibration and Gage Control .......................................................................................................... 16

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

1. History & Products Carl Zeiss, founded in 1846 in Jena, Germany as a workshop for precision mechanics and optics, has evolved into an international technology company headquartered in Oberkochen, Germany with divisions in the Optical, Medical Technology, Semiconductor, and Industrial Metrology sectors. As the leader in measuring technology, the Carl Zeiss Industrial Metrology Technology (IMT) division offers a comprehensive product line in Bridge-type and Horizontal-arm measuring machines. Our scanning technology, which today has applications in all performance categories, was a pioneering development. We offer metrology solutions for in-process quality assurance to a wide variety of industries. Our measurement equipment is used by our customers to verify the dimensions of their manufactured parts and serves as the foundation of their Statistical Process Control (SPC) systems. Today, as in the past, major companies count on technology from Carl Zeiss in the area of metrology solutions. Price pressure has forced many automotive manufacturers to outsource part of their production to medium sized companies. This trend has raised expectations in terms of quality. Suppliers of the automotive industry have to maintain a standard of high precision and accuracy when manufacturing complex parts. To achieve this, these suppliers require equipment that is comparable to that of their customers (i.e., machining equipment and measuring machines).
Carl Zeiss Industrial Metrology Technology (IMT)

The IMT Vision

We make process quality visible and are the leading Global
Partner for Industrial Measuring Technology. We always keep one step ahead. Together with our customers we constantly develop new ideas for superior metrology products and services.

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

2. Organization & CZ relationship Carl Zeiss IMT Corporation (CZIMT) is an American corporation wholly held by Carl Zeiss, Inc. in Thornwood, NY. We are part of the CZ IMT-GmbH division of Carl Zeiss, which is headquartered in Oberkochen, Germany. The insert located above shows the vision statement developed by the CZ IMT-GmbH. CZIMT ensures that all of our efforts and activities, as well as our policies and objectives support and are fully aligned with that vision. CZIMT maintains a detailed organization map to clearly define and communicate responsibilities and authority within our business. Job responsibilities and authorities are further defined for each employee in their Job Descriptions. The chart details our organization structure and was current at the time of this document release. Currently, the scope of this IMS manual fully covers all parts of our company.. Our management team also sets annual goals for all of our employees and managers provide performance feedback to their employees during individual annual performance reviews. During regularly held All Employee meetings, the management team updates employees on the companys Key Performance Indicators (graphs and performance data) and the strategic business goals for the current fiscal year.

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Working Procedure CZ-IMS

3. Policies This manual outlines the quality, environmental, and calibration systems utilized by Carl Zeiss IMT Corporation (CZIMT). As the title of this manual implies, our key management systems have been combined into a single integrated management system. Each of the following policies establishes our objectives and serves as a guide for the management of our quality, environmental, and calibration systems. An important objective of each policy is the satisfaction of the interests of our stakeholders, which include:

INTEGRATED MANAGEMENT SYSTEM MANUAL

Our customers, Our owners, Our employees, Our suppliers, The communities in which we operate and, The environment.

Quality Policy
Our commitment to quality comes from two sources. First, we recognize our obligation to preserve and uphold the tradition of our founding company Carl Zeiss, which has exemplified exceptional quality and technical innovation for over 150 years. Second, our valued customers depend upon the unquestionable quality and integrity of our metrology instruments to ensure the quality of their own products and processes. Our goal is to be the worlds leading provider of superior quality metrology products. We intend to achieve this goal by developing and producing the most accurate, reliable, durable and maintainable products and services through the application of Total Quality Management (TQM). It is the responsibility of the Executive Management Team to communicate our commitment and goal to all employees of Carl Zeiss IMT Corporation, and to promote a culture and work environment in which employees feel responsible for the quality of their work and committed to the process of continuous improvement.

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

Health, Safety, and Environment Policy

We are committed to health, safety, and environmental (HSE) excellence. Our commitment includes: Protection of the health and safety of our employees, customers, and neighbors. Continuous reduction and prevention of pollution. Minimization of waste products. Compliance with all applicable laws and regulations. Conformity with corporate directives and initiatives. Compliance with contractual customer HSE requirements.

When making choices about our material and energy use, we employ the following priorities to guide our decisions: Preferred Reduce the use of materials and energy not absolutely required. Reuse materials or recover energy, wherever practical. Recycle material that must be discarded, when possible.

Calibration Policy
Carl Zeiss will utilize calibration methods and processes that meet or exceed the expectations of our customers and are consistent with the sound methods accepted by both industry and metrology experts. Carl Zeiss management will implement and maintain a system to ensure: We understand our customers calibration needs and have the ability to meet their requirements before accepting new work. Zeiss calibration technicians have the tools and equipment necessary to comply with company requirements, customer needs, and professional standards. Ample training and support is provided to all our calibration technicians so that they will have the information to successfully complete calibrations. Technicians and managers are free of undue pressure, influences, or conflicts that might affect the integrity or quality of our calibration work. Our calibration systems, processes, and results are in compliance with ISO 17025. We continually improve our calibration systems, methods, and results.

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

4. Registrations and Accreditations CZIMT maintains compliance with the major international management system standards, which are valued by our customers. It is our goal for our certificates to cover all parts of our corporation. At the time of release of this document, our certificates cover both the Minneapolis and Brighton facilities and all of our employees located in the field. Quality ISO 9001, DQS is our registrar Environmental ISO 14001, DQS is our registrar Calibration ISO 17025, A2LA is our accreditation body.

Our registrations and accreditation will change, as standards are revised, superceded, or retired, our organization changes, and as our customers expectations change. The current scope of each registration or accreditation is documented on the corresponding certificate. We maintain copies of all our current certificates on our website so that our customer may quickly verify their current status. By following the directions below you may obtain certificate copies for printing or for electronic storage. 1. Enter website located at www.zeiss.com/imt (or cmm.com). 2. Select Quality Certificates from menu on left hand side. 3. For US certificates, select Carl Zeiss IMT Corporate Certificates from right hand menu for quality, environmental, and calibration certificates. Note: certificates for both our North American and German operations are available. Chose the certificates you wish. 4. Select Download next to the items for which you wish to obtain a copy. 5. Complete the information blocks and follow instructions to obtain an Adobe PDF format certificate copy. You may obtain copies of our software certificates and our policies from the same location on the Web.

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

5. Process Orientation & Process Maps CZIMT utilizes a process-oriented approach to ensure product quality and conformance to requirements. We have mapped our entire management system. This Process Map numbers and separates our key processes into three groups: Management Processes, Business Processes, and Supporting Processes. Each of our 23 processes, contained in these three groups, are also mapped. These second-level maps name all applicable corporate and local procedures, which include our policies and requirements used to ensure consistent and predictable process performance. These same procedures identify related process records Process Map and their retention requirements, as applicable. Process maps are available in our on-line Document Control Database, which is accessible to all employees.
For Carl Zeiss IMT Corporation; Minneapolis, MN Strategic Business Plan Management Review
Management Processes

MP-01

MP-02 MP-03

Internal Audits

Quality Manual is CZ-IMS

MP-04

Human Resource Management

Business Processes (BP)

Value Add Chain

Marketing BP-01

Concept Phase BP-02

Development Hardware Software BP-03 BP-04

Sales BP-05

Planning BP-06

Material Control BP-07

Production BP-08

Applications & Projects

BP-09

Field Service BP-10

Supporting Processes

SP-01 SP-02 SP-03 SP-04 SP-05 SP-06 SP-07 SP-08 SP-09

Purchasing Health, Safety, and Environment Document and Record Control Identification and Traceability Product and Inspection Status Control of Non-Conforming Material Corrective and Preventive Action Continuous Improvement Calibration and Gage Control

5.1.

Management processes CZIMT integrated all key areas into a single management system, which includes Quality management, Health, Safety, & Environmental (HSE) management, and Calibration management. The sub-processes below cover all three areas. 5.1.1. Strategic Business Plan Our Carl Zeiss Vision, developed by our corporate office, provides the foundation that guides CZIMTs strategic planning. Its Mission statement and Long Term Goals establish direction for our future plans. Our Executive Management Team (EMT) develops specific business plans and objectives for CZIMT. Established CZIMT goals, objectives, and plans are communicated to our employees for action. In addition, our Quality Manager completes an annual strategic review covering all key aspects of our Quality, HSE, and Calibration systems.
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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

Performance against objectives is evaluated, recommendations are made, and a new strategic plan is developed for the next fiscal year. 5.1.2. Management Review Management reviews are conducted at regular intervals determined by our EMT but never fewer than four times annually. The EMT has appointed a Quality Manager, who reports on the continuing suitability, adequacy, and effectiveness or their Quality, HSE, and Calibration systems. Key Performance Indicators (KPIs) are reviewed by the EMT to monitor system performance against established goals or objectives. Customer feedback is actively solicited, included in our KPIs, and utilized as a Management Review input. Management Review inputs and outputs are documented and maintained as records. Quality, HSE, and Calibration related actions are recorded in the EMT Action Log.
Carl Zeiss IMT Actions:
# 1 Action
Check training records and determine if training plans are missing from any managers. Let EMT members know result of investigation. Determine why data for Lost Time KPI has not been available and correct so that KPI can be brought up to date. Hire an external trainer to provide Hazardous Communications and R-T-K training for Minneapolis employees (page 11). Training to be provided as soon as possible. Accepted SF&G schedule revisions (page 14). (CQR) and SF&G Technical Service Manager to complete A2LA application starting late June. CQR to contact A2LA to determine their best pre-audit and accreditation audit dates.

Assigned to:
Training Coordinator

Due
6/3/05

Management Review
2 3

VP Operations, Production Manager, & Corporate Quality Representative Training Coordinator and Corporate Quality Representative (CQR) Corporate Quality Representative (CQR)

6/15/05

6/20/05

May 24, 2005

Approved:

7/29/05

Participants: President, VP Operations, VP Sales, VP Marketing, VP Software, VP Finance, National Service Manager, and Corporate Quality Representative
Procedures on Linus1\Reviews\FY_04-05\07_May_EMT.ppt

5 6 7

Page 1

Page 17

5.1.3. Internal Audits Our internal audits are integrated into a single system, which assesses our Quality, HSE, and Calibration systems. The Quality Manager creates an annual audit schedule, obtains approval from the EMT, and oversees the performance of the audit system. The audit results are reviewed by the EMT and actions are tracked by a database until a root cause analysis is completed and the problem satisfactorily resolved. Audit checklists, audit reports, and finding databases are maintained as records, which are reviewed and used to identify trends and issues that require further improvement actions.

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

5.1.4. Human Resource Management The EMT is committed to the belief that our employees are our most important asset. This commitment to our employees is anchored in our Corporate Vision Statement where it is included as a long-term goal. The EMT provides CZIMT employees with the needed infrastructure and a work Carl Zeiss IMT environment conducive to further product quality and employee health. The EMT also ensures that employees receive needed training and are competent to perform their assigned tasks. This is an example from our e-Learning database which allows employees to train on-line at their own pace and the database maintains training records
Carl Zeiss 2005

5.2.

Business Processes Our Process Map identifies eight key Business Processes. Each is a key process step in our value creation chain, which creates the products and services sought by our customers. 5.2.1. Marketing Marketing is the initial process of our value creation chain. Surveys are conducted to actively solicit input from our customers and user community and are used as an input into product design and the development of our strategic business plan. Marketing also completes customer surveys to measure their satisfaction with all the products and services provided by CZIMT. The EMT reviews the data to help determine if and where additional improvement may be required. You may find out more about CZIMT Marketing by visiting our website at www.cmm.com.

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

5.2.2. Concept and Development Product concepts are created to satisfy future customer needs and to help advance science and community welfare. Design seeks to advance product reliability, to provide low life-cycle costs, and to minimize the environmental impacts during their development process for both hardware and software products, as well as the product life cycle and beyond. Design utilizes a review system incorporating both verification
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and validation testing to ensure that inputs match outputs and customer needs. Important tools like FMEAs, MTTF, and MTTR are used to minimize failures and maximize product reliability.

5.2.3. Sales The Sales organization represents the primary internal customer of our Marketing department. Our Sales Team interfaces directly with CZIMT customers. Sales Representatives, with support from our Sales Engineering team, help determine customer needs and identify products that will meet these needs. We have established procedures to ensure that all purchase orders, whether for products or services, are reviewed to ensure compliance with customer requirements. 5.2.4. Planning & Material Control Both production and service orders are carefully planned to ensure that product and delivery goals are achieved. Delivery performance is carefully tracked and our goal is 100% on time performance. Material requirements are planned using a MRP and
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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

stock inventory control system to ensure scheduled demand is met. A control system is in place to monitor customer-supplied materials and to ensure protection of customer proprietary information. We inform our customers promptly, if nonconforming customer provided material is identified. 5.2.5. Production Product realization planning is utilized to ensure that our products and service processes consistently produce the planned results. Controls like checklists, inspections and testing protocols, as well as double checks are utilized to monitor process performance and to define improvement plans as needed. We employ the use of unique identifiers for key parts and subassemblies to provide traceability. These identifiers tie test results to the component and permit identification of materials if special testing or replacement is required. 5.2.6. Applications & Projects We have developed project management tools and processes that allow us to customize measuring technology solutions to meet special customer requirements. Our Project Engineers and our Non-Standard Product Coordinator directly oversee and manage the production of these customized products. 5.2.7. Field Service Service deploys technicians who provide repair, maintenance, upgrade, and calibration services for our customers at their facilities. CZIMT standard service processes are combined with comprehensive training to ensure the quality of our field service work. Our service products include A2LA accredited calibrations. 5.3. Supporting Processes

Nine processes support the Business Processes identified in the horizontal value creation chain. A Process Map details all applicable procedures, both corporate and local implemented to ensure the quality objectives for each of the nine processes.
5.3.1. Purchasing Purchasing supports most of our Business Processes. CZIMT subscribes to the ISO 9000 principle of mutually beneficial supplier relations. We understand that the quality of our products depends primarily on the products and services that we purchase. Only mutually beneficial relationships will ensure the required supply of high quality materials and services. CZIMT documents and communicates required purchase requirements to our suppliers. We also evaluate supplier performance and communicate improvement needs in joint Purchasing/Supplier meetings. A combination of first article inspections, receiving inspection, supplier self-inspection, and Dock-to Stock certification is used to ensure the quality of purchased materials and services. 5.3.2. Health, Safety, and Environment
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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

As outlined in our HSE policy, CZIMT seeks to protect the health and safety of employees and customers and to advance community welfare by minimizing the impact on our shared environment. A Safety team is chartered to monitor our system and report improvement needs to the EMT. Our environmental process requires periodic environmental aspects and impacts assessments and the establishment of improvement programs with goals and objectives, when needed. 5.3.3. Document and Record Control CZIMT has established a process that controls the approval of new or revised procedures, institutes periodic reviews, and assures the removal of obsolete processes from use but maintains their retention for history purposes. Our document control policies apply to both our procedures and work instructions. Our record control policy requires that all employees have access and that identified records are retrievable, safeguarded against loss or degradation, and are retained for a specified time. 5.3.4. Identification and Traceability We use part numbers, revisions, and serial numbers to identify critical materials. This allows us to trace a critical material back to its source or its original acceptance test documentation. We also use assembly checklists and Gage Calibration system records to ensure traceability of product to processes and traceability to calibration standards and masters. 5.3.5. Product and Inspection Status We use our business software to track the inspection status of materials and create needed reports. We use production checklists to track the status of products in assembly and to identify their status. Additionally, we utilize daily meeting as necessary to track product status of our equipment and ensure its on-time completion. 5.3.6. Control of Non-Conforming Material When non-conforming or poor quality material is discovered, we require that it is quickly and clearly identified, then segregated and quarantined to prevent unapproved use. The non-conformity or defect is documented and recorded in our MRN (material reject notice) database. We use the information obtained from the reject material or MRN database to initiate needed corrective actions.

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

5.3.7. Corrective and Preventive Action When corrective or preventive action is needed we employ the use of the 8D process developed by Ford. Our goal is to always identify and eliminate the root cause or causes in order to prevent recurrence. As part of our preventive action, we also use design and process Failure Mode and Effects Analysis (FMEAs) to identify potential failures and eliminate their causes.

Processes
Inspected, nonconforming (incl. .analysis of returned parts)

Quality Records Customer complaints

Audit Reports
Implement corrective action and when possible initiate preventive action, consider similar / same processes / products

Create Corrective Action Report - evaluate potential causes

Analyze failure; systematic problem solving process

Determine corrective action

Find root cause

Document result

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

5.3.8. Continuous Improvement Carl Zeiss built its business on continuous improvement of its products and services, starting with our first optical products to the sophisticated measurement technology equipment produced by CZIMT today. We continue this heritage through the following programs:

Worldwide, intranet-based employee suggestion system Annual Vision Award competitions, and Employee goals and incentive programs

We understand that continuous improvement is instrumental to maintaining our position as a market leader within our field. Use of goals, measurements, appropriate statistical methods, and analysis are an important part of our continuous improvement and process control methods.

Performance

s inuou Cont

cess t Pro emen v Impro

Continuous Improvement Activities lead to improved performance

Plan
Corrective Action

Preventive Actions eliminate potential problems before they occur

Act ual Dev iatio n

Corrective Action fills the gap between actual and planned performance

Time

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Working Procedure CZ-IMS INTEGRATED MANAGEMENT SYSTEM MANUAL

5.3.9. Calibration and Gage Control Since calibration work is one of the most important services offered to our customers, we implemented a calibration management system based on ISO 17025. Our objective is to provide our customers with assurance of our CMM calibration competence. We chose A2LA as our accreditation body because of their well-established reputation within the North American market, and we now offer our customers A2LA Accredited calibrations for their CMMs.

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