Product Substitution
INTRODUCTION
We take responsibility for Quality and we act with Integrity in all we do. Everyone at Northrop Grumman has the duty to ensure that these Values are reflected in the products and services we provide. Our customers expect that we will follow precisely the product specifications set out in the contract. A deviation without prior customer approval is called product substitution and must be avoided. Every employee is responsible for knowing the specifications, procedures and instructions applicable to their job. The company?s reputation for quality and integrity as well as the employee?s depends on this.
Product substitution is supplying goods or services that do not meet contract specifications. Some examples are:
- Use of materials or components other than those called for in the contract
- Failure to perform the operations as specified in the contract
- Failure to inspect and test exactly as the contract requires
- Processes performed by personnel or suppliers not certified to do so
- Falsification of documentation related to material content or testing
All materials, testing and quality assurance steps must be followed as specified in the contract, unless a change, deviation or waiver is approved by the customer. Documentation related to the product and process should be considered part of the product or service and must be accurate.
Some additional examples of product substitution are:
- Using the wrong solder type
- Reworking of a product by an employee who is not certified or whose certification is out of date
- Using a part that is ?equivalent? or even ?better than? without prior written approval
- Acceptance stamping a product without having performed the inspection
- Failure to report products (data, software, etc.) which you know to be nonconforming.
Some product substitutions are allowed but only if they have been arranged with and approved by the customer. If a product substitution takes place without approval, we are not providing what the customer paid for and not delivering what we promised. Customer approval can be achieved using any of the following processes:
- DEVIATION ? Customer authorization before manufacturing to change a design requirement
- WAIVER ? Customer authorization during or after manufacturing to change a design requirement because of nonconformance
- ENGINEERING CHANGE PROPOSAL ? A formal request to the customer to make major specification changes
- MATERIAL REVIEW BOARD ? Representatives from functional organizations who review, evaluate and disposition nonconforming material
- CONTRACT SPECIFIC ALLOWANCE/REQUIREMENT ? The substitution of ?better than? parts is allowable only when specifically authorized directly or by reference within the contract.
RESPONSIBILITY
The obligation to ensure product integrity and avoid product substitution involves all functions and employees who participate in the development, procurement, production, inspection and testing of our products. This includes bids and proposals and negotiations, engineering, procurement, manufacturing, quality assurance and shipping.
An environment that encourages open and candid communication will help employees understand problems and effectively resolve any compliance issues. It is important that employees not be reluctant to ask questions to identify substitution issues before they become problems.
If you suspect that there might be a product substitution problem, immediately bring it to the attention of supervision. If you can anticipate a possible problem and head it off by bringing it to the attention of supervision, it is your duty to do so.
PENALTIES AND RISKS
Product substitution may be the actions of one or more employees. Maybe you know of a stronger or cheaper part or a better or faster way to perform an operation or even have the new or improved part but don?t have customer approval. Don?t do it. The consequences are serious and may include:
- Injury or loss of life for those using our products
- Failed systems
- Loss of your job
- Penalties and fines for both the company and employee
- Damage to company reputation for quality and integrity and the resulting negative consequences for business
Prevention of product substitution depends on the vigilance and attentiveness of employees. Be sure you:
- Read, understand and follow instructions that apply to your operations
- Perform all operations required in proper sequence
- Use current, accurate and complete documentation
- Record information accurately
- Sign off only on operations you perform and only when completed
- Communicate, raise issues and seek answers to questions before they become problems
Do not hesitate to speak up if you suspect product substitution or are asked or directed to substitute a product or falsify documentation. If you have questions or concerns, there are a number of resources that can help: Management, Quality Assurance, the Law Department, your local Business Conduct Officer (BCO), the Sector OpenLine, or the Corporate OpenLine.