SUPPLIER SELECTION AND MANAGEMENT

Transcription

1 Doc # SOP SSM01 Quality System Documentation Release # rel A Revision # rev 1 SUPPLIER SELECTION AND MANAGEMENT Being a Standard Operating Procedure level documentation of the Wacom Quartz implementation of the ANSI/ISO/ASQ Q Standard, paragraph 7.4 Process Owner: Tracy Rieth Senior Buyer / Planner Approved By: James Roeger VP - Phoenix John H. Smalling Quality Manager Tony Cortese Buyer / Planner Released: 1/6/2015

2 Table of Contents Changes in This Revision: Purpose and Scope Definitions Procedure 4 Source Selection Measuring and Monitoring Supplier Performance Managing Supplier Performance Supplier Classifications Quality Records & References 10 Quality Records 10 Past Due Items 10 Open Orders 10 Supplier Delivery & Quality Ratings 10 Supplier Scorecards 10 Performance Notification letter References 10 Form # SS01 10 Form # SEQ01 10 Form # NDA01 10 Form #SCS01 10 FORM #SCAR01 10 WI #CB01 10 SOP #CA01 10 SOP # P01 10 Appendix A 11 Page 2 of 11

3 Changes in This Revision: Paragraph All Prior Text or Intent Release A, Revision 1, 10/20/14, Initial Release Page 3 of 11

4 1.0 Purpose and Scope This defines the responsibilities and processes associated with supplier selection, measurement of supplier performance, management of supplier(s), and supplier classifications. This process applies to all site specific suppliers defined within the scope of the quality system. This includes Customer mandated suppliers and suppliers of outsourced processes. This procedure can only be performed by Purchasing, or other personnel with an Epicor account and password having the correct rights assigned within the system. 2.0 Definitions Epicor Vista Key Suppliers Management Review Team (MRT) Procurement Agent Purchase Order (PO) Supplier Scorecard Vendor Enterprise Resource Planning software and database used at Wacom Quartz to control Sales, Purchasing, Production and Inventory data. Usually top 10 suppliers in terms of spend, but suppliers may be added or removed per MRT recommendation. Wacom Quartz Corp Management Review Team Personnel with title of Buyer / Agent of Wacom Quartz with procurement authority. Note, buyer and procurement agent can be used interchangeably Contract commitment to buy that is released in Epicor Supplier performance tool used internally at Wacom Quartz to rate suppliers and help identify opportunities for improvement. Supplier to Wacom Quartz. This term is used interchangeably with supplier. 3.0 Procedure Source Selection.1 The criteria for supplier selection is based on the following:. The supplier(s) ability to supply the product in accordance with the specific drawings and specifications for that product..1.2 The supplier(s) ability to remain cost competitive. Where competition is possible, bidding multiple suppliers is encouraged, especially for new product or product that has not been competed in over 12 months to verify that the pricing is still fair and reasonable..1.3 The supplier(s) need to be on the approved supplier list that is maintained in Epicor database and backed up per WI #CB01 titled Computer Backup Systems Instructions. Page 4 of 11

5 .1. Supplier approval is granted by MRT based on successful evaluation of the FORM - SEQ01 Supplier Evaluation Questionnaire..1.4 Other considerations:.1. When component parts are customer-directed, the product shall be ordered from a supplier on that customer s engineering requirement. Check the customer s engineering documents to see if there are any approved suppliers listed. If not, the historical supplier(s) Wacom Quartz approved shall become the supplier(s) of record for that part and customer All procurement activities over the Buyer s purchasing approval level (see SOP- P01 for guidelines) or any new Bill of Material supplier being considered should be presented in front of the MRT for source selection approval prior to request for quotes being sent and before purchase order award If MRT gives approval for a new supplier to be bided, the Buyer will have to set up non-disclosure agreement (see Form NDA01) prior to any request for quote or any other sensitive information such as drawings being sent. Buyer will also coordinate with the Quality Manager to send the Supplier Quality Survey form # SQS MRT reserves the right to ask for any procurement activity to be presented before them and to overrule any purchasing decision based on what they believe is in the best interest of the company. 3.2 Measuring and Monitoring Supplier Performance 3. Supplier performance reports and data should be reviewed and updated on a regular basis to help identify risks and opportunities for improvement. Supplier performance will be monitored and updated as follow: 1 Weekly: Buyer will send a Past Due report to suppliers in Excel format with orders that are past their PO due date. Past due can easily be found in Epicor in the Buyer Workbench under the PO tab / Open PO tab / Late tab. Records will be kept on the Vendor Material server under V:\Past Due. 2 Biweekly: Buyer will send Open Orders reports to suppliers in Excel format with orders due within the next business days (depending on product lead time) to get confirmation that the supplier will meet the committed on-dock date per the purchase order agreement. Records will be kept on the Vendor Material server under V:\All POs\Open POs. 3 Monthly: Buyer will review and update all BOM suppliers delivery and quality ratings by the end of the first week of the month with the previous months information. Records will be kept on the Vendor Material server under V:\Supplier Performance\Delivery and Quality Ratings. 2. Monthly delivery and quality ratings for all BOM suppliers will be reviewed on a monthly basis during the Management Review Team (MRT) meetings Page 5 of 11

6 4 Quarterly: Buyer will review and update key supplier s Scorecard on at least a quarterly basis. See Form # SS01 titled Supplier Scorecard. Records will be kept on the Vendor Material server under V:\Supplier Performance\Supplier Scorecards..1 Key Supplier Scorecard will be reviewed on a quarterly basis during the Management Review Team (MRT) meetings 5 Yearly: 5.1 Buyer will prepare the key supplier reports for the Yearly Review Conference that is held in January. Records will be kept on the Quality server (Q:\) with the folder naming format as 20XX YRC. 4.2 Buyer will verify the lead times on all active part numbers in Epicor on at least a yearly basis with all BOM suppliers to help ensure accuracy. Records will be kept on the Vendor Material server under V:\Lead Time. 6 As needed: 6.1 Scorecard for any other supplier may be created and/or updated on a as need basis. 6.2 The MRT may request any supplier performance data at any time. 5 All performance records will be kept for 3 years without any deletions. 3.3 Managing Supplier Performance 3. Supplier(s) that are identified to be low performing based on monthly delivery and quality ratings and/or the Supplier Scorecard will prompt the Buyer, Quality Manger, and MRT to review the suppliers performance more closely. 1 Low Performance Triggers: -12 month average of on-time delivery below 90% and/or quality below 98% -3 months in a row of on-time delivery below 90% and/or quality below 98% -Supplier Scorecard with overall rating below 85% -Buyer, Buyer s Manager, Quality Manager, or MRT may request that any supplier be reviewed more carefully at any point in time. 2 Escalation of low performing supplier(s): Buyer will send a Performance Notification letter to any supplier that hits any low performance triggers in section 1 of this procedure notifying them of the low performance along with the raw data that has indicated the low performance or any information relating to the concern of low performance (see Appendix A for example Performance Notification letter). 2.2 Buyer will review the proposed letter with their manager prior to letter being sent to get approval and to see if any further escalation is needed at that time. The manager has the discretion to bring the situation to the attention of the MRT at any time. 2. Records of the sent Performance Notification letter will be kept on the Vendor Material server under V:\Vendor Issues. Page 6 of 11

7 2.2.2 Records of the letter will be kept for 3 years without any deletions. 2.3 Note, if the low performance rating is quality related the letter needs to be reviewed and approved by the Quality Manager prior to sending to supplier. It is up to the Quality Manager to decide if a Supplier Corrective Action Request (FORM SCAR01) is appropriate to send along with the letter. 2.4 Buyer will closely monitor the supplier s performance for 60 calendar days following the issuance of the letter for signs of improvement. Buyer will promptly communicate monthly delivery and quality ratings to the supplier so they are aware of their scores during this time. 2.5 Buyer will attempt to actively engage the supplier in performance improvement initiatives such as lead time verification, setting up meetings with Wacom Quality and the supplier on any nonconformance issues to try and help come up with a solution for improvement, or etc. 2.6 If after 60 days from the Performance Notification letter the supplier still has not improved to a level above the low performance triggers, then the Buyer will present the situation to MRT. Information to be presented includes the supplier s performance data, any performance improvement activities that have taken place or are in work, any other information that might be relevant to the supplier s performance, and the Buyer s recommendation going forward MRT will review the information to determine their recommendations which may include: -Continuing with the current activities with the supplier and going back to MRT in another 60 days or so if the supplier still has not reached acceptable performance level(s), especially if there are already signs of improvement -Adding additional performance improvement activities to attempt with the supplier and going back to MRT in another 60 days or so if the supplier still has not reached acceptable performance level -Issue a Supplier Corrective Action Request (FORM SCAR01) -Probation for the supplier (see section 3..5) -Disqualifying a supplier (see section 3..4) -Approve an alternative metric level for that specific supplier based on their capabilities and product complexity. 2.7 Whatever the MRT recommends will be fully documented within the MRT meeting minutes with detail on their decision including the steps they expect the buyer to take and reasoning behind their decision for future reference. 3.4 Supplier Classifications 3. Below are the general supplier classifications: 3..1 Active: Parts/supplies have been ordered from this supplier within the last two years. Supplier has been deemed a qualified/approved supplier to do business with. Parts/supplies may continue to be purchased from this supplier for the foreseeable future. This status is indicated in Epicor by the Inactive box not being checked under the Supplier Maintenance screen Inactive: Parts/supplies may not have been ordered from this supplier in the last two years. Supplier may have been deemed not a qualified/approved supplier to do business with. Parts/supplies may NOT be purchased with this supplier without going through the re- Page 7 of 11

8 qualifying process (see section 3.4.3). This status is indicated in Epicor by the Inactive box being checked under the Supplier Maintenance screen Qualified / Approved: Supplier has been deemed capable of providing quality parts and/or services. This status is indicated in Epicor by the Approved box being checked under the Supplier Maintenance screen Disqualified / Disapproved: Supplier has been deemed NOT capable of providing quality parts and/or services. Parts/supplies may NOT be purchased with this supplier without going through the re-qualifying process (see section 3.4.2). This status is indicated in Epicor by the Inactive box being checked and not having the Approved box checked under the Supplier Maintenance screen Probationary: This classification is a step between a supplier s status going from Active to Disqualified. MRT may use this term for a supplier that has poor performance but is not easily replaced by another qualified supplier. Probationary means that orders may be placed with this supplier while Wacom Quartz is working to get another supplier qualified to provide those parts/services. New statement of work for this supplier is not recommended. If new statement of work is to be bided to a probationary supplier, the Buyer is required to get MRT approval prior to bid(s) being sent. This status is indicated in Epicor by the Inactive box being checked and not having the Approved box checked under the Supplier Maintenance screen For the Buyer to place orders with a supplier on Probation, they will have to draft the PO in Epicor; and then, ask their Manager to approve the PO. probationary Manager will review the circumstance for placing the ordering the If Manager approves moving forward with the order, then they will uncheck the Inactive box and check the Approved box under the Supplier Maintenance screen for that specific supplier making the supplier temporarily Approved and Active. Next, the Manager will check the Approved box on the Purchase Order Entry screen. Once the PO is approved, the Manager must update the Supplier Maintenance screen back to Probationary status If Manager does not approve moving forward with the order, then they must explain to the Buyer why not and a plan forward which may include how to work with the supplier to get them off probation before lead time on the product that is needed, alternative sources or product and etc Note, only the Materials Manager and/or Quality Manager may change the Supplier Maintenance fields Approved and Inactive in Epicor Criteria for Disqualifying Suppliers 3.4. Purchasing and Quality may recommend suppliers for disqualification. Supplier disqualification criteria may include, but is not limited to: Evaluation of the overall impact supplier has on Site production schedule and product quality; whether an approved alternate supplier exists; transition costs and timing, with respect to production needs MRT to review and approve all requests for supplier de-qualification Once a supplier has been disqualified they will have their supplier number updated with the inactive box checked and approved box unchecked in Epicor. This prevents Page 8 of 11

9 future use of this supplier. The supplier is not allowed to be created under a different supplier number Criteria for Re-Qualifying Suppliers 3.4. Purchasing and Supplier Quality shall be responsible for recommending supplier requalification Supplier re-qualification criteria may include, but is not limited to: evaluation of the past overall impact the supplier had regarding on site production schedule and product quality; whether the issues that resulted in disqualification have been resolved or are no longer applicable; transition costs and timing, with respect to production needs; site current business needs MRT to review and approve all requests for supplier re-qualification Once a supplier has been re-qualified they will have their supplier number activated and approved in Epicor In Epicor suppliers are assigned a group for accounting purposes Group 001 is reserved for suppliers that are bill of material only suppliers Group 002 is reserved for suppliers that are shop supplies only suppliers Group 003 is reserved for supplier that can be both (either bill of material or shop supplies); this group assignment must be looked into more carefully by purchase order line item when working on accounting reports to properly assign those dollar amounts. Page 9 of 11

10 4.0 Quality Records & References Quality Records The following table lists records generated and maintained during the Procedures section of this controlled document. Next to each record is show the paragraph number of this or other controlled document where the specific procedures for Identification (I), Collection (C), Indexing (X), Access (A), Filing (F), Storage (S), Maintenance (M), and Disposition (D) of said record can be found. Record Name I C X A F S M D Past Due Items 5 Open Orders 5 Supplier Delivery & Quality Ratings 5 Supplier Scorecards 5 Performance Notification letter References The following table lists reference materials mentioned in this controlled document along with their probable accessibility. Unless otherwise noted, these are documents NOT controlled by Wacom Quartz. Note* All references listed with the name in the format FORM #xxx are controlled forms; a complete list of which can be found in the Control of Quality Records Procedure, document # SOP #CQR01. Name Description Accessibility Form # SS01 Supplier Scorecard a controlled Form Form # SEQ01 Supplier Evaluation Questionnaire a controlled Form Form # NDA01 Non-Disclosure Agreement a controlled Form Form #SCS01 Supplier Quality Survey a controlled Form FORM #SCAR01 Supplier Corrective Action Request a controlled Form WI #CB01 SOP #CA01 SOP- P01 Computer Backup Systems Instructions a controlled Work Instruction Site Corrective/Preventive Action Work Instruction a controlled Standard Operating Procedure Purchasing a controlled Standard Operating Procedure Page 10 of 11

11 Appendix A: Sample Warning Letter to a Low Performing Supplier Date: XX/XX/XXXX To: Contact Name Company Name Company Address Subject: Delivery Performance Notification Dear <insert contact name>, This letter is to notify you that <insert company name> has been performing below expectations for the last three consecutive months. Wacom Quartz has an expectation that supplier s delivery performance be higher than 90% on-time. <insert company name> on-time delivery performance for the months of January, February, and March are as follows: 78% (Jan.), 85% (Feb.), and 65% (Mar.). For your convenience attached to this letter is the raw data showing how these ratings are calculated. Please review and notify us of any inaccuracy within 5 business days from the date of this letter so we may make any corrections if needed. If no corrections are needed, we ask for your help in improving on-time delivery to our purchase orders. We will be closely monitoring <insert company name> delivery performance over the next 60 days for signs of improvement. Please let us know if there is anything you think we may be doing that is contributing to your company s low delivery ratings. We are more than happy to verify lead times in our system or look into anything else that might be a factor. Sincerely, <Insert Your Name> Job Title Wacom Quartz 5050 S 38th Place Phoenix, AZ PH: Fax: XXXXX@wacomquartz.com Page 11 of 11