AN ORGANIZATION AND ITS SUPPLIERS
- ISO 9000

ISO9000:2000:

An organization and its suppliers are interdependent and a mutually beneficial relationship enhances the ability of both to create value.

Definition: supplier
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".

ISO9004:2000:

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 expectations,
- jointly establish a clear understanding of the partners' needs and expectations, 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 processes,
- 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 regulatory requirements,
- the supplier's logistic capability including locations and resources, and
- the supplier's standing and role in the community, as well as perception in society.

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, and
- 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.

Juhani Anttila