This month's question

What is the technical difference between a performance part and a functional part?

Our response

Before answering this question, it’s important to first understand what is meant by “performance part” and “functional part,” and how they’re viewed by the two parties that handle them: the producer and the consumer. The producer manufactures the parts, and the consumer needs (purchases) those parts and uses them in production.

While a producer’s intent is to have all the parts it manufactures be performance parts, sometimes there are manufacturing issues that result in the parts not meeting specification. The producer is the party that determines whether a manufactured part is a performance part.

In some instances, manufactured parts that aren’t performance parts are functional parts. But only the part's consumer can determine whether a nonperformance part is functional.

While all performance parts should be functional, not all functional parts are performance parts. A functional part is not a performance part when some aspect of production or a finished-part quality characteristic is out of specification.

To break this down to a more granular level, consider the following hypothetical situation: A consumer needs a certain performance part to manufacture its finished product—its inventory of performance parts is zero. Currently, the consumer’s only qualified vendor is experiencing manufacturing issues. The consumer is concerned that it is rapidly approaching an out-of-stock situation with its finished goods inventory and desperately needs performance parts from the producer. Relative to performance parts, the consumer understands that:

  • All the performance part specifics have been met.
  • Upon purchase of the performance part, either a purchase order or part certification shall serve as evidence that the part is what the consumer thought it was purchasing.

The producer’s goal is to produce the performance parts the consumer needs the first time, every time. The producer defines a performance part as a part that meets all the production specifications that support the part. This includes (but is not limited to):

  • Using approved raw materials per the bill of materials.
  • Using qualified manufacturing equipment with all manufacturing parameters falling into the manufacturing specification allowable tolerances.
  • Using a qualified manufacturing process.
  • Using a process-certified manufacturing associate to manufacture the part.
  • The part meeting the drawing and inspection document requirements.
  • The part being certified upon sale to consumer.

If a producer manufactures a performance part, it can sell the part for its intended use and certify that the part conforms exactly to what was qualified in the consumer’s application. With this certification, the producer assumes all the risk associated with the consumer’s use of the performance parts.

In the hypothetical example, because neither the consumer nor the producer have performance parts in their inventories, and the producer is having difficulty producing performance parts, the consumer may decide to ask whether the producer has any nonperformance parts in its hold or quarantine areas. If the producer says yes, the consumer must decide whether any of those parts are functional.

Any nonperformance part may be deemed functional by the consumer. If the consumer wants to use the nonperformance part in its production, the consumer must issue a deviation to the producer prior to the sale of the nonperformance parts.

If the consumer decides to use a nonperformance part:

  • The producer must provide the consumer with specific information about why the parts are nonperformance, which must be noted on the consumer’s deviation request.
  • The consumer assumes the risk of using the nonperformance parts because it—not the producer—deemed the parts functional.
  • The producer’s nonperformance parts are now the responsibility of the consumer.

As you can see, there are multiple facets to consider when differentiating between a performance part and a functional part. The intent of this answer is to get you thinking holistically about the implied definitions.

Additional resources

If you have manufacturing experience, this narrative may sound all too familiar. But if you don’t have background in this area or these are new considerations for your organization, you may need help understanding the way the producer and the consumer approach the concept of performance and functional parts.

If you’ve never been in a manufacturing environment and have never been concerned with inspection plans and processing parameters, there’s a good chance you’ve never had to worry about being a consumer of performance parts or functional parts. The question becomes, “Who can I ask for help?”

If there’s someone in your network who has experience in this space, consider reaching out to him or her. If the answer still is unclear or you don’t have anyone in your network who can help, consider reaching out to a consultant or consulting firm that has expertise in this area. At my firm, for example, we work alongside clients and walk them through the process. This not only provides them with the answers they need, but also with tools they can implement internally going forward.


The author thanks Fang Zhou, senior consultant at Valeocon Management Consulting, for his input into this response.

This response was written by Keith Wagoner, senior process improvement consultant, BlueLine Associates, Raleigh, NC.

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