IATF 16949:2016 Clause 8.6.4 Verification and acceptance of conformity of externally provided products and services

The organization must establish and maintain documented procedures to ensure that purchased product conforms to specified requirements. Once the make or buy decision has been made, control of any purchasing activity follows a common series of activities. The specification process, which starts once the need has been identified and ends with a request to purchase. The evaluation process, which starts with the request to purchase and ends with the placement of the order or contract. The surveillance process, which starts with placement of order or contract and ends upon delivery of supplies. The acceptance process, which starts with delivery of supplies and ends with entry of supplies onto the inventory and/or payment of invoice. The organization must ensure that incoming product is not used or processed until it has been inspected or otherwise verified as conforming to specified requirements and requires that verification be in accordance with the quality plan or documented procedures. When we purchase items as individuals it is a natural act to inspect what has been purchased before using it. To neglect to do this may result in us forfeiting our rights to return it later if found defective or nonconforming. When we purchase items on behalf of our employers we may not be as tenacious. We don’t get the same pleasure out of it and are not necessarily eager to see what the product can do for us. So the company has to enforce its own receipt inspection policy as a way of protecting itself from the mistakes of its suppliers. Another reason for inspecting product on receipt is that it is often the case that characteristics are not accessible for inspection or test after subsequent processing. Characteristics that have not been verified on receipt may never be verified. This is the main purpose behind the requirement rather than of forfeiting your rights. The key is to verify the purchase products as it allows you to receive product into your company and straight onto the production line if you have verified that it conforms to the specified requirements before it arrives. An example of this is where you have performed acceptance tests or witnessed tests on the supplier’s premises. You may also have obtained sufficient confidence in your supplier that you can operate a “Just-in-time” arrangement but you must be able to show that you have a continuous monitoring program which informs you of the supplier’s performance.

Clause 8.6.4 Verification and acceptance of conformity of externally provided products and services

The organization shall have a process to ensure the quality of externally provided processes, products, and services utilizing one or more of the following methods:

  1. receipt and evaluation of statistical data provided by the supplier to the organization;
  2. receiving inspection and/or testing, such as sampling based on performance;
  3. second-party or third-party assessments or audits of supplier sites when coupled with records of acceptable delivered product conformance to requirements;
  4. part evaluation by a designated laboratory;
  5. another method agreed with the customer.

The standard provides several options for verifying incoming product quality. You can use different combinations for different products and suppliers depending on their ongoing performance. In any case these must be included or referenced in your Control Plans. Your incoming inspection process must define and document the criteria for doing this and what records you keep to show effective control of purchased product quality and supplier quality performance. Use the APQP process to evaluate the risks and controls needed for products or product groups. Include or refer to these controls for incoming product in your Control Plans. Statistical data must relate to product characteristics or process parameters from the production run from which the product came from. It should include any special and regulatory characteristics (for product or process) where designated by the customer or your own organization. You must define and document the acceptance criteria for all sampling plans. Check if any of your customers require approval of your sampling plans. Third party assessments must be done by an accredited registrar. Parties conducting second party assessments may need to be approved by your customer. Designated laboratories must be ISO/IEC 17025 accredited or have evidence from your customer, that they are acceptable for carrying out part evaluations

Receiving inspection and testing

The standard requires that you ensure that incoming product is not used or processed until verified as conforming, but how do you do this? The only way to make certain of this is to install a “gate” through which only conforming items may pass. You need to register the receipt of items and then pass them to an inspection station equipped to determine conformance with your purchasing requirements. If items would normally pass into storage areas following inspection, as a safeguard you should also make provision for the storeperson to check that all items received have been through inspection, rejecting any that have not. By use of labels attached to items you can make this a painless routine . If some items are routed directly to the user, you need a means of obtaining written confirmation that the items conform to the prescribed requirements so that at receipt inspection you can provide evidence that:

  • Nothing comes into the company without being passed through inspection.
  • Nothing can come out of inspection without it being verified as conforming

If the user is unable to verify that requirements have been met, you will need to provide evidence either that it has passed your receipt inspection or that it has been certified by the vendor. This requirement poses something of a dilemma when purchasing subcontract labor because it cannot be treated the same as product. You still need to ensure, however, that the labor conforms with your requirements before use. Such checks will include verification that the personnel provided have the requisite qualifications, skills, and knowledge and they are who they say they are. These checks can be made on the documentary evidence provided, such as certificates, but you will probably wish to monitor their performance because it is the effort you have purchased, not the people. You will not be able to verify whether they are entirely suitable until you have evaluated their performance. Subcontract labor could be classified as product released prior to verification being performed and so you need to keep records of the personnel and their performance during the tenure of the contract. Receipt inspection doesn’t need to be a department, a section, a separate room, a full time job for someone, or a particular person. It is a process through which all product must pass, even those received on a “Just-in-time” basis. Someone should verify that products can pass un-inspected. At a customs post some people are stopped, others are waved through; all are inspected to some degree — it all depends on the confidence gained by observation. The verification carried out, however, has to be in accordance with some plan. The standard requires firstly that you verify conformance and secondly that you should do it in accordance with some plan or other. Your plans, therefore, need to prescribe the acceptance criteria for carrying out such verification. If the standard required that you verify conformance in accordance with the quality plan, it would give you the option of not specifying any measures at all in your quality plan for verifying conformance, so what should you put into your quality plan or documented procedures on receipt inspection? The main aspects to cover are as follows:

  • Define how the receipt inspection personnel obtain current purchasing requirements.
  • Categorize all items that you purchase so that you can assign levels of receipt inspection based on given criteria .
  • For each level of inspection, define the checks that are to be carried out and the acceptance criteria to be applied.
  • Where dimensional and functional checks are necessary, define how the receipt inspection personnel obtain the acceptance criteria and how they are to conduct the inspections and tests.
  • Define the action to be taken when the product, the packaging, or the documentation is found to be acceptable.
  • Define the action to be taken when the product, the packaging, or the documentation is found to be unacceptable.
  • Define the records to be maintained.

Everything should be passed through a receipt inspection. However, in order to relate the degree of inspection to the importance of the item, you should categorize purchases, an example of which is as follows:

  • If the subsequent discovery of a nonconformity will not cause design, production, installation, or operational problems of any nature, a simple identity, carton quantity, and damage check may suffice. An example of this would be stationery.
  • If the subsequent discovery of a nonconformity will cause minor design, production, installation, or operational problems, you should examine the features and characteristics of the item on a sampling basis. An example of this would be electrical, electronic, or mechanical components.
  • If the subsequent discovery of a nonconformity will cause major design, production, installation, or operational problems, you should subject the item to a complete test to verify compliance with all prescribed requirements. An example of this would be an electronic unit.

These criteria would need to be varied depending on whether the items being supplied were in batches or separate. However, these are the kind of decisions you need to make in order to apply practical receipt inspection procedures. In determining the amount and nature of receiving inspection, consideration should be given to the control exercised at the supplier’s premises and recorded evidence of conformance provided. The supplementary requirements require the supplier to use one or more of four prescribed methods unless waived by the customer.

Supplier Audit

Within your process you need to provide a means of identifying which items have been subject to inspection at the subcontractor’s premises and the receipt inspection action to be taken depending on the level of that inspection. In one case, the product may have been accepted by your representative on the subcontractor’s premises. In another case, a product from the same batch may have been accepted by your representative but not the one that has been delivered. Alternatively your representative may have only performed a quality audit to gain a level of confidence. You need to specify the inspection to be carried out in all such cases. The standard emphasizes that consideration should also be given to the recorded evidence provided. Even if someone has performed inspection at the supplier’s premises, if there is no evidence of conformance the inspections are of little value. The fact that an inspection was carried out is insufficient. There has to be a statement of what was checked and what results were obtained and a decision as to whether conformance has been achieved. Without such evidence you may need to repeat some of the inspections carried out on the subcontractor’s premises. Assessments by second or third parties can be an acceptable alternative but it depends on the standards used for the assessments. An ISO 9001/IATF 16949 assessment alone would not give sufficient confidence to remove all receiving inspection for deliveries from that particular supplier. You need to examine product as well as the system until you have gained the confidence to reduce inspection and eventually remove it. Subsequently continual assessment of the subcontractor should be carried out. Here are some key elements of the process:

  1. Supplier Evaluation and Selection: Establish a thorough supplier evaluation and selection process to ensure that potential suppliers meet the organization’s quality standards and requirements. This process may involve assessing their capabilities, quality management systems, past performance, and compliance with industry standards.
  2. Second-Party or Third-Party Assessments: Conduct on-site assessments or audits of supplier sites to verify their manufacturing processes, quality control practices, and adherence to specified standards. These assessments can be conducted by internal personnel (second-party) or external auditing organizations (third-party).
  3. Records of Delivered Product Conformance: Maintain records of the quality and conformance of the externally provided processes, products, and services received from suppliers. This documentation should demonstrate that the delivered items meet the organization’s requirements and expectations.
  4. Performance Monitoring: Continuously monitor the performance of external suppliers through metrics such as on-time delivery, defect rates, customer complaints, and corrective actions. Regular performance evaluations help identify any potential issues or trends that require attention.
  5. Non-Conformance Management: Establish a process to address non-conformances identified during supplier assessments or when delivered products do not meet the organization’s requirements. This may involve initiating corrective actions, working closely with suppliers to resolve issues, or considering alternative suppliers if necessary.
  6. Supplier Development: Work collaboratively with suppliers to improve their capabilities and processes. Encourage open communication and support them in implementing quality improvement initiatives.
  7. Collaboration with Customers: Engage with customers to gather feedback on the externally provided items and assess their satisfaction with the appearance items. Customer input is valuable in identifying potential areas for improvement in the supply chain.
  8. Supplier Collaboration Agreements: Establish clear agreements and contracts with suppliers that outline quality expectations, delivery schedules, and any specific appearance-related requirements. These agreements help ensure that both parties are aligned on quality standards.
  9. Risk Management: Identify and assess potential risks associated with external suppliers, and implement risk mitigation strategies to reduce the impact of potential issues on appearance item production.

By having a well-defined process to ensure the quality of externally provided processes, products, and services, organizations can maintain consistent product quality and customer satisfaction. Regular evaluations, records of conformance, and effective communication with suppliers are key factors in achieving this goal.

Receipt and Evaluation of supplier’s statistical data

If the supplier supplies statistical data from the manufacturing process that indicates that quality is being controlled, then an analysis of this data based on assurances you have obtained through site evaluation can provide sufficient confidence in part quality to permit release into the organization. Where you have required your subcontractors to send a certificate of conformity (C of C) testifying the consignment’s conformity with the order, you cannot omit all receiving checks. Once supplier capability has been verified, the C of C allows you to reduce the frequency of incoming checks but not to eliminate them. The C of C should be supported with test results. Therefore you need to impose this requirement in your purchasing documents. However, take care to specify exactly what test results you require and in what format you require them presented, as you could be provided with attribute data when you really want variables data. Sampling inspection should be used when statistical data is unavailable to you or you don’t have the confidence for permitting ship to line. leveraging statistical data provided by suppliers is an essential aspect of ensuring the quality of externally provided processes, products, and services in the automotive industry. Statistical data helps in understanding and evaluating the performance of suppliers, identifying trends, and making data-driven decisions. Here’s how an organization can establish a process for utilizing statistical data from suppliers:

  1. Data Collection: Request suppliers to provide statistical data related to the processes, products, and services they deliver. This data may include quality metrics, defect rates, on-time delivery performance, customer complaints, and any other relevant performance indicators.
  2. Data Validation: Verify the accuracy and integrity of the statistical data received from suppliers. Cross-check the data against agreed-upon criteria and use independent methods to validate its accuracy, if necessary.
  3. Performance Metrics: Define key performance metrics that the organization considers critical for evaluating supplier quality. These metrics should align with the appearance item requirements and overall quality objectives.
  4. Data Analysis: Analyze the statistical data to identify patterns, trends, and potential areas of improvement. Utilize tools such as statistical process control (SPC) charts, Pareto analysis, and trend analysis to gain insights into supplier performance.
  5. Supplier Scorecards: Develop supplier scorecards that present the analyzed data in a clear and concise manner. These scorecards can provide a snapshot of supplier performance and help in identifying top-performing and underperforming suppliers.
  6. Continuous Improvement: Collaborate with suppliers to address any quality issues identified through the data analysis. Work together on improvement plans and share best practices to enhance overall product quality.
  7. Supplier Communication: Maintain open and transparent communication with suppliers regarding their performance data. Provide feedback and seek clarifications if needed to ensure a mutual understanding of quality expectations.
  8. Risk Assessment: Use statistical data to assess the risk associated with each supplier. Consider factors such as stability, capacity, and their ability to meet appearance item requirements.
  9. Periodic Reviews: Conduct regular reviews with suppliers based on the statistical data. These reviews can help identify opportunities for optimization and set improvement targets for future performance.
  10. Data-Driven Decision Making: Utilize the statistical data to make informed decisions about supplier selection, continuous improvement initiatives, and overall supply chain management.

By establishing a process for utilizing statistical data from suppliers, organizations can enhance the quality of externally provided processes, products, and services. Data-driven insights help in identifying strengths and weaknesses in the supply chain, fostering collaboration with suppliers, and ultimately delivering appearance items that meet customer expectations.

Part evaluation by accredited laboratories

Part evaluation by accredited contractors or test laboratory provides independent verification which can substitute for your own receiving inspection, providing you maintain control over the contractor. Utilizing part evaluation by accredited laboratories is an effective way to ensure the quality of externally provided processes, products, and services in the automotive industry. Accredited laboratories are recognized for their expertise, adherence to strict quality standards, and ability to provide reliable and accurate evaluations. Identify and select accredited laboratories that specialize in the evaluation of appearance items and related components. Accredited laboratories have certifications or accreditations from relevant authorities, indicating their competence and adherence to recognized quality standards. Clearly define the scope and requirements for the part evaluation by the accredited laboratories. This includes specifying the appearance attributes, performance criteria, and any other relevant characteristics to be assessed. Establish written agreements or contracts with the selected accredited laboratories. These agreements should outline the scope of work, evaluation methods, timelines, confidentiality, and any other relevant terms. Provide the accredited laboratories with appropriate samples of the appearance items or components for evaluation. Ensure that the samples represent the actual production parts accurately. Collaborate with the accredited laboratories to determine the evaluation methods and techniques to be used. This may involve visual inspection, color measurement, gloss evaluation, surface analysis, and other relevant assessments. Ensure that the accredited laboratories collect relevant data and provide detailed evaluation reports. The reports should include the results of the evaluation, observations, any non-conformities detected, and recommendations for improvement. Review the evaluation reports and analyze the findings to identify any quality issues or opportunities for enhancement. Use the data-driven insights to make informed decisions and address potential concerns. Collaborate with external suppliers based on the evaluation results. Work together to address any non-conformities and implement corrective actions to improve part quality. Use the feedback and insights from the accredited laboratories to drive continuous improvement initiatives in the manufacturing and supply chain processes. Schedule periodic evaluations by the accredited laboratories to ensure ongoing quality control and to monitor the effectiveness of improvement efforts. By leveraging part evaluation by accredited laboratories, organizations can gain independent and expert assessments of appearance items and related components. This process helps ensure that the appearance items meet the required quality standards, adhere to customer specifications, and align with industry best practices. The use of accredited laboratories adds credibility to the evaluation process and reinforces the commitment to delivering high-quality appearance items in the automotive industry.

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