ISO9001 in 2021 Week by Week - Week 40 - 8.5.3 Property belonging to customers or external providers

This is a 52 week discussion of ISO9001:2015. Each week, we discuss a specific clause of the ISO9001:2015 standard in detail and look for ways to trim the fat. (As a member of TAG/TC176, the committee responsible for review and revision of ISO9001, (possible revision in 2023), I’ll keep you posted on what I learn all year!)

(It is strongly recommended that you purchase a copy of ISO9001:2015  for reference).  And, be sure to do your homework!

8.5.3 Property belonging to customers or external providers

This week, we’ll discuss some of the situations when organizations along the whole supply chain cooperate in order to produce a product or service.  As important as defining requirements prior to entering into a contractual agreement, it is also important to clearly define responsibilities where materials or equipment is shared as part of the agreement.  The standard states:

“The organization shall exercise care with property belonging to customers or external providers while it is under the organization’s control or being used by the organization.” 

It’s tough to be more specific than “exercise care” when defining how far an organization should go in protecting a customer’s or external provider’s property.  When trying to demonstrate compliance, there could be some grey area here, unless the specifics are actually defined in a contract somewhere.  But common sense says, an organization should take appropriate measures to protect anything that is temporarily stored or on loan from someone else.

“The organization shall identify, verify, protect and safeguard customers’ or external providers’ property provided for use or incorporation into the products and services.” 

I take issue with the requirements of “identify” and “verify”, because it is my opinion that this should be the responsibility of the owner (customer or external provider).  But, I must relent that if this is not already done, it must be done by the organization to ensure anything not belonging to the organization is clearly identified as such.

“When the property of a customer or external provider is lost, damaged or otherwise found to be unsuitable for use, the organization shall report this to the customer or external provider and retain documented information on what has occurred.” 

Nothing much new here.  The only caution is to ensure that “documented information” is retained, should a report of this nature take place.

The most interesting part of this clause is actually the “note”!  Remember, notes are not “shalls”, but in this case the “can” leads to what may be auditable against these requirements.  Many organizations may initially think, “we don’t have any customer or external provider’s property, so this doesn’t apply to us.  But, with this clarifying note, almost EVERY organization has something to address in the list below.

“NOTE  A customer’s or external provider’s property can include materials, components, tools and equipment, premises, intellectual property and personal data.”  I like this additional clarification which includes intellectual property and data.  These are commonly shared, and there has been little attention to this previously.

Today, there is an enormous reliance on shared data between organizations and all along the supply chain.  We communicate so much electronically – specifications, drawings, production requirements, advance ship notices, billing, contact information, etc.  As stated in the first paragraph, we must “exercise care” in protecting this information.   This could be in a very formalized, structured method such as NDAs (non-disclosure agreements), data protection to protect from breach or loss of data, ethical business practices, restricted access to data within an organization and more. 

THIS WEEK’S HOMEWORK

Have a look at your process and how this area is dealt with in your QMS.  But so much more importantly, get out there and look around!  How much property belonging to customers or external providers do you actually have?  Do have returnable packaging?  Consignment materials?  Borrowed tooling?  Proprietary software?  Fixtures/gauges?  Labels?  Are you leasing land or space from an external provider?  Open your mind and look around.  Be sure your system’s scope includes all the scenarios and requirements in the standard.  Then, take things a step further and ask, “What if?”  What if something belonging to a customer or supplier was actually “lost, damaged or otherwise found to be unsuitable for use”?  Is the notification process sufficient?  Is documented evidence retained?  Has there ever been a loss of property or data?  How was it handled?  Is your system robust and compliant with the requirements?

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Watch this 3-minute video about another great resource to accompany this series.   Get the self-directed, on demand, online learning series  ISO9001 in Plain English, today and you'll get:

• A clear understanding of the requirements of ISO9001:2015
• Proven tips to build a robust quality system that's easy to use
• Ways to reduce documentation and paperwork (yes, really!!)

Each video is about 15 minutes and targets a specific element of ISO9001, (with over 6 hours of total content!).  We translate all the gobbledegoop into Plain English you can understand and leverage the requirements to get maximum VALUE from your quality efforts. 

For a deeper dive into the process side of your quality system, get Tribal Knowledge - The Practical Use of ISO, Lean and Six Sigma Together, a simple guide to UNITE ISO9001, lean and Six Sigma to create a robust quality system with better results.  Read what ASQ American Society for Quality – Quality Progress Magazine  had to say about it. 

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