How to implement H&S and Quality Control Requirements in Contract for Potential Supplier?

[greenlantern]

Sorry if this is the wrong forum section to post in but I am looking for some direction on including quality requirements in the business contract with a prospective supplier.

As of now management at my start up hasn't included explicit health and safety/ quality control requirements in the contract for this NPI project and I pushed them to add it. They agreed to include those items in the contract itself so that it doesn't become a problem when we request the supplier to implement QC inspections to ensure specs are being met.

Is there any standard process I can follow for writing the exact verbiage to be included in the contract? Management asked me to draft the quality requirement section and it isn't something I've had previous experience doing.

Some more background, I lead the ISO 9001 audit and the supplier recently got their certification. There are some serious concerns our company has regarding their quality control. I want to make sure it's in the contract so they don't push back when we request additional QMS process/ test procedures etc. from being implemented.

Thanks in advance for any suggestions.

 

[Ninja]

Are you trying to mandate the EHS of your supplier? Or just in your company after goods are received?

For the first, I would reject your contract terms out of hand...you don't run my business, I do. BTDT.
For the second, that is totally reasonable...and US law.

You get to dictate what you are trying to buy. How I run my safety system is not your call, it's OSHA's call. How I make it may or may not be proprietary...depending on what it is...but you CAN mandate that the method of making it not change from the first approval samples.

What quality control they use for your product...you can climb in their shorts as deep as you want...just realize that it may or may not affect pricing.

 

[greenlantern]

Are you trying to mandate the EHS of your supplier? Or just in your company after goods are received?

For the first, I would reject your contract terms out of hand...you don't run my business, I do. BTDT.
For the second, that is totally reasonable...and US law.

You get to dictate what you are trying to buy. How I run my safety system is not your call, it's OSHA's call. How I make it may or may not be proprietary...depending on what it is...but you CAN mandate that the method of making it not change from the first approval samples.

What quality control they use for your product...you can climb in their shorts as deep as you want...just realize that it may or may not affect pricing.

Thanks for the reply. Yeah we aren't trying to mandate their operations however we are aware they don't have sufficient processes in place to meet certain product requirements and want to propose (not demand) certain test procedures done that would adequately test to ensure specs are met.

To clarify our main concern is the spec related to health and safety product requirement, not the environmental health and safety of their factory.

Also, they were asking specifics about which tests they should use for our specs so it has been more collaborative than us just dictating how to run their operation.

 

[Ninja]

health and safety product requirement

they don't have sufficient processes in place to meet certain product requirements

That is product requirement..go for it...in that area, the customer is always right.
The practical definition of "the customer is always right" is "they are buying X...so we need to make sure we are shipping X"

propose (not demand) certain test procedures done that would adequately test to ensure specs are met

Test procedures? Demand away. If you're paying for it, you can dictate how it is tested, and what the test results must be.
You can even require that the lot by lot data is emailed to you for approval prior to shipping.
Just realize that testing costs money, and it shows up in the sales invoice.

Also, they were asking specifics about which tests they should use for our specs so it has been more collaborative than us just dictating how to run their operation.

They were asking? Sounds awesome. but when you write up a contract, limit it to what rally matters...preferences do not belong in contracts, only needs.

 

[greenlantern]

That is product requirement..go for it...in that area, the customer is always right.
The practical definition of "the customer is always right" is "they are buying X...so we need to make sure we are shipping X"


Test procedures? Demand away. If you're paying for it, you can dictate how it is tested, and what the test results must be.
You can even require that the lot by lot data is emailed to you for approval prior to shipping.
Just realize that testing costs money, and it shows up in the sales invoice.


They were asking? Sounds awesome. but when you write up a contract, limit it to what rally matters...preferences do not belong in contracts, only needs.

Appreciate your insights. Yeah since it is a critical component there is a budget for it.

As far as the actual verbiage goes is there any standard process to follow? I know it really depends on each contract and business negotiation but is it common to explicitly define which test inspections are required or is it usually more broad/high-level statements regarding that?

We generally keep all the detailed product specification in the technical drawings. I thought to add it there and then call out in the contract that the quality specs in the drawing need to be adhered to.

Just trying to figure out what level of detail quality requirements have in the contract since it's out of my wheelhouse.

 

[Ninja]

Pretty sure at that point the standard 'standard' is "get as much as you can outta it."
But hey, that's just me, the business guy.

Define what you need (in writing). Pay as little as possible...and rake 'em over the coals just short of them considering your business not worthwhile.
That's how capitalism works...and it does work...

 

[John Broomfield]

Dare I say that your company’s supplier selection criteria need work?

Attempting to repair poor selection with more onerous contract requirements is unlikely to succeeed.

Instead, upgrade your supplier selection/development process so you buy only from safe capable suppliers.