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Which department of the supplier should sign the PCN agreement

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In most companies, the Product Change Notification (PCN) agreement is primarily led and signed by the Quality or Engineering department, but other departments such as Legal, Sales, and Procurement may also be involved. Below is a breakdown of responsibilities:

Primary Responsible Departments

1. Quality Department (QA / Quality Management)
This is typically the lead department because:

  • They are responsible for product consistency and change control

  • They understand customer requirements regarding change notifications (e.g., PPAP, FAI)

  • They can evaluate the technical impact and manage validation processes

2. Engineering / R&D Department
When the change involves design, material, or process modifications:

  • Engineering defines the change content and impact assessment

  • They work with customers to evaluate and approve the technical details

Supporting Departments

3. Sales / Key Account Management

  • Facilitates communication with the customer

  • Coordinates timing and customer approval for changes

  • Understands PCN clauses in customer contracts, including notification lead time

4. Legal Department

  • Reviews legal liability, indemnity clauses, and notification obligations in the PCN agreement

  • Ensures compliance and minimizes contractual risks

5. Procurement Department (if applicable)

  • In cases where the company is a tier-1 or tier-2 supplier, procurement may need to ensure upstream suppliers also follow PCN procedures

Practical Recommendations

  • For key customers (e.g., in automotive, medical, aerospace industries), it's advised to include PCN terms as part of the main contract or as an annex to the quality agreement

  • The agreement should clearly specify:

    • What types of changes require notification

    • Notification timelines (e.g., 90 days, 180 days)

    • Whether the customer has the right to approve or reject changes

    • Responsibilities and liabilities for unauthorized or unnotified changes (e.g., fines, returns, compensation)

Summary

The PCN agreement is usually signed by the Quality or Engineering department, with support from Sales, Legal, and Procurement as needed.