what are the guidelines, if there is, in the identification of high-risk suppliers. I want to be sure that i am able to correctly identify those suppliers who are really high-risk. Thank you.

what are the guidelines, if there is, in the identification of high-risk suppliers. I want to be sure that i am able to correctly identify those suppliers who are really high-risk. Thank you.

Perhaps the word 'high-risk' should be substituted with 'CRITICAL'. Critical parts are those that affects the function of the product you manufactured directly or to a large extend. It can be extended to those parts where there are few or no known substitutes, in short supply or rare in the market. You would want to have a handle on these suppliers because they can have an effect on functionality or availability and therefore customer satisfaction.

Also look at: Suppliers - Classifying Critical and Major suppliers & how to define them? (http://elsmar.com/Forums/showthread.php?t=2558&highlight=critical+suppliers)

From the GSK (Glaxo Smithkline Beecham, a Pharmaceutical giant) CORPORATE RESPONSIBILITY REPORT 2005, the following is mentioned -

Our critical suppliers must work to the highest quality standards and produce an uninterrupted supply of materials and services to GSK. If they do not, the safety, effectiveness or availability of our medicines could be affected. For these reasons, we seek long-term relationships with critical suppliers and regularly monitor all aspects of their performance, including human rights.

Critical suppliers must pass a detailed assessment before they can be selected. As well as looking at quality issues, we also assess their policies and procedures for health and safety, human rights, and environmental issues.
These rigorous assessments reduce the risk of issues of non- compliance after the contract has been signed.

Where suppliers do not meet our required standards, we work with them to agree a remedial programme which must be implemented or completed before we award any new business to them. All contract manufacturers must also be approved by the applicable regulatory authority before they can start manufacturing GSK medicines.

After a contract has been awarded we seek to develop strong, open relationships with critical suppliers. This includes formally agreed Supplier Reviews, to assess performance and identify and agree areas for improvement. After a Supplier Review the agreed action plan is signed off by GSK and the supplier. Where a supplier can’t or won’t improve their performance we will move our business to an alternative supplier.

We have launched a preferred global vendor programme to reduce the number of suppliers. As well as reducing costs and increasing efficiency this will make it easier to monitor and influence supplier standards.

Probably this will help you.

what are the guidelines, if there is, in the identification of high-risk suppliers. I want to be sure that i am able to correctly identify those suppliers who are really high-risk. Thank you.

Loraine,

Here (http://elsmar.com/Forums/showpost.php?p=153645&postcount=20) is an excellent post from Jim Wynne about risk.

Stijloor.

Thank you guys...

The thing is, i am still a new SQE and i am trying to find ways to identify those 'High-risk" suppliers for me to be able to address the right suppliers that must be developed. Through the identification of these suppliers, i can therefore narrow-down the list of suppliers that needs help until i can identify which really needs help. SO my concern is, how am i suppose to identify these 'high-risk suppliers" or what factors should be considered in the process?

happy holidays...

Thank you guys...

The thing is, i am still a new SQE and i am trying to find ways to identify those 'High-risk" suppliers for me to be able to address the right suppliers that must be developed. Through the identification of these suppliers, i can therefore narrow-down the list of suppliers that needs help until i can identify which really needs help. SO my concern is, how am i suppose to identify these 'high-risk suppliers" or what factors should be considered in the process?

happy holidays...

Loraine,

OK, here is a simple question: Who are your suppliers that if they fail to meet you needs and expectations can put you out of business and/or can get you in trouble with "The Law?" Begin there. You'd be surprised.

Stijloor.

When I first saw the term "high risk" I believed it meant the risk of their not performing to your standards. Please tell me if I am wrong about this. Assuming the supplied products are problem-free, I would be interested in the "soft" factors of customer service.

1) I would be interested in their communications quality. When you speak with a rep, is he/she always knowledgeable, in general and about your account? Helpful? Return calls promptly for follow up or messages left?

2) I would carefully scrutinize the C of A and/or C of C. Is it specific, or a sixteenth-generation photocopy of a plain-vanilla certificate?

3) I would do test runs on the supplier if it is not required to send a C of A or C of C with every shipment, but is contracted to supply it on request. How fast do hey get it to you? I it always accurate? #1 applies here too. Quality of response to a question matters.

4) I would google this company and see if it seems sound. Is it a thriving company, or is it in financial swampland? Don't just look at growth for the sake of growth, look at news articles talking about current events.

5) I would make a scorecard out of these qualitative and quantitative assessments for future reference. I would not use questionnaires, as I hold them in very low esteem--they are usually too generic to be of any practical use, and you can't really be sure who is completing them.

These are just some general ideas, I encourage you to use their contexts to help decide what sort of things YOU want to know about the supplier: exactly what services you ever expect out of them, and how much variation in them you're willing to accept.

I hope this helps!

Loraine,

OK, here is a simple question: Who are your suppliers that if they fail to meet you needs and expectations can put you out of business and/or can get you in trouble with "The Law?" Begin there. You'd be surprised.

Stijloor.

Good advice, but I'm not sure that it has to go to that extreme, although it might. The first step is to define "risk" independently. What might be risky to your business could be inconsequential in someone else's. The most obvious are things like late shipments, and nonconforming material--things that might have an immediate effect on your business. Suppliers' financial condition might present risk. I know of a recent instance (http://www.journaltimes.com/articles/2004/06/09/local/iq_2926452.txt) where a supplier suddenly going out of business created havoc for a company that didn't have a contingency plan to deal with it.

Once you know what "risk" means, you can review your history with present suppliers and look for signs of potential trouble. You shouldn't limit your assessment to just bad things that have happened in the past, though. As in the case of the supplier that suddenly went belly-up, you need to look at the possible impact of losing a key supplier, and come up with a plan. It might not just be a financial situation; I've also seen instances where things like fires and floods cut off key supply lines. Ask yourself what will happen to your production lines if you come into work one morning and find that a key supplier's building burned down overnight. (http://cbs2chicago.com/local/fire.Green.Line.2.333073.html).

Second. You must first define "risk" or "critical". Note that the industry you are in may affect your definition. For example, in the medical device industry, the GHTF has a definition for "critical supplier"s. And in general the government's interest is in nothing but whether the supplier's product affects your product's safety and performance.

I must admit that I was unable to find a definition of "critical" supplier by the US FDA. Worse, I was unable to find how GHTF uses the term "critical supplier".

Loriane,

Here is a excel file with guidence for this and the requirements.

Loriane,

Here is a excel file with guidence for this and the requirements.

Thanks for sharing :applause: