ENTERPRISE VIEW: Best Practices to Manage Supplier Quality

May 1, 2010
It has always been true that your suppliers’ issues are your issues—and even that your suppliers’ suppliers’ issues are your issues. 
In today's regulatory and competitive environment, supplier non-conformances can have a profound effect on operational and corporate performance. Manufacturers struggle to manage supplier quality at a holistic level, often never finding the root cause of adverse events due to the lack of visibility into supplier performance.In the latest research on Supplier Quality Management, Aberdeen Group used five key performance criteria to distinguish the Best-in-Class from Industry Average and Laggard organizations regarding performance in the area of supplier quality management.When asked about the top strategies established by the responding companies, the results indicated that the market at large is most concerned with improving the visibility and control of quality processes across manufacturing operations and supply chain. Furthermore, in the context of supplier quality management, visibility and control is much more than simply receiving and testing raw materials. It includes visibility into suppliers' overall quality processes throughout the suppliers' manufacturing processes, not just final inspection results. In many industries and contexts, it is essential for brand owners to have visibility into a supplier's overall performance. For example, there can often be a very big difference between a part that has been reworked multiple times and a part that has passed on first inspection, which can, in turn, impact final product quality, and often plays a role in effective root-cause analysis.When it comes to visibility and control, technology plays a key role. Best-in-Class companies are nearly 35 percent more likely than Laggards to implement Supplier Quality Management (SQM) technology, providing suppliers and employees with a single platform to improve visibility and automate quality initiatives across the supplier base.Adopting this technology will enable manufacturers to proactively manage relationships with suppliers and understand the long-term value that suppliers are delivering to the operation from a quality perspective. The overall adoption rate of this technology has been low, which is an opportunity for non Best-in-Class companies to invest in SQM solutions to improve supplier visibility and control.When asked about a new SQM system installed at his company, Ben Stewart, commercial IT manager at Inteva Products LLC, (www.intevaproducts.com), an automotive supplier based in Troy, Mich., mentioned that, "The biggest benefit we have seen with the new system is the ability to have a very direct and straightforward way to communicate any information we need with our supply base. In the past, we had to look at different solutions outside our ERP (enterprise resource planning) system or come up with a homegrown solution. But now, since our suppliers have access to the SQM system through an Internet browser, we are able to effectively share and communicate data with our suppliers. It allows us to collaborate much more efficiently with our suppliers using a single solution."Mehul Shah [email protected], is Research Analyst, and Matthew Littlefield, [email protected], is Senior Research Analyst at Aberdeen Group Inc., in Boston.Inteva Products LLCwww.intevaproducts.com

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