Supplier Quality Management
A systematic way to ease and validate supplier quality


Supplier Quality Management

A systematic way to ease and validate supplier quality

Supplier Quality Management (SQM) software is used for monitoring and responding to changes in supplier performance on an enterprise scale. Supply chains for complex manufacturers are extensive and difficult to manage. To optimize performance, manufacturers must carefully track how each supplier is contributing to their enterprise. Are suppliers causing problems, or are they enabling success? SQM software can determine the answer.

Benefits of SQM include:

Improved communication with suppliers
Continuous improvement in supplier performance
Ability to measure and compare supplier performance
Continuous improvement in design and production
Healthy competition among suppliers through accountability

Quality is a critical component of Industry 4.0, and SQM is the first step to building quality in the production process. It is much easier to achieve the highest caliber, lowest-cost product if quality management is built into the build process. An SQM solution is one of the key steps to succeed in business initiatives such as continuous improvement, Six Sigma manufacturing, and lean manufacturing.

What Is Supplier Quality Management?


Supplier quality management is the measure of a supplier’s ability to deliver their goods or services. It is mainly used to audit quality in the supply chain and to identify the root cause of any issue that arises.

For complex discrete manufacturers, suppliers are involved in production to the extent that they may as well be considered part of the manufacturing enterprise. SQM provides the level of visibility and communication needed for suppliers to contribute their specific knowledge in the design process, creating a proactive, collaborative approach to the most consistent delivery of high-quality finished goods.

It’s important to view supplier management as an ongoing process, not a one-time project. It requires continuous optimization to maintain top performance. The benefits of supplier quality are fully realized once companies have built a relationship of shared expertise and resources. Suppliers can provide more than components— they can also provide specialized design and development services.

Most importantly, SQM software provides centralized communication with suppliers. It creates a framework for collaborative supplier quality and eliminates the problems caused by email and paper-based communication.

More Than Just Quality Inspections

A well-designed SQM solution delivers more than on-spec parts. It can reduce the frequency of inspections, which saves time and money while yielding higher productivity. As suppliers show sustained performance and reliability, SQM relaxes the inspection requirements

How to Choose a Supplier in Complex Manufacturing

Supply chains are the lifeblood of any complex, highly engineered production process. The more agile and flexible the supply chain, the greater the resilience and strength of the manufacturer. SQM has become a competitive advantage for manufacturers tasked with producing highly engineered products where they must assure the quality of their entire supply chain.

The quality standards in today’s increasingly networked and global marketplace demand strict compliance and lowered costs. Manufacturers must have complete faith in their suppliers. No two suppliers are the same, and every manufacturer has unique needs for their product and circumstances.

The following are some general steps to a successful supplier relationship:

Lay Out Your Supplier Strategy

When choosing a supplier, there is more to consider than just cost. Factors like compliance, on-time delivery, and customer service contribute to the overall value. The supplier that is cheaper upfront might be more expensive in the long run, if the overall value is low. Manufacturers should determine factors like a supplier’s reliability and quality consistency, in addition to any specific factors for their unique situation.

Compare Suppliers

Once you have laid out your supplier strategy, you can compare quotations and samples from suppliers. It is just as important to compare quality samples as it is to compare price quotes. Lower prices might denote lower-quality products, which will cost more money in the long run than it saves in the short term.

Look for Partners

Suppliers are an extension of your enterprise and value chain. Besides strong quality and on-time delivery, suppliers need to be communicative and accessible. Take the time to find supply chain partners that you can build a lasting business relationship with.

Make Backup Plans

It’s important to find the perfect supplier, but it’s also important to have alternatives ready. Especially during periods like the coronavirus pandemic, volatility can cause suppliers to suddenly shut down or run out of materials.

Understand Supplier Quality Certifications

In addition to the above general tips, there are some specific quality certifications that manufacturers should seek from their suppliers. The ASQ provides a series of certifications that range from specialized highly experienced quality professionals to part-time beginner quality analysts.

The more agile and flexible the supply chain, the greater the resilience and strength of the manufacturer.

How to Measure Supplier Quality in Complex Discrete Manufacturing

One of the main advantages of Supplier Quality Management software is the ability to accurately and quickly measure the quality of your suppliers. Most manufacturers use their own unique KPIs, but there are some overarching aspects of supplier quality that are always important to measure.

The traditional approach to supplier quality is to inspect incoming items to ensure they meet purchase specifications. A best-in-class SQM approach calls for much more. SQM takes a proactive role in ensuring that supplier materials and services meet the manufacturer’s quality expectations. SQM incorporates all the processes associated with supplier delivery, including manufacturing processes, on-time delivery, and proper packaging.

Here are some of the ways SQM measures quality in complex discrete manufacturing:
  • Align Business Goals with your Suppliers
    Having a clear performance goal for your own business makes it easier to apply the same logic to business partners. One of the best ways to achieve success with continuous improvement is to choose suppliers that are aligned in using methodologies such as Six Sigma or lean manufacturing. SQM provides a systematic approach to ensuring supplier alignment.
  • Enact a Real-Time Data Collection System
    SQM allows paperless tracking of supplier performance. Instead of waiting for paper questionnaires or site visits, manufacturers can use SQM to access real-time information on defective parts, late deliveries, or any other issue negatively impacting supplier performance.Manufacturers can also track positive results, like on-time deliveries and consistent quality performance. With all of this information easily accessible, manufacturers can optimize the group of suppliers they work with and avoid being held back by low-performing business partners.
  • Design a Performance Assessment System Specific to your Business
    In complex manufacturing, no two business processes are the same. That means that it is important to layout measurement strategies using in-depth knowledge of the specific situation. Correctly measuring performance in complex manufacturing is not one-size-fits-all.
  • Strengthen Communication and Information Flow
    Supplier performance improvement is a two-way operation. Manufacturers need to be clear and specific about their expectations, and suppliers need to give the information needed to measure their performance. With SQM software, the real-time feedback flow and streamlined communications speed up the process of sharing information between manufacturer and supplier.

The Benefits of Effective Supply Chain Quality Management

Digital Thread

Closed-loop Quality Management

Closed-loop quality management means providing a centralized process for corrective and preventive action (CAPA) for non-conformances, which avoids communication issues that can arise from siloed departments. Without centralized communication between departments, time can end up being wasted on unnecessary quality inspection processes.

Digital Twin

Closed-loop Supplier Management

Closed-loop supplier quality management ensures that suppliers have robust quality assurance processes in place and that the performance is visible. In turn, this drives higher supplier quality performance than can be achieved by testing alone. Fewer issues will arise during manufacturing, and you can scale down the number of inspections needed to maintain a high rate of quality.

By closing the loop on supplier quality management, manufacturers can expect to see many positive results in areas such as:

Reduced manual management tasks
Supplier ownership of process strengths and weaknesses
Improved component parts quality
Minimized need for third-party contract inspection
Minimized inventory in receiving inspection
Reduced inspection and audit oversight cost
Lower sourcing and warranty administrative costs
Quicker issue disposition and corrective action

7 Reasons Why an SQM System is Vital to an Industry 4.0 Strategy

Read why SQM is essential for Industry 4.0

To achieve the benefits and competitive advantages of Industry 4.0, manufacturers will need a robust SQM enterprise solution. Download the e-book and find out why.

iBASEt's Supplier Quality Management Software & Features

iBASEt’s SQM solution provides a robust, comprehensive approach to Supplier Quality Management on an enterprise scale. Here are some of the more important features of the product.


iBASEt SQM employs dynamic state switching for inspections. Based on real-time supplier KPIs, SQM scales testing frequency according to supplier performance. As a supplier’s quality performance improves, lot sizes will lower and quality procedures will be less stringent. If supplier performance starts to decline, SQM will tighten inspection procedures and increase lot sizes. Dynamic state switching ensures there is adequate testing to maintain quality without wasting time on extraneous QA activities. This method also introduces competition into the market, resulting in an improved value chain.


The iBASEt SQM solution can improve visibility into compliance by providing the capability to query real-time supplier status, constraints, and history records for all related processes and activities. This includes processes such as online verifications and characteristic data collection for inspection orders. SQM is a key tool for dealing with modern compliance regulations.

Non-Conforming Material Report (NCMR)

NCMRs are used to document material issues so that the party responsible for the material disposition is notified of the problem. Users can then rework, repair, or scrap the materials as needed. With iBASEt SQM, manufacturers can access any supplier’s history of NCMRs and use that information to assess overall supplier quality.

Corrective and Preventive Actions (CAPA)

Once a material issue has been identified, the next step is Corrective and Preventive Actions (CAPA). The iBASEt closed-loop CAPA process helps manufacturers reduce the number of issues by more accurately isolating the root cause, and providing the integration needed for a cross-functional team to successfully resolve them.
For industries like medical device manufacturing, the FDA requires that manufacturers document all CAPA processes. iBASEt’s digitalized SQM solution creates historical records for every CAPA process that occurs during production.

Extending quality control throughout the value chain improves not only quality, but every other aspect of operations from production efficiency to system integration, service and support, customer satisfaction, and the company’s overall profitability and competitiveness.

Advanced Product Quality Planning (APQP)

APQP helps manufacturers keep up with today’s stringent quality standards. For example, the AS9145 quality standard for the Aerospace & Defense industry is becoming a contractual requirement on many new projects. APQP provides a framework for focusing on product quality early in the design process. For any manufacturer with an Industry 4.0 initiative, APQP provides a key source of data.
APQP’s purpose is to identify potential areas of failure and use that information to plan quality to support any weaknesses. APQP empowers the manufacturer’s ability to implement successful new product introductions and take a proactive approach to quality.

Production Part Approval Process (PPAP)

As the next phase of Advanced Product Quality Planning, PPAP is the method to ensure part compliance and associated changes throughout the value chain.First, PPAP focuses on the verification of both the design and production processes used to produce the part, such as a First Article Inspection. Second, it begins a trial run where the production control plan is released and monitored. This control plan will define the quality standards and verification methods to be employed throughout the build. Final quality process control plans are then implemented, and production can commence.
Together, APQP and PPAP create a proactive approach to product quality by bringing it into the initial design process. The product and production processes are then designed with quality control in mind.

Measurement System Analysis (MSA)

MSA is a key tool to analyze variations in inspections, measurement, and test equipment. iBASEt’s SQM software ensures that the variation in inspections is minimal. During the measuring phase, it collects data accurately, using the same measurements to provide contextualized data. Accurate measurement data is a top priority because it will influence decisions regarding the business or production process. iBASEt SQM ensures that all measurement systems are accurate and consistent.

Statistical Process Control (SPC)

SPC can be used to monitor internal processes and eliminate any issues. It provides important statistical information to be used during process improvements. iBASEt SQM employs contextualized data collection to control and optimize any business process using statistical analysis.


Extending quality control throughout the value chain improves not only quality, but every other aspect of operations from production efficiency to system integration, service and support, customer satisfaction, and the company’s overall profitability and competitiveness.
Because of its far-reaching impacts, Supplier Quality Management should be a key component of any Quality, Six Sigma, or Industry 4.0 initiative and should be a central consideration as enterprises look to digitally transform their operations.

In the end, you are talking about operational change management. You need end-user involvement – those who are doing the work to be involved in the process – in order to have any lasting success.

— Scott Baril, Chief Customer Officer

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