Supplier selection using performance self assessment reporting in the automotive industry : executive summary

The automotive industry has adopted the use of third party quality management certification as the main quality approval mechanism for its supply base. In addition, most organisations have a system of supplier monitoring to measure their existing supplier's performance and this approach makes it difficult for suppliers to gain new business because their quality capability is unknown to the customer. Two case studies were conducted to determine whether or not suppliers certified to one of the automotive quality management standards had improved quality performance compared to those with the generic ISO 9001/2 standard. The research concluded that the additional certification requirements and increased costs associated with the automotive standards resulted in no quality benefit. Furthermore, a third case study using second party quality assessment results demonstrated that there was no correlation between these audit results and achieved quality performance. Therefore the research set out to answer the question : How can the current supplier selection practices used within the automotive industry be improved to ensure effective decision-making? The Supplier Performance Evaluation Datasheet (SPED) process was developed from a synthesis of current practice and input from industry experts. It incorporates adaptations of best practices in non-quality assessment methods. Three key elements of the SPED process are: - Performance reporting - Minimum performance standards - Stakeholder engagement The proposed process was evaluated through two case studies at Cosworth Technology Ltd and from an expert opinion survey of industry experts in the field of supplier management. The conclusion of this study was that the SPED process would enable customers to select new suppliers with high levels of confidence. It would add value to all organisations taking part and it is easy to implement. Ian