Understanding The ISO/TS 16949:2002 Standard 

7.2 Customer-related Processes  

7.2.1 Determination of Requirements Related to the Product 

You shall determine the requirements related to the product: 

a)    Specified by your customer (including delivery and post-delivery activities) 

b)    Not stated by your customer (but needed for specified or intended use, where known) 

c)    Statutory and regulatory requirements related to the product 

d)    Any additional requirements determined by your organization 

Note 1:  Post delivery activities include after-sales product service, provided as part of   customer contract or order 

Note 2 :  This requirement includes recycling, environmental impact & characteristics identified as a result of knowledge of product & manufacturing processes (see clause 7.3.2.3) 

Note 3 :  Compliance to (c) includes all applicable government, safety & environmental regulations applied to acquisition storage, handling, recycling, elimination & disposal of materials 

 7.2.1.1 Customer – designated Special Characteristics 

You shall demonstrate conformity to customer requirements for designation, documentation and control of special characteristics. 

7.2.2 Review of Requirements related to the Product 

You shall conduct a review of requirements related to the product before committing to supply product to the customer (e.g. submission of tenders; acceptance of contracts or orders; acceptance of changes to contracts or orders) and to ensure that: 

a)    requirements relating to the product are defined 

b)    contracts or order requirements differing from those previously expressed are resolved 

c)    your organization has the ability to meet defined requirements 

You shall maintain records of this review of requirements and actions arising from this review 

You shall confirm customer requirements before acceptance, where the customer provides no documented statement of requirement.   

You shall ensure that relevant documents are changed and relevant personnel are informed of the changes, when product requirements are changed.  

Note  In some situations, such as internet sales, a formal review is impractical for each order, instead the review can cover relevant product information such as catalogues or advertising material. 

7.2.2.1     Review of requirements relating to the product - Supplemental 

You shall obtain customer authorization, if you plan on waiving the requirement stated in 7.2.2 for a formal review (see Note).  

7.2.2.2 Organization Manufacturing Feasibility 

As part of the contract review process, you shall investigate, confirm and document the manufacturing feasibility of the proposed products as well as perform a risk analysis,  

7.2.3 Customer Communication 

You shall determine and implement effective arrangements for communicating with customers on: 

a)    Product information 

b)    Enquiries, contracts, or order handling (including amendments) 

c)    Customer feedback (including complaints) 

7.2.3.1 Communication Supplemental –  

You shall have the ability to communicate necessary information, including data, in a customer specified language & format (e.g. computer aided design data, electronic data exchange). 

Key Explanation Points and Tips: 

Þ      Customer related processes must include controls for - determining customer and regulatory requirements; a review of such requirements; and communication with the customer. 

Þ      Customer requirements extend beyond product specifications and may include – on-time delivery; packaging; labeling, mode of delivery, documentation, communications, QMS requirements, after sales servicing, etc. Review customer specific requirements on IAOB websites; IATF requirements; design specifications and design records, etc. Many of these requirements may also come from regulatory, industry or from within your own organization. 

Þ      As this standard represents specific automotive OEM’s, your QMS must provide objective evidence that your QMS processes can identify and manage these requirements and that customer-specific requirements are effectively implemented.  Priority should be given to customer-specific requirements issued by IATF subscribing OEM members (e.g. GM, Ford, Daimler-Chrysler, BMW, Fiat, Renault, VW, etc.) These requirements may be obtained through OEM contracts, service level agreements, SQA procedures, OEM websites, etc. Also review specific requirements for product at OEM customer or IATF websites. 

Þ      Depending on the product or service, you must determine if any industry or regulatory requirement is applicable on product characteristics or process parameters that affect the product’s safety or compliance with regulatory requirements.  Determine if there are any designated special characteristics related to products or process. You must consider all laws and regulatory requirements that may affect your product, materials, labor, production processes, your facility and work environment, etc. Review specific requirements for special characteristics at OEM customer or IATF websites. 

Þ      Where some or all of the processes - for determining customer requirements; for contract review and customer communication; etc., are done offsite, then you must show the linkages and interaction of these offsite activities with your on-site QMS processes (see clause 4.1). 

Þ      Where the organization, product and processes are complex and may require a multidisciplinary approach. The APQP process is a good tool to control and manage this process.  

Þ      The nature of requirements review may be different for different types of product or services. Your review records must show basis of review.  

Þ      Make sure you do your due diligence, Feasibility and risk analysis before you commit to contractual arrangements. I have seen many tier 1 and 11 suppliers get into serious financial trouble, for taking on programs and product that the OEM transferred from another supplier, because they did not assess all the risks. Be careful of taking on other suppliers problems! 

Þ      Manufacturing feasibility (which includes risk analysis), is an assessment of your organization’s capacity and capability to effectively and efficiently provide the customer specified deliverables. The risk analysis should include programming timing; resources; development costs and investments; potential for, and effects of, possible failures in processes, including your suppliers. You should also consider financial and profitability risk. The results of your assessment must be recorded on the applicable APQP form. Review specific requirements for feasibility at OEM customer or IATF websites. 

Þ      Sometimes it may take a few months to receive an order or contract from the customer, after you have sent them your quotation. Your review process must ensure that you compare the customer’s order or contract with your latest quotation, and resolve any differences (accept or re-negotiate), before you accept the order or contract.  

Þ      Your customer relations management process must include a sub-process for change control and must include – a review of the change (from customer or internal) and its impact on fit, form, functionality, other processes, financial, delivery, etc. again, use applicable sections of APQP to address change control. 

Þ       Obtain customer approval in writing for any waivers of contractual or QMS requirements. 

Þ      Customer communications may take many forms including – customer representative (see clause 5.5.2.1); industry recognized computerized interfaces and software for product (EDI; CAD); Customer provided software and interfaces for design and development, logistics, customer satisfaction feedback, etc; multi-disciplinary OEM/Supplier teams for product programs; etc. You must ensure that personnel at all levels have the competency and training to use these communications media and tools. Review specific communication requirements at OEM customer or IATF websites. 

Þ      Clause 7.2 does not require a ‘documented’ procedure. However, you must identify and document all processes addressing this clause as part of your QMS (see clause 4.1). For these processes, you must also identify what specific documents, controls and resources are needed (see clause 4.2.1d. and 7.1b.). You could use a documented procedure or other combination of practices, procedures and methods that may not necessarily require documentation. Look at the risks related to your product, processes and resources in determining the extent of documented controls you need to have (also see clause 4.2.1 notes). 

Þ      Performance indicators (to measure the effectiveness of customer-related processes in meeting requirements and achieving quality objectives) should focus on reducing variation in and improving these p rocesses and related use of resources. Indicators may include reduction in - quote cycle time; pre and post-award review cycle time; order entry errors and omissions; etc., and improvement in conversion ratio (i.e. ratio of contracts/orders awarded to quotes).  It might be quite useful to obtain feedback relating to why jobs/contracts were lost.  

Þ      For performance indicators for customer communications processes, see clause 5.5.3 first paragraph of key explanation points and tips.