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Supplier definition

Discussion in 'ISO 9001:2015 - Quality Management Systems' started by KatieB, Oct 4, 2019.

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  1. KatieB

    KatieB New Member

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    Hi,
    I'm trying to determine if there's a threshold or certain criteria for when a supplier is to be included within the assessment process. My company works with 80+ suppliers, though approx 10 would make up 50% of dollar value.
    Do we undertake a risk assessment to identify the suppliers to focus on? Or is there another method or definition to determine who to include?
    Thanks
     
  2. John C. Abnet

    John C. Abnet Well-Known Member

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    Good morning @KatieB and welcome to this site.
    By "...included within the assessment process", I assume you mean within the context of clause 8.4 "Control of externally provided..."

    If that is the case, then I would point you to clause 8.4.1 a); b); c).

    For example, 8.4.1 a) indicates "when...products and services from external providers are intended for incorporation into the organization's own products and services".

    For example, if I'm making smoke detectors, then the external provider (supplier) from who I purchase my wires from, is "to be included within the assessment..."

    If you are a manufacturer, think content.

    Hope this helps.

    Be well.
     
  3. Andy Nichols

    Andy Nichols Moderator Staff Member

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    Katie:

    ISO 9001 doesn't require "assessments" of any kind. It requires evaluation and periodic re-evaluation (as well as selection, monitoring etc). Suppliers should be limited to those who affect the products/services you provide. Having come from the supply chain I can assure you that, from a quality perspective, all that's required is "OTIS" evaluation (to use Roxane's dad's maxim) - On Time, In Specification. Methods to evaluate a new to you supplier are various, including sample approvals etc and should be based on the type of product - commodity etc and the impact of quality on your product/service.
     
  4. Golfman25

    Golfman25 Well-Known Member

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    More likely than not the low dollar value supplier is a low risk supplier. So you can use a sliding scale. Do less with the guy you only buy something once/twice a year and more with the guy you buy from every week. The other thing is when you do statistical assessment like on-time delivery, they should have a min. number of deliveries to be relevant. Good luck.
     
  5. RoxaneB

    RoxaneB Moderator Staff Member

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    Potentially, but not necessarily. I would be hesitant to use cost and purchasing frequency as the factors for determining who is more critical to the process.

    There are other variables to consider such as, but not limited to:
    • Lead time needed to delivery
    • Inventory maintained on-site
    • Back-up supplier defined
    • Direct impact on quality of the product
    In my previous life, there were some items which had long lead times, so we kept one back-up on site - they were one of our more expensive items to be purchased, and there was no back-up supplier, and they were critical to the process (i.e., if we didn't have these items, our production line could not operate at all). We didn't buy frequently from them, but they were obviously on our Approved Vendor List and we had some supplier control and product risk mitigation factors in place.
     
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  6. Golfman25

    Golfman25 Well-Known Member

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    Always exceptions, but I find it easier to manage by the rule rather than the exceptions.
     
  7. RoxaneB

    RoxaneB Moderator Staff Member

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    I suppose one could argue that my own experiences are simply confirmation bias...just as they would be from your own experiences. ;)

    Managing by the rule rather than the exception is often a smart approach - I'd rather the solution address 80% of the issue than the outlying 20%. That being said, supplier management, including the level of control to have within the organization, will vary from organization to organization and from industry to industry. Without knowing the OP's industry and the nature of the supplier's products/services (and level of impact on the organization's final product), it may be difficult to reach any form of consensus on a recommendation for her.
     
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  8. KatieB

    KatieB New Member

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    This is all very helpful - thank you all.

    As a bit of background, we design custom furniture that is then manufactured by various "partners" (ie outsourced).
    Some products we are simply a retailer for (buy in as-is, sell to customer under supplier's brand name), and hence I understand we wouldn't need to include them in the same way (so @John C. Abnet your response is very helpful).

    So, you're correct @Andy Nichols , I'm trying to determine who needs to be on the evaluation and periodic re-evaluation list. The On Time, In Specification evaluation would be quite straightforward for us to implement. @Golfman25 and @RoxaneB - I think a risk anaylsis would be the best way to determine this for us - an example is below (please let me know what you think).

    For the products we design, they can be quite complex in terms of manufacturing. One product - say a chair - may be split into the following manufacturers
    (i) supply of timber shell,
    (ii) staining/lacquering of timber shell,
    (iii) metalwork for frame,
    (iv) powdercoating of frame,
    (v) fabric supply for seatpad,
    (vi) upholstery work for making seatpad,
    (vii) misc fixings such as plastic stoppers to feet,
    (viii) assembly of finished product.
    So 8 factories / suppliers involved for the one chair.

    Dollar value-wise (vii) would be worth about 40c, while (i) is $40
    Risk-wise, we have back-up / multiple supply options for most steps - (ii), (iv), (v), (vi), (vii), (viii) - but the higher risk steps are (i) timber supply, and (iii) metalwork and they're quite specialised and we've had trouble sourcing good quality backup manufacturers.

    In this case, our supplier management for this product (example only) is focused on (i) and (iii), as the highest risk components. Would it be acceptable, from an ISO compliance perspective, to only evaluate suppliers (i), (iii) and (viii) final assembly?

    Thanks,
    Katie
     
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  9. John C. Abnet

    John C. Abnet Well-Known Member

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    As @Andy Nichols stated, there is no specific ISO requirement for "assessment".

    To paraphrase, there are three areas I would emphasize....

    8.4.1-
    * "organization shall ensure ...conform to requirements"
    * "organization shall determine the controls..."
    * "...organization shall determine...criteria for evaluation, selection, monitoring performance..."


    Council:
    1- Cost is not an appropriate basis for considering "impact ...on the organization's ability to meet...requirements" (8.4.2-c-1) [the least expensive item can have the greatest impact/risk]
    2- Your concept of applying RBT (risk based thinking) is a sound approach. (risk= "impact" as stated above)
    3- 8.4.1 General requires "...determine and apply the criterial for evaluation, selection...". In otherwords, the standard leaves it to "you" and does not dictate.
    4- Be selfish for your organization and its customers. Set the standard aside for the moment and...
    a) gather the correct cross functional team, ..
    b) go into a room with a white board and ..
    c) determine what the ORGANIZATION needs to do to protect itself and its customers from a negative impact on requirements, IF there are insufficient controls to select and evaluate and control and monitor suppliers.

    Reminder:
    I assume your organization is not new? What has your organization been doing in the past? Has it been sufficient? If so, then capture what already works and don't change anything.
    Don't do ANYTHING for the auditor or the standard. Determine what the organization needs an then apply what is needed in a manner that meets the requirements of the standard


    Hope this helps.
    Be well
     
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  10. KatieB

    KatieB New Member

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