A Framework for Supplier Quality Management

The Quality Control Plan

Controlling product quality across the supply chain requires the implementation of a robust quality control plan for each purchased component at each tier of the supply chain.

A quality control plan details how the supplier ensures that each feature of the component meets the buyer's specifications. The plan includes control elements such as the manufacturing process flow, process parameters, measurement methods, statistical sampling plans, work instructions, fixtures, training etc.

There are a large number of control elements and selecting the appropriate element for your situation can be challenging. The framework outlined below will help you identify the right controls and structure the most effective and efficient plan for each component.

The Underlying Framework

The Supplier Quality Management Framework groups the required controls into 4 levels:

  1. Establish Foundational Processes
  2. Control Manufacturing Processes
  3. Inspect Finished Products
  4. Monitor & Improving Supplier Performance

A Supplier Quality Management Framework

A buyer (or customer), must verify the existence of the first three groups of controls - Foundational Processes, Process Control, and Inspection - at each supplier for each part. In addition, a buyer must establish a monitoring mechanism to ensure that the controls established at each supplier are working effectively.

Ensuring a Win-Win for Buyer and Supplier

Controls related to inspection and monitoring benefit the buyer by reducing the possibility of a defective part entering the buyer's factory or reaching the end customer.

On the other hand robust foundational processes and process control benefit both the supplier and the buyer. The supplier benefits by preventing defects and therefore avoiding the costs associated with inspections, rework, scrap, lost capacity, customer escalations, returns etc. In addition, these costs are invariably transferred to the buyer, and the buyer faces both increased risk of defective parts and increased costs in the absence of foundational processes and process control. In an average machine shop these costs run around 7% of revenue and represent a huge opportunity for improving profitability at the supplier and reducing costs for the buyer.

Therefore, while Inspection related controls form the "minimum acceptable" set of controls for a buyer, it is essential for a buyer and supplier to work together on the Foundational and Process Control elements to ensure a lower total cost for both buyer and supplier.

Implementation

Here is a partial list of controls that fall in each of the four categories described above. A buyer will need to select the appropriate controls from each of the four categories to build a quality control plan for a specific component.


1factory Supplier Quality Controls

In the next few blog posts, we will explain when and how to effectively and efficiently deploy each of these controls across your supply chain.