Question about Circumstances - Customer Prints and Changes after Contract Acceptance

[qualitytrec]

At my company our main customer often sends us very difficult parts to make the tooling for then we have to run them.

CASE #1:
The customer usually sends us preliminary information that is vague at best. The part starts out looking simple and by the time we are kicking off the tools the part has changed into something barely feasible. Yes, we keep quoting as we go but something else to consider is that we very rarely (I can not recall once) have completed prints. Usually when we get to PPAP the "release" prints are missing the C Datum completely, they have line tolerancing to intersection points of lines in addition to profile tolerancing (which by the way are very difficult to get to measure in tolerance when combined). After we get these new prints which resemble little of what the customer and our company have been discussing we have a clean up meeting where we are asked to draw up with justification the changes we require (SREA) to the print. And submit the PPAP to the print mark-up. Several months later the print is released and updated to the SREA except it does not match what we asked for or submitted. This causes our next PPAP to have dimentional issues as a result. ( no they do not make us resubmit at print release just update warrant and yes we bring up the print issues )

CASE#2:
Lately the customer has been sending us prints during APQP and having us tolerance and datum them. We are not design responsible nor do we have access to the assembly prints or CAD that our parts mate to so we basically pull numbers out of our chutes and through darts at a chart until we get them all figured to what we think we can reasonably hold. Then the customer dimensions the print completely different anyway and we end up with case #1.

Do any of you know a way to stop this madness? I am wore out.

Oh, by the way we just got another job from them and their QM dropped of a PSO book which was not known to be a requirement until a month after the job was awarded. We have never done PSO but it looks like some work. My boss laughed as he went out to golf.

 

[Wes Bucey]

What's PSO?
Possible Survivable Options
or
Production Sign Off?

Ann Landers always said, "No one can take advantage of you unless you let them."

The situations you describe are all traceable back to the Contract Review stage. Now that you have a good track record on this customer, you can start incorporating some of your gripes as conditions of new contracts. This is your boss's job, supported by the information you give about the real costs involved in dealing with vague specifications.

Add a "concurrent engineering phase" (and charge) to the contract for dealing with the issues in Scenario 1.

In scenario 2, insist on CAD of mating parts, even "gold standard samples" if available.

Some customers might even thank you for making them more efficient, if you point out the costs and delays in not being efficient.

 

[Marc]

I have gone through something similar to this. People were not happy but I found the customer had no design engineers who could correctly GD&T a print to begin with. Nor did my client have anyone who really understands GD&T. I hired an outside consultant from a laboratory who understands GD&T and called a meeting.

NOTE: I held firm - Any change from the original Request for Quote and the print at that time was a contract change.

At the meeting with the GD&T expert we pointed out that the customer's design people had no idea how to GD&T a print. The result was the client now has a GD&T expert 'on call' from the lab and he did print markups - which the customer 'requested' we do - with the customer present.

Bottom line is - Can you reach a point where you can really communicate with the customer. Many times the real answer is no. They're every bit behind as you are and often their resources, for example design engineers or whoever is tolerancing prints, are insufficient or not 'compent'.

Part of the problem - which I have seen many times over the years - is where a contract is agreed to and tolerances are agreed to by the supplier which they cannot hold and they either DO know they can't, or the contract review did not provide for a decent print review.

Secondary is where the customer continues to 'make refinements' after the contract is accepted and the supplier does not apply the contract review process each time. I have watched so many times where even a formal ECR (Engineering Change Request) came through during production (not to mention during phases 3 and 4 of APQP) and it was not subjected to contract review (it's a change - they want something different). Next thing you know the company finds the change is going to cost plenty (if it's even possible) and wonders how they 'got in this mess'.

We've all heard of the 'paper napkin' print - Everything agreed to but nothing 'official'. It is alive and well, just variations on the same theme.

All this said, this is typical of 'doing business' these days.

 

[Charmed]

Dont' tell them what it is costing

Dear Markasmith:

BTW, I forgot to mention one thing though. As long as they don't seem to care, just keep sending them the bill for all services faithfully rendered. Don't overcharge. Just honest charges.

In one of (community-related) volunteer assignments, I dealt with a similar situation. We were publishing a quarterly magazine. The previous committees, all volunteers, responsbile for this publication activity would descend literally in the printers house, late at night, the week before publication deadline and ask for all kinds of last minute changes. Many articles to be included in the publication were handwritten. I tried to bring some order into the "madness" as our printer told me. But, I also told him to enjoy it. If not, the committee could always take their business elsewhere.

Send the bill and keep the work coming. That's the bottom line - for you.

Charmed

 

[qualitytrec]

I found the customer had no design engineers who could correctly GD&T a print to begin with. Nor did my client have anyone who really understands GD&T.

Marc I believe this is likely in my situation.

NOTE: I held firm - Any change from the original Request for Quote and the print at that time was a contract change.

My boss is in charge of this and usually he fails to recognize that his and my time are worth something also so he does not charge for these types of services. Also more to what you are saying my boss is more interested in landing the work then making a fair profit (in his mind he can find ways to short cut the system later).

At the meeting with the GD&T expert we pointed out that the customer's design people had no idea how to GD&T a print.

This seems like a good way to get someone fired or gain a disgruntled customer to me. Where do you buy the kid gloves for this. And how do you deal with the customers "guru" who will listen to no lesser beings.

Part of the problem - which I have seen many times over the years - is where a contract is agreed to and tolerances are agreed to by the supplier which they cannot hold and they either DO know they can't, or the contract review did not provide for a decent print review.

It is very difficult to have a print review with incomplete prints and information. I have discussed how feasibility is determined when the product requirements are unclear or undefined with my boss who has a point when he says. "Do we want the work? Then all we can do is ask and then work with what is available." Which by the way is usally not much.

Secondary is where the customer continues to 'make refinements' after the contract is accepted and the supplier does not apply the contract review process each time. I have watched so many times where even a formal ECR (Engineering Change Request) came through during production (not to mention during phases 3 and 4 of APQP) and it was not subjected to contract review (it's a change - they want something different). Next thing you know the company finds the change is going to cost plenty (if it's even possible) and wonders how they 'got in this mess'.

Preach it!!

Thanks for your in put.
Mark

 

[qualitytrec]

What's PSO?
Possible Survivable Options
or
Production Sign Off?

Part Sign Off
SREA= Supplier Request for Engineering Approval

Ann Landers always said, "No one can take advantage of you unless you let them."

My boss lets the customer, I let my boss. My payoff is insurance. My wife is pregnant with #6 and I need the coverage.

The situations you describe are all traceable back to the Contract Review stage. Now that you have a good track record on this customer, you can start incorporating some of your gripes as conditions of new contracts. This is your boss's job, supported by the information you give about the real costs involved in dealing with vague specifications.

Add a "concurrent engineering phase" (and charge) to the contract for dealing with the issues in Scenario 1.

I have mentioned this to him and he has tried but the customer bucks it. Being that they are the ones keeping our lights paid he backs down.

In scenario 2, insist on CAD of mating parts, even "gold standard samples" if available.

Some customers might even thank you for making them more efficient, if you point out the costs and delays in not being efficient.

We do insist on CAD and it does not come so still difficult. We have found the sure way to get the tolerances is to build the tools first. "If you build it they will come"

Thanks
Mark

 

[Bill Ryan - 2007]

This is a fairly common issue in our world (automotive). Although some Design Engineers seem to have a better understanding of GD&T nowadays, there are a lot of them still out in left field. I have a part drawing which has several feature control frames calling out 7 (or 8, or 9?) degrees of freedom . When I asked the Product Engineer to clean it up, his response was to "mark up a drawing with what you want to see and we'll get it changed". That's fine, but it will take 2 years for this particular customer to get a new print issued. What I did to :ca: was document exactly how we were measuring the feature (ignoring the fourth datum) and had him sign it. It is now a "part" of the part drawing (still no updated print).

One other huge issue we run into is when a customer decides to change a part from an iron forging (for example) to a die casting. Normally the time line for Start of Production (SOP) is pretty tight and all we can do is play around with gates and runners and possibly get some relief with radii. But, once approved, it's like pulling teeth to get the design so it is actually manufacturable. I know I'm going to get the "Contract Review" argument, but realistically, some issues just don't rear their ugly heads until you are running the part for some time. On one part I can remember, we had a Finite Element Analysis (FEA) done and we, internally, performed a Flow Analysis (EKK). Both "studies" showed the potential for a weak spot in the wall of the casting. We suggested a change to the design, but that would have delayed the project for a couple of weeks so the customer said to go ahead with the original design and "we'd work it out after PPAP". Sure enough, a year into the production phase of the part, a wall broke out in their assembly line. Here comes the "8D" and "Controlled Shipping - Level II". Basically our response was that we had told them about this possibility up front and they chose to not follow through. Our "Containment" was to 100% destructively test. Our "Corrective Action" was to redesign the wall area. Our "Preventive Action" was to "No quote" parts redesigned from a different material/process without complete FEAs and EKKs and following through with what those tests were telling us (there's a lot more to the story, but it's not necessary for this post). The customer couldn't come up with a limit for us to destructively test product so their assembly line with some sort of manual "Poka-Yoke" in it was the final test. The customer also mandated their Design Engineering Dept. to sit down with us and do what it took to make the issue go away. Within 3 months we had the new design implemented (plus took care of a couple of other "nagging" issues) and have run for 3 years with no more issues.

Not sure what I'm trying to prove here (did I wander too much?), but it certainly opened up our eyes to realize that suppliers (ours too!!) better "be in bed" with customers as early up front as possible.

 

[Marc]

You know, sometimes one has to take a realistic look and face someone down. I was asked in to help deal with a customer and I did what had to be done. No kid gloves. Facts. Data. It doesn't pay for a company to pay a customer to take their product. Disgruntled? Yes - The customer was. Tough. There were a number of other problems going on but I did the same thing with - Held their feet to the fire. At one point it was claimed by the customer that certain PPAP packages were never sent by my client. Unfortunately, the QE who was 'before me' didn't keep good records so many I couldn't even find in-house, much less prove they were sent. Luckily someone at the customer's facility found the PPAP packages in the drawer of an SQE who had 'gone elsewhere' and I heard about it through the grape vine. I confronted the customer 'big boys' and they fessed up.

It's a two way street...

Some years back I was managing a test laboratory. I was hired to do finite element analysis but walked in the door and was told to find out why the laboratory wasn't making money and fix it. I'm a biologist and that was my 'real' introduction to contracts and contract review. I looked at the numbers, found the problems and fixed them. We lost a few customers but who wants a customer who you are loosing money on?

What I learned was to identify the failure modes - not a hard problem when you look at the costs - the numbers.

I can say after I was done at the client I was referring to above, the contract was renegotiated with a very significant increase in price to the customer. Bottom line is I stared them down and with an expert who tore them up (they had a design person there and all the 'big shots' were there as well) the reality came out. I do know my client was holding their breath when I did a number of things. They weren't used to standing up to the customer and saying "Look, we like you as a customer but we can't make money on what we sell you so we'll finish the current contracts without change but that's it." In one case I literally stopped shipping a part until they agreed to provide certain information and a waiver. Needless to say, within a day the stuff hit the fan but I got what I asked for and we started shipping parts again.

Many times they are breaking their own rules, or telling YOU to break their rules. You have to stop that.

I advise all clients to do one thing if nothing else - make sure their contracts clearly spell out Terms and Conditions. Running changes through ECNs, for example, can be expensive and it should be CLEAR that the customer is responsible for extra incurred costs. On the other hand, I have seen many companies so poorly run that they had no idea what things were costing because they had no system to track what was happening. Heck - I've seen companies that didn't even really know what scrap was costing...

A last thought - You mentioned starting a contract without 'all the necessary information'. In that case you have to get something signed by the customer acknowledging that and that there will (may) be extra charges. Actually that should be part of any contract but it is especially important when one knowingly enteres into a contract with insufficient information.

My classic is from a client back in the early 1990's. Contract was with Ford for about 1.5 million pieces a year. Ford had a bad year and reduced their 'order' to about 750,000. OK - The contract was bid on 1.5m pieces. At 750k pieces they were loosing money. Since increase or decrease in volume wasn't addressed in the original contract, the company was literally paying Ford to take their parts. As you might guess, conditions of volume were addressed in future contracts.

Just some thoughts...

 

[Cari Spears]

What's PSO?...Possible Survivable Options

LOL, that's a good one.

 

[qualitytrec]

My classic is from a client back in the early 1990's. Contract was with Ford for about 1.5 million pieces a year. Ford had a bad year and reduced their 'order' to about 750,000. OK - The contract was bid on 1.5m pieces. At 750k pieces they were loosing money. Since increase or decrease in volume wasn't addressed in the original contract, the company was literally paying Ford to take their parts. As you might guess, conditions of volume were addressed in future contracts.

We have had the same issue with nearly every part on our floor quote it at x but it is ordered at d. Right now we have a part that we were told was going to run for one year with 8750 shipped every week. We quoted accordingly then they said we were responsible for packaging so we requoted based on the volumes they had told us and expanded our facilities. As soon as the packaging was acquired and the facilities were complete the orders dropped to 4000 a week and the program length was cut to 4 months. This on top of trying to get compensated for the steel increases has hit the pocket book of this small company pretty hard. My boss walks around looking dazed most of the time now and still does not seem to get the contract review at changes. I feel for him but he put the hole in the boat.

P.S. My boss gets mad when I talk tough to the customer. Currently we have no packaging (except the stuff we purchased fo rthe program mentioned above). The customer still wants us to ship . Figure that one out. When I confronted (confronted because I had asked emailed begged and pleaded already) the customer on that one he promptly called my boss and I am told I am bad and stand in the corner. How do we make bricks without straw oh Pharoh?