Forming excellent supplier partnerships
Managing supplier quality and performance is as simple – and as complicated – as instilling the habit of excellence in yourself and in your suppliers. In general, people (and yes, you are “people” and your suppliers are “people”) live up or down to the expectations that you place on them. Expect that you will be the best partner that your suppliers have ever encountered. Expect that your suppliers will be the best partners that you have ever encountered. Forming excellent supplier partnerships is crucial.
Setting the bar
Of course, expectations must be realistic and clearly communicated. Otherwise, you are setting yourself and your suppliers up for failure.
Contracts are the vehicle by which you communicate your expectations to your suppliers and by which they can judge what to expect of you. You can benchmark their progress according to the specifications of the contract and they can benchmark you by how well you communicate your perception of their progress to them.
For example, the contract may require that the supplier deliver 100 widgets per month with no greater than a 10% error ratio to your company. Month after month, the supplier delivers its promised 100 widgets. Month after month, you accept these widgets without comment.
You are missing an opportunity to create excellence. After the first shipment, tell the supplier how his product performed. “You know, Bob, we just used the last of your first shipment of widgets. We found that you had a 15% error ratio in that shipment, delaying our production by 10 days until the next shipment arrived.” Bob (the supplier) can then make adjustments on his end to meet your requirements if he wants to keep the contract. But without this feedback, Bob will be blindsided when you do not renew the contract the following year.
Your feedback may prompt the next conversation of, “You know, Bob, we just used the last of your recent shipment of widgets. We found that you had a 6% error ratio, allowing us to increase our productivity for the month. Thank you for helping us to exceed our goal!”
Congratulations. You are making steps to form a solid partnership with Bob as a supplier.
Incorporating SQM software
Naturally, you do not have time to call each of your suppliers every month. And, while the personal touch will certainly nudge your suppliers to go that extra mile for you, it isn’t always practical.
A sound, Internet-based supplier quality management (SQM) software solution enables you to communicate in real time with each supplier based on the electronic feedback generated automatically by the system from the moment you scan the parts at the door until your final product ships.
Yet, surprisingly in this digital age, many companies are slow to adopt this holistic solution. In fact, according to Dan Jacob of LNS Research, a leader in providing insightful technological research to industry executives, automation rates are “stubbornly low, with only 21% of respondents automating with software.” Read the blog.
Mr. Jacob further notes that many current SQM processes lack maturity, affecting internal quality processes, and that SQM automation ranks 10th in the hierarchy of automated quality processes. NC-CAPA (Non-Conformances/Corrective and Preventive Action), Complaint Handling and Audit Management all outrank SQM in spite of the fact that a robust EQMS could eliminate many of the issues that outrank it.
Spreadsheets, emails and hard copy files all can be used to track supplier quality, but they are time-consuming, error-prone and lack the necessary transparency and feedback to create a true partnership with your suppliers.
How does your supplier/partner know if he is creating the habit of excellence if he can’t even see whether or not his shipments meet your standards? If you don’t care enough to provide such information to him, why should he care enough to up his game to exceed your expectations?
Identifying appropriate SQM software
Just as you benchmark your suppliers through contract specifications, you can benchmark the best EQMS for your company by asking yourself the following simple questions:
- Do the processes (assessment, performance, change management, advanced planning, charge-backs, supplier corrective actions, etc.) integrate tightly with our internal SQM?
- Can I benchmark for performance across my local, regional and global supplier landscape?
- Is my organization able to determine risk across the supplier landscape and prioritize for critical suppliers?
- Is access for all stakeholders secure yet easily managed with regard to solicited and unsolicited responses?
- Are we able to share information to encourage, partner and drive improvement without fear of compromising the organization?
Solutions that work as hard as you do
IQS is an industry leader in EQMS solutions, providing manufacturers with the software they need to maintain their competitive edge.
Mr. Jacob completes his report by noting that top innovators (in relation to best quality practices) consistently out-perform those with ad-hoc processes significantly across such metrics as New Product Introductions (NPI) and Cost of Poor Quality.
Contact IQS today to see how an appropriate EQMS will enable you to make a habit of excellence not only in your company but in your relationships with your suppliers as well.