Customers own most of our tooling - Is this Customer Provided Equipment?

[mshell]

Thanks to all of the contributors for the information in the forum. The various ideas and topics discussed have been instrumental is helping to develop the QMS at our organization.

Now I need some input.

We are a small Injection Molding and Thermoforming company and I have just discovered that customers own most of our tooling (molds, vaccum boxes, cameras, etc.). Past QA employees classified the cameras as customer provided equipment however, due to the fact that we have the tooling manufactured, they did not classify it as customer provided. If I am understanding the Standard, this tooling must be classified as Customer Provided Equipment. Please offer your views on this issue.

Thanks,

Mshell

 

[David Hartman]

Thanks to all of the contributors for the information in the forum. The various ideas and topics discussed have been instrumental is helping to develop the QMS at our organization.

Now I need some input.

We are a small Injection Molding and Thermoforming company and I have just discovered that customers own most of our tooling (molds, vaccum boxes, cameras, etc.). Past QA employees classified the cameras as customer provided equipment however, due to the fact that we have the tooling manufactured, they did not classify it as customer provided. If I am understanding the Standard, this tooling must be classified as Customer Provided Equipment. Please offer your views on this issue.

Thanks,

Mshell

First, Welcome to the Cove.

Now to address your post. At a previous employer's (government radios/electronics) we often requested suppliers develop special test fixturing for components or modules to be supplied by the supplier, molds for supplier provided castings, etc. These fixtures, molds, etc. were then to be considered as our (customer) equipment, and were to be properly identified and handled as such.

If fact, we performed an annual review/audit to ensure that the equipments were being properly maintained and accounted for.

For us some of these equipments were in fact considered as "government tooling/fixtures" just because they were being created/maintained in support of a government contract, which added a whole different layer of control requirements.

I don't know if I have directly answered your question or not, but I guess to sum up where I was headed: I would suggest that this equipments could be considered as customer property, but I would recommend reviewing your contract/purchase order with the customer to get a better understanding of the customer's requirements (in fact you may what to contact your customer, just to be on the safe side).

 

[Claes Gefvenberg]

If I am understanding the Standard, this tooling must be classified as Customer Provided Equipment. Please offer your views on this issue.

Thanks,

Mshell

I totally agree: The tooling must be considered as Customer Provided.

/Claes

 

[mshell]

ddhartma,

Your response has raised yet another question. Some of our customers have suppliers that manufacture components that become part of our completed product. My organization pays the supplier but the customer control supplier selection. Would this also need to be classified as customer provided equipment?

Thanks,

Mshell

 

[David Hartman]

ddhartma,

Your response has raised yet another question. Some of our customers have suppliers that manufacture components that become part of our completed product. My organization pays the supplier but the customer control supplier selection. Would this also need to be classified as customer provided equipment?

Thanks,

Mshell

In MHO no. Since your company pays for these supplies, they are yours. In-fact the supplier themselves should be added to your "approved" supplier list (although you could note their approval as being based on customer selection, and even limit their use to supplies for that specific customer if you wanted to/felt the need to go that far).

 

[Jimmy Olson]

ddhartma,

Your response has raised yet another question. Some of our customers have suppliers that manufacture components that become part of our completed product. My organization pays the supplier but the customer control supplier selection. Would this also need to be classified as customer provided equipment?

Thanks,

Mshell

We deal with the same issue here. Our customers specify the parts and suppliers that they want us to use, but we do all the ordering, purchasing, and storage and therefore classify the parts as our property. Occasionaly we do get parts that are given to us by the customer and those parts are classified as customer property. Hope that helps

 

[mshell]

Whew

That is good news. We have several items that fall under that category.

 

[Icy Mountain]

We don't have customer supplied tooling. When the customer supplies components for use in manufacturing our products that is "customer supplied" . When they specify a vendor and part number and we do all the rest we treat that as any other component.

 

[howste]

I am currently working with an injection molding company that also builds tools which the customer pays for. They are considered customer property (7.5.4) and also need to be considered in 7.3 because even though they are not the "finished parts," the company designs, builds, and sells them to the customer.

 

[Wes Bucey]

I agree with the thaumaturgist [magician or "wonder worker"] that 7.5, 7.3 and even 7.4 (Purchasing) all play a part in the matter of customer-owned or provided property.

In every company where I've been in charge of dictating the manner of compliance, I take the tack to treat all equipment, toolings, drawings, or components supplied or paid for (thereby creating the "owned" designation) in exactly the same manner as we treat our own.

Ergo, when a customer supplies components, they get the same treatment as if we were buying them from a third party - we investigate and approve the method of production and inspection or we conduct incoming inspection before they are accepted into our system.

Similarly for tooling (whether designed and built by us in-house or outsourced to our own supplier or delivered from our customer's warehouse), we inspect it and maintain it as if it were ours.

Think about customer-supplied machines and tooling in the same way as if you leased them from a finance company (with an obligation to return them in good repair or pay damages) or paid for them with your own company's cash.

So, the only difference in the way we deal with customer's tooling, drawings, machines, components versus our own is in the accounting department and perhaps the ownership label affixed to the item.

Here are sample paragraphs from our QManual:
7.5.4.1 Material incorporated into finished product

Our activities do not normally involve the use of customer supplied material, either by us to a supplier or by our customer to us or one of our subcontractors or other suppliers. When required by contract, we verify, store, and maintain material as required by our QMS procedures. If we damage or lose material, we notify the customer and take agreed actions.

7.5.4.1 Customer documents

We frequently take possession of customer documents (intellectual property), ranging from design drawings to specification lists. We treat all customer documents within our configuration management process. This means each document is positively identified as customer’s. Copies, access, and changes are strictly monitored and controlled. Agreement to handle documents in this manner is documented before accepting possession of customer documents. When documents no longer need be retained per contract or regulations, they are returned to customer or disposed of as agreed with customer.