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Supplier Quality, Cost, and Delivery
Part 2 of 3

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Since our customers expect our products to work out of the box, first time, every time, we cannot expect any less from our suppliers. If we are to be a just-in-time supplier to our customers, we must expect our suppliers to meet our delivery needs—first time, every time. Every part must be usable upon receipt, at the point of use. Do we expect our suppliers to 100 percent inspect our parts before shipment? Only if they do not have their production processes in control to assure our delivery of good parts. Our company must operate in a JIT environ­ment; therefore, we cannot deal with nonconforming parts. The sup­plier must demonstrate their process capability and control, or they cannot be our supplier. We cannot develop a partnership with any sup­plier, until they have demonstrated their capability to provide 100 per­cent usable parts in every shipment.

My company does measure quality in a number of different ways. We measure line rejects, but we do not inspect parts at receiving. We also measure quality through warranty claims from our customers. If we detect a supplier with a major quality issue that is affecting quality to our customers, we review the quality issues with our suppliers and request corrective action. The supplier's actions must include a pro­cess for elimination of the quality problem, and not just a fix to a cur­rent issue. Their root-cause analysis and countermeasures for perma­nent elimination of the quality issue are required.

Documentation from the supplier is a written "8-D analysis form" noting the issue, root cause, corrective action, responsibility for the action, and date of completion. Verbal feedback is no longer accepted. Once the quality problem has been identified, the buyer is responsible for ensuring that the supplier provides satisfactory corrective action.

The quality department is no longer responsible for the supplier's poor quality, the buyer is. If the supplier cannot demonstrate a process for pro­viding acceptable quality, the buyer must help the supplier in his efforts, or find another sup­plier. The cost of poor quality is high. It can create line stop­pages, customer service issues, and customer unhappiness with your product, as well as in­crease your total costs through increased warranty costs.


We also evaluate suppliers using a formal supplier develop­ment manual, which documents our certification process. Our supplier life cycle is as follows:


      approved supplier: a supplier approved for business transactions.


      qualified/preferred supplier: a supplier that has
demonstrated a level of performance to allow incoming skip lot inspection of product and has a potential for business growth. Qualified status may be awarded if an approved supplier achieves
high marks on our internal
business survey form, which evaluates their production and quality processes. ISO registration also helps support this rating. In addi­tion to achieving a "good" rating on the business survey, suppliers must demonstrate delivery of conforming products to our factory for two consecutive quarters.

•      certified supplier: a supplier at the highest level of achievement
allowing access to all businesses within our corporation. Status can be awarded if a qualified/preferred supplier achieves a rating of
"excellent" on the business survey and demonstrates four successful quarters of quality deliveries to the factory.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 10

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