WH-SOP-35 Handling of Non Conforming Products of Non Conforming Products Ver : 1.0 AT/WH/SOP 35 ... include also assembly related problems. ... • LG-WI-06 Goods Inwards Inspection

Handling of Non Conforming Products

Ver : 1.0

AT/WH/SOP 35

Date : 06/08

Hard copy of this document is uncontrolled Page 1 of 16

1. Objective

The objective of this SOP is to describe the activities involved in Identifying, Segregating, Storing, Replenishing the missing components/Rectifying the possible damages and Claiming / Selling the damaged / non conforming stocks (both handsets and accessories) identified in the warehouse

- While Receiving the stocks from the Suppliers - While Receiving the stocks back from the Channels (with or without

incident reports) - While Warehouse Handling

The objective of this work instruction is also to Agree / control prices for any clearance activities of the damaged / nonconforming stock.

2. Scope

The scope of the activities defined in the procedure is applicable to the handling and clearance of the damaged / non conforming stocks in the warehouse of Axiom Telecom. This process is applicable to the damaged / non conforming stocks that comes under any of the classification as mentioned below:

• Incorrect products in the shipment

• Mismatch IMEI no.

• Incorrect Transceiver component

• Incorrect Accessory Items

• Missing Transceiver

• Missing other than transceiver

• Product Damage

• Packaging damage

• Incorrect package

• Label Quality, etc The non conforming stocks will be identified at various levels like receiving the stocks from the supplier (Visible damages), Retail sales advisor while opening the sales box in front of the customer (invisible damages), Customer returns (invisible damages), during the process of replenishing, picking or warranty processing (visible / invisible damages), old stocks, etc. Claims for each non conforming items shall be handled separately based on the nature of non conformances and Brands. (Refer: LG-WI-05 Claims Processing R1) Non Claimable stocks shall be cleared / sold with the best price that will be finalized and approved by the senior management.


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3. Definitions and Classifications of Damaged / Non Conforming Stocks

Non Conforming Products – Means the products that doesn’t conform to the product requirements. This can be identified during different stages of Operations like New Shipment arrival, In Warehouse (for example During cycle counting process, Picking phase, replenishing phase, etc), Channel returns, etc. Once the non conforming products are identified in the warehouse, the products should be quarantined and stored properly with proper

• Tags, signs or stickers affixed to the product

• Labeled bins, boxes and bags

• Remarks or descriptions written directly on the product

• Tape or ribbon wrapped around the product

• Storing the product in specially marked areas , etc

S.No

Category: Description: Examples

1.

Incorrect products in the shipment

Some or all product models shipped different than agreed. Example: in-box item and/or complete sales package is different than what was ordered by the customer.

2. Mismatch IMEI no.

IMEI does not match in transceiver, type label, gift box or master carton. Includes also missing and duplicate IMEI, label etc.

3. Incorrect transceiver component

Shipment includes transceivers with different HW than agreed. Parts on transceiver, not accessory items

4. Incorrect other in-box items

Inbox accessory items different than agreed. Including user guide, MMC card, cable, battery, etc. Accessory in sales box.


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5.

Missing transceiver

Transceiver/s missing in the sales boxes, entire sales packages

missing from master carton, or entire master carton or shipment

is missing. E.g. products are stolen.

6.

Missing other than transceiver

Oter items than transceivers missing from the sales boxes.

Including user guide, MMC card, cable, battery, etc.

7.

Product physically damaged

Items in the sales box damaged. E.g. scratch in the transceiver,

dust under the window, or protective film forgotten to remove

from inside of the window. Can include also assembly related problems. It’s not Packaging

damage. If damage to packing causes damage to products, then

choose product physically damaged.

8.

Packaging damage -

Major

Major Damage in the packaging e.g. sales package, master carton, or pallet. It’s not product damage.

If packaging is damaged but product is not damaged, choose

packaging damage.

9.

Packaging damage -

Minor

Minor dent or scratch in the sales packaging. These can be rectified

and sold in the respective channels.


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10.

Incorrect packaging

Shipment packed incorrectly or with incorrect packaging material.

E.g. sales package insert is incorrect, master carton is stacked

incorrectly, or pallet material is incorrect.

11.

Label quality

Missing, poorly positioned, poor printing quality (bar code, text) in label. Label on transceiver, sales package, master carton or pallet.

12.

Product functionally inoperable

Product cannot be sold or used as-is. May cause delays at Trade Customer and/or need repaired or

replaced.. E.g. Does not turn on, Blank

screen, Power cycles, Corrupted screen, Non-functioning Keypad,

etc. It should not be caused by

physical or transportation damage to device or packaging.

No visible environmental damage (exposure to water, cold, heat,

etc.). Not cosmetic damage, not missing parts on transceiver


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Summary of Handling the Non Conforming items

Source Definition of non conforming products

identified from the source

Nature of Non Conforming

Products

Process for handling the non conforming

products

Person Responsible

for classifying

the non conforming

product

Person Responsible for claiming /

selling the non

conforming product

New Shipment (Principles)

The non conforming products like damaged package, missing items, product damage, wrong items, etc identified in the warehouse while receiving new shipments from the suppliers

Incorrect products in the shipment, Mismatch IMEI no., Incorrect Items inside the box, Missing items, Product Damage, Package Damage, Label Quality, etc

All the non conforming products will be properly stored in the respective locations and a claim will be placed with the supplier ( Refer the work instruction for Claiming Process)

Admin Controller- Warehouse

Logistics Assistant

Package damage (major / minor)- Claimable from the Principle


Logistics Assistant

Missing Accessories like Battery, memory cards, charger, etc-Claimable from Principle


Logistics Assistant

Warehouse Operations

The non conforming products like damaged package, missing items, product damage, etc identified during the warehouse operations. This will also include non conforming products caused due to the pilferage happened in the warehouse

Missing Handsets -Claimable from Principle

All the non conforming products will be properly stored in the respective locations and a claim will be placed with the supplier ( Refer the work instruction for Claiming Process) Admin

Controller- Warehouse

Logistics Assistant


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Box Damage due to the handling of stocks in the warehouse

All the non conforming products will be properly stored in the respective locations and will be sold through the wholesale channel with the price approved by VP/CEO. The difference amount / loss will be accounted against warehouse channel


Wholesale Dept.

Missing items due to theft or pilferages in the warehouse

All the non conforming products will be properly stored in the respective locations and will be sold through the wholesale channel after replenishing the missing accessories from the warehouse stocks. The cost of the accessories taken from the stock shall be charged against warehouse channel

Logistics Manager

Wholesale Dept.

Package damage (major / minor)- Claimable from the Principle


Logistics Assistant

Missing Accessories like Battery, memory cards, charger, etc-Claimable from Principle


Logistics Assistant

Channel Returns

The non conforming products like , missing items, product damage, wrong items, etc identified in the channels in front of the customers

Missing Handsets -Claimable from Principle

All the non conforming products will be properly stored in the respective locations and a claim will be placed with the supplier ( Refer the work instruction for Claiming Process) Admin

Controller- Warehouse

Logistics Assistant


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Box Damage due to the handling of stocks in the channels

All the non conforming products will be properly stored in the respective locations and will be sold through the wholesale channel with the price approved by VP/CEO. The difference amount / loss will be accounted against the respective channel


Wholesale Dept.

Missing items due to theft or pilferages in the channels

All the non conforming products will be properly stored in the respective locations and will be sold through the wholesale channel after replenishing the missing accessories from the warehouse stocks. The cost of the accessories taken from the stock shall be charged against the respective channel

Logistics Manager

Wholesale Dept.


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4. Abbreviations / Synonyms

GIDR – Goods In Discrepancy Report Transceiver - Handsets

5. Inputs

• GIDR

• Incident Reports

• Template for Approval of Damaged Stocks

6. Process

• Handling the Non Conforming Products – New Shipments

• Handling the Non Conforming Products – Channel Returns

• Handling the Non Conforming Products – In Warehouse Process

• Clearance of Non Conforming Products

• Stock Adjustment after the Claims Process


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7. Activities


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8. Outputs

• GIDR

• Credit Notes

• Sales Invoice

• Template for Approval of Clearance Stock

9. Monitoring and Measurement

• Stock Status in Damaged Location

• No. of Pending Claims –Logistics Coordinator

• GIDR status – Logistics Coordinator

• No. of GIDR’s made within 24hrs of identification of non conforming product in the

warehouse

• No. of Claims made within 48 hrs of receipt of GIDR

• Credit Note received Vs Claims raised

10. Forms and Records

Name Reference

Incident Report

GIDR

Template for Approval of Clearance Stock

Template for - approval of defectuve stocks (2).xls


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11. Interfaces

12. Process Tailoring

None

SOP WH-SOP-02 Stock receipt

WH-SOP- Stock Returns from Retail

WH-SOP- Stock Returns from Direct Distribution

WH-SOP- Stock Returns from Wholesales

WI • LG-WI-05 Claims Processing R1

• LG-WI-06 Goods Inwards Inspection -Nokia

ISO Clause 7.5.3,7.5.5, 8.3

Documents

WH-SOP-35 Handling of Non Conforming Products of Non Conforming Products Ver : 1.0 AT/WH/SOP 35 ... include also assembly related problems. ... • LG-WI-06 Goods Inwards Inspection