Supplier quality rating

Over a period of time supplier quality rating provides a quantitative summary of supplier quality. This type of rating is useful in deciding how to allocate purchases among suppliers. Rating furnishes both buyer and supplier with common factual information that becomes a key input for identification and tracking of improvement efforts and for allocating future purchases among suppliers.

To create a single numerical quality score is difficult because there are several units of measures, such as:

• The quality of multiple lots expressed as lots rejected versus lots inspected.
• The quality of multiple parts expressed as percentage non conforming.
• The quality of specific characteristics expressed in numerous natural units. e.g.: percentage of active ingredient.

Measures in use:

Supplier quality rating plans are based on one or more of the following measures:

Product percentage nonconforming: It is the measure of the ratio of the amount of defective items received to the total number of items received. On the whole, the formula is the number of lots rejected divided by the number of lots received; on an individual piece basis, the formula is the number of individual  pieces  rejected  divided  by  the  number  of  individual  pieces received.

Overall   production    quality:   the   supplier   performance   at   incoming inspection and later phases of product application are summarised in this plan. Each phase is assigned points; in case of no problems, maximum points are given.

Economic  analysis:  the  comparison  of  suppliers  on  the  total  cost  for specific purposes is done by this plan. The overall cost includes the quoted price plus quality costs for defect prevention, detection, and correction.

Composite plan: Quality is not limited to supplier performance. It includes delivery against schedule, cost, and other performance categories. These multiple  needs  suggest  that  the  supplier  rating  should  include  overall supplier performance rather than just supplied quality performance.

Act on nonconforming product:

Instances of non conformance will arise during the performance of the contract. These may be on the product itself or on process requirements or procedural requirements. If a product is unfit for use, priority effort should go to such cases.

Communications to the supplier on non conformance must contain a precise description of the symptoms of the defects. The sample form is the best description of the symptoms of the defects.