Customer Supplied Product - When does it become that?

[michelle8075]

This question is in regards to Customer Supplied Product. When we were in our QS-9000 TE days, we had to define when Customer Supplied Product became Customer Supplied Product in our procedure because of the issue described below.

Anyway, our procedure states that " Additionally once (my company) provides a product to the customer regardless if that product has been fully purchased by the customer, and the product is returned to (my company) for rework, integration, etc. it is then considered Customer Supplied Property".

Problem: We are a TE supplier, our customer's normally send us tryout parts, and items for integration into our systems. One issue came up a couple years ago when we were making several car body pallets. Even thought our customer did not "own" the pallets yet... we sent them to our customer to try it out, then they would send it back to us. We serched for a way to control the influx of the many pallets that were coming back and forth. The QM at the time, said that these were CSP.

I am not comfortable with the statement in our procedure. I think we should just leave it at Customer Supplied Product is just what the name states (Property owned by the customer period). For some reason some higher up's think I should keep the procedure the way it is, and of course there are others opposed.

This is driving me crazy. Any suggestions on what your procedures state or what you believe is Customer Supplied Product.

 

[Rachel]

For us, "customer-supplied product" is a product that they deliver to us for use in our process, the output of which is a product for them. Did you follow that?

Here's an example - we gasket a part for a customer. The customer supplies the part - we apply the gasket - and we send it back to the customer.

Another example - we process materials for a customer. They send us their raw materials - we mix them together - and we package it and send it back to them.

Another example - we mould a part for a customer. The customer supplies the mould - we make the part - and we deliver the part to them. Not a "customer-supplied product", but a "customer-owned tool"...there's a difference.

I wouldn't say that *anything* coming from a customer is customer-supplied - the original ownership (in our case, at least) is what defines customer-supplied product. FOr us, rework material is essentially ours - they're returning it to us because it wasn't fit or adequate....in that case, we send replacement product...or issue a "supplier-supplied credit note"!

Hope this helps...
Cheers,
-R.

 

[michelle8075]

For us, "customer-supplied product" is a product that they deliver to us for use in our process, the output of which is a product for them. Did you follow that?

Here's an example - we gasket a part for a customer. The customer supplies the part - we apply the gasket - and we send it back to the customer.

Another example - we process materials for a customer. They send us their raw materials - we mix them together - and we package it and send it back to them.

Another example - we mould a part for a customer. The customer supplies the mould - we make the part - and we deliver the part to them. Not a "customer-supplied product", but a "customer-owned tool"...there's a difference.

I wouldn't say that *anything* coming from a customer is customer-supplied - the original ownership (in our case, at least) is what defines customer-supplied product. FOr us, rework material is essentially ours - they're returning it to us because it wasn't fit or adequate....in that case, we send replacement product...or issue a "supplier-supplied credit note"!

Hope this helps...
Cheers,
-R.

Hi Rachel,

I understand what you were saying. We do control items for integration into our product (such as the gasket) in our Customer Supplied Product Procedure.

I am guessing you are saying that if a customer purchased a product, and it needed re-work you determine it as Customer Supplied Product. But, if it is not purchased yet by the customer...... do you still define that as Customer Supplied Product (because it as essentially "touched" their hands sort of speak and is now sent back to you)?

Thank you for your examples, it lets me know that I am essentially doing ok in my procedure.

Have a good one.

 

[qualitygoddess - 2010]

For us, "customer-supplied product" is a product that they deliver to us for use in our process, the output of which is a product for them. Did you follow that?

.

I agree. You could perhaps define it as product and/or raw materials supplied by the customer for use in your process. This could then include materials that might be drop shipped from your customer's supplier to you. If the customer bought it, and then gave it to you to use at no cost to you, then it is theirs.

If you do something to the product, and the customer doesn't like it and returns it to you for repair or rework, now it is yours to deal with. Why? Because your company most likely charged the customer for the value added.

 

[Rachel]

Hi Rachel,

I understand what you were saying. We do control items for integration into our product (such as the gasket) in our Customer Supplied Product Procedure.

I am guessing you are saying that if a customer purchased a product, and it needed re-work you determine it as Customer Supplied Product. But, if it is not purchased yet by the customer...... do you still define that as Customer Supplied Product (because it as essentially "touched" their hands sort of speak and is now sent back to you)?

Thank you for your examples, it lets me know that I am essentially doing ok in my procedure.

Have a good one.

Not quite. I should have been a bit clearer in my original post.

Rework is not classified as CSP in our process at all. Rework is just that - rework. In more general terms, items like rework are classed as "return of goods" (ROG): they're items that we sold that were returned to us. This includes rework items, items that were off-quality, items that the customer just does not want anymore or bought too much of (we may charge a restocking fee for that), or something like return of containers for recycling.

The difference between ROGs and CSP is that CSP is something that the customer provides to you in order for you to be able to supply a product back to them.

If this helps you to understand it, a CSP to the supplier may, from the customer's perspective, be considered "outsourcing of processes" - but be careful, because that may not always be the case. The gasketing example could be an example of a customer outsourcing a process (or a supplier receiving CSP)...but in a case where a customer is supplying, say, a certain box for packaging, that wouldn't necessarily be considered an outsourced process.

So - CSP is something that they supply to you and that you use in a process for supplying product to them. ROG is something that you have supplied to them that they have found unfit, or no longer need, or that you are accepting as a service for your customer (i.e., recycling).

 

[Rachel]

Just had another thought...you seem to be hung up on the "purchase" aspect of it. Whether or not the customer has purchased the item should not be the deciding factor.

Think of it this way: say you buy a pair of pants that are too long. You can (a) take them back to the store for exchange or refund (ROG), or (b) take them to a tailor and have them shortened (CSP - you are supplying the tailor with your pants, and he/she is supplying the hem).

Or, say you buy a plain ring from a jeweller. Some time goes by, and you decide you want a ring with stones. You can (a) take it to the jeweller as a trade-in (ROG), or (b) take it to the jeweller and have them add a stone to it (CSP - you are supplying the ring for them to do further work to it, and then they are returning the improved ring to you).

Does that clear things up a bit?

 

[Paul Simpson]

Who supplied it?

I have always dealt with CSP based on who provided the parts or material. So raw material, components, trial parts that have been provided by the customer (i.e. that they have somewhere along the line paid for) is CSP. The requirement is that there are additional controls applied to notify them in the event you damage something they own.

I agree with Rachel's distinction betwen returned goods and CSP.

 

[michelle8075]

Just had another thought...you seem to be hung up on the "purchase" aspect of it. Whether or not the customer has purchased the item should not be the deciding factor.

Think of it this way: say you buy a pair of pants that are too long. You can (a) take them back to the store for exchange or refund (ROG), or (b) take them to a tailor and have them shortened (CSP - you are supplying the tailor with your pants, and he/she is supplying the hem).

Or, say you buy a plain ring from a jeweller. Some time goes by, and you decide you want a ring with stones. You can (a) take it to the jeweller as a trade-in (ROG), or (b) take it to the jeweller and have them add a stone to it (CSP - you are supplying the ring for them to do further work to it, and then they are returning the improved ring to you).

Does that clear things up a bit?

Sorry Rachel to get back so late, but I understand. Those examples were great. I can use them when I talk to the "big dogs" about finally changing their procedure to make some common sense.

 

[Rachel]

Not a problem at all, Michelle - glad to be of help.
Cheers,
-R.