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How can we classify suppliers?

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Question added by Hesham Taha , Country Supply Manager , ABB
Date Posted: 2016/03/02
ِِِAlaa eldin Ahmed Abdelalim  Tammam
by ِِِAlaa eldin Ahmed Abdelalim Tammam , محاسب عام , شركة العزام للمقاولات

As part of sound supplier control practices, it is often necessary to classify your suppliers. A distributor you purchase off-the-shelf cosmetic screw covers should not warrant the same level of scrutiny as a contract manufacturer assembling the core technology of your product. When you classify suppliers, you can save time qualifying less critical suppliers and focus more time on the handful of critical ones that have significant impact on your product quality.

Note: Ultimately, you need to choose how classifications should be named and assigned within your organization based on your product. Each product is different and this should just be used as a guide to help divide your suppliers up.

Level 0 / Trivial SuppliersThese suppliers are ones that do not affect product quality. These suppliers often do not even have an associated supplier file or have any requirements.Supplier Examples: Office supplies, foodMethods of Qualification: None

Level 1 / Non-Critical SuppliersThese suppliers have minimal affect on product quality or are sometimes large distributors that supply off-the-shelf goods. Note that it is often difficult to qualify large distributors if you are a small medical device company and they may not even want to fill out a supplier survey.Supplier Examples: non-critical screws/nails/tools, cosmetic-related goods, prototyping facilities (these may become critical suppliers when prototypes become production-level), R&D equipmentMethods of Qualification: Supplier Surveys

Level 2 / Moderate SuppliersModerate-level suppliers have a direct impact on product quality and supplier issues from these vendors could potentially cause voluntary recalls and/or moderate risk to the customer. These suppliers often provide custom parts that are not found off-the-shelf.Supplier Examples: Testing facilities, Packaging material, Custom-designed parts, Pest controlMethods of Qualification: Supplier Surveys, Quality Agreement, NDA, Certifications (optional), As needed re-evaluation

Level 3 / Critical SuppliersCritical suppliers have a significant impact to product quality and supplier issues from these vendors could result in recalls, FDA warning letters and/or customer harm. These are the suppliers that require the most amount of attention; metrics and monitoring should be a continuous part of supplier controls for these vendors.Supplier Examples: Sterilization facilities, Labeling, Contract manufacturers, Critical power/electronic partsMethods of Qualification: Supplier Surveys, Quality Agreement, NDA, Certifications, On-site Audits, Annual re-evaluation

ConsultantsConsultants are a tricky "supplier" to classify since they can have varying impact on product quality. Most of the Quality, Regulatory or Engineering consultants would fall under the Moderate Supplier category, but it wouldn't be unheard of to have a consultant be a Critical Supplier if they were handling items crucial for product safety.Methods of Qualification: Consultants typically need to provide a resume and documented evidence of his/her credentials and training matrix

Firstly, Perform ABC & HML analysis of inventory and identify the Class-A and Class-H items of your inventory. Secondly classify then classify them based on the lead time and payment terms. , Thirdly, reliability and the quality of service they provide. Finally quality you might have already considered as these items are in ABC and HML list.

Abhirup Das
by Abhirup Das , Business Analyst- Corporate , Bhatia Brothers Group

Kindly go thru my technical blog  to get the answer

http://abhirup-das.blogspot.ae/2011/05/approach-and-implementation-of-single.html

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