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5.1 Governance and Operating Model

Supplier Quality Management (SQM) is the technical firewall separating external supply chain entropy from your internal manufacturing stability. Unlike Procurement, which optimizes for cost and delivery (Commercial), SQM optimizes for Risk and Capability (Technical). This chapter mandates the operational architecture required to extend process control beyond the factory walls, ensuring external partners function as reliable extensions of the internal production line.

Mission and Boundaries

The Supplier Quality Engineer (SQE) operates with absolute separation of powers from Procurement. This separation is critical to prevent the conflict of interest inherent in prioritizing "cheaper" over "compliant."

  • If the issue is Technical (Capability, Risk, Specification) –> SQE owns the decision.
    • Mandate: Exercise veto power over new suppliers based on audit results.
    • Mandate: Block or Quarantine suspect material immediately. This authority overrides production urgency.
    • Mandate: Own the Supplier Corrective Action Request (SCAR) cycle from initiation to validation.
  • If the issue is Commercial (Price, Terms, Logistics) –> Procurement owns the decision.
    • Mandate: Negotiate pricing, payment terms, and contracts.
    • Mandate: Select the partner from the SQE-qualified list.
    • Mandate: Expedite late deliveries.

Pro-Tip: Never allow "Commercial Leverage" to override a "Technical Veto." If a supplier is technically incapable, no price discount can compensate for the resulting line-down risk.

Authority Matrix (RACI Logic)

Ambiguity during a quality spill is a failure mode. adhere to the following decision logic to maintain velocity.

Scenario: New Supplier Qualification

  • SQE: Accountable. Validates technical capability.
  • Procurement: Consulted. aligns commercial terms.

Scenario: Stop Ship / Quarantine Stock

  • SQE: Accountable. Executes the physical and digital block.
  • Operations: Informed. Adjusts production planning.

Scenario: Deviation Approval

  • Engineering: Accountable. Only design authority can waive a specification.
  • SQE: Consulted. Assesses risk of the deviation.

Scenario: Recovery Cost Negotiation

  • Procurement: Accountable. Recoups financial losses from the supplier.
  • SQE: Informed. Provides technical evidence of the failure.

The Operating Lifecycle

The SQM lifecycle is a closed-loop control system. Do not treat these as linear administrative steps; they are gates that must be cleared to proceed.

Phase 1: Qualification (Pre-PO)

  • Input: Procurement nominates a potential source.
  • Action: Execute Risk Assessment and On-Site Audit (VDA 6.3 / ISO 9001).
  • Logic:
    • If Audit Score ≥ Threshold –> Pass. Add to Qualified Vendor List (QVL).
    • If Audit Score < Threshold –> Fail. Assign "Do Not Use" status.

Phase 2: Incoming Control (Active)

  • Input: Material arrives at Dock.
  • Action: IQC inspects per the SQE-defined Sampling Plan.
  • Logic:
    • If Compliant –> Release to Stock.
    • If Non-Compliant –> Reject to MRB.

Phase 3: Escapes & Reaction (Reactive)

  • Input: Defect detected on Line or Field.
  • Action: Initiate Containment (24h) and issue SCAR.

Phase 4: Resolution & Monitoring (Sustaining)

  • Input: Supplier submits CAPA.
  • Action: Verify Permanent Corrective Action (PCA).
  • Metric: Update Supplier Scorecard.

Interface with Internal Stakeholders

The SQE operates as the system architect for external quality, requiring precise interfaces with internal teams.

  • Interface with IQC: The SQE acts as the "Legislator" (defines the inspection plan and limit samples), while IQC acts as the "Enforcement" (executes the plan).
    • Requirement: Provide clear, binary acceptance criteria. Ambiguous instructions lead to false rejects or escapes.
  • Interface with Production: Production is the primary customer.
    • Requirement: If bad parts stop the line, SQE presence on the floor is required within 15 minutes to assess impact.
  • Interface with Program Management (PM):
    • Requirement: Define the "Risk Profile" for NPI. If a supplier is high-risk, mandate "Safe Launch" protocols (e.g., 100% source inspection).

      Required Quality Records (The "Evidence Pack")
    Suppliers must generate and retain specific records for every manufacturing lot. These records must be retrievable within 24 hours upon request.
    • Retention Period:
      • Standard: 5 Years.
      • Safety Critical / Automotive: 15 Years.
      • Medical: Indefinite (Lifetime of product + 2 years).
    • The "Lot History Record" (LHR):
      1. Traceability: Raw material lot codes (e.g., Resin Batch #, PCB Date Code) linked to the finished unit serial number.
      2. Process Parameters: Reflow oven profiles, Molding press settings, or Crimp pull test values for the specific production run.
      3. Inspection Results: First Article Inspection (FAI) report, In-Process QC logs, and Final QC (OBA) reports.
      4. Test Data: Pass/Fail logs for every serialized unit (ICT/FCT).
      5. Personnel: ID of the operators and inspectors who touched the lot.

      The Supplier Risk Rating Model

      Risk is not a feeling; it is a calculated score. Every active part/supplier combination is assigned a risk tier based on weighted technical inputs.

      • Risk Factors (Inputs):
        1. Criticality (40%): Does this part affect Safety (e.g., High Voltage) or Function (e.g., CPU)? (High/Med/Low).
        2. Process Maturity (20%): Does the supplier use automated inspection (AOI) or manual visual check? (Auto/Manual).
        3. Quality History (20%): Have there been any SCARs or MRB rejects in the last 12 months? (Yes/No).
        4. Complexity (20%): Is the part a custom mechanical assembly (High Risk) or a standard passive component (Low Risk)?
      • The Risk Tiers:
        • Tier 1 (High Risk): Custom Mechanics, Safety Critical Parts, or New Suppliers (< 6 months).
        • Tier 2 (Medium Risk): Standard Active Components (ICs), Connectors.
        • Tier 3 (Low Risk): Standard Passives (Resistors, Capacitors), Hardware (Screws).

      Control Levels (The Response)

      The Risk Tier determines the "Inspection Intensity" at the receiving dock.

      Level 1: Tightened Inspection (High Risk)

      • Scope: New Suppliers (NPI), suppliers on Probation (Grade C), or Critical Safety Items.
      • Mandate:
        • Sampling Plan: AQL 0.4 / Level II (High sample size).
        • Documentation: Full Certificate of Analysis (CoA) with actual measurement data required.
        • Safe Launch: The first 3 lots from a new supplier must undergo 100% measurement of Critical Dimensions (CDs) before moving to sampling.

      Level 2: Normal Inspection (Medium Risk)

      • Scope: Established suppliers with stable performance (> 6 months w/o SCAR).
      • Mandate:
        • Sampling Plan: AQL 1.0 / Level II.
        • Checks: Verification of MPN, Date Code, Packaging condition, and basic dimensional check (Key Characteristics only).
        • Documentation: Standard Certificate of Conformance (CoC).

      Level 3: Skip-Lot / Dock-to-Stock (Low Risk)

      • Scope: Preferred Suppliers (Grade A) providing commodities (e.g., Yageo, Vishay).
      • Mandate:
        • Sampling Plan: Inspect 1 out of every 5 lots (Skip-Lot).
        • Flow: Material moves directly from Dock to Warehouse.
        • Revocation: A single line-reject immediately revokes Dock-to-Stock status for 3 lots.

      Dynamic Risk Adjustment

      The system is not static. Performance drives the control level.

      • Escalation (Tightening):
        • Trigger: A single field failure or Line Down incident.
        • Action: Supplier moves immediately to Level 1 (Tightened).
        • Duration: Minimum 3 consecutive clean lots required to de-escalate.
      • De-Escalation (Relaxing):
        • Trigger: 10 consecutive lots accepted with zero defects.
        • Action: Supplier moves to Level 3 (Dock-to-Stock) to save IQC labor.

      Supplier Quality Requirements Index (The "Contract")

    We do not rely on "Standard Industry Practice." We rely on specific Dannie Standards. These documents are incorporated by reference into every Purchase Order (PO).
    • Binding Mechanism: The PO states: "Seller agrees to comply with the Dannie Supplier Quality Manual (SQM) Rev X." Acceptance of the PO constitutes legal acceptance of these rules.
    • The Index (Hierarchy of Authority):
      1. The Drawing (2D/3D): The absolute truth. (Dimensions, Material).
      2. The Specification: Performance requirements (e.g., "Must withstand 85°C").
      3. The Quality Manual (SQM): The procedural rules (Sampling, SCARs, Audits).
      4. External Standards: IPC-A-610, ISO 9001.

    Evidence Submission (The "Virtual Lock")

    For Critical Tier 1 suppliers, we do not just "trust" they have the records; we demand the evidence upfront.
    • The "Ship-to-Stock" Gate:
      • Requirement: The supplier must upload the Certificate of Analysis (CoA) and Measurement Report to the Dannie Supplier Portal before the shipment leaves their dock.
      • Validation: The system blocks the "ASN" (Advance Ship Notice) if the evidence is missing or shows out-of-spec data.
    • CoC (Certificate of Conformance):
      • Mandatory Statement: "We hereby certify that these goods were manufactured in accordance with Drawing Rev X and PO # Y."
      • Signature: Must be signed by a Quality Manager, not a Sales Rep.

    Audit Defense and Retrieval

    If a field failure occurs, the "24-Hour Rule" applies.
    • Scenario: A battery fire occurs in the field.
    • Demand: Dannie demands the "Reflow Profile" and "Battery Batch # Traceability" for the specific date of manufacture.
    • Failure: If the supplier cannot produce the record within 24 hours, they are presumed liable for the failure due to lack of process control.



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