Another "Parent Company" Question - 'Sister' company handles sales

J

jmp4429

I can’t figure out what the heck is going on here. Maybe someone can help me out.

We are a T1 supplier to the automotive industry. The confusing bit is that we don’t sell directly to our automotive customer. We have what I would call a sister company that handles sales. We ship the product directly to the auto company, but the auto company sends payment to the sister company, who then pays us. Technically, once a product comes off the end of the line and into finished goods, it belongs to the sister company (from an accounting standpoint only - everything else is handled directly with the auto manufacturer).

Many people here are quick to call this sister company our “parent company.” I have been told several times now that we have to be careful to refer to them as our “sales representative,” because they are not TS certified and it would cause us to lose our certification. I want to make a note here that according to my coworkers, what we do is eligible for certification, it's just that we have to be careful about what we say we do to avoid a big mess trying to explain this.

Is this true? As far as I can tell from reading the certification scheme, a site can become independently certified to the standard without the parent company requiring certification. However, if we say that they are our sales function; wouldn’t their sales department require an audit as an off-site support function?

Without trying to sound like an idiot, this information is something that has been passed through the company, and the people who initially made this determination don’t work here anymore. Basically, there’s nobody here anymore who can explain to me “this is why we decided it has to be this way.”

Edited: Just had what may have been an “aha” moment. Could it be that if we say they are our parent company, and we sell our product to them to resell to the auto manufacturer, that we appear to be 2nd Tier to a non-certified company and therefore not eligible for certification at all?
 
T

Teri - 2011

We have almost the exact situation here. At the time of our initial registration to TS, we invited the "sales group" to our plant and our registrar audited them here. Simple as that. The standard says that they must visit the remote locations, but ours didn't. The sales people brought with them all the documents needed, and what they didn't have with them, was faxed down.
 
J

jmp4429

Thanks, Teri, I wonder if we can work something out like that. It'd make our life a lot easier if the sister company would just get themselves certified though.

Oh well.
 
J

Jan C

It is my understanding that if your sister company does not manufacture, they cannot get stand alone certification to TS. We are a parent company to a plant in Mexico, they manufacture OEM and we don't so we must comply and will be audited as a remote site because we do the design, sales, and delivery but the Mexico plant will be who gets the certification. bummer huh?
 

Helmut Jilling

Auditor / Consultant
jmp4429 said:
I can’t figure out what the heck is going on here. Maybe someone can help me out.

We are a T1 supplier to the automotive industry. The confusing bit is that we don’t sell directly to our automotive customer. We have what I would call a sister company that handles sales. We ship the product directly to the auto company, but the auto company sends payment to the sister company, who then pays us. Technically, once a product comes off the end of the line and into finished goods, it belongs to the sister company (from an accounting standpoint only - everything else is handled directly with the auto manufacturer).

Many people here are quick to call this sister company our “parent company.” I have been told several times now that we have to be careful to refer to them as our “sales representative,” because they are not TS certified and it would cause us to lose our certification. I want to make a note here that according to my coworkers, what we do is eligible for certification, it's just that we have to be careful about what we say we do to avoid a big mess trying to explain this.

Is this true? As far as I can tell from reading the certification scheme, a site can become independently certified to the standard without the parent company requiring certification. However, if we say that they are our sales function; wouldn’t their sales department require an audit as an off-site support function?

Without trying to sound like an idiot, this information is something that has been passed through the company, and the people who initially made this determination don’t work here anymore. Basically, there’s nobody here anymore who can explain to me “this is why we decided it has to be this way.”

Edited: Just had what may have been an “aha” moment. Could it be that if we say they are our parent company, and we sell our product to them to resell to the auto manufacturer, that we appear to be 2nd Tier to a non-certified company and therefore not eligible for certification at all?

You are correct that if the parent sales department is part of your "TS system," then they have to be audited. Your last paragraph is the clearest part. It may be cleaner to be in a tier 2 position, and your customer is the parent, which is a tier 1. It is up to the customer whether they would accept the parent not being certified. Of course, that would have to be acceptable to your parent, your customer, and the certification body.
 
Top Bottom