Customer will not submit Purchase Orders - System for ISO 9001 Compliance

[djbeatsent]

My company's biggest customer does not like to submit PO's. We have drawings and requirements for the products, but do not have any purchase orders. The job has been running 24/7 for the last year and they have always paid for all of the parts on time.

Has anyone else ever experienced a customer like this? I'm not sure whether they are lazy, or what the deal is...but I am trying to come up with some sort of system or paperwork that will keep us in ISO compliance.

This is another one of those, "owner say who cares if they pay" but quality manager says "no way" situations.

 

[ScottK]

You can't force your customer to issue a PO I suppose if you've always done business with a handshake with them.

Is there a contract that could stand in for a blanket PO?
If not, I'd suggest writing a contract or quality agreement for them to sign off on phrasing is as something you need for your inernal compliance.

 

[TPMB4]

Was the parts first started on a verbal order? I know an old company I worked with always took verbal orders from people. When asked what the PO number or reference was they just said use my name. I guess that was acceptable for them since they were often not very big companies. Do you know how this customer first ordered from your company? Was it a verbal with a handshake from someone senior at your company and theirs? Could you just use an internal order of some kind or use their buyer's name as the blanket order reference? Do you get your instructions as to what is needed from some kind of EDI, Schedule or tracker that has a reference you could use?

However, if your customer is a bigger concern, the order is a big quantity possibly spread over some time or this issue is a NC from your external auditor then it is something that needs a solution. I know of companies who work to emails from a customer representative which can be kept as a record for the purchase system. Also others who simply work to a system of cages in a system which means if they get a cage for a part they just fill it and send it off. The order is the cage turning up at their site.

How does your system work for knowing what to supply? Is there anything in there that can be used as a reference number or order number or as an authority to proceed with making the particular part and quantity? Somewhere there must be something that could be used as part of a system.

 

[SteveK]

My company's biggest customer does not like to submit PO's. We have drawings and requirements for the products, but do not have any purchase orders. The job has been running 24/7 for the last year and they have always paid for all of the parts on time.

Has anyone else ever experienced a customer like this? I'm not sure whether they are lazy, or what the deal is...but I am trying to come up with some sort of system or paperwork that will keep us in ISO compliance.

This is another one of those, "owner say who cares if they pay" but quality manager says "no way" situations.

Probably a silly question (or two). Is this not an example of a "call-off"? That is, where there is one single order (there must have been some purchase start point) e.g. for 10,000 widgets a year and they are then "called off" when needed - no more POs required. This can work both ways e.g. as a supplier or customer (we use both, mainly as a customer). If this is documented in a procedure (e.g. Contract or Purchasing) that you have, would this not cover your QMS requirements?

Steve

 

[somashekar]

My company's biggest customer does not like to submit PO's. We have drawings and requirements for the products, but do not have any purchase orders. The job has been running 24/7 for the last year and they have always paid for all of the parts on time.

Has anyone else ever experienced a customer like this? I'm not sure whether they are lazy, or what the deal is...but I am trying to come up with some sort of system or paperwork that will keep us in ISO compliance.

This is another one of those, "owner say who cares if they pay" but quality manager says "no way" situations.

There is no need for any purchase order at all.
What is needed is the purchasing information. Since many financial, statutory and legal obligations are interlinked, purchase order (PO) are the most commonly used term, that is authorised by a responsible officer (signed)
If you look at customer related process, you will see that what ever your customer asks (His purchasing information), you just need to have effective arrangements for communicating with customers in
relation to the
a) product information,
b) enquiries, contracts or order handling, including amendments, and
c) customer feedback, including customer complaints.
If you perform the above, you are good.

 

[John Broomfield]

My company's biggest customer does not like to submit PO's. We have drawings and requirements for the products, but do not have any purchase orders. The job has been running 24/7 for the last year and they have always paid for all of the parts on time.

Has anyone else ever experienced a customer like this? I'm not sure whether they are lazy, or what the deal is...but I am trying to come up with some sort of system or paperwork that will keep us in ISO compliance.

This is another one of those, "owner say who cares if they pay" but quality manager says "no way" situations.

djbeatsent,

No document is needed for a contract to exist.

Many organizations do not issue documented purchase orders but all customers should make their requirements clear perhaps by issuing drawings and specifications as in your case.

As an auditor I would be concerned your client's upkeep of drawings and specifications issued to your organization and how they communicated their requirements to your organization regarding quantity and the timing of any deliveries.

Your records of contract review would also be of interest.

I would also see if they paid on time so you have resources for investing in continual improvement (see 6.1).

John

 

[Mikishots]

My company's biggest customer does not like to submit PO's. We have drawings and requirements for the products, but do not have any purchase orders. The job has been running 24/7 for the last year and they have always paid for all of the parts on time.

Has anyone else ever experienced a customer like this? I'm not sure whether they are lazy, or what the deal is...but I am trying to come up with some sort of system or paperwork that will keep us in ISO compliance.

This is another one of those, "owner say who cares if they pay" but quality manager says "no way" situations.

To be compliant with the requirements of ISO 9001:2008, you'd need to be able to show that you have satisfied the points in Subclause 7.2.1, which also flows to Subclause 5.2.

1. You have a way of determining exactly what the customer wants, including how to send it to them and any scheduled maintenance (if applicable).
2. You have a way of determining anything that the customer needs but hasn't explicitly stated; an example might be stainless steel hardware if you know your customer is also using the item in marine environments.
3. You have a way of determing the applicable statutory or regulatory requirments for that item.
4. Other.

The customer doesn't need to send a PO, but your company is required to have a consistent and effective method of finding out exactly what they want, how they want it and when they want it. If you can show that, there's no compliance issue.

 

[djbeatsent]

To be compliant with the requirements of ISO 9001:2008, you'd need to be able to show that you have satisfied the points in Subclause 7.2.1, which also flows to Subclause 5.2.

1. You have a way of determining exactly what the customer wants, including how to send it to them and any scheduled maintenance (if applicable).
2. You have a way of determioning anything that the customer needs but hasn't explicitly stated; an example might be stainless steel hardware if you know your customer is also using the item in marine environments.
3. You have a way of determing the applicable statutory or regulatory requirments for that item.
4. Other.

The customer doesn't need to send a PO, but your company is required to have a consistent and effective method of finding out exactly what they want, how they want it and when they want it. If you can show that, there's no compliance issue.

How does a company know exactly how many to send if it is not stated somewhere? Won't my auditor ask me that? I am sure we have everything covered, except the amount of parts and when to deliver.

Currently they are picking up whenever they feel like it, and paying randomly withing 15 days. The only order paper trail we have is a record of what was purchase and when. Am I in the clear then?

 

[somashekar]

How does a company know exactly how many to send if it is not stated somewhere? Won't my auditor ask me that? I am sure we have everything covered, except the amount of parts and when to deliver.

How many need not be also stated somehere. It can be said, (Telephone, across a coffee, verbal, whatever...)
If you can demonstrate that you have communicated back to customer (and internally) so as to be able to meet what was asked (how many and when) you are good within your QMS

 

[djbeatsent]

OK looks like I didn't really even have an issue to begin with. This thread should be useful in the future for others.

Thank you for everyone's responses!