Best way to implement Contract Review? ISO 9001 - Contract Review

[Arturo Rosales]

4.3.2 Review

Before submision of a tender, or at the acceptance of a contract or order the tender, contract, order shall be reviewed by the supplier to ensure that:

The requirements are adequately define and documented: where no written statement or requirement is available for an order receive by verbal means, the supplier shall ensure that the order requirements are agreed before their acceptance;


How will be the best way to implement this clause?

Having a writen confirmation from the customer on each order will comply?

Please share some ideas of implementation of this clause with in your company.

We are a medium size company; we receive about 100 orders a day (different parts).

Let me know.

Arturo Rosales.

 

[Don Winton]

Arturo,

I am not certain there is a "best way." The methods must be applicable to your method of operation and best business practices. But, I would not suggest "written confirmation" for 100 orders per day. Anyway, my $0.02 worth.

Section 4.3.2 basically applies to how you determine if order requirements are "adequately defined and documented." If an order is received in a hard copy, this is a review of the requirements submitted by the customer and a determination if your company can fulfill the requirements of the order.

If your facility receives orders by verbal means, then as orders are received, Sales (or whoever) fills out a 'matrix' type of form that completely describes the customer's requirements. This form is submitted to manufacturing for fabrication. This is a relatively simple method of compliance with 4.3.2 and also meets the requirements of 4.3.4.

Regards,
Don


[This message has been edited by Don Winton (edited 12-01-98).]

 

[Marc]

Good distillation of the requirement, Don.

 

[Marc]

Subject: Re: Contract Rev Requirements/Order Confirmation /Eberhardt/Schoffman
Date: Thu, 8 Jul 1999 16:06:12 -0600
From: ISO Standards Discussion

From: ASchoffm
Subject:RE: Contract Rev Requirements/Order Confirmation /Eberhardt/Schoffman

>Bill Eberhardt wrote:

Many of our customers fax order requests which are incomplete: "Send me 1000 " widgets". We construct the order based on previous order history with success.

My questions to the group for opinions are:

* Per ISO 900X, do we need to confirm the info with our customers?
* Is a "fax-back"- complete order information faxed back to the customer adequate or do we need to speak directly with the purchasing authority?

* If our customers prefer us not to call, isn't this flying in the face of the standard- not giving the customer what he wants/expects?>
>
RESPONSE

Bill, your final question is one that is the key to the answer. Many people in their (well-intentioned) zeal to conform to the ISO 9000 specs forget that customer satisfaction is not only the cornerstone of ISO 9000 but also the fundamental factor in running a business.

If you have to "convert" your customer's orders to state what you know they want, you should document that internally. If you can fax back that info to the customer, so much the better. But suppose the customer just doesn't want to be bothered with any confirmation. That does not make it contrary to ISO specs.

Your procedures may indicate that your company will confirm the customer's orders. There can always be exceptions. These can be documented explicitly or your requirements can be generalized. But ISO should never and never has to be structured to put your relationship with your customer in jeopardy. Internally, you have to state what your procedures are and follow them. But that's it.

Perhaps an analogy would be a customer who comes to the same restaurant for dinner 3-4 times a week, gets the same table and the same waiter and begins with the same libation every time. He orders "the usual". If the waiter continuously confirms that he wants "a dry Beefeater martini with two olives" every time he orders, the customer may get upset and state "I said the usual. Don't you know what that is by now?"

You state "We construct the order based on previous order history with success."

There you go. ISO loves you.

Alan Schoffman

 

[Marc]

Subject: Re: Contract Rev Requirements/Order Confirmation /Eberhardt/Bigelow
Date: Fri, 9 Jul 1999 10:31:46 -0600
From: ISO Standards Discussion

From: Jim Bigelow
Subject:RE: Contract Rev Requirements/Order Confirmation /Eberhardt/Bigelow

> Is a "fax-back"- complete order information faxed back to the customer
adequate or do we need to speak directly with the purchasing authority?<

Fax back is a good way to make sure you have "constructed" the proper order based on historical purchases. This both makes good sense and should easily satisfy the ISO requirements.

Your customer seems less than quality oriented if he does not take the time to clearly describe his requirements. I have been thru many horror stories when my company and others followed similar sloppy practices.

I recognize you have to go with the flow, but you may help avoid a mess by confirming back what you believe the customer has ordered.

Best regards,. Jim Bigelow

 

[Marc]

Subject: Re: Contract Rev Requirements/Order Confirmation /Eberhardt/Naish
Date: Fri, 9 Jul 1999 11:27:42 -0600
From: ISO Standards Discussion

From: PNaish
Subject: RE: Contract Rev Requirements/Order Confirmation /Eberhardt/Naish

Bill,

ISO should work for you as well as your customer. If you consider what your customer really wants and you and they agree and you document it that way you should be successful in business and ISO.

* Per ISO 900X, do we need to confirm the info with our customers?

You may find that you will have standard customers that follow a given pattern which you want to document as the main stream of your business and put it into your procedures. Then there will be customers for whatever reason you want to do contract review with differently. In your procedures allow for special plans based upon mutual agreement .

If the customers agree that they will indicate when there is any change to the information, and they do not make a change, develop a plan for what you and they will do and when it will be done. Talk to them once at the beginning of the process and document it in a quality plan. Then do it. Make sure the appropriate employees who will interface with those special customer are trained on the plan and that they can follow it.

* Is a "fax-back"- complete order information faxed back to the customer- adequate or do we need to speak directly with the purchasing authority?

If they fax it or they call or they email or EDI transferto your system, as long as you and they agree this is the method used you should be okay. Many of our clients especially distributors use Fax, phone, email, snail mail, and EDI depending on which customer they have and what the customer wants. As long as you mutually agree to the method of communication and the contracted agreement for the product or service you meet ISO 9000.

* If our customers prefer us not to call, isn't this flying in the face of the standard- not giving the customer what he wants/expects?

You are exactly right and that is why you need to agree with your customer and develop your procedures and plans to meet their needs.

Phyllis

 

[TheOtherMe]

I am dealing with this right now!

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Subject: Re: Clause 4.3 application /Antonov/Naish
Date: Mon, 16 Aug 1999 13:33:58 -0600
From: ISO Standards Discussion

From: PNaish
Subject: RE: Clause 4.3 application /Antonov/Naish

I believe you hit it on the head when you say it must depend on the business. That does not mean how big or how small though. And I don't believe it means how complex or not.

I also don't believe that there is always a need for a form for contract review while I do think it is very helpful. For many smaller companies, there are any numbmer of software programs that can help with defining the contract. We use Quick Books to do our quotes. We discuss what the client wants and enter their requests into the system choosing from preset categories. If a client wants something new we add a new category.

We send the quote for the client to review along with a standard contract with the specifics left to be completed when the services part is agreed upon. If they feel it is what we agreed upon, we send a formal contract with all the associated terms and conditions and services filled in. The contract is signed by both companies before we begin work.

For open contracts where the client chooses to use our services like you would an attorney for occasional calls and the like we agree who can make the calls, what the fees will be, and the terms and formalize that in an open contract. This is like a yearly contract for a manufacturer where the customer sets an annual pricing, delivery, and terms and then issues line releases against the contract.

Some companies I have seen take all orders by phone and enter them into their MRP system and ship against the MRP or sales order system. I have used several clothing catalogs to purchase from and have found they not only do a great job of delivering as promised but even send a notice if something has to be back ordered longer than they originally thought.

For those of you who have used Amazon.com on the net to buy books, I think they are an excellent example of contract review and letting customers know the status of the order. At anytime I can go into my account & see what is waiting for shipment, what is being shipped and is in transit, and any changes to the original delivery expectations. I recently ordered a book on a four to six week delivery. They sent an email three days later indicating the publisher had run out and does not plan to republish for an undetermined period of time. They asked if I wanted to leave the order on the books or cancel it. A half a year ago my husband ordered from a similar book store and was recently pleased to hear the order was being sent.

Check out some of the on line site for contract review forms and if you haven't bought from one try it and see how it works.

As far as the procedures are concerned, that depends on how elaborate you want your system versus how much is computer driven and easy to execute. I had a friend who worked over the Christmas buying season last year for a catalogue company that took orders by phone. Their procedures were so simple she only had to go through one hours of training to be up to speed. She did have the advantage of being computer knowledgeable and had also used some on - line systems in previous jobs.

Phyllis