Formal Procedures

For the certification process to be successful it must be a formal process. This requires that procedures be docu­mented and shared with the suppliers. It is important that you and your suppliers understand each parties responsi­bilities and expectations. Those involved in each process must be educated and trained. An audit process must exist to verify compliance to procedures and policies as written and when necessary changed to meet new expectations. For each written procedure a flow chart should be con­structed and disseminated. If necessary pictures and diagrams provided to insure standards are met.

Specific procedures should include but are not limited to, receiving inspection, documentation requirements, mea­surement system, return goods activities, partnership agreement, de-certification, probation, packaging and ship­ping, purchase requisition, order acknowledgment, expe­diting, supplier survey, supplier assessment, and new supplier approval. To facilitate development of procedures generic procedures can be purchased and modified to meet your requirements.

Measurement System

A measurement system needs to be designed and imple­mented to provide performance data. This system provides information on the ability of suppliers to meet system requirements and provide objective feedback for corrective action. The measurement system should be designed around the elements of the cost ownership model. When measur­ing and evaluating a supplier two separate measurement matrixes should be constructed, one for new supplier selection and one for performance measurement of an existing supplier. From a cost benefit point of view it would not make sense to measure approved suppliers on the same criteria as a senior supplier. A senior supplier is defined as a supplier who has strategic importance to the organi­zation. Thus a senior supplier must be measured on more criteria than an approved supplier. As with the supplier survey each measurement criteria must be assigned point value and weight. Then point ranges determined for acceptable, upper and lower control limits. Most likely you will be required to design and program a measurement system to meet your needs. The majority of manufacturing packages are some what limited in their ability to meet requirements of supplier measurement system. Although some measurement criteria is standard in manufacturing software; i.e., delivery performance and quality perfor­mance. Feedback forms can be utilized to provide identi­fication of deficiencies. It is recommended that whatever system is designed that it be easy to use and maintain. Don't measure items unless they provide a benefit.

Conclusion

The time frame for implementation of a supplier certifica­tion program vary by company based resources, number of suppliers and design content of the supplier certification program. In general you can plan on a one to five year implementation cycle to bring on line all your suppliers. It is important to continually conduct a cost/benefit analysis during the implementation cycle when designing each element of the supplier certification program. This way you are assured of creating a workable program. Each company must decide what is right for them. Because the implementation cycle can extend over a period of time you will have suppliers in different phases of the supplier certification program. You must decide from a strategic perspective which suppliers should come on line first.

A properly conduct implementation should result in cost savings realized by minimizing total costs for procurement. Savings will be generated through but not limited to reduced cost of quality, consistent delivery performance, increased productivity through improved communication, reduced variability in delivered products, streamlined systems, reduction/elimination of non-valued added activi­ties, price competitiveness, inventory reduction and tech­nology application.