1. Taking Control of Supplier Quality:
5 Best Practices for Implementing a Successful
Supplier Governance Program
Gerard J. Pearce
Executive Vice President
SQA Services, Inc.
www.sqaservices.com - "Global Quality on Demand"

2. TODAY
Objectives:
• Reiterate the current state and why
• Explore five best practices
Agenda:
5 10 15 20 25 30
overview
background
best practices overview
summary
www.sqaservices.com - "Global Quality on Demand"

3. FORCES ON SUPPLIER QUALITY
Challenges inside your supply chain
– Moving Target
– Distance
– Can’t go, shouldn’t go
– Mergers, acquisitions, splits and spinoffs
– Global Financial Crisis
– Cultural and local knowledge factors
– CAR Sickness
www.sqaservices.com - "Global Quality on Demand"

4. FORCES ON SUPPLIER QUALITY
Challenges inside your company
– Resources Vs Requirements
– More travel
– More detective work/chasing
– Connection
– Standard Tools
– Greater detail, number and
frequency
www.sqaservices.com - "Global Quality on Demand"

5. TAKING CONTROL OF
SUPPLIER QUALITY
5 best practices
that support
successful
control
All linked.
All there already?
www.sqaservices.com - "Global Quality on Demand"

6. HARNESSING SUPPLIER
DATA ANALYTICS
Integrating supplier data:
Quality / Performance
Are they succeeding?
Compliance
- Are they set up to
succeed? Overall Risk
Supplier Scorecard
Supplier Dashboard
Supplier Quality Profile
External …others?
factors
- Are they Criticality
impacted by the
- how important are they?
environment?
www.sqaservices.com - "Global Quality on Demand"

7. HARNESSING SUPPLIER
DATA ANALYTICS
Prioritization supplier quality focus
– Based on status low medium high
– Strategic Partners
– Strategic Stinkers high
supplier status
– Regional Coverage
medium
low
www.sqaservices.com - "Global Quality on Demand"

8. HARNESSING SUPPLIER
DATA ANALYTICS
Aim to create “Supply Chain Intelligence”
www.sqaservices.com - "Global Quality on Demand"

9. MANAGING SUPPLIER QUALITY
PROGRAMS
Process I
‘Manufactured’ Supplier Evaluation
– Consistency Vs Redundancy
– Consider all the moving parts and control them
– Map all activity
– Free up high-value resources for high-value tasks
– Invite self-serve visibility rather than reports
– Steal ideas with pride
www.sqaservices.com - "Global Quality on Demand"

10. MANAGING SUPPLIER QUALITY
PROGRAMS
Process II
‘Bigger Picture’ Supplier Evaluation
– View evaluation as part of a larger process
– Increase the evaluation scope to add value
(counterfeit risk, process capability)
– Exploit ‘Administrative Intelligence’
www.sqaservices.com - "Global Quality on Demand"

11. MANAGING SUPPLIER QUALITY
PROGRAMS
Tools
– Consensus on what the tools are and how to use
them
– More than a checklist (templates, notifications,
gold samples, lessons learned)
– Feedback loop through review
– Share with pride
www.sqaservices.com - "Global Quality on Demand"

12. MANAGING SUPPLIER QUALITY
PROGRAMS
Automation
– Support the process, not just the results
– Align with IT strategy and existing infrastructure
– Eliminate manual steps
– Monitoring and alerts
t!
– Facilitate exchanges (beyond Outlook) aler
– View towards SC intelligence
– ‘Careful what you wish for…
www.sqaservices.com - "Global Quality on Demand"

13. BROADENING
SUPPLIER ASSESSMENT
• What’s wrong with supplier audits?
• Not suitable for every supplier
• Objective moves away from supplier
‘selection’
• Focus more on continuous improvement
• Added elements typically reflect critical
industry topics
www.sqaservices.com - "Global Quality on Demand"

14. BROADENING SUPPLIER
ASSESSMENT
Integrated Focus in
Assessments:
Capability of
Processes Performance
Risk
Management
Regulation Investigation
Compliance Process
Capability of
Measurement
Systems
Quality
Systems
www.sqaservices.com - "Global Quality on Demand"

15. STREAMLINING SUPPLIER
CORRECTIVE ACTION
Set up for success
– Establish or reinforce the process
– Identify the stakeholders
– Opportunity presented by corrective action
– Different levels of corrective action
– Avoid ‘CAR sickness’
www.sqaservices.com - "Global Quality on Demand"

16. STREAMLINING SUPPLIER
CORRECTIVE ACTION
Close the loop
– Explain the process
– Follow-up
– Help the supplier
– Act on results
www.sqaservices.com - "Global Quality on Demand"

17. COOPERATION AND SUPPLIER
IMPROVEMENT
Share Responsibility
– Obtain commitment up front
– Data: do it once, do it fast, do it right
– Develop two-way visibility
– Buy-in eliminates redundancy, errors
– Establish ‘Controlled Connection’ through
organizational boundaries
– Opportunities beyond simple transactions
– Promote a collaborative, time-saving environment
www.sqaservices.com - "Global Quality on Demand"

18. COOPERATION AND SUPPLIER
IMPROVEMENT
Take the lead
– Identify resources
– Agree minimum acceptance criteria
– Use closure date guidelines for milestones
– Have a library of improvement tools
– Monitor in line with streamlined Corrective
Action
– Adjust accordingly
www.sqaservices.com - "Global Quality on Demand"

19. Objectives: SUMMARY
• Reiterate the current state and why
• Explore five best practices
• Recognize challenges of Supply
Chain Control
• Adopt best practices, starting
with a risk-based approach
• Look for better ways to use what
you have
• Look for ways to share the
burden with suppliers
www.sqaservices.com - "Global Quality on Demand"

20. THANK YOU!
Questions and further information:
Gerard Pearce
310-802-4448
gpearce@sqaservices.com
www.sqaservices.com - "Global Quality on Demand"