I am a supplier quality engineer reporting to the process and quality manager (not a sourcing manager). I am tasked with creating and maintaining a ten worse supplier list based on quality received. We do not have incoming inspection but we do have a non conforming form and process in place which identfies the non conformances during manufacturing process. My idea is to use the NCMR process in which MRB will deem whether the defect is the result of a supplier. What I need from the forum is feedback and ideas of what criteria I should put in place to eventually remove the supplier off the list.
Thanks,
Bob Z

I am a supplier quality engineer reporting to the process and quality manager (not a sourcing manager). I am tasked with creating and maintaining a ten worse supplier list based on quality received. We do not have incoming inspection but we do have a non conforming form and process in place which identfies the non conformances during manufacturing process. My idea is to use the NCMR process in which MRB will deem whether the defect is the result of a supplier. What I need from the forum is feedback and ideas of what criteria I should put in place to eventually remove the supplier off the list.
Thanks,
Bob Z

Hello,

I would start with the evaluation of the Supplier Development Process.
What specific criteria do you use to select, approve and monitor suppliers?
Have you "classified" your suppliers in terms of their impact on your final product quality?
Do you already have supplier performance monitoring data?
Do you have a SCAR (Supplier Corrective Action Request) in place?
I would be careful not to just use Nonconforming Material Report (NCMR) data to evaluate the performance of a supplier. Sometimes poor supplier performance can be caused by poor customer-supplier communication.

Establish a set of objective/measurable criteria such as delivered quality, on-time delivery, responsiveness to SCAR's, competitive pricing, etc.
Collect the data of a reasonable period of time, perform a Pareto Analysis, and then determine your "Worst Ten Suppliers."

Now, after all this, is your intent to help the "worst" ones to get better, or just to eliminate them? Please keep in mind that beating up on suppliers may not be your best strategy. Where I came from we say: "It takes two to tango."

I am sure you'll hear from other Covers as well.

Wishing you the best.

Stijloor.

Hello Stijloor,

The supplier eval is conducted by global sourcing. This includes selection and approval. As for monitoring we use the NCMR process for electrical and mechanical. We also use a first pass yield database for our electrical (PWBA's). I also have a SCAR process which is in place but does need help which I am working on.
I am not sure what you mean as far a classifying their impact. Aside from basic hardware (screws, nuts, etc...) all our parts are an impact to our final product.

Do you already have supplier performance monitoring data?
As stated above FPY, SCAR's and NCMR's. I do not monitor or am I requested to show anything related to on time deliveries or other sourcing activities related to purchasing.


I would be careful not to just use Nonconforming Material Report (NCMR) data to evaluate the performance of a supplier. Sometimes poor supplier performance can be caused by poor customer-supplier communication.
Our suppliers are required to review our official documents and submit first piece qual parts.

My perception of supplier quality is I am in a trusted partner ship with them, they are just an extension of our company. My intention is not elimination but with my large supply base I need to approach the top ten and try to reduce the incoming issues.

Bob Z

Hello Stijloor,

The supplier eval is conducted by global sourcing. This includes selection and approval. As for monitoring we use the NCMR process for electrical and mechanical. We also use a first pass yield database for our electrical (PWBA's). I also have a SCAR process which is in place but does need help which I am working on.
I am not sure what you mean as far a classifying their impact. Aside from basic hardware (screws, nuts, etc...) all our parts are an impact to our final product.

[Do you already have supplier performance monitoring data?] As stated above FPY, SCAR's and NCMR's. I do not monitor or am I requested to show anything related to on time deliveries or other sourcing activities related to purchasing.


[I would be careful not to just use Nonconforming Material Report (NCMR) data to evaluate the performance of a supplier. Sometimes poor supplier performance can be caused by poor customer-supplier communication.] Our suppliers are required to review our official documents and submit first piece qual parts.

My perception of supplier quality is I am in a trusted partner ship with them, they are just an extension of our company. My intention is not elimination but with my large supply base I need to approach the top ten and try to reduce the incoming issues.

Bob Z


Hello Bob Z,

Quote: "I am not sure what you mean as far as classifying their impact."

Some of my Clients classify their suppliers into "A", "B" and "C" suppliers.
An "A" supplier has a direct/immediate impact on product quality such as raw material suppiers. A "B" supplier would have an indirect impact such as a maintenance services supplier. A "C" supplier could be one that provides MRO items and other supplies.

The manner in which the suppliers are monitored and feedback provided depends on how they are "classified."

Hope this helps. I'll do some more "digging" for you.

Stijloor.

My perception of supplier quality is I am in a trusted partner ship with them, they are just an extension of our company. My intention is not elimination but with my large supply base I need to approach the top ten and try to reduce the incoming issues.

Bob Z

Hello, Bob! I really like your above quote. I too, share that perception.

I guess I am a bit unclear the specific information you are looking for. Are you wanting to develop some cut-off criteria to get rid of suppliers (poor performers), or to strengthen the relationship with your current suppliers?

Do you feel you have too many suppliers? Are you wanting a weighted system for awarding contracts?

There are many approaches you can take, depending on your purpose. Too, how many variables do you want to consider? Like 3-5, or up to 20 factors?

Hi Brad,
I am glad to see I am not alone. My new manager is looking for me to bull dog the suppliers and I do not want to take the bully role. I would like to work with the supplier in a manner that is respectful yet forceful which over the years has worked well for me. So with that aside I am trying to decide what would be the best way to remove the supplier off the list based on their preformance after I notify them of their status on the list. I will be using qty of NCMR's and qty and responsivness to SCAR's for mechanicals and the same for electrical but will include FPY. Should it be 1 month, 2 months, etc....

Hi Brad,
I am glad to see I am not alone. My new manager is looking for me to bull dog the suppliers and I do not want to take the bully role. I would like to work with the supplier in a manner that is respectful yet forceful which over the years has worked well for me. So with that aside I am trying to decide what would be the best way to remove the supplier off the list based on their preformance after I notify them of their status on the list. I will be using qty of NCMR's and qty and responsivness to SCAR's for mechanicals and the same for electrical but will include FPY. Should it be 1 month, 2 months, etc....
My advice, FWIW is to first separate supplier base into tiers. My reasoning for tiers was

sole source supplier - keep the romance going with lots of personal communication - these are the guys you HAVE to have a true partnership with because replacing them is almost too traumatic to contemplate.
source critical to your own product (usually custom made to your specification, regardless of how many different suppliers) - the most critical part is selection and approval and on-site inspection tour by your organization or a trusted third party agent. These are the folks you want to keep in the loop by telling them the TRUTH about the quantities you will use and what percentage you will purchase from them. These are also the guys you can be firm with when telling them performance on
(a) quality;
(b) delivery;
(c) responsiveness to requests
are critical to keeping any contracts. Don't hesitate to pull the trigger if you give them fair warning and they still treat you like a redheaded stepchild.
off-the-shelf suppliers of commodities - do a thorough investigation of their reputation and quality BEFORE placing an order for quantity. I often ordered and paid for (in advance) a few samples, ostensibly for prototype purposes, and subjected them to an intense inspection for dimensional and functional characteristics. If I had any hassle about the order or I thought the packaging and handling of my sample order was slap dash or substandard, I didn't bother to discuss the matter with them, I just moved on to the next supplier - in my book, such poor performance brings to mind the adage: "You only get one chance to make a good first impression." When an organization does not have the facilities to perform a thorough incoming inspection of ordered goods, then it needs to contract with a trusted third party to make spot checks and it is much more important to satisfy yourself the supplier is doing everything right at HIS shop so you can truly have "dock to production line" confidence in the goods you buy from him.

Hi Brad,
I am glad to see I am not alone. My new manager is looking for me to bull dog the suppliers and I do not want to take the bully role. I would like to work with the supplier in a manner that is respectful yet forceful which over the years has worked well for me. So with that aside I am trying to decide what would be the best way to remove the supplier off the list based on their preformance after I notify them of their status on the list. I will be using qty of NCMR's and qty and responsivness to SCAR's for mechanicals and the same for electrical but will include FPY. Should it be 1 month, 2 months, etc....


Your approach is far superior. Your manager is wrong.

Toyota and Honda collaborate with their suppliers over problems. GM and Ford bully...you decide which one works better...

Collaboration is great, and preferred. My policy is to always try to help a supplier who has fouled-up. But in the real world, when you're not a major purchaser (say <5% of a supplier's business) sometimes the suppliers DO treat you like crap because they know you can't afford to qualify a new supplier.

I have two suppliers who are sole source, and both were great when they were designed-in. Both are AS9100 certified. But ownership has changed in one case, and in both cases the attitude has changed, and it is like pulling teeth sometimes to work with these guys. More and more I am being convinced that sole sourcing anything is bad business.

]....But in the real world, when you're not a major purchaser (say <5% of a supplier's business) sometimes the suppliers DO treat you like crap because they know you can't afford to qualify a new supplier.

It is usually cheaper to qualify a new supplier (long term) than to fight with a supplier who is capable of treating you like crap.

It does not have to be expensive to qualify a new supplier, but it is always expensive to deal with a bad one.



I have two suppliers who are sole source, and both were great when they were designed-in. Both are AS9100 certified. But ownership has changed in one case, and in both cases the attitude has changed, and it is like pulling teeth sometimes to work with these guys. More and more I am being convinced that sole sourcing anything is bad business.


That is why many don't do it. While single sourcing can and often works well, it is only effective when there are clear understandings and clear monitoring of performance.

If anyone is remotely interested, Agency Theory goes a long way in explaining a lot of the thoughts here.
***********
I would submit to you, though, if you have a supplier with poor quality, it will always be less expensive to add another approved supplier than dealing with them.

Mike, I know you were stating a reality. But I am still of the mind that it don't matter how big you are, you should still be receiving excellent service. Too, you may only comprise 2% of your current suppliers business, but you may comprise 10% of the next suppliers business.

Do you have to have some formal written justification for adding a new vendor, or is it pretty easy to do?

It is usually cheaper to qualify a new supplier (long term) than to fight with a supplier who is capable of treating you like crap.

It does not have to be expensive to qualify a new supplier, but it is always expensive to deal with a bad one.


Sure, sometimes you can re-qualify new suppliers for a reasonable cost relative to putting up with a crappy supplier. But, trust me, sometimes it is cost prohibitive, especially when it is for aerospace products sold to the military via a major defense contractor. The expenses for my company are estimated at 7 figures when all is said and done, which is ~ 25% of our yearly profit!

Sure, sometimes you can re-qualify new suppliers for a reasonable cost relative to putting up with a crappy supplier. But, trust me, sometimes it is cost prohibitive, especially when it is for aerospace products sold to the military via a major defense contractor. The expenses for my company are estimated at 7 figures when all is said and done, which is ~ 25% of our yearly profit!Bummer!

One of the reasons I wrote
"sole source supplier - keep the romance going with lots of personal communication - these are the guys you HAVE to have a true partnership with because replacing them is almost too traumatic to contemplate."

was because I DO understand some situations make it next to impossible to change suppliers due to problems up and down the supply chain, not just the difficulty of finding another supplier with capability and capacity to make your product.

Did the ownership change come as a surprise or were you notified well in advance and given an opportunity to meet and "bond" with the new owners? If it was surprise, your relationship with the supplier was not as close as it could have been.

Obviously, something more than ownership change has occurred in the relationship or else the second company would not also be giving your company grief.

In terms of sole source, I was on both sides of the "sole source scenario"and made it a large and high priority to know nearly as much about things at my supplier as I knew about my own company. The situation as a sole source is also "iffy" if the purchaser is secretive about plans for changes and nurses a "grudge" for real or imagined offenses of the supplier.

It may be a difficult notion for people to follow or accept, but the personal relationship between buyer and seller has a large effect on the "perception" of events which occur from time to time:

If my purchaser started stretching out payment beyond contract terms, in my mind, that was as big a breach of the relationship as if I was consistently late on delivery (delivery of goods or delivery of payment have equal weight in my mind.)
If my supplier changed from same day response to a query to "next day" or "next week," it was a signal that something was seriously wrong with the relationship. If the late response came without an effusive apology, that was absolute proof the relationship had degraded. As a good quality pro, the task is to determine root cause and either make a correction AND corrective action OR prepare to dissolve the relationship.
If quality of product or packaging showed a trend to worsen without proactive comment from a supplier about efforts toward corrective action, this was a big signal the supplier's organization was deteriorating, not just the relationship between us.When the relationship cannot be repaired or if the supplier organization is deeply flawed (whether because of something the purchaser has committed or omitted or due to outside influence), it's time to get a new supplier, no matter how inconvenient, costly, or painful, BECAUSE the ensuing problems will inevitably cause more pain and cost more than changing suppliers.

Sure, sometimes you can re-qualify new suppliers for a reasonable cost relative to putting up with a crappy supplier. But, trust me, sometimes it is cost prohibitive, especially when it is for aerospace products sold to the military via a major defense contractor. The expenses for my company are estimated at 7 figures when all is said and done, which is ~ 25% of our yearly profit!


True, aerospace and military changes the equation considerably. Good luck!

Bummer!

Did the ownership change come as a surprise or were you notified well in advance and given an opportunity to meet and "bond" with the new owners? If it was surprise, your relationship with the supplier was not as close as it could have been.

Obviously, something more than ownership change has occurred in the relationship or else the second company would not also be giving your company grief.


Wes,

We knew in advance -- though it was before I got here. Still...efforts certainly were made to "bond" with the new top dogs, but it is folly to think that a close relationship can be had when only one party has interest. Surely you have learned that lesson in life! No matter how diligent you are and how wonderful your relationship management skills, sometimes the relationship goes down and there is nothing you can do about it.

What you state as obvious is really not so. Out of hundreds of suppliers, and a couple dozen key ones, why does it shock you that 2 companies may change considerably unless we did something to provoke them?

I honestly can't say that it is worth $1M plus to change this supplier at this time. But for $100K it would probably be worth it just to be able to tell them to take their product and ...

Wes,

We knew in advance -- though it was before I got here. Still...efforts certainly were made to "bond" with the new top dogs, but it is folly to think that a close relationship can be had when only one party has interest. Surely you have learned that lesson in life! No matter how diligent you are and how wonderful your relationship management skills, sometimes the relationship goes down and there is nothing you can do about it.

What you state as obvious is really not so. Out of hundreds of suppliers, and a couple dozen key ones, why does it shock you that 2 companies may change considerably unless we did something to provoke them?

I honestly can't say that it is worth $1M plus to change this supplier at this time. But for $100K it would probably be worth it just to be able to tell them to take their product and ...I'm sorry. I did not mean to imply the customer had done anything to incite the change, merely that sufficient warning of an impending change, regardless of the cause (ownership or employee change for example), sometimes makes it easier to use the time to arrange for an alternate source of supply. Especially the part about working with folks upstream in the supply chain to accept such change, especially when you can explain the advantage for everyone.

thanks for great replies