Automotive Quality Systems Handbook Episode 7 ppsx

The standard allows for undocumented verbal orders but requires that the order requirements are agreed before their acceptance. The third party auditor cannot confirm conformity with this requirement as there will be no objective evidence to substantiate the transaction other than the payment invoice. If the supplier confirms the agreement in writing a written statement of requirement exists. The standard does not stipulate that the agreement has to be documented only that the requirements need to be documented regardless of who produced them. The only evidence that the requirements were adequately defined is therefore the payment from the customer against the suppliers invoice. Resolving differences (4.3.2.1b) The standard requires that before submission of a tender, or acceptance of a contract or order (statement of requirement), the tender, contract, and order are reviewed to ensure that any contract or accepted order requirements differing from those in the tender are resolved . There is a slight conflict in this clause as it requires that before acceptance of an order, you need to ensure that any differences between your tender and the accepted order requirements are resolved. Clearly if you have not accepted the order you dont need any accepted order requirement. But this small ambiguity doesnt detract from the essence of the requirement. Whether or not you have submitted a formal tender, any offer you make in response to a requirement is a kind of tender. Where a customers needs are stated and you offer your product, you are implying that it responds to your customers stated needs. You need to ensure that your tender is compatible with your customers needs otherwise the customer may claim you have sold a product that is not fit for purpose. If the product or service you offer is in any way different than the requirement, you need to point this out to your customer in your tender or in negotiations and reach agreement. Always record the differences in the contract. Dont rely on verbal agreements as they can be conveniently forgotten when it suits one party or the other. Ensuring that the supplier has the capability to meet contractual requirements (4.3.2.1c) The standard requires that before submission of a tender, or acceptance of a contract or order (statement of requirement), each tender, contract, and order be reviewed to ensure that the supplier has the capability to meet contract or accepted order requirements . Contract review 227 auto203.qxd 10/04/00 21:32 Page 227 You must surely determine that you have the necessary capability before accepting the contract as to find out afterwards that you havent the capability to honor your obliga- tions could land you in deep trouble. It is important that those accepting a contract are in a position to judge whether the organization has the capability of executing it. You have to consider that: l You have access to the products and services required. l You have a license to supply them if appropriate. l You have the technology to design, manufacture, or install the product. l You have the equipment to utilize the data in the form that the customer may provide to you (e.g. CAD/CAM, NC Tapes, Advanced Shipment Notification). l You have the skills and knowledge to execute the work required in the time required and to the specified standards. l There is sufficient time to accomplish the task with the resources you have available. l You have access to appropriate subcontractors and suppliers. l There is a secure supply of the necessary materials and components. l You can meet the terms and conditions imposed by your customer. l You are prepared to be held to the penalty clause (if specified). If you dont have any of the above, you will need to determine the feasibility of acquiring the relevant license, the skills, the technology, etc. within the time-scale. Many organizations do not need staff on waiting time, waiting for the next contract. It is a common practice for companies to bid for work for which they do not have the necessary numbers of staff. However, what they need to ascertain is from where and how quickly they can obtain the appropriate staff. If a contract requires specialist skills or technologies that you dont already possess, it is highly probable that you will not be able to acquire them in the time-scale. It is also likely that your customer will want an assurance that you have the necessary skills and technologies before the contract is placed. No organization can expect to hire extraordinary people at short notice. All you can rely on is acquiring average people. With good management skills and a good work- ing environment you may be able to get these average people to do extraordinary things but it is not guaranteed! 228 Contract review auto203.qxd 10/04/00 21:32 Page 228 In telephone sales transactions or transactions made by a sales person without involving others in the organization, the sales personnel need to be provided with current details of the products and services available, the delivery times, prices, and procedures for varying the conditions. Identifying cost elements (4.3.2.2) The standard requires the supplier to have a process for identifying the cost elements or price in developing quotations . This requirement is an extension of clause 4.3.2.1. It places further constraints on the tendering process. Customers need confidence that supplier quotations have been developed using valid data. They want to be sure that you are capable of maintaining the price quoted and not underestimating or inflating material costs. By employing a process for developing quotations using established metrics you reduce variations when quotations need to be frequently produced by different people. An approach to take would be to establish a database of pricing data that includes: l Labor costs l Component and material costs l Overheads l Packaging costs l Transportation costs l Development recovery costs l Profit margins l Handling costs, where incoming material is stored and shipped without value added l Discounts for quantity The process would need to include: l Means to capture pricing data from suppliers Contract review 229 auto203.qxd 10/04/00 21:32 Page 229 l Means to capture internal cost elements l Means to select product/service specification variables and associated prices l Means to update the data periodically l Means to generate quotations using the data The third party auditor is entitled to look at the elements making up the quotation to verify that all appropriate elements have been included, but will not examine the values attributed to these elements. Meeting customer-specific requirements (4.3.2.2) The standard requires that the supplier ensure that any customer-specific requirements are met. Customers may have specific requirements that apply to the contract acquisition processes, such as limitation on profit, special quotation forms, validity of quotation, etc. VDA 6.1, for example, has a requirement for the marketing function to be incorporated into the operational organization. Amendments to contract (4.3.3) The standard requires suppliers to identify how an amendment to a contract is made and correctly transferred to the functions concerned . There may be several reasons why a customer needs to amend the original contract  customer needs may change, your customers customer may change the requirement, or details unknown at the time of contract may be brought to light. Whatever the reasons you need to provide a procedure for amending existing contracts under controlled conditions. On contracts where liaison with the customer is permitted between several individuals  e.g. a project manager, contract manger, design manager, procurement manager, manufacturing manager, quality assurance manager  it is essential to establish ground rules for changing contracts, otherwise your company may unwittingly be held liable for meeting requirements beyond the funding that was originally predicted. It is often necessary to stipulate that only those changes to contract that are received in writing from the contract authority of either party will be legally binding. Any other changes proposed, suggested, or otherwise communicated should be regarded as being 230 Contract review auto203.qxd 10/04/00 21:32 Page 230 invalid. Agreement between members of either project team should be followed by an official communication from the contract authority before binding either side to the agreement. Having officially made the change to the contract, a means has to be devised to com- municate the change to those who will be affected by it. You will need to establish a distribution list for each contract and ensure that any amendments are issued on the same distribution list. The distribution list should be determined by establishing who acts upon information in the contract and may include the technical or design managers, the production and procurement managers, the test, commissioning, and installation managers, and the quality manager or management representative. Once established, the distribution list needs to be under control because the effect of not being informed of a change to contract may well jeopardize delivery of conforming product. Maintaining records of contract reviews (4.3.4) The standard requires records of contract reviews to be maintained . Each order or contract should be signed by a person authorized to accept such orders or contracts on behalf of the organization. You should also maintain a register of all contracts or orders and in the register indicate which were accepted and which declined. If you prescribe in your contract acquisition procedures the criteria for accepting a contract, the signature of the contract or order together with this register can be adequate evidence of contract review. If contract reviews require the participation of several departments in the organization, their comments on the contract, minutes of meetings, and any records of contract negotiations with the customer represent the records of contract review. It is important, however, to be able to demonstrate that the contract being executed was reviewed for adequacy, for differences in the tender, and for supplier capability before work commenced. As stated previously, if you dont have written contracts you cant have records of contract reviews. The minimum you can have is a signature accepting an assignment to do work or supply goods but you must ensure that those signing the document know what they are signing for. Application of requirements Consider, for example, the transaction made between a person purchasing a replace- ment lamp for a motor vehicle. How might these requirements apply in such a case? l The customer inquires whether the supplier has a lamp for a motor vehicle. Contract review 231 auto203.qxd 10/04/00 21:32 Page 231 l The supplier obtains details of the type, model, and year of the vehicle, which lamp in which position, and then accesses the stock computer to identify the part num- ber. l The supplier then confirms with the customer that the correct lamp has been locat- ed. (The supplier is ensuring that the requirements are adequately defined. There is no document unless the customer makes the transaction by mail and there is no tender because the customer did not request one. These requirements of clause 4.3.2.1 are therefore not applicable.) l The supplier then establishes that the identified part is in stock. (The supplier is now establishing the capability of meeting the requirement.) l Having determined that the item is in stock and informed the customer of the price, the supplier presents the lamp together with an invoice to the customer for payment. (The invoice is the record of the contract review.) l Should the customer change the requirement, a new transaction will commence. (This new transaction is the method by which amendments to contract are made.) Task list 1 Define what constitutes a contract for your organization. 2 Determine when a formal review of a contract is necessary. 3 Determine what constitutes a review of a contract. 4 Prepare a procedure for conducting formal contract reviews. 5 Determine which functions in the organization should participate in contract reviews. 6 Decide how you will obtain input, comment, and participation in contract reviews. 7 Determine who should receive copies of the contract. 232 Contract review auto203.qxd 10/04/00 21:32 Page 232 8 Establish criteria for determining whether sufficient information has been provided in the contract. 9 Establish a means for the reviewers to determine whether your organization has the capability to meet the contract requirements. 10 Prepare a contract amendment procedure covering incoming and outgoing amendments. 11 Establish who will hold the records of contract reviews, where they will be filed, and who will have access to them. 12 Establish a tendering process in which cost elements are identified, captured, and used to provide valid quotations. Contract review questionnaire 1 How do you review tenders, orders, and contracts? 2 How do you coordinate contract reviews? 3 In what documents are the channels of communication and interface with the customer defined? 4 How do you ensure that requirements are adequately documented before they are accepted? 5 How do you ensure that requirements differing from those in the tender are resolved before contract or order acceptance? 6 How do you ensure that you have the capability to meet the contractual requirements before accepting a contract or order? 7 How are amendments to contracts made and correctly transferred to the functions concerned? 8 In what documents do you record the results of contract reviews? 9 How do you ensure that valid cost elements and values are utilized in developing quotations? Contract review 233 auto203.qxd 10/04/00 21:32 Page 233 Dos and donts L Dont accept any contract unless you have established that you have the capability to satisfy its requirements, and you have agreement on the payment to be made on completion and when completion is required. J Do establish what constitutes acceptance by the customer. J Do ensure that those determining compliance with contracts have access to current versions of the contract. J Do read the small print and any reference documents before you accept the contract. J Do declare any areas where your offer differs from that required and state the reasons in terms advantageous to the customer. J Do establish the boundaries affecting what you and the customer are responsible for. L Dont make promises to your customer that your staff will not be able to honor. J Do check your sources of data, prices, technical specification, etc., and that they are current and applicable to the specific terms of the contract. J Do issue contract amendments on the same distribution list as the original contract. L Dont imply acceptance of a change to contract in any communication other than a formal contract amendment. 234 Contract review auto203.qxd 10/04/00 21:32 Page 234 Chapter 4 Design control Scope of requirements This chapter deals with requirements for the control of any design activities carried out by design-responsible suppliers. Design-responsible suppliers are those with authority from the customer to design a new product specification or change an existing product specification for product delivered to a customer. It follows therefore that the requirements of section 4 are not intended to be applied to software, tools, and equipment used for internal purposes. The requirements of element 4 do apply, however, to design test- ing and verification services. Design can be as simple as replacing the motor in an existing vehicle with one of a different specification, or as complex as the design of a new automobile or any of its subsystems. Design can be of hardware, software (or a mixture of both). Before design commences there is either a requirement or simply an idea. Design is a creative process that creates something tangible out of an idea or a requirement. The controls specified in the standard apply to the design process. There are no requirements that will inhibit creativity or innovation. In order to succeed, the process of converting an idea into a design which can be put into production or service has to be controlled. Design is often a process which strives to set new levels of performance, new standards or create new wants and as such can be a journey into the unknown. On such a journey we can encounter obstacles we havent predicted, which may cause us to change our course but our objective remains constant. Design control is a method of keeping the design on course towards its objectives and as such will comprise all the factors that may prevent the design from achieving its objectives. It controls the process not the designer; i.e. the inputs, the outputs, the selection of components, standards, materials, processes, techniques, and technologies. auto204.qxd 10/04/00 21:33 Page 235 The principles outlined in the standard can be applied to any creative activity and while the standard primarily addresses the design of automotive products for onward sale to customers, the principles can be applied to internal systems such as an information technology system, an inventory control system, and even the quality system. The requirements in element 4.4 are linked with other clauses of the standard even when there is no cross reference. This relationship is illustrated in Figure 4.1. 236 Design control CONTRACT REVIEW (4.3) DESIGN INPUT (4.4.4) DESIGN PLANNING (4.4.2) RESEARCH & DEVELOPMENT (4.4.2.3) DESIGN OPTIMIZATION (4.4.5.2) DESIGN OUTPUT (4.4.5) DESIGN REVIEW (4.4.6) DESIGN CHANGE (4.4.9 DESIGN VERIFICATION (4.4.7) DOCUMENT AND DATA CONTROL (4.5) QUALITY PLANNING (4.2.3) PRODUCT REALIZATION (4.2.4) QUALITY RECORDS (4.16) STATISTICAL TECHNIQUES (4.20) CORRECTIVE AND PREVENTIVE ACTION (4.14) CONTINUOUS IMPROVEMENT (4.1.1.4) ORGANIZATIONAL INTERFACES (4.1.2.4) PROTOTYPE PROGRAM (4.4.8.3) DESIGN VALIDATION (4.4.8) Figure 4.1 Clause relationships with the design control element auto204.qxd 10/07/00 16:43 Page 236 [...]...auto204.qxd 10/04/00 21:33 Page 2 37 Design control 2 37 Design procedures (4.4.1) Procedures to control the design (4.4.1) The standard requires the supplier to establish and maintain documented procedures to control the design of the product in... in all probability be a breakdown of each of these stages, initially for the complete design and subsequently for each element of it If dealing with a system you should break it down into subsystems, and the subsystems into equipment, and equipment into assemblies, and so on It is most important that you agree the system hierarchy and associated terminology early on in the development program, otherwise... may be necessary and so these engineers generate part specifications and pass these to the parts engineers Some of these transactions may be in-house but many will be subcontracted Some systems houses only possess systems engineering capabilities and subcontract most of the hardware or the software to specialists In this way they concentrate on the business they are good at and get the best specialist... governing the work, and either use a formal contract if external or a work instruction if internal l Define the reporting and review requirements for monitoring the work l Define the quality management requirement for assuring the quality of the work Identifying and documenting technical interfaces (4.4.3) The standard requires that technical interfaces between different groups which input to the design process... organizational interfaces are often inseparable as the detail specification may need to be written around a particular supplier However, within each development specification the technical interfaces between systems, subsystems, equip- auto204.qxd 10/04/00 21:33 Page 244 244 Design control ments, etc should be specified so that when all these components are integrated they function properly In some situations it... standards, and other sources of input to the design input requirements to be taken into account You should provide design guides or codes of practice that will auto204.qxd 10/04/00 21:33 Page 2 47 Design control 2 47 assist designers in identifying the design input requirements that are typical of your business The design output has to reflect a product which is producible or a service which is deliverable... documentation is critical to the success of the product, as poorly constructed handbooks can be detrimental to sales auto204.qxd 10/04/00 21:33 Page 253 Design control 253 The requirements within the product specification need to be expressed in terms that can be verified Hence you should avoid subjective terms such as good quality components, high reliability, commercial standard parts, etc as... cases there will need to be only one design review after completion of all design verification activities However, depending on the complexity of the design auto204.qxd 10/04/00 21:33 Page 2 57 Design control 2 57 and the risks, you may need to review the design at some or all of the following intervals: l Design Requirement Review to establish that the design requirements can be met and reflect the... what are these appropriate stages? In the note which appends the requirements of clause 4.4 .7 of the standard, the reference to design reviews implies that it is a design auto204.qxd 10/04/00 21:33 Page 260 260 Design control verification activity The other design verification activities referred to in clause 4.4 .7 are intended to precede the relevant design review and so provide input data to that review... not require the design control procedures to address each requirement of this clause but were they not to, you would need to demonstrate that the absence of such procedures had no adverse affect on the quality of design You need to develop a design strategy that sets out rules for designing your products and services If your products are grouped into various ranges, you will need standards for each range . of automotive products for onward sale to customers, the principles can be applied to internal systems such as an information technology system, an inventory control system, and even the quality. REVIEW (4.4.6) DESIGN CHANGE (4.4.9 DESIGN VERIFICATION (4.4 .7) DOCUMENT AND DATA CONTROL (4.5) QUALITY PLANNING (4.2.3) PRODUCT REALIZATION (4.2.4) QUALITY RECORDS (4.16) STATISTICAL TECHNIQUES (4.20) CORRECTIVE. capability to meet contract or accepted order requirements . Contract review 2 27 auto203.qxd 10/04/00 21:32 Page 2 27 You must surely determine that you have the necessary capability before accepting