Customer Supplied Product - Definition (including returnable packaging containers)

[Jim Biz]

How does your company define Customer Supplied Products?
(Are customer owned - returnable packaging containers "customer supplied products"?)

This issue came up in an internal audit at our plant - found opinion conflict as to what should be / should not be included.

What "Things/Items" do you consider?

Regards
Jim

My opinion: If it has value, it should have some kind of control on it. Where, who, how much, etc..If it would make your Customer angry if you lose or damage it, it should be controlled. True, it's not product, but, it is assets. J.M.2.C.W.

[Alf Gulford]

I can give you one example.

We make a particular type of chair (medical device) that uses vinyl upholstery. If a customer doesn't want to use the colors we offer, perhaps because they want to match their own decorating scheme, they'll send us a roll of upholstery to use on the cushions.

While that upholstery is in our possession we are responsible for it. When the order is completed, if there is significant material left over, our customer service rep will contact the customer and get a disposition (return or destroy).

Alf

To directly respond to the container issue...definitely, yes! Customer containers are (and should be) considered "customer supplied material". I deal with heat treaters, platers, etc. The containers in which customers send material are customer supplied. They are tagged (when emptied), properly stored, and systems set up to ensure they are returned when the process is complete.

Lose a few and get backcharged $1000 once...executive management quickly buys into the fact that these "customer supplied materials" should be controlled!

Our customer consigns the raw product to us for processing and return to them, so we consider it as customer supplied product.

Where this situation comes into play is its relationship to receiving inspection requirements.

All of our consigned goods fall under customer supplied product and do not have to go through the same (sometimes stringent) receiving requirements.

As a note, this is all documented and approved by the customer/supplier during the product realization process.

The cost benefit of using the customer supplied product element has allowed us to document cost and price savings that are also a requirement of product realization/contract review.

This documentation can come in handy when the customer knocks at your door asking for a price reduction!

ASD...

[Jim Biz]

Can't say I have a disagreement with any of the posts Raw materials - anything going into an end product with "asset value is understandable and surley need controled.

Does the definition change if customers supply semi loads of "empty" Tubs/wire baskets/ plastic shipping boxes- cardboard/foam wrapping etc. and there are no item count records or charges exchanged?

Every registration audit I've been involved in considers packaging supplied by the customer to be customer supplied material and subject to controls according to 4.7. I've written around some items using a "low nominal value" approach and haven't gotten hit on it (yet). But most of the items you mention probably wouldn't fit in that class; I generally reserve it for non-customer specific cardboard boxes, generic plastic bags, etc.

As an example with respect to empties, I was in on a recent audit where the auditor "suggested" my client consider maintaining a documented inventory of empty containers provided by one of their customers. My client is resisting this primarily because it would have to be a new system and probably manual. I've suggested they rely on work instructions that involve having the receiving personnel visually inspect for damage on receipt, then clearly tag each container with the customer's name, and place them into proper storage. Release from storage is authorized by the packaging operation on the traveler. I figure if their customer demands an inventory at any point in time it could be constructed.

By the way...it's also documented in procedures, work instructions, and training that if any customer container is found damaged, it must be reported to the Production Manager for notification of the customer and disposition of the container.

[Greg Mack]

I guess firstly, it is important to realise that yes the containers are customer supplied product. I don't think it is a topic to get too worked up over.

To put it easily, just think along the lines that everything which is supplied from the customer to your business is a 'product' supplied by the 'customer'. That way you would expect that everything is controlled and no arguements with auditors over the Standard or anybody else (particularly the cusotmer) can be warranted to take place.

An important point to remember is that the new Standard also now includes "intellectual property". Possibly some for of 'confidentiality agreement' may suffice in these cases. At least that is how I am treating it.