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Having a formal system in place to track and evaluate supplier performance is essential to the smooth operation and profitability of any business. As an AS9100D certified contract manufacturer, we are required to evaluate and select our suppliers based on their ability to meet our requirements and those of our customers. This assessment is essential to reduce the risk of nonconforming parts. Below please find the top six considerations we use when managing our supplier relationships to reduce the risk of non-conforming parts:
- Supplier Evaluation. The process of evaluating and approving potential suppliers plays a critical part to ensure only qualified companies are selected to provide product. At Fusion, we have created specific performance criteria for assessing and tracking our suppliers.
- Specifications. Complete and definitive information must be clearly conveyed through drawings, part numbers, descriptions, images or notes to accurately represent the expected product to be supplied. All customer requirements flow down to subcontractors through our purchasing contracts.
- Inspection Reports and FAI Process. Depending on customer requirements and our assessment of risk, vendors may be required to provide first articles and associated reports, along with production inspection reports at a specified frequency. The formal documentation provides another level of assurance that only conforming product was shipped by the supplier.
- Corrective Action. How many Corrective Actions have we required from a supplier? How many products had to be scrapped or returned as a result of the supplier failing to meet specifications? We review all of this data throughout the course of the supplier relationship. Requiring Corrective Actions per our AS9100D/ISO 9001:2015 standards allows the supplier to correct the problem, which then helps develop their performance and drive the conversation towards continuous improvement.
- Supplier Performance. Executing an assessment program to track and monitor supplier performance is an effective way to identify areas of opportunity to improve product quality. Key performance indicators (KPIs) include quality, delivery, cost and service.
- Continuous Improvement. Does the supplier make continuous improvements to eliminate the root cause of their nonconformities? The fundamental reason or cause for the nonconformance needs to be determined to eliminate the problem from recurring in the future. Some areas for improvement may include organizational process changes, personnel training, clarification of specifications, tool and equipment maintenance, and inspection criteria.
No matter what industry you are in, suppliers and vendors play a vital role in your company's success. Your business should have a system in place for evaluating, selecting and then reevaluating the suppliers and vendors it works with. Nonconforming parts represent inefficiency, waste and can cause serious problems. Focusing on ways to ensure conforming product is successfully produced will positively contribute to the strength of the supply chain and overall organizational health.