Three aspects of a good Supplier Quality Program
1. Choose the Right Supplier
• Audit the Supplier’s Business
• Verify the Supplier’s Capability
2. Measure Supplier Performance
• Measure the Supplier’s Quality Performance
• Measure the Supplier’s Service
3. Develop Supplier Relationship
• Supplier site visits to communicate concerns
• Offer suggestions for process capability CTQ control level
• Encourage development of a continuous improvement program
and use of Lean/Six Sigma tools
Thomas A. Crane 2010 Supplier Quality 1
Not all Suppliers are equal. Some Suppliers are more business critical and
require more attention to develop strategic relationships. One way to
subdivide Suppliers is to evaluate the parts or materials they provide.
Suppliers can be divided into three categories.
1. Critical Suppliers
Critical Suppliers provide parts or materials that are critical to the functionality of your
finished product, or are critical to the safety of your employees or the safety of the
end user of your product.
2. Major Suppliers
Major Suppliers provide parts or materials that are important to the efficient
production of you product. Parts or materials that have CTQs designated for process
control purposes can cause lost productivity, down-time, and higher scrap costs
when these parts or materials are out of spec.
3. Minor Suppliers
Minor Suppliers provide parts or materials that do not affect safety, functionality or
production of your products. Parts or materials from minor suppliers are normally
readily available stock parts or materials, or are available through multiple suppliers.
Thomas A. Crane 2010 Supplier Quality 2
The path to good supplier quality:
Critical and Major Suppliers Minor Suppliers
Identify potential suppliers Identify potential suppliers
Perform business audit
Sample parts/material approval
Sample parts/material approval
Pilot run of production quantity Run line trial with sample parts/material
Approve supplier Approve supplier
Measure Supplier performance Measure Supplier performance
Develop Supplier Relationship
Thomas A. Crane 2010 Supplier Quality 3
Identify potential suppliers
Choosing potential suppliers is motivated by a myriad of reasons, cost, service, location,
leveraging of corporate buys, etc. Regardless of the motivation for adding a new supplier, it is
essential to communicate as much as possible during the initial process of requesting
quotations. The more information about the parts or material specification, SPC data and
certification requirements, expected stocking levels, and packaging and delivery requirements
that you can share with the potential supplier the more accurate their quote will be.
Thomas A. Crane 2010 Supplier Quality 4
Perform business audit
For critical or major suppliers a business audit should be done before doing business and then on a
periodic basis determined by the supplier’s performance. The business audit should include all
aspects of the business including:
Organization and Management Operational Goals (metric that support the goals)
Financial Stability Growth Plan
Pricing Supplier/Customer Interface (Customer Focus)
Management Responsibility Documentation
Procedures Change Control
Quality Planning Traceability, Inspection and Testing
Process Control and SPC Process Control Levels (L1, L2, L3 or L4)
Metrology Corrective Action and Problem Solving
Cost of Quality Technical Capability
Handling Storage, Packaging, Delivery Training
Continuous Process Improvement Materials Management
Scheduling/Quick Response Productivity
Equipment and Tooling Maintenance Equipment/Tooling Design and Qualification
Sub-tier Supplier Responsibility Reliability, Qualification and Audit Testing
Employment Practices Environmental and Worker Health & Safety
A score card for the audit can be developed to aid in evaluation and development of improvement
plans. Each of the categories are scored based on objective evidence shown during the audit.
A minimum score can be established to help avoid potentially weak suppliers.
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COMMUNICATE, COMMUNICATE, COMMUNICATE
• CTQ Flow-down review and Drawing Updates: The clear communication of specifications and
expectations are essential to the success of any supplier quality program. This process begins with
your own internal review of CTQ flow-down (see appendix A), drawings, specifications, regulator
requirements, and packaging and delivery requirements. These should all be reviewed internally to
ensure they clearly convey all the requirements for parts or materials being ordered from the
• Review specifications with Supplier: After any updates or modifications have been completed, all
the drawings, specifications, regulator requirements, and packaging and delivery requirements
should be reviewed, in detail, with the supplier to ensure they are clearly understood. Requirements
for SPC data for CTQs and material certifications should be included in the specifications.
• Review Service Requirements: Service requirements should be included in the specifications in
order to make the expectations clear. Expected lead times, stocking levels, any special packaging
or shipping requirements, and any lot traceability requirements need to be clearly stated. Verify that
the service requirements are understood by the supplier.
• Review the Supplier Score Card Metrics: Explain the aspects of the Supplier Scorecard Metrics and
verify that the supplier understands how their performance will be evaluated (see Measure Supplier
Performance section below). Most suppliers will respond to performance metrics if they understand
Thomas A. Crane 2010 Supplier Quality 6
Sample parts/material approval
• Supplier should supply a minimum of 30 parts with capability data on any CTQs identified or
material analysis with a sample of the material analyzed.
• Supplier should provide Gauge R&R data for measurements systems used to measure the
parts or analyze the raw material. If a third party lab is used, then the lab name and address
along with the Gauge R&R data from the lab should be provided.
• Audit the data submitted by measuring the parts or having the material analyzed. This is done
to validate the supplier’s capability to measure parts.
• Perform a line trial with the sample parts or material to verify that they perform properly in your
product and that they do not introduce any issues in your production processes.
• Communicate results to the Supplier.
Pilot run of production quantity
• Order a production quality of parts from the supplier for a pilot run.
• Supplier should supply capability data for the production run (and/or material certifications) with
the parts or material identified with a lot number.
• Track the use of the parts or material through your production and note any change in production
efficiencies, down-time or increases in scrap.
• Communicate results to the Supplier
Thomas A. Crane 2010 Supplier Quality 7
Approve the Supplier
• Once the sample parts are approved and pilot run is successful the supplier should be added to
the approved supplier list for the parts or material tested and approved
• All new suppliers should be monitored closely to make sure they can provide quality parts with
quality service over an extended period of time. This may require more frequent calculation of
their supplier score using the metrics described in the Measure Supplier Performance section
Measure Supplier performance
Measuring the supplier’s performance is a combination of both the quality level of the supplied
product as well as the service level provided by the supplier.
• Part/Material level PPM
• Supplier Level PPM
• Supplier compliance to SPC data or material certification submittal requirements
• Responsiveness to Corrective Actions Requests and effectiveness to corrective actions taken
• On-time delivery / Promises kept
• Order accuracy (item numbers and quantities correct)
• Compliance to packaging and/or shipping requirements
A score card should be generated on a periodic basis and communicated to the suppliers.
Corrective actions should be requested if one of the metrics fall below desired level.
Thomas A. Crane 2010 Supplier Quality 8
Develop Supplier Relationship
You should develop a strategic relationship with critical suppliers and many of the major
suppliers. If possible you should periodically visit the supplier and personally discuss their
performance metrics (both good and bad).
Encourage suppliers to apply Lean/Six Sigma tools to reduce waste and improve process
stability and capability. Help them to understand the power of these tools and how to use them
to improve the control levels on CTQs to at least an L2 level (see appendix A for details on
Work with the suppliers to develop continuous improvements projects directed at PPM
reduction, improvements to OTD and order accuracy, productivity projects that lead to improved
productivity and reduced cost, and project to improve their cost of quality. Projects should be
well defined, with stated results that are measurable, and have a well defined timeline and
Developing a personal relationship with suppliers provides quicker resolution to quality or
service issues, as well as improved overall quality and service.
Thomas A. Crane 2010 Supplier Quality 9
Supplier Quality - Appendix A
CTQ Flow-down -- Identify What to Measure
Marketing – Technology – Quality - Manufacturing
Quality Functional Deployment (QFD) CTQ flowdown is a form of Quality Functional Deployment (QFD). It is a
process for making sure that the Voice of the Customer is reflected in the
• Identify customer’s CTQ’s (VOC) design and manufacturing of products.
• Translate customer CTQ’s to CTQ flowdown begins with the voice of the customer and the design process.
product-performance CTQ’s Understanding the customer needs and expectations along with any
• Identify Low level Red X’s that regulatory requirements (captured and documented) is the first step.
impact Parts/Process CTQs Translating those needs and expectations into product design and easy to
understand specifications is the next step. (This is an essential step, both
• Prioritize the Red X’s
internally for your production and externally for Suppliers)
• Assign current control levels Producing products that meet the design specifications and therefore meet
L1, L2, L3, or L4 the customer needs and expectations and all regulatory requirements is the
L1 and L2 control levels are
desired for each CTQ A robust Product Design Rationalization process is crucial. Technology
design reviews with Quality and Manufacturing are essential for successful
CTQ control levels
L1 – Mistake Proof (product, part, and/or process designed to ensure the CTQ is met without operator intervention)
L2 – Early Warning (SPC is used to monitor part dimensions and/or process parameters to maintain control of CTQ
within specification limits. Data can be reviewed for continuous improvement opportunities.)
L3 – Operator Dependent (When L1 or L2 control level is too costly or improvement project is a lower priority, then L3 is
acceptable if proper safeguards are in place. Clear control plans for process setup and
operation, first piece and in-process inspections with data recorded, and frequent quality audits
of procedures and records are needed for L3 control level to be effective.
L4 – no quality plan (For a true CTQ, this level is never acceptable.)
Thomas A. Crane 2010 Supplier Quality 10