Who charges for PPAP's? Is it common to charge customers for PPAP's?

S

Steven Sulkin

#1
I understand its common to charge customers for PPAP's. Do a lot of you do this? How much do you charge?

Thanks,

Steve.
 
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Howard Atkins

Forum Administrator
Staff member
Admin
#2
We do not charge for PPAP as PPAP but we add the cost into our quotation as part of our expenses.
Despite this I received a letter from a customer that notified me that plastic material was being changed by the supplier and how much would it cost him to receive a new PSW. He was not sure what he needed as he had to ask GM but he said he would return for a quote.
 
K

Kate Kliebhan

#3
We do not charge for PPAP at the moment, but may in the future. One of our suppliers charges us $300 per part to do their end of the PPAP, however.
 
#4
We roll a $250-$500 cost for "paperwork preparation" into the per piece cost on our quotations. (We sell large lots, sometimes into the tens-of-thousands of pieces in a given lot).

What's nice is, the per piece price never goes away, so after that, it is "gravy."
 
J

Jim Biz

#5
We don't charge either but I have inquired of some of our customers and they say that "SOME DO" charge... So gulible me went and gathered up information on how much the charge "should be" just to recover the Labor & Time input expense of preparing all those customer/plant specific forms - Layouts,Fmea's, Process plans design/process validations, Material, Heat treat, Plating, Painting certifications, cp/cpk studies "life of product" record keeping tracking etc.

What I came up with was right at 150.00 per part.. when we exceeded 300 reports in a single year and approached our customers Purchasing departments concerning the recovery of these costs they politely told us that the information was very good and quite understandable BUT it was "in their view" (and would remain) our cost of doing business. We even complete Second level suppliers information at no charge as a 3rd level subcontractor (their view was the same as our other customers "if you don't supply it free of charge we'll simply opt to find a supplier that will..

Goes to show just how far "customer satisfaction" can be pushed. Sad part is that many times the QA department demands added results without explaination to the purchaseing depts concerning what labor or actions are involved in complying with the request.

I won't even go into the differences in Prepration criteria and return validation communications form plant to plant within the same corporations.

Sorry if this sounds like sour grapes - I know there is a VALID place for added attention in some products (medical Or Nasa products for instance) but personal expierence has show me that It's possible there are more bad things that occur with PPA's than good ones. - All those pieces of signed paper -- all too often do not make the actual product any better than it would have been without them.
 

Marc

Hunkered Down for the Duration
Staff member
Admin
#6
Originally posted by ALM:

We roll a $250-$500 cost for "paperwork preparation" into the per piece cost on our quotations. (We sell large lots, sometimes into the tens-of-thousands of pieces in a given lot).
Please explain to me 'per piece cost'. If you make 10's of thousands and charge $250-$500 for each piece (per piece) that's a lot of money.
 

Marc

Hunkered Down for the Duration
Staff member
Admin
#7
Originally posted by Howard Atkins:

We do not charge for PPAP as PPAP but we add the cost into our quotation as part of our expenses.
One time charge?
 
#8
Charging for PPAP preparation would be an acceptable business practice,however, IMO the entire cost of implementation and upkeep of the QS9000 process should be figured into contract negotiations.
 
#9
Originally posted by Marc Smith:
Please explain to me 'per piece cost'. If you make 10's of thousands and charge $250-$500 for each piece (per piece) that's a lot of money.
Sorry for any lack of clarity. When I said we "roll the cost" into the "per piece cost" of a given run, I meant to say that the $500 is divided among the quantity of the first production run quantity. So, if we make 50,000 pieces for the first production run, we quote an additional $.01/piece to cover PPAP preparation. I probably should have written that we "bury the cost of the PPAP into our per-piece cost over a production run."

Could you imagine?!?!? $500 per piece for PPAP?!?!

Of course, if I could GET that much... I'd open my own PPAP preparation business!



[This message has been edited by ALM (edited 19 April 2000).]
 
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