Supply Chain Quality Management
Supply chain quality management, also known as supply quality management (SQM), involves three major processes: supplier approval, document organization (or contract review), and ongoing monitoring. Successful SQM executes each of these three processes and necessarily maintains communications between suppliers, manufacturers, and end-user clients.
Here’s how it works.
Supplier Approval. The supplier approval process focuses on identifying, assessing, and selecting appropriate vendors for a particular contract or on-going service. Once selected and vetted, the organization purchases materials from the supplier.
Request for Quotation/Contract Review (Or Project Kick-off).The purchasing entity triggers an initial inquiry for quotation or issues an order for production. This results in the second process in supply quality management is a review of technical requirements and documentation, which brings supplier key team members to the table for collaboration. The purchaser, supplier and in some cases, third parties agree to procedures and specifications, which includes deadlines, project outlines, contracts, and quality assurance metrics. Organizers obtain necessary supplier documents, then begin tracking product manufacturing and gauge supplier performance against the predetermined quality metrics.
Ongoing Monitoring. With the production fully underway, it must be kept on track. Deliverables not only have to be produced on time but must meet quality assurance standards. Supply chain quality managers and engineers perform technical qualifications, audits, monitor manufacturing closely and build reports for both suppliers and internal personnel. If additional vendors or manufacturers join the project or quality assurance issues arise, this is the process that addresses those problems.
Supplier Quality Problems and Challenges to Problem Resolution
Supplier quality problems aren’t unique to your business or even your industry. They’re global—and endemic.
The renowned international management consulting firm, McKinsey & Company, performed a comprehensive analysis of quality incidents across eight private industry sectors and identified that 40% of those incidents stemmed from supplier quality issues.
When the firm studied the financial impact of supplier quality problems, it was able to uncover three key factors that contributed to these issues:
Communication. Due to the nature of working with multiple organizations, communication issues are an inevitable part of large manufacturing projects. Most notably, there’s a limited amount of collaboration and communication during the project’s design phase. As a result, companies misunderstood their client’s needs and overlooked important product specifications. Even if they did express concern over certain parts of the supply chain management (SCM), these concerns could be ignored or underestimated, particularly when compared to the other parts of the project the client deemed important.
Quality Assurance. The McKinsey study found that quality assurance metrics are frequently not driven by data, resulting in uninformed decisions about Key Performance Indicators (KPIs). Therefore, instead of creating and subsequently tracking accurate, data-driven KPIs, the metrics many organizations choose were not relevant to the overall success of the project deliverables.
Manufacturing Limitations. Suppliers don’t have the trained personnel, equipment, knowledge, or manufacturing capabilities to meet the project specifications as agreed upon. These limitations, commonly unknown or under-communicated, create delays and manufacturing nonconformances that inhibit the ability to deliver a high-quality product to market on time.
The three contributing factors McKinsey was able to isolate are not the only obstacles to a solid end to end quality management. On top of problems with manufacturing, supplier-internal communication/documentation, and quality assurance, organizations and suppliers struggle during the request for quotation and contract review phase of the process.
Specifically, many organizations face a significant stumbling block in the submission and control of supplier documentation. This critical documentation is the only way for suppliers to demonstrate their technical proficiency and to show how they meet a customer’s technical qualifications. During the monitoring phase of a project, supplier documentation is typically the only way for the organization to conduct an audit, request a corrective action, and manage non-conformance .
Historically organizations managed the submission and control of supplier documentation with paper copies or via hybrid methods using a combination of paper, software and shared files. These system breed disorganization; namely, suppliers and the customer’s staff having access to different versions of the same document and not having a means to track document review and approval.
Now, with the advent of cloud-based software, organizations and suppliers can access shared documents, make real-time changes, issue requests for information, and alert parties when they need to review documents. Therefore, cloud-based software can ameliorate the common challenges most organizations experience in their supply chain to drive positive, meaningful supplier engagement and improvement.
QMSC Cloud-based Software Mitigates Your Supplier Quality Problems
QMSC provides end to end supplier quality management, allowing your organization to increase visibility throughout every step of the supply chain.
In addition to its automated, cross-platform tracking reports, QMSC cloud-based software sends customized notifications and reminders to employees, managers, your suppliers, and your clients. It allows relevant parties to collaborate on documents, reduce review and approval cycle times, and remove road-blocks to supply chain communication.
Don’t let the design & manufacturing phases of your next project or your ongoing manufacturing process get marred by miscommunications, ill-informed quality assurance KPIs, and manufacturing limits. Use QMSC cloud-based software to handle your supply quality management and boost your supply chain efficiency.