I may have missed an answer to this question during a search of the forum, but here goes anyway...

Does anyone have any advice on how to determine a Critical Supplier? Here are some excerpts from our procedures and how we've defined "Critical" Suppliers and "Critical" Components...

• Critical Component: Any component, having (our company) Part Number, affecting the quality and/or safety of a finished, packaged, or labeled device.
• Critical Supplier list (CSL): A subset of the ASL, determined by Purchasing and/or Quality Assurance, containing single source suppliers or suppliers providing critical components or services to (our company). These suppliers may be based on importance of product, dollar value and/or volume. For service providers, the criteria will be the criticality of the service provided. These CSL suppliers will be part of the periodic supplier performance reviews.

...and what do we define as "periodic supplier performance reviews"?

• (Our company's) goal is to monitor CSL suppliers quarterly and formally review CSL suppliers annually.
• reviews may occur more frequently and may be prompted by internal complaints or objective evidence or a poor rating
• Table 3 lists the categories by which a supplier is evaluated

"Table 3" above refers to the following criteria; 1) Quality - based on incoming inspection and production rejects for "dock to stock" material, 2) Delivery - On Time Delivery adjusted for required or requested changes and 3) Additional Supplier Rating - subject rating of "intangibles" such as customer service, response to non-conformances, etc.

When I reviewed our receipts over the past year, we have approximately 79 suppliers that fit the category of "supplying assigned P/N's" - which if I rated all of these, that's all I'd get done!! :frust:

Have we backed ourselves into a corner with these definitions? Some of our P/N'd parts include "off the shelf" inductors, packaging materials, etc. We used to classify suppliers by only dollar amount - but our registrars didn't like that method and in retrospect, it's not really the right way to go about it.

We'd like to pare down this list of 79, but I was looking for some thoughtful advice on a legitimate way to do that without merely putting blinders on and hoping for the best. Any advice would be greatly appreciated.

I've been revamping our Supplier Qualification program, and have found a Great Tool that I downloaded from the Cove - and it works very well for our current list of 18 "critical" suppliers. However we wanted to review and revise that list. Any thoughts???

-Steve

At my company we evaluate all suppliers using a similar spreadsheet to the one I have attached. The status of the supplier changes as their percentage changes, which is evaluated by late shipment, rejects and accepted shipments. The status changes colors for quick reference to how suppliers are performing.

Hope this helps.........

At my company we evaluate all suppliers using a similar spreadsheet to the one I have attached. The status of the supplier changes as their percentage changes, which is evaluated by late shipment, rejects and accepted shipments. The status changes colors for quick reference to how suppliers are performing.

Hope this helps.........

Hi Frank:

Excellent SS!! Where were you when I was searching for an easy way to rate suppliers!:bonk: The SS I "plagerized" from the Cove earlier works fairly easy as well - but I have a question for you; How do you manage to rate some 242 Suppliers quarterly! :mg: Do you do anything else with your time?:cool:

Seriously, I like the fact that you have a quick look at your entire supplier list but how do you get the data for each of these suppliers? Do you have an automated query through your MRP system or something similar?

-Steve

Document Control personnel enters data upon receipt of paperwork from receiving inspection, just before filing it. It seems complex entering data manually but, we determined it averages at the most 30 minutes a day. Which isn't that bad in my opinion, considering the info. you get in return. Also, the one I use at work charts this data. As for rating and sending 242 performance reports, it takes approx. 2 to 3 hours once every 3 months, which again is that bad considering.

Just for kicks.... :notme:
30 min. day = 2.5 hrs a week = 130 hrs a year
2.5 hrs quarterly = 10 hrs a year
Overall 140 hrs a year = approx. 5.83 days to maintain this list. :biglaugh:

Thank you Frank. If manual works, there's no need to make it more complex than it needs to be. Obviously, our list of 79 is a little smaller than your list. I appreciate your info.

I'm curious to see if anyone else weighs in - but it's Friday afternoon! :beerdive: :drunk:

Thanks!

No problem.

The fact that you feel the need to describe some suppliers as "critical" seems to indicate that some form of CA is needed. You need to ask yourself what it is you're afraid of. Do you think that a given supplier might screw up something important? If so, why don't you do something about it, such as changing suppliers? Are you reacting to the fact that some feature on a drawing has been identified as critical? If so, and you have a reasonable level of confidence in the supplier, what are you worried about?

I just think that the whole idea of pigeonholing some suppliers as "critical" misses an important point, which is that if you're worried about your suppliers, you need to do something about it other than making a spreadsheet and having their names in bold red type.

Hi Jim:

Thank you for your insightful and thought provoking questions! I guess sometimes you "inherit" a system and don't step back and ask these types of questions. It's one of those "can't see the forest for the trees" type of things...
The fact that you feel the need to describe some suppliers as "critical" seems to indicate that some form of CA is needed. You need to ask yourself what it is you're afraid of. Do you think that a given supplier might screw up something important? If so, why don't you do something about it, such as changing suppliers?
We have a very good non-conforming system in place that would catch anything that would fall into this category. In a recent case, we did search out and found a replacement supplier. ...so that can't be the reason...
Are you reacting to the fact that some feature on a drawing has been identified as critical? If so, and you have a reasonable level of confidence in the supplier, what are you worried about?
Good point. See above... So that can't be it either...
I just think that the whole idea of pigeonholing some suppliers as "critical" misses an important point, which is that if you're worried about your suppliers, you need to do something about it other than making a spreadsheet and having their names in bold red type.
Well said! After discussing your feedback amongst ourselves this morning, it becomes clear that by "critical" I think we're looking more at "business critical" (or should be) more than "product critical". We have systems in place to find product critical defects - but we don't always do a good job monitoring "business critical" suppliers.

We're in a unique situation where some of our purchase product is unique and not easily "re-sorced" (pun intended). Having said that, there are still some things we can do other than just generate reports!

Thanks again! ~Steve

Other then quality and delivery don't you think price is one of the criteria to evaluate critical suppliers?

Thank you.

Other then quality and delivery don't you think price is one of the criteria to evaluate critical suppliers?

Thank you.

For our situation, we don't have a lot of control on price. We are unique in that, for most of our critical materials, we're pretty much locked in to one supplier due to the special nature of the products we buy. In many cases, we'd spend more developing a new supplier (if we could even find one with the capability) than we would sticking with the current supplier. Also, we're not big enough to carry the necessary clout to affect price. In some cases, we're not "big enough" to affect quality either!:frust: I just look at this as "job security" for me and the rest of the QA Dept. :notme:

There is still a "pain threshold" to price, but ours is pretty high - so for now we don't include that aspect in our "official" supplier monitoring.

Dear Mr.Steve,

In my purchasing procedure it is stated that critical vendors are those who are directly involved to the production. Is this correct or each organization has their own way to determine crtical suppliers? I'm not very clear in this matter could you please elobrate?

Thank you and best regards.
Thurai

Dear Mr.Steve,

In my purchasing procedure it is stated that critical vendors are those who are directly involved to the production. Is this correct or each organization has their own way to determine crtical suppliers? I'm not very clear in this matter could you please elobrate?

Thank you and best regards.
Thurai

To answer your first question; Yes, it is up to each organization to determine what constitutes a critical Supplier. If you go back to the first post in this thread where I asked my original question, you'll see that we define critical suppliers in much the same way as you've stated here. Having said that, there are several of our suppliers that are "directly involved in production" that do not supply many parts or supply parts that may be "less critical" than others.

We are in the midst of revamping our Supplier Qualification and Monitoring program and were facing the same daunting task you've implied above. What we've discussed as a way to "pare down" the list to make it more manageable is incorporating an analysis of Risk. As an example;

We have a supplier from which we purchase inductors. The inductors are "off the shelf" items. Are the inductors critical to our product performance? -Yes. However, due to the products we make, we do 100% testing before each product leaves the building. Therefore, the detection rate of bad inductors is very high which subsequently makes the Risk of bad product leaving very low. We could easily switch suppliers. Therefore, we do not monitor this supplier for our Quarterly performance review because the cost would outweigh the benefits.

Our plan is to apply much the same logic to our current "Critical Suppliers List" so that, by our procedure, we've addressed each Supplier but only monitor those we deem necessary through our Risk Analysis. This will cause an investment of time at the front end, but will yeild a manageable list for monitoring that is based on analysis and logic.

I hope this helps. It is one approach from a smaller company without unlimited resources to "monitor everybody". ~Steve

Dear Mr.Steve,

Thank you very much for your valued explaination to my questions.

My vendor assessment form has 8 assessment criteria to be evaluated. The 8 are quality, price, delivery, service/tech support,business track record (new supplier), accreditation(new supplier) and OMS.

Results will be satisfactory, improvement required, warning and disqualified.

For your information I'll summarise the vendors' yearly performance in term of quality, price, and delivery based on the recorded particulars on the PO

My interpretation on quality is that if there is no any complaint from the end user then there is no problem on quality. Am I correct? Please correct me if i'm wrong.

For price and delivery i've no problem. I've a quotation to prove for the price and for the delivery it is recorded in the PO after receiving the DO.

Thank you and best regards
M.Thurai

At my company we evaluate all suppliers using a similar spreadsheet to the one I have attached. The status of the supplier changes as their percentage changes, which is evaluated by late shipment, rejects and accepted shipments. The status changes colors for quick reference to how suppliers are performing.

Hope this helps.........

So does our company.

Dear Mr.Frank T

Thank you very much for your valuable spreadsheet. I'm going to use it in future with some modification.
I have tried to add in one more row to the vlook table but the colors don't work. In my organization there are four results to classify a vendor after evaluating them. They are disqualified, warning, improvement need and satisfactory. Due to these four result i need to modify your spreadsheet.
Your spreadsheet is really a very useful tool to me. Please help me for the colors to work if i add in a row.

Thank you and best reagards.

Dear Mr.Frank T

Thank you very much for your valuable spreadsheet. I'm going to use it in future with some modification.
I have tried to add in one more row to the vlook table but the colors don't work. In my organization there are four results to classify a vendor after evaluating them. They are disqualified, warning, improvement need and satisfactory. Due to these four result i need to modify your spreadsheet.
Your spreadsheet is really a very useful tool to me. Please help me for the colors to work if i add in a row.

Thank you and best reagards.
Firstly I must thank Frank T. for the Spreadsheet – simple clear and concise.

Now Thurai – hope its not to late – the colours you required are controlled by the menu “format – condition formatting”

If you go to any cell click the above options you will see the conditional formatting instructions, however as far as I understand you can only apply 3 conditions (for formulas and Cell Values is), this spreadsheet uses “Formula”, you could achieve the required results by options in “Cell Values is” – if anyone knows different, let us know.

A possible “cheat” is to allow a 4th condition in the worksheet format – for examples if they’re are no rejects or late deliveries do not apply cell formating.

Further information the, “conditioning formatting” can be applied to single cells within your lines – 3 conditions can be applied to each cell, therefore its possible to have multi coloured lines / cells.

Not an expert in spreadsheets, however it will get you started, Excel help sheet may explain it clearer than me!!