Supplier Selection & Management - What You Need to Know

Our latest quarterly newsletter Feature Article discussed strategic supplier selection. Due to the response we’ve had, we wanted to follow-up on our blog.

We were surprised to discover many of our newsletter subscribers didn’t know a variety of options existed for gaining additional assurances when going through the supplier selection process.

Determining which option you leverage involves the level of risk you’re willing to take in the process.

What are the options?

Legal Verification

The most basic information that you will want to have verified by an external source includes legal verification. Is the supplier legally able to partner and produce products for you? It becomes less clear how to do that when you’re looking at potential suppliers abroad. Using a 3rd party with local access is often preferred due to the cost and time required to execute internally.

Credit Standing

Another indicator of performance is generally an organization’s credit rating.

Supplier Verification

Does the supplier exist, and are they observably consistent with the information they provided. For example:

How many employees work there?
How many years have they been in business?
Who are their top three customers and what percent of sales do they make up?
Do they have any certifications?
What does the factory look like?
What equipment is available on-site?
How many production lines are there?
Do they subcontract anything to other suppliers?
What is their product capacity?

Supplier Audit

This on-site evaluation is performed by a quality professional that specializes in evaluating quality management systems. The idea is to gain assurances on a number of applicable topics through objective evidence. In general, the auditor looks at the following and provides a comparative analysis of conformances and non-conformances:

Management
Engineering
QC & Assurance
Incoming Receiving Inspection
Manufacturing
Packaging
Non-Conforming Materials
Corrective Action
Inspection & Test Equipment

Specialized Audits

Depending on your industry or other factors, specialized audits may be required. For example, many stakeholders now demand organizations support their social responsibility claims with on-site audits. SA8000 or social-based audits specialize in topics related specifically to the workforce and human rights issues. Other examples include:

Automotive ISO/TS 16949
Medical Devices ISO 13485
Environmental ISO 14001
GMP

Combination Audits

It’s often possible to create a combination audit to address certain components of multiple areas. For example, due to cost considerations, a company may prefer to combine the social accountability components with a more general QMS review.