VI.E Supplier Improvement
Whether it is to help resolve problems or is simply a part of ongoing continual improvement, ensuring that supplier performance improves is required if an organization is to maintain competitiveness. Improvements may be related to products, processes, systems, value and competitive pricing, or strategies. Feedback to suppliers is an important component for their improvement, helping them to understand strengths and weaknesses from the purchaser’s perspective.
When the transaction is business-to-business, evaluate the purchasing process as well as supplier performance. Look at:
- Is the purchasing process measured solely on reducing costs, the head of purchasing measured on “Don’t pay too much. Don’t run out. And never shut down a line”?
- Is the focus on suppliers absorbing storage costs, causing higher prices?
- Is the total cost of procurement considered (price poor quality poor delivery)?
- Are specifications given the suppliers correct and adequately defined?
- Are buyer–supplier relationships more adversarial than collaborative?
A focus on the supplier’s quality system is one means of supplier improvement and can be done through assessment and scoring of the appropriate processes. Suppliers that are audited against a quality system standard may be asked to improve particular aspects of the system (for example, better qualification of critical processes or use of statistical process control). Some industries require that registered companies develop their suppliers based on the requirements of the industry quality management standard (for example, ISO/TS 16949 for automotive, AS9100 for aerospace, and TL 9000 for telecommunications).
Audits that are performed against a company’s standards or other criteria such as the Baldrige Criteria typically measure strengths and weaknesses. Suppliers are given a score, and some purchaser’s require scores to be above a minimum in order to award business.
Assessments done of a supplier’s quality system must be done by personnel who are adequately qualified in the assessment process as well as the particular standard being used for the assessment. Perhaps more importantly, they must have the ability to communicate with supplier personnel in a manner that will result in a willingness to listen to the results, rather than their feeling criticized.
Recorded Webinar: Strategies to Prevent Supplier Issues
Quality Management BOK Reference
VI Supply Chain Management
VI.D Supplier Improvement - Define and conduct supplier audits, evaluate corrective and preventive action plans, provide feedback, and monitor process improvements.
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