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Supplier Claim Process

Sensata Technologies will begin implementing a new Supplier Claim Process related to supplier quality events that ties the financial claims of our customers and/or the financial consequences impacting Sensata’s operations to our supply base.

The process starts either with an incident being discovered in Sensata’s production line or with a customer complaint, from the customer production line or from the field. In all cases, Sensata first determines if Sensata is responsible or if the part is fully within the application specification. Should Sensata determine it has (some degree of) liability for the incident, the quality organization determines whether the root cause is supplier-, process- or design related. In the first instance the Supplier Quality Engineering (SQE) organization gets involved and the process towards the suppliers is initiated through a Defective Material Report (DMR) that describes the failure. In parallel of the work to agree on the corrective and preventive actions, Sensata tracks all expenses related to the incident.

Effective June 1, 2010, Sensata will begin to include a claim statement with every DMR that will be followed by a detailed claim statement itemizing expenses incurred either internal or external (i.e. at our customer’s location or in the field) related to, but not inclusive of, sorting, rework, containment, storage, replacement, expedite fees, customer claims, etc., to be debited from a supplier’s open payables account upon the completion of a final formal corrective action report (8D) report with root cause as determined to be the result of the supplier’s performance.

As a reminder, per our Global Supplier Quality Manual G-SM-1, suppliers are required to complete an 8D report within fourteen (14) calendar days from receipt of notice, or unless otherwise negotiated and agreed to in writing between the supplier and the Sensata SQE. In the event, the supplier fails to respond on time, Sensata will have the right to automatically debit the supplier’s account for the full claim amount. Suppliers will have sixty (60) days from the original DMR date to contest the claim amount and provide evidence that the nonconformance was not caused by the supplier and/or a supplier’s subcontractor(s).

In addition, Sensata will begin to charge a fee with every DMR that is issued, that will be credited back to a supplier upon evidence that the nonconformance was not caused by the supplier and/or a supplier’s subcontractor(s).

Further information about this process can be obtained by contacting your local Sensata buyer. Thank you for your continued support as a valuable part of the Sensata supplier family.

Yours sincerely,

Gene Golab
VP Procurement
Sensata Technologies
Eric Reidemeister
Quality Director
Sensata Technologies



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