2019

STANDARDS OUTLOOK

Why Customer Related Processes Don’t Always Work

by Dale K. Gordon

One of the original driving factors behind the worldwide adoption of ISO 9000:2000 was the belief it would improve customers’ confidence in the ability of suppliers to meet specified needs, requirements and quality expectations.

When the customer is buying an item, article or commodity designed, specified, packaged and delivered in a form and format completely determined by the supplier or organization offering the product, the relationship is fairly straightforward.

From fast food to automobiles, the customer chooses from among the offerings of different suppliers based on some need, desire or set of criteria. The customer-supplier relationship is then based on such factors as fitness for use, value, warranties and service of the products or offerings.

There may be some degree of customization (do you want pickles on that hamburger?), but in most cases the customer is picking among predetermined sets of constraints the supplier has decided to put in place. In these cases customer satisfaction is based not necessarily on contractual arrangements but on agreed terms and conditions of sale and service entered into by the customer and supplier.

The customer in these situations is seeking satisfaction in matching his or her needs through the particular offerings of the suppliers. The customer does not determine the design parameters, manufacturing methods, materials or methods of storage, transportation or even delivery. These are left to market forces that cause design and manufacturing to evolve based on customer preferences and desire for improved products at competitive prices.

In the previous scenario, compliance or use of ISO 9001 is not something highly valued by the customer, but it can give confidence the product was produced in a controlled and organized fashion and the supplier offering the product has processes to consistently produce products and services designed to increase customer satisfaction.

When There Are Requirements

A different set of circumstances exists in the customer-supplier relationship when the customer is inherently or intimately involved with specifying requirements the supplier must fulfill.

In these situations, suppliers are usually chosen for their knowledge, expertise, technology or capability to meet some customer specified criteria for the product or service. Acknowledgment of the implementation of a recognized and understood quality management system (QMS) such as ISO 9001 has more significance because the customer can have a higher degree of confidence the supplier will deliver to the customer’s stated needs when work is performed inside a defined and managed set of processes.

Most customers tend to overlook their roles and responsibilities in making such relationships work. In a highly competitive marketplace, many organizations tend to rely on the supplier to fully understand the customer’s wants, needs and requirements. In fact, miscommunication and supposition frequently can lead to poor customer satisfaction, if not catastrophic results.

Full understanding of clause 7.2 on customer related processes can prevent this (see “Clause 7.2 of ISO 9001”).

This clause is the essential requirement in the success of any business relationship and the ability to satisfy the customer. My experience indicates it is the one business process that gets little attention in both the customer’s evaluation of a supplier’s capability and the supplier’s assessment of its own QMS, both internally and externally (the third-party assessment process).

Pitfalls

In a highly competitive marketplace, suppliers are hesitant to challenge customers and often agree to take on work or contracts without fully evaluating the implications of the customer’s requirements.

Customers often do not pay close attention to fully specifying or describing what they want the supplier to do, specifying requirements that are not fully applicable or do not describe needs in sufficient detail for the supplier to interpret them correctly.

In this advanced electronic age, some customers effectively hide requirements from suppliers by referencing volumes of terms and conditions in electronic files on multiple websites suppliers must first find before discerning for themselves what the customer wants.

A classic example is the procurement of multimillion dollar products (think airplanes to oil platforms) when the customer comes to “buy off” or accept delivery of the product. What is a primary cause for rejection? I would tend to guess it is a visual or aesthetic quality of the product: The paint has a blemish, or there is a bad looking weld or cosmetic problem with the item. A costly item should visually represent its worth, but the important issues are what the customer’s cosmetic requirements were and how they were specified in the original order acceptance process.

ISO 9001, clause 7.2, says an organization should determine requirements specified by the customer, including the requirements for delivery and postdelivery activities and requirements not stated by the customer but necessary for specified or intended use, where known.

Typically, many issues arise from perceived or real expectations that are not specified and not known or required for intended use, and hence are not planned for by the supplier.

In making procurement decisions, customers tend to spend a great deal of time, energy and resources on other aspects of a supplier’s ability to provide a product—usually areas such as technical or manufacturing capability, delivery, distribution and cost or price negotiations as well as the legal terms and conditions of a contract.

Communication

The processes for communications—typically from the customer to the supplier—are largely ignored. Time and time again, the cause of customer satisfaction failures can be pinpointed to the supplier’s failing to fully understand the customer requirements and communicate those requirements internally.

Failures also prevail because customers fail to fully define their needs or get agreement or confirmation from suppliers that they understand what the customer wants. Sometimes customers even change requirements without proper acknowledgment and understanding on the part of the supplier.

The ability of the supplier to fully and accurately meet customers’ requirements is inversely proportional to the complexity of the procurement, from both a technical and terms and conditions standpoint.

The rate of compliance drops even more dramatically when the supplier is the pseudo design and manufacturing agent on behalf of the customer, and the customer expects the item to be as if the customer designed and produced it within its own complex system.

If these situations were truly analyzed, I suspect we would learn more time spent between customers and suppliers specifying, determining and understanding requirements of an order is positively related to customer satisfaction.

To be compliant with ISO 9001, suppliers need to be more vigilant in ensuring they have a complete understanding of the customer’s expectations and have properly communicated those expectations within their organizations. Suppliers also need to ensure their understanding of customer expectations is communicated back to and confirmed by the customer.

Customers also have an obligation to put effort and resources s p into communicating with suppliers. In this area I believe ISO 9001 is insufficient, with its only mention being in clause 7.4.2, which says purchasing information should describe the product to be purchased, including where appropriate:

  • Requirements for approval of product, procedures, processes and equipment.
  • Requirements for qualification of personnel.
  • QMS requirements.

In this clause, the customer’s processes for communicating with suppliers are not proportional, nor do they match the supplier’s needs of clause 7.2. In complex and noncommodity procurements, customers should examine the processes and resources that allow the supplier to fully comply with the requirements of the standard and spend more energy in the supplier communication process.

Correspondingly, suppliers need to protect themselves and insist customers complete the acknowledgment and agreement processes of clause 7.2 before final acceptance of orders, commencement of work and expenditure of resources.

Many standard terms and conditions of purchase orders issued by customers say something to the effect that “any shipment of goods ordered or performance of any services called for herein shall constitute acceptance of all terms and conditions of this order.” This occurs even when the supplier has not agreed in writing or acknowledged it will be able to perform to the customer’s expectations, especially when some of the customer’s expectations are buried in other documents or specifications and are only discovered when problems arise or failures of the product occur.

Customers and suppliers both have to be willing participants for any organization to claim a robust, fully functional QMS. The requirements of clause 7.2 cannot be performed in a vacuum. Even when suppliers are eager for work and want to do their best to satisfy their customers, it still takes proper and detailed input from the customer for the customer-supplier relationship to be successful.


DALE K. GORDON is vice president of quality for MPC Products in Skokie, IL. He is an ASQ Fellow, past chair of the American Aerospace Quality Group and one of the writers of the AS9100 aerospace standard. Gordon earned a bachelor’s degree in industrial engineering from General Motors Institute (now Kettering University) in Flint, MI, and an MBA from Butler University in Indianapolis.


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