What is Supplier Quality?

1. Definition

● Vendor

– An entity that provides goods or services to the enterprise, usually referring to the seller in the transaction, without emphasizing the depth of the cooperative relationship

● Supplier

– Similar to Vendor, but more often used in long-term collaborations, emphasizing the relationship of continuous supply of raw materials, parts or services

– The terms “vendor” and “supplier” can be used interchangeably in the procurement and supply chain domain

● Supplier Quality

– Whether the products or services provided by the supplier meet the agreed quality standards and requirements

– It is a single-dimensional quality assessment

● Supplier Quality Assurance (SQA)

– A systematic activity to ensure that suppliers continue to meet quality requirements through audits, process monitoring and other measures

– Focus on prevention and process control

● Supplier Quality Management (SQM)

– A system for comprehensive management of supplier quality, including selection, evaluation, improvement and collaboration

– Aim to improve the overall quality level of the supply chain in the long term

2. Benefits of Supplier Quality Management

● Improve Product Quality& Ensure Product Consistency

– Ensure that the raw materials, parts or services provided by suppliers meet quality standards and reduce defects and defective product rates

– Ensures that the final products meet customer expectations consistently

● Reduce Supply Chain Risks

– Reduce the risk of production suspension, recall or customer complaints due to quality problems through strict supplier evaluation and monitoring

● Optimize Costs

– Reduce rework, scrap and after-sales repair costs

– Improve overall supply chain efficiency

● Enhance Supplier Relationship

– Establish long-term and stable relationships

– Promote continuous improvement of suppliers

● Improve Customer Satisfaction

– Stable product quality helps improve the end-customer experience and enhances brand reputation

● Comply with Regulatory Requirements

– Ensure that suppliers comply with industry standards and regulations (such as ISO, FDA, etc.) to reduce compliance risks

● Shorten Lead Time

– Optimize supplier processes through quality management, reduce delays caused by quality problems, and improve delivery on time

● Promote Continuous Improvement

– Through data analysis and feedback mechanisms, promote suppliers to optimize processes and management levels continuously

● Enhance Market Competitiveness

– A high-quality supply chain system can become a differentiated competitive advantage for enterprises and help expand the market

● Reduce Inventory Waste

– Reduce inventory backlogs or emergency procurement needs caused by quality problems and improve inventory turnover

3. Supplier Selection Criteria

3.1 Middlemen (Distributors/Traders)

Core Goals: fast turnover, profit maximization, market demand matching

Selection Criteria:

● Price Competitiveness: low procurement cost and large profit margin

● Supply Stability: continuous and stable supply to avoid out-of-stock risks

● Delivery Speed: fast response and shortened inventory turnover time

● Product Diversity: suppliers can provide multiple categories of products to meet the needs of different customers

● Flexible Payment Term: support longer payment terms or credit transactions

● Market Demand Matching: suppliers’ products meet the trends and regulatory requirements of the target market

3.2 Importers

Core Goals: compliance, cost control, stable cross-border supply chain

Selection Criteria:

● Compliance: Comply with the regulations of the importing countries (such as FDA, CE, RoHS, etc.)

● Price + Tariff Impact: The comprehensive cost (FOB/CIF, etc.) is competitive

● Supply Chain Reliability: Ability to stably complete international logistics, customs clearance and other processes

● Quality Consistency: Avoid customs detention or customer complaints due to quality problems

● Complete Documents: Ability to provide complete documents (such as certificate of origin, quality inspection report, etc.)

● Localization support: Suppliers can accommodate time differences, language communication and after-sales service

3.3 Producers (Manufacturers)

Core Goals: ensure production continuity, controllable quality, and cost optimization

Selection Criteria:

● Quality Compliance: raw materials/components meet technical specifications (such as size, material, durability)

● Supply Stability: JIT (Just in Time) delivery capabilities to avoid production line shutdowns

● Cost Advantage: Under the premise of ensuring quality, give priority to cost-effective suppliers

● Technical Cooperation: suppliers can participate in product development or process improvement (such as Tier 1 suppliers in the automotive industry)

● Quality Management System: ISO 9001, IATF 16949 and other certifications certified

● Social Responsibility Compliance: meet environmental protection (such as REACH), labor standards (such as BSCI) and other requirements

3.4 End Users (Individual Consumers/Corporate Users)

Core Goals: meet usage requirements, high cost-effectiveness, after-sales guarantee

Selection Criteria:

● Product Performance: meet usage requirements (such as function, durability, user experience)

● Price Rationality: choose the best option within the budget

● Brand Reputation: give priority to well-known brands or suppliers with a good reputation

● After-Sales Service: provide warranty, return and exchange, technical support, etc

● Convenience: convenient purchase channels (such as e-commerce platforms, local stores)

● Compliance and Safety: meet local safety standards (such as 3C certification, UL certification)

4. Key Factors in International Sourcing Before Placing the First Order From A Supplier

4.1 Reliability: Can It Fulfill the Contract Stably in the Long Term?

4.1.1 Audit of Production and Delivery Capabilities

● Factory Inspection (Online/Offline)

– On-site inspection or live video inspection, focus on:

✅ Actual operation status of the production line (not staged)

✅ Inventory management level of raw materials/finished products in the warehouse

✅ Quality inspection process (such as whether there are IQC/IPQC/OQC records)

● Key Questions:

What is the maximum order volume in the past 12 months? What is the on-time delivery rate?

● Capacity Verification

– Requires production schedule and equipment list to check whether the advertised capacity is true

– Such as “monthly production of 100,000 units” must correspond to the number of workers and machines

4.1.2 Quality Consistency

● Sampling Inspection

– Requires sending pre-production samples (not specially made samples)

– Send samples to third-party agencies (such as SGS, BV) for testing according to target market standards

– Key Questions:

How can the bulk goods be ensured to be consistent with the samples? Is there a lot of quality inspection reports?

4.1.3 Supply Chain Risk Resistance

● Backup Plan

– Any alternative plans for raw material sources, logistics partners etc

– Key Questions:

If the raw material price increases/logistics is delayed, how will you deal with it?

4.2 Authenticity: Is It False Advertising?

4.2.1 Check Qualifications and Documents

● Authenticity of Certificates

– Required to provide ISO, CE, BSCI and other certificate numbers, and check the validity on the official website – such as ISO certificates can be verified through the IAF database

– Be Alert: Photoshop forged certificates, expired certificates

● Company Information

– Check the created date, business type and status etc., through the official government websites

– Tips: Google “country + business registry search” to quickly find the official websites

4.2.2 Customer Testimonials

● Required to Provide Proof of Cooperation

– Contact information of at least 3 recent overseas customers (must be non-affiliated companies)

– Contact to inquire:

✅ Delivery on time rate

✅ Quality problem handling efficiency

✅ Whether to recommend this supplier

– Be Alert: Only provide shell companies as “customers”

4.2.3 Production Authenticity

● Real-time Production Evidence

– Required to provide:

✅ Real-time video of the workshop (with date watermark)

✅ Raw material purchase invoice (spot check of records in the past 3 months)

4.3 Integrity: Is It Worth Long-Term Relationship?

4.3.1 Analysis of Historical Cooperation Records

● Require References of At Least 3 Customers with More Than 2 Years of Cooperation

– Proactively contact these customers and ask:

✅ Has the supplier ever breached the contract unilaterally (such as unwarranted price increase, delayed delivery)?

✅ When quality problems occur, do the supplier proactively solve them (such as compensation, replenishment)?

✅ Would you recommend this supplier?

– Be Alert: If the supplier only provides new customers or refuses to provide references, it may hide bad records

● Customs Export Data

– Use tools (such as ImportGenius, Panjiva) to check the supplier’s export records to verify whether it has long served the target market (such as Europe and the United States), and whether the customers are consistent with the publicity

4.3.2 Social responsibility and business ethics review

● Verify ESG (Environment, Society, Governance) Performance

– Check whether it has passed social responsibility audits such as BSCI, Sedex, SA8000, etc., to avoid working with sweatshops or environmentally illegal enterprises

– Key Questions:

Is there a record of employee strikes or environmental penalties?

● Attitude Towards Intellectual Property Protection

– Explicitly ask:

✅ Have you signed an NDA (non-disclosure agreement)?

✅ How to prevent the leakage of design drawings/patents?

– Performance of Honest Suppliers: Proactively propose confidentiality clauses and demonstrate internal control processes

4.3.3 Financial and Legal Risk Screening

● Credit Report

– Use third-party institutions (such as Dun & Bradstreet) to obtain the supplier’s:

✅ Credit rating

✅ Legal litigation records (such as contract disputes, wage arrears cases)

✅ Shareholder structure (whether it is a shell company)

4.3.4 Crisis Response and Long-Term Commitment

● Simulate Emergency Scenario Questions

– For example:

If the price of raw materials suddenly rises by 20%, how will you deal with it? Will you execute according to the original contract?

– Performance of Honest Suppliers:

— Clarify the binding force of the contract (such as “execute according to the agreed price”)

— Or propose a reasonable negotiation plan (such as “share part of the cost”)

4.3.5 Tips for Fast Verification

● Industry Reputation Research

– Search for supplier name + keywords such as “review”, “fraud” “scam” on Google, LinkedIn and industry forums to see if there are any negative reviews

● Trial Order with Small Volume

– Place a low volume order to test quality, delivery, cooperation etc

– The first order requires the supplier to provide full process transparency (such as sharing production schedules and quality inspection videos) to test their commitment to fulfillment

5. Supplier Quality Certifications

5.1 ISO 9001

● Quality management system standardization (process, continuous improvement)

● Applies to: all sectors, including manufacturing, services, healthcare, education, government, and non-profit organizations

5.2 IATF 16949

● Upgraded version of ISO 9001 for the automotive industry (emphasis on defect prevention)

● Applies to: Automotive parts

5.3 AS9100

● It’s based on ISO 9001 but adds requirements specific to the aerospace, aviation, space, and defense sectors

● Applies to: aerospace, aviation, space, and defense sectors

5.4 ISO 13485

● A quality management system (QMS) for medical device manufacturers and suppliers

● Applies to: medical device

5.5 Good Manufacturing Practices (GMP)

● Ensures that medicinal products are consistently produced and controlled to the quality standards appropriate to their intended use and as required by the product specification

● Applies to: medicinal products

5.6 ISO 14001

● Environmental management system(reducing pollution and resource consumption)

● Applies to: Chemical raw materials, plastics, metal processing

5.7 ISO 45001

● Occupational health and safety management system

● Applies to: all sectors, including manufacturing, construction, service, public institutions, etc

5.8 RoHS/REACH

● RoHS: Restriction of Hazardous Substances

● REACH: Registration, Evaluation, Authorization and Restriction of Chemicals

● Both are European Union regulations focused on protecting human health and the environment by managing hazardous chemicals

● RoHS: specifically targets electrical and electronic equipment, restricting the use of 10 hazardous substances

● REACH: a broader regulation that applies to all chemical substances manufactured, imported, sold, or used within the EU

5.9 BSCI

● Business Social Compliance Initiative, now known as amfori BSCI

● Help a business monitor its supply chain to ensure that all suppliers are treating workers ethically and legally

6. Building Supply Chain Quality Assurance

6.1 Supplier Selection: Quality First

6.1.1 Supplier Criteria

● Quality Certification:

– Automotive: IATF 16949

– Medical industry: ISO 13485

– General manufacturing: ISO 9001 + industry-specific certification (such as IPC-A-610 in the electronics industry)

● Historical Quality Data Review:

– Requires customer return rate (PPM) and batch qualification rate data for the past 12 months

6.1.2 In-Depth Factory Inspection

● Quality System Audit:

– Apply VDA 6.3 (automotive) or SQAM (Supplier Quality Assurance and Management) standards to evaluate supplier processes

– Key points: Incoming material inspection (IQC), process control (IPQC), and outgoing inspection (OQC) records

● Production Consistency:

– Randomly select work-in-progress (WIP) on the production line and compare samples with finished products for consistency

6.2 Contract Signing: Quality Clauses Locked

Quality Agreement

Clear:

– AQL (Acceptable Quality Level): e.g. Level II, Critical: 0, Major: 2.5%, Minor: 4.0%

– Quality compensation clauses: if defects cause line stoppage, compensation is $ XXX/hour

– Design Change control: material/drawing/process changes must be approved in advance

6.3 Production and Delivery: Process Monitoring

6.3.1 Plant Quality Inspection (PSI)

● First Article Inspection (FAI):100% size/function verification before mass production

● Initial Production Check(IPC): quality control inspection conducted in the initial stage after the start of production

● During Production Check (DPI): random inspection when 30% of production is completed

● Final Random Inspection (FRI): check the quality of the entire batch by random sampling before shipment

● Pre-Shipment Inspection(PSI): ensure that the product meets the contract requirements and can be shipped safely

6.3.2 Digital Quality Monitoring

● Tool Application:

– MES System: real-time tracking of production parameters (such as welding temperature, injection pressure)

– Blockchain traceability: batch numbers of key components (such as chips) can be traced throughout the process

6.3.3 Third-Party Testing

● High-risk categories must be inspected:

– Electronic equipment: EMC testing (such as CE certification)

– Food contact materials: FDA migration testing

6.4 Logistics and Post-Delivery: Risk Closed Loop

6.4.1 Transport Quality Control

● Ask suppliers to provide:

– Temperature and humidity recorder data (for medicines and precision instruments)

– Transport vibration test report (for fragile items)

6.4.2 Rapid Arrival Inspection (IQC)

● Standard actions:

– Complete random inspection within 24 hours after arrival (according to the MIL-STD-105E)

– Use portable testing equipment (such as XRF spectrometer to measure material composition)

6.4.3 Dynamic Management of Quality Performance

Criteria:

● ≥90: Excellent (increase orders)

● 80-89: Pass (keep observation)

● <80: Warning (correct within a time limit)

6.5 Continuous Improvement

6.5.1 Joint Quality Improvement (JQI)

● Hold supplier quality meetings monthly:

– Use 8D report to analyze TOP3 defects

– Provide technical support (such as sending engineers to assist in process optimization)

6.5.2 Develop Backup Suppliers

● For key materials/components, at least 2 qualified suppliers are certified to avoid single point failure

6.5.3 Phase-Out Mechanism

● If the quality score is <80 for 2 consecutive quarters, the supplier exit process will be initiated

6.6 Recommended Technical Tools

6.6.1 Quality Data Analysis

● Minitab: SPC statistical analysis

● QMS software: such as SAP QM, Qualio

6.6.2 Supply Chain Visualization

● Flexport: logistics monitoring

● TraceLink: pharmaceutical supply chain traceability

7. Challenges in Supplier Quality Management & How to Overcome Them

7.1 Five Major Challenges

7.1.1 Inconsistent Supplier Performance

– The quality standards, production processes, and management capabilities of different suppliers vary greatly, resulting in fluctuations in incoming material quality

– Even for the sample supplier, the quality can vary over time

7.1.2 Low Transparency of the Supply Chain and Difficulty in Real-Time Monitoring

– Quality problems of Tier 2/Tier 3 suppliers cannot be discovered in time

– Such as raw material substitution and process changes

7.1.3 Low Supplier Cooperation and Slow Improvement

– Some suppliers are unwilling to invest resources in improvement, resulting in repeated problems

7.1.4 Poor Cross-Departmental Collaboration and Unclear Quality Responsibilities

– The procurement focuses on costs, while the quality pays attention to compliance, and the production aims at lead time, resulting in conflicting goals

7.1.5 Complexity and Compliance Risks of Global Supply Chains

– Different countries’ regulations (e.g., EU RoHS, US FDA) and cultural differences (e.g., communication methods) increase management difficulties

7.2 How to Overcome Them?

7.2.1 Supplier Selection: Strict Criteria

✅ Quality Certification: such as IATF 16949 for the automotive industry and ISO 13485 for the medical device industry 

✅ In-Depth Factory Inspection: review of production process, quality inspection system, equipment maintenance records

✅ Trial Production Verification: low volume orders to test stability and then decide whether to work with suppliers in long term

Tools:

● Supplier Scorecard: quantitative evaluation from the dimensions of quality, delivery time, service, etc

● Third-party audit (such as SGS, BV): avoid the subjectivity of internal audit

7.2.2 Process Control: Digitalization + Transparency to Reduce Quality Fluctuations

✅ Key Node Monitoring: such as First Article Inspection, During Production Check, Final Random Inspection

✅ Digital Quality Data: MES/QMS system collects key parameters in real time, such as welding temperature and injection pressure

✅ Blockchain traceability: ensuring that the source of raw materials can be traced to prevent cutting corners

7.2.3 Supplier Quality Improvement: from “Passive Improvement” to “Active Prevention”

✅ Joint Quality Improvement (JQI):

• Hold quality meetings every month to analyze the TOP3 problems
• Provide technical support (such as sending engineers to the factory to optimize the process)

✅ Incentive and Phase-Out Mechanism:

• Give more orders to excellent suppliers (such as the “Gold Supplier” program)
• Start the supplier phase-out process if the standards are not met continuously

Tools:

• 8D/5Whys Analysis: dig deep into the root causes to avoid recurrence of problems
• SPC (Statistical Process Control): Predict quality trends through CpK/PpK indicators

7.2.4 Cross-Departmental Collaboration: Establish an Assessment Mechanism That Prioritizes Quality

✅ Purchasing: Quality ≥ cost (e.g., quality accounts for 40% and price accounts for 30%)

✅ Production: Refuse to accept unqualified materials to avoid “production with problems”

✅ Quality: Has “veto power” and can suspend procurement for major problems

7.2.5 Global Supply Chain Management: Localization + Standardization

✅ Localized Quality Team: Set up SQE (supplier quality engineer) in supplier concentration areas

✅ Unify Global Quality Standards: e.g., AQL sampling plan, test methods

8. Example of Making a Supplier/Vendor Selection

8.1 Product Information

Product: Commercial handle set

Drawings: 2D & 3D available

Quantity: 10,000 sets

Market: Europe

Steps to making a supplier selection:

8.2 Product Requirements and Technical Specifications

✅ Define Materials:

● Plastic parts

– Base: nylon

● Metal parts

– Handle: Aluminum

● Surface treatment: Electroplating

● Manufacturing process: die casting, injection molding (or just check with Xiamen Eternal Precision)

✅ Dimensions and Tolerances: 3D drawings (STEP/IGES format) + 2D drawings with tolerance marked

✅ Functional Test Standards: set up testing standards, such as:

– Tensile strength test

– Salt spray corrosion test

– Impact resistance test

– Wear resistance test

– Torsion strength test

– High temperature resistance test

– Low temperature toughness test

✅ Certification: N/A

Tools:

● Provide Technical Data Sheet (TDS)

● Use FMEA (potential failure analysis) to identify risks in advance

8.3 Select Potential Suppliers

Channel:

Search Engines:

● Google

● Local search engines, like Ecosia, Qwant in Europe

B2B platforms:

● Europages (European suppliers)

● Alibaba(Chinese suppliers)

● ThomasNet (North American suppliers)

Trade Shows:

● FENSTERBAU FRONTALE in Germany (windows, doors and facades)

Hannover Industrial Fair in Germany (metal processing)

● CHINAPLAS (plastic parts)

Supply Chain Recommendation:

● Ask existing suppliers if they can do it or any supplier recommendations

Criteria:

● Professional matching: experience with similar handles/home hardware

● Capacity: monthly production capacity check

● Quality Certification: ISO 9001, IATF 16949 (a plus point)

8.4 Initial Evaluation and RFQ

✅ Sign Non-Disclosure Agreement (NDA) with Potential Suppliers

– Suppliers are prohibited from copying designs or leaking them to competitors

✅ Send RFQ (request for quotation), including:

– 3D + 2D drawings

– Material and other requirements

– Target date 

✅ Supplier Feedback:

– Compare price, mold cost, lead time, payment term etc 

– Phase out suppliers with abnormally low prices (may cut corners)

Tools:

– Use Cost Breakdown Analysis to verify the rationality of quotations

8.5 In-Depth Factory Inspection

● Online: Live video viewing of workshops, quality inspection equipment (such as three-coordinate measuring machine)

● Offline: Send a team or entrust a third party (such as SGS) to audit:

– Process flow chart: from material incoming to finished product shipment

– Quality control for each process

– Incoming material inspection (IQC) and process control (IPQC) records

8.6 Supplier Nomination

● Nominate the supplier

● Sign Sales Contract, note:

✅ Description of Goods

– Product name, specification, model, quality, packaging requirements, etc. must be listed in detail to avoid vague statements

✅ Quality Requirements:

– Define AQL level

– Certificates: such as CE

✅ Incoterms & Payment Terms

– Incoterms Terms: EXW, FOB, CIF etc

– Payment Terms: T/T (30% deposit, balance before shipment etc), L/C etc

✅ Delivery and Transportation

– Lead time, port, mode of transportation (sea/air) and division of responsibilities

– Quantity and deadline must be specified if split the shipment

✅ Acceptance and Claims

– Specify the inspection period (e.g. within 15 days after arrival), quality objection process and claim period (if the goods are damaged, a third-party inspection report must be provided)

Risk Avoidance Clauses

✅ Force Majeure

– Define the scope (such as war, natural disasters) and agree on the conditions for delayed performance or termination of the contract

✅ Breach of Contract and Termination

– Specify the proportion of liquidated damages (such as 15% of the contract amount) and the conditions for termination (such as delayed delivery for more than 30 days)

✅ Intellectual Property and Compliance

– Ensure that the goods do not infringe on third-party patents/trademarks, especially OEM orders require review of authorization documents

– Comply with the regulations of the exporting/importing country (such as EU REACH, US FCC certification)

✅ Choice of Governing Law

– It is recommended to choose a familiar law (such as Chinese law or British law) to avoid unclear laws in the other country

✅ Dispute Resolution Method

– Preferably agree on arbitration (such as the Singapore International Arbitration Center or the China International Economic and Trade Arbitration Commission) to avoid high litigation costs and long periods

✅ Completeness of Attachments

– Attachments such as technical agreements and quality inspection standards must be included as part of the contract and stamped with a saddle stamp

8.7 Sample

● Kick off mold development

● Ask suppliers to provide 3-5 sets of samples (sample quantity can be adjusted depending on actual situations)

● Test:

– Dimensions (CMM report)

– Functional test (as per the testing standards above)

● Based on testing results:

– Approve samples if results are good

– Modify the mold and re-make samples if any issues

8.8 Mass Production and Continuous Quality Monitoring

✅ Production Process Control:

– Key node inspection: First Article Inspection, Initial Production Check, During Production Check, Final Random Inspection, Pre-Shipment Inspection

– Third-party sampling: such as BV/SGS

✅ Logistics and Delivery:

– Designate freight forwarders to ensure transportation safety

✅ Long-Term Improvement:

– Monthly supplier rating: quality, lead time, service

– Implement VMI (vendor managed inventory) to reduce the risk of out-of-stock

9. Conclusion

Purchasing and selecting a vendor can be demanding, especially when it comes to global sourcing. And the supplier quality management is the foundation for a long-term business and a brand’s reputation.

A good supplier can ensure the product quality, while a right supplier balances the good quality with cost effectiveness.

Contact Xiamen Eternal Precision to save money and time.

10. People Also Ask

I. What is the ideal process to manage the supplier’s quality?

● Refer to this article: Section 8. Example of Making a Supplier/Vendor Selection

II. Do you guys have a process flow on how you conduct External Vendor/Supplier Quality Management and How do conduct Quality Performance Review with them on a Monthly Basis?

1. External Vendor/Supplier Quality Management

1.1 Supplier Selection and Certification

✅ Steps:

– RFQ (Request for Quote): clarify quality requirements (such as AQL, material standards)

– Factory audit: evaluate quality system (ISO 9001, IATF 16949)

– Sample testing: verify product compliance (size, function, durability)

– Low volume trial production (PPAP): ensure mass production consistency

Output:

– Supplier Access Assessment Report

1.2 Sign a Quality Agreement

✅ Core Terms:

– Quality Standards: such as AQL Level II, Critical 0 defects)

– Change Management: process/material changes require customer approval

– Liability for Breach of Contract: such as compensation clauses for quality issues

1.3 Incoming Material Inspection (IQC) and Process Control

✅ IQC Inspection:

– Sampling according to MIL-STD-105E, recording defect types (such as poor size, appearance defects)

✅ Production Process Monitoring:

– SPC control of key parameters (such as injection temperature ±5℃)

– Regular pre-shipment inspection (PSI) for high-risk suppliers

1.4 Quality Problem Handling (8D/Automotive)

✅ 8D Report Process:

– Problem description (including pictures/data)

– Temporary containment actions (such as full inventory inspection)

– Root cause analysis (5Why/fishbone diagram)

– Permanent corrective actions (such as process optimization)

– Verification of Permanent Corrective Actions (follow-up for 3 months)

1.5 Continuous Improvement (JQI Joint Improvement)

✅ Monthly Quality Meeting:

– Analyze the top 3 problems and create improvement plans

– Suppliers submit monthly quality reports (including PPM and improvement progress)

2. Quality Performance Review

2.1 Supplier Scorecard

Criteria:

● ≥90: Excellent (increase orders)

● 80-89: Pass (keep observation)

● <80: Warning (correct within a time limit)

2.2 Quality Performance Review Steps

2.2.1 Pre-Meeting Preparation:

– Collect data (IQC report, 8D closed loop rate, customer complaints)

– Suppliers submit “Monthly Quality Summary” (including improvement actions)

2.2.2 Meeting Agenda:

● Performance Review: Display Scorecard (Excel/print)

● Problem Analysis:

– TOP3 defect types (such as scratches, dimensional deviation)

– Repetitive problems (such as a supplier has not solved the same problem for 3 months)

● Improvement Plan:

– Develop actions for next month (such as “reduce welding defect rate to <0.5% before June”)

● Reward and Punishment Measures:

– Excellent suppliers: Award “Best Supplier of the Year” award

– Poorly rated suppliers: Reduce orders or start the exit process

● Post-Meeting Follow-Up:

– Record “Meeting Minutes” and send emails to both parties for confirmation

– Update the progress of actions every month (such as Gantt chart)