FinalInspectionA...

Final Inspection Audit Process

Introduction

All Charming Charlie vendors are responsible for the overall quality of the product they ship to Charming Charlie. All vendors are responsible for ensuring that their factories have

proper quality assurance procedures in place and for ensuring that factories are conducting their own internal quality inspection audits prior to shipping. The following provides the standard method and process for final inspections audits for Charming Charlie.

Acceptable Quality Level (AQL) Inspection Method: Charming Charlie inspections must follow the following standard: ANSI/ASQC Standard Z1.4 2008 General Inspection Level II, AQL Critical O, Major 2.5, Minor 4.0.

Definition of Major/Minor (and Critical defects) Major Defect

Any condition found adversely affecting the product's sale-ability or adversely affecting its form, fit, or function. A major defect is likely to result in the end-user returning the product to the source from which it was purchased for replacement or refund. (Example: A broken zipper on a garment) Minor Defect Any condition found, which while possibly less than desirable to the end user of the product, does not adversely affect its ability, form, fit, or function and is unlikely to result in its return to the source from which it was purchased. (Example: Crooked label placement inside of a garment)

Critical Defect Any condition that can cause harm or injury to the user and/or result in a hazardous

condition. (Example: Sharp points or edges). Any inspection audit finding that includes one critical defect is rejected.

July 2013 – V.02

Page 1

Inspection Method: Level II, AQL major 2.5/minor 4.0 How to Use the Charts

Step 1 - In TABLE I, using the Using Normal Inspection Level II you will locate the PO quantity/lot/batch size to determine the level to inspect.

Step 2 – In TABLE II, sample code level indicates the sample size to be inspected. For example a PO/Lot/Batch size of 3,000 units would be inspected at a level “K.

July 2013 – V.02

Page 2

Step 3 – Continuing in Table II, using the MAJOR 2.5/MINOR 4.0, you will see that the inspection guidelines indicate the acceptable defect levels for Major under column 2.5 (“Ac”) and for Minor under column 4.0 (“Ac”).

Acceptance number (Ac) based on 2.5 Major/ 4.0 Minor Defect findings You will note in TABLE II (above), the letters “Ac” and “Re” appear across the top of the chart within the section labeled ACCEPTABLE QUALITY LEVELS (normal inspection).

“Ac” is defined as the “acceptable number” of non-conforming pieces (or defects) allowed during the inspection. “Re” is defined as the “rejection number”, meaning that an inspection audit finding that meets or exceeds this amount results in a “rejected” status of the inspected batch/lot.

Example: Method Level II, AQL major 2.5/minor 4.0 Final Inspection Product: Handbag

PO/Batch size: 3,000 pieces Sample size: 125 pieces

July 2013 – V.02

Based on the Handbag example above, the acceptable number “AC” for major defects is 7 and for minor defects is 10. If the inspection uncovers non-conforming units that have

more than 7 Major defects (8 or more) and/or more than 10 Minor defects (11 or more), the entire inspection quantity is Rejected.

Page 3

Rejected Inspection Audits

When the number of non-conforming pieces (defects) exceeds the acceptable number (“Ac”) your batch/lot is “Rejected”.

Please complete the following steps when submitting “Rejected” Inspection Audits Forms: Step 1 Using the Charming Charlie Inspection report included, indicate the individual total number of each Major and Minor defects found. Take photos of all of the Major and Minor non-conformance issues (defects) found during the inspection process. Step 3 Step 4 Indicate the TOTAL number of Major and Minor defects found at the bottom of the inspection report. Mark the box that states “REJECTED”. Date and sign the completed inspection audit form. Forward the Inspection Form along with all defect photos to: **********************. Step 5 Do not ship any goods until you receive an approval from Charming Charlie QA Department. (You may expect a response within two (2) business days of the receipt of your Inspection Audit Form.) Step 2 Accepted Inspection Audit When the number of non-conforming goods (defects) meets or is below the acceptable number (“Ac”) your PO/batch/lot is “Accepted”.

Following are steps for Accepted Inspection Results: Step 1 Using the Charming Charlie Inspection form included, indicate the total number of non-conforming issues found (listing each major and minor defect). Step 2 Take photos of all of the non-conformance issues (defects) found during the inspection process, and replace the non-conforming items prior to shipping.

July 2013 – V.02

Page 4

Step 3 Step 4 Indicate the TOTAL number of Major and Minor defects found at the bottom of the inspection report. Mark the box that states “ACCEPTED”. Date and sign the completed inspection audit report.

The inspection report must be maintained on the vendor’s side and furnished immediately upon Charming Charlie’s request to: **********************.

Failure to provide a copy of the Final inspection report upon Charming Charlie’s request may result in further action as determined by Charming Charlie including but not limited to PO cancellation, RTV, third-party inspection at vendor’s expense and/or inspection at Charming Charlie’s DC with vendor chargeback.

July 2013 – V.02

Page 5