QA within the purchasing process Sourcing Strategies & Supplier Evaluation Flashcards
OEM Ford Explorer in 2000
Initial Situation:
US administration alerts Ford and Firestone due to a
high number of accidents of Ford Explorers equipped
with Firestone tyres.
Estimated 3000 injured and 250 death casualties
Causes:
Tread separation causes accidents: rolling over
Production of the tyres during a strike period in the
plant at Decatur, IL.
Modifications before SOP, among them the recommendation
to lower tyre pressure from 35 psi to 26 psi
Consequences:
Recall of Ford, change of 14,4 Mio tyres
Blaming each other for the failure
End of a more than 100 year old relationship
Apple Watch: problems with a
supplier from China
Quality problems with an important component of the Apple Watch. Modules for
vibration alarms and light “knocking” fell out.
In case of tattoos, the ink under the skin can provides errors detection of the heart
rate.
A defect component is probably the reason for delivery delay of Apple Watch.
Supply chain in case of a plastic
chemicals producer
Business-to-Consumer (B2C) –> Private car buyers
Supply Chain within Business-to-Business (B2B):
Producer of plastic chemicals -> Plastics manufacturer -> Manufacturer of plastic parts (interior fittings, headlamps) -> Carmaker -> (Private car buyers, Rent a car company, Companies with car pool, Public authority with car pool)
Business-to-Organisations (B2O) (most public institutions, e.g. states, non-profit organisations) -> Public authority
with car pool
Difference betw. Consumer and
Industrial goods based on its markets
Industrial goods are produced and demanded by organisations in order to be able to
create value or further products (e.g. investment or consumer goods).
The main challenge: „Quality“ Definition
Quality is the fulfilment of requirements and expectations! of the customer
The main challenge: „Value Creation“
Definition
The Value Creation is referred to those company’s activities, which contribute to an increase in Value of the company’s performance.
Increase of Value > (Σ resource consumption [e.g. for production]) + (Σ efforts [e.g. by application of
know-how])
The Value Chain of a company
Company: is a system in which a certain performance is able to create profitability.
Transfer quality responsibility to
the supplier
Prerequisites:
• Have confidence in the capability of the supplier
• Perform supplier audits thoroughly
• Clearly assign the responsibility for quality control to the supplier
Advantages:
• Reduce redundant quality control
• Reduce time and effort for quality control at the customer
• Faster response time at the supplier
Next level:
• Exchange information on quality data
• Engage in partnership for design and development
• Optimise supply chain process
Possible criteria for supplier evaluation
Evaluation tree
Purchasing - Price, Cost reduction initiative
Quality - Quality performance, System QA
Logistics - Logistic performance, Logistic system
Technology - Current technology position, Conformity with requirements
Soft facts - cooperation, Complaint management
Classification of supplier after evaluation
Score:
A - 100-95% - preferred (top rated supplier)
B - 95-85% - accepted (few small problems with easy fixes)
C - 85-75% - partially OK (Important problems, high need of CAPA)
D - 75% less - change (Various important problems, supplier change necessary)
Possible escalation mechanism
Problembehebung Vorladung des Lieferanten Lieferantenbesuch Liefer Problem solving Supplier Blocked for change new projects Immediate reclassification Supplier visit or supplier audit Personal reporting of Supplier management
Possible escalation mechanism
Problem solving - Personal reporting of Supplier management - Supplier visit or supplier audit - Immediate reclassification - Blocked for change new projects - Supplier change
Key figures for supplier
evaluation
Quality Value [WQ] = Number of deliveries with good quality / Total number of deliveries
Schedule Value [WT] = Number of deliveries within the delivery period / Total number of deliveries
Total Value [W] = Quality Value WQ x Schedule Value WT
Supplier selection
Purchasing Policies and Agreements
Depending on the business relationship all parties involved should exchange
information and procedures for the following aspects:
• Targets of purchasing (in context to the corporate philosophy)
• Principles of collaboration (ideas about the business practices)
• Aspects of supplier selection processes (know-how, quality, reliability, etc.)
• Objectives and importance of framework contracts (e.g. QAA)
• Importance of international rules and standards (e.g. compliance to human
rights, sustainable use of resources, etc.)
Quality Assurance Agreements (QAA)
Targets for quality assurance agreements (QAA):
• Harmonizing of quality requirements
• Failure prevention at the supplier
• Building of mutual trust
• Define the “rules of the game”
• Avoid redundant quality controls
• Legal safeguard together with commercial agreement
Sources:
• Chamber of commerce
• Syndicates
• Company’s websites
