Supplier Certification Defined
Supplier certification isn't just a purchasing program. It can be defined as "An on-going, flexible corporate wide process and an element in a firm's procurement, design, manufacturing and marketing strategies." It is only one of the many processes in a manufacturing system dedicated to Total Quality Management (TQM). Supplier certification should not be perceived as a program where external suppliers guarantee the on-time delivery of zero defect parts to your plant. This view defines supplier certification as a one way street where you pick the direction of traffic. A supplier certification program must reflect a two way street where the internal flow of material must be as organized as the flow from external suppliers. What is true for the supplier side is also true for the customer side to which you supply finished materials.
This two way process is characterized by the term SIPOC, which is defined by the elements of Suppliers, Inputs, Processes, Inputs and Customers. Suppliers provide inputs for your processes (internal or external), which in turn you transform through processes that create outputs to customers next in the supply chain linkage.
Activities that comprise a supplier certification program include supplier base reduction, formal measurement activities, supplier assessment activities, formal procedures, supplier partnerships, total quality management, communication/teamwork, education/training and improvement activities to streamline operations. Two of the most important building blocks are quality and reliability.
Specific goals for a supplier certification program must be established for each operating environment based upon strategies and needs of the organization. The desired goals must integrate into the strategies as defined by the business plan. Specific goals might include the following:
• Process focus to reduce non-value added activities and increase productivity both internally and externally.
• Develop a measurement system for evaluating suppliers and improving supplier performance.
• Product focus to improve quality, eliminate defects and reduce variability.
• Develop standard procedures for purchasing activities.
• Improve communication and provide education/training across the supply chain.
• Establish long term strategic partnerships.
• Improve cost competitiveness.
• Reduce procurement lead time, improve delivery performance and optimize inventory management.
• Minimize supplier base.
Because a supplier certification program involves parties across the supply chain it requires that all departments within the company be involved as well as key departments at the supplier's facility. A core team needs to be established to implement the supplier certification program. This core team should include but is not limited to representation from manufacturing, purchasing, quality and engineering departments. Support functions should be called upon as required to assist and support the core implementation team. Listed below are departments and some of their responsibilities for implementation and maintenance of a supplier certification program.
• Accounting-reporting COQ data, accounts payable terms, payment activities.
• Engineering-Material standardization, technical support, value analysis, specifications, commodity specialist.
• Human Resources-Training, skill assessment, job responsibilities, labor relations.
• Marketing-Customer requirements.
• Production-Material usage, packaging, training, value analysis.
• QA/QC-Inspection requirements, supplier survey, supplier assessment, specifications/tolerances.
• Receiving-Documentation, transportation, packaging.
• Purchasing-Procedures, measurement activities, contract development, sourcing, supplier certification coordination.
• MIS-Support programming requirements, electronic data interchange, bar coding systems.
• Labor-Job skills, improvement activities.
• Supplier-Improvement activities, partnership activities.
The engineering function must organize their personnel to provide commodity specialists. These commodity specialists provide a focal report for communication between technical personnel of the supplier and other engineering personnel within the company. The use of engineering commodity specialists provide optimum utilization of engineering personnel because no one individual can focus their attention toward a commodity group rather than expect engineering personnel to be experts for all commodity groups.
To Be Continued
To stay current on manufacturing competitive knowledge. please subscribe to our weekly bulletin, "Manufacturing. Basics and Best Practices (MBBP)." Simply fill in the below form and click on the " subscribe button."
We'll also send you our Special Report, "8-Basics of Kaizen Based Lean Manufacturing."
All at no cost of course.