A Guide to Supplier Management

By The Pro QC Quality Assurance Team

Part 1 – Supplier Identification, Quality Systems Audits & Supplier Relationship Management

You’ve already defined your targets in support of your business strategy. You have designed and defined the product specifications that are necessary to fulfill your customer’s needs. Now you just need to find and collaborate with a reliable supplier to produce a product that meets your specifications. A reliable supplier or factory delivers excellent product quality, ensures on-time delivery at a competitive cost and most importantly within an ethically responsible environment.

However, finding the right supplier or vendor is only half the battle – maintaining the supplier relationship and performance throughout is key to achieving long term success. We’ve put together a go-to guide for this and other topics related to supplier development that you’ll need to bear in mind as you embark on your production and quality journey.

Choosing a Supplier

The hardest part about getting started is finding the right supplier. You do need to dedicate time to this – when you begin your supplier identification investigation, it is always a good practice to dedicate resources to formally review and approve your list of suppliers. Whether it is being done internally by your own team or outsourced to a reputable agent, an approved vendor list is a crucial first step to achieving quality assurance.

A supplier with the right technical capability is obviously important, but one should never overlook production capacity and quality consistency. A small manufacturer may not be able to keep up with your demand whereas a big manufacturer may have too many orders to cater to your needs, which often leads to late delivery.

Another important consideration is the legal side – contracts, tax audits and so forth – this is part of a different service usually, but one that is imperative to ensure is included in your forward-planning as you embark on your supplier investigation.

When Pro QC gets started finding our clients the right supplier, we assess their potential options on-site – doing a deeper check into a shortlist of factories, visiting them to verify documentation and environmental and working conditions.

One challenge when you don’t already have a relationship with a supplier can be getting valid references and ensuring the accuracy of information. Stringent background checks are imperative.

We then provide detailed reports on their general operations, quality systems, qualifications, and capabilities. We are also able to locate and manage the supplier base for you, as your sourcing agent.

Through our initial supplier audit, we evaluate the supplier’s current practices – e.g. operational excellence & working conditions – to ensure they are right for you.

Alongside this is ensuring the legal registrations are valid for suppliers, and that they have passed all relevant certification checks.

Once you’ve narrowed down a supplier that works for you, always have at least one back-up in mind in case you quickly realize the first relationship may not be quite the right fit.

Production Quality and Audit

To make sure your suppliers are manufacturing your product to expected levels of quality, Supplier Audits, or what we call Quality System and Compliance Audits here at Pro QC, are the next imperative consideration in the supplier development process.

This type of audit makes an initial assessment of whether the quality system of the factory has the right leadership, management team, infrastructure, resources, processes and procedures in place to deliver a satisfactory end-product according to your specifications. Other audit types include the social compliance audits (e.g. SA8000) which evaluate that working and environmental conditions in the factories meet all safety regulation standards. If you are interested in more than a snapshot-in-time-audit, an auditing program can be established which provides an ongoing check of the compliance level of the supplier to ensure they consistently maintain standards and focus on continuous improvement.

At Pro QC we engage an independent review, conducted by a certified auditor, which ensures full neutrality of the supplier audit or factory audit. The auditors assess the supplier through a very structured checklist that is recognized by a global certification body (e.g. ISO, IATF, SMETA, BSCI), and client-specific requirements can also be incorporated.

A thorough review of production line processes can also be carried out in order to make any necessary recommendations to improve the quality, performance or delivery time of your product.

Supplier Relationship Management

After you have found the right suppliers following an initial or more detailed supplier audit, it is imperative to approach the Supplier Relationship Management (SRM) process systematically. In short, this entails cultivating a relationship with the supplier to ensure your needs are being communicated efficiently and effectively.

Important to remember here is that there are often cultural differences to be mindful of when working with suppliers from different regions, so setting the tone for the relationship and ensuring everyone is on the same page is the first step. This process can be challenging and time-consuming if you are going in with the little experience of working where your suppliers are located, which is why it is important to enlist a company that has experience working with suppliers in the market you are looking at.

Pro QC considers facetime to be imperative to cultivating a working relationship with suppliers. Not only do we take the time to conduct regular supplier visits to put a human face to the various product and quality requirements, but we also ensure contact is maintained through monthly calls and consistent communication.

We support our clients through tailor-made programs which include the handling of purchase orders and invoices, ensuring regular communications during first production and other key dates. This keeps everyone on the same page and informed of any changes as they happen. This level of communication is central to maintaining and managing an effective supplier relationship.

A good supplier relationship can help make or break a business, as suppliers can also be helpful sources of information and advice. If supplier engagement is high, there is a greater likelihood of stronger supplier performance and a more successful end product for the client.