In industries like aerospace, defense, or automotive where an adulterated part or component can have a catastrophic effect to your business performance, managing supplier quality and compliance are top-of-mind issues for executives. With sometimes thousands of such relationships and dependencies, the number of quality management issues to monitor and control can be overwhelming.

Recently, there’s been an increasing trend on the part of senior leaders to turn to their quality management system (QMS) for transforming many of these traditionally challenging supplier relationships into a source of competitive advantage. They’re interested in migrating away from reactive supplier quality strategies to proactive ones that leverage next-generation automation, communication, and collaboration technologies.

Below, we’ll discuss the roles of seven different technologies that companies are using to overcome supplier quality challenges. Most of the technologies listed—software functionalities and modules—fall within the enterprise quality management software (EQMS) category.

1. Supplier risk scorecards
With supplier risk scorecards, organizations can rate and rank suppliers based on performance in a harmonized way across sites. This is particularly beneficial to mitigating risk and improving quality when you’re dealing with hundreds or thousands of suppliers at once and tiering them so that you can focus on the most risky suppliers. Companies that depend on suppliers have been using supplier risk scorecards for quite some time, and EQMS has helped to automate the process. The software acts as a single version of the truth for all supplier risk profiles.

2. Cloud-based supplier portals
Opening up traditionally email- and FTP-based lines of communication and collaboration, cloud-based supplier portals enable interaction between manufacturing and engineering groups with upstream trading partners. These portals also allow suppliers to have access to market-leading technology. They can actually log in to use the same systems that downstream partners use, and in turn improve their own operations in new and sometimes more effective ways. This approach can be particularly helpful for areas such as change management (which involves equipment, processes, and standard operating procedures), managing process variability and improving first-time quality, and communicating quality specifications.

3. Statistical process control
Many companies are extending statistical process control (SPC) capabilities to suppliers to enable monitoring and controlling process variability from remote locations. When suppliers and partners receive SPC training and are on board with using it, manufacturers can experience significant downstream quality improvements that affect the bottom line. Using supplier portals as a means for communication, suppliers can actually submit SPC data and other information to corporate quality managers.

4. Supplier audit management
In the past, supplier audits have been a tedious exercise. However, streamlining audits with EQMS has been beneficial to quality measures and efficiency for many organizations. Rather than simply relying on an auditor to check off boxes on clipboards at supplier sites and later enter that information into a system, EQMS can help to digitize and even automate parts of the supplier audit process. The software triggers notifications and also typically connects to supplier risk management capabilities.

5. Document management
Relying on paper-based and manual processes can be quite a challenge when dealing with numerous suppliers. Document management facilitates collaboration and the sharing of key documents such as work instructions, audit forms, and regulatory forms. Most document management capabilities are armed with version control and can be extended to suppliers via cloud-based platforms.

6. Supplier quality training modules
Many companies have noted difficulties with keeping suppliers abreast of changes. With EQMS, organizations can deploy supplier training and certification modules, automating the process and requiring that off-site operators are educated on regulatory or quality specification changes. This can also be helpful with educating suppliers on specific processes, like submitting SPC data into web portals.

7. Supplier nonconformance management
The corrective and preventive action (CAPA) process is a widely used tool for resolving nonconformances in the manufacturing environment. Many organizations are using EQMS to deploy it at supplier locations to help automate the supplier CAPA process and generate notifications and alerts so manufacturers can help resolve quality issues faster.

Improving supplier quality management with EQMS

The earlier you can catch or get ahead of quality issues, the less negative impact they will have, and establishing a foundation early to manage supplier quality will go a long way for improved quality, risk, and compliance—and not just upstream, but across the value chain.

Increasingly, organizations are working to build an end-to-end quality management system, and even close the loop between functional units. For more information on how manufacturers with complex supplier networks are developing integrated quality systems that span the value chain, download this free report “Building Integrated Quality Processes in Aerospace and Defense.”

First published Feb. 11. 2014, on the LNS Research blog.