There are a number of ways to conduct an evaluation of your suppliers. To begin with, many organizations create a survey in which they outline various questions pertaining to quality systems. Some companies consider ISO 9001 certification to be the best representation of control over production and quality, and therefore will evaluate the supplier based on their certification to this standard. Another common method is to place a few trial orders to make an assessment.
If the supplier is deemed critical to the manufacturing process, the initial qualification of a supplier will typically consist of an on-site assessment, along with the survey. On-site audits of the supplier is recommended for your critical suppliers, at minimum, if not all suppliers that contribute to your finished product. The frequency of these audits should be based on the compliance history of the supplier.
Once a supplier is qualified, many companies will initiate a quality agreement. This provides the basis from which on-going supplier management is achieved. The supplier quality agreement will typically provide details related to scheduling audits, re-evaluation, and probation conditions of the supplier. It should also require that should the supplier make any changes in the component/material they will provide notification to your company prior to implementation.
Concepts like supplier scorecards, cost-of-poor-quality, charge-backs and cost-recovery are also wonderful tools to monitor the performance of your suppliers. They are also helpful in enabling manufacturers and suppliers to forge strong partnerships.