How do we monitor supplier quality management? 5 key practices
The quality of your end product is only as strong as the quality of its weakest link, often residing within your supply chain. For dedicated Supplier Quality Engineers, the critical question isn’t just “how do we monitor supplier quality?” but rather, “how do we do it optimally to ensure sustained performance and compliance?“
This article dives into the best practices for managing supplier quality. Learn how robust vendor quality management strategies, coupled with strategic supplier quality support, can transform your supply chain from a potential risk factor into a competitive advantage.
What is supplier quality management?
Supplier Quality Management (SQM), often referred to as vendor quality management, is critical for organizations reliant on external providers for components, materials, or services. It encompasses the entire lifecycle of supplier engagement, from initial selection and qualification to ongoing monitoring, performance evaluation, and continuous improvement.
As defined by industry standards like ISO 9001, SQM involves establishing robust processes to ensure that suppliers consistently meet agreed-upon quality specifications, delivery schedules, and regulatory compliance requirements.
Effective SQM fosters stronger partnerships through supplier quality support and allows for a seamless integration of external contributors into the quality management system. It’s about building a resilient and high-performing supply chain that is able to fulfill current needs but can also adapt to future demands, while delivering steady value.
How to monitor a supplier’s performance?
Now that we’ve established the critical role of SQM, let’s delve into the actionable strategies for ensuring your suppliers consistently meet expectations.
Critical practices for managing supplier quality
- Measure the cost of quality: Find out how much it costs to manufacture a quality product. Then look at how much poor quality costs – scrap, rework, sorting and processing, warranty, and recall costs.
- Introduce a cost recovery system: Agreeing to a cost recovery process can boost accountability throughout the supply chain. It may allow you to recover the cost of poor quality from a supplier and encourage them to look at and address issues causing poor quality quickly and efficiently.
- Audit your supplier: Agree on a procedure to quality check your supplier against non-conformances in manufacturing, quality, service provision, compliance, etc. Audits can identify areas for improvement and help you agree on corrective actions, responses, resolution processes, targets, etc.
- Introduce supplier scorecards: Standardized scorecards may give you a way to rate suppliers’ performance and benchmark one supplier against another. Scorecards can measure suppliers’ key performance indicators (KPIs), non-conformances, or risks. They can help you track improvements or failures in quality over time, identify improvement areas, and agree on corrective actions to minimize quality risks in the future.
- Integrate IT processes: Instead of separate financial, quality, and operational systems, an integrated enterprise solution can enable communication, collaboration, and quality control across the supply chain from procurement to delivery.
