AN ORGANIZATION AND
ISO 9000 standards present a plenty of details for considering the
development of supplier relationship
- ISO 9000
An organization and its suppliers are interdependent and a mutually
beneficial relationship enhances the ability of both to create value.
organization or person that provides a product
EXAMPLE Producer, distributor, retailer or vendor of a product, or
provider of a service or information.
NOTE 1 A supplier can be internal or external to the organization.
NOTE 2 In a contractual situation a supplier is sometimes called "contractor".
Management should consider the potential benefits of establishing
partnerships with suppliers to the organization, in order to create
value for both parties. A partnership should be based on a joint strategy,
sharing knowledge as well as gains and losses. When establishing partnerships,
an organization should:
- identify key suppliers, and other organizations, as potential partners,
- jointly establish a clear understanding of customers' needs and
- jointly establish a clear understanding of the partners' needs and
- set goals to secure opportunities for continuing partnerships.
Management should establish relationships with suppliers and partners
to promote and facilitate communication with the aim of mutually improving
the effectiveness and efficiency of processes that create value. There
are various opportunities for organizations to increase value through
working with their suppliers and partners, such as:
- optimizing the number of suppliers and partners,
- establishing two-way communication at appropriate levels in both
organizations to facilitate the rapid solution of problems, and to
avoid costly delays or disputes,
- cooperating with suppliers in validation of the capability of their
- monitoring the ability of suppliers to deliver conforming products
with the aim of eliminating redundant verifications,
- encouraging suppliers to implement programmes for continual improvement
of performance and to participate in other joint improvement initiatives,
- involving suppliers in the organization's design and development
activities to share knowledge and effectively and efficiently improve
the realization and delivery processes for conforming products,
- involving partners in identification of purchasing needs and joint
strategy development, and
- evaluating, recognizing and rewarding efforts and achievements by
suppliers and partners.
Requirements for suppliers' processes and product specifications
should be developed with suppliers in order to benefit from available
supplier knowledge. The organization could also involve suppliers
in the purchasing process in relation to their products in order to
improve the effectiveness and efficiency of the organization's purchasing
process. This could also assist the organization in its control and
availability of inventory.
The organization should establish effective and efficient processes
to identify potential sources for purchased materials, to develop
existing suppliers or partners, and to evaluate their ability to supply
the required products in order to ensure the effectiveness and efficiency
of overall purchasing processes.
Examples of inputs to the supplier control process include
- evaluation of relevant experience,
- performance of suppliers against competitors,
- review of purchased product quality, price, delivery performance
and response to problems,
- audits of supplier management systems and evaluation of their potential
capability to provide the required products effectively and efficiently
and within schedule,
- checking supplier references and available data on customer satisfaction,
- financial assessment to assure the viability of the supplier throughout
the intended period of supply and cooperation,
- supplier response to inquiries, quotations and tendering,
- supplier service, installation and support capability and history
of performance to requirements,
- supplier awareness of and compliance with relevant statutory and
- the supplier's logistic capability including locations and resources,
- the supplier's standing and role in the community, as well as perception
For suppliers and partners, the organization should:
- survey the opinions of suppliers and partners on their satisfaction
with the purchasing processes of the organization,
- monitor and supply feedback on the performance of suppliers and
partners and their compliance with the organization's purchasing policy,
- assess the quality of product purchased, contributions from suppliers
and partners, and mutual benefits derived from the relationship.
Use of electronic linkage with suppliers should be considered in
order to optimize communication of requirements.