posted 08 February 2001 02:51 PM               

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?

posted 08 February 2001 04:11 PM               

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).

posted 08 February 2001 06:07 PM               

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...

posted 09 February 2001 07:37 AM               

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?

posted 09 February 2001 10:18 AM               

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.

posted 10 February 2001 01:38 AM               

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.

posted 10 February 2001 12:11 PM               

You make a good point about the issue of "intellectual property", and the confidentiality agreement will probably be a good approach. I think most companies probably treated customer information properly in the first place, but the new standard does make it somewhat official.

posted 10 February 2001 01:37 PM               

Intersteing to find that "way back in the archives" there was an agreement made.

1)all onsite "returnalbe containers" were counted.

2) $X.XX each was priovided as acceptable "payment for returnable materials", onsite at that time.

3) The agreement includes a mechnism for recount and return if/when our business relationship has ended.

This information would not have been brought to light without internal audits and the insight you as contributors have provided. It appears that justification for not tracking them as Customer assets can be made.