SUPPLIER PARTNERSHIP

PRINCIPLES OF CUSTOMER/SUPPLIER
RELATIONS
1.Both the customer and the supplier are fully
responsible for the control of quality
2. Both the customer and the supplier should

be independent of each other and respect

each other’s independence
3. The customer is responsible for providing
the supplier with clear and sufficient
requirements so that the supplier can know
4. Both the customer and the supplier should
enter into a no adversarial contract with
respect to quality, quantity, price, delivery
method, and terms of payments

5. The supplier is responsible for providing the

quality that will satisfy the customer and
submitting necessary data upon the
customer’s request
6. Both the customer and the supplier should
decide the method to evaluate the quality
of the product or service to the satisfaction
of both parties

7. Both the customer and the supplier should

establish in the contract the method by
which they can reach an amicable
settlement of any disputes that may arise.
Principles of Customer/Supplier
Relations

8. Both the customer and the supplier should

continually exchange information, some
times using multifunctional teams, in order
to improve the product or service quality.
9.Both the customer and the supplier should
perform business activities such as
procurement, production and inventory
planning, clerical work, and systems so
that an amicable and satisfactory
relationship is maintained.

10. When dealing with business

transactions, both the customer and the
supplier should always have the best
interest of the end user in mind
PARTNERING

There are 3 key elements to partnering

relationship:
1.Long-term Commitment
2.Trust
3. Shared vision
1.Long-Term Commitment

Experience has shown that the benefits of

partnering are not achieved quickly.

2. Trust
Trust enables the resources and
knowledge of each partner to be combined
to eliminate an adversarial relationship.
3. Shared Vision

Each of the partnering organizations must

understand the need to satisfy the final
customer.
SOURCING

SOLE
A sole source of supply implies that the
organization is forced to use only one
supplier

MULTIPLE SOURCING
Multiple sourcing is the use of two or more
suppliers for an item
SOURCING

SINGLE SOURCING
Single sourcing is a planned decision
by the organization to select on supplier
for an item when several sources are
available.
SUPPLIER SELECTION

1. How critical is the item to the design of

the product or service ?

2. Does the organization have the

technical knowledge to produce the items
internally? If not, should that knowledge be
developed ?
. SUPPLIER SELECTION

3. Are there suppliers who specialize in

producing the item? If not is the
organization willing to develop such a
specialized supplier ?
 Ten conditions for selection and
evaluation of suppliers

1. The supplier understands and

appreciates the management philosophy
of the organization
2. The supplier has a stable management
system.
In determining this condition, several
questions should be asked:
Is there a quality policy statement that
includes objectives for quality and its
commitment to quality?
Is the policy implemented and
understood at all levels of the
organization?
Is there documentation that indicates
who is in charge and responsible for
quality in the organization?

Is there a member of top

management with the authority to
execute a quality system?
Does the management have
scheduled reviews of its quality
system to determine its
effectiveness?
3. The supplier maintains high technical
standards and has the capability of
dealing with future technological
innovations
4. The supplier can provide those raw
materials and parts required by the
purchaser, and those supplied meet the
quality specifications
5.The supplier has the capability to produce
the amount of production needed or can
attain that capability

6. There is no danger of the supplier

breaching corporate secrets
7. The price is right and the delivery dates
can be met, In addition, the supplier is
easily accessible in terms of
transportation and communication.
There must also be a system to trace the
product or lot from receipt and all
changes of production delivery
8. The supplier is sincere in implementing
the contract provisions.
Does the supplier have a system for
contract review, and does that system
include a contact review of requirements
and how difference between the contract
and/ or accepted order requirements
should be resolved?
Further, does the system allow the
inclusion of amendments?
9. The supplier has an effective quality
system and improvement program such
as ISO/QS 9000
10. The supplier has a track record of
customer satisfaction and
organization credibility. A recent
study by Andersen, the University of
Cambridge, and Cardiff Business
School found Japan to be the leader
in the number of world class
automotive supplier plants, but the
U.S Held the top three supplier
positions. Of the 13 supplier plants
identified as “World Class”, five were
from Japan
SUPPLIER CERTIFICATION
CRITERIA
1. The Customer and supplier shall have
agreed upon specifications that are
mutually developed, justifiable and not
ambiguous
2. The supplier shall have no product
related lot rejection for a significant
period of time, say, one year, or
significant number of lots, say, 20
. SUPPLIER CERTIFICATION
CRITERIA
3. The supplier shall have no nonproduct-
related rejection for a stated period of
time, say, 3 months or number of lots,
say five.
4. The supplier shall have no negative
nonproduct-related incidents for a stated
period, say, 6 months, or number of lots,
say, ten
.SUPPLIER CERTIFICATION
CRITERIA

5. The supplier shall have a fully-

documented quality system. ISO9000 is
an excellent model to build a system
even if registration is not the goal
6. The supplier shall have successfully
passed an on on-site system evaluation.
. SUPPLIER CERTIFICATION
CRITERIA
7. The supplier must conduct inspections
and tests. Laboratory results are used for
batch processes and statistical process
control (SPC) is used for piece part
production.
8. The suppliers shall have the ability to
provide timely inspection and test data
SUPPLIER RATING
The Customer rates Suppliers
* Obtain an overall rating of supplier
performance

* Ensure complete communications with

suppliers concerning heir performance in
the areas of quality, service, delivery and
any other ensure the customer desires.
SUPPLIER RATING

The Customer rates Suppliers

• Provide each supplier with a detailed and
factual record of problems for corrective
action.
• Enhance the relationship between the
customer and the supplier
RELATIONSHIP DEVELOPMENT

INSPECTION
The goal of inspection is to eliminate,
substantially reduce, of automate the
inspection activity. There four phases of
inspection
1. 100% inspection
2. Sampling
3. Audit
4. Identity Check
RELATIONSHIP DEVELOPMENT

TRAINING

In Small organizations, the senior

managers perform many different
functions. Frequently no one has
expertise in quality or the ability to
train the work force.
TRAINING
Therefore, the customer or a
consultant must start the training
process. Larger organizations may
invite the supplier to attend their
courses or present the course at the
supplier’s plant.
Such training and the types of
courses may be a requirement for
partnership. Training should be
viewed as an investment, not an
expense
RELATIONSHIP DEVELOPMENT
TEAM APPROACH
Customer/supplier teams are established
in an number of areas, such as product
design, process design, and the quality
system.
It is a good idea to involve suppliers
when the team is first assembled rather
than at the end of its activities. Team
meetings should occur at both parties’
plants so they obtain a greater
understanding of the processes.
RELATIONSHIP DEVELOPMENT
RECONGNITION
Creating incentives for suppliers is
one way to ensure that they remain
committed to a quality improvement
strategy. Incentives may be in the
form of a preferred supplier category
with it rewards.