Defect Rate for asking for an RMA - Company wants an RMA for every defect found

A

axelrios

#1
I have a SQE role, one of our suppliers used to be internal(part of the same company) but now we are a separate company, my ompany want me to RMA for every defect found, previous splitting the company we allowed a small % of reject by common agreement, now they want me RMA very single defect, from the supplier point of view, they cant provide 100% quality and there is no contract or formal agreement after the split

my company do a 100% inspection on each shipment fro years, lots are ~2500 parts and production rejects ~15 parts from the supplier, if these were on a sampling by our AQL on sampling these would pass,

what would be a good approach for this situation? taking on account that these material are consigned with now with 0 cost
 
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normzone

Trusted Information Resource
#2
That sounds like a fun situation ... I've had suppliers who insisted on shipping product that they had sorted out the most grievous defects and let us sort the rest. We were only able to use 75% of what they supplied and the rest was scrapped at our expense. The supplier would not accept RMA material - they viewed it as being within their process specifications.

We tried to negotiate a deal where they would sort the flawed (cosmetically) ones and simply sell us the flawless ones for a higher cost, but they did not want the burden of sorting and the responsibility for escapes. So 100% sorting on our end ...

The solution was to get Finance and Purchasing on board with the idea of ordering 44% more (remember, only a 75% yield) so as to meet needed quantities.

And no formal contract between the two organizations? There probably is, but nobody has read it. Your organization surely has some form of terms and conditions, and the newly spun off company will be developing their own.
 
Last edited:

Bev D

Heretical Statistician
Staff member
Super Moderator
#3
This is an issue many of us are facing today. Increasing quality expectations bring us to defect levels that are too low for reasonable sampling plans to detect and now we use 100% inspection and/or capturing failures on the line. The concept of an acceptable defect rate is becoming extinct. Unfortunately the processes that govern how we handle this have not kept up.

I suggest thinking a bit differently about this and including your finance and commodity/purchasing teams in this. Ask what you gain from an actual return. If defect rates are rather low and the defects are 'well understood or known' consider how you can deal with financial compensation in the least wasteful manner possible. A return doesn't improve anyone's understanding. You count them and throw them away then simply charge back to your customer. If a new defect occurs a return would have value so the supplier can study it.
 

howste

Thaumaturge
Super Moderator
#4
I have a SQE role, one of our suppliers used to be internal(part of the same company) but now we are a separate company, my ompany want me to RMA for every defect found, previous splitting the company we allowed a small % of reject by common agreement, now they want me RMA very single defect, from the supplier point of view, they cant provide 100% quality and there is no contract or formal agreement after the split

my company do a 100% inspection on each shipment fro years, lots are ~2500 parts and production rejects ~15 parts from the supplier, if these were on a sampling by our AQL on sampling these would pass,

what would be a good approach for this situation? taking on account that these material are consigned with now with 0 cost
I'm curious what you mean when you say "RMA." In my mind this means Return Material Authorization, and the material is sent back to the supplier at their expense. Sometimes it's just the rejected parts, and sometimes it's the whole lot of material.

I've also heard some people use RMA as a generic term meaning to reject supplier material, with or without corrective action. Can you please describe what RMA means in your post?
 
P

PaulJSmith

#5
Do you have a procedure in place to address this? If so, use that as your guide. It may or may not require an update to address the new arrangement. If not, you might use this opportunity to add one.

In the short term, you probably need to gather all of the information you can find regarding the "wink-n-nod" agreement. This may entail getting all knowledgeable parties together in one room so everyone is on the same page at the same time. Bev's idea of involving finance and purchasing is excellent as well. Your description of the situation could get very costly in a lot of ways (money, time, supplier relationship) if it's not addressed in a timely manner.
 

Miner

Forum Moderator
Staff member
Admin
#6
This is an issue many of us are facing today. Increasing quality expectations bring us to defect levels that are too low for reasonable sampling plans to detect and now we use 100% inspection and/or capturing failures on the line. The concept of an acceptable defect rate is becoming extinct. Unfortunately the processes that govern how we handle this have not kept up.
All too true. Processes need to have built in mistake proofing, and designs need to be more robust to achieve today's quality expectations.
 
A

axelrios

#7
RMA is like you mentioned autorization to return the material phisically and in the system, but we only return the "bad parts" most of the time
 
A

axelrios

#8
I'm curious what you mean when you say "RMA." In my mind this means Return Material Authorization, and the material is sent back to the supplier at their expense. Sometimes it's just the rejected parts, and sometimes it's the whole lot of material.

I've also heard some people use RMA as a generic term meaning to reject supplier material, with or without corrective action. Can you please describe what RMA means in your post?

Thanks
RMA is like you mentioned autorization to return the material phisically and in the system, but we only return the "bad parts" most of the time
 
A

axelrios

#9
This is an issue many of us are facing today. Increasing quality expectations bring us to defect levels that are too low for reasonable sampling plans to detect and now we use 100% inspection and/or capturing failures on the line. The concept of an acceptable defect rate is becoming extinct. Unfortunately the processes that govern how we handle this have not kept up.

I suggest thinking a bit differently about this and including your finance and commodity/purchasing teams in this. Ask what you gain from an actual return. If defect rates are rather low and the defects are 'well understood or known' consider how you can deal with financial compensation in the least wasteful manner possible. A return doesn't improve anyone's understanding. You count them and throw them away then simply charge back to your customer. If a new defect occurs a return would have value so the supplier can study it.

Yes, it is indeed frustrating, supplier comments that the defect rate is below AQL, so no penalization can be done, is this legit??

Our organization used to be ok with that, now they want 100% material to be good
 
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