When working with a supplier, you expect that the goods and services it delivers to you are of a certain quality. You also expect items to be delivered on time and to meet agreed-upon requirements, whether that’s simply to mitigate risk or work with internal infrastructure and processes you have.
The best way to ensure consistent quality from your suppliers is to develop a plan for supplier quality management (SQM), using either a GRC program or a supplier quality management system (QMS).
Supplier quality management is less about product quality and more about supplier performance. That means you’ll need to monitor how the supplier delivers, rather than what it delivers. Supplier quality management should be a continuous component within your larger supply chain management program, to help ensure a frictionless experience for all parties.
The qualities of effective supplier quality management include:
- Clear and effective communication
- Negotiated contracts that establish standards for delivery
- Agreed-upon terms in the event of a supplier’s failure to deliver
- Up-to-date security and risk management
- A reliable GRC platform that automates supplier questionnaires and cybersecurity training
- Compliance with all audits and inspections
What Are the Benefits of Supplier Quality Management?
By focusing on long-term partnerships with your suppliers, you reduce the parties that have access to your protected and sensitive information. You can mitigate the risk of onboarding and authenticating multiple new entities, who might expose you to security risks. Instead, you can manage the same supplier for the same product at every instance.
Maintaining a smaller supplier list also means fewer relationships to maintain, allowing you to focus your energy across other business processes. Procurement is a critical business process to optimize, since the cost of poor quality can be higher than you may think.
What Are Some Ways to Measure Supplier Quality?
Supplier quality management requires continued monitoring of each supplier. You should watch the incoming data for points at which suppliers hit their targets and when they don’t, making note of any trends that may appear. Negative trends will need to be addressed to maintain supplier consistency.
Consider creating supplier “scorecards” with expected performance metrics for each one. This gives suppliers a clear understanding of their performance, helping with quality improvement while giving your organization markers for each review cycle.
What Is the Supplier Management Process?
Before working with a supplier, you’ll need to approve it. Supplier approval usually consists of the requirements and fail-safes that guard your working partnership. It includes:
- How to contact your supplier
- The agreed-upon safety measures the supplier will follow
- Procedures for third-party audits
- What corrective action occurs if a subpar product or service is delivered
Audits and Inspections
Part of managing vendor risk is performing regular audits to ensure supplier quality control. The audits should be conducted at regular intervals, checking that the supplier’s practices continue to align with your organization (or at least those laid out in your contract). Once you’re comfortable in your long-term partnership with a supplier, you can automate your third-party audits and conduct them remotely.
When receiving products or raw materials from a supplier, regular inspections should occur to confirm that each item is delivered according to standard and to protect against non-conformance.
Again, once you’re comfortable with your working agreement, an automated program can help to make this part of the supplier quality management program go smoother.
Non-performance and CAPAs
If you come across product that does not meet your quality standards, you’ll need to write nonconforming material reports (NCMRs). That report will then inform the preventive steps you and your supplier take to reduce the likelihood of repeat mistakes. These steps make up a Corrective and Preventive Actions (CAPAs) report.
How ZenGRC Helps Businesses Improve Supplier Quality
The best way to manage supplier quality issues is with a full reported dashboard that allows you to pull data, share reports, and automate the onboarding process all in one place.
ZenGRC lets you do all this while seamlessly integrating with your existing digital ecosystem. Our experts can guide you to create the most efficient supplier quality management suite while still maintaining and nourishing your long-term business partnerships.
Schedule a demo of ZenGRC today.