Cost of Deviating Away From PPAP Requirements

A

AdamRaisedACain

#1
Hello,

I'm not sure if I am in the right forum or not to ask for clarification on this issue but I will give it a shot. The question does not come until the end.


We are a small supplier to HD engine manufactures. All of our HD engine customers require PPAP standards and we are compliant in that regards. We have been a supplier of PPAP'd components and processes for over a decade now.


Just recently we have decided to make a line change to one of our product lines as part of our lean six sigma initiative. This line is completely dedicated to this one customer. We have openly discussed with our customer, submitted change requests, risk mitigation plans, all activities involved, timing of activities, expected results showing improved efficiency / flexibility and most importantly major cost savings.


Our customer has not given us the approval to move forward with this change. This current line set up is very costly to us and is not efficient. The current setup does not allow for operational effectiveness and carries multiple risks to both the producer and end user. THIS IS VERY HIGH VOLUME PRODUCTION. Our customer has threatened us with costs if we proceed without approval.


We have been doing business with this one customer for about 15 years and no contract, sourcing agreement, purchase agreement has ever been put in place. So here is my question: If we decide to make this line move without our customer's approval and the initiative is a success; do we the manufacture, owner of the product design, building, equipment and labor, face possible litigation?
 
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L

lk2012

#2
hi,
you've got a nasty situation going - no contract / agreement and the customer won't budge. OUCH.

How about pointing out the financial benefits of this new line? Most companies listen up when you go ker-ching.
Have the representatives of your company visited your customer to discuss this change face to face? Or how about inviting the customer and show them how much better this new line would be? Sometimes the personal touch brings the results you wanted.
In any way, do not implement the change without the approval. It could have tragic consequences for your business.
Good luck!
 
A

AdamRaisedACain

#3
Hi lk,

Thank you for responding. To answer your question, yes we have shown our customer the financial benefits. The cost savings presented by initiating the change over is more than substantial. There are also benefits to overall quality, efficiency and flexibility. The current set up does not achieve operational effectiveness which is a disadvantage to both parties. We have presented the new process face to face and electronically. They have seen our current set up many times. We may try to arrange another face to face but the target date is quickly closing in and the sequences leading up to the kickoff are already in process.


What it comes down to is our billion dollar customer feels the need to bully us when its us that owns everything; product design, materials, labor, processes in manufacturing, engineering and quality.
 
L

lk2012

#4
hi,
great to hear you've already done all the meetings and presentations including the massive financial benefit.
This seems to be going the 'personal' way now, somehow you'd best do with persuading the customer that it was their idea in the first place.
best of luck
LK
 
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