Supplier Quality Management
(Chapter 8)

Over view of supplier quality manageent

What is Supplier Quality ?

Ability to meet or exceed

Current and future expectation or requirements

Critical performance on a consistent basis

Why be concerned with Suplier Quality ?

Supplier impact on quality

Continuos improvement requirements

Outsourcing of purchase requirements

Factors afecting supply management role in managing supplier quality

Ability of supplier to affect buyer’s total
quality

Internal resources available to support supplier

Ability of buyer to practice world- class quality

Supplier’s willingness to work jointly to improve quality

Supplier’s current quality levels

Buyer’s ability to collect and analyze quality-related data

Supplier quality management using a total quality management perspective

Define quality in terms of customers and their requirements

Pursue quality at the source

Stress objective rather than subjective analysis

Emphasize prevention rather than detection of defects

Focus on process rather than output

Strive for zero defects

Establish continuous improvement as way of life

Make quality everyone’s responsibility

14 Points

Create a vision and demonstrate commitment

Learn the new philosophy

Understand inspection

Stop making decisions purely on the basis of price

Improve constantly and forever

Institute training

Institute leadership

Drive out fear

Optimize the efforts of teams

Eliminate exhortations

Eliminate numerical quotas and measurement by objective

Remover barriers to pride in workmanship

Encourage education and selfimprovement

Take action

Evaluate key value-adding points in process where defects could occur,

Product and process design

Issue of sharing proprietary information

Make decisions on facts, not feelings

Rigorous supplier measurement system

Develop a preferred supplier list

Need for predictable consistency and reduced process variation

Reduce reliance on appraisal, inspection, and detection activities

Supplier certification program

Use of corrective action requests

Move from product orientation to process orientation

Quality process -> quality output

Supplier must provide ongoing evidence of process capability

Structured, companywide supplier evaluation and selection system

Conformance to requirements

Key performance metrics to identify improvement opportunities

Supply base rationalization and optimization

Cost of quality

The Seven Wastes

Appraisal costs

Failure costs

Prevention costs

Direct costs of measuring quality

Internal – occur before product or service is provided to customer

External – occur following production or after customer takes possession

Keep defects from occurring

Idle time

Delivery

Inventory

Wasted operator motion

Waste from rejected parts

Over-production

Waste in the work itself

Value analysis/value engineering

Supplier development

Supply base rationalization and optimization

Supplier incentive and reward systems

Aligned vision and goals

Physical co-location with suppliers

Executive-level buyer-supplier councils

Shared technologies

Joint projects

More collaborative buyer-supplier
relationships

Pursuing Six Sigma supplier quality

Proven quality principles and techniques

Virtually error-free performance

Increasing customer expectations

Focus on defect prevention, cycle time reduction, and cost savings

Use of Six Sigma Black Belts

The DMAIC Model

Define

Measure

Analyze

Improve

Control

Improvement activity and goals

Existing system, establish metrics, and identify performance baseline

System and develop causal hypotheses

Develop ideas, test solutions, and implement new process, structure, and system

Establish standard measures and procedures to ensure new system stays in control

Using ISO standards and MBNQA criterria to asess supplier quality systems

ISO 9000:2008

ISO 14000:2004

Malcolm Baldrige National Quality Award

Originally developed in European Common Market in 1987

Third-party registration process

Internationally accepted and recognized process quality standards, not product standards

Main Sections of ISO 9000:2008

Quality management system

Management responsibility

Resource management

Product realization

Measurement, analysis, and improvement

Eight Principles of ISO 9000:2008

Customer focus

Leadership

Involvement of people

Process approach

Systems approach to management

Continual improvement

Factual approachnto decision making

Mutually beneficial supplier relationships

Benefits of ISO 9000:2008

Buyers have immediate confirmation of supplier’s registration

May substitute for variety of individual buyer certification programs

Included on master list of certified firms and may garner additional business

Helps address ANSI standards

Established in 1993 to promote environmental awareness and protection

Benefits of ISO 14000:2004

Fewer pollutants generated

Reduced liability

Improved regulatory compliance

Better public and community relations

Lowered insurance premiums

Enhanced profitability through

Improved resource management

Reduced waste generation

Leadership

Strategic planning

Customer focus

Measurement, analysis, and knowledge management

Workforce focus

Operations focus

Results

Basic contents of a supplier quality manual

Quality control and process management procedures

Metrics and measurement protocols

Testing and acceptance procedures, definitions, and documentation control

Basic responsibilities of both buyer and supplier

Minimum process required for supplier regarding …

Inspections

Use of statistical process control

Continuous improvement

Testing

Sample evaluations

Performance improvement

Description of supplier selection and evaluation process

Conduct of buyer audits

Description of buyer’s quality improvement programs and activities

Copies of relevant forms along with instructions

Description of process capability study process

How to handle and/or store nonconforming products

Description of claims process

How to develop and submit corrective action plans

Supplier certification process

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