Is this acceptable as RBT within the new 9001 ... ?

There is an order for 20 # of some standard motors from a customer urgently
It will take about 50 days to build due to low stocks
The marketing manager tells customer to make 100% payment for immediate delivery.
The marketing manager knows the customer well, and his payment trends, and does not expect payments within 30 - 40 days.
The planning and build of the standard motor is nevertheless in action.

 

This is in any case acceptable as factual approach to decision making.

 

If you are in the party adopting BBT, you might put it in that bucket instead...
Either way, a business decision was made knowing the risks and making a judgement call based on past data and expected future performance...how could it NOT be acceptable as RBT?

Wise, though?....it is very wise right up until the customer wires the money the next day...then it becomes foolish and potentially damaging.

 

How can we conclude that it is not RBT but RISKY THINKING, without more understanding of the context of the organization, the authority of the marketing manager and his knowledge management and risk based thinking....
Perhaps he knows more that us that such a delivery promise will make him pay up within the time the motors will be ready.
Are we edging out his company context., knowledge management and his RBT and bringing in our own ideal considerations .... ?
I fear this is what the new breed of quick trained auditors to the new ISO 9001 will resort to ~~~~~

 

Amen from an auditee...not an auditor.

Placing myself in that position...
Risks were considered and a decision was made in light of the situation as I see it.
If it is required that I consider both the risk and the benefit...I have done so.
If the auditor doesn't like the decision, that is beside the point.
I trust that the standard will govern the process (that risk was considered)...not the business (defining how I make business decisions).

Am now in a situation where I have to choose whether to take a lower than normal downpayment for equipment since this fiscal year's budget only has $X left in it.
The balance of payments will come from next fiscal year's budget.
It is up to me whether to risk or not. Next year's budget may not get approved...and may not have room for the balance of payments...but that is my call to make, and my risk to take, and not for judgement from an auditor.
I'd have a pretty hard time accepting an NC for a business decision.
That said, I would have no issue with the NC if I hadn't even considered that it was a risk.

If I chose not to accept the abnormal downpayment, there would be a customer complaint...so be it.
More to the point, if I choose not to accept the abnormal downpayment, the customer may buy from my competitor.
And if I choose to accept it...I may get stung.
ISO can't help me out of that one...only require that I consider the downsides.

 

LOL....agreed regarding NA auto.

But the premise of the OP is "The marketing manager tells customer to make 100% payment for immediate delivery."

The "negotiation" (more like ultimatum) was 100% payment up front.
When the customer gets around to actually paying...only then will the product ship.
The risk analysis determines that by the time "payment up front" would be received, immediate shipping would be possible.

I run a business myself...my terms offered are either net30days or 100% up front as I see fit, customer by customer.
Customers who purchase materials are used to net 45, net60, 2nd day 2nd month, etc....and pay accordingly regardless that they are in violation of the terms offered.
For payment up front orders...I get the check 2nd day of 2nd month...and ship then.
To negotiate until my terms and the PO terms match? Fogetaboutit...I would lose half of the sales and shut down their production line.

If the basic premise of ISO9001 and a QMS is to override my knowledge of my customer's behavior and limit my actions resulting from that knowledge...then the premise is flawed.
I don't think that is the basic premise of a QMS.
Risk-based Thinking, IMO, is about thinking on the risks...and making the best call you can.

 

I do not see my organization allowing a QMS auditor to see very much in the Accounting world. I also have not been exposed to those types of financial games. I can guarantee that the scope of the QMS will NOT get into financial games, aside from following the processes through sales, applications, credit, billing, and collection. How do you measure on time shipping in this situation? In reality, some pieces of this example would fall short of compliance even before anyone made it to RBT.

 

Are lucky people better risk based thinkers ... ?
Someone who is lucky is always relaxed and never tense.
Will follow the gut feeling
Will break normal routine for new experience
Will recollect and use learning from things that went well
Will visualize himself to be lucky and successful
Will spread confidence around.
.....

 

There may be a good policy and standard requiring many things. This case is of a standard motor, that is held in inventory always based on sales trends. There could be other make motors of same standard available and the customer could go and fetch. There is a risk of losing the order certainly. The marketing manager has played his best card knowing the customer well and his payment trends. Its a simple and straight case of risk based thinking...

 

OP: "The marketing manager tells customer to make 100% payment for immediate delivery. "
AN: "Unless you haven't given us the whole story it's not about accepting an order based on when they get paid,"

Am I missing something?
100% payment for immediate delivery means (to me anyway) I'll ship when I get paid.
The risk is that they will pay sooner than expected...and this was considered...this is totally RBT.

 

@ AN (He doesn't have product in the quantity required and didn't specify the lead time)
Urgently is the business word the customer used.
He doesn't have the full 20 # motors is what we know now from the case.
What we do not know to the extent is the Marketing manager's past information and knowledge of customer responses, and the confidence within himself to make a risk based decision, and by how much the stock are low.
Can I present an intermediate risk....
If the customer comes with 100% payment, say after a fortnight ..... The marketing manager says that now all the 20 motors are not available, due to recent sales. However he can deliver his complete stocks of 20 - whatever and deliver the balance within another fortnight IF 100 % payments are made now. There is every chance that this customer contract review will succeed.
If the customer buys whatever in stock and pays for it, its a success still. (even if some recent sales has happened or not)
If the customer still walks away, its acceptable as an outcome of his risk based decision.
If the customer never returned again its acceptable as an outcome of his risk based decision. (its a standard motor) Someone else had stock and made a sale.
.
..
...
At the outset if the marketing manager offers the 20 - whatever stock against full or sale payment ., and then says it would take some more days to get stocks of the balance ~~~... Then
1. He makes that much sale or the full sale of 20 # (Customer has the money and he needs urgently, which we know is unlikely...)
OR
2. Does not make the sale at all
You would not need an experienced marketing manager to do such sale.

So the RBT gets you options. The knowledge and experience helps you decide. And a good process interaction of it gets you moving forward.