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1. CQE EXAM
PREPARATION COURSE
Part 1
Management and Leadership
By :
Eng : Hosam Abd El-Galeil

2. Chapter 1 A. Quality Philosophies and Foundations
Chapter 2 B. The Quality Management System
Chapter 3 C. ASQ Code of Ethics for Professional Conduct
Chapter 4 D. Leadership Principles and Techniques
Chapter 5 E. Facilitation Principles and Techniques
Chapter 6 F. Communication Skills
Chapter 7 G. Customer Relations
Chapter 8 H. Supplier Management
Chapter 9 I. Overcoming Barriers to Quality Improvement
Content

3. Objective :
Chapter 8
H. Supplier Management
Analyze (Analysis Level)
Break down information into its constituent parts and recognize their
relationship to one another and how they are organized; identify
sublevel factors or salient data from a complex scenario.
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4. Beginning in the 1940s, the use of quality standards for suppliers has gradually
evolved into a system that assures quality products that meet requirements with
only a limited amount of inspection by quality control personnel.
MIL-Q-9858, BS 5750, industry - specific (starting in the early 1960s), and ISO
9000 standards have each made their contribution.
The goal is to assure that purchased items and materials conform to requirements
without the need for extensive inspection upon receipt by the purchaser and that
continual improvement is being practiced.
Suppliers also can be found both internally and externally to the organization, so the
best advice is that you must find some way of communicating with all of your
suppliers on a regular basis.
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5. Procurement Standards And Specifications
Standards and specifications are documents containing criteria that must be met,
and these documents become legally binding by reference on the purchase order.
They can be in the form of engineering drawings, catalog descriptions, or other
documentation.
It is important that the applicable standard or specification document be
incorporated into the purchase order so there is no doubt that the requirements
are to be met. If they are not incorporated, there is no basis for enforcing compliance.
The purchaser need not always develop original specifications.
Commercial quality specifications are available and range from detailed engineering
drawings (which may include references to process specifications, such as reliability
verifications and inspection requirements) to off-the-shelf items (which are defined by
the characteristics on the manufacturer’s data sheet or catalog).
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6. Survey Versus Audit Versus Sampling Inspection
They provide internal or external customers with a degree of confidence, but not
absolute assurance, that the quality of the product or process is what it should be.
Survey
The survey can be defined as a broad overview of a supplier’s system and/or
processes that is used to evaluate the adequacy of that system or processes to
produce quality products (LaFord 1986).
The system survey
is used to assess whether the supplier has appropriately controlled
systems that will adequately prevent the manufacture of
nonconforming products.
The process survey
is used to evaluate whether a supplier has controls in place to ensure
that the process will manufacture quality products.
Process controls include proper tooling, equipment, inspection, and so on.
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7. Audit
An audit can be defined as a systematic examination of the acts and decisions
with respect to quality to independently verify or evaluate compliance to the
operational requirements of the quality program, specifications, or contract
requirements of the product or service (American National Standard 1978a).
Survey Versus Audit Versus Sampling Inspection
Audits of a supplier’s systems or processes
Can only be performed at the supplier’s facility.
Audits of a supplier’s product
May be performed either at the supplier’s or customer’s facility.
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8. The system audit
Is a documented activity performed to verify, by examination and evaluation of
objective evidence, that applicable elements of the quality system are suitable
and have been developed, documented, and effectively implemented in
accordance with specified requirements (American National Standard 1978a).
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9. The process audit
Is an analysis of elements of a process and appraisal of completeness,
correctness, or conditions, and probable effectiveness.
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10. The product audit
Is a quantitative assessment of conformance to required product characteristics.
Simply stated, the product audit verifies that the system and processes used to
produce the product are capable of producing a product that conforms to the
established specifications/requirements.
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11. Sampling Inspection
Inspection is a process of measuring, examining, testing, gauging, or
otherwise comparing the unit with the applicable requirements.
1) Sampling inspection
Is somewhat comparable to survey and audit.
2) 100 percent inspection
Is somewhat comparable to production line operation because each and
every item is subjected to it.
Is required in certain highly critical processes, and in processes that
produce unavoidable defects, such as semiconductor fabrication.
Both Deming and Juran point out that 100 percent inspections done by
humans are usually only around 80 percent effective.
In today’s industrial environment, 100 percent inspections are nearly
always automated.
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12. 1. Acceptance sampling
Is sampling where decisions are made to accept or reject a product or
service based on the results of inspected samples.
2. Skip-lot inspection
Is an acceptance sampling plan in which some lots in a series are accepted
without inspection because the sampling results for a stated number of
immediately preceding lots met stated criteria.
Explication of this methodology is found in American National Standard,
ANSI/ASQC S1-1987.
3. Incoming inspection
Is the inspection of purchased parts at the customer’s facility, after the
shipment of parts from the supplier, to ensure supplier compliance with
specifications and contractual agreements.
4. Source inspection
Is the inspection of purchased parts at the supplier’s facility by a customer
representative to ensure supplier compliance with specifications and
contractual agreements.
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Types Of Sampling

13. Surveying The Supplier
The primary purpose of a survey of a supplier or potential supplier is to
ascertain whether the supplier has:
Adequate financial resources (evaluated by purchasing)
Adequate manufacturing capabilities (evaluated by manufacturing engineering)
Adequate quality systems (evaluated by the quality assurance group).
In preparing for the survey :
The team leader should obtain as much information about the supplier as
possible.
The purchasing agent can provide copies of the supplier’s annual reports, credit
investigation, Dun & Bradstreet reports, Internet searches, and so on.
A facilities and equipment list should be obtained for review by manufacturing
engineering,
A copy of the supplier’s quality manual must also be reviewed prior to the survey.
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14. The survey team may be made up of members from :
purchasing,
manufacturing,
quality control
 plus various specialists in the areas of nondestructive testing
 product design, or other special processes
At times, the team may consist of only the quality professional.
(1) Assure that all of the team members agree on the theme and purpose of the
survey.
(2) Assure that the roles and responsibilities of each team member are understood
by the others.
(3) Draft a preliminary survey agenda.
(4) Select the team leader.
It is important that the team meet prior to arriving at the supplier’s facility.
The presurvey meeting is held to:
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15. In order to quantify the results of a survey
The primary method of quantification is for the survey team to use a checklist(s) to
record survey results.
Checklists commonly used cover both procurement and manufacturing/quality
aspects of a supplier’s organization.
The manufacturing/quality checklists often are broken into the
following categories:
1. Drawing and specification control
2. Purchased material control
3. Measuring and test equipment control
4. Process control and product acceptance
5. Material storage area, packing, shipping, and record retention control
6. Quality program management
7. Statistical process control
8. Strength summary of system survey
9. Corrective action summary of system survey
10. Summary report
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16. The supplier procurement checklist often is broken
down into the following categories:
1. General information
2. Product information
3. Facilities and equipment information
4. Sales, shipping, and payment information
Many professional evaluators prefer to have the supplier also score
a copy of the checklist in order to better compare the customer’s
viewpoint with that of the supplier’s.
It is essential that all levels of supplier management understand the scope
and purpose of the survey
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17. 1. List all individuals present and their correct titles
2. List the areas evaluated
3. List any major deficiencies requiring written corrective action
4. List any minor deficiencies
5. A summary that states the final conclusion, for example, approval, conditional
approval, or disapproval
6. A closing statement expressing appreciation for the supplier’s assistance and
cooperation.
The end product of the survey or quality program evaluation should be an
understandable final report. The report should detail the following:
Survey follow-up
is carried out to assure that satisfactory corrective action has been taken by a
supplier that did not qualify at the time of the survey visit.
A report from the supplier, accompanied by suitable documentation of
corrective actions taken, may be adequate.
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18. Supplier Rating And Evaluation
Rating a supplier’s capabilities is a twofold process:
(1) Rate or evaluate the supplier’s system (financial, manufacturing, quality)
The rating of a supplier’s system usually begins with the initial supplier
survey (discussed earlier).
Often, the initial survey is followed up with a periodic supplier resurvey,
called a systems audit.
The audit provides the customer with an opportunity to evaluate the
supplier’s systems over time so that any deterioration is noticed
immediately.
(2) Rate the supplier’s delivered product.
The rating of a supplier’s delivered product basically takes the form of
recording, in some predetermined manner.
The results of incoming inspections can include failures caused by the
supplier’s delivered products that appeared during the customer’s
manufacturing cycle or while the product was in service.
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19. The common aspects are quality, price, and delivery.
Supplier rating elements and formulas
The quality factor usually includes:
Quality
Rating
Price
Rating
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20. • Timeliness rating
The timeliness rating is based on the due date of the lot minus some
demerit (for example, 10 percent) for each day the lot is early or late
beyond some specified grace period or window.
It is important to note that if the supplier chooses the freight carrier, the
system can base the due date on the date the lot is received on the
customer’s dock. If the customer chooses the freight carrier, however, the
due date should be measured by the date shipped from the supplier.
• Completeness rating
Time Rating
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21. An overall rating can be derived by assigning percentages to the
aforementioned aspects of quality, price, and delivery.
The next step is to assign weights to the three main factors. For example:
This generic example can be expanded into an elaborate computerized system.
It also can be tailored for use by smaller businesses that may still have manual
systems. 21

22. Supplier Monitoring
The purchasing organization usually tracks and monitors suppliers.
A special supplier quality assurance (SQA) group may be formed to work with the
buyer to look at suppliers’ performance.
Some common supplier information includes:
Defective parts per million (PPM)
Cost adjustment requests
Delivery date slippages
Performance improvement
Using metrics such as the above, a quality information system (QIS) can
generate reports such as supplier profiles by select criteria.
Suppliers can be ranked by PPM, improvement, or similar metrics.
Preferred suppliers can then be selected using quantitative data instead of
guesswork and politics.
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23. INCOTERMS/Delivery Terms
Ford Motor Company, for example, generally uses standard delivery terms.
INCOTERMS are generally letters or abbreviations that represent a universal
understanding of the parties involved, terms of sale, point of origin, destination, and
party responsible given a certain condition.
The purchasing department normally manages this process.
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24. Partnering with Suppliers
Ideally, suppliers are treated as partners in satisfying customers.
This requires a mature organization with objective information. Communication
skills, careful fact gathering, and a good QIS are all needed to achieve this goal.
You and your suppliers should keep constant communication open on many fronts to
ensure that everything is working well to delight the ultimate customer.
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25. C Q E Exam Prep. Course
STUDY GROUP
www.facebook.com/groups/1458356601047218/

26. www.facebook.com/ASQCQE
www.youtube.com/QualityInitiative