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Ten Steps to Quality Supplier Relations

Probing the 2012 regulatory landscape, quality and risk managers want to know, “Specifically, how do we start a program of compliance?”

The answer is:  start with #1 below. Then proceed to #2. Quality programs don’t have to be drudgery; they can be rational, engaging, dynamic processes. When it comes to suppliers, think “alliance,” not “compliance.”

Ten steps to managing supplier data:

1. Most important: clear, regular communication with suppliers gets results – so decide on a way to automate communication with suppliers. For instance, a mail program that you can set in advance to contact suppliers every two weeks, like Constant Contact, is better than trying to remember to email suppliers by hand and track whether they responded and what they said in your Microsoft Outlook email folders. Automate, automate, automate.

2. Establish the vision: the big picture goal is better products; the way that is going to happen is by getting the cleanest, most reliable data from suppliers.

3. Get executive buy-in, both upstream, downstream and in your own organization; then create your “tiger team” of internal evangelists and data gatherers. Talk with the marketing team. They will get excited about Quality, Green and CSR. You need this – your toughest sell is internal and marketing will do a lot of that work for you.

4. Talk with suppliers: make sure they know how a system benefits them, e.g., by eliminating duplicate data capture they save time and money, a reputable data warehouse can be safer than in-house storage, etc.

5. Draft a plan to educate suppliers to clarify requirements and unify goals.

6. Evaluate and make inventory of your extant data in the ERP system, PLM, and procurement software (most compliance software will be able to “talk to” these systems, so decide which data you want to work with).

7. Decide on at least some specifications for an easy-to-use web-based (accessible 24/7) portal where suppliers could enter chemical, ingredient, raw material and/or BOM information – usually a portal with a compliance database to screen data against regulations and global zip codes. At least know loosely what your specs would be if you were to go the software route, because those specs will help you design your own program either way.

8. Find, update and freshen records about product and part ingredients for measuring and communicating corporate-wide progress.

9. Design a program that collects data on tomorrow’s chemicals-of- concern as well as collecting data on known toxics.

10. Verify supplier compliance equally with all suppliers (don’t play favorites): data integrity depends on consistency, data integrity itself benefits both you and your suppliers.

Do not impose too much restriction on suppliers right away – asking for too much too soon can cause unintended consequences, such as “pushing” or “hiding” the undesirable chemical back into the supply chain, only to have it pop up later in a context beyond your control. Instead, an automated, gently tiered data gathering program is recommended. This will avoid overwhelming supplier-partners with demands they cannot meet. Again, think “alliance,” not “compliance.”

There is such a thing as automated supplier data gathering technology. If pursuing that route, the software – whether SaaS or boxed — must be relational-database driven. This means the data is stored in many separate but customized tables all meaningfully linked together in one central data warehouse. There simply is no other way to keep track of so much data and keep it current, consistent and clean. An example of this type of software is Material Disclosure software, recipient of the Gartner “Cool Vendor” honor for 2012. You want supporting software to automate the communications with suppliers, the data gathering, the storage and retrieval, the supplier scorecarding, and the compliance alerts.  The software should also leverage the resulting Corporate Social Responsibility (CSR) value for the company using it.

Global environmental regulatory compliance – including REACH, RoHS, WEEE and many others both local and global – remains a challenge for manufacturing companies. The hope is that this article will help readers realize that getting started is absolutely doable. Just do it, whether you start now, or soon, or are starting overdue to not using best practices the first time. When you’re done with Step 1, then start Step 2.  And – snap — you’re on your way.

For over a decade Chris Nowak has been immersed in the business of environmental management, regulatory compliance and supplier material disclosure process.  Nowak now serves as Director at Actio Corporation, makers of the market-leading software supporting quality and risk management programs.

Chris Nowak
For over a decade, Chris Nowak has been immersed in the business of environmental management, regulatory compliance and supplier material disclosure process.  Nowak serves as Director at Actio Corporation.
 
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2 thoughts on “Ten Steps to Quality Supplier Relations

  1. We loved your article Chris, it really hits home on some actionable and tangible steps that can be taken to manage supplier data. I especially liked your quote: When it comes to suppliers, think “alliance,” not “compliance.” We put together some thoughts in our article, “Three Ways Retailers Can Help Their Suppliers Tackle Sustainability” that really align well with your steps and thought you might enjoy: http://www.sustainabilityconsulting.com/blog/2012/3/1/three-ways-retailers-can-help-their-suppliers-tackle-sustain.html

  2. Chris, a really informative article and one which I can certainly resonate with! Our biggest challenge is communications with the vendor base, on a global basis making even more of a challenge!
    With differing requirements given to vendors from their global customers , we can understand why vendors are sometimes confused or appear ignorant to requirements

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