Contract Review Question - China manufacturing site to exclude 7.2.2?

noelb

Starting to get Involved
#1
Good day to everyone. I have a question concerning contract review. My company recently signed a long term contract with a customer. We are in the process of building a facility to manufacture their product. Since the facility will be China and all of the contract details have been worked out, would it be possible for the manufacturing site to exclude 7.2.2? They will be our only customer.

:thanx:
 
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P

potdar

#2
Re: Contract Review Question

Good day to everyone. I have a question concerning contract review. My company recently signed a long term contract with a customer. We are in the process of building a facility to manufacture their product. Since the facility will be China and all of the contract details have been worked out, would it be possible for the manufacturing site to exclude 7.2.2? They will be our only customer.

:thanx:
For long term (as well as once off) contracts, manufacturing related product requirement essentially includes two components. Product design and delivery commitment. Whenever a change in any of these is demanded by the customer, capability of meeting the customer's requirements needs to be reviewed by the manufacturing site.

If your contract excludes all such possibilities, you may claim exclusion of 7.2.2

In my opinion, any such a situation is practically impossible.
 
T

Ted Schmitt

#4
Re: Contract Review Question

Good day to everyone. I have a question concerning contract review. My company recently signed a long term contract with a customer. We are in the process of building a facility to manufacture their product. Since the facility will be China and all of the contract details have been worked out, would it be possible for the manufacturing site to exclude 7.2.2? They will be our only customer.

:thanx:
How long is this long term contract for?

During this period (of the contract) can any changes me made to delivery dates, price, product requirments, specifications, quantities to be deliveres, shipping requirements/destinations etc... In my opinion there are to many possibilities where a review of the present contract might be necessary to be able to exclude 7.2.2 (see last paragraph just before the note) "Where product requirements are changed, the organization shall ensure that relevant documents are ammended and that relevant personnel are made aware of the changed requirements."
 
D

D.Scott

#5
Re: Contract Review Question

Good day to everyone. I have a question concerning contract review. My company recently signed a long term contract with a customer. We are in the process of building a facility to manufacture their product. Since the facility will be China and all of the contract details have been worked out, would it be possible for the manufacturing site to exclude 7.2.2? They will be our only customer.

:thanx:
As an auditor I would find it difficult to exclude 7.2.2

Having said that, the standard allows exclusion of portions of section 7 as long as it can be justified. I would advise that your registrar is the one you want to run this past.

Personally, I would think you need to address the section just in case you ever have a request from your customer to supply a new part. I also assume it could be possible in the future for your company to take on some new business, even if it is a subsidiary or partner of your current customer. Another area where this would apply would be under contract review. If your customer changed the requirements of the part you make now, you would need to review the new requirements.

Carrying it to an extreme, even if there were never any changes, new parts etc., the standard identifies it as a "shall". My opinion is that you should address it in your system.

Dave
 

noelb

Starting to get Involved
#6
Re: Contract Review Question

The contract is for 7 years and all of the particulars are handled by the corporate office (typically the President and COO). Any changes are then forwarded to the facility.

:thanks:
 
V

vanputten

#7
If the manufacturing site is within the system scope of the facility doing the contract review, then there is no need to exclude 7.2.2.

If the manufacturing site has their own system and is outside of the certificate/system scope, then they will need to perform 7.2.2. 7.2.2 does not only apply to traditional contracts. The manufacturing site I hope reviews the requirements related to the product before making any commitments.

Regards,

Dirk
 
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