Putting a Supplier on Probation

R

RosieA

In our QMS, we have a multi-step process for working with problem suppliers. It starts with a quarterly review of our "Repeat Offenders" with Commodity Management, Buyers and Supplier Development. We put plans together to assist the problem suppliers including:

Supplier Performance Kaizen
Supplier Development Plan
Visits to the supplier to assess progress
Large scale projects to address specific issues.

The focus is on helping the supplier through education, root cause analysis, and data analysis.

However when these methods do not work, we need to have a next step, before disqualification. We are considering a "probation" option as the last step and are working on criteria for that option.

We plan to start with a re-audit of the supplier, a risk analysis specific to this supplier, and an Action Plan with due dates that must be met before they can be released form probation.

Do any of you have a process similar to this that you can share?

In some cases, such as when the supplier builds our product with Tooling that might be difficult to move, or processes that are unique to that supplier, we are having difficulty establishing a deadline for improvement actions.

Thanks
 
W

Wilderness Woody

We use "Active - Probation" as a supplier category. It requires a specific Quality Plan with each order submission so that the requestor takes on additional oversight to determine the acceptance of incoming product or service.

It's sort of like trying to repair your credit... if you prove your ability to deliver quality product, you can work your way off probation and be reinstated as fully Active status. There are time periods and numbers of shipments needed to be met to get out of probation. Tying the Quality Plan documentation to the requestor can help team up your own staff with supplier and it's in both of their interests to get off probation!
 
P

PaulJSmith

The biggest problem I've encountered is usually follow through. Many suppliers are picked and maintained for some reason, and it's not always the quality of their work; they're convenient, they're the only one we know of who does that, etc., etc. Getting the excuse makers to accept that something needs to be done to either improve or (gasp) replace a supplier can many times become an internal politics battle. Issues like tooling always play into it, too, as you've noted. Ultimately, though, it usually falls on the QM to make the case and enforce the decision. Probation is the pivotal step that makes the most sense, to me, anyway.

We're teetering on such a decision with one of our biggest suppliers right now.
 

John Broomfield

Leader
Super Moderator
The biggest problem I've encountered is usually follow through. Many suppliers are picked and maintained for some reason, and it's not always the quality of their work; they're convenient, they're the only one we know of who does that, etc., etc. Getting the excuse makers to accept that something needs to be done to either improve or (gasp) replace a supplier can many times become an internal politics battle. Issues like tooling always play into it, too, as you've noted. Ultimately, though, it usually falls on the QM to make the case and enforce the decision. Probation is the pivotal step that makes the most sense, to me, anyway.

We're teetering on such a decision with one of our biggest suppliers right now.

Paul,

Would that failure to establish effective criteria for the reselection of suppliers (7.4.1) be worthy of corrective action?

John
 

Big Jim

Admin
Paul,

Would that failure to establish effective criteria for the reselection of suppliers (7.4.1) be worthy of corrective action?

John

Good luck with that. Opening a corrective action in a political situation could be a career changer, and not usually for the better.

If someone is in that situation it may be wise to be dusting off their resume anyway.
 

John Broomfield

Leader
Super Moderator
Good luck with that. Opening a corrective action in a political situation could be a career changer, and not usually for the better.

If someone is in that situation it may be wise to be dusting off their resume anyway.

Big Jim,

I agree, insufficient authority from the CEO is also a problem.

But need this fear (and lack of authority) stop the Registrar's auditor from reporting the 7.4.1 nonconformity too?

John
 

Jim Wynne

Leader
Admin
There is no point in putting suppliers on probation unless there's evidence that doing so will help to improve performance. This sort of thing often comes down to who has the most financial clout. If you tell an under-performing supplier that they will get no new business until their ship is righted, it won't make much difference if the supplier's not concerned about new business with you, for whatever reasons there might be. On the other hand, if a supplier *needs* your business and more of it, it could have a positive effect.

Another thing to consider is the idea that if a supplier is consistently and repeatedly performing poorly, it's a sign that the entire management system of the company is out of whack. From that perspective, whip-cracking will have no effect whatsoever, or the effects will be transitory and will never be sustained.

What you need to do is try to understand (a) why the supplier performs poorly; (b) what power you have to affect the performance and (c) the implications of trying to manipulate a system that isn't likely to change. This last one includes the internal political implications that others have mentioned here.
 

Big Jim

Admin
Big Jim,

I agree, insufficient authority from the CEO is also a problem.

But need this fear (and lack of authority) stop the Registrar's auditor from reporting the 7.4.1 nonconformity too?

John

It is not likely to stop a CB auditor from writing a nonconformance if he finds it, but that is not as politically devistating a XXXXXXX in the wind while facing your superiors.
 
P

PaulJSmith

Paul,

Would that failure to establish effective criteria for the reselection of suppliers (7.4.1) be worthy of corrective action?

John
Yes, and it did. While it was not well received by some, it was understood as a necessity. In fact, we've already started to transfer some of the business to a new supplier. We are also still working with the troublesome supplier to continue their development. While we're not their biggest customer, we are a formidable chunk of their sales. So, they have some skin in it.

We're a small tech manufacturer, and change here happens slow, but it is starting to happen as we grow. Beating out the politics and ingrained bad habits (like continuing to use poor-performing suppliers) are our biggest challenges. The business started out in the owners garage 15 years ago, and some of that garage mentality still exists.
Working on that.
 

normzone

Trusted Information Resource
" The business started out in the owners garage 15 years ago "

Didn't they all...This is a common challenge.

At the size of company I work with (under 100 people) probation is largely a waste of resources. You have to define how they get on it, how they get off it, and then spend resources maintaining it.

As stated earlier in this thread, the supplier in question is either on the way out or embedded in your culture by virtue of cost, proximity, or politics.

Their popularity comes and goes - There's always a "booty call" supplier that for all their other faults, will do whatever you ask at the last minute.

It's Monday...and I'm feeling it ;-)
 
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