7 Tips for Better Quality Performance by Tier-1 and Sub-Tier Suppliers
Blog | February 13th, 2023

7 Tips for Better Quality Performance by Tier-1 and Sub-Tier Suppliers

Supplier Quality Performance has a direct impact on business and financial metrics, especially in sectors such as manufacturing and medical device. Therefore, having a well-designed process for continuously improving supplier quality metrics plays a crucial role in enhancing overall quality performance. Regulatory bodies and standards such as the Food and Drug Administration and ISO recommend a proactive and collaborative approach to ensure suppliers meet their quality requirements.

However, we often see that businesses may have a strong relationship with their tier-1 suppliers and sign a contractual agreement (with quality-related stipulations) with them but find it challenging to be equally engaged further down the supply chain. But this is where the risks to the environment and quality lurk, according to a report published by ILO (International Labor Organization).

Additionally, in most cases, the sub-tier suppliers are SMEs. These organizations have fewer people responsible for quality management and access to data and information is a challenge. Overall, there is lesser data visibility and transparency. It also becomes difficult to collaborate more and bring about change. As a result, ensuring the required quality and policy requirements down the chain becomes challenging.

Some of the key challenges gathered from a Deloitte report and listed by ILO include:

  • Limited or poor visibility beyond their tier-1 suppliers in 65% of the cases
  • Absence of full transparency of the entire supply chain for procurement teams in 94% of the cases
  • Supply chain disruptions caused by issues below immediate vendors in 40% of the cases

SMEs constitute 90% of businesses worldwide and employ two-thirds of the global workforce. Therefore, the impact of poor management of the supply chain can have a deep impact on product quality and performance.

The risks can range from operational risks including –

  • Delays, disruptions, shortages, and quality control issues
  • Governance risks caused by non-compliance
  • Cybersecurity risks leading to loss of privacy or data, etc

Collaborative business models help mitigate risk and increase proactivity. Relationships with suppliers promote innovation and ensure continuity of supply.

A data-driven, system-based approach to help develop quality and environmentally sound, enduring business models that can help to address the root causes of the problems and prevent future recurrences of supply-related issues.

This approach should be integrated with the business strategy and create a competitive advantage for the company. It can also facilitate a transformational change to not only improve global supply chains but also the return on investment and risk mitigation.

Supplier management goes beyond identifying good suppliers and includes continuous interaction, collaboration, and coordination to improve quality outcomes.

Improved Supplier Quality Performance: 7 Key Points to Remember

A risk-based approach to quality management of the supplier enables meeting compliance requirements, improves the quality of supplies, and thereby enhances the quality of products and services. For businesses, it also reduces the uncertainties due to unexpected disruptions to the supply chain and minimizes delays.

Therefore, it is mission-critical to implement a sound and robust supplier management system. It should ideally include these 7 aspects for better quality performance of the suppliers across the chain:

  • Create a Supplier Management Policy: Create a clear policy on identifying, assessing, and creating a list of potential suppliers, managing them, and reviewing them periodically. Ensure that this policy is documented and communicated to all the stakeholders and translated into action to help the business assure a reliable supply chain.
  • Identify and Map Your Suppliers: Constantly review suppliers and prioritize their importance to the business based on what they supply, how much, the quality, reliability, and other critical criteria. This will help to proactively and collaboratively manage the suppliers.
  • Define Expectations and Measure Performance: A clear communication of what is expected of the suppliers and any subsequent changes is critical to ensure the delivery of supplies that conform to the specifications. Supplier performance should also be measured against clearly established metrics and a scorecard covering all important aspects measured for continuous correction and improvement.
  • Empower Teams with Information and Training: By establishing a team that interacts with the supplier, different aspects of supplier performance can be tracked and monitored better. All organizational needs from the supplier can be managed more efficiently. But it requires the team to have a clear understanding of what is required and training to empower them with the skills needed for effective supplier management.
  • Automate and Be Data-driven: Manual supplier management can be tedious and prone to errors and oversight. By automating the process, businesses can have better control and outcomes. This will also provide access to meaningful data that can be analyzed to perform SWOT and continuous improvement.
  • Have a Top-down Approach: The corporate goals and supplier performance goals must be synchronization for the business to be able to achieve its targets without challenges from the suppliers. The involvement of the top management can also improve resource allocation.
  • Bite Only as Much as You Can Chew: Having a buffer is good in case of emergencies. But too many suppliers but not enough resources to manage can be counter-productive. Therefore, map resources and suppliers to achieve a perfect balance and improve the efficiency of supplier management.

ComplianceQuest EQMS: A Preferred QMS Solution for Improved Supplier Management and Quality Performance

ComplianceQuest’s cloud-based, scalable, and flexible enterprise-wide quality management system provides a comprehensive solution for the end-to-end management of suppliers. It is geared to

  • Improve compliance
  • Enable collaboration between suppliers and the business
  • Facilitate document exchange and deviation request
  • Rate the suppliers by maintaining their scorecards
  • Create and maintain an approved ASL
  • Speed up and improve the production part approval process
  • Allow suppliers to submit inspection data
  • Enable onboarding and change management
  • Initiate audits
  • Make corrective action requests
  • Manage permit-to-work
  • Enable reporting and analytics
  • Anytime, anywhere mobile access

To know more about how to improve the transparency and efficacy of your sub-tier supplier strategy, click here: https://www.compliancequest.com/supplier-management-software/

You can also watch the CQ Supplier Management demo video to understand more: https://www.compliancequest.com/demo-video/cq-supplier-management/

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