When PPAPs are not a contractual requirement

#1
We have a commercial customer who has started asking us for PPAPs via email requests. I'm hesitant to just start providing PPAPs because we are not required to do so in the customer's contract / PO. This applies to new products, and for revisions to existing products. My plant manager is getting annoyed with me because I keep asking why the customer suddenly need PPAPs. My company's previous owners refused to provide PPAPs, but the customer kept buying product from them regardless. I feel like the customer's current requests are unreasonable, considering they've been doing business fine without PPAPs. All that said, I'm probably fighting a loosing battle here, and I know that I probably need to just shut up and start producing PPAPs. On the other hand, shouldn't we at least be charging the custoner for these reports? What would be a good rate to charge?
 
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Jim Wynne

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#2
When a customer presents new requirements, they should be told that pricing will be revisited. Sometimes this is enough to get them to back off. You should make certain, if you haven't already, that there's nothing in the contract that references some other document(s) where the "new" requirement may be found. As far as pricing is concerned, it should be a matter of determining what the new requirement adds to costs.
 
#3
Thanks Jim. Good point, I still need to dig through the contract and make sure the new requirement isn't buried in there somewhere, but I doubt it. I don't get the impression that this customer really knows what they're doing. I come from aerospace, where these things are usually all fleshed out. I'm not even sure if this customer knows *why* they're requesting PPAPs.
 

outdoorsNW

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#4
At a past job, I saw plenty of cases where the PPAP was asked for after the contract is accepted and production had begun. Not only is there the cost that is not in the contract, but sometimes the required data for the PPAP requires changes to how the product is inspected, such as a larger sample size, collecting numerical data rather than go-no go, and so on. If the job is not set up correctly for the PPAP, non-standard data won't be collected by production.

In a few cases, the person asking for the PPAP wanted a larger sample size than possible with the quantity ordered! [This happened more than once; clearly people at some customers were not talking to each other.]
 

Miner

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#5
Out of curiosity, how do you verify to yourself that you are meeting the customer's requirements? I would hope that you have measured, tested, etc. the product to confirm that it meets requirements. Do you plan out your quality system, so you know what ongoing controls are required to assure the product continues to meet requirements? In all reality, you probably already have 80% of the documents required in a PPAP.

As a customer, this always irritated me when a supplier refused to supply a PPAP. I found the most vocal in refusing also tended to have the most out-of-spec characteristics.
 
#6
Out of curiosity, how do you verify to yourself that you are meeting the customer's requirements? I would hope that you have measured, tested, etc. the product to confirm that it meets requirements. Do you plan out your quality system, so you know what ongoing controls are required to assure the product continues to meet requirements? In all reality, you probably already have 80% of the documents required in a PPAP.

As a customer, this always irritated me when a supplier refused to supply a PPAP. I found the most vocal in refusing also tended to have the most out-of-spec characteristics.
We do standard visual & dimensional inspection, and testing when required. We are not yet ISO9000 certified, but plan to be by next year. If we were already ISO certified, you are correct, we would have many of the requirements in place already to make PPAPs much easier for us. I am currently vocal about it because we're a small company of 40 people. I am the only engineer in house, covering much of what a manufacturing engineer AND and quality engineer would need to do, as well as plant manager duties. I'm currently putting out fires after the previous owners left the place in disrepair. For example, one of our computers died, and it was connected to 3 different production label printers. I've spent the last week figuring out how to recover the lost files and get us up and running again. Without labels, we can't ship any product. PPAPs seem extremely unnecessary at the moment.

As a customer, how did you flow down the requirement for PPAPs to your supplier? Was it a contractual requirement?
 
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Miner

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#7
As a customer, how did you flow down the requirement for PPAPs to your supplier? Was it a contractual requirement?
Not at first. Most of our suppliers were willing to provide them, but we did get a few that pushed back and wanted to charge for them. Our response was that if they wanted to get paid for their tooling, they better prove to us that the product that came from the tooling met our requirements. We did eventually start adding it to the contracts, but those same suppliers apparently didn't read the contracts, and still pushed back. As I said, the ones that fought the most were the least compliant with meeting requirements.
 
#8
Not at first. Most of our suppliers were willing to provide them, but we did get a few that pushed back and wanted to charge for them. Our response was that if they wanted to get paid for their tooling, they better prove to us that the product that came from the tooling met our requirements. We did eventually start adding it to the contracts, but those same suppliers apparently didn't read the contracts, and still pushed back. As I said, the ones that fought the most were the least compliant with meeting requirements.
Haha, that's a fair point. We don't charge for tooling though. In my experience, the tough aproach works both ways. I've lost good suppliers becasue my boss insisted on coming down hard on them. They stopped quoting our jobs, because they had other customers banging on their door, and they knew they were good on cost, delivery, and quality.
We are in a simlilar situation, and I'm questuoning whether we want to keep this customer. I'm not really concerned about charging them for PPAP, I just need to know they need one *before* we start quoting the job. I also need to know which level PPAP they're going to impose, so I know how many hoops we have to jump through. Bear in mind that I regularly need to kick their prints back to them as unmanufacturable, full of mistakes, etc. That's the kind of customer I'm dealing with. Lowest margins out of any of our customers, and they apparently insist on price reductions every year lol. Who needs customers like this?
 

Miner

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#9
I understand. I will add that forcing the issue on PPAPs (as well as making the suppliers share our pain) make a 99% reduction in supplier PPMs.
 

Jim Wynne

Staff member
Admin
#10
Out of curiosity, how do you verify to yourself that you are meeting the customer's requirements? I would hope that you have measured, tested, etc. the product to confirm that it meets requirements. Do you plan out your quality system, so you know what ongoing controls are required to assure the product continues to meet requirements? In all reality, you probably already have 80% of the documents required in a PPAP.
Ah, but it's not nearly that easy. Nearly every job shop customer has requirements for new-part approval. Sometimes it's as simple as a dimensional report, samples and material test reports. One of the things we don't know here is what the supplier means by "PPAP." PPAP is the end point of the APQP process, and if that whole AIAG process is expected of a supplier, it's not as simple as filling in the blanks. I don't need for my customers to tell me what I should be doing, especially if what I have been doing has been sufficient in the past. If the customer wants to impose new requirements, there will almost inevitably be new costs involved, and to say that it shouldn't be more costly because the supplier should be doing all of those things anyway doesn't cut it.

As a customer, this always irritated me when a supplier refused to supply a PPAP. I found the most vocal in refusing also tended to have the most out-of-spec characteristics.
There are many suppliers who have refused automotive work because of the onerous requirements, heartache and pain that goes with dealing with automotive customers. If this is something new to this particular customer, there will be all kinds of problems over the specific requirements, I guarantee. If a customer has a number of suppliers who have trouble meeting the specifications, that's a different problem that PPAP won't cure. That customer should know what their suppliers are doing with regard to advance planning and such, and dropping a new requirement but not expecting to pay for it won't help anything.
 
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