Are you treating all your suppliers the same when it comes to quality management?
Are you treating all your suppliers the same when it comes to quality management?
Taking a risk-based approach to supplier classification and evaluation can help you address problems.
One of the fundamental principles of supplier management is supplier evaluation and re-evaluation. Before you can engage in these critical processes, you鈥檒l need to define your suppliers according to level of risk.
A supplier should be controlled to the extent that the supplier is going to present risk to your product or service. , a quality specialist and consultant with more than 25 years of experience in quality management, talked about supplier management during a recent webinar hosted by the 外国美女色情片.
Rick explained that risk is a core concept when it comes to supplier management through the lens of ISO 9001. Taking a risk-based approach to supplier evaluation and re-evaluation will help you understand what the impacts would be if the supplier makes an error, sends low-quality product, doesn鈥檛 send the product on time, etc.
Defining high-risk and low-risk suppliers
High-risk suppliers are those who provide mission-critical products or services, such as material. 鈥淚f you鈥檙e making things out of steel, and a supplier sends you the wrong grade of steel or the wrong sizes or the profiles aren鈥檛 right, that鈥檚 really high risk,鈥 says Rick. These errors directly impact your ability to provide the product to your customers and is high risk to your business.
If it would be difficult to find an alternate supplier for whatever product or service you鈥檙e purchasing, that would be considered high risk. If it鈥檚 relatively easy to source the material or service from other places, those suppliers would be low risk. For example, the business that supplies you with printer paper or the company that maintains your lawn are likely low risk.
A supplier that鈥檚 high risk for you might be low risk for someone else, and vice versa. Consider a transportation service. Whether they鈥檙e a high-risk supplier depends on how critical the service is to your business. 鈥淗ow important is timeliness to your business? If you鈥檙e working with a client who expects you to make deliveries within a 30-minute window, it鈥檚 very, very important,鈥 says Rick.
Ultimately, it鈥檚 up to your company to determine the relative level of risk that a supplier or classification of suppliers present to you, and to document who you鈥檒l be engaging with in a level of supplier control appropriate to the level of risk.
Supplier evaluation and re-evaluation
Rick points out that there are two required control points when it comes to supplier evaluation in ISO 9001 鈥 evaluation and re-evaluation.
Evaluation steps are taken when you鈥檙e first engaging with a supplier or re-engaging with a supplier you haven鈥檛 used in years. Re-evaluation is when you review the supplier鈥檚 performance; this should happen on a set frequency.
As Rick says, 鈥淓valuation is when you ask if you want to do business with that supplier. Re-evaluation is when you ask how it鈥檚 going now that you are doing business with them.鈥 With low-risk suppliers, re-evaluation can happen once a year, while higher-risk suppliers need continuous re-evaluation.
One of the requirements 鈥 and, in fact, one of the benefits 鈥 of a quality management system standard is that supplier evaluation and re-evaluation isn鈥檛 subjective. With a standard like ISO 9001, you鈥檙e defining and documenting the specific criteria that suppliers will be judged against, and you鈥檙e documenting how well the supplier meets those criteria.
There are a range of possibilities in terms of how you鈥檒l be evaluating suppliers against your criteria. You could do physical onsite evaluations, ranging from quick visits to multi-day full system registration-style audits. This is a great approach if you鈥檙e dealing with a supplier you鈥檝e been having some issues with. Sometimes that鈥檚 not practical or necessary, so you might choose to do a 鈥渂ook鈥 audit, where you ask the supplier to send you procedures, quality manuals, or inspection forms. Other possibilities include assessments made by other organizations or your employees; certifications, registrations, or qualifications; test purchases; or customers dictating supplier use.
According to Rick, it鈥檚 important not to set hard, simple thresholds for a re-evaluation. 鈥淏e careful about setting a threshold of, say, five nonconformances for when you start getting angry at suppliers. Five nonconformances is very different if you have a supplier sending you 5,000 line items a year versus a supplier that sends you 10 items a year.鈥
A re-evaluation can consider a range of factors beyond the 鈥減rice/speed/quality鈥 triangle, including on-time delivery, problem offloading, new/lost technical skills or capabilities, or what Rick calls commercial matters. These are factors relating to how quickly the supplier responds to errors, how cooperative they are to work with, and how they affect your own internal processes and timelines. A management or ownership change is also a good time to initiate a re-evaluation.
Manage suppliers with a reliable framework
Whatever risk levels you assign your suppliers to, and however you choose to evaluate and re-evaluate them, make sure you鈥檙e documenting everything according to the quality standard requirements. Quality management system standards like ISO 9001 provide a framework for establishing a systematic and effective approach to supplier management, contributing to improved quality, reduced risks, and enhanced overall business performance.
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