2019

EXPERT ANSWERS

Defining the customer

Q: My organization machines raw material to customer specifications. Usually, my organization buys the raw materials we machine, but sometimes, customers send us raw material, such as forgings and castings, which we machine to their specifications. Occasionally, the material we receive from the customer is defective, for example having excess porosity or rust. These defects are not acceptable to the customer, but they send the parts to us for machining. If we machine the parts and return them in the same condition (with excess rust and porosity), the customer issues a rejection to us.

Should these customers who provide raw material be classified as customers or suppliers, and be logged into the supplier base and receive reports based on their quality? I think any customer that provides raw material should be treated as a vendor or supplier. Defective raw material received from that supplier should be rejected and quarantined, and the supplier should provide disposition and a corrective action. But not everyone agrees with me.

Is there a section in ISO 9001 that covers this situation? We have sent the customer the following definitions from ISO 9001:

  • ISO 9000:2005—Quality management systems—Fundamentals and vocabulary, Clause 3.3.5—Customer: organization (clause 3.3.1) or person that receives a product (clause 3.4.2). Examples include consumer, client, end user, retailer, beneficiary and purchaser. A customer can be internal or external to the organization.1
  • ISO 9000:2005, Clause 3.3.6—Supplier: organization (clause 3.3.1) or person that provides a product (clause 3.4.2). Examples include producer, distributor, retailer or vendor of a product, or provider of a service or information. A supplier can be internal or external to the organization. In a contractual situation, a supplier is sometimes called "contractor."2 In this definition, I think a producer could also be the customer.
  • ISO 9001:2008—Quality management systems—Requirements, Clause 7.5.4—Customer property: The organization shall exercise care with customer property while it is under the organization’s control or being used by the organization. The organization shall identify, verify, protect and safeguard customer property provided for use or incorporation into the product. If any customer property is lost, damaged or otherwise found to be unsuitable for use, the organization shall report this to the customer and maintain records (see clause 4.2.4). Customer property can include intellectual property and personal data.3

Question submitted via
ASQ’s Ask the Experts Blog
http://asqasktheexperts.com

References

  1. International Organization for Standardization, ISO 9000:2005—Quality management systems—Fundamentals and vocabulary, Clause 3.3.5—Customer.
  2. International Organization for Standardization, ISO 9000:2005—Quality management systems—Fundamentals and vocabulary, Clause 3.3.6—Supplier.
  3. International Organization for Standardization, ISO 9001:2008—Quality management systems—Requirements, Clause 7.5.4—Customer property.

A: Bottom line, the customer is still the customer even if it supplies the materials to be serviced or machined. The customer is the organization or person that receives a product or service.1
You point out that these customers purchase a service from your organization. Therefore, all the clauses that apply to customer satisfaction and customer requirements apply.

Clause 7.5.4—Customer property2 also applies in this situation. This is about ownership of the property. Property can include personal data or intellectual property. You don’t own the property so you need to care for it, especially because it belongs to your customer. The customer may supply it because it is able to get a better deal, or perhaps it doesn’t trust your purchasing and incoming inspection controls. It does not matter why the customer is providing it, as long as everyone understands its responsibilities for verification that the customer-supplied product meets requirements.

One possible trap is when defective product is supplied by the customer. You use it as required by the customer, but the customer complains about the end product and blames you. In your case, the responsibilities for verification have not been clearly defined. Clause 7.5.4, the customer-supplied product clause, states that your organization must verify the customer-supplied product, report it if it is unsuitable and keep a record.3 A savvy auditor might determine your organization is not conforming to the requirements of this clause.

Stepping outside the ISO box, I can offer advice from my personal experience as a former plant manager and business manager, though my advice may or may not be applicable for your situation. In many organizations, there is a divide between sales and manufacturing teams, and there is a belief that the sales team makes the money and manufacturing team spends it.

In actuality, sales and marketing are the drivers to maximize revenue and manufacturing and operations are the drivers to minimize cost. Together, they create the value-added margin that provides salaries, benefits and profit for investors. The sales team does not want to do anything that would upset the customer, and the operations team does not want to commit to anything that increases cost.

I recommend a meeting between the interested parties in operations and marketing. Put the facts on the table and come up with a win-win-win solution to this problem—for operations, sales and the customer.

My comments represent my personal observations and conclusions and not that of any organization of which I am a member.

J.P. Russell
Founder and managing director
QualityWBT Center for Education
Gulf Breeze, FL

References

  1. International Organization for Standardization, ISO 9000:2005—Quality management systems—Fundamentals and vocabulary, Clause 3.3.5—Customer.
  2. International Organization for Standardization, ISO 9001:2008—Quality management systems—Requirements, Clause 7.5.4—Customer property.
  3. Ibid.

Incoming inspections

Q: How should I implement an incoming inspection for polymers at each water filtration plant within my organization? What would the sampling plan be if I receive the polymers in different containers and even trucks?

Brenda Rivera
Guaynabo, Puerto Rico

A: Polymers typically lend themselves to testing (chemical analysis) rather than inspection. Therefore, incoming polymers should be tested to verify they possess the characteristics and quality that is important to you, the customer.

Polymers are made in batches. Therefore, each batch should be tested. After a batch is tested and accepted, there is no need to perform testing from a given container or a truck so long as the polymer delivered is from the tested batch.

Typically, customers ask their polymer suppliers to submit a certificate of compliance (CoC) for each batch of the polymer produced and delivered or received. CoC is generally a test report by a testing laboratory agreed upon by the customer and the supplier, indicating various test results meet the requirements. Some suppliers perform testing in their own laboratories while some suppliers engage services of an independent testing laboratory. CoC is essentially a document that states that the delivered shipments meet the customer requirements. Most customers do perform their own testing—sometimes at random—to verify the CoC.

Therefore, an incoming inspection program for polymers at each water filtration plan would include:

  1. Obtaining a CoC for each shipment. If a shipment consists of only one batch, one CoC would be fine. If a shipment consists of polymers from more than one batch, a CoC for each batch should be required.
  2. Periodically verifying CoCs by your own testing periodically.

Some customers do not want to deal with CoC for each shipment because it increases their work. Therefore, they require suppliers to produce CoC on demand on a random basis. This, of course, depends on the level of trust between suppliers and customers.

Pradip Mehta
Mehta Consulting LLC
Coppell, TX


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