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Assessing Customer SPECIFIED Suppliers



Subject: Re: Assess Customer SPECIFIED suppliers? /Perdue/Ganor/Naish
Date: Mon, 26 Jul 1999 10:54:52 -0600
From: ISO Standards Discussion <[email protected]>

From: [email protected]
Subject: Re: Assess Customer SPECIFIED suppliers? /Perdue/Ganor/Naish

The standard requires you to qualify your sources. It does not say how and it does say that it can be different for different types of suppliers.

First I want to define sole sourced for this response. The supplier is the only company in the world you can buy from. No one else makes the material or goods. As an example, at one time the only company making the pentium chip was Intel. There was no one else in the world who manufactured it and that you could buy it from. That was sole sourced. No aspersions on Intel - even if they delivered half the time late. And 50% were bad you could not go anywhere else. So there was nothing you could do. (I have had similar situations even when I worked at Intel with suppliers to Intel as well as Intel). When you are on the leading edge of technology or in a captured supplier situation you have to live with what you have and try to work with the source as best as they will respond.

If the supplier is truly sole sourced, you can put in your procedure that sole sourced suppliers need only fill out a form indicating their business information you need to set them up in your system. An evaluation buys you nothing as there is no one else to buy from. So no matter how bad they are you will have to use them.

I agree with Eitan - you then have to determine what inspection you will do. But that comes under planning rather than qualification.

If they are not sole sourced as defined above then you have to determine what level of qualification is need in addition to the business information so that you will know which source to use and why you are choosing them.

As far as customer required suppliers is concerned, most of my clients have successfully based years of audits with the qualification for customer supplied sources being the qualification criteria. However, they also indicate the suplier can only be used for the customer who specified them until the supplier is qualified by their standard qualification for new suppliers. Some do the additional qualification as time passes and add them for all customers. Other suppliers are not added because they are never needed for anything else.

When I was at Intel we frequently had to do site audits of new suppliers and even existing ones after a number of problems. I can say from history that some companies looked good in the site audit but could not perfom adequately. Others might not do so good in the audit because they hadn't dotted their "I"s and crossed their "t"s. And some started out good but relied too heavily on one or two people and fell apart after the people left.

The point is to do as good a job as you can and to the degree appropriate for the type of supplier and experience in that commodity. But be cost effective and do only what makes good business sense. Tracking what you get after you get started is equally as important as not being afraid to request actions from a supplier who is ineffective.



Subject: Re: Q: Assess Customer SPECIFIED suppliers? /Perdue/Randall
Date: Mon, 26 Jul 1999 11:39:25 -0600
From: ISO Standards Discussion <[email protected]>

From: [email protected]
Subject: Re: Q: Assess Customer SPECIFIED suppliers? /Perdue/Randall

> From: Jon Perdue x2281 <[email protected]>
> Subject:Q: Assess Customer SPECIFIED suppliers? /Perdue
> All-
> Please consider, is a supplier evaluation ALWAYS a requirement to place a
> supplier on an AVL?

The short answer is yes.

> What about a "Sole Source" of a product?

The determination that a supplier is a sole source IS an evaluation. Be prepared to show the auditor the evaluation.

> In a recent (external) audit, a nonconformance was raised because our sole
> suppliers bypassed the evaluation and went straight onto the AVL.

I would agree with your external auditor.

> What if a customer SPECIFIES to use a particular supplier?

Where your customer specifies the use of a supplier then it becomes a contract requirement (4.3) to use that supplier. No evaluation of customer specified supplies is necessary (but those suppliers can ONLY be used in producing product under the specific contract requiring their use).

Your quality system should be written to address this issue and allow the use
of customer specified suppliers.

> Does that mean we don't need to follow the requirements of ISO9001/94 4.6.2
> Evaluation of subcontractors
> "The supplier (us) shall:
> a) Evaluate and select subcontractors on the basis of their ability to meet
> subcontract requirements including the quality system and any specific
> quality assurance requirements;"

Yes - the contract requirement overrides this requirement.

> My opinion is we still need to evaluate them.
> I don't see any provisions for exceptions in the standard for this
> requirement.

The "intent" of a quality standard is to ensure that you meet the requirements of your customer (regardless of how silly your customer's requirements may seem). Meeting the requirements of the standard (where a conflict occurs) should be a secondary consideration. Consider this -- if you don't meet the requirements of your customer you are in breach of contract. Surely that cannot be the intent of ISO 9000.

> The final criteria for acceptance may be "Are they Customer Specified" (or
> "Sole Source") and if so, they are approved for the AVL regardless of the
> evaluation information collected.

If they are truly sole source -- then there is no other option. If they are customer specified, then you must use them or be in breach of contract.

> The next issue is, if they are Customer Specified, how do you identify that
> Customer approval, so in case someone looks on the AVL they know the
> supplier is only approved for the Customer named "________", and shouldn't
> be used as a supplier for just any Customer.

You are correct -- that the AVL should specify use for that specific customer only.

Further, you should either obtain a written customer requirement (or authorization) to use the supplier (from the customer's representative) - OR your employee should record:
(1) the name of the customer representative who issued the order to use a specified supplier,
(2) which supplier (including location) was specified to be used,
(3) the date on which the order was given,
(4) the name of the employee who received the order.

I hope that this helps,

Richard C. Randall


To put a further twist on things, what if each part you are being supplied with is a prototype part? How do you evaluate a supplier that is going to be a one shot deal? I am having a problem justifing a AVL, when we will most likely only use them once.


Tom Goetzinger

I would suggest that within your procedure for evaluating suppliers, you provide yourself with a way to do what you need to do. That could be a statement that "a single purchase is allowed from a supplier before formal evaluation is necessary, providing that it is approved by both purchasing and engineering". You could also create a class of suppliers called "single use" that would allow you to buy once with less than full evaluation, with the proper reasons.

Andy Bassett

Maybe this is a good point to throw in an issue. The whole Purchasing element of ISO is one that i see abused the most frequently.

Maybe i am unlucky with my companies, but it seems to me that many of them simply dont see the value of a good Supplier Management Approach, and do the usual con trick of updating the supplier list in the week before the audit. They attach no value to the idea of controlling the input from their suppliers and dodge the issue by sending out bland questionnaires that are filed without even being reviewed and then thrown onto the Approved Vendor List.

I would go so far as too say that a good Supplier Management Project is worth much more than the rest of the ISO Standard put together, and i would go further and say that for a typical manufacturing company, where inputs (supplier delivered goods) are more than 50% of Sales, an investment in a Suppier Development Manager would bring you much more than hiring a Quality Manager.

Hope im not doing you out of work Marc.

Andy B


Not hurting my 'business'. I do see more equal importance of different functions than you do, however. Yes - if you always get excellent material 100% of the time and at a 'good' cost, it will help things. However, that is only one possible failure mode out of many. For example: With all that good material all the time, if your PM schedule sucks and equipment is always down your good material does not matter one iota. Your equipment has to be 'online' so you can USE that good material. From this you can say exactly what you said about the purchasing function. It's a concert folks, and no single member is more holy than another. Another extreme would be your shipping folks - If they can't get product delivered intact and on time, your company will die.

Yes folks, it's a concert.
Andy Bassett wrote:

They attach no value to the idea of controlling the input from their suppliers and dodge the issue by sending out bland questionnaires that are filed without even being reviewed and then thrown onto the Approved Vendor List.
My apologies for getting off-topic slightly, but I encountered the single most interesting questionnaire that I have ever received.

I am one of those who, as much as I hate it, reviews each and every bland questionnaire thrown my way.

Well, it is a good thing that I do because for the first time ever, I received a questionnaire that was designed to check and see if the person completing it... is READING IT!

A sample of the questions sprinkled throughout the survey...

a) All of you equipment is out of calibration and none of it is identified as being part of your non-existent calibration system. (YES NO)

b) Your documentation is approved for use by anybody in the company, even those not remotely responsible for said documentation. (YES NO)

c) The quality inspection procedures are available at all points of use and do not detail how inspection is to be carried out at all. (YES NO)

These are just a few examples. After doing a double-take, I burst out in a fit of laughter right there in my office.

I'd hate to be the Manager at a company who just ran down the list circling "yes" to all of the questions, stuffing it back into the envelope and into the mail!

Guess what? I have a feeling that I will be revising OUR questionnaire very, very soon.

I'm STILL laughing about it. I wrote in the final comments that it was the best questionnaire I have ever received.


[This message has been edited by ALM (edited 30 July 1999).]


Super Moderator
You all ought to try having your hands tied like we do. Our sole source is the DoD supply system. Even though the quality and pricing of material is touted as world-class, we still get $600 toilet seats that don't fit, $400 rubber hammers and caps that go on kitchen stool legs that cost $250. Oh yea, the caps are round and the legs are square, there are 3 caps to a set and 4 legs on each stool.

We also get consumable materials like oil, glues, sealants and other similar items that are either out of shelf-life on delivery or go out of date tomorrow.
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