1. Supplier Certification
Jieyoung Cho, Jennifer Kimmell, Miranda Mullin, Justi Tipton, Jeff Verber

2. What is Supplier Certification?
Part of a larger strategy of Supplier Quality Management
Process of managing the relationship between your organization and its suppliers to coordinate as one in creating value for all stakeholders
A minimum requirement to be considered for work
Main goal: continuous improvement

3. Why Certify? Way to determine which suppliers meet the company’s needs
Aware of what suppliers can and can not do before everyone invests time and money
May not have to do some processes, such as inspection
Consistent methods for managing suppliers
Develop supplier capabilities
Build stronger and open relationships
Better communication and sharing of information
Better serve our customers
Meet corporate improvement objectives through collaboration

4. Factors in Certification
Quality
Delivery, cost, and technology
Environmental standards
Financial status
Communication capabilities
Business practices/processes
Importance of factors vary across
industry and companies

5. Types of Certification
ISO 9000 – (International Standards Organization) quality program for certification, emphasis on documentation as well
Industry equivalents (ISO – auto-industry)
Self-designed certification program by company
Many companies use the ISO and other equivalents as a base to then focus on what is important to them, or to make the requirements more strict.

6. International Organization for Standardization (ISO)
Specifies standard requirements for “state-of-the-art products, services, processes, materials and systems, and for good conformity assessment, managerial and organizational practice.”
Measures quality, ecology, safety, economy, reliability, compatibility, interoperability, efficiency, and effectiveness
Currently ISO is developing areas to assess environment, service sectors, security, and good managerial and organizational practices.

7. Types of ISO
ISO 9000
Primarily concerned with "quality management".
The customer's quality requirements
Applicable regulatory requirements
Enhance customer satisfaction
Achieve continual improvement of its performance in pursuit of these objectives.
ISO 14001
Primarily concerned with "environmental management".
Minimize harmful effects on the environment caused by its activities
Achieve continual improvement of its environmental performance.
Can be applied in:
Product Development
Design Department
Not a complete list, but these are the two main types. Also, there are updated versions of each of these, but these are the general families of ISO certifications.

8. Company Examples High-Tech Industry: Applied Materials
Complete Supplier Management Process
Automotive Industry: Toyota
Environmental Focus
Airplane Industry: Boeing
Retail/Food Industry: Starbucks

9. Applied Materials (AMAT)
Supplier Management Process
Supplier Approval Process
Assessment process is used for new suppliers as well as existing suppliers when needed
All suppliers must perform an annual F-52 ISAT self-assessment
Applied Materials may conduct an on-site validation for any annual assessment
Supplier Performance Management
Quality, Delivery, Cycle Time, Cost
Agreements Process
Request for Quotation
Supplier Performance Management:
4 primary metrics: quality, delivery, cycle time, cost
1) SAT Lead communicates performance goals and requirements as part of the development efforts
Goals and requirements are linked in the Supplier Agreement
2) Suppliers must meet and maintain performance goals or risk losing their classification
SAT Leads are the primary contacts for suppliers to achieve goals and track improvement efforts
3) Applied Materials reviews performance achievements with each supplier during business reviews

10. AMAT: F-52 ISAT ISAT = Integrated Supplier Assessment Tool
Strategic Supplier Management
5 Criteria
SSQA (Standardized Supplier Quality Assessment)
Lean Manufacturing and Capacity Management
Special Process Technical Assessments
Business Alignment
Business Infrastructure
Assessment can be customized to specific suppliers.
Some criteria are desktop assessment questions
Composite assessment score and rating from all pillars
Scores determine supplier’s overall status
Assessment gaps are addressed as SCARs or Roadmap items
SCAR = supplier corrective action request
Supplier Improvement Roadmap purpose:
To document and determine gap closure to achieve next level of supplier status
To provide a tool to be utilized by Applied Materials and engaged Suppliers to track the progress of continuous improvement projects
SSQA is an assessment tool designed by Semiconductor Manufacturing Technology (SEMATECH), a consortium formed by semiconductor manufacturers, to help suppliers develop comprehensive quality-driven processes and improve quality management systems.
Management Commitment How various levels of management support the requirements. Systems Approach A documented process that is undergoing continuous process improvements. Deployment The extent of implementation of the processes. Results The key metrics obtained and monitored from the deployment of the processes

11. AMAT: Confidential Information (CI) and Intellectual Property (IP)
A supplier CI and IP Control Plan must include the following:
Corporate Commitment
Documented policies and processes to protect CI
Periodic self-assessments
Physical and Information Security Controls
Limiting access to CI to only those with a need to know
Labeling and securing all documents and databases
Returning or destroying and CI that is no longer needed
Effective visitor controls.
Human Resource Controls
Training
Nondisclosure agreements (NDAs)
Sub tier Supplier Controls
Non-disclosure agreements (NDAs)

12. AMAT: Levels of Certification
First Article Inspection (FAI)
Part to Print (PTP)
Form, Fit, Function (FFF)
Wafer Process Qualification TEST- Alpha and Beta Testing
In order of increasing difficulty
FAI = Demonstrates suppliers’ capability to meet documented requirements prior to production approval and authorization to ship material to Applied Materials or its customers

13. TOYOTA FOCUSING ON ENVIRONMENTAL IMPROVEMENTS
Automotive Industry
TOYOTA
FOCUSING ON ENVIRONMENTAL IMPROVEMENTS

14. EMS Certification Standards
ISO (TOYOTA, GM & FORD)
INTERNATIONAL STANDARDS ORG
KYOTO EMS STANDARDS (KES)
MIYAKO AGENDA 21 FORUM
ENVIRONMENTAL MANAGEMENT
ECO-STAGE EVALUATION SYSTEM
BASED ON TOYOTA EMS STANDARDS
GREEN SUPPLIER GUIDELINES

15. Management System
Organization's structure for managing its processes - or activities - that transform inputs of resources into a product or service which meet the organization's objectives, such as satisfying the customer's quality requirements, complying to regulations, or meeting environmental objectives.

16. Toyota Supplier Environmental Program
Suppliers
Has ISO certification or meets in-house standards
Substances of concern
Products-does not contain 19 categories of substances, including heavy metals
Manufacturing-does not utilize 457 substances, including organochlorine substances
Other requirements
Submission of official corporate commitment to regulatory compliance
Reporting of material composition data, etc.

17. Working Closely With Suppliers
Environmental rating system
Workshops
Support programs/activities
On-site inspections of major suppliers
Prevent environmental risk
"Toyota has a unique relationship with its suppliers. We are known for expecting them to share our high quality standards. Now we are asking them to join us in becoming environmental leaders."

18. Airline Industry
Boeing

19. Boeing Preferred Supplier Certification
Suppliers are evaluated on:
Advanced Quality System Implementation
Business Processes
Performance
Suppliers who meet or exceed standards receive benefits including:
Selection Preference
Reduced Inspections
Industry Recognition
Additional Business Opportunities

20. Worldwide:18 GOLD, 176 SILVER, and 438 BRONZE
Boeing (cont.)
Levels of Certification
Gold
Silver
Bronze
Boeing scores the following categories:
Cost
Quality
Product Delivery
Leadership
Technology
Support
Worldwide:18 GOLD, 176 SILVER, and 438 BRONZE

21. Boeing (cont.) Gold Lockheed Martin Corporation Harris Corporation
Silver
3M Company
Mitsubishi Heavy Industries LTD.
TEKTRONIX Inc.
Bronze
West Coast Aerospace Inc.
ITT Industries, Inc.
(As of March 31, 2006)

22. Retail/Food Industry
Starbucks

23. STARBUCKS PREFERRED SUPPLIER PROGRAM COFFEE SOURCING GUIDELINES
PERFORMANCE CRITERIA
QUALITY
ENVIRONMENT
SOCIAL CONDITIONS
SUSTAINABILITY MEASURES
FINANCIAL INCENTIVES
THIRD PARTY VERIFICATION

24. Conclusion Overall benefits Varies across industry and company
Improve supplier competitiveness
Optimize source selection process
Reduce inspection
Support lean manufacturing
Varies across industry and company
Not a one time certification but a continuous improvement process
Supplier competitiveness – once you have a supplier cert. process in place, the suppliers are going to know what to expect and will understand that you are concerned about more than just price
Optimize source selection process – once you have determined the appropriate certification process than it can be a standard used, with some modification depending on the part/process

25. Sources
International Organization for Standardization. “ISO in brief.” May < Retrieved April 23, 2005.
International Organization for Standardization. “ISO 9000 and in brief” <
Northeast Supply Chain Conference. “Supplier Certification.” September 20, < Retrieved April 17, 2006.
Society of Manufacturing Engineers. “Supplier Certification.” < Retrieved April 17, 2006.
“Supplier Quality Management and Certification”
Strategic Materials Initiatives. “Welcome to Applied Materials: Supplier Training.” Applied Materials. Slides 49-51,53-58,65,71,