Approved Supplier List

Mr. Pareto Head and Supply Chain comic strip

Question

I would like to know how supplier status in the Approved Supplier List (ASL) should be managed so that there is complete traceabilty.  For instance, a vendor status is changed from approved to not approved in the ASL for reasons other than substandard performance which is documented in an audit report, how should QA document such change to ensure that these changes are tracked. Could QA make changes in the ASL without notifying the Purchasing Department and without any documentation?

Answer

Thanks for contacting ASQ’s Ask the Experts program.  Concerning your questions, about supplier status traceability, and ASL management, the following response is provided.

Dependent on the number of suppliers involved and the availability resources, an organization may choose to utilize a single or combination of methods to monitor supplier performance and supplier status.  These methods may range from using an MS Word or Excel spreadsheet, Access database to a multi-user database.

As you are aware, ISO 9001:2008, Clause 7.4.1, requires the organization to establish criteria for selection, evaluation and re-evaluation of suppliers.  This clause also requires records of results of evaluations to be maintained.  This includes any necessary actions taken as a consequence of the evaluations conducted, such as the removal of a supplier from the ASL or changed approval status.

ISO 9001:2008 does not limit a company’s ability to remove a supplier from the ASL.  This is an internal decision based on the company’s established criteria.  So there could be various reasons for removing a supplier from the ASL.  Likewise, with changing a supplier’s status from pending, approved to not approved.  As mentioned, ISO 9001:2008, Clause 7.4.1, requires records of supplier evaluations to be maintained, and any actions taken as a result of the evaluation to be retained.

The a primary purpose of the ASL is to ensure the placement of purchase orders or contracts are limited to those suppliers that meet the company’s established criteria for supplier selection, evaluation, and re-evaluation.  For this reason, Purchasing must be included in any changes made that may affect their use of the ASL.

Generally speaking, Purchasing is responsible for maintaining and updating the ASL, which includes ensuring the current status of suppliers of products and services are identified.   The company’s internal audit process is typically used to assess Purchasing’s conformance with established criteria for supply chain management.

In summary, I would not recommend that changes be made to any QMS process without the involvement of the QMS process owner and management as applicable.  ISO 9001:2008, Clause 5.4.2, sub b., requires top management to ensure that the integrity of the QMS is maintained when changes are planned and implemented.  If changes are made to the ASL, Purchasing should certainly be involved.

I hope this helps.

Best regards,

Bill

Bill Aston, Managing Director
Aston Technical Consulting Services, LLC
Kingwood, TX 77339
Office: (281) 359-ATCS (2827) or Toll Free: (888) 968-9891
Website: www.astontechconsult.com

Combating contamination

Q: We want to ensure that we are receiving clean containers to package our products. How can we improve our incoming inspection process?

A: You should encourage your vendor to ship only clean containers. Then, be sure that the shipping and receiving process doesn’t cause contamination. If you can determine the source or sources of the contamination, the best fix is to remove the cause.

If that approach is not possible and you have incoming containers that may have some contamination, then consider the following elements in creating an efficient incoming inspection process.

1) How do you detect the contamination?

Apparently, you are able detect the container contamination prior to filling them, or are able to detect the effect of the contamination on the final product. Given that you are interested in creating an incoming test, let’s assume you have one or more ways to detect faulty units.

As you may already know, there are many ways to detect contamination. Some are faster than others, and some are non-destructive. Ideally, a quick non-destructive test would permit you to inspect every unit and to divert faulty units to a cleaning process. If the testing has to be destructive, then you’ll have to consider lot sampling of some sort.

There are many testing options. One is the optical inspection technique, which may find gross discoloration or large debris effectively. Avoid using human inspectors unless it’s only a short term solution, as we humans are pretty poor visual inspectors.

Another approach is using light to illuminate the contamination, such as a black light (UVA). Depending on the nature and properties of the contamination, you may be able to find a suitable light to quickly spot units with problems.

Another approach, which is more time consuming, is conducting a chemical swab or solution rinse and a chemical analysis to find evidence of contamination. If the contamination is volatile, you might be able to use air to “rinse” the unit and conduct the analysis. This chemical approach may require specialized equipment. Depending on how fast the testing occurs, this approach may or may not be suitable for 100 percent screening.

There may be other approaches for detecting the faulty units, yet without more information about the nature and variety of contamination, it’s difficult to make a recommendation. Ideally, a very fast, effective and non-destructive inspection method is preferred over a slow, error prone, and destructive approach. Cost is also a consideration, since any testing will increase the production costs. Finding the right balance around these considerations is highly dependent on the nature of the issue, cost of failure, and local resources.

2) How many units do you have to inspect?

Ideally, the sample size is zero as you would first find and eliminate the source of the problem. If that is not possible or practical, then 100 percent inspection using a quick, inexpensive, and effective method permits you to avoid uncertainties with sampling.

If the inspection method requires lot sampling, then all of the basic lot sampling guidelines apply. There are many references available that will assist you in the selection of an appropriate sampling plan based on your desired sampling risk tolerance levels.

Another consideration is the percentage of contaminated units per lot. If there is a consistent low failure rate per lot, then lot sampling may require relatively large amounts of tested units. You’ll have to determine the level of bad units permitted to pass through to production. Short of 100 percent sampling, it’s difficult (and expensive) to find very low percentages of “bad” units in a lot using destructive testing.

3) Work to remove original source(s) of contamination to permit you to stop inspections.

I stress this approach because it’s the most cost effective in nearly all cases. In my opinion, incoming inspection should be stopped as soon as possible since the process to create, ship and receive components should not introduce contamination and require incoming inspection to “sort” the good from the bad.

Fred Schenkelberg
Voting member of U.S. TAG to ISO/TC 56 on Reliability
Voting member of U.S. TAG to ISO/TC 69 on Applications of Statistical Methods
Reliability Engineering and Management Consultant
FMS Reliability
www.fmsreliability.com

Related Resources:

Digging for the Root Cause, Six Sigma Forum Magazine, open access

Many Six Sigma practitioners use the term “root cause” without a clear concept of its larger meaning, and similar situations occur in Six Sigma training programs. As a result, many practitioners overlook root causes. Read more.

The Bug and the Slurry: Bacterial Control in Aqueous Products, ASQ Knowledge Center Case Study, open access

When a customer reported a problem using the polycrystalline diamond (PCD) slurry supplied by Warren/Amplex, the company traced its product through the supply chain in order to identify the cause and quickly implement a solution. Read more.

Explore the ASQ Knowledge Center for more case studies, articles, benchmarking reports, and more.

Browse articles from ASQ magazines and journals here.

Dock to Stock

Suppliers, supplier management

Q: I have been tasked with implementing a dock to stock policy. Does an expert have any advice or information to share towards forming a dock to stock policy?

A: To begin, here is a brief definition of dock to stock (DTS):

Dock to stock is a receiving method whereby materials are delivered directly to point of use (storage or manufacturing), skipping the normal receiving inspection.

For most organizations, parts which are given a DTS status are those which have been “proven” to be compliant. It is common practice to perform a receiving inspection on the parts for a minimum of five deliveries (some companies choose 10).

After a supplier has proven to deliver a compliant product five times, that individual item/part number is given DTS status. It is then general practice for production/assembly departments or line personnel to verify compliance as needed. If a product is found to be noncompliant, it is put on a contingency list and must prove its validity again — usually through five to 10 compliant shipments before it is returned to DTS status.

Keep in mind that the DTS process is rarely used in some industries/companies. For example, a company certified to ISO 13485 (medical devices) would not use DTS due to FDA regulations — here’s an excerpt from 21 CFR 820.80 (b):

“Receiving Acceptance Activities: Incoming product shall be inspected, tested or otherwise verified as conforming to specified requirements.”

In short, determining how many acceptable shipments to qualify a supplier for DTS status is up to the company. Requesting a certificate of compliance with each shipment can tend to encourage a supplier to ensure their own quality, as does a yearly audit of the supplier’s facilities (if appropriate).

I hope using the guidelines above will help lead you toward your goal.

Bud Salsbury
ASQ Senior Member, CQT, CQI

Related Content:

Browse the free, open access resources below, or find more in the ASQ Knowledge Center.

Chinese OEM Reduces Returns With Improved Product Testing, ASQ Knowledge Center case study

When Continental Automotive Systems, Tianjin, China, began producing an electronic component known as the silver box, the return rate was more than 1,200 parts per million (ppm), versus a goal of less than 100 ppm. A Six Sigma improvement team used quality tools including trend charts, Pareto charts, and cause-and-effect diagrams to analyze the failure modes for the reported defects, finding that many were not being covered by product testing processes. Read more.

Cost-Effectiveness Based Performance Evaluation for Suppliers and Operations, Quality Management Journal

This research establishes a cost-effectiveness based  performance evaluation system for suppliers and operations. The purpose is to provide a methodology for “integrating supplier and manufacturer capabilities through a common  goal, profitability improvement, based on lowering the cost of purchased materials.”  Read more.

Expert Answers: Stock and Standards, Quality Progress

The advisability of implementing dock-to-stock is discussed. Read more. 

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