Common use of Quality Objectives Clause in Contracts

Quality Objectives. 10.1 The Contractor is expected to maintain a continuous improvement programme. 10.2 The Contractor is under the same obligation to GROHE to pursue the zero defects target as GROHE is to its customers. In the event that the zero defects target cannot be attained in the short term, the Contractor shall propose upper limits for defect rates as temporary interim targets together with suitable action and shall coordinate these with GROHE. Defect rates below the agreed upper limits shall not relieve the Contractor of its obligation to process all complaints and keep up continuous improvement. This shall not prejudice the Contractor’s liability for product defects. 10.3 PPM targets shall be agreed separately with the Contractor and revised annually as part of annual supplier assessments by Procurement. In case new targets are not set by the end of June in any given year, the most recently agreed targets shall be automatically renewed for another year. 10.4 Should agreed ppm targets be continuously exceeded, GROHE shall be entitled to call an unscheduled Quality Meeting. The Controlled Shipping Level process in accordance with Appendix 3 can additionally be applied as follows until ppm performance is consistently below the agreed ppm targets. 10.4.1 Any complaint within agreed ppm targets shall solely result in a defect notification. 10.4.2 Any complaint above agreed ppm targets shall result in status CSL1, prompting 100% quality control of the products concerned on Contractor premises. 10.4.3 Any complaint above agreed ppm targets when CSL1 is in force shall result in status CSL2, prompting 100% quality control of the products concerned on GROHE premises by a third party at the Contractor’s expense. 10.4.4 Any complaint above agreed ppm targets when CSL2 is in force shall result in status “new business on hold” (NBH). This means that no new orders will be placed with the Contractor for the time being.