Roxane Napoli, Marketing Manager, Pilgrim Quality Solutions
Cost of quality, defect rates, and customer complaints can often be tied back to a common cause – poor supplier quality. Supplier-related defects are the most costly and difficult to correct, which is why managing supplier quality properly is incredibly important.
Your organization depends on you to ensure that suppliers are providing high quality materials in a timely manner. This means that you need to filter through a complex and potentially global web of suppliers, and understand where potential problems are occurring (or where they may occur in the future). So let’s take a look at some process improvements that will help you hone in on your most important suppliers and manage their quality activities for maximum impact.
Organize and Monitor Your Suppliers
First, who are your suppliers? Do you have a spreadsheet or database that includes all of them? At a minimum, you’ll want to compile a comprehensive list of your suppliers, an itemized list of what they supply, and at least 2 good contact points at each organization. If a problem occurs, you want to be able to reach someone in the supplier’s organization quickly.
Once you have a handle on your supplier base, you want to be sure that suppliers are being monitored and that you’re maintaining records of quality activities related to each supplier. This includes incoming inspection results, sampling plan status, defects, CAPAs, audit results, certificates of analysis, and other documentation related to each supplier.
At some point, you will also want to establish a set of KPIs to monitor. These can include metrics such as on-time delivery, successful new product introductions, CAPA effectiveness, and defect rates.
Use Your Existing Quality Processes to Improve Communication
Relationship building is a key aspect to getting high-quality results from your suppliers. One part of building these relationships is finding a good way to communicate the periodic issues or changes as they occur. Your existing quality system can help with this, especially if you’re using automated quality management software.
Most organizations involve suppliers in their nonconformance and CAPA processes. This is a logical point for reporting defects to suppliers and holding them accountable for the effectiveness of their improvements.
Another quality system touch point for suppliers is your change management process. Are you connecting supplier-related changes into your change management system? Supplier communication can happen at any part of the change process. This includes triggering internal changes based on a supplier change, considering your suppliers during impact assessment, or notifying suppliers when a change you’re making affects them.
Supplier score cards are another vehicle for enhancing supplier communication. Scorecards improve your picture of supplier performance over time and give you a consistent set of metrics to share with your suppliers. Rather than simply reporting each defect or CAPA, a scorecard helps you communicate high-level trends (both good and bad) and keep suppliers in the loop about your ongoing perception of their performance.
Incorporate Risk Management into Supplier Quality Management
A basic principle of managing quality risks is aligning your risk prevention or mitigation activities with a problem’s risk. Understanding which suppliers are low-risk or high-risk is the starting point for defining the scope of various quality activities, including incoming inspections and audits. High-risk suppliers may require more frequent on-site audits, while low-risk suppliers may not. Similarly, high-risk suppliers may need additional attention during incoming inspection, while low-risk suppliers may not require inspection at all.
As you monitor your high-risk suppliers, it may also be helpful to dig into their suppliers as well. You may discover variability in second and third-tier suppliers that can considerably increase your downstream risk.
It is also important to note that each supplier’s risk level will change over time. These fluctuating risk levels may affect your supplier audit schedule or the supplier’s sampling status during incoming inspection. These changes in risk provide an opportunity to optimize the way you manage your suppliers. By monitoring both risk and performance levels, you have the opportunity to quickly hone in on problems areas with low-quality suppliers, while reducing the costs associated with inspections, audits, and other quality management activities for high-quality suppliers.
Examine and Close Supplier-Related Quality Loops
Within your quality system, you’re monitoring and documenting quality events such as nonconformances, CAPAs, and audits as they arise. In addition to the individual events, it can be helpful to evaluate larger trends for each supplier to “close the loop” on supplier-related defects.
One quality loop is analyzing your internal quality system data for frequently found in-process defects or customer complaints, and determining whether these were caused by suppliers. If so, these defects should be communicated with each supplier and incorporated into future audits or incoming inspection plans. This also creates an opportunity to assess the risk of these defects occurring in similar products and to modify your procedures appropriately.
Another quality loop to close is when you examine supplier quality data for your various sites. For example, if you’ve encountered an unexpected supplier defect, you can share this with your extended team. The lessons that you learn can help your team be proactive about looking for similar problems at their own sites and maximize the impact of your continuous improvement efforts.
What do you do to stay on top of supplier quality? Let us know in the comments below.
Supplier Quality Management Overview
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