Dealing with Parts Rejection

Suggestions on how to deal with an order that has been rejected by the customer and tips on how to improve your process as a whole from start to finish.

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You got the call or the email, or maybe the box just showed up. One of your customers rejected some parts. The box winds up in inspection and everybody wants to know what happened. One of your inspectors or Quality Manager pulls a piece out of the box and checks the validity of the rejection. Yep, they’re right. The part is bad, and now comes the fun part.

Does any of this sound familiar? This initial “process” is very common and is mentioned here only because it’s a bit funny to watch. But now that you know the parts are deviant, do you have a standardized process for dealing with this rejection?

I ask this question because in many companies, the way a rejected order is handled is completely different than that of a “regular” order. True, a number of differences are to be expected. However, there should be a process in place to deal with the particular nuances of any rejected order.

Without getting into the particulars of each subject, ask yourself the following questions to see if your company has answers for each:

1) Once the rejection is verified by inspection, where does the paperwork go?
2) How and when does accounting get involved in the rejected order process?
3) How is the order entered and does engineering/quality and/or purchasing get to review the order before it is released for rework/replacement or re manufacturing?
4) Who checks for other orders for this part in your system and what about any finished inventory of these parts on your shelf?
5) Are similar parts you make for this or other customers examined to see if the same type of defect exists on them as well? And if found, is the customer notified?
6) Once quality defines the type of rejection, is there a feedback to manufacturing to clarify or change the existing process to positively correct the problem for next time or is this a one-time event?
7) Is there some kind of internal tracking of rejects to see if there are trends within the manufacturing process that need correcting (training, machine issues, tooling issues etc.)?
8) Since these parts were deviant as shipped, is the inspection process examined to determine how this defect was not detected?

Whatever your answers are to the above questions, tor me, they all boil down to four general areas:

Paperwork

The incoming paperwork has to be forwarded through order entry quickly and the type or response (repair, remanufacture, or replacement) must be determined to allow the shop to turn the parts around.

Money

This order must also make its way to the accounting department to allow them to handle the money side of the order with the customer. Many customers will expect credits that they will take whether or not you have that credit in your files or mail it to them. There is no accounting problem that your accounts receivable clerk hates more than to receive a check with a credit taken that they are not aware of.

Quality

Your quality department will likely investigate the matter to see if it is an isolated instance and if any process changes are required. They will also want to know how these deviant parts got out of the plant without being found. Transparency is important because it insures that continuous improvement will occur to correct any systemic or process problems found.

Tracking

Under no circumstances should parts be touched without a routing to go along with them. Seems a little rough, but think about it. If the parts are not entered into the system, somebody is trying to do an end around the process. I’m not a suspicious person but without an order, you’ve got to question the motives of those involved.

These questions and their answers barely scratch the surface of what can be a daunting affair if these sorts of orders are not handled in a standardized manner regardless of the type of remediation required to “fix” the parts. Nowadays, with quality being assumed for most vendor/customer relationships, any slip may cause you a hit to your quality rating or worst case, to lose orders. Quality must be built into your process and verified by inspection along the way and at time of shipment.

Rejects are a pain, but if handled in a prescribed manner, the pain will be minimized and you’ll be able to recover with the least cost incurred.

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is the president of TopGun Consulting, a manufacturing consultancy with a focus on helping companies improve their practices and processes to increase the profitability and satisfaction of the owners of those companies. David has over 30 years of experience in manufacturing, more specifically in the gear industry. Using his experience, David is able to quickly assess difficulties  and recommend simple, yet effective, solutions to those issues. For more information, contact David Senkfor at david@topgunconsulting.net or (602) 510-5998, or visit Top Gun’s website at www.topgunconsulting.com.