What is a Supplier Certification
Many companies have implemented a supplier certification program as an important part of JIT. The goal of this type of program is to develop a win/win relationship that ties your company to your supplier for mutual success. The reduced lead times and frequent deliveries of JIT cannot be asked of the supplier until he has made some progress with JIT principles. Until the supplier has demonstrated his ability to produce zero-defects products using SPC and has reduced his setup time, the risk of having deliveries made on a JIT schedule is too great.
Both the customer and the supplier benefit from a supplier certification program. Here are some of the customer benefits:
- The customer receives a zero-defect product.
- The program eliminates administrative formalities.
- The supplier reduces setup time.
- The supplier has a known process capability with SPC.
- The supplier can eliminate inspection with SPC.
- There is reduced inventory when the program is carried to the supplier’s supplier.
- The supplier gets first consideration for new business.
- There is mutual cooperation and trust between customer and supplier.
- There are closer functional ties and improved teamwork between customer and supplier.
- The supplier can lower total cost.
- There is a sharing of cost savings.
Most of these benefits can be achieved by setting up mutual goals in the areas of
- Total quality control and SPC
- Total cost reduction (not price reduction)
- Smaller lot sizes and more frequent deliveries
With less rework, less scrap, fewer specification and drawing errors, and fewer receiving and invoicing errors, the total cost of the product can be reduced. With the guarantee of zero defects, inventories and safety stock can be reduced, and inspection can be eliminated. Smaller lot sizes and more frequent deliveries can be accomplished with reduced setup and streamlined administrative paperwork.
Supplier Certification Criteria
The use of SPC should be a requirement of any supplier certification program. This will assure you that your vendor is capable of producing the part to your specification. The use of SPC on the production process will then guarantee that all parts are defect-free and can be delivered to your production line, bypassing inspection by the supplier and the customer.
In addition to requiring that the supplier use SPC, you should consider these areas when evaluating supplier abilities and performance:
- Management commitment to partnership
- Technical capability and support
- Quality history
- Delivery performance — on time and correct quantity
- Total cost competitive
- Preventive maintenance
- Problem solving
- Financial stability
- Business base — customer and industry
- Purchasing support
- Lead time
- Waste elimination
- Research and development
- Education and training
- Labor conditions, morale
- Employee turnover and management stability
- Environmental concerns
- Sales support
These criteria should be defined in measurable terms whenever possible to minimize the subjectivity of your rating. On-site surveys are necessary, as are frequent visits to the supplier’s location in order to cement the relationship aspect of this program.
Internal Supplier Certification
After developing your criteria and measurements, perform an audit on your own company. How can you ask your suppliers to do something you aren’t doing yourself? You don’t have to have perfect performance in all areas before starting your certification program, but you should have improvement commitments and goals in place. After all, we are all suppliers to our customers internally and externally. It will be much easier to carry this program to your external suppliers when you have experience and results to present to them. Your team will be more credible and enthusiastic when it has some success of its own to talk about.
Teams should always include persons from the purchasing, engineering, and quality functions. At varying times, you will also want to include production and finance staff. It is important that these people establish a relationship with counterparts at your supplier’s facility to enhance communication and problem-solving.
The certification process is very long and time-consuming. It often takes a year or more before you will be able to certify a supplier or a part. Change takes time, and what you are doing in a supplier certification program is changing the culture of your own organization as well as the culture of your supplier’s organization. This is where management commitment comes in. Without it, there will be little chance of success. But the benefits of the program are so great that any enlightened management team should find the program easy to support and encourage.