SECTION 1.11
Qualifying Suppliers

In our company, the cost of purchased materials, parts, and services sometimes exceeds 50% of the manufacturing costs. Thus, the overall program for quality in our company must extend to the suppliers (or vendors) from whom the purchases are made.


SECTION 1.11.1
Vendor Quality Policy

1. Multiple sources of supply will be developed for all important purchases or services.
2. Suppliers will be required to review all requirements and agree to them before a purchase order is issued.
3. Where appropriate, the facilities and personnel of our company will be made available to suppliers to assist them in achieving mutual objectives.
4. Data on supplier quality will be collected and used to determine the parameters in which incoming inspection will operate.
5. Supplier quality ratings will be prepared for use in selecting suppliers.

SECTION 1.11.2
Vendor Quality Policy-Technological

For traditional and proprietary products, the supplier is usually self-sufficient. The products which require outside manufacturing may require the type of engineering and technical assistance given to an in-house department. This assistance may require "exchange visiting", i.e., mutual visits to see each other's operations. These visits create the risk that the visitors will make unauthorized use of the knowledge obtained during the visit, but usually the need to take the risks is justifiable.

SECTION 1.11.3
Vendor Quality Policy-Economic

The life-cycle-cost concept requires that the supplier understand the buyer's cost over the entire useful life of the product. To the purchase price the buyer must add a whole array of quality-related costs: incoming inspection, material review, production delays, downtime, extra inventories, etc. However, the supplier also has a set of costs which he or she is trying to optimize. The buyer should put together the data needed to understand the life-cycle-costs or the cost of use and then press for a result that will optimize these.

SECTION 1.11.4
Vendor Quality Policy-Managerial

Because the products or services which we purchase involve a wide range of supplier capabilities, the planning for use of these capabilities must be coordinated with the capabilities of the buyer. A major effect of this form of interdependence is that the assurance of good quality can not be derived from incoming inspection. Instead, the assurance must come from placing responsibility on the supplier to (1) provide the correct product or service, and (2) furnish proof that it is right.

SECTION 1.11.5
Vendor Quality Responsibilities

The question has arisen: Who is responsible for vendor quality? Shown on the nest page is a chart that outlines separate responsibilities by department (reference the Quality Manual)