Pay more attention in the processes from your suppliers

There is a clear trend in the market on supplier selection and evaluation to include process validation and some process criteria from Suppliers in more detail than before. These days Companies ask their suppliers minimum requirements to be a supplier on their suppliers in terms of processes standards and validate them. Some use an specific  standard to evaluate some just audit companies in detail process validations. But more and more ISO 9001 or TS is not enough.

In the automotive industry, it al started with Car Manufacturers like for example Ford and GM  imposing their Standard (Q1 for Ford and QSB from GM) as a manufacturing standard. So if a company wanted to be start delivering parts (these days they do not accept new suppliers); they needed to manufacture according some rules. This statement, follows a basic principles for Tier 1 in automotive, they are supposed to be an extent of the car manufacturer line, so there is no possibility of manufacture differently or with lower standards.

Companies now use this principle of “how can I guarantee certain standards to the customer if my suppliers do not have it”. That means that Second or third level suppliers in the automotive industry where exempt of applying certain rules or following strictly certain manufacturing methods.

Every company must have their own criteria of what suppliers.But it is real that these criteria should be strongly foreseen in the selection but also in Evaluation. There are multiple reasons for including processes in supplier evaluation. But the most important is that all the companies I have worked or deeply known, have an A/B/C on suppliers and a percentage of the C suppliers that no one ever visited and trusted by available ISO certificates.

This is directly linked to Risk Management in the company. Which is the risk of potencial problems due to inadequate manufacturing processes. Therefore there must be an evaluation for suppliers (I take fro granted that all new suppliers are audited in a company).

But how to handle the risk? I am the opinion that there must be a unique assessment of a company, whether it is an industry standard (VDA, QSB, etc..) and this assessment must include all organizational criteria from quality to engineering, process control, supply chain, etc.. The assessment must be clear in terms of green, yellow red or validation points, but what is acceptable in a process and what is not. All suppliers must be initially audited according these standards (never accept a supplier without auditing their processes).

There are ways of evaluation from processes for existing suppliers, it can be also based on supplier self-evaluation to existing audits, or your team opinion based on visits. But, what is clear is that this information must be used to clean the panel of suppliers of possible risks. This must be at a priority level and must fulfill the basic idea that your evaluation system must reflect the reality of your panel of suppliers.

Finally, just as a conclusion, it is incredibly much more expensive to react to a big problem due to a inadequate supplier process that invest time and money and “sleep well at night” because the risks in the panel are mitigated.

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