Supplier Development / Supplier Quality | Quality-One

What is Supplier Development / Supplier Quality

Supplier Development is an investment of time and effort by an organization to develop or grow their suppliers over time to reach and maintain the required level of quality, on-time delivery and responsiveness.  Proper supplier development can improve a supplier’s capability and technical knowledge, reduce cost and promote a mutually beneficial culture of collaboration and continuous improvement. Supplier Quality is the method or metrics used to monitor and evaluate the quality of the supplier’s goods and services. By utilizing supplier quality and development methodologies, an organization can gradually build a solid supply chain consisting of high-quality, dependable and consistent suppliers. Some key aspects or pillars of supplier development are as follows:

Supplier Collaboration

Collaboration with the suppliers early in the development cycle can reduce or eliminate late design changes and assure the supplier is capable of producing the part or assembly to print tolerances. It is beneficial to involve them early in new product development programs and provide them with the information required to be successful and meet design intent. This collaboration has the potential to reduce development time and foster innovation in product and process design.

Track Performance and Standardize Quality Metrics

Through the standardization of metrics, all suppliers are then evaluated on the same scale. Supplier scorecards are commonly used to document and monitor performance. The scorecards enable the organization to rank a supplier’s performance relative to the entire supply base and assist in tracking improvements or reductions in the supplier’s quality over time. Tracking performance over time will provide a broader view of performance and quality trends. The metrics frequently tracked are quality, delivery and responsiveness to any quality issues.

Monitor the Cost of Quality

The Cost of Poor Quality (COPQ) can devour a significant portion of an organization’s profit margins and annual revenue. Unfortunately, many organizations fail to measure and track COPQ at all or in a systematic and consistent manner. By calculating and monitoring COPQ, organizations can identify problem areas to address or identify opportunities for cost reduction. The Cost of Good Quality (COGQ) should also be measured. COGQ includes costs associated with preventing supplier quality issues, maintaining a Quality Management System (QMS) and monitoring supplier quality. Investment in COGQ generally results in fewer supplier quality issues.

Perform Regular Quality Audits

Utilize regular supplier or Second Party Audits to align the supplier with internal product or process quality standards and promote continuous improvement. While it is usually not possible to audit all suppliers on a regular basis, the information gained from measuring and monitoring the supplier metrics will indicate the “at risk” suppliers. One of the primary objectives of a supplier audit system is to prevent any quality issues from reaching your customer. In addition, the supplier audit can be used to assure the supplier is capable of producing and delivering the appropriate quantities to meet demand. A well-planned audit system helps assure that quality parts are received on time, every time.

Collaborative Approach to Corrective Actions

Through utilization of a collaborative approach to corrective actions, certain problems and miscommunication issues can be avoided. It is important to ensure that the supplier is aware of what is expected of them when a quality problem arises and a Corrective Action Request (CAR) is issued.  Take the time to train suppliers on quality policies and requirements before a problem arises. Collaborate with the supplier closely during each stage of the corrective action process. Provide them detailed and thorough information regarding the non-conformance. Let them know your expectations regarding short-term countermeasures, problem investigation, Root Cause Analysis (RCA), permanent corrective actions and the proper method of reporting their progress and results. Taking the time to inform and train suppliers will pay off by maintaining a good working relationship and preventing the recurrence of any non-conformances.

The supplier development activities benefit both the organization and the supplier. Collaboration and clear communication of expectations are essential for developing better relationships with suppliers and improving product quality. Supplier development is about building a strong supplier base integrated into a corporate culture that regards suppliers as an extension of their business, as partners and not separate entities. When implemented properly, robust Supplier Development / Supplier Quality systems generate significant value through the reduction of quality or delivery issues, reducing cost and strengthening your brand equity.