Ok, time to
stir the pot a bit. I know there is a silent majority of people out there who
roll their eyes while simultaneously pressing their lips at the mention of
Approved Supplier Lists; they look at it as a necessary evil; a constant source
of findings on internal and external audits; a down-right thorn in the side!
On the other
hand, many of those same people, when presented the opportunity to get on a
major customer’s Approved Supplier List, are heard to herald their unflinching
dedication to all aspects of quality, and are seen to conspicuously post their
quality pedigrees on their virtual sleeves. We love getting recognized by those
major customers with neat trophies or certificates of recognition for on-time
or other measured performance, don’t we? No problem with that, right? So, why
which regulation or standard you fall under, the requirements regarding the
elements of your Approved Supplier/Vendor List may vary, but they all have
common threads: Who are you getting your parts or services from?; How are they
qualified to get on your list?
findings by internal or external auditors are due to non-compliance with what
was said in the firm’s own manual. Here’s a sampling:
manual states you won’t issue any Purchase Orders unless the supplier is on
your list, but the auditor finds evidence to the contrary.
order to facilitate ‘hot’ or ‘AOG’ orders, the manual provides for an initial
(Single) Purchase Order while the Approval process takes place, but the auditor
finds several PO’s have gone out over a seemingly long period without the
manual states that you will somehow track the quality performance of those
suppliers, but in actual practice there’s no evidence of it.
purchasing/sales staff at your firm have silently discovered how to work- around
your process. In fact, taming this crew and getting them to follow published
procedures is a common theme - There,
I said it and I meant it.
firms have purchased ERP systems with built-in capability to control who you
issue PO’s to, and to list and report who comprises the Approved Suppliers,
firm or its employees don’t fully understand or use this capability. Typically,
this includes the QA department – Dude,
make the software you’ve paid for work for you!
‘Permissions’ to change things are granted to the wrong, or too many employees,
thereby diluting the supposed controls.
‘work-around’, another one used frequently in the industry is what I’ll call
the ‘Hidden Supplier’. Many firms have active programs to reduce or place a cap
on the number of suppliers they use, hence a reduced or capped Approved
Suppliers List. This is somewhat understandable since after all, you have to
manage all those firms on your list. Suppose you need a part, and the only
supplier is not on your Approved, capped Suppliers List. No problem, just issue
the PO to someone on the list, and by phone ask them to get the part from the
firm not on the list, hence the hidden supplier. You get the part from an
approved supplier (who got it from someone else), and everyone is happy, right?
The problem is, both the approved supplier and
hidden supplier got a price markup; two instead of one. This is one of the
reasons why these caps or reduced-supplier-base initiatives seem to come and
about the data talking to you regarding the Quality History of your suppliers?
Too often unfavorable data just sits there, dormant. Maybe it makes its way
into an internal report. But how about sharing your information with the
offending party; the supplier? The most common excuse is that the supplier is a
big name, and you’re just a small fish; that they won’t listen you. Really? Have you even tried? If the
extent of such communication is that you issue a ‘speeding ticket’ (a CAR or
SCAR), then perhaps I understand why you don’t get any response. Pick up the phone, establish a
colleague-to-colleague dialog with the person at the supplier; have your data
and examples ready. Most of time you’ll see results and a genuine interest, and
usually, thanks. Try it.
are the firms that take their system for Approved Suppliers beyond merely
meeting the base-line requirement of the standard or regulation; they want to
actively meet the spirit and intent of
the requirements. Attributes of such firms might include the following:
ERP system is airtight; NO PO’s can
be issued by anyone unless the supplier is already approved.
are as proud of their restricted suppliers list as they are of their approved
list. Recurring reasons to restrict suppliers include:
of the supplier to return surveys despite repeated attempts (don’t get me started on that one, it’s
inexcusable; there, I said that too, and I meant it).
percentage of the PO’s issued resulted in rejects when the product was received.
‘issues’ such as FAA Unapproved Parts Notices, DOT IG Reports, GIDEP Alerts, Debarred
Lists, CAA Notices or Alerts, etc.
of periodic reports for management review which may include suppliers with
great on-time performance and zero rejects, and of course, those with delivery
or quality issues.
the household names or fortune 500 firms which have formal recognition rewards
for their best performing suppliers – Bravo. For the recipients, we all love
seeing those trophies, plaques, and certificates in the Main Lobby; it gets the
supplier’s employees pumped.
minimalists satisfied with just meeting the standard, I hope you’ll challenge
yourself to utilize the requirement as an opportunity to better serve your firm,
and to develop meaningful relationships with the suppliers you’ve teamed with.
comment on this blog – your stories, observations, or best practices.
Over ‘n out