Posts Tagged ‘supplier auditing’
Supplier Quality Management Benefits, Responsibilities
There are benefits to creating strong relationships with suppliers from a customer’s perspective especially if a standalone supplier quality management function exists. Supplier measurement can take place, risk mitigation exercises (both reactive and proactive) can be accomplished and information and improvements can be shared for common gain. A supplier quality management function can create a community for all those involved , Account Managers, Supply chain Consultants, Supplier Performance Managers, in which they can integrate knowledge and deliver profit generating opportunities for both organizations through the exploration of additional, above and beyond current contract business opportunities .
Executive involvement is vital to the success of aligning the relevant strategic players to accomplish objectives and form the basis of building partnerships and ultimately unlocking value for both organizations. The Procurement functions should take the central role in coordinating supplier relationships, at the same time as owning and coordinating the process, authority and technology.
Suppliers: Positive & Negative Affects
Suppliers are an integral part of any organization’s overall process. As such, they have the potential to be a positive or negative force. When suppliers are a positive force, materials arrive on time, materials are processed in a problem-free manner and costs are controlled. When suppliers are a negative force, materials often arrive late, processing problems occurs, and the supplier is of little or no help in resolving such issues. Obviously, it just makes good sense to have good suppliers.
The industry is quickly moving toward requiring their subcontractors and suppliers to be AS9100 compliant and/or certified. By conforming to AS9100 or becoming registered by a third party, suppliers can gain a competitive advantage and benefit from the improved processes and continuous improvement that is the foundation of ISO 9001:2008 certified quality management systems.
General Electric Aircraft Engines (GEAE) was one of the first manufacturers to require AS9000 compliance by all of their direct material suppliers. Currently, GEAE is requiring as9100 certification for all new suppliers, and existing suppliers have a gap audit and a certification audit performed to coincide with their existing surveillance audit schedule.
Auditing Your Suppliers And Assessing Risk
Supplier audits need to focus on the suppliers and quality management systems that are truly critical to the supply chain, and better utilize available expertise to ensure that performance requirements will be met. Why do we perform supplier audits/? Once we understood that the purpose is to ensure overall success of the supply chain, then an expansion of related audit issues is also required. Supplier quality system audits have contributed to spreading the word about the importance of quality, and the need for a management system that helps keep quality on every business’ agenda. It’s now time to expand the boundaries of our thinking to include other issues, such as risk, that allow a business to grow and prosper or fail.
Companies that do not utilize a strategy for managing supply chain risk may be exposed to potentially negative influences, including impact on procurement, manufacturing and time to market processes in supply chain.
It’s for these reasons that supply chain risk management is now an essential part of a company’s supply chain strategy. It is the only way companies can ensure risks are identified in the entire value chain and mitigated to deliver financial goals.
AS9100 Fast Becoming A Supplier Requirement
The aerospace industry has recognized AS9100 as a means for continually improving quality and on-time delivery within their supply chain. Most of the major aircraft engine manufacturers, such as General Electric’s Aircraft Engine division (GEAE), Boeing, Rolls-Royce Allison and Pratt & Whitney, are requiring their suppliers to be certified to AS9100.
AS9100 certification can be used throughout the entire aerospace supply chain including the design and manufacture of airport and airline operations, replacement parts, supply and maintenance, cargo handling, overhaul and repair depots and flight operations.
The industry is moving towards requiring their suppliers to be AS9100 compliant / certified. By becoming AS9100 compliant / certified, suppliers can gain a competitive advantage and benefit from the process approach and continual improvement that are the foundation of ISO 9001:200* certified QMS.
Currently, the Boeing Company requires all Boeing suppliers to be BQMS (Boeing’s Quality Management System) approved or have a waiver. AS9100 Rev B is a significant part of Boeing’s BQMS requirements.
General Electric Aircraft Engines (GEAE) was one of the first manufacturers to require AS9000 compliance by all of their direct material suppliers. Currently, GEAE is requiring AS9100 certification for all new suppliers, and existing suppliers have a gap audit and a certification audit performed to coincide with their existing surveillance audit schedule.
Customer Relationship Management Software
Customer relationship management (CRM) is a customer-centric business strategy with the goal of maximizing profitability, revenue, and customer satisfaction. Technologies that support this business management system purpose include the capture, storage and analysis of customer, vendor, partner, and internal process information. Functions that support this business purpose include sales, marketing, customer service, training, professional development, performance management, human resource development, and compensation. Technology to support CRM initiatives must be integrated as part of an overall customer-centric strategy. Many CRM initiatives have failed because implementation was limited to software installation without alignment to a customer-centric strategy. This is why CIS Continuous Improvement Software excels in CRM. All of these CRM requirements are totally integrated into one CRM Solution including the Cross-Platform Communication capability of CIS!
Your CIS consultant can show you how to improve communication both internally and with your customers and suppliers any time, anywhere.
AS9100 Managing Suppliers
Managing suppliers throughout the aerospace supply chain is a major challenge for the industry. The chain is long, and within the supply base, there are sources that serve many industries. Because the industry is so dependent upon this supply chain, AS9100 includes a number of additional expectations for identifying and maintaining suppliers. Supplier approval is just one step in the process of managing suppliers.
Effectively communicating requirements is very important. The standard lists seven specific areas for consideration. They range from defining engineering requirements to managing test samples and right of access to suppliers’ facilities.
The industry typically relies upon one of three methods for product acceptance. An organization might conduct a receiving inspection, perform the inspection at the supplier’s facility or formally assign product acceptance to the supplier. Procedures for determining the method of supplier control are required, as are the processes used when using these methods.
But no element of supplier control is more important than understanding that a supplier is responsible for managing its suppliers and subtier suppliers. This includes performing special processes that are frequently subcontracted to business consutling firms. The supplier must use customer-approved sources; however, ensuring that the processing is properly performed is the supplier’s responsibility.
A new avenue has opened up in supplier surveillance auditing, which has had the effect of lowering cost and delivering real time results to customers. AS9100 software applications have made it possible to manage the quality requirements for as9100 from your desk top, while lowering the cost of visiting suppliers less frequently. This system is so effective that some registrars are now considering using it for such requirements as document review, corrective and preventive action effectiveness, quality objective review, internal audit effectiveness etc. All of this is done remotely thus lowering travel costs and disruptions to the customer business. Some requirements will always require on site visits, but the amount of time needed to complete a surveillance audit will reduce dramatically.
What are The Supplier Requirements For AS9100?
The industry is quickly moving toward requiring their subcontractors and suppliers to be AS 9100 compliant and/or certified. By conforming to AS 9100 or becoming registered by a third party, suppliers can gain a competitive advantage and benefit from the improved processes and continuous improvement that is the foundation of ISO 9001:2000 certified Quality Management Systems.
Effective Dec. 2003 the Boeing Company began requiring all Boeing suppliers to be BQMS (Boeing’s Quality Management System) approved or have a waiver. AS 9100 Rev. B is a significant part of Boeing’s BQMS requirements.
General Electric Aircraft Engines (GEAE) was one of the first manufacturers to require AS 9000 compliance by all of their direct material suppliers. Currently, GEAE is requiring AS 9100 certification for all new suppliers, and existing suppliers have a gap audit and a certification audit performed to coincide with their existing surveillance audit schedule.
Auditing The Supplier Selection and Evaluation Process
ISO 9001:2008 says you must select and evaluate your suppliers based on their ability to meet your requirements and evaluate them. There is no set method of doing either of these, but there are a few things that are common. It is important to understand that the size of your organization and the number and type of suppliers drives the form of supplier selection and evaluation. It is the internal auditor’s or external auditor’s responsibility to determine if the method selected is effective and is being followed.
The first step in evaluating the method used to select and evaluate is to determine what the standard actually says. This gives you the requirement by which we, (The auditor’s), will decide on compliance. The standard says that you shall; “evaluate and select suppliers based on their ability to supply products in accordance with the organization’s requirements.” Additionally it states you shall establish; “Criteria for selection, evaluation, and re-evaluation…” And; “Records of the results of evaluations and any necessary actions arising from the evaluation shall be maintained…”
This means that you (the organization) decide on the rules for your suppliers. As auditors we need to look at the criteria given for supplier selection and evaluation. It is important to remember that our job is not necessarily to pass judgment on whether we think the criteria is sufficient. Our job is to determine if those responsible for purchasing are aware of the criteria and are following the plan. We can make recommendations on the intrinsic worth of the criteria, but should limit our conformance decision to whether the standard is adhered to.
The second step is to determine the process used to meet the standard. Supplier selection and evaluation may be part of a single process, or may be two separate processes. The process approach is the best way to accomplish this objective. Meaning you must first determine all of the inputs and outputs of the supplier selection and evaluation processes. This is easily done by looking at how your organization describes their processes in the Quality Manual. Process maps can also provide you with much of the required information.
How Do You Demonstrate Compliance to AS9100?
More than 60 percent of IAQG members have implemented the AS9100 standard internally and are flowing it down to their suppliers. Most members will require suppliers to comply to the updated version of AS9100 (which is aligned to ISO 9001:2008 and supercedes older ISO 9000 standards). This is consistent with the transition from the old ISO 9001 standard to the new version.
Organizations within the industry differ in their compliance to AS9100 verification requirements. Some use their own external auditors to verify suppliers’ quality management systems. Others share the results of their quality system audits with suppliers in the industry. Most provide suppliers with copies of external audits. Most permit suppliers to share the audit results with other customers, too.
The industry is using the results of third-party registrars as a means of demonstrating a quality management system’s compliance to AS9100. The Americas Aerospace Quality Group, working with the Registrar Accreditation Board, has established a process and requirements for auditors performing audits to AS9100 and registrars granting supplemental registrations. The process includes additional AS9100 training and practical experience and ensures that auditors are competent and that registrars are experienced in the industry. The AAQG has created a Registrar Management Committee to oversee this important function. Its methodology is defined in SAE AIR5359. Europe and Asia are developing equivalent methods.
Supplier Management Software Solutions
Controlling Your Supplier Base Using CIS – Large corporations may not have a need for CIS Software for their own applications because they generally have an integrated information system that has been in use for many years that meets their requirements for management and quality assurance. However, their system does not integrate with their supplier base and does not provide for a complete control over their suppliers other than simple reporting of nonconformities, engineering approvals and purchasing.
Most larger corporations have a supplier control department that will audit and approve suppliers to ensure that the suppliers are capable of meeting their stringent requirements. Additionally, the supplier control department will monitor and perform periodic audits of the suppliers to ensure continued conformance to their specifications.
This approach, although effective in controlling the quality, is very expensive when the travelling expenses and time to audit is factored into the overall cost.
CIS Software offers the larger corporation as well as small business a solution that is more effective and far less costly. If the suppliers to a large corporation are using the CIS Software, then the supplier control department can perform electronic audits of their systems far more often without the huge travelling expense. CIS will also offer immediate reporting of supplier issues and their resolutions.