Session 9- Supplier certification:

Select one supplier from your group that you have determined is a good candidate to undergo certification.Prepare a brief summary of how you would apply each of the steps in the certification process to this supplier.Prepare a short written report of your group’s findings, and present the findings to the class (if called upon to do so).

Ground rules:

1. As a group, prepare written answers for submission, and possibly presentation.2. If required to do so, present your findings to the class. The instructor will provide a time limit for the presentations.3. Groups not presenting should provide constructive input on the presentations. This is a group activity, and you will be evaluated on your group’s constructive input.4. Submit your group’s short written report to the Instructor at the end of the class.

Why the supplier was chosen for Supplier Certification

-supplier certification program will assist the company in formalizing an assessment program that evaluates the systems a supplier has in place in order to assure a defined quality level (including reliability and consistency) and an on-time delivery timetable at a market driven cost. -a partnership will facilitate an open exchange of information which can lower costs, and increase adaptability and speed to market of new cutting edge technology-if major improvements can be made on defect rates (minimizing the need for inspection), on time delivery, order cycle times, and the percentage of ‘perfect orders’ (complete, on-time, accurate, etc.), and overall responsiveness to customer needs, especially during emergencies and crises.-company is single sourcing, or purchasing critical components from the firm, or engaging in long-term contracts-will help facilitate supplier base consolidation, and overall reduction of the number of suppliers-certification performed via a thorough examination of all key aspects of vendor performance

Steps of Certification

Step 1 – A New Philosophy

The relationship between firm and supplier is an essential component of the certification process. Traditionally the relationship between supplier and buyer is adversarial- this will need to transform into a relationship based on trust, cooperation and open communication (including advice) with the goal of a long term commitment. -certification can help enable a higher level of quality if there are shared goals, commitments and even risks between supplier and buying firm

Step 2 – Goals and ObjectivesThe design of the supplier certification program will include specific goals for improvement. This will include: -reduced freight costs for critical components, -reduced downtime-increased frequency of preventative maintenance programs-minimizing paperwork and duplication of labour-minimize unit costs, -labor savings, -inventory reduction -yield improvements, -reduced losses, -process efficienciesThe measure of success will be performed through analysis of:-annual expenditures for freight, labour, unit costs, inventory and carrying costs-the percentage of downtime as a result of maintenance and product quality issues

Step 3 – The Certification TeamIt is essential the certification team members are skilled in group interaction, and have the time and ability to commit to the program, and are directly involved with incoming projects and materials, and can benefit directly from the program. They will also need to reflect the appropriate level of management and executive support to ensure the certification program is accountable. The team members will include the following:Production PurchasingEngineering

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Step 4 – Supplier InvolvementThe certification program will begin at the earliest possible opportunity. The supplier will be contacted, and the partnership and subsequent certification process proposed, as well as a brief overview of what activities will be involved, and what the outcome will look like. It will be very important to underline the selling points, including shared benefits, lower costs, increased productivity etc., and how the buying firm will be involved in meeting the supplier’s firm halfway in the process, rather than the supplier’s firm bearing all of the costs and work required to make the program successful.

Step 5 – Implementation

The first step in the certification process will be a survey to be completed by the supplier. The survey will be designed to determine how the vendor manages the quality control of its systems, including: facility management, quality of final product, cost bars, technology development, customer satisfaction, freight and distribution methods, preventative maintenance programs, inventory and production, etc. The survey results will then be compiled and scored based on the following matrix:

Category Weighting Vendor’s Score

The rating scale would be based on the following:0 – no quality control system5 – Evidence of a well designed and implemented QC system (i.e. ISO9000)

Another performance metric to be evaluated will be done through on site visits, and an audit of supplier facilities. Information regarding historical vendor performance, including records on statistical information, rejects, the handling of emergencies will be compiled to create a baseline. -consider vendor self-assessment to help speed the process along

Step 6 – Quality Agreement

In the event the supplier can meet the expectations of supplier certification, a quality agreement will be constructed. The quality agreement will state the responsibilities of both the buyer and the supplier, and measures to be taken in the event of problems.

Responsibilities of BuyerRoutine factory visits and auditsAccurate and timely purchase requestsSensitive relevant information shared quickly and readily

Responsibilities of SuppliersPerformance of productReduction of rejected product by 20%Detailed preventative maintenance schedulesReduction of late shipments by 20%

Step 7 – Maintenance

A periodic review (every 4 months) will be initiated to ensure the program is meeting the needs of both buyer and supplier. In the event the buyer determines that the existing criteria must be changed within the certification program, the vendor will be given adequate time to adjust and meet the new expectations to remain certified. Inspection audits will also be conducted to ensure that quality specifications are being adhered to.