27 June 2023
supplier qualification process

Why is it important to have a supplier qualification process in the company?

Finding reliable suppliers is crucial to a company’s success and, if well structured, the qualification activity can really generate value.

However, with so many options available, it can be difficult to determine which suppliers are reliable and can provide the quality of goods or services required. This is where a solid supplier qualification process comes into play.

There are many reasons to invest time and resources in creating a robust supplier qualification process:

  • avoiding working with unreliable or unqualified suppliers
  • ensuring the quality of products or services provided to the end customer
  • reducing the risk of financial losses
  • maintaining corporate reputation

What is a supplier qualification process?

A supplier qualification process is a series of activities aimed at ensuring that suppliers meet company-specific criteria and standards.

These criteria and standards may include elements such as the quality of the products or services provided, compliance with safety and environmental regulations, the ability to meet the company’s production requirements, and the ability to provide products or services in a timely manner.

A well-structured supplier qualification process includes an initial evaluation of suppliers, followed by continuous monitoring to ensure that suppliers maintain the criteria and standards throughout the collaboration.
The output? The supplier register! The information collected will be grouped in the file dedicated to each individual supplier, there will be the outcome of the qualification of each one of them, and from there it will be possible to assess potential actions to rationalise the supplier base.

The benefits of a supplier qualification process

  • Risk reduction: qualifying suppliers can help reduce the risk of problems such as late delivery, poor product or service quality and regulatory violations
  • Quality improvement: selecting reliable, high-quality suppliers can help improve the quality of the products or services a company offers its customers.
  • Cost control: strict qualification of suppliers can help establish supply agreements that optimise costs and reduce production costs.
  • Increased productivity: working with reliable and qualified suppliers can improve the efficiency of the company’s production process, ensuring the timely delivery of products or services.
  • Product lifecycle management: the company can work with suppliers to ensure that the necessary materials, components and services are available on time and stay in line with product lifecycle requirements
  • Customer satisfaction: if the products or services offered by the company are high quality, delivered on time and at a competitive price, customers will be more satisfied and may be more inclined to do business with the company in the future.

Some key points

There are some elements to consider when designing your qualification process.
It is important to consider an evaluation of suppliers that is not only initial, but also ongoing. Can the suppliers maintain the requirements and standards they had at the beginning of the collaboration?
For this reason, the initial qualification must always be accompanied by a system for monitoring the performance of suppliers.
Moreover, one should never stop looking for alternative suppliers.

Steps in the qualification process

  • Defining the company’s criteria and standards and define how suppliers are selected, customised according to the type of purchase and company. One has to ask: what factors determine the suitability of a supplier?
  • Identifying potential suppliers
  • Creating one or more supplier evaluation questionnaires. Questionnaires are used to collect information on potential suppliers: at this stage, special care must be taken to have data that is constantly up-to-date, but which are also really necessary for qualification purposes, and are manageable.
  • Evaluating suppliers. Evaluation can be performed by several corporate departments (supplier quality, environment, safety…) and can be defined upstream with an algorithm on closed answers, or provide for open-ended answers.
  • Creating a list of qualified suppliers.
  • Monitoring and managing suppliers over time

With IUNGO’s qualification process module, it is possible to speed up and automate activities related to the qualification process. Create customised questionnaires and keep your supplier list constantly updated.