Cost Recovery of 100K usd on a non-conformal part without spec definition of failure mode.
A high voltage wire was provided to our customer for an automotive application. This wire needed to be stripped for further terminal crimp process.
Wire in question used, by process design at vendor facility, a paper film to protect cooper strands from insulation process.
Over the course of the stripping procedure, paper film did not tear-off the copper, which lead in a terminal crimped over the paper instead of the copper strands.
This failure mode caused field problems and returns before 1,800 miles driven.
After a full 8 D's analysis our customer found that there wasn't a trong written information in supplier's wire tech spec or print to reference to paper stripping conditions.
Based on this condition, supplier refused any liability.
Negotiate with supplier to share liability (total impact of field faliures @ OEM including rework and sorting process at our customer facility was 100K usd. )
We designed a strategy based on supplier groups of discussion.
Being the central teams to discuss => D&R and application engineering.
We prepared a significant data collection to support each of the different discussions.
Documenting every meeting agreements.
Based on that information we prepared a tailored offer that supplier can digest better as follow:
- Liability will be collected in 3 leg schedule by quarter. full amount: 100K usd.
- Collection will be made from accounts payable of current quarter.
Proposal was accepted.
End user analysis forced our customer to move away from the paper film technology to ensure this problem will never happen again.
Supplier didn't have that technology in place to support new requirements.
We were forced to move 3.5M usd's in business, away from supplier.
We designed an exit strategy to ensure full cooperation from supplier beyond the product that will leave: other parts that will remain with them.
We accomplished this task with no commercial impact for remaining products and full commitment from supplier to bounce back to the level of business they had.
Supplier is now a key strategic wire cable supplier for our customer.
Alaska #511, Fracc. Campestre Arboleda
Ciudad Juarez, Chihuahua, México
MX +52 (656) 388.2754
US +1 (915) 407.8367