Customer Specific Requirements / Customer Requirements for Indirect Customers

#1
IATF FAQ #8 states that an organization only needs to comply with CSRs and CRs for direct customers. I have two questions:
  1. Is anyone out there adhering to CSRs and CRs for indirect customers (i.e. purchasing product through a distributor) because they are deemed strategically significant even though the distributor's PO does not contain any CSR or CR references?
  2. If so, what percentage of your automotive customer base are you doing this for?
 
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John C. Abnet

Teacher, sensei, kennari
Staff member
#2
Good day @dlesaux
As you noted, "IATF" (only notes in the FQA as you mention), speaks to and clarifies "direct" customers.

However, your direct customer may (likely does) cascade your indirect customer's (e.g. OEM) requirements down to you, at which point those OEM requirements become your direct customer's requirements.

I am curious as to the motive of your question. For example, when you state "...they are deemed strategically significant..", ...who is doing the "deeming" . If your organization deems it strategically significant, then the RBT (risk based thinking) approach required by IATF 16949 should cause your organization to weigh the risks and consider adopting and controlling regardless. I have same question and view specific to "...what percentage...".

Maybe you could provide a little of the back-story for us?

Hope this helps
Be well.
 

optomist1

A Sea of Statistics
Super Moderator
#3
Hi dlesaux,

Earlier this year I completed the AIAG course "CQI-19 Sub-Tier Supplier Management..." I will scan my notes from this great course...till then... let me see if this addresses your specific questions....
Cheers Optomist1
 

Johnny Quality

Quite Involved in Discussions
#4
dlesaux,

As @John C. Abnet states direct customers sometimes state in their CSR's that their customers CSR's also flow down to you.

In my last position I had one tier 1 customer who did this out of the 8 or so automotive tier 1 customers we had. In their CSR which we had to sign they stated that the following CSR's applied to their suppliers and listed a series of document from all their customers which we had to conform to. All these documents were hidden behind the OEM's supplier portal and asking our customer for copies revealed the documents had no context between us and our customer.

Naturally, I crossed them all out on the agreement and signed.
 
#5
Good day @dlesaux
As you noted, "IATF" (only notes in the FQA as you mention), speaks to and clarifies "direct" customers.

However, your direct customer may (likely does) cascade your indirect customer's (e.g. OEM) requirements down to you, at which point those OEM requirements become your direct customer's requirements.

I am curious as to the motive of your question. For example, when you state "...they are deemed strategically significant..", ...who is doing the "deeming" . If your organization deems it strategically significant, then the RBT (risk based thinking) approach required by IATF 16949 should cause your organization to weigh the risks and consider adopting and controlling regardless. I have same question and view specific to "...what percentage...".

Maybe you could provide a little of the back-story for us?

Hope this helps
Be well.
Thanks for your reply John! Perhaps my question was poorly worded. Our fundamental question is: how often do organizations comply with CSRs/CRs for indirect customers even though - as the IATF FAQ states - they don't have to.

To answer your questions:
  • "strategically significant" equates to potential significant revenue
  • "the deeming" is being done by sales/marketing based on revenue roadmaps
  • "what percentage" is being driven by my upper management's curiosity
I hope these clarifications provide the "backstory" behind our questions!
 
#6
Hi dlesaux,

Earlier this year I completed the AIAG course "CQI-19 Sub-Tier Supplier Management..." I will scan my notes from this great course...till then... let me see if this addresses your specific questions....
Cheers Optomist1
Thanks Optomist1! We would welcome any notes pertaining to this!
 
#7
dlesaux,

As @John C. Abnet states direct customers sometimes state in their CSR's that their customers CSR's also flow down to you.

In my last position I had one tier 1 customer who did this out of the 8 or so automotive tier 1 customers we had. In their CSR which we had to sign they stated that the following CSR's applied to their suppliers and listed a series of document from all their customers which we had to conform to. All these documents were hidden behind the OEM's supplier portal and asking our customer for copies revealed the documents had no context between us and our customer.

Naturally, I crossed them all out on the agreement and signed.
Hi Johnny Quality! I loved your "Naturally, I crossed them all out on the agreement and signed" comment! (y)
 

Ninja

Looking for Reality
Trusted Information Resource
#8
FWIW, about 40% of our revenue stream was Tier I (previous company).

Our synonym for "indirect customer" was "not a customer". If the Tier I wants to flow stuff down from someone else, they are welcome to put it in their requirements and flow it down that way...and then we would quote accordingly.
"You have to comply with things someone you aren't allowed to interact with wrote and you can't have input on...and they may change without notice with no recourse available" is a non-starter.
 

Mikey324

Quite Involved in Discussions
#9
dlesaux,

As @John C. Abnet states direct customers sometimes state in their CSR's that their customers CSR's also flow down to you.

In my last position I had one tier 1 customer who did this out of the 8 or so automotive tier 1 customers we had. In their CSR which we had to sign they stated that the following CSR's applied to their suppliers and listed a series of document from all their customers which we had to conform to. All these documents were hidden behind the OEM's supplier portal and asking our customer for copies revealed the documents had no context between us and our customer.

Naturally, I crossed them all out on the agreement and signed.

We had the same situation. We have some customers who require we implement their end users CSR's. This is stated in their manual. Most link to the end user portal and the need for a supplier number and password. All of which we don't have. After review on their end, our customer waived those requirements in their manual for us in writing.
 

Johnny Quality

Quite Involved in Discussions
#10
We had the same situation. We have some customers who require we implement their end users CSR's. This is stated in their manual. Most link to the end user portal and the need for a supplier number and password. All of which we don't have. After review on their end, our customer waived those requirements in their manual for us in writing.
It's the only logical step. We're not going to get access to the OEM's supplier portal, dig for these documents and try to make them and their requirements fit with our actual customer.

When I asked for these documents I was told by the SQE we was dealing with that we were the first supplier to ever request the documents.

IATF is a pain...I miss the misery at times but then I'm reminded about stuff like this. Especially questioning our 3rd party auditors or our CB representative about something illogical and having a reply that always started with "the rules say".
 
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