Broken Supplier Management System

[RCW]

I have sifted through A LOT of posts in the "Supplier Q.A." in search of finding answers to my problems. While there was good information to be found, I still find myself lost, going in circles.

Here's my overalll problem: My supplier evaluation system is not working and I have backed myself into a corner.

Background info: Several months ago I noticed a large portion of my suppliers (total # of suppliers around 600 (not a typo)) were qualified under grandfathering. This was from the original implementation of my ISO9001 system back in 1999. There was also no records of the suppliers being reviewed other than those that had delivery and/or quality problems. (A "no news is good news" review). I then asked purchasing to re-qualify their grandfathered suppliers.

I worked with purchasing to establish supplier acceptance criteria. We came up with 1) supplier has an ISO-9001 style cert, 2) accreditation to an industry standard, 3) customer-specified supplier, 4) authorized distributor of part manufacturer, 5) reviewed by engineering, 6) approval by quality thru quality questionnaire (I don't like them either but work with me on this), or 7) they are consultants supplying resume or reference letter.

I thought in this day and age that at least 80% of my suppliers would hold an ISO 9001 cert. I was wrong. It looks like less than 50%. I am also finding that a) purchasing is having problems fitting suppliers into this criteria, b) I have found a few suppliers that I have problems qualifying and c) if they don't have an ISO cert them purchasing automatically has them fill out a quality questionnaire.

I am really at a loss here. I realize my system is broken but don't know what direction to take. I have reviewed two "canned" procedures and they both use a list similar to mine. Is a qualification list necessary? I realize that every company is different and attacks this from a different angle but right now purchase orders are waiting to be placed due to a failed system.

Desperately seeking assistance.......

 

[Wes Bucey]

How many (real number or percentage) of the suppliers are supplying off-the-shelf products and how many are making custom product to your company's specifications?

Forget the off-the-shelf guys for the time being and concentrate ONLY on any and all custom suppliers. These guys need to be reviewed and approved on a regular basis simply because so many things can change in a relatively short period of time.

If you don't see your path based on this short comment, call or pm me and we can go over the topic in depth.

 

[RoxaneB]

Here's my overalll problem: My supplier evaluation system is not working and I have backed myself into a corner.

The activities you mentioned as part of your evaluation program sound as if they are more aligned with the initial step of getting a supplier on to the approved list.

What are the activities involved on a moving-forward basis?

This is where I would suggest speaking with your internal stakeholders and finding out what their requirements are for suppliers...those quality thingies like:

• On-time delivery (especially if your company is a JIT organization)
• Physical/Chemical attributes (e.g., must contain 50%-60% of chemical XYZ, dimensions/tolerances, etc.)
• Proper certification with each delivery

Then, as you move forward and track nonconformances (and hopefully have them resolved), you and your team can determine if you wish to continue doing business with them.

This tracking may not only help to shorten your list of suppliers, but may also give your organization a leg to stand on come price/contract negotiation time.

 

[Sidney Vianna]

Desperately seeking assistance.......

You can have a look at the guidance documents provided via Chapter 8 of the IAQG Supply Chain Management Handbook website.

Despite the fact that the guidance is targeted for the Aviation, Space & Defense Supply Chain, you can assess the levels of controls and requirements that would make sense for your business sector, context and risks. I am attaching one of the documents to this message, but, as mentioned above, I encourage you to familiarize yourself with all the material availabe in Chapter 8 of the IAQG SCMH.

 

[RCW]

The activities you mentioned as part of your evaluation program sound as if they are more aligned with the initial step of getting a supplier on to the approved list.

Correct. That's where one of the problems resides.

What are the activities involved on a moving-forward basis?

For the most part what you listed is being captured. On-time delivery, completeness of paperwork (certs and other required records) and physical quality of the part (damage, workmanship).

I think this is where another problem exists. The data is there but it is not being crunched and applied to all the suppliers. The process is only looking at finding the big numbers. In hindsight, I shouldn't have made Purchasing re-qualify grandfathered suppliers. I should have pushed more for reviewing existing suppliers.

 

[Golfman25]

My $.02. Figure out what are you trying to do and why? It seems like you might just be creating work, without value.

You seem to be treating every supplier the same and using a hammer to solve the problem. For example, Wes points out that there is a significant difference between off the shelf distributors and custom products. Focus on the suppliers you can make a difference, good or bad, to your company.

And if it was a mistake to re-qualify grandfather suppliers, undo it. Grandfather them back in change your focus.

Good luck.

 

[cutsdean]

I tend to agree with Wes. Start with suppliers that manufacture components to your specifications.

categorise your suppliers and group them. Those with Iso can be approved with a review date two weeks prior to their iso cert running out. Stockists can have a short term approval based on risk, say six weeks. This leaves the rest which should be sent a simple questionnaire identifying if they have a management system of any kind. Those that have a management system can be considered lower risk. Those that do not must have a more in depth assessment carried out.

It is also worth checking if suppliers have any 3rd tier approvals from other customers.

Supplier approval is about identifying and mitigating risk. In order to get the purchase orders out you must understand the risk the suppliers present. Longer term you can develop a more in depth questionnaire which will help with risk assessment and enable you to determine 're-certification dates for each supplier.