Have you ever had any misunderstandings or issues with any of your suppliers? I’m sure your answer to that question was: YES! Usually, these situations happen due to miscommunication. Often, suppliers operate on assumptions when trying to meet customer expectations. Therefore, having a clear idea about the expectations of another person is one of the most important aspects of any relationship.
Transparent communication between partners helps build a level of understanding and establishes mutually beneficial relationships. Written documentation can achieve all these goals. And that’s why you need to have a supplier quality manual in your company.
What is a supplier quality manual?
A supplier quality manual is used to promote continuous improvement by clearly communicating a company’s expectations and requirements to its suppliers of both materials and services.
This document must present the minimum requirements for a supplier to provide its goods and services in compliance with the established quality requirements. The manual is used together with other documents such as purchase order, technical specifications, and terms and conditions that are already commonly used.
The document must be continually updated to meet the expectations of a growing company and ensure its continuous improvement.
What should be included in the manual?
You are convinced that your company needs a supplier quality manual, right? And if you have reached this post, it is because you are having a hard time creating it and need to know which items should be included in this document. Therefore, I will list below the main requirements that your manual must have to ensure clear communication between you and your suppliers and continue to enable continuous improvement for your quality system.
1. Purpose
Clearly describe to your supplier what the purpose of the manual is.
Examples:
- Disclose specific requirements regarding company standards
- Disclose the Quality/Environmental Policy.
- Explain and align important concepts regarding the Quality / Environmental Management System.
- Disclose the Code of Ethics and Social Responsibility
2. Policies
Disclose your company’s policy in full. Whether it is a quality, environmental or integrated policy. It is key that your supplier, as an absolute participant in your management system, has easy access to your policies. Thus, you ensure that they are aware of your company’s commitment to quality and the environment, and that you also require the same commitment from your business partners.
3. Code of ethics and business conduct
Your suppliers are also directly linked to your Code of Ethics and Business Conduct. How they act can directly affect your company’s values and image. Consequently, in addition to disclosing your full code of ethics, also describe what you expect from your partners regarding issues such as: slave labor, fraud, anti-corruption, harassment, forced labor, child labor, employee health and safety, among other subjects.
4. Minimum requirements
Share the minimum requirements a supplier must have to work with your company. This may vary according to the type of product or service it provides. Some requirements: licenses, certifications, permits, accreditations, technical reports, insurance, occupational health assessment program, among others. Here, it is also important to highlight who will be responsible for sending or requesting documents whenever they expire.
That is, your company will have this control and will request the supplier for renewal whenever a license expires, for example, or will it be the responsibility of the partner to send this information automatically? Will the supplier be penalized if this document is not sent by the requested deadline? It is critical to describe these conditions.
5. Risk matrix
If you have a supplier risk matrix that classifies and differentiates partners according to the type of input or service they provide and their real impact on your organization’s end product, it is important that you explain in your manual the methodology used to prepare the matrix. That way, your suppliers will be aware of why they might be evaluated differently.
6. Assessment
It is important that you have an assessment process for your supplier management. It may be a questionnaire, audit, or document evaluation. I wrote another post here on the blog providing greater details about the whole process. Include in your manual all the rules related to the supplier assessment process conducted by your company. Examples of some rules are:
- How scoring is done;
- How often does this assessment take place;
- What are the downgrading rules;
- What is the deadline for sending information, whether questionnaires, action plans or documents;
- The rule applies even for certified suppliers.
If the audit process only happens in specific situations, clearly describe when and why it will occur. See some examples below:
- Nonconformities that affected your end customer;
- Recurrence of nonconformities;
- Failure to reach the required score in the questionnaires;
- When checking the efficiency and effectiveness of action plans;
- Changes to the production process;
- Representativeness of the supplier according to its risk;
- Customer request
7. Indicators
List in your manual all the indicators that are used to monitor your suppliers as well as the potential consequences of not reaching the target. In this item, in addition to quality KPIs, you may also add financial indicators. Some KPI examples:
- On-time delivery;
- Audit results;
- Number of nonconformities;
- Return rate;
- Response time;
- Supplier availability;
- Price competitiveness.
8. Transportation and packaging
Establish the basic requirements that represent a quality product delivery for your company. Don’t forget to inform the allowed delivery times.
9. Nonconformities and action plans
Detail how the supplier complaint process was designed in your company, from what types of situations a complaint can be registered to deadlines for sending an action plan, as well as your own and your partner’s responsibilities.
It is important that your supplier has additional training on how to complete investigations of nonconformities. If you require a specific method for root cause identification (5 whys, Ishikawa, RCA), the supplier must be trained on how do it.
The same rule should be applied to action plans. If there is a need to use a particular method, such as 5W2H, you must ensure your supplier receives appropriate training for this method. Remember that not all of your partners have all the knowledge and management processes of your company and sharing wisdom is beneficial for both parties.
10. Additional requirements
If you see the need, describe some essential items that your suppliers must have in their units if identified in your internal risk matrix. For example:
- Traceability and audit trail of their entire process;
- Training of all their employees, including sharing the requirements of your manual;
- Use of certified laboratories for analysis of raw materials;
- Preventive and corrective maintenance;
- Change control;
- Risk and opportunity management;
- Control and management of their suppliers;
11. Contacts
Share the contact list (names, emails, job titles and phone numbers) of people the supplier may need. The departments that generally have this interaction with external partners are:
- Quality;
- Purchasing;
- Health, Safety and Environment;
- Labs;
- Research and Development;
- Security.
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