Jul 16, 2011

Cost of goods sold (COGS)

Cost of goods sold (COGS) refers to the inventory costs of those goods a business has sold during a particular period. Costs are associated with particular goods using one of several formulas, including specific identification, first-in first-out (FIFO), or average cost. Costs include all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of goods made by the business include material, labor, and allocated overhead. The costs of those goods not yet sold are deferred as costs of inventory until the inventory is sold or written down in value.

Jul 4, 2011

What is APQP & PPAP?

APQP (Advanced Product Quality Planning) and PPAP (Production Part Approval Process) are methods used in
the automotive and some other industries. Their purpose is to ensure that the supplier understands the
customer's requirements and is capable of providing the required quality and quantity of product on time.
APQP sets out a clear path for planning, implementing and verifying a process.
The APQP process has five phases. What phases a company has to complete depends on what they do. There
are checklists provided in the back of the guide published by AIAG that are very helpful in keeping on the right
path. They provide the organization and consistency needed to ensure a successful product and process launch.
If I needed to boil the whole idea down to a few words, it would be "Matching the voice of the supplier's
process to the voice of the customer, VOP = VOC."
PPAP is the hard proof that the supplier understood the customer's requirements. It principally involves
gathering all the data and information that was generated throughout the APQP stage and presenting in
prescribed method and format to the customer for review and, hopefully, approval. The customer reviews the
PPAP submission and renders one of three possible decisions:
1) Product and process approved as submitted
2) Interim approval with a request for additional information or samples
3) Not approved - start over