It’s the suppliers responsibility! Isn’t it?

There is a lot of conflicting opinions about what an OEM should do for ensuring that their suppliers meet ISO 26262:2018 when it is applicable to the suppliers scope of work.

The clauses of ISO 26262:2018 are clear. They include that the OEM requires that the supplier meet ISO 26262:2018, and for higher ASILs require the supplier to provide the OEM with a functional safety assessment report.

Therefore when the supplier agrees to do this, this is enough for the OEM to fulfill its obligations. Isn’t it?

What if the supplier in reality hasn’t met ISO 26262:2018 and either does not know, or not told the OEM, or has provided an functional safety assessment report that incorrectly claims compliance.

Isn’t it then the suppliers responsibility to make good any losses that are claimed as a result of this?

For example if there is a claim made for losses suffered, to the OEM, due to omissions by the supplier.

The answer is that it is not this simple.

The OEM’s customer may have suffered a loss. This individual will not consider it the suppliers fault, they will see it at the OEMs fault. Whether the OEM can legally point to the supplier or not.

The OEM may have bad publicity due to having to complete a recall. So the OEM business is effected.

Although the OEM can blame the supplier and claim no responsibility, it is unlikely to resolve the OEM from at least part of the responsibility. Afterall the OEM selected the supplier, and did not ensure that the supplier fulfilled its responsibility. Therefore at least part of the responsibility could be put on the OEM.

The supplier could be quite small, and be unable to make good all the losses suffered, and as a result the OEM cannot recover all its expenses.

For example, a supplier of a large OEM made a change without getting the approval of the OEM customer. The change resulted in a safety issue and a recall of over 1 million vehicles. The OEM had very large losses, that were far in excess of the ability of the supplier to pay. In addition to many unhappy customers. Even though this was clearly the suppliers fault, the OEM suffered irredeemable loses.

In the United States, when seeking to recover losses and there are multiple parties responsible, the claim is likely to be made against the organisation most able to pay. Regardless of who was more responsible. So if the supplier is smaller than the OEM, it is likely that they will seek remedy from the OEM, even if the OEM was only 5% responsible.

Therefore the OEM should ensure that the supplier is capable of achieving functional safety for their scope of supply prior to sourcing, and check to confirm that the supplier has achieved functional safety for their scope of work in the development phase, prior to the start of production.

This is so that the safety issue is less likely to occur, because compliance with ISO 26262:2018 reduces the risk of the violation of a safety goal. If a safety issue did occur due to the suppliers scope of work, the OEM could also show due diligence and thus any responsibility for the loss so any claim made goes to the supplier to resolve.

We hope you found this article useful. We have other articles on functional safety that are freely available. More detailed information is available in our store.

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