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Supplier approval and monitoring

Discussion in 'Supplier Quality, Audits & Other Supplier Issues' started by MKKIM, Sep 5, 2022.

  1. MKKIM

    MKKIM Member

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    Hi,

    Now I need to make a process for supplier approval and its performance monitoring, I am wondering how it is managed in your cases. We do not want it to be too complicated that it requires significant amount of time.

    Below is what I am thinking
    1. Categorize current suppliers into 3 different groups, including "High Risk", "Medium", "Low"
    Those groups are differentiated by amount we order annually and importance of components.
    Also, it determines necessity of monitoring. High and Medium would require monitoring; while Low would not require any monitoring.

    2. Create supplier questionnaire; if they successfully deliver the parts in first 3 batches, we accept and list them in supplier approval list

    3. Monitor/review supplier performance in terms of Pricing, lead time vs. actual delivery time, any NCRs

    Would the above be common practice?

    Any input would be much appreciated.

    Regards
    MK
     
    MKKIM, Sep 5, 2022
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  2. Bev D

    Bev D Moderator Staff Member

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    I wouldn’t worry about common practice - the popularity of an approach has no bearing on it’s utility.
    Supplier questionnaire are typically useless paperwork. They rarely reveal anything useful that you can’t determine thru normal due diligence: financial status, which standards they are certified to, etc.
    Categorizing by risk is a useful thing. Be sure that risk is about the effect on your ability to manufacture parts and not so much on the probability of a failure. (Remember COVID had a low probability form most people and so did the hurricane flood in Houston that took out the only US Resin manufacturer for about 6 months…
    Delivery accuracy is good. Defect rate is good.

    But many things are difficult to quantify. At one of the organizations I worked for the VP of Supply Chain asked me about a very complex supplier evaluation program his supplier quality manager wanted to implement. I asked him two questions: what 3 suppliers keep you up at night worrying about them? And what 3 suppliers do you never worry about? He reeled off the answers immediately. I then asked him ho this new evaluation would have ranked them? He scrapped the complex system.

    Keep it simple and keep it real…
     
    Bev D, Sep 5, 2022
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    MKKIM, tony s, RonR Quality Pro and 3 others like this.
  3. yodon

    yodon Well-Known Member

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    Excellent advice from @Bev D !

    In reading through the post, though, it seems like there are only 2 categories since you don't indicate anything different for medium and high risk suppliers. And what's the rationale for the 3 batches? (NOTE: I'm not saying anything is *wrong* with the approach you outline, just echoing the "keep it simple" idea.)
     
    yodon, Sep 6, 2022
    #3