Supplier quality is the ability of a supplier to deliver goods or services that will meet and satisfy customers’ requirements. The quality performance of suppliers will affect largely and directly to the quality performance of an organization. Ineffective procurement techniques for supplier quality can be catastrophic to business growth. It will negatively impact the reputation of organization, create legal and financial impacts that cannot be fully passed to the supply partners at fault. Thus, most of the organizations emphasizes on effectively managing and improving supplier quality.
Supplier quality is assured by having clear requirements on all aspects of product quality, logistics, legal, environmental requirements and quality requirements. To manage and improve supplier quality, organizations shall apply the procurement techniques including measuring and tracking of the cost of quality (COQ), implementing cost recovery process, alignment of supplier risk management with quality audits, supplier rationalization, standardization of supplier quality and performance metrics as well as application of collaborative approach to corrective action.