Supplier certification

A certified supplier is one whose quality data record shows that it does not need to perform routine inspection and test on each lot or batch received.

A preferred and approved supplier produces better than the minimum required. An approved supplier meets minimum requirements. Some organisations use different terms and even different rankings, but usually certified suppliers are the ideal.

Supplier certification provides a model for the low DPM levels (defects per million needed for just-in-time manufacture, drastically decreases buyer inspection costs, and recognises suppliers for partnerships. Certified suppliers receive preference in competitive bidding and achieve industry recognition by their certified status. In the context of supply chain management, Just in Time addresses to an inventory strategy that is used to improve a business's return on investment by a reduction in process and all related costs.   This informs the production processes as to when it is necessary to make stock the inventory.  When the stock drops to a certain level, new stocks have to be ordered. This helps maintain space in the warehouse  and  keeps  costs  down  to  a  reasonable  price. Just in time supplier replaces the order at the earliest when the requirement is critical.

The idea of supplier certification implies equally to the service sector. The  criterion  for  supplier  certification  has  been  well  explained  by  The American  Standard  for  Quality  (ASQ.)  This  suggests  eight  criteria  for certification .They are as follows:

• The supplier selected should have no product- related lot rejections for at least once in a year. Example: an alternative is volume related.
• The supplier selected should have no non-product related denial for at least six months.
• The supplier selected should have no production-related negative incidents for minimum six months. Example: ease with which the supplier's product can be used in the buyer's process or product.
• The supplier selected should have passed a recent on-site quality system evaluation.
• The supplier selected should have completely agreed on specification.

Example: No ambiguous phrases like "characteristic odor" or "clear of contamination"

• The supplier selected should have fully documented process and quality system. The system must cover plans for continuous improvement.
• The supplier selected should have timely copies of inspection and test data. It should have real time availability of data.
• The supplier selected should have a stable process and must be in control. Example: Statistical control and process capability studies.