4.1 Governance and Operating Model

Supplier Quality Management (SQM) is not an administrative extension of Purchasing; it is the technical firewall separating external supply chain entropy from internal manufacturing stability. While Procurement optimizes for cost and logistics (Commercial), SQM must ruthlessly optimize for Risk and Capability (Technical). This chapter defines the operational architecture required to treat external partners not as vendors, but as remote extensions of your production line.

Separation of Powers

The Supplier Quality Engineer (SQE) requires absolute separation from Procurement to prevent the conflict of interest inherent in prioritizing "cheaper" over "compliant."

Decision Logic for Authority:

• IF the issue is Technical (Capability, Risk, Specification):
  • THEN SQE owns the decision.
  • Powers: Veto new suppliers, Block/Quarantine suspect material. This authority overrides production urgency.
• IF the issue is Commercial (Price, Terms, Logistics):
  • THEN Procurement owns the decision.
  • Constraints: Must select partners from the SQE-qualified list.

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 or recall cost.

The Operating Lifecycle

Treat the SQM lifecycle as a closed-loop control system.

Phase 1: Qualification (Pre-PO)

• 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)

• 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)

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

Phase 4: Resolution & Monitoring (Sustaining)

• Action: Supplier submits CAPA.
• Logic: Verify Permanent Corrective Action (PCA) and update Scorecard.

The Supplier Risk Rating Model

Risk is a calculated score, not a feeling. Assign every active part/supplier combination a risk tier based on weighted technical inputs: Criticality (Safety/Function), Process Maturity (Auto vs Manual), and Complexity.

Control Levels (Inspection Intensity):

• Level 1: Tightened Inspection (High Risk)
  • Scope: New Suppliers (NPI), Probation, or Critical Safety Items.
  • Mandate: AQL 0.4 / Level II.
  • Safe Launch: Measure 100% of Critical Dimensions for the first 3 lots.
• Level 2: Normal Inspection (Medium Risk)
  • Scope: Established suppliers with stable performance (> 6 months w/o SCAR).
  • Mandate: AQL 1.0 / Level II.
  • Check: Verification of MPN, Date Code, Packaging.
• Level 3: Skip-Lot / Dock-to-Stock (Low Risk)
  • Scope: Preferred Suppliers (Grade A) providing commodities.
  • Mandate: Inspect 1 out of every 5 lots.
  • Revocation: A single line-reject immediately revokes Dock-to-Stock status for 3 lots.

Dynamic Risk Adjustment

The system must adapt dynamically to performance data.

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

Supplier Quality Scorecard

The Scorecard is the single source of truth. It is generated monthly.

Metric Weighting:

1. Incoming Quality (DPPM) – 40%:
   • Target: < 200 PPM.
   • Penalty: Any lot rejection triggers a "Zero Score" for the month.
2. Field Escapes (Severity) – 30%:
   • Logic: A single safety escape = 0 Points (Automatic Fail).
3. Response Velocity (SCARs) – 20%:
   • Target: Initial 3D (Containment) < 24 Hours.
4. Administrative Compliance – 10%:
   • Focus: Missing CoCs, wrong labels.

Final Checklist

Control Point	Requirement / Threshold	Non-Negotiable Rule
Authority	Technical Veto	SQE can block any shipment regardless of Commercial pressure.
Qualification	Audit Score	< Threshold = Fail (Do Not Use).
High Risk	Inspection Level	AQL 0.4 / Level II (Tightened).
Safe Launch	Measurement	100% Check for first 3 lots of new parts.
Escalation	Trigger	1 Failure = Level 1 (Immediate Tightening).
Records	Retrieval Time	< 24 Hours (Failure implies liability).
Contract	Binding	PO must reference SQM as primary truth.