Last week, IATF published additional updates on the Sanctioned Interpretations document. An additional SI #19 on section 8.4.2.4 for Supplier Monitoring is put up. This updates solves a decade-old of an issues related to premium freight for suppliers.
For years, many organizations implementing the IATF 16949 scheme has always raise this question: ‘why do i need to spend resources compiling the incidences of premium freight caused by my suppliers?’ Well, to put in perspective, there are few real world constraints. First of all, how would the organisation get to know every case whenever the supplier paid extra for a premium freight? The organization may have receive the goods on time when in reality the supplier paid premium for special express delivery. The cases the organization get to know is when the shipping container arrive with less the the total quantity due to split shipment. Hence we have always hear grievances from organizations on the value of capturing such data.
The rational of the premium freight was obviously based on the principle that when the supplier has paid more for a premium freight to rush the good s to be shipped on time to customers, it represents a symptoms of potential problems hidden within the supplier operations. It’s a can of worms when open, we may find production issues like poor scheduling, inconsistent production quality, variation of material and the list goes on. The data for premium freight was meant to serve as an indicator of weaknesses in the supplier operations.
The premium freight issue is a legacy from a older standard. Dating back to the 1990s, when QS-9000 was the de-facto standard required by the American car makers, the automotive industry was required to capture the cost of premium freight for both the organization and the supplier. Yes, you read it right, it was for the cost in dollar and cents. Fast forward to modern day IATF scheme, we are now capturing data for incidents of premium freight, which is how many times it occurs.
It’s August 2020, IATF has finally decided that the premium freight monitoring for suppliers is redundant. The results is simple, let’s delete the line from the requirements. That’s it! We no longer need to capture this data on premium freight caused by suppliers. For once, you may surprise the person responsible for compiling this data. “Psst…guess what, for once the update on the SI bring us less work!”. You can now officially remove it, effective October 2020.
For the official IATF statements, head to this link: https://www.iatfglobaloversight.org/wp/wp-content/uploads/2020/08/IATF-16949-SIs-Aug-2020.pdf
Author: Leon Ng