Run & rate for bulk materials

[Ursula_D]

We are a medium sized company and produce bulk materials via batch production on demand of the customer. It's always the same workflow: production -preparation, -mixing, -nuancing , quality control ( 100% inspection), filling and dispatch. At the moment we are discussing a quality assurance agreement, in which the customers wants to make run & rate obligatory for us. We understand run & rate as a tool for proving, that a production line can produce the quantity of the parts, requested by the customer. We perform feasibility studies when the volume of the orders exceed normal batch sizes, but this seems not enough for the customer. Your comments would be highly appreciated. Thank you

 

[ScottK]

Hi Ursula.
I would push back against that, hard, if I found such language in a quality agreement.
That should be part of a commercial contract, not a quality agreement. And would be part of the PPAP, I believe.

 

[Ninja]

It seems reasonable that if the customer wants a true volume production run to prove volume capability, that the customer would pay for the product produced at a mutually agreed price (assuming that the product meets mutually agreed specs).

 

[Bran]

I agree with ScottK. Run at Rate is recorded at the time of PPAP, but there is a difference of demonstrated rate (for quality) and what is actually agreed to by commercial or in the sales agreement. I dont think the PPAP solidifies that the process must be producing at that rate every time an order is placed. The intention of including run @ rate seems, to me, to give the customer an indication of how many parts they can order vs what the process can actually produce.

Just happened upon a related scenario, had a customer question why we, as a bulk material supplier, are leaving the Production rate field in the Declaration statement on the PSW form CFG-1001 blank with no explanation (refer to field #23 on pg 22 of the AIAG PPAP manual).

We will start including a statement under the Explanation/Comments (field #25) stating that the run at rate is not applicable for our process with an explanation as to why.

 

[Jim Wynne]

I agree with ScottK. Run at Rate is recorded at the time of PPAP, but there is a difference of demonstrated rate (for quality) and what is actually agreed to by commercial or in the sales agreement. I dont think the PPAP solidifies that the process must be producing at that rate every time an order is placed. The intention of including run @ rate seems, to me, to give the customer an indication of how many parts they can order vs what the process can actually produce.

Run-at-rate is typically done after PPAP approval and is intended to verify that the production rate cited in the contract and/or on the PSW can be sustained. It's verification of the supplier's ability to sustain an acceptable production rate.

Just happened upon a related scenario, had a customer question why we, as a bulk material supplier, are leaving the Production rate field in the Declaration statement on the PSW form CFG-1001 blank with no explanation (refer to field #23 on pg 22 of the AIAG PPAP manual).

We will start including a statement under the Explanation/Comments (field #25) stating that the run at rate is not applicable for our process with an explanation as to why.

Like all other manufactured commodities, the concept of production rate (how many/how much can be made withing a given time period) does apply to many bulk materials. There might be no need for run-at-rate to be done, but that shouldn't absolve you from putting a production rate on the PSW.

 

[Jim Wynne]

We are a medium sized company and produce bulk materials via batch production on demand of the customer. It's always the same workflow: production -preparation, -mixing, -nuancing , quality control ( 100% inspection), filling and dispatch. At the moment we are discussing a quality assurance agreement, in which the customers wants to make run & rate obligatory for us. We understand run & rate as a tool for proving, that a production line can produce the quantity of the parts, requested by the customer. We perform feasibility studies when the volume of the orders exceed normal batch sizes, but this seems not enough for the customer. Your comments would be highly appreciated. Thank you

Run@Rate (not "&") is often waived by customers. Sometimes they expect it to be done, and sometimes they expect it to be witnessed by their own people. Based on the information you've provided, I see no reason that R@R shouldn't be done. If this is a new requirement, like everything else in customer requirements it's negotiable, and your company might decide to revisit pricing.

 

[Bran]

Like all other manufactured commodities, the concept of production rate (how many/how much can be made withing a given time period) does apply to many bulk materials. There might be no need for run-at-rate to be done, but that shouldn't absolve you from putting a production rate on the PSW.

Appreciate the clarification here. The PSW form states "...samples were produced at the production rate of __ /__ hours", so my mind immediately jumped to run at rate incorrectly. For purposes of filling out what my customer requested, I think the best I can do is provide the explanation on the PSW rather than filling in the one size fits all "x/x hours" which wouldn't make sense. The explanation was not previously given, the production rate was just left blank which I think was the issue.

You are correct, we do not have customers requesting run at rate information. In place of this we do get many questions about available capacity.