Supplier Quality Management


Choosing the right suppliers involves much more than scanning price lists. Your choice of the supplier will depend on a wide range of factors such as value for money, quality, reliability, and service. How you weigh up the importance of these different factors will depend on your business priorities and strategy.

This guide illustrates a step-by-step approach you can follow that should help you make the right choices. It will help you decide what you need in a supplier, identify potential suppliers and choose your suppliers.

Supplier quality management (SQM) is a critical activity for any business that relies on suppliers in the provision of their goods or services. It involves managing, monitoring and responding to changes in the supplier's ability to fulfill customer's needs on time and to the agreed quality specification.

Key Practices For Managing Supplier Quality

You can use several strategies to monitor and improve quality throughout your supply chain. For example, you can:
  • Measure the cost of quality - find out how much it costs to manufacture a quality product. Then look at how much poor quality costs - for example, scrap, rework, sorting and processing, warranty and recall costs.
  • Introduce a cost recovery system - agreeing a cost recovery process can boost accountability throughout the supply chain. It may allow you to recover the cost of poor quality from a supplier, and encourage them to look at and address issues causing poor quality quickly and efficiently.
  • Audit your supplier - agree on a procedure to quality check your supplier against non-conformances in manufacturing, quality, service provision, compliance etc. Audits can identify areas for improvement and help you agree on corrective actions, response and resolution processes, and targets, etc.
  • Introduce supplier scorecards - standardized scorecards may give you a way to rate suppliers on performance and benchmark one supplier against another. Scorecards can measure supplier's key performance indicators (KPIs), non-conformance or risks. They can help you track improvements or failures in quality over time and identify areas for improvement, as well as agree on corrective actions to minimize quality risks in the future.
  • Integrate IT processes - instead of disconnected financial, quality and operational systems, an integrated enterprise solution can enable communication, collaboration and quality control across the supply chain from procurement to delivery.

How to Monitor Supplier's Performance

In monitoring the performance of suppliers, it often helps to keep track of critical metrics and KPIs, such as the percentage of:

  • returned products
  • products delivered on time and complete
  • products in compliance with regulations or quality standards
  • new products introduced in the market that met time, volume, and quality targets
  • Other supplier performance metrics may include: order fill rate, lead-time variance, received vs ordered units, ordered price vs invoiced price, an accuracy of advanced shipment notifications, etc. Find more tips to help you review your suppliers' performance.

Supplier Quality Assurance and Certification

Some suppliers may have a quality-related accreditation, such as the ISO certification (Usually 9001). This is a globally recognized mark of quality excellence, which declares that the supplier:

• is operating to verifiable standards
• has a solid quality management system in place

Choosing quality-certified suppliers offers you reassurance that they have the right processes in place to provide you with consistent, reliable, quality service. See more on quality management standards and choosing the right suppliers.

Importance of Supplier Quality Management

Managing your supplier quality can bring many benefits to your business. It can increase your product quality, boost your bottom line and enhance your business' reputation. On the other hand, poor supplier quality can lead to lost sales, costly recalls, penalties for non-conformance or legal action.

Categories

management (15) supply chain (10) career (9) hairashid (9) FMCG (8) HR (7) hidayah (7) islam (7) retail (6) marketing (5) traveling (5) sales (3) recruiter (2)
Copyright © HAIRASHID | Design by HAIRASHID