VI.D Supplier Performance

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Excerpt From The Certified Manager of Quality/Organizational Excellence Handbook

In order for suppliers to know how they are performing, they must receive feedback from the purchaser. Since the product or service is usually delivered to a location that is remote from where it is designed and produced, this feedback is the primary mechanism that allows the supplier to maintain performance in line with their purchaser’s expectations. 

This means that for suppliers providing products or services critical to quality, the purchaser must have a formal process for collecting, analyzing, and reporting supplier performance. Following are some of the more common assessments of supplier performance:
  • Questionnaires/audits. Suppliers may be requested to fill out a survey containing questions about their organization and how their quality system is designed, and what plans for improvement have been developed. The purchaser may instead conduct an on-site assessment as a means of learning more about the details of the system. The purchaser may also conduct a satisfaction survey within its own organization, asking appropriate employees to rate a particular supplier based on product performance and experiences with supplier communication and problem resolution.
  • Product data. Suppliers are often requested to provide product quality data with each delivery, which is used in place of formal verification by the purchaser. The purchaser may then analyze the data numerically or statistically, looking at overall rates of compliance to specification as well as process stability and capability. Any verification performed by the purchaser also provides data that can be used for this analysis. Internal performance of the product (for example, number of failures when the product was used by the purchaser) can also be analyzed. A number of defects analysis is common for many manufacturing industries. Data from analyses of field failures that indicated the supplier was at fault can also be reported.
  • Delivery performance. Supplier performance against delivery requirements (for example, total number of days early and total days late) can be tracked based on a comparison of receiving records against order requirements.
  • Corrective actions. When problems are reported to suppliers with a formal request for corrective action, this triggers a tracking process for ensuring that the supplier responds. These records can be analyzed to determine whether a supplier has been timely in its responses, as well as the effectiveness of the corrective actions.
  • Product price and total cost. Companies are always trying to reduce the cost of raw materials and services, or at least minimize increases. The ability of suppliers to continually show progress in this area can partially be done through a cost-of-quality analysis (see Chapter 13, Section 5) or a broader financial analysis that looks at the total cost of doing business with the supplier. Supplier-provided data on continual improvement efforts is also desired.

Quality Management BOK Reference

VI Supply Chain Management
VI.C Supplier Performance - Define, develop, and monitor supplier performance in terms of quality, cost, delivery, and service levels, and establish associated metrics for defect rates, product reliability, functional performance, timeliness, responsiveness, and availability of technical support.

Additional Resources
Back to the Supply Chain Management CMC
Back to the Quality Management Body of Knowledge

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Date Added: Sep 14, 2018
Date Last Modified: Apr 20, 2022
Category: Resources
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