Six Steps to Qualifying Suppliers

Imagine that you are a QA consultant. Last night you wrote a blog about the three tools needed to qualify suppliers. Today you are auditing a supplier, and have just complimented the purchasing manager on his quality program. During lunch, Kim, the general manager, says, “Michael was just showing me the blog you wrote about how to qualify suppliers. I was confused—your blog seemed to say that we are doing everything wrong, but you just told us that our supplier quality program looks great.”


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Your response to Kim is, “The blog you read was describing what your customers should be doing to qualify suppliers—not what you should be doing to qualify suppliers. In your case, most of your suppliers are customer-mandated.”

This leads Kim to ask, “What should we do to qualify suppliers? What do you recommend if the supplier is not capable of making good parts?”

Your response? “You should help that OEM by helping the supplier get better. If the supplier doesn’t listen, keep trying, and ask the customer for help as a last resort.”

OEMs often force suppliers to use other suppliers that they—the supplier—would never choose. However, if the OEM specifies weak second-tier component and raw material suppliers, its first-tier suppliers will have fewer resources to devote to its own internal processes. One weak link can prevent the best outcome from occurring. The blog mentioned in our opening story summarized three weak tools—and recommended three better tools for qualifying suppliers.

The first three tools mentioned were:

  1. Requiring ISO certification
  2. Requesting a copy of the supplier’s quality manual
  3. Reviewing supplier questionnaires

The second three tools recommended were:

  1. Statistical process control (SPC)
  2. Process validation
  3. Supplier auditing

Michael and Kim, our purchasing manager and general manager at our supplier, are using all six of these tools. The first three are used to qualify customer-mandated suppliers, while the second three evaluate existing supplier performance. It’s true that the process for qualifying suppliers can differ, depending upon your position in the supply chain. Still, OEMs will benefit from adopting this six-step program to ensure that they’re not recommending inferior suppliers anywhere in the chain.

ISO Certificate Tracking

Michael’s team of buyers maintains the most current copy of each supplier’s ISO certificate on file, but their method of tracking it is unique. On each purchase requisition, the buyer is required to look up the expiration date of the certificate and write this date on the requisition. Therefore, if a certificate is nearing its expiration date, the buyer will request an updated certificate along with the next purchase order. If the supplier fails to provide an updated certificate, the incoming inspection team could place the next shipment on hold until the updated certificate is received. This mechanism ensures 100% compliance.

Use of Quality Manuals

The team requests quality manuals from suppliers, but the manuals are used by the supplier auditing team to plan audits. The manuals list all the relevant supplier procedures, and there is a process interaction diagram that the audit program manager uses to plan the audit agenda.

Supplier Questionnaires

The team has done an exceptional job of working with other departments in the company to develop a detailed supplier questionnaire that is specific to the needs of orthopaedic contract manufacturing. The questionnaire covers aspects such as raw material traceability and incoming inspection methods—critical for preventing use of metals that might be out-of-specification. The questionnaire also includes questions about inspection equipment that the supplier has available to perform final inspection and to generate statistical process control (SPC) charts.

Reduced Sampling Justification

The company uses the last piece of information in the supplier questionnaires, supplier SPC capabilities, as a strategic competitive advantage. Most suppliers are forced to absorb the cost of performing 100% incoming inspection of all dimensions for purchased components from second tier suppliers. This company uses SPC data to categorize supplier tiers. If a supplier provides SPC data as part of the documentation for each lot of components shipped, then incoming inspectors review SPC data to verify that the process parameters match validation run data. If data analysis indicates that process parameters resulted in an abnormal data distribution for any dimension, incoming inspectors perform inspection of that dimension(s) using a tightened sampling plan. All other dimensions are sampled on a normal or reduced sampling plan—based upon the process capability for each dimension.

“Dock to Stock”

The team also requests that SPC data is emailed in advance of parts. This gives the inspectors more time to review documentation and helps the company adjust their schedule to compensate for possible component supply shortages. SPC reports are requested in a standardized format with color coding of the process capability for each dimension. Any suppliers that use this format, and consistently demonstrate that their processes are at least 99.9% capable of meeting customer specifications, are eligible for the “Dock to Stock” program. “Dock to Stock” parts receive a special acceptance sticker, and parts are moved to inventory without incoming inspection. Not all customers allow this, and therefore this option is tracked at the individual component level and documented in the company’s MRP system.

Notification of Changes

The greatest risk of quality problems occurs when there is a process or specification change. The team exhibits best practices in communicating changes to suppliers by following these guidelines.

  1. Purchase orders always include part numbers, revisions, documentation requirements, packaging requirements, shipping requirements and the requested delivery date(s)
  2. Drawings are included with every purchase order—even when there is no change
  3. Suppliers are required to confirm each order—including all the details of the purchase order
  4. A copy of the purchase order and drawing is sent to incoming inspection upon receipt of order confirmation
  5. Supplier agreements include a requirement to notify the company of all process and specification changes—regardless of risk
  6. If a change is made, the change approval notice must include a disposition for all purchase orders that are in progress
  7. Buyers update or cancel and reissue purchase orders for all changes—including agreements to move delivery dates to earlier or later dates

Risk Control Plans

The team develops a risk control plan for each new product that the company quotes. The risk control plan is developed after the company has gathered part specifications and supplier data. Assumptions about the likelihood of “Dock to Stock” parts and inspection requirements are indicated in the quotation to provide a basis for renegotiating prices if the suppliers are not capable of achieving the “Dock to Stock” category, or if the inspection requirements increase over time. This risk control plan has also been used to identify profit sharing opportunities between the supplier and OEM.

Process Validation & Supplier Audits

The last two “better tools” recommended are ones that are not always performed by the supplier for second-tier suppliers. The team developed a unique supplier matrix for each purchased part. Their company and their customers independently score the importance of process validations and on-site supplier audits at the beginning of each project. Then the two companies compare notes and discuss the differences. This provides a tool for the companies to focus on the processes that should be validated and the suppliers that should be audited. Finally, the two companies discuss which company is better suited to oversee the component supplier’s validation or to perform the on-site supplier audit.


The company in our story above is an amalgam of a few great suppliers that I have audited—among the dozens of weaker suppliers I have visited over the years. If you are an OEM, I recommend that you

1) Adopt some of these tools internally
2) Teach these tools to your suppliers, and
3) Focus on “better tools” like SPC, process validation and supplier auditing

If you are a supplier, I have only one additional recommendation:

4) Strive to share the burden of process validation and supplier auditing with your customers.

My last pearl of wisdom is:

5) Look for suppliers that will make you better.


Robert Packard of Packard Consulting is a regulatory consultant with 20 years of experience developing products and managing projects in the medical device, biotechnology, pharmaceutical industries. His experience includes research, product development, operations management, manufacturing engineering, equipment design, regulatory affairs, quality assurance and fund-raising. Rob’s passion is training others. Rob may be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..


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