A Guide to Supplier Quality Management: Benefits, Processes, and Measurement
Eric Hansen
Supplier quality management plays an integral role in the success of any manufacturing plant. It also presents ongoing challenges for companies, especially those with an extensive product line. Recent trends indicate that supplier-related quality issues are on the rise, posing significant challenges for manufacturers striving to maintain high-quality standards.
While each company must adopt practices that align with the nature of their particular business, there are a few elements every successful supplier management program should encompass. Here’s a closer look at what a robust supplier quality management system should entail.
This article includes:
What Is Supplier Quality Management?
Supplier Quality Management (SQM) refers to the process of ensuring that a supplier’s products or services meet the standards, claims (e.g., Kosher, Gluten Free, etc.), and requirements of the purchasing organization. It is a critical function for maintaining product quality, ensuring compliance with regulatory standards, and achieving operational efficiency in manufacturing and production industries.
Key Components of SQM:
Supplier Evaluation and Selection
Assessing potential suppliers for their ability to meet quality, safety, and regulatory standards.
Evaluation criteria may include certifications, past performance, and production capabilities.
Supplier Qualification and Onboarding
Establishing formal qualification steps, collecting and maintaining proof of qualification and data for future assessment
Setting clear expectations for quality, delivery timelines, and compliance.
Ongoing Monitoring and Assessment
Continuously tracking supplier performance using metrics like non-conformances, reliability, and adherence to specifications.
Utilizing supplier scorecards or other tools to evaluate and improve performance over time.
Compliance and Documentation Management
Maintain proof that suppliers comply with relevant regulations (e.g., FSMA, GFSI)
Digital platforms are often employed to streamline document collection and storage.
Quality Control and Testing
Conducting regular inspections and audits of materials and components received from suppliers.
Addressing issues through well-documented non-conformance reports and corrective actions.
Collaboration and Communication
Building strong partnerships with suppliers through regular communication, shared goals, and transparency.
Collaboration fosters trust and encourages continuous improvement.
What Are the Benefits of Supplier Quality Management?
Having a strong supplier quality management process in place has several benefits for manufacturers. For these benefits to be realized, however, companies must work to build a relationship of mutual trust and open communication through shared expertise and resources, as well as support from key stakeholders in both companies.
Enhanced Product Quality: ensures that raw materials and ingredients meet stringent quality standards, leading to consistent, high-quality end products.
Improved Regulatory Compliance: better adhere to food safety regulations such as FSMA, GFSI standards, and HACCP requirements, reducing the risk of fines, recalls, and legal issues.
Risk Mitigation: identify and address potential risks in the supply chain, such as contamination or supply disruptions, while minimizing operational downtime and protecting consumer safety.
Cost Savings: identifying quality issues early in the supply chain helps to avoid the high costs associated with recalls, rework, waste, and it can reduce overheads tied to manual monitoring processes.
Improved Supplier Relationships: foster transparency and collaboration with suppliers, creating stronger, more reliable partnerships.
Streamlined Operations: tasks like tracking supplier certifications, monitoring performance, and ensuring timely audits translate to better resource management.
Ability to Adapt to Market Changes: quickly pivot to address shifts in consumer demand, ingredient availability, or regulatory updates.
Brand & Reputation Management: ensure the delivery of safe, high-quality products to consumers, safeguarding brand reputation.
Innovation: encourage the exploration of new ingredients, processes, or products, driving innovation.
What Is the Supplier Management Process?
Supplier management is an ongoing process, not a one-time activity. It entails several key steps which, once implemented effectively, can support optimal product quality, supply chain resilience and reliability, and boost your bottom line. Here’s what the framework should entail.
Approval
Companies must develop, document, and enforce qualification steps for supplier approval. These steps will vary based on risk and could include self-assessments or audits.
Each company should also have a comprehensive checklist that details the steps needed for approval. This will act as guidance so all parties can stay on track during the onboarding process. The checklist should define roles for everyone involved in the process, and in most cases, these roles will span several departments. There should also be a separate qualification checklist that screens potential vendors for the effectiveness of their quality and safety systems. It could entail:
Supplier contact information
Quality and safety measures
Third-party audits and certification of claims
Policies for returning products or materials
Compliance/performance history
Audits & Certifications
Audits are an effective and proactive supplier quality control activity, and should be performed periodically to verify that the supplier’s practices align with the purchasing company’s requirements. Most facilities use audits to ensure their suppliers have comprehensive safety and quality programs. While larger companies may be able to perform second-party audits, most use third-party audits from sources such as GFSI schemes.
To streamline the audit process, many facilities are leveraging plant management software that supports remote audits. With these tools, suppliers can add attachments and be assigned tasks, while internal teams can perform sign-offs easily through one integrated system. SafetyChain’s Supplier Compliance solution enables you to clearly define your supplier requirements, share those requirements with suppliers, capture and monitor critical documentation, and ensure suppliers never fall out of compliance.
Incoming Inspections
Inspections are another form of supplier quality control. Raw materials and ingredients must be constantly evaluated for compliance with pre-established specifications. This is another area in which plant management software can provide an advantage by managing your inspections within the system; you will receive notifications to alert the appropriate parties of any out-of-spec results. Incoming inspections become more efficient, ensuring compliance with predefined quality standards. Regular inspection with an electronic platform will provide the data needed for visibility into the relative performance of your partners.
Ongoing Communication
Keeping the lines of communication open with suppliers ensures that expectations are clear, issues are addressed promptly, and any changes to requirements are understood and incorporated. Your plant management software should feature a private supplier network that allows you to digitally share and capture requirements, eliminating paper and emails that get buried in inboxes. Having a designated portal also protects your confidential documents and eliminates phone calls, emails, and management via spreadsheet to support time savings for both parties. Much of the maintenance of supplier management can be automated with plant management software; for instance, notifications will be triggered when a supplier certificate or other document is about to expire, so they can quickly and easily upload a new document.
Non-Conformance & CAPAs
Materials that fail to meet quality control standards should result in nonconforming material reports. From there, it’s important to track the steps taken to remedy the issue and prevent it from happening again, which should include Corrective and Preventive Actions (CAPAs).
How Is Supplier Quality Management Measured?
A critically important aspect of supplier quality management is continuous monitoring of each supplier’s performance on an ongoing basis. Look for both on-target performance as well as any negative trends that must be addressed to confirm all suppliers are consistently supporting your company’s ability to provide a safe, high-quality end product. Supplier scorecards have metrics that track a supplier’s performance, which can help uncover areas of concern and highlight potential opportunities for improvement.
Performing all of these activities on a continual basis is complex and challenging, but process manufacturers can deploy technology to help them succeed. With features like private supplier networks, automated notifications, and supplier scorecarding, plant management software can help companies achieve greater visibility and effectiveness in their supplier quality management activities.
Westrock Achieved a 10% Increase in Production Time With SafetyChain
Westrock Coffee runs large-scale production of freshly brewed coffee, utilizing pre-ground coffee beans as the primary ingredient.
By implementing SafetyChain’s data entry and supplier compliance system, Westrock’s facility began tracking and trending grind size and yield data. This proactive approach allowed for real-time monitoring of supplier performance and more precise quality control, and enabled their team to address and resolve grind-related issues promptly.
Ready to see improvements in your plant? Book a demo with one of our SafetyChain experts.
