Difference between a subcontractor and a supplier

[Miner]

@Ninja I've had that scenario also where we had a supplier ship parts to a plater who then shipped them to us for further processing. In that case we called them both suppliers. The only time we used subcontracting is where we initially had product in house then sent it out for processing then received it back in house. Again, that is just the way we handled it.

 

[Jim Wynne]

An OEM might arrange to purchase an assembly from a single supplier. That supplier might opt to subcontract certain components of the assembly, and in some instances all of the components. Thus for a single-sourced assembly there might be several subcontractors. The prime supplier of the assembly is responsible to its customer--the OEM-- for all of the specifications and requirements for each component as well as the finished assembly. In reality, supply chains can branch out all over the place. For example, a subcontractor as defined above might in turn "farm out" part of the work to its own subcontractor. There are no simple answers to the question.

 

[Ninja]

Just to add a new wrinkle for the heck of it...

An OEM buys a part from me...as sole supplier...
I don't make it, any part of it...I buy it, make sure it looks pretty, remove the label, put my own label on it.
What am I (other than a guy who sees a great opportunity when he sees one)?
More to the point, is my supplier a contractor? Subcontractor? manufacturer?
And who is my provider to the OEM?

Agreed, context and complexity.

 

[Miner]

My current company also does some of this. We call it brand labeling (except we have them put our label on it) and we call them "factored product suppliers" as in factor = agent. This is probably unique to my company.

 

[Big Jim]

The terms are interchangeable. Just like trying to determine a difference between a vendor and a supplier your knocking your heads against the wall.

Vendor is defined as an entity that sells things. Supplier is defined as someone that provides things. So technically if you can find a provider that doesn't charge you for it that entity would not be a vendor. In business that is not sustainable.

Was sub-contractor is a term left over from the 1994 version?

ISO 9001:1994 used the term "supplier" for the subject of the standard, and it was replaced by "organization" in the 2000 version. So if the "organization" used to be called the "supplier", what would you call the entity that the "supplier" bought from?

 

[Cari Spears]

We decided to define the difference because we have different expectations from a supplier that's picking off the shelf, and a subcontractor that is doing work to print. Subcontractors have all kinds of requirements that we do not expect material and component suppliers to have.
Define your suppliers however it makes sense.

 

[Big Jim]

We decided to define the difference because we have different expectations from a supplier that's picking off the shelf, and a subcontractor that is doing work to print. Subcontractors have all kinds of requirements that we do not expect material and component suppliers to have.
Define your suppliers however it makes sense.

Absolutely you can define them any way you want internally. It would be wise to not forget that it doesn't necessarily apply to other organizations you interface with. That's where it gets confusing.

 

[Ed Panek]

If you train and sign off to our SOPs and forms (QMS) you are considered a contractor. If you are evaluated without training to our QMS you are a supplier.

 

[Richard Regalado]

Why not use the term "external provider" for both?

 

[Cari Spears]

Why not use the term "external provider" for both?

In our case, we created two different categories because we have different requirements and extent of control of each category.

Distributors simply go straight on the list and we monitor their order accuracy and on-time delivery. Subcontractors may have to undergo on-site audits for particular processes; they may need to be approved to our customers' standards for things like DPD and welding; they might need certified personnel to perform particular processes; etc.

They're all suppliers, or vendors, or external providers - whatever you choose to call them. We chose to define the two categories because it makes sense for us.