US – Monitoring of External Providers
1.0 – Purpose
1.1 – The purpose of this procedure is to help define and determine the criteria needed for the evaluation, selection, monitoring and re-evaluation of external providers for HIPER Global.
2.0 – Scope
2.1 – The scope of this procedure covers all aspects of the monitoring and measuring of external providers.
3.0 – Definitions
3.1 – Critical Supplier: a supplier whose goods and/or services could affect product quality.
3.2 – Non-Critical Supplier: a supplier whose goods and/or services do not directly impact product quality.
3.3 – New Supplier: a supplier that is not on the current AVL but is needed to produce goods or services.
3.4 – Inactive Supplier: a supplier whose goods and/or services has not been used for over one (1) year. An inactive supplier will be listed as such within the EPICOR database.
3.5 – Sole Source Supplier: a supplier whose goods and/or services are solely provided by a single source, this source maybe furnished by a customer.
3.6 – Customer Furnished Material: material provided by the customer for use in final products/s. This material is verified by the customer prior to receiving into EPICOR.
3.7 – EPICOR: the ERP System used at HIPER Global.
3.8 – Risk: the potential loss due to quality that fails to meet set goals or metrics.
3.9 – AVL: Approved Vendor Listing
4.0 – Reference Documents
4.1 – Form-0081: External Provider Rating System Spreadsheet (scorecard worksheet)
4.2 – Form-0019: Supplier Questionnaire Form
4.3 – PU-0008: Creating a New Supplier in EPICOR
4.4 – QM0002: Management Review Process
4.5 – QM0005: Corrective Action Procedure
4.6 – QM00014: Customer Furnished Material Policy
5.0 – Ownership
5.1 – The Purchasing Manager has the overall responsibility for the control of this process and has the authority to approve or reject supplier evaluations or re-evaluations. The Quality Manager maybe included with the decision-making process, when applicable.
6.0 – Process
6.1 – HIPER Global monitors, evaluates and re-evaluates the services provided by external sources. This is done through but not limited to:
6.1.1 – On Time Delivery
6.1.2 – Ease of Doing Business
6.1.3 – Quality of Product
6.1.4 – Risk
6.2 – All suppliers will be evaluated and re-evaluated as per the processes listed below. Formal scorecards will be emailed on a quarterly basis to the top five (5) dollars received into inventory for critical suppliers. These scorecards will be emailed to the suppliers no later than three (3) weeks after the end of the applicable quarter by the Purchasing Manager.
6.3 – HIPER shall work with suppliers to assure conforming material is being manufactured and received, if nonconformances are found HIPER will work with the supplier until resolution is confirmed.
6.4 – New Supplier
6.4.1 – When a new supplier is requested Form-0019 (Supplier Questionnaire Form) will be sent by the Purchasing Manager to the new potential supplier.
6.4.2 – A new supplier can be requested by any internal department, but must be approved and on the AVL prior to purchasing any goods or services (this does not apply to non-critical suppliers).
6.4.3 – The form shall be completely filled out by the supplier, making sure each section is fully answered.
6.4.4 – If the supplier is ISO or AS9100 Certified the supplier only shall fill out the sections up until the “Certification and Accreditations” box. If the supplier is certified to either of the two standards, they must provide a copy of their certificate.
6.4.5 – If the supplier does not have either of these certifications, then the entire form must be filled out.
6.4.6 – Once the form has been completed by the supplier it is returned to HIPER for review.
6.4.7 – The Purchasing Manager will review the form to assure all applicable information has been filled out. If the form is incomplete, it will be returned back to the supplier until completion.
6.4.8 – After reviewing the form, the Purchasing Manager will check mark the box for Approved, Disapproved, Conditional or Restricted. If the form is checked off as Disapproved the initial initiator is notified as to why the supplier is not approved.
6.4.9 – If the supplier is marked off as anything except disapproved, the Purchasing Manager will sign and date the form, then the supplier will be placed on the AVL. The supplier will be placed in the section of the AVL that is applicable to that supplier (critical, non-critical, sole source or customer furnished).
6.4.10 – The updated form will be saved in the ISO Shared Drive. The file string will have the date the form was approved, for example: supplier ABCD-08222022. This date string will allow the Purchasing Team to better understand when the form was received and will need to be re-evaluated (see critical supplier section below).
6.4.11 – This string process will also be used when saving ISO and AS9100 certificates, but the date will be when the certificate expires.
6.5 – Critical Suppliers
6.5.1 – Once a critical supplier has been added to the AVL, it is re-evaluated at the end of every quarter. The re-evaluation process reviews the suppliers On Time Delivery scores, certification status, and any open nonconformances or corrective actions.
6.5.2 – If a critical supplier falls under a scorecard rating of under 70 points a corrective action maybe incorporated. The Purchasing Manager and the VP of Operations will review and shall decide if corrective action is needed.
6.5.3 – At the end of a three (3) year cycle Form-0019 will be resent out for the critical suppliers to resubmit and update the form. The forms will be reviewed as noted above and will be placed in the suppliers’ applicable folders. Older evaluation forms will be archived within the same folder to show history.
6.5.4 – The ISO and AS9100 Certifications for applicable critical suppliers are reviewed monthly by the Purchasing Manager to assure all certificates are current. If it is found that a certificate has
expired the Purchasing Manager will reach out to the supplier.
6.5.5 – The top five-dollar per revenue suppliers are issued a scorecard every quarter. This is done by using Form-0081. This process can be found in PU00011.
6.6 – Non-Critical Suppliers
6.6.1 – Any supplier that is listed in the AVL under the “Non-Critical “ tab shall not be used for any products or services that would directly affect product quality.
6.6.2 – Non-Critical suppliers are monitored and re-evaluated on an annual basis. This evaluation will review, On Time Delivery (OTD) and will discuss if the non-critical supplier should be changed to “Inactive” or placed as a Critical supplier.
6.6.3 – The results of this annual evaluation is kept on the internal ISO secured drive under the Supplier Management folder.
6.7 – Direct Source Supplier
6.7.1 – This type of supplier is a supplier where the goods and services are provided through only one required source.
6.7.2 – The Purchasing Manager and the VP of Operations will review these types of suppliers on a quarterly basis.
6.7.3 – The review will consist of but is not limited to:
6.7.3.1 – Any open nonconformances.
6.7.3.2 – Any new requirements from the customer that would change the status of the sole source
provider.
6.7.4 – The review maybe performed via a meeting (in person or TEAMS) with notes taken about which suppliers were discussed and any open actions needed. The notes from the meeting are kept within the Supplier Management Folder.
6.8 – Inactive Suppliers
6.8.1 – Inactive suppliers are suppliers that have not been issued a Purchase Order for over one (1) fiscal year.
6.8.2 – This type of supplier shall be listed as “Inactive” within HIPERs ERP System (EPICOR) and will only be used if evaluation/ re-evaluation is performed using Form-0082 and then maybe added to the AVL. If the supplier will be used as a “Critical” supplier than Form-0019 will be used before they are added to the AVL.
6.9 – Customer Furnished
6.9.1 – This is material that has been furnished by the customer for the use in final products or services (we should add in the AVL what products are being used and then we can ask for their inspection report that they performed on the parts prior to receipt here at HIPER).
6.9.2 – HIPER Global reserves the right to review any and all data inspection reports from the customer prior to receipt. If customer supplied items are found to be defective or become lost the customer is notified as soon as possible.
6.9.3 – Customer furnished products may consist of equipment, tools, software or inspected parts.
6.10 – Flow Downs Requirements for Critical Suppliers
6.10.1 – When sending a Purchase Order to a Critical supplier, all assigned flow down requirements, including the requirements set forth for the supplier’s subcontractor (if applicable), shall be sent and clearly defined within the Purchase Order.
6.10.2 – If the supplier has any questions regarding flow down requirements, they shall be resolved prior to the Purchase Order being approved or accepted.
6.11 – Corrective Action
6.11.1 – If corrective action is required during any part of this procedure, then the Corrective Action Procedure QM0005 shall be followed. All report findings will be stored in the S:/Shared ISO9001:2015/Quality Management System/Quality Control/Corrective Actions and SCARS.
6.11.2 – Corrective Actions will be used for supplier scorecard performance reviews, were applicable.
6.11.3 – Suppliers found with continual poor performance may result in them being removed from the AVL.
6.12 – Management Review
6.12.1 – The results of the evaluations and re-evaluation will be reviewed during the quarterly management review meetings.
6.12.2 – The review will discuss On Time Delivery, any open supplier corrective actions or nonconformances and any disqualifications.
6.13 – Risk
6.13.1 – During any evaluation or re-evaluation process any associated risk shall be discussed prior to approval.
6.13.2 – Risk Factors for Critical suppliers shall be reviewed, and the appropriate box will be checked (High or Low) on Form-0081 after Risk Evaluation is performed.
6.13.3 – At a minimum, the Quality and Purchasing Managers will review and evaluated risk prior to sign offs.
6.14 – Open Order Report
6.14.1 – The Purchasing Manager or his designee is responsible for providing weekly open order reports to responsible groups within the organization. These reports will be used to see all the applicable open orders within the system and to assure all delivery dates are meeting expectations.
6.14.2 – This report is generated using the internal ERP System (EPICOR).
System Management -> Business Activity Queries
Query ID – > Search
Find Query ID: PO Open BOS –
Description: Open Purchase Orders BOS plant
Analyze (top tab)
Test (bottom Tab)
Copy to Excel
Sort by buyer and/or Supplier
Save by Date (Example All Open Order Report 03-09-23)
7.0 – Quality Records
7.1 – All quality records associated with this process will be kept in the secured shared drive (S:/ISO9001:2015/Supplier Management) then filed in the appropriate folder.
7.2 – AVL records may also be stored within the EPICOR System.
