As companies increasingly outsource production parts, the manufacturing process is becoming more and more complex. It’s critical to take ownership of your supply chain and to develop strong relations with suppliers right from the start. Supplier quality management is a business practice commonly used to measure, analyze, and improve the quality of your vendors, yet it can be challenging to implement the right strategy when managing a globally dispersed network. Use this blueprint to create and improve your supplier quality management strategy.
1. Set Supplier Expectations
In addition to the government and ISO regulations and standards currently in place, every company has their own version of what “quality” is. It’s crucial to develop your own set of quality standards, best practices, and test procedures that will yield the highest value for your company.
Consider, for example, creating a production part approval process (PPAP), where suppliers are required to submit quality documents for any new or revised part. Having a consistent PPAP in place can help avoid miscommunication and provide the necessary supplier quality assurance needed to reduce defect rates.
With your expectations clearly defined and processes well-documented, you’ll need to effectively communicate this information to your suppliers. Before you even place your first order with a supplier, ensure they understand and agree to comply with the terms of your expectations
2. Create Supplier Scorecards
Supplier scorecards provide a solution for visibility into real-time metrics and tracking improvements over time. In fact, companies that take advantage of tools like scorecards can experience a 20 percent increase in accurately measuring supplier performance metrics.
You should begin developing supplier scorecards by identifying key performance indicators (KPIs) to determine how supplier performance should be measured. Responsiveness, lead time, and defect rate are all important metrics to track when assessing your supplier quality.
3. Integrate Risk Assessment
Risk management is an integral part of a complete supplier quality management system. Integrating risk assessment enables companies to take a proactive, rather than a reactive approach to supplier quality management to more efficiently determine quality improvement and mitigate risk.
Consider the trend of increasing the role of suppliers in daily quality management processes: as a supplier’s part or product quality decreases over time, the level of risk increases. As such, acknowledging supplier risk early in the value chain is implicit to anticipate and meet the demands of your processes and goals, while safeguarding your company’s assets.
4. Build Strong Supplier Relationships
Supplier partnerships are cultivated during the onboarding process and must be maintained for continuous improvement. Transparent, continuous communication with suppliers is crucial to building strong relationships with your suppliers. Without clear communication, supplier quality suffers because they are not getting the feedback and direction needed to meet your expectations.
It’s important to ensure consistency with your supplier network, whether it’s using the latest software version, notifying suppliers of all tasks, requirements, and specifications, or ensuring all documents in use are in the latest revisions. This consistency makes working with a globally dispersed network of suppliers more efficient since everyone has the same features and information available and no one can fall behind due to lack of updating.
5. Utilize Skip-Lot Receiving Inspections
As labor shortages and a widening skills gap continue to weigh on the production capabilities of manufacturing companies, it’s often challenging to find the resources to test every part prior to use. To improve the speed and efficiency of receiving inspections, many manufacturers today are deploying a skip-lot receiving methodology.
As the name implies, a skip-lot receiving inspection is a feedback system in which a trusted supplier’s parts, essentially, “skip” inspection. As you develop stronger relationships with your suppliers and track their improvements, you’ll be able to quickly identify which suppliers are the right candidates for your skip-lot receiving system versus the suppliers that require closer inspection.
6. Implement an Enterprise Quality Management Software (EQMS) Solution
Businesses are increasingly turning to enterprise quality management software (EQMS) to quickly and efficiently manage supplier quality. EQMS solutions transform the way your company engages, collaborates, tracks, and improves all supplier-related quality management activities in a secure, centralized system. From building supplier scorecards to tracking nonconformances and corrective actions, an effective, holistic EQMS solution can improve supplier quality management at your company.
Contact IQS today to learn more and to request a demo of our supplier quality management software.