Ready to blow on a customer

[lendaddy]

We have a new project that we're running for a newish customer. It's simple enough, a steel tube cut to a precision length (+/- .010" tolerance).

Anyway, they just called and stated they found one piece 1/2" long. OK, this is obviously an end piece that the equipment failed to segregate into the scrap chute. They've run 200,000 of these and they have only found this one. This is a .0005% fallout.

They want the entire remaining inventory sorted (65,000 pieces). We met with them and they won't budge.

I want to kill something small and furry.

[widgeon13]

Guess their into the 6 sigma shlt!! That sucks!

[TerryH]

Just don't swallow! You don't know who blew him off before you.

[IROC]

BTDT, although I have been on the other end. We had some parts made for a very weight-critical program (check out the thread on lasers in airplanes) with a requirement on our vendor to certify the weight on each item produced. We found nearly at the end of the assembly that one of the components weighed significantly more than what their certified weight said it did. Suddenly, every part in the assembly was suspect. Do we disassemble and weigh every part? What do we do? Trust them that this was a one-time anomaly? Needless to say, it cost us a lot of money. They were sorry, but that's the way it goes.

Put yourselves in their shoes - they trusted you to deliver a product that met certain requirements and you didn't. I understand your frustration, but how did that piece make it out of your shop in the first place?

[Overpaid Slacker]

Tell them no. If 0.0005% isn't good enough, and they don't care enough about your business not to force you to incur substantial costs on 1 in 200,000 error, they can find someone to do it better than 0.0005%.

Have they ever been late (even by a second) in payment? Demand an irrevocable demand letter of credit to back their payment. Oh, it's going to cost them bank fees? Too bad. If any slip up is material, then we'll need full bank support. Oh, and personal guarantees from the owners.

If it's not set forth in whatever contract (including a purchase order) you have, tell 'em to screw.

Alternately, tell them they've got to have one of their people present for the full duration of the segregation, and if less than 0.001 percent are faulty, they'll pay the full cost of your time.

They'll come back.

JP

[Moses]

Originally Posted by lendaddy

We have a new project that we're running for a newish customer. It's simple enough, a steel tube cut to a precision length (+/- .010" tolerance).

Anyway, they just called and stated they found one piece 1/2" long. OK, this is obviously an end piece that the equipment failed to segregate into the scrap chute. They've run 200,000 of these and they have only found this one. This is a .0005% fallout.

They want the entire remaining inventory sorted (65,000 pieces). We met with them and they won't budge.

I want to kill something small and furry.

Does the 1/2" piece mess them up in any way?

A few suggestions;

1) Have a friendly face to face. If they fail to see the reason of your position offer to sort the entire inventory at an absurdly increased price.

2) Charge them for the extra 1/2" piece.

[lendaddy]

The part caused them to scrap an assembly. The assembly is about $5.

Contrary to IROC's claims no manufacturing process can be 100% defect free. This is not a case where we individually certified and marked parts.
You must be kidding. This could have been a cleaning guy that thought he was helping out when he found one on the floor and tossed in in a bin or several other potential causes. It's an imperfect world.

[RWebb]

This is why people hire contract lawyers.

What is in the K re provisions for out of spec parts?

[lendaddy]

Originally Posted by RWebb

This is why people hire contract lawyers.

What is in the K re provisions for out of spec parts?

There are no contracts in the sub tier auto industry.

[IROC]

I realize that no manufacturing process is 100% defect free. Typically these things are caught before they leave the shop, though. I realize errors occur. If they knew up front that there was not going to be 100% inspection and that you could not certify that every part met their requirements, then they don't have a leg to stand on.

If this issue only caused them to scrap a $5 assembly then I don't understand what their problem is.

[Tim Hancock]

I feel for you Lendaddy...you need the work, but companies cannot afford to pay fair prices due to offshore competition and on top of that they expect more for less. American manufacturing is doomed.

As you can imagine Lendaddy, I want out of this business ASAP. As a special machine designer, I am sick of trying to design more complex machines with more safety features for dumber operators in shorter time frames for less money. The "world" economy is the main reason. Contributing factors that accelerated the situtation include: high union wages along with ultra restrictive safety and enviromental laws.

[rfloz]

Originally Posted by lendaddy

There are no contracts in the sub tier auto industry.

Odds are very, very good that your state enacted some version of the Uniform Commercial Code (which governs dealings between merchants/wholesalers as opposed to retail/consumer issues. Odds are medium pretty good the answer is in there.

A telephone call to the company lawyer and an hour of his time to research it will cost you a few hundred dollars.

[BReif61]

If they're getting this bent out of shape over $5 lost, I sense something else is truly at the heart of the matter. (Not necessarily lendaddy's company)

[legion]

After you blow on the customer, the courteous thing to do is to offer him a towel and a shower.

Seriously, have a face to face. Start by asking him what the problem was, what issues it caused him, and what he expects from you.

[lendaddy]

Originally Posted by rfloz

Odds are very, very good that your state enacted some version of the Uniform Commercial Code (which governs dealings between merchants/wholesalers as opposed to retail/consumer issues. Odds are medium pretty good the answer is in there.

A telephone call to the company lawyer and an hour of his time to research it will cost you a few hundred dollars.

You guys play in a different world I say that not as a jab, just as reality. You don't get lawyers involved unless you want end end relationships in this business. I have to come up with a way to smooth this, it's not a head butting battle.

[lendaddy]

Originally Posted by BReif61

If they're getting this bent out of shape over $5 lost, I sense something else is truly at the heart of the matter. (Not necessarily lendaddy's company)

That was my initial thought as well, that they may be trying to weasel out of the deal or slow down the production flow. Time will tell but I am quite powerless either way.

[Vipergrün]

Crappy situation to be in. However, now the customer has to call into play your quality assurance process, mfg process, etc.. They are probably thinking "yeah, this time it was a 5.00 cost, what about next time"

[lendaddy]

Originally Posted by legion

After you blow on the customer, the courteous thing to do is to offer him a towel and a shower.

Seriously, have a face to face. Start by asking him what the problem was, what issues it caused him, and what he expects from you.

This has already been done and they(he) didn't budge. The story is that the higher ups are making him do it and I'm going to talk to the higher ups tomorrow after I'm cooled off. It's rare that these things don't get resolved but it's asinine the hoops you have to jump through to do it.

[lendaddy]

Originally Posted by Vipergrün

Crappy situation to be in. However, now the customer has to call into play your quality assurance process, mfg process, etc.. They are probably thinking "yeah, this time it was a 5.00 cost, what about next time"

Absolutely they are worried that they may not catch the next one which would be more costly to them. I understand that.

But...I am never going to 100% check these parts at the price they are getting them for...there is not a chance in hell of it. That being said they WILL get a defective part again someday I guarantee it. They need to make a decision on their end if they want me to 100% check and raise my prices or if they can create an inline verification process that will always catch such an error. I cannot improve on my current 1 in 200,000 defect rate without 100% sorting.

[Mule]

Best thing you said was to wait & cool down before you talk to the higher up.