Insurance to cover for nonconformances ?

Hello everyone,


My question is about the " insurance " ! lol Let me explain ...

We assemble electronic cards and during the assembly process , some pcb's have delaminated in the oven ( because they had contained too much moisture and the moisture has found a way to escape) . Components that have been installed are a waste and the loss is > $ 10K ...

The supplier will receive of course a NCR and will be probably ready to replace the pcb's but not the associated loss of $ 10k ! These cards have been sold to a few dollars each . We could ask him to indemnify us in such cases but the cost of pcb's would surely be several times the current price.

The question is: when you make supplier assessments (pre-qualification, evaluation, etc), do you ask them if they have insurance ? What should I know about this? ? Sample Clause ? Example of contract ? of practice?

Needless to say, my bosses are not very happy with the performance of the subcontractor . We probably have ourselves an insurance but from how much is it justified to use it ?

How the automotive industry manages this? This could have hurt us badly if we would have volume ...

And at the same time , we need the supplier so we do not want to cause him problems too ...

A thought off the top of my head:

Is there a way to work with the supplier and find the real root cause of why moisture escapes and prevent it at the source? If each non-conformance costs over $10,000 then spending time and (reasonable) money to prevent the non-conformance will pay for itself in a short amount of time.

LesPiles said:

We assemble electronic cards and during the assembly process , some pcb's have delaminated in the oven ( because they had contained too much moisture and the moisture has found a way to escape) .

Click to expand...

Be sure your oven profile is correct for this board assembly. If it's incorrect, you could delaminate pcbs regardless of moisture content.

LesPiles said:

The supplier will receive of course a NCR ... And at the same time , we need the supplier so we do not want to cause him problems too ...

Click to expand...

You are not causing problems for your supplier by reporting Non-Conforming product from them. You are, in fact, providing them valuable feedback for their own processes, and opportunities for improvement. If they see this as a "problem," then you might question your perceived need of that supplier.