Quality Management – The Procurement Angle!

Tuesday, May 24th, 2016

Quality Management – The Procurement Angle!

The procurement angle in quality management is far more than ensuring a specification is provided to all members of the supply chain. We were once engaged to advise a ‘naval systems’ European manufacturer who had a contractor with a USA client. Our task was to process map the whole quality management system, starting with our clients’ contract with their USA client. Within the specification was a requirement that all sub-assemblies and assemblies had to be tested for acceptance at the clients’ San Diego laboratories. Unfortunately, our UK client hadn’t read this contractual provision and the equipment was being manufactured in the UK! The project was running late and now the sub-assemblies and assemblies had to be flown to the USA – and back – at a prohibitive cost to comply with the specification. So, what is the procurement angle here? The answer lies in what detail should be included in the contracts with the supply chain? You should consider, at least:

  • Inspection rights at the supplier
  • Involvement of a third party inspection agency
  • The nature of acceptance criteria
  • Rights of Rejection
  • Corrective action by the supplier
  • Destruction testing when applicable
  • Time-scale to correct faults at inspection
  • Contract damages is a recall programme is necessary

This is a complex subject and always worthy of a review.