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Interesting Purchase Order for its Terms and Conditions

#1
I've been making note of some of the more interesting purchase order terms and conditions. Following are some of them summed up briefly:

2% of the product failing in the same mode while under warranty triggers customer's right to demand design change at customer option and seller expense

Ten year warranty, spares supply, and one year EOL notice

Shipments five days earlier than target will be rejected, returned, and reshipped at the sellers expense

Shipments five days later than the target will be rejected and cancelled

China ROHS compliance ? product shall have a label stating how many years before ROHS substances will leak out

Counterfeit suspect parts will be confiscated by the customer, will replaced at the sellers cost. This liability does not lapse until a space vehicle has been launched

No research involving human subjects may be performed

No correction tape or write-overs

Any requirements waived in writing by the customer continue to stand regardless, despite any contract to the contrary

No child labor may be used, unless subcontracted through the southern Sudan
 
P

pldey42

#2
The telecom industry with its TL 9000 (based upon ISO 9001) discourages early and late deliveries. Late deliveries can cause expensive knock-on effects - the bolts is late so the sub-assembly is late so the equipment is late so we start earning money later than our investors expected.

Early deliveries, too, can be expensive. Suppose we drop-ship a big piece of equipment to an address in NYC where, on a specific day, the traffic will be stopped so that a huge crane can winch it through a window onto the customer's premises - if it arrives a few days early, it can't just sit on the sidewalk.

The ten year warranty sounds a bit over the top, but again, in telecom, spares are expected for the service life which could easily be ten years, and the one year EOL notice is often required (or something like) so that new network investment can be planned with confidence in supplied parts.

Some of the others are wild. I especially like the one about it being ok once we've gone into space.
 

John Broomfield

Staff member
Super Moderator
#3
I've been making note of some of the more interesting purchase order terms and conditions. Following are some of them summed up briefly:

2% of the product failing in the same mode while under warranty triggers customer's right to demand design change at customer option and seller expense

Ten year warranty, spares supply, and one year EOL notice

Shipments five days earlier than target will be rejected, returned, and reshipped at the sellers expense

Shipments five days later than the target will be rejected and cancelled

China ROHS compliance – product shall have a label stating how many years before ROHS substances will leak out

Counterfeit suspect parts will be confiscated by the customer, will replaced at the sellers cost. This liability does not lapse until a space vehicle has been launched

No research involving human subjects may be performed

No correction tape or write-overs

Any requirements waived in writing by the customer continue to stand regardless, despite any contract to the contrary

No child labor may be used, unless subcontracted through the southern Sudan
normzone,

Thanks, some of these made me smile.

Most terms and conditions from customers and their suppliers pass like ships in the night.

Rarely are they seen or questioned.

We're usually too busy looking at the main parts of the PO or contract itself to ensure the requirements have not changed from the quote and that we can still meet them.

Perhaps we should spend more time eradicating unreasonable terms and conditions but it's one of those jobs that we'll do later.

Perhaps the contract review part of our sales procedures should kick new T&Cs upstairs to the legal department while we get on with the "real work".

John
 
#4
I can see justification or rationale for all but the one about child labor. I'm still scratching my head on that one. The delivery time window was a major factor in the JIT (Just In Time) fervor in the 90s, especially the penalties. I recall tales of some suppliers having trucks full of product lined up outside Japanese OEMs to fit into four-hour windows of acceptable delivery.
 

somashekar

Staff member
Super Moderator
#5
Sustainability initiative and drive down the supply chain is common, and as a part of this no use of child labor is a significant term of PO.
 
#7
"No correction tape or write-overs..."
This requirement is very common. I live in Canada, and Transport Canada rules are very straightforward in this respect:

"if changes to established records become necessary, they are made in such a manner that the reason for the change and the identity of the person making the change are also recorded, and the original information remains available".

White-out and correction tape is intended to obliterate the previous entry.
 
#10
And here's a good one - The customer will provide us forecast periodically, and we will prepare materials and production capacity to meet that forecast. But this does not constitute a purchase order, and they don't have to buy anything. But be ready, just in case.

Wes, I'll send you a PM.
 
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