Tag Archives: relationship

Planning for the unforeseeable through supplier evaluation

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Having the flexibility to identify, contain, and adapt to foreseeable and unforeseeable issues is critical to a comprehensive response plan for quality nonconformances and product recalls. Proactive, responsible companies that implement comprehensive vendor/supplier/contract manufacturer evaluation programs and performance tracking systems as components of an overall quality management system (QMS) will boost preparedness and ensure smooth responses to otherwise devastating product recall scenarios.

Any business — large companies especially — should select contract manufacturers in the same way they select suppliers and other vendors: with thorough research, hand-on inspection and rigorous screening.

A good way to think of it is this: Treat suppliers, vendors and contract manufacturers as if they are your own facilities. Even if they are not providing you with an end-user product, if your company name is going to be on the final product, your customers will view you as responsible and you will be ultimately accountable for the defect.

The alternative – basic adherence to minimal regulatory requirements – does not constitute the wisest PR and quality assurance philosophy. Recall that five years ago, a nationwide recall on children’s toys containing lead paint—and manufactured in China—cast a pall on the integrity of the country’s quality standards. It also forced American toy giant Mattel to recall more than 18 million products and face significant brand damage.

Even entrenched brand images can be dealt significant blows by product recalls, especially when those recalls affect the lives and health of children. For quality managers at companies that rely on contract manufacturers and suppliers overseas, such situations are a call to action: a proactive corporate ethos on quality management — and supply chain traceability in particular — will not only save time and costs long term, it will ensure products exceed minimal regulatory requirements and avert potential public relations and brand image crises. A comprehensive QMS that enables enhanced supply chain traceability and supplier relationship management is the hallmark of such an approach and will inevitably save costs in the long run.

The advantage of web-based supplier management

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While a supplier management system can be implemented without software, the benefits of establishing a software-based system are numerous and significant. Depending on how comprehensive the solution is, a software-based system can be capable of providing real-time metrics that can be accessed instantly with the click of a button, thus rendering an entire supply chain and vendor base transparent. Some critical features of a comprehensive software-based supplier management system include:

Supplier management and evaluation

The system should be able to register and categorize suppliers by company name, supplier number and performance rating as well as other details in a centralized portal. The system should use this information to schedule, notify, and archive all supplier evaluation activities and results and develop a consistent supplier rating program with customizable surveys.

Risk management and continuous improvement

To avoid quality issues and ensure all elements of the supply chain run at peak performance, the supplier management system should be capable of:

  • Tracking supplier non-conformances and all details associated with those non-conformances.
  • Specifying target investigation dates or target response dates and manage all investigation related data.
  • Implementing corrective actions and measure their effectives over time.
  • Reporting on and analyzing root causes.

Streamlining workflow

To take the time and energy out of micromanaging data and issuing notifications, the system should be capable of streamlining supplier management workflow by tracking all supplier and vendor data in a central portal that’s accessible across the organization. A proactive system should also be capable of sending automated email notifications on pending and overdue supplier tasks to employees and their supervisors.

Real-time visibility and reporting

An ideal system should be capable of monitoring, reporting on and storing data on each stage of the process, including initial vendor registration and setup, ongoing supplier performance assessments, the implementation of corrective and preventive actions and evaluations on the success of those actions. Employees with access to the system should be able to instantly update information and generate ad hoc, boardroom quality supplier management reports on root causes, correction actions, and authorize claim amounts based on real-time data.

Some key requirements

A web-based supplier management system should be:

  • Accessible from multiple locations around the world under stringent security protocols.
  • User-friendly and intuitive, thereby increasing user adoption and reducing training and support costs.
  • Easily configurable to address company-specific requirements and metrics (initial and ongoing).
  • Scalable, allowing an organization to roll out the system to key suppliers.

Learn more about supplier management optimization strategies and tactics by checking out Intelex’s Optimizing Supplier Performance white paper, or by giving us a call to discuss our supplier management solutions.