Suppliers - How "direct" is "direct"? Services DIRECTLY to Chrysler, Ford, GM

[SteelWoman]

QS defines a "supplier" as "providers of production materials, production or service parts, or heat treating, plating, painting or other finishing services DIRECTLY to Chrysler, Ford, General Motors...."

My question: we are a raw material steel processor and are looking at a new program where one of the Big 3 will place the order with us, but we will not be the final processor - we will send out wide or slit coils to a blanker who will then blank the material before sending it on to our Big 3 customer. Does this trip us into the world of Tier 1 supplier or do we still maintain Tier 2 status as a "step removed" supplier?

[SteelWoman]

Almost forgot... ALSO, how about a future where we decide to do the blanking ourselves? If we send blanks to the Big 3 DIRECTLY that, at least in my mind, would make us definitely Tier 1 since we would then be providing "production materials" for them to form into parts?

[Sam]

1- What did the Big 3 order from you? Raw material or blanks.
2- Are you using a Big 3 approved supplier for the blanks.
3- What are your requirements?
Knowing thes concerns will help in deciding your fate.

[SteelWoman]

The order is for the blanks, we will send the steel to another processor who will actually blank it and then send it on to the big 3 customer. What leaves OUR plant will be the steel, unblanked. The blanker is approved by our own QS procedures as an approved processor.

[db]

Part of the answer will depend on your relationship with the blanker. If the OEM pays you for the blanks, then the blanker is just a contractor (like a heat treater). Even if the blanker ships to the OEM, if the OEM pays you…you are the supplier!

If the OEM pays the blanker for the blanks, then you are the supplier to the blanker.

All IMHO of course,

Dave B (the other Dave)

[Sam]

If the purchase order is directed to your company for blanks, then you would be a Tier 1 supplier.

[SteelWoman]

Even if we dont' do the final process? The reason I'm seeking clarification is that in the PAST we have successfully argued in audits that, for instance, if a customer places an order with us and we process the material to a POINT, but then send the material to another one of our "sister plants" for the final processing, then the "sister plant" is Tier 1, but we are Tier 2. Our auditors have always accepted this. So then I wonder if we process material to a point and then send the material to someone ELSE for final processing, then how is that any different?

[Marc]

> if a customer places an order with us and we process the
> material to a POINT, but then send the material to another
> one of our "sister plants" for the final processing, then
> the "sister plant" is Tier 1, but we are Tier 2.

Your sister plant is categorizing your plant as a supplier.

> if we
> process material to a point and then send the material to
> someone ELSE for final processing, then how is that any
> different?

Who is paid? Who got the order? You or the company which does the post-processessing for you? If you got the order and got paid, you're the Tier 1 even if it's 'drop ship' (post-processor ships directly to your customer). This is not as evident when the relationship is between 2 different plants under the same corporate umbrella.