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ThePositiveImpactofSupplierQualityManagement

BestPracticesandPracticalInsightsfor2015

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TodaysPresenters

BrandonHenning
Director,CPGIndustrySolutions
SpartaSystems

DirkDusharme
EditorinChief
QualityDigest

Whatwelldiscuss
Industrychallenges
ValueofSupplierQuality
Management
FiveSQMbestpracticesthat
youcandonow

2013

1999

Food & Beverage recalls


have increased 135%

PRODUCT RECALLS
USexperiences30classI&IIfoodproduct
recallsperweek(USDA).Europeexperiences20
perweek(RASFF) 2013costtotheindustry
over$150BillionDollars

Recall Execution Effectiveness Report, Deloitte, GMA, FMI, GS1. May 2010

52%

are a

Incidents result of
Supplier & Contract
Vendor Issues
Recall Execution Effectiveness Report, Deloitte, GMA, FMI, GS1. May 2010

Industrychallenge:
IdentifyingQualityIssuesEarly

Corporate
Planning&Design
Issue
Resolution
Cost

Supplier
Network

Manufacturing
Facilities

10X

1X

Distribution
Centers

100X

Consumers

1000X

22%

Only
ofcompaniesseequalityasan
integratedfunctionoftheirsupplychains1.

Gartner,SJacobson,Quality:TheMissingLinkinYourSupplyChainStrategy,January2015

Visibility into the supply chain


is a growing challenge

65%
80%
51%
of CPG
companies
supplycompanies
chainare
partners
lack
outsourcing
visibility
help with innovation
into their material
suppliers

The supply chain communication gap


due to manual communications

Suppliers

Manufacturers
quality management
processes

Preventing quality issues in the supply


chain, leads to sustained revenue growth!
Better manage
suppliers
Decrease cost
of poor quality

Drives
Operational
Excellence
Prevent
Supply Chain
Incidents

Good News
SamesolutionthatenablesSupplyChaincollaborationalsoassistsyoutoreach
yourOperationalExcellenceandTopLineRevenueGoals

Value gained from installing supplier quality & internal quality management software
Effective Supplier Relationship Management
Quality & Process Improvement
Production Intelligence
Production Execution
Cost of quality reduced
Cost of goods sold decrease
NPI time to market increased
Overall Equipment Effectiveness (OEE) increased
Reduced Average Waste Rate

$90M+

Best Practices to
Ensure Supply
Chain Quality &
Safety

1. Establish the Supplier Foundation

Record all suppliers and locations


Perform site audits, submit findings &
review Corrective Actions

BENEFITS:
Reduce risk of supply chain incidents
Centralize supplier information
Manage cost of audits

ERP

Vendor
Supplier
Site

Whosuppliesus?
Wheredoesitcomefrom?
Arewecompliant?
Whatsnext,overdue,pendingfollowup?

Audits
Findings/
Actions

2. Supplier Onboarding

Manage certifications and


agreements

Material Qualification

Ingredient/Ingredient Spec Version


to Supplier Site Mapping

Supplier
Site

Ingredient

BENEFITS:
Brand protection & corporate social
responsibility
Reduce scrap and waste
Reduce new product time to market

Certifications
Questionnaires

Ingredient
Spec

Questionnairestoassessrisk
Auditsforingredientrisk
Category/subcategory
Status
Conditionallyapproved
Fullyapproved
Linktospecandspecversion

Whatnewingredientsneedtobequalified?
Whatnewsitesneedtobeonboarded?
Whatsitesprovidewhatingredients?

3. Supplier Verification

Manage the complex relationship between


supplier sites ingredients and manufacturing
sites

Manage supplier certificates & documents

Communicate BOM & ingredient spec


changes efficiently

Whatsuppliersitescansupplywhatmanufacturing
sites?
Whatsuppliersitesareimpactedbyachangetothis
versionofthespec?
SupplierSite

Mfg SiteA

Mfg SiteB

Ingredient

BENEFITS:
Reduce Cost of Good Sold

Mfg SiteN

Reduced Cost of Quality


Manage risk and change effectively

Ingredient
Spec

Supplierdriven
DrivenbyR&D

4. Integrated Incident Management

Supplier Event Management


Incident, Investigations
Complaints related to supplier materials

SupplierNC
/Event

InternalNC/
Event

Market
Complaint

Supplier Performance
On time delivery
COA Issues & Defects
Product to spec adherence

EndtoEnd
IncidentMgmt

Customer/consumer
complaint
Supplychaindefect(i.e.
deliveryissue,qty,
recall,etc.)
Ingredientqualityissue
(i.e.COA,IQATest,etc.)
Manufacturingrunissue

Supplier Risk Updates


BENEFITS:
Reduce cost of raw materials

Supplier
SiteX

Stratus
Portal

Reduce raw material variability


Improve yields
Increase supply chain reliability

Investigation
Correctiveactions
Resolution/closure

Supplier
Contact

5. Real-Time Performance

View supplier & internal performance


reports

Monitor complaints, quality and risk


analytics

BENEFITS:
Continuous supplier improvement and
collaboration
Operational productivity
Reduce audit and oversight costs
Improved operational and NPI performace

Benefits of extending quality


management into the supply chain
Increased
visibility
Improved
operational
efficiency

Enhanced
accountability
Product safety
& compliance

Sparta Systems empowers the


Quality Ecosystem

Stratas
Visibilityacross
thevaluechain

AuditsontheGo
Insidethefacilityand
withinsupplierfacilities

Food&
Beverage
Quality
System

Analytics
Identifyissues
&trendsearlier

TrackWise EQMS

Mobile

Harmonizedsetof
qualitymanagement
modules(SQM,
Complaints,Incidents&
Investigation,Non
conformance,Corrective
Action)

Approve&close
issuesonthe
road

Questions