Outsourced Process or Purchased Product - Buying OEM Valves

I have searched threads here on the Cove on the topic and read them all, but I have a particular situation and would like your expert opinions.

My certification scope is : "Design, Development, Manufacturing and Servicing of gate, globe, check, butterfly, ball and knife gate valves in Iron and Steel".

We are planning on buying OEM valves (gate, globe and check steel valves ONLY) from a Chinese manufacturer (ISO 9k certified) with our brand name and selling it on the Brazilian market. I have visited and audited this factory during a 3 day visit. Audit report done, pictures taken, sample documents utilized copied, and with every shipment I will receive a full product certificate which will include Chemical composition of all components, mechanical properties of all components, results of hydrostatic and pneumatic tests and the Chinese manufacturer´s signature liberating these valves. I plan on visiting this manufacturer every 6 months to continue monitoring and auditing their QMS. All these valves are manufactured according to international standards (API and BSI).

My questions are the following :

1) Is this considered an outsourced process or a purchased product ?

2) If it´s an outsourced process would the control over such outsourced process me considered satisfactory (audit, visit, pics, documents and test certs) ?

Thanks !

Re: Outsourced Process or Purchased Product

I would consider it a purchased product because, based on your descriptions it does not impact any of your processes. That is, outsourced process would be if the testing only were being done over there, or if they manufactured the valve stems only while you manufacture the other parts, then do assembly and test.

Re: Outsourced Process or Purchased Product

tedschmitt said:

My questions are the following :

1) Is this considered an outsourced process or a purchased product ?

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Because of your scope:

tedschmitt said:

My certification scope is : "Design, Development, Manufacturing and Servicing of gate, globe, check, butterfly, ball and knife gate valves in Iron and Steel".

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... this is an outsourced activity.

tedschmitt said:

2) If it´s an outsourced process would the control over such outsourced process me considered satisfactory (audit, visit, pics, documents and test certs) ?

Thanks !

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It looks good but only time will tell. If the product keeps satisfying the customers then it is enough. If the product doesn't satisfy their needs then you have to do more!

Re: Outsourced Process or Purchased Product

Jennifer Kirley said:

I would consider it a purchased product because, based on your descriptions it does not impact any of your processes. That is, outsourced process would be if the testing only were being done over there, or if they manufactured the valve stems only while you manufacture the other parts, then do assembly and test.

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I almost posted the same thing, Jennifer, but wanted to see what others would say. Glad to see I was on the right track....

Re: Outsourced Process or Purchased Product

The next question is whether you want your current certificate to cover these products or not. If yes, then you may need to consider it as contract manufactured and show evidence of control over the production process. Meaning, having copies of all necessary inspection, test, validation records, lot travelers, etc and perhaps do some final inspection (in Brazil) before dispatch to customers. Discuss with your current CB.

Re: Outsourced Process or Purchased Product

harry said:

The next question is whether you want your current certificate to cover these products or not. If yes, then you may need to consider it as contract manufactured and show evidence of control over the production process. Meaning, having copies of all necessary inspection, test, validation records, lot travelers, etc and perhaps do some final inspection (in Brazil) before dispatch to customers. Discuss with your current CB.

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Thanks Harry, yes I do want to continue to include steel valves as part of my scope... I do perform spot checks on the imported valves here on my test benches as I also have client inspections here testing imported valves... all passed !

Re: Outsourced Process or Purchased Product

tedschmitt said:

My questions are the following :

1) Is this considered an outsourced process or a purchased product ?

2) If it´s an outsourced process would the control over such outsourced process me considered satisfactory (audit, visit, pics, documents and test certs) ?

Thanks !

Click to expand...

Interesting knowing which way to go with the question but I am not sure it really matters whether it is an outsourced process or purchased product. Either way, you have to control the activity and from what you say, you look to have good control over it. As always, the proof will be in the response from your customers

Re: Outsourced Process or Purchased Product

tedschmitt said:

1) Is this considered an outsourced process or a purchased product ?

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In my estimation, what you describe is a procurement activity. If you want to increase the level of "transparency" of your certification scope statement (read Guidance # 3 of the IAF Guidance in the Application of ISO9001:2000 document), you could reword your scope of certification to read something like: "Design, Development, Manufacturing and Servicing of gate, globe, check, butterfly, ball and knife gate valves in Iron and Steel; Importation, Sales and Distribution of gate, globe and check steel valves".

The level of "transparency" of certificates is a big unresolved issue in the Industry. Imagine if you were to outsource ALL of your manufacturing processes. Many organizations do that. Still, their scope of certification have no mention that manufacturing is outsourced. The few buyers that scrutinize the scope of certification of their suppliers have no indication that major processes are being outsourced.

tedschmitt said:

2) If it´s an outsourced process would the control over such outsourced process me considered satisfactory (audit, visit, pics, documents and test certs) ?

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You mentioned that the Chinese supplier is ISO 9001 certified. Do you require them to maintain the certification in good standing? Do you require them to send you copies of the external audit reports? Or the findings? It is up to you to determine what requirements you will impose onto your suppliers, but, if ISO 9001 certification/attestation is something that you consider important, you should EXPLICITLY require that of your supplier.