ISO 9001 says that you should select suppliers based on their ability to meet your requirements and evaluate their performance on a regular basis. My experience is that most organisations treat this as a tick-a-box activity performed grudgingly once a year by an inexperienced person with a little time on their hands. STOP! It’s time to take this seriously.
You know that old adage “You’re only as strong as your weakest link”? It’s been around forever, and that’s because it’s true. And you might be a link in the middle of that chain. You might have a lot of suppliers on either side of you, yet we tend to focus on the suppliers downstream even though those upstream can cause a lot of damage to our products, services, and reputation.
Good suppliers are worth paying extra for. Reliability, consistency, lead times, customer support, trust – these attributes all reduce risk and costs.
What can you do?
The most common way of evaluating suppliers is to ask them to complete a questionnaire that often goes something like this:
- “Do you have a quality / WHS / environmental management system in place?”
- “Is it certified? If your answer is yes, please attached a copy of your certificate. If your answer is no, please answer the following 99 questions.”
Another, dare I say it better approach, would be to evaluate suppliers based on risk. Some suppliers pose a greater risk to your business than others and no organisation has unlimited resources. So it makes sense to group suppliers according to risk and to have different evaluation and relationship building activities in place for the different risk levels.
For example, if you could not meet your customer’s needs without a certain supplier, then you might want to form a really close relationship with them by visiting them regularly, or if this is not possible, by meeting with them frequently over Skype, Netmeeting, or one of the many other meeting tools out there. Part of your evaluation might include auditing them using open ended questions (because you’ll find out more that way), and your audit of a high risk supplier might be more thorough. It might also question whether they meet requirements outside of ISO 9001, AS/NZS 4801 and ISO 14001. For example, do they have good contingency plans in place? (contingency planning is not just about major disasters. It’s also about preparing for events such as the loss of data, people, customers, suppliers, and other disruptive events. But I’ll save that for another day).
Don’t forget that if you do have a management system in place, then it will be generating information for you that is useful when it comes to assessing the performance of your suppliers. You should be reviewing your records of the problems they have created for you by checking your non-conformance log, corrective action register, issues register, or whatever you call it. But of course, you shouldn’t always wait for the review before acting. Depending on the level of pain they cause you, some suppliers might need to be contacted about their performance immediately, some might even need to be replaced immediately.
One of the most common reasons why many organisations don’t manage their suppliers well is because it is all too painful. It takes time and hence money, they have trouble remembering when they should evaluate, it is too hard. But there is great software out there that takes the pain out of supplier evaluations. Click here to find out more.
As with so many things in life, communication is the key. Through good communication they’ll come to know what is important to you and where you’d like them to change or improve. If they value you as a customer then they are more likely to be responsive to your needs. Improving your supply chain relationships will contribute to your own continuous improvement and that’s got to be a good thing.
If you’d like some guidance or need a sounding board please email me at email@example.com. Alternatively, visit my website where you’ll find my Top 5 Essential Tips and free ISO procedures.