Supplier Evaluation - Simplest System

[normzone]

I'm feeling lean...I'd appreciate it if anybody can poke holes in this logic. I understand the benefits of building relationships, screening suppliers, ad nauseum, but I'm in a tight spot. I inherited a small repackaging outfit, some design, recent ISO certification, very young QMS, no QA resources except me.

My take on meeting the minimum requirements of the ISO 9001:2008 standard:

COTS suppliers must be able to provide product as specified.

OEM manufacturers must have capability to produce to technical specifications.

Suppliers will be selected based on their ability to deliver or produce product in accordance with documented specifications.

Subsequent Purchase Orders with a given supplier shall constitute records of evaluation and re-evaluation of that supplier.:

From ISO 9001:2008 -

The organization shall ensure that purchased product conforms to specified purchase requirements.

The type and extent of control applied to the supplier and the purchased product shall be dependent upon the effect of the purchased product on subsequent product realization or the final product

The organization shall evaluate and select suppliers based on their ability to supply product in accordance with the organization's requirements. Criteria for selection, evaluation and re-evaluation shall be established.

Records of the results of evaluations and any necessary actions arising from the evaluation shall be maintained

 

[El Capten]

What is your question?

 

[normzone]

My question is would you, as an external auditor, accept this as a legitimate method of supplier qualification and re-qualification for a small outfit ? I think the logic and method is legitimate, but I know how accustomed auditors are to seeing periodic surveys, qualification, re-qualification and dis-qualification rituals.

 

[Golfman25]

I think you might have trouble with the subsequent issuance of a PO being evidence of evaluation or re-evaluation. For a small company, what I have seen work is an annual review of all of its suppliers. But you only deal with the outliers -- those suppliers who suck. So you might have a list of 20 suppliers. 19 are fine. 1 is a problem. You identified the problem child and deal with it as needed.

 

[normzone]

I see your point. What I'm trying to avoid is setting up more than I need solely to meet the standard.

In a very small organization, the buyers know who is on time and who is delivering quality product. Awareness of pricing advantage also exists.

You have the suppliers who are challenged in delivery performance but you'll continue to buy from them anyway because of pricing.

You have the suppliers who are challenged in quality performance, but you'll buy from them anyways when the other suppliers in your stable have backlogs that won't permit them to meet your delivery criteria.

And you have the suppliers who are pricey but flawlessly deliver your most complex items, so they get those orders.

The buyer shifts his business amongst those suppliers as appropriate, and if a supplier offends in an extreme manner you simply don't do business with them...that is, until you really need them again for some compelling reason.

The reviews are all in the buyers head, and the Purchase Order really is the evidence of the review. I can put a more data intensive system in place, but it's just burning resources for no real benefit.

 

[Reg Morrison]

According to ISO 9001, you must use DATA to assess supplier performance. So, supplier related data needs to be gathered, analyzed and decisions must be made, based on what DATA tells you.

Typical data includes product conformity data, OTD data, rejection data, etc...

Just like your customer repeat orders should not be used as a measure of their satisfaction, your repeat orders to a supplier is not adequate data of supplier performance. No loopholes, please.

 

[Golfman25]

I see your point. What I'm trying to avoid is setting up more than I need solely to meet the standard.

In a very small organization, the buyers know who is on time and who is delivering quality product. Awareness of pricing advantage also exists.

You have the suppliers who are challenged in delivery performance but you'll continue to buy from them anyway because of pricing.

You have the suppliers who are challenged in quality performance, but you'll buy from them anyways when the other suppliers in your stable have backlogs that won't permit them to meet your delivery criteria.

And you have the suppliers who are pricey but flawlessly deliver your most complex items, so they get those orders.

The buyer shifts his business amongst those suppliers as appropriate, and if a supplier offends in an extreme manner you simply don't do business with them...that is, until you really need them again for some compelling reason.

The reviews are all in the buyers head, and the Purchase Order really is the evidence of the review. I can put a more data intensive system in place, but it's just burning resources for no real benefit.

I agree with you 100%. In a small company you're involved in the day to day details and you know who you should by from or not. And you certainly know when a real problem arises.

I don't see where ISO mandates the use of "data" in supplier evaluation. It allows you to establish the requisite criteria.

So how do you get it out of your head and into a format an auditor can see (because records of review need to be maintained)? Use a simple once per year form to record your thoughts. You can add criteria to your review form -- i.e.; on-time delivery, pricing, service, etc. Make note of any supplier problems and correct as necessary.

 

[normzone]

Thanks all for your input so far. Please continue to argue both sides of this as you see fit - I need all the help I can get.

Yes, ISO 9001:2008 does say in 8.4 "The analysis of data shall provide information relating to...d) suppliers (see 7.4)

7.4 just says "...extent of control applied to the supplier...dependent upon...effect...on product"

AND

evaluate and select suppliers based on their ability to supply product in accordance with the organization's requirements. Criteria for selection, evaluation and re-evaluation shall be established. Records of the results of evaluations and any necessary actions arising from the evaluation shall be maintained

I believe that my approach would meet 7.4 and any records requirement with any auditor familiar with small business, but most will expect to see the resource sucking "we do it yearly because we're required to' approach.

I don't think my approach meets 8.4, however, so I guess I'm stuck observing the sacred rituals for fear of offending the powers.

All my suppliers pass a "good quality" test, but none of them pass even a liberal "on time" test. That's not going to change, the nature of the business is too demanding to hit the high bar reliably.

But that's another problem for another time.

 

[PaulJSmith]

I think you've skipped over a very important part of 8.4 ... the very first sentence:
"The organization shall determine, collect and analyze appropriate data..."

It's completely up to you as to what "data" works best for your company.

 

[kgott]

I disagree with most of the advice given. You can use and un-use, any supplier you want for any reason you want.

Your re-evaluation crtieria can be anything you like, eg you can say any supplier you use remains approved to supply the company unitl such time as you are dissatisifed with them for any reason then you will no longer do business with them.

Time based re-evaluation of suppliers is not required. In relatity, you are reviewing and making decisions about continuing use of a given supplier every time you do busienss with them.

This applies to your staff to as they are also suppliers which is often overlooked in all this supplier selection, evaluation/re-evaluation discussion.