Quality Progress - January 2016 - (Page 56)
BACK TO BASICS
Supplier Selection and Maintenance
The extent you go to depends on the associated cost, production and risk
by Dennis R. Arter
ompanies in the United States
use government laws and contract requirements to select
suppliers and monitor their suppliers' performance. To control the
goods and services companies buy,
they must thoroughly define their
requirements for the items or tasks,
select a supplier that can meet their
requirements and make sure their
supplier continues to perform well.
All suppliers are not equally important to your company's success.
"Awesome" suppliers are the ones
you need for survival. They may be
the only ones who make the components you need or have tools and
technologies you don't. Your "important" suppliers are replaceable, but
only with great cost and effort. You
could do without them, but you
would rather not have to find new
suppliers. Your "commercial" suppliers provide proven products and
services to you and others. These commodities are readily available, and
competition will keep the quality high.
According to contract law, companies must define requirements in
a formal way. It's common to use a
purchase order (PO) to define
requirements. A PO contains technical requirements, acceptance criteria
and quality system requirements. It
also specifies the price a company is
willing to pay, quantities it wants,
and delivery times and locations. If
the seller agrees, it's a legal contract.
Technical requirements and acceptance criteria tell the supplier what a
company wants and how good it
must be. These are often contained
in designers' drawings and specifications. If you use standard designs for
components, you can use national or
international standards for the
requirements. It saves time and
money and results in fewer mistakes.
Quality system requirements tell
the supplier what controls to maintain as the parts are being made.
Again, we may specify the use of
international standards, national
standards or industry standards.
Often, the supplier is small, and the
risk of failure is low. Then these inter104
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national, national and industry standards can be too complicated and
specify more controls than necessary.
In this case, identify those quality system requirements critical to success,
put them on a page and include the
page as part of the PO package.
There are times when you don't
need to specify a quality management system. When you order
catalog items, the supplier's normal
business practices may be just fine.
The difficulty or ease of supplier
selection depends on the cost and risk
associated with the goods and services you are buying. It also depends
on how the goods and services are
produced. At the easy end, look at a
product in a sales catalog and examine the description. If it meets your
needs, purchase it using a PO.
On the more difficult end, you can
use the bid process if there are several suppliers to choose from. Send out
a "request for proposal" to potential
suppliers. The suppliers will look at
your needs and send an offer showing what they can do and what it will
cost. Compare the bids from several
suppliers and choose the best one.
Going even further, you can ask
your potential suppliers to answer a
list of questions. The questions
should ask about the organization,
processes used and management
controls in place. These questionnaires can be useful to both parties
if they are kept to a reasonable
length (10 pages at the most).
The most complex and costly form
of supplier selection is an on-site
survey. Several people from your
company can visit the supplier and
examine its technical processes and
machines. Look at the design and
check the quality management system it uses. These site surveys are
costly but will make you confident
the supplier can meet your needs.
Companies used to require a certificate of conformance for all parts
received. This said the part met all
requirements of form, fit and function.
Unfortunately, these certificates were
often signed without the parts having
W W W . A S Q . O R G
been checked. Today, you only need
to require a certificate of conformance
for the most important parts.
A variation of the conformance
certificate is the certificate of compliance. This paper says the part
meets all physical requirements and
was made according to the rules.
This certificate is needed for parts
used in spaceships and nuclear
power plants, but it is too much for
parts used in a swimming pool.
Many companies ask their suppliers to send statistical control charts
with the parts. These charts show
process variation and can be useful
to the customer because they show
if there's any variation in material
processes or quality.
Site visits are another way to
monitor the supplier. Once or twice
a year, your own technical experts
can visit the supplier to discuss
problems and technical matters.
These are friendly visits designed to
help both parties.
You can also conduct routine
quality system audits of your suppliers. The important suppliers may
need audits once a year. The less
important may need audits only
every two or three years. Again, use
cost, production and risk to choose
which suppliers to audit.
For more information
The ISO 9001:2000 standard
contains basic requirements for purchasing controls, and ISO 9004:2000
provides more advanced guidance.
Also, becoming involved with ASQ's
Customer Supplier Division is a
great way to meet with others and
learn about supply chain management.
DENNIS R. ARTER is a consultant and trainer in
quality auditing in Kennewick, WA. He earned a
bachelor's degree in chemistry from the University
of Illinois-Champaign-Urbana. Arter wrote
Quality Audits for Improved Performance
published by ASQ Quality Press. He is an ASQ
Fellow and a certified quality auditor.
If you would like to comment on this article, please post your remarks on the
Quality Progress Discussion Board
on www.asqnet.org, or e-mail them to
Table of Contents for the Digital Edition of Quality Progress - January 2016
According to Plan
Use Your Head
Stakeholder Management 101
All About Data
Eight Simple Steps
Which Six Sigma Metric Should I Use?
Turning ‘Who’ Into ‘How’
In the Beginning
Outputs and Outcomes
That’s So Random—Or Is It?
Improving a System
Putting It All on the Table
Know the Drill
It’s Fun To Work With an F-M-E-A
Solve Problems With Open Communication
Tell Me About It
Separate the Vital Few From the Trivial Many
To DMAIC or Not to DMAIC?
Breaking It Down
1 + 1 = Zero Defects
Curve Your Enthusiasm
Make a Choice
What Is a Fault Tree Analysis?
Successful Relationship Diagrams
The Benefits of PDCA
Return on Investment
The Art of Root Cause Analysis
Why Ask Why?
Get to the Root of It
Checks and Balances
Clearing SPC Hurdles
Supplier Selection and Maintenance
Building a Quality Team
Plan Experiments to Prevent Problems
Quality Progress - January 2016