Our current external auditor claims that the Customer Property requirements only pertain to customer-consigned material that is planned to be built into products or finished goods that will be eventually delivered to the customer.
However, a few years back a different external auditor wrote a nonconformance against our return materials process for not meeting the standard's requirements because on occasion we do receive product that we repair and return.
Who is correct? Does Customer Property pertain to "repair and return" services?
I would say your repair and return items do apply to customer owned product. In this case your "product" is the repair of the item returned, which is obviously required and included in the final "product" (repaired item) and delivered back to the customer.
I agree it should be included. However, in this case the Return Material process and Customer Property become related. It is returned material and it is customer property. I would argue a non-conformance because of the "interpretation" issue with the auditor. You'll find numerous examples of process interrelations throughout an organization (i.e. records and contract review, etc.) so why single these 2 out as not being related?
Remember, your system has to work for you not your auditor! I would make them show me where it says it only pertains to consigned material and where customer returns can't be apart. Take them to task and make them prove it to you. We (as auditees) have to prove we're compliant so I don't feel it's wrong to make the auditor prove that I deserve an NC.
Oh maiden of steel once again you have raised a good point!
I don't disagree with you. We don't personnaly operate that way because it takes extra time to look up if we've been paid or if they are withholding payment. Sometimes parts are on an open ended PO and there's no way to tell. I've found it easier to consider all returned parts as customer owned. For this field of manufacturing it is easier to manage. We just ensure the parts have an RMA assigned.
You are correct, most of us don't look it up to see if the bill is paid to categorize whether it is customer owned or not...but, I think that in some cases it might be a good argument if the auditor gets pushy. We don't, can't do reworking or repair, so we don't have to worry about it, but I'm not above using legalities to argue my point when an auditor gets nit-picky.