1. Track Cost
The best practice in measuring supplier quality is tracking the cost of poor supplier quality. Such cost of poor supplier quality could add up to 10% of the company’s revenue. The steps to take while calculating the actual cost of poor quality are rework, scrap, categorization and processing costs due to poor quality.
2. Cost Recovery
Organizations require to actively laboring with their suppliers to increase their quality, so that they can lessen their own cost of poor supplier quality. Thus a cost-recovery system, in which the suppliers are charged back for supplying poor quality of components, is an efficient way to establish business regulation and accountability into the supply chain.
3. Supplier Audit
Supplier audits are a great way to ensure that a supplier is following the processes and procedures that you agreed to during the process of selection. The supplier audit recognizes non-conformances in the process of manufacturing, engineering, shipment, invoicing and quality process at the supplier. At the end of the audit both the supplier and manufacturer must identify corrective actions jointly and implement these successfully.
4. Supplier Scorecard
Supplier Scorecards is a best practice to use facts to mark the performance of the supplier within the supply base and track progress in the supplier’s quality over a period of time. Scorecards also give a data point into any business negotiations in the future.
5. Implement Quality Management
Schematic reductions in the Cost of Poor quality can be achieved by executing a Quality Management System (QMS) that offers an integrated and closed loop corrective action process. In a manufacturing company, when nonconformance, deviations out of specifications, customer complaints comes up, corrective and preventive actions need to be set off to remedy the problems.
In case of any quality issue, the first step must be investigating to find out the root cause. Once the root cause is identified implement CAPA (Corrective and Preventive action). CAPA could include amendments to a procedure, promoting the skill set of a worker through training or recalibrating the manufacturing equipment.
7. Engaging Suppliers
It is vital for manufacturers to employ suppliers in every aspect of their quality management system, so that the supply-base is completely integrated into the QMS being rolled out. Some of the main requirements include supplier must be able to offer quality-related facts to the manufacturer without having to set up a mandated QMS in their environment. This could be attained by feeding information from the supplier’s quality system into the quality system of the manager or making the supplier to utilize a manufacturer’s web-based QMS.