Sunday, October 1, 2023

New Vendor assessment audit system

Supplier Assessment Audit System

Supplier assessment is procedure to evaluate any new company (New supplier) on the basis of various checkpoints and automotive requirements., to check whether this new supplier will be able to meet company requirement or automotive standard requirement.

When we start this assessment audit?

Supplier Audit system

This assessment audit is done when, any organization need to add new supplier under new product development / under replacement of existing supplier or adding new one as second source of risk assessment.

What is Procedure to select new Vendor?

Before selecting new vendor or supplier, organization has to analyze their business requirement. Then organization will search a new vendor. Then organization will put new RFQ (Request for Quotation)/RFP (request for proposal)  as per business requirement. In that RFQ/RFP organization will give details of business and will ask vendor to submit vendor information sheet along with organization chart, or other documents which contains information about employees and background of vendor. Organization will give own check sheet to fill by vendor, in that check sheet, following details are requested:-

  • Manufacturing Facilities/Tools Details
  • NoC/Legal Compliance (Consent to operate) document
  • Manufacturing Procedure
  • Plant Capacity
  • ELV/RoHS compliance
  • Sources/Raw Material details
  • Locations/Sub supplier Details
  • Past Trouble details
  • Organization chart
  • Bill of material/Deviation/Or vendor concerns

Then organization will evaluate the proposal and select the vendor. Now assessment audit could be done to evaluate overall performance of vendor, if passed then business can be awarded.

Next will be creating negotiation contract. All change details to be discuss and benchmarks and time constraint to be clearly defined.

How to evaluate a new vendor?

To evaluate a new vendor organization will do assessment audit as per check sheet. Sometime organization will issue SOR through one of their department, and all required check points are summarized in that SOR, a long discussion or verification would be done on each point of SOR. But if SOR is not given, then QA team could do assessment audit at vendor location. If passed then Go-ahead can be done for further processing. But company to company it could change.

Honda Motor company do supplier assessment before business awarding. Or some organization do assessment after business awarded, but in rare cases. Many tier 1 also do assessment after selection of supplier.

So assessment is done as per below check sheet. In that check sheet there will be some main clauses and sub-clauses in main clauses. Followings are section/ Heading Points which are covered in those check sheet.

  • Category /Control Item (Main Clauses)
  • Sub clauses check points /Requirement
  • Judgment (OK/NG/Partially Done)
  • Remarks Column
  • Score system ( Marking creteria-3 if OK, 1.5 is Partially Done, ZERO-NG)

Assessment check could be different for different companies, for Tier-1 it will be different, for Tier-2 its will be different. But requirement of those check sheet match around 85%-90%. Here i am going to explain about evaluation of Tier-2 supplier. So followings are main clauses over which we do evaluation of new vendor:-

1. Production Preparation/New Product Development

  • Regarding Implementation procedure of production preparation.
  • Regarding management/Implementation by production preparation plan (APQP matrix)
  • Defect prevention on the stage of process design by using FMEA/Matrix Diagram
  • Product/Process Evaluation at Quality evaluation
2. Change Management
  • Definition and implementation of change management
  • Definition and control method for initial part (First part/Lot)
3. Standards Management 
  • Procedure to make process control standard (QA process chart)
  • Procedure to control standards (Process control standard/Inspection standard/Operation standard)
4. Education and Training
  • Education/Training Procedure
  • Educations for manager/Inspectors/Special operators
6. Quality Audits and Process Verification
  • Activity to keep/Improve production Quality
  • Content of process Review
7. Supplier Control
  • Evaluation method for new supplier
8. Handling abnormities in Quality
  • Handling when abnormal situation occur
  • Prevention of recurrence (Customer Claim/In-process Failure/Supplier Failure)
9. 5S management 
  • Location of production site
  • Production equipment management
10. Equipment Management
  • Maintenance of equipment, Jig and Tools
  • Maintenance of inspection equipment
11. Implementations of standards 
12. Product Management
  • Management of part flow
  • Non-Confirming part management
13. Handling Management  (Bin Trolley Management)
14. Critical parts Management (Safety Parts management)
15. Adequate testing facilities
16. Process Audit
17. Scale and top management bandwidth
  • Management bandwidth and organization structure
  • Review mechanism
  • Plants sales turnover’
  • PAT/sales (Profit after tax)
  • D/E Ratios* (Debt/Equity)
  • ROCE (Returns on Capital employees)
18. Safety
  • Working Condition
  • Human and machine safety
  • Fire safety
19. Legal Compliance and Environment
  • Consent to operate
  • ESI/PF
  • Hazardous waste management
Complete Audit check sheet is as below in PDF, you can also download Supplier audit check sheet from here.

Above file is PDF of vendor assessment check sheet.

Now next come 2nd page of assessment, here we give overall marking in all assessment points or clauses. We highlighted minimum marks obtained section wise, action is requested against those clauses. Radar chart is drawn on the basis of score obtained by vendor.

Radar chart in Supplier assessment audit

Sometime we call it Radial Chart/ Web chart/Spider Chart/Polar Chart. In radar chart we compare multiple quantitative variables. By Radar chart we can see which point/Variable is scoring high and low  within the Datasheet, making them ideal for displaying performance. Each evaluation point will have an axis and will start from center. All points will be arrange radially with equal distance between each other. Below is picture of Radar chart, you can understand basic concept of Radar chart.

From this we can see, all variables are starting from the center and are arranged radially with each other. Variable A has score 1 mark out of 10, variable B has score approx.- 2.5, Variable C has core 5, Variable D has score 5, Score of Variable E is 6, Variable F- 2.5, Variable G has score maximum 8.9 marks out of 10.

Below is Score card of assessment audit of any vendor.

Let’s understand the Radar chart of this assessment audit.

Supplier has score good following categories:-

1. Facilities Management

2. Operator Management

3. OPS & Check sheet

4. Change Management

5. Maintenance of equipment, Tools & Fixtures

Supplier has score poor in below categories:-

1. Storing & Incoming

2. Part Storage & Handling

3. Supplier Control

4. Legal, Environment and Safety

So this was all about Supplier assessment/Vendor assessment. Explanation was done for Tier-2 audit check sheet.

Supplier assessment by Honda is also done as per Honda decided checks sheet, i have also uploaded those check sheet on this website. You can download/or read from there.

Read all about Honda supplier audit procedures and checks sheets “What is Honda QAV-2 Audit?


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