PPAP - Complaint from a Tier One customer concerning Product Dimension

[1010011010]

Hello,

I've been a couple times in the same situation. In the end it all came down to common sense and finding an agreement that works for both sides - which might be sharing the costs.

Let's look at the facts:

• You produced knowingly a part out of spec and didn't change anything about it.
• Your customer knowingly accepted that part for the whole time
• The OEM just found out about it, but knowingly or not (we don't know that) accepted this part for the whole time as well
• The contractual agreements between you and your customer are a bit "fuzzy" on this topic

Talking plainly

• The OEM is not amused, because he was (and probably still is) being sent non conforming parts
• Your customer is not amused (and maybe a bit embarrassed) because he was caught off-guard during an audit and now has to react
• You were caught off-guard, thinking that it will just work as usual

I propose to gather the facts, e.g. time frame of non conforming (accepted) production, number of produced parts, maybe even rejection ppm from your customer, etc.

Take those facts and talk to your customer. Let them know, that you understand their predicament and that you want to find a solution that works for both parties. So after you set the stage, you show your proposal for a fix. Make clear the necessary modifications and costs associated. Then at the end, point out that looking at the facts, your partnership with the customer, etc. you propose to share the costs 50/50.

To me this would be a fair agreement, as both parties share the issue and I'm sure that both parties feel more or less "guilty". The "guilty" feeling part is also usually the part, that helps accepting those cost sharing proposals. Also keep in mind, that your customer is under pressure from his OEM, so that should ease the negotiations as well - at least a little.

In summary: Stop looking for a loop hole in your contracts for now, talk to your customer, try to find an agreement to share the cost.

 

[ncwalker]

In summary: Stop looking for a loop hole in your contracts for now, talk to your customer, try to find an agreement to share the cost.

I am in supplier quality in a Tier 1 in the automotive industry. And this is the best advice you have been given in the entire thread.

The print is the contract. If it is out of print, it is on you including all costs.

The PPAP is us saying we agree that the controls you have placed on your floor CAN make a part to specifications. Not will, CAN. It is not a blanket approval that whatever you sneak by during PPAP will be acceptable later.

If you came to me and said "But we always sent it like this ...", depending on your ATTITUDE, my answer would be:
a) Did you get a deviation from MY system with representatives from MY company (at least purchasing, supplier quality, design engineering, and possibly central quality) signing it? Because if you don't have this, then you have to meet the terms of the contract. (Print). A "email message read" is NOT a deviation.
b) OK, we will see what we can work out.

Think about it this way ... You submit a PPAP with everything in spec. 6 months later, your process drifts and you make out of spec parts. You can't look at me and say "well, YOU approved the process, so because the process failed, it's on you ..." That's not what a PPAP is.

You are very much 100% on the hook for this unless you produce the deviation. Now, let's talk shared costs. Your customer may be very amenable to that. But again, attitude. If you come at me with "well we think it's YOUR fault because YOU approved PPAP" and won't even own one portion of the cost, I as your customer SQ am very much going to stick it to you for every cost. Hell, I'll even start back charging you for my time to teach you a lesson. We pay you to be the professional whatever it is you make.

But if you come at me with "I need some help. I'm a little stuck with my tooling budget. And the fact that this part has been like this since day one indicates it can't be that important. What can you do to help me absorb some of this?" I may try and absorb ALL of it. You need to have a conference call with your buyer and SQ on the phone at the same time.

But if you have historically been a cantankerous, argumentative supplier, you're screwed.

 

[tongxiaozhi]

Hello,

I've been a couple times in the same situation. In the end it all came down to common sense and finding an agreement that works for both sides - which might be sharing the costs.

Let's look at the facts:

• You produced knowingly a part out of spec and didn't change anything about it.
• Your customer knowingly accepted that part for the whole time
• The OEM just found out about it, but knowingly or not (we don't know that) accepted this part for the whole time as well
• The contractual agreements between you and your customer are a bit "fuzzy" on this topic

Talking plainly

• The OEM is not amused, because he was (and probably still is) being sent non conforming parts
• Your customer is not amused (and maybe a bit embarrassed) because he was caught off-guard during an audit and now has to react
• You were caught off-guard, thinking that it will just work as usual

I propose to gather the facts, e.g. time frame of non conforming (accepted) production, number of produced parts, maybe even rejection ppm from your customer, etc.

Take those facts and talk to your customer. Let them know, that you understand their predicament and that you want to find a solution that works for both parties. So after you set the stage, you show your proposal for a fix. Make clear the necessary modifications and costs associated. Then at the end, point out that looking at the facts, your partnership with the customer, etc. you propose to share the costs 50/50.

To me this would be a fair agreement, as both parties share the issue and I'm sure that both parties feel more or less "guilty". The "guilty" feeling part is also usually the part, that helps accepting those cost sharing proposals. Also keep in mind, that your customer is under pressure from his OEM, so that should ease the negotiations as well - at least a little.

In summary: Stop looking for a loop hole in your contracts for now, talk to your customer, try to find an agreement to share the cost.

I appreciate your answer to my question, from which I can see that you have very rich experience in quality and in dealing with customer complaint. It is impossible to define everything clearly in the contract, espcially in China, where contract are not always respected. I fully agree with you that it all comes down to common sense in the end. I depends on the way we communicate with customers.

 

[tongxiaozhi]

I am in supplier quality in a Tier 1 in the automotive industry. And this is the best advice you have been given in the entire thread.

The print is the contract. If it is out of print, it is on you including all costs.

The PPAP is us saying we agree that the controls you have placed on your floor CAN make a part to specifications. Not will, CAN. It is not a blanket approval that whatever you sneak by during PPAP will be acceptable later.

If you came to me and said "But we always sent it like this ...", depending on your ATTITUDE, my answer would be:
a) Did you get a deviation from MY system with representatives from MY company (at least purchasing, supplier quality, design engineering, and possibly central quality) signing it? Because if you don't have this, then you have to meet the terms of the contract. (Print). A "email message read" is NOT a deviation.
b) OK, we will see what we can work out.

Think about it this way ... You submit a PPAP with everything in spec. 6 months later, your process drifts and you make out of spec parts. You can't look at me and say "well, YOU approved the process, so because the process failed, it's on you ..." That's not what a PPAP is.

You are very much 100% on the hook for this unless you produce the deviation. Now, let's talk shared costs. Your customer may be very amenable to that. But again, attitude. If you come at me with "well we think it's YOUR fault because YOU approved PPAP" and won't even own one portion of the cost, I as your customer SQ am very much going to stick it to you for every cost. Hell, I'll even start back charging you for my time to teach you a lesson. We pay you to be the professional whatever it is you make.

But if you come at me with "I need some help. I'm a little stuck with my tooling budget. And the fact that this part has been like this since day one indicates it can't be that important. What can you do to help me absorb some of this?" I may try and absorb ALL of it. You need to have a conference call with your buyer and SQ on the phone at the same time.

But if you have historically been a cantankerous, argumentative supplier, you're screwed.

I fully agree with you that this is the best advice I have been given. I also appreciate your advice and insight into this issue. We also have some suppliers, I have the same feeling as you mentioned.

 

[Marc]

... The print is the contract. If it is out of print, it is on you including all costs. ...

Excellent point, and excellent post. Thank you! But - Did you mean "... not on the print..." ?

 

[Ninja]

ncwalker...Best post I've read in a long time.
How do we give "kudos" on this new resurrection of the Cove?

...never mind...it was the same place as before...

 

[Marc]

... How do we give "kudos" on this new resurrection of the Cove? ...

The "Thanks" button or "Karma" button.