Weekly Topic for the Quality Area (12.05-12.11): Quality Issues in Procurement

The use of raw materials purchased from reputable manufacturers generally goes through three stages: 1. Sample submission. 2. Send sample batches of trial products. 3. Batch usage. In the first stage, manufacturers usually receive samples from several companies; these samples are meant to be used in the production process. The quality of these samples is generally not an issue, but the quality control department still needs to examine them one by one and classify them into different grades for the purchasing department to choose from (taking cost factors into consideration as well). In the second stage, the manufacturer selects products from a few suppliers for trial use on a small scale. At this stage, the quality control department’s task is to conduct ongoing inspections to determine whether these trial products are stable. For the third stage, the manufacturer will choose a supplier to purchase goods in large quantities, and the quality control department can conduct inspections at regular intervals. After each batch of raw materials arrives, random samples are taken for inspection in fixed quantities; during use, random samples are also taken for inspection at regular intervals.

Regarding the supplier’s quality management, it seems to be the responsibility of the quality manager or the purchasing manager. Main considerations: The overall pass rate of supply quality – calculate for each supplier the number of times substandard materials were supplied, and what proportion this represents of the total number of supply instances. Delivery time guarantee: How many times was delivery not made on time, and what percentage does that represent of the total deliveries? Guarantee of supply accuracy: For certain products, such as sheet materials, if the supplier always delivers sheets with a lower thickness, for example 0.5 mm less than the theoretical value, ； The theoretical value is 5mm; therefore, when using this sheet material to manufacture bulk products, 10% more products will be produced, as sheet materials are purchased based on weight. Conversely, if the upper diffuser plate is thickened by 10%, it essentially means that the cost of your product increases by 10%. This isn’t really a matter of quality, but if manufacturers can strictly control the plate thickness and keep the error within 1%, then such quality standards can help avoid fluctuations in costs. The procurement of raw materials varies greatly depending on the type of materials being purchased. There are also too many differences in quality control points. By chemical products, does the poster mean only chemical raw materials? , or including chemical industry accessories and so on

Reply to 1# yuanyongan: Currently, foreign companies place great emphasis on the management and auditing of suppliers. In China, however, on-site audits of suppliers are rarely conducted; basically, only their qualifications are collected, with little consideration given to further management measures. For example, there are many enterprises around us, but the management of suppliers is virtually non-existent; the annual re-evaluation is merely a formality to meet certification requirements. If stricter management is to be implemented, here’s my view: 1. Classify suppliers for management based on the degree of impact of raw materials on the products ； 2. Select suppliers based on the classification results; the methods described in points 2 and 3 can be used during this process.

This post was last edited by yuanyongan on 2011-12-5 at 13:40. To ensure procurement quality, contract control is necessary, and contract control mainly refers to the management of the following types of agreements. 1. Quality assurance agreement: The enterprise should enter into a quality assurance agreement with the supplier to clearly define the quality responsibilities that the supplier must assume. The agreement may include one or more of the following: (1) full trust in the supplier’s quality system ； (2) Submission of the specified inspection/test data and process control records for the shipped goods ； (3) 100% inspection/testing by the supplier ； (4) Lot receipt sampling inspection/testing to be conducted by the supplier ； (5) Implement the formal quality system specified by the enterprise ； (6) Regular evaluation of the supplier’s quality system by the company or a third party ； (7) Internal receiving inspection or screening. 2. Verification method agreement: Reach a clear agreement with the supplier regarding the verification methods to check whether they meet the requirements. To further improve product quality, the agreement may also include the exchange of inspection and testing data between the two parties. The main contents of the agreement regarding the verification method include: inspection items, inspection conditions, inspection procedures, sampling data, sampling methods, acceptance criteria, testing information to be exchanged between the supplier and the buyer, and the location of verification, etc. 3. Agreement on dispute resolution: Systems and procedures should be established to provide solutions for quality-related disputes between the supplier and the company. Provisions should be made regarding the handling of both routine and non-routine issues. Routine issues refer to general quality problems that do not conform to the product’s technical standards ； Abnormal problems refer to quality issues outside the scope of product technical standards, or large quantities of unsafe or substandard products, etc. Establish communication channels and measures to streamline the handling of quality matters between the company and its suppliers.

Procurement is the best field to be in; there’s plenty of profit to be made. However, quality control is a real headache. Procurement is generally controlled by the boss’s relatives; you, as someone in charge of quality control, can’t do anything about it. If we must talk about quality control, then various materials come with national standards, and it would be better to enforce strict checks through random sampling.

Flawless but superficial theoretical concepts; Baidu puts it well: 1. Quality management in the procurement department 　　(1) Quality management of material procurement； 　　(2) Organization of material procurement ； 　　(3) Coordination of material procurement and supply ； 　　(4) Control of material procurement and supply. 　　2. Supplier evaluation and certification, as well as product acceptance checks 　　(1) Evaluate suppliers ； 　　(2) Establish a procurement certification system ； 　　(3) Material acceptance 　　3. Procurement quality management assurance system 　　Quality assurance refers to the methods and procedures used for quality control, that is, systematic checks of the product’s functions and its production process to ensure that the product quality meets the required standards. Edit this section: The role of procurement quality management 1. It helps to improve the quality of a company’s products. 2. It helps to ensure that production proceeds in an orderly and continuous manner. 3. It helps to guarantee safety throughout the production and use phases of a company’s products. Edit this section: The basic principles of procurement quality management 1. Appropriate location ； 　　2. Appropriate quality ； 　　3. Appropriate timing ； 　　4. Appropriate price ； 　　5. An appropriate quantity ； Editing this section: Measures to strengthen procurement quality management
The following comprehensive measures should be taken for procurement quality management:
① Strengthen the procurement functional department, clarify its responsibilities and authorities, implement centralized management of materials, and carry out unified procurement;
② Build a capable, efficient, and highly qualified team of purchasers; properly handle their selection, hiring, training, and performance evaluation;
③ Develop a scientific procurement plan and implement it conscientiously; adjustments may be made when necessary;
④ Conduct qualification assessments of suppliers to ensure that all products are purchased from qualified vendors; maintain records of such qualified suppliers;
⑤ Prepare complete and accurate procurement documents, which should then be submitted to suppliers after approval by competent personnel;
⑥ Enter into procurement contracts with suppliers in accordance with the requirements of the Economic Contract Law of the People’s Republic of China, and ensure strict compliance with these contracts;
⑦ Arrange for verification and incoming inspection of procured items;
⑧ For the procurement of large quantities or critical materials, methods such as competitive bidding may be employed. Methods for Purchasing Quality Management I. Formulating a joint quality plan When purchasing modern products, one is not only buying the products themselves but also the services provided by the suppliers in areas such as product design, manufacturing processes, quality control, and technical support. To effectively purchase such services from suppliers, it is necessary to align the capabilities of both the supply and demand sides. The way to achieve this alignment is by developing a joint quality plan. A joint quality plan generally includes three aspects: economics, technology, and management. 　　II. Dispatching permanent representatives to suppliers 　　 To directly monitor the quality of goods supplied by suppliers, the purchasing party may send permanent representatives to those suppliers. The main responsibilities of these representatives are to set specific quality requirements for the goods, to understand the supplier’s quality management practices, such as the establishment of quality management organizations, the preparation of quality system documents, the development and implementation of quality systems, as well as aspects related to product design, production, packaging, and inspection. In particular, they are responsible for overseeing the final inspections and tests carried out before goods leave the factory, and for verifying and confirming the quality certification documents provided by the suppliers, thereby ensuring quality control within the supplier’s organization. 　　III. Regular or irregular supervision and inspection
The purchasing party may, depending on the actual circumstances, assign technical personnel or experts to conduct regular or irregular supervision and inspection of the supplier. Supervision and inspections help to gain a comprehensive understanding of suppliers’ overall capabilities, promptly identify their weak points, and require them to make improvements; this thereby ensures the quality of supplies from a systemic perspective. The main tasks are to supervise and inspect the implementation of the purchase and sale contract between both parties, with a focus on overseeing the quality of the goods to be purchased. For instance, prior to production, it mainly involves supervising and inspecting the quality of raw materials and purchased components ； In production, the main focus is on monitoring and inspecting the quality of semi-finished products at each stage of the process ； After production, the main focus is on supervising and inspecting the inspection, testing, and packaging of the finished products. It should be noted that key processes or special processes must be given priority in supervision and inspection. 　　IV. Keep abreast of changes in suppliers’ production status
Due to changes in both the internal and external environments of enterprises, the production status of suppliers is bound to change as well. The purchaser should keep abreast of any changes, and for any significant changes in production, it should require the supplier to report to it promptly. In cases of significant changes in product design or structure, manufacturing processes, inspection and testing equipment, or procedures, etc., the supplier shall proactively inform the purchaser of the situation. Upon receiving the report, the purchaser should carefully analyze the situation; if necessary, they should go directly to the supplier to find out more, with the main focus being to determine the impact on product quality. In most cases, suppliers modify product designs and adopt new materials, equipment, and processes to improve product quality and production efficiency; this is beneficial for ensuring product quality. However, it must also be noted that any change requires a period of adaptation; during the initial stage of the change, it is easy for the quality of products to become unstable. This requires ensuring quality by strengthening final inspections and tests. 　　V. Regular Ranking 　　 The main purpose of regularly ranking suppliers is to assess their quality and overall capabilities, as well as to provide a basis for making decisions regarding whether to retain or replace them. 　　VI. Assisting suppliers in implementing new quality systems and management methods 　　 To effectively control the quality of purchased goods, purchasers should introduce to suppliers the advanced quality management techniques and methods that they have developed over the years, and actively help and guide them in improving their quality management and technical capabilities significantly in a short period of time, thereby enhancing their quality assurance abilities. It is beneficial for the supplier to receive some assistance from the purchaser, and it is also beneficial for the purchaser themselves. The assistance provided to suppliers is multi-faceted; its main purpose is not to increase production capacity but to improve product quality. Focusing on quality improvement, it can assist suppliers in organizing technical training for relevant personnel, carrying out technical upgrades to equipment, and achieving standardization and regularization in inspection and testing. Implement the ISO 9000 series standards and strive for quality system certification, etc. The focus of assistance to suppliers is on strengthening the weak areas in product quality and addressing the key issues that affect it.

The landlord wants to discuss: quality issues in procurement. 1. I have studied the above viewpoints very carefully. 2. I think large-scale purchasing is not something that your technical staff can decide on these days; there aren’t so many rules and regulations for small-scale purchases. 3. Purchasing staff should be aware of the quality standards for the items you need:) It’s better to include these specific requirements in the tender contract than to rely on verbal statements. With these indicators in place, anything that doesn’t meet the quality standards is rejected. The contract must be favorable to us. 4. When there are suitable manufacturers available, it’s essential to assess the credibility of these companies and their negotiators (this is very important; otherwise, even after signing a contract, you’ll run into troubles. Time waits for no one). Ask them to recommend a few of their previous clients – obviously not all of them, as confidentiality is important. See for yourself. Ask around. 5. Payment method: Full payment – what percentage should be paid in advance? It’s all a matter of technique. 6. What I mentioned above refers to bulk goods; it’s pointless to talk about small quantities. Hehe, if you buy one piece and end up losing money, no one will pay attention to you :P

I have one here – a PPT created by another company that focuses specifically on procurement, with very detailed information. I can send it to you if you need it. Personally, I think procurement involves quality issues quite rarely. The two key aspects in procurement are “sourcing” and “purchasing”; quality is a basic requirement. “When ‘purchasing’, it’s necessary to conduct thorough research and investigate various aspects of the supplier’s capabilities; quality is of utmost importance. When ‘buying’, money has to be spent, and of course everyone wants to get good products at a low price. Therefore, cost seems to be the key factor to consider, followed by delivery time and the assurance of delivery quality. So quality is just a basic element that comes into play during the procurement process. Or rather, the buyer’s bottom line

Quality issues in the procurement process mainly stem from two aspects: raw material quality problems and supplier quality problems. Quality issues with raw materials are mainly reflected in the product quality and delivery. Quality issues with raw materials manifest in two aspects: first, the raw materials purchased are of poor quality, with certain performance parameters failing to meet the specifications set by the purchaser. Secondly, it is because the customer or purchaser changes their procurement requirements, resulting in the existing components failing to meet the new quality standards. Regarding product delivery, quality issues mainly manifest as product damage caused during transportation, damaged packaging of the incoming materials, damaged or missing labels on the incoming materials, incorrect shipment of goods, and mixing of different types of materials. 　　Supplier quality issues mainly fall into three categories: 1. Poor supplier operations lead to unstable supply quality and delivery times ； 　　2. The investors or partners of the supplier change their investment priorities, resulting in a shift to other areas of production or withdrawal from the manufacture of the raw materials required by the purchaser ； 　　3. The supplier’s poor financial condition led to bankruptcy. 　　Once any of these various types of problems occur, the purchaser must take immediate action to address them and rectify the situation. All associated costs, such as the expenses for analyzing and testing defective products, the transportation costs related to returning or replacing goods, the additional expenses resulting from the use of alternative products or suppliers, the costs of contacting suppliers for discussions or sending personnel to inspect their production sites, as well as the losses due to production shutdowns caused by poor quality, all fall under quality costs.

1. Strictly control the manufacturers of equipment and materials. Manufacturers with poor product quality and poor performance are not allowed to participate in bidding. 2. Strictly control prices. Manufacturers whose prices are significantly lower than market rates should provide samples or allow on-site visits before they can submit bids. 3. Strictly control the technical standards. Manufacturers are required to process the products in strict accordance with the technical manuals and drawings, and must not alter their design without permission. 4. Strictly enforce the acceptance process. For the acceptance of products upon arrival at the factory, strict joint inspection by multiple departments is necessary, and responsibility for this task must be assigned to specific individuals. 5. Ensure strict control over installation. Standards must be followed during the installation of equipment or materials; cuttings corners are not allowed. 6. Strictly control usage. During the use of equipment or materials, strict adherence to operating procedures must be observed; they must not be used at temperatures or pressures beyond the specified limits.