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Quality contract guidelines for forging, stamping and sheet metal parts

1. Preface

Quality management is becoming more and more important. Customers from the metal processing industry are increasingly transferring the manufacturing of parts to their suppliers. Especially in the automotive industry and its supply chain system, the production of parts is increasing, and the quality control requirements are constantly improving. As the final customers have high expectations for quality, their disappointment with quality will inevitably lead to a decline in business.

20220625195949 61511 - Quality contract guidelines for forging, stamping and sheet metal parts

In this environment, the cooperation between customers and suppliers becomes more and more important.
To minimize the occurrence of defects, all participants in manufacturing must reach a unified quality control strategy and abide by consistent quality principles.
Based on this objective, the quality contract guidelines put forward the principle of signing quality agreements, which reflects fairness and does not discriminate against any participant.

2. Scope of application

Quality contract guidelines are quality terms reached between forging, stamping and sheet metal manufacturing enterprises and customers. The purpose is to make both parties become successful partners by pursuing zero defect products and reducing product quality costs as much as possible.

3. Quality management system

The supplier quality management system can be certified through ISO 9001 or IATF 16949, and the certification needs to be completed through the evaluation of a third party with certification qualification.
If the audit involves other necessary items (such as claims (lawsuits), new process implementation, etc.) or the customer and the supplier agree to conduct the audit, the audit procedures and contents need to be fully communicated between the customer and the supplier, and both parties need to reach an agreement before the audit.

4. Parameters of forged, stamped and sheet metal parts (hereinafter referred to as “parts”)

All parameters of forging, stamping and sheet metal parts, including surface quality and surface defects, need to be defined by drawings and technical standards, and special tolerances must be noted and explained.
Where possible, Chinese national standards for forging, stamping and sheet metal manufacturing processes or group standards of China Forging and pressing association must be used.
Some dimensions requiring statistical process analysis (SPC) and contents with “special tolerance” requirements must be agreed between the customer and the supplier before signing the contract, and shall be marked or described on the drawings.
In addition, the involved tolerance determination must consider the current process level, process feasibility and the limitations of inspection means of forging, stamping and sheet metal manufacturing.
The location of machining and paint positioning points of customers (or subcontracting machining enterprises) must be indicated on the drawings, so that suppliers can pay special attention to the important parts and dimensions of forging, stamping and sheet metal parts.
In case of any complaint or dispute arising from the problems of the parts that affect the subsequent processing or use, the user shall bear all the responsibilities. The user cannot use the requirement of “no defect” as a reason to solve the problem, because it is not an accurate expression. This expression is generally interpreted as “zero defect”, which is difficult to achieve in any case. This expression should not be marked in the drawing.

5. Detection and inspection methods

In the production process quality control practice, including inspection methods, inspection devices and inspection equipment, before forging, stamping and sheet metal production, both customers and suppliers need to coordinate and reach an agreement.
The supplier will perform all agreed inspection items before delivery. These inspections need to be agreed in advance and carried out during production and before delivery. At the same time, both parties need to determine whether these inspection contents are key elements or non key elements, whether they need sampling inspection or 100% inspection.
When the customer receives the parts from the supplier, before machining, if necessary, the customer will recheck the inspection contents, or conduct acceptance inspection on the parts according to the agreement reached at the time of signing the contract between the two engines. The agreement reached by both parties must be written in the procurement contract or marked in the drawings.

6. Product or process change

The change of product or manufacturing process has an impact on product quality. Either the parts supplier or the customer must notify the other party in writing of the change. It can be implemented only after being confirmed by both parties. Once the change is determined by both parties, it must be expressed, marked or stated in the technical parameters, drawings or technical documents (agreements).
All relevant changes must be recorded in a list and archived.
Corresponding processes must be developed or established to ensure that suppliers are aware of the changes and change contents. At the same time, it is necessary to complete the update of new technical parameters and drawings or the change of technical documents (agreements). At the same time, it is necessary to control and effectively record the changes.

7. Traceability

The traceability method must be determined by both parties to ensure that the identification method remains unchanged throughout the production process until the final product can be identified.
In case a certain amount of accidental defective products are found in the customer’s factory, reliable traceability should ensure that the defective products can be calibrated in time to ensure that the number of such products is reduced.

8. Guarantee

In principle, the guarantee should be included in the trade contract, but some items are related to the guarantee, such as problem response action, which will be explained in detail in the following articles.

9. Problem response

As the basis of effective working methods, in case of quality problems, the list of personnel responsibilities determined by both the customer and the supplier shall be exchanged.
If quality problems are found in the delivered products, the customer shall promptly send a written report to the supplier upon receipt of the defective parts. The written report must clearly describe the problem, including the size or non-compliance with the requirements of technical parameters.
The report must also include the identification of the problem parts (e.g. shipping number, see Part 7 for others), so that the supplier can check whether the problem parts are still in production, whether they are kept in the supplier’s factory warehouse, or whether they are in stock at the customer.
The timely response of customers enables suppliers to quickly identify problems and take measures to ensure that no problem parts are produced or shipped. In order to find the root cause of the defective parts, the customer will mail the representative defective parts or potential defective parts to the supplier as soon as possible, so that the supplier can carry out further technical analysis and evaluation soon. During this process, the customer shall take photos of parts defects and provide them to the supplier by e-mail.
When finding and eliminating the root causes of problems, suppliers should immediately respond and take effective countermeasures. These measures include visiting customers immediately, conducting on-site investigation, and obtaining first-hand information about problems.
All actions and measures taken and the problem must be documented and sent to the customer, or the customer can be reported in the form required by the user (such as “8D” report).
The preliminary analysis made by the supplier through the research on the complete manufacturing parameters and the forging, stamping and sheet metal manufacturing processes must confirm whether the problem is a “single piece accident” or a batch of parts with “WIP” (work in process) in the user’s processing.
Some “single incident” cases are as follows:
Under the condition of 100% process technology control, human error occurs.
Caused by raw materials not inspected.
Accidental machine error.
Based on the judgment results, negotiate the parts that may have problems and reach a solution.
In case of “single incident”, the supplier does not need to conduct special screening with the customer in the form of agreement.
In case of frequent problem parts, all possible problem parts shall be inspected, screened or reprocessed. If it is impossible to carry out quality inspection, problem confirmation and treatment for all possible problem parts at the customer, all possible problem parts shall be returned to the supplier for inspection, screening or reprocessing.

10. Screening and rework

Before inspection and screening, the remedial measures to be taken (such as machining, functional testing, statistical investigation, etc.) must be evaluated.
If the supplier determines the problem of the problem part after receiving the problem part, the customer shall allow the supplier to inspect, rework or replace the remaining possible problem parts.
Any inspection screening or rework to be completed at the customer’s factory must be approved by the customer before the work is performed.
No matter where and in what way (based on specific time, cost and quality considerations), the inspection and rework shall not lead to shutdown in principle.
If the customer cannot identify the problem parts due to the loss of traceability information, the supplier’s responsibility is limited to the batch of the current problem parts.

11. Responsibility

In principle, the commercial contract must specify the responsibility for the supply of parts. Of course, the quality assurance issues should also be specified.
Generally speaking, China has clear regulations on the quality responsibility of parts (commodities), which shall be observed in the implementation of parts supply. Therefore, there is no need for special clarification in the contract.
The responsibility mentioned here refers to the responsibility to deal with or solve the cause of the problem.
If the customer makes a claim and the customer and the supplier cannot reach an agreement on the responsibilities in the dispute, it is necessary to seek a solution from a third party or experts.
The responsibility of the parts supplier must be clarified and agreed before the cost of the solution to the problem parts, whether it is “recall” or “taking remedial measures to the satisfaction of the user”, needs to be paid.

12. Disputed quality cost

Each quality accident must be specific and solved as the only special problem, which cannot be treated in a general way. The goal of both parties is to reach a settlement agreement, solve problems, and both parties must accept the single event that belongs to either party.
The agreement must specify the treatment of some incidental expenses (such as VAT), warranty costs and responsibilities.
In all cases, the loss of profits or other financial losses caused to the customer will not be included in the incidental expenses, and the supplier will not bear them.
In addition, penalties or incidental expenses (such as dispute resolution staff costs, reception costs, internal work expenses and other similar expenses) cannot be included in the incidental expenses, and the supplier will not bear them. However, some reasonable expenses incurred by the customer (such as the working expenses of the testing machine and the functional inspection expenses) will be borne by the supplier.
If the supplier does not have the responsibility to solve the problem, when the problem is solved by the supplier, the customer must pay all the costs incurred due to the quality of the solution, including the costs caused by consumption, rework and late delivery.

13. Confidentiality

In order to enable the supplier to show “production know-how”, both parties must sign a confidentiality agreement.
Other confidentiality clauses required must be listed in the commercial contract.

14. Quality documents (agreements)

Relevant quality documents and technical agreements must be carefully archived and integrated into the supplier’s quality system.
If other documents need to be archived or recorded, they shall be implemented according to the agreement reached by both parties.
Quality related documents or technical data and records shall be kept for 5 years. However, for parts with quality problems, the retention period of data, documents and records must be extended to 15 years.

15. Nonconforming product PPM

Ppm (parts per million) has become an important indicator to evaluate the product quality capability of a supplier in the automotive industry and other forging, stamping and sheet metal manufacturing industries.
The objective of PPM shall be determined according to the complexity of parts, which must be determined by both parties and updated regularly through consultation.
If the PPM objectives are implemented in stages, suppliers should be regularly informed of the progress of the objectives so that they can meet the PPM objectives of each stage in an appropriate manner.
The response measures and actions taken to achieve certain ppm objectives must be implemented to the letter, and these measures and actions must also be unanimously agreed by customers and suppliers and implemented in the agreement.
It is required to consider the process capability index (e.g. cpk>1,33) when setting the PPM objective, so that the PPM objective and the process capability index are not contradictory.
As a basic principle, based on the concept of continuous improvement, the final ppm target value should gradually approach zero from reducing the issue of problem parts.
In any case, it must be recognized that setting ppm to zero is unrealistic from a practical point of view.
On the other hand, the commitment of PPM does not exempt the supplier from the responsibility for the problem parts.
When it is impossible to confirm the exact cause of the problem parts (for example, it is impossible to confirm whether the defect occurred in the processing of the supplier or the customer), the problem products cannot be used to calculate the PPM value of the supplier.

16. Raw materials

As the metal material of forging, stamping and sheet metal manufacturing industry, steel is the main focus of forging, stamping and sheet metal manufacturing. Steel mills must work together with their customers and take the most effective measures to achieve the goal of zero defects for forging, stamping and sheet metal parts.
In any case, the unmeasurable residual defects inherited from steel products must be taken into account. These defects (such as casting cracks and internal inclusions) cannot be found during steel manufacturing or subsequent use, processing and testing.
In order to reduce the occurrence of such undetectable defects, it is necessary to analyze the entire development and production process of the final parts and establish the necessary testing process before production, so as to determine the residual defects to the greatest extent.
As a reasonable part of a complete supply chain, it is necessary for suppliers and customers to negotiate and reach an agreement on these testing processes.
The “traceability”, “guarantee”, “problem response”, “screening and rework” and “responsibility” related to steel quality shall be handled in accordance with the corresponding paragraphs of the quality contract guidelines for forging, stamping and sheet metal parts.
In practice, the steel supplier designated by the customer is used for the final parts. In this case, the special relationship between the customer and the supplier needs to be defined in the commercial contract.

Source: China Flange Forgings Manufacturer – Yaang Pipe Industry (

(Yaang Pipe Industry is a leading manufacturer and supplier of nickel alloy and stainless steel products, including Super Duplex Stainless Steel Flanges, Stainless Steel Flanges, Stainless Steel Pipe Fittings, Stainless Steel Pipe. Yaang products are widely used in Shipbuilding, Nuclear power, Marine engineering, Petroleum, Chemical, Mining, Sewage treatment, Natural gas and Pressure vessels and other industries.)

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