5 Strategies for Building a Quality Supply Chain

Qualified vs Unqualified Leads
June 15, 2017
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Building a quality supply chain isn’t only advisable, it’s a requisite in today’s global economy. And market leaders are turning it into a competitive advantage.

Today’s fast-paced business world is evolving at a rate such that market leaders have no choice but to continually adapt to emerging strategies in order to gain an edge over the competition.

Below are 5 strategies you can use to build a quality supply chain:

  1. Build an Integrated IT Architecture That Extends Deep Into Your Supply Chain

It’s no surprise that almost all of today’s organizations (no matter how big or small) face an IT architecture comprised of disconnected data sources and systems. These solutions are often implemented to solve a set of problems without considering that longer-term strategic vision of a seamlessly integrated set of enterprise solutions. For supplier quality management, this raises some major challenges, especially if financial, engineering, quality, and operational systems are disconnected.

Market leaders are thinking about the big picture, and investing in integrated solutions that enable communication and collaboration from procurement up through design, manufacturing, and service. This means companies are creating closed-loop quality management by integrating enterprise applications across the value chain. Supplier Quality Management Software, which can be delivered standalone or through an extension of existing enterprise solutions like EQMS, PLM, MOM, or ERP, is much more effective when part of the overall integrated IT architecture with access to enterprise financial, product, supplier, and asset data.

By adopting these emerging solutions, companies are able to automate many traditional paper-based and manual processes, and manage them on single system rather than numerous disconnected ones. Integrating these data sources with other enterprise applications delivers levels of visibility, clarity, and interaction between functional units.


2.   
Implement a Supplier Risk Scorecard Solution that’s Standardized Across the Enterprise

There is risk involved with every supplier. Implementing supplier scorecards is a critical component to help you manage, understand, and mitigate that risk. Companies that rely on many suppliers are developing supplier risk scorecards and processes to evaluate and rank them based on historical and current performance. When you’re dealing with hundreds of suppliers, such a process can become the cornerstone of your SQM initiatives.

It’s important to develop a standardized way to evaluate and rank suppliers that extends across the enterprise. This can be achieved with our Sourcing Spot technology.

Our clients expect us to connect them with suppliers that are the best in the market. While cost is always important, ability to supply on time and meet our clients’ quality standards is equally critical.

Our SaaS technology sourceitis used by Sourcing Spot and our clients to manage all RFQs and jobs from a single dashboard. It gives our users instant access to all quote and job data and, as a supplier to Sourcing Spot, you are also provided access to the sourceit technology suite, and a virtual scorecard to rank potential suppliers.

 


3.   
Identify Metrics and KPIs to Monitor Supplier Performance

Every department will have its own way of measuring supplier performance, but it’s advisable to identify supplier metrics that matter most to your operation to be measured across all business units. Standardizing the way these metrics are calculated and reported will deliver major benefits when it comes to identifying areas for improvement and determining which areas require more resources or some type of change.

Metrics to consider include:

  • Defective parts per million
  • Percentage of defective products received
  • Percentage of returned products
  • Complete and on-time delivery
  • Quality
  • Delivery
  • Total Cost Savings

4.    Create a Collaborative Environment and Establish Processes for Managing Supplier Compliance and Audits

Because suppliers are located around the world, there will always be the challenge of making sure the parts and components being produced and delivered meet your compliance requirements. Compliance requirements may be internal or external, or government regulations, or industry standards. Supplier audits can support meeting compliance requirements, but not every organization has the resources required or the processes in place to conduct them. It’s crucial to establish a formal audit management plan which delineates the frequency of on-site visits, reporting requirements for suppliers, and the depth into the supply chain to which you’ll go to audit suppliers. If these relationships are built on trust, and both parties see that increased focus on quality delivers benefits to all, initiatives and change are much more likely to be effective.

 

  1. Hold Suppliers More Accountable For the Quality of their Suppliers’ Products

One of the challenges of working with suppliers is that they have their own supply chains. Not only do you have to rely on them to perform, by default you have to rely on their suppliers. Many market leaders are extending the responsibility of supplier quality management down to suppliers, holding them accountable for the quality of products. In some cases, market leaders are even investing in their suppliers’ SQM capabilities to reduce the potential for and cost of poor quality.

 

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