Today, companies resort to contemporary practices and technologies to reduce overhead costs while aiming to increase productivity and efficiency. One of the most popular ways of ensuring business efficiency is through supply chain management. Could Supplier Quality Management provide a solution to improve your enterprise operations and functions?

Supplier Quality Management in Focus

Businesses do not operate on their own. Right from the purchase of raw materials up to the delivery of finished products, various units play a vital role in the smooth operation. Supplier Quality Management (SQM) is a tactical coordination among the involved units related to finances, information and materials. In a nutshell, SQM ensures there is a seamless and synchronized flow of supplies and materials resulting in a more efficient and productive operation.  

Components of Supplier Quality Management System

Since SQM is a network of interconnecting units working together to ensure smooth operation, each aspect must take charge and address specific elements in the overall process. This includes:  

  1. Product: This aspect of SQM oversees the overall movement of raw materials, supplies or goods from the supplier to clients and vice versa.
  2. Information: This section monitors proper flow of information involving delivery status, inventory information and transmitting of orders.
  3. Financial: This aspect is concerned with the flow of finances within the system. It deals with shipment payments, ownership contracts and credit policies.

For SQM to be useful and reliable, these aspects must be integrated with one another within the bounds of an enterprise. Just like with other management systems, if one element fails, the rest will follow.

Understanding the Best Practices in SQM

To realize the benefits of SQM, experts in the industry share these best practices:  

Implementation of a Supplier Audit Framework

Most additional costs incurred by an enterprise is due to poor supplier quality. Through a Supplier Audit Framework, you can identify quality vendors who are able to meet the highest standards. It also allows the implementation of cost recovery measures charging all expenses incurred by the company due to a poor supplier back to the vendor. Furthermore, this promotes discipline and accountability in the supply chain.

Keeping Balance Between Economy and Quality

There is a constant struggle between cost reduction and setting the benchmark for quality. The urge to cut down costs sometimes lead to compromising quality. SQM aims to select the most favorable option presented without sacrificing the quality of the product.

Maintaining Constant Communication and Collaboration

Keeping an open line of communication among stakeholders is an essential part of Supplier Quality Management. Communication reduces unnecessary bottlenecks in the operation due to miscommunication and ineffective transmittal of information.

Having a Supplier Quality Management system can be an enterprise’s secret weapon given how volatile the supply and demand process can be in the real world.

Do you wish to engage SQM in your enterprise? Click here to learn more about our supplier management solutions.