How to strengthen your supplier approval program

25th March 2022

When it comes to finding a new supplier for your organization, your reputation is on the line as you want to supply your customer with the best quality products. Developing a good supplier approval policy and implementing established rules will considerably lower your organization's risk.

The fast-changing nature of the supply chain, laws, and regulations are influencing the process of transparency and accountability to a great extent. It expanded the responsibilities of suppliers to companies reselling the produce. For example, these laws are, e.g., the Hazard Analysis and Critical Control Point (HACCP) and Foreign Supplier Verification Programs (FSVP). It is of utmost importance to ensure that risks of uncompliant produce entering a firm's supply chain are reduced by a well-managed supplier approval process. Therefore, we created this blog post on how to strengthen your supplier approval program. 

8 steps to strengthen your supplier approval program

1. Supplier approval standardized checklist 

Creating a standardized checklist to evaluate suppliers should be utilized across departments allowing them to be effective and efficient. Using a ceaseless approach to how it should be maintained and implemented to match the ever-changing environment is vital. It should include the product's quality, delivery, dependability, price/service ratio, and future directions. 

2. Supplier Questionnaire

 

The Global Food Safety Initiative (GFSI) standards require that packaging, raw material, ingredient, and service providers have a documented approval procedure. Demonstrating a supplier's past performance and assigning a risk level to each material or service is also part of the code's criteria. 

 

So, this questionnaire may be used as a foundation for supplier assessments and determining the supplier's categorization based on its value in the supply chain.  

 

Additionally, information on QA safety parameters, third-party audits, COAs, the vendor's returned goods policy, and contact information should be included in the

questionnaire. The QA department should review the questionnaire to ascertain that company standards and criteria are met. Then the QA has the authority to reject or approve a supplier and prescribe corrective measures that the supplier must follow to be accepted.

With Chain Compliance, you can easily share documents with every supplier in your supply chain.

3. Using a single platform

A single platform for organizing and digitizing all supplier information is best to efficiently manage the required volume of supplier information. It should include information on the names and codes for all commodities and ingredients, approved primary and alternate suppliers, the related dangers for each component or item, the techniques utilized to authorize suppliers and accept ingredients, and a system to track supplier performance. Next to this, any other relevant information such as lab results et al.

4. Monitoring (Scorecard)

Suppliers must be aware that their performance will be evaluated and documented. Each organization chooses multiple criteria from its suppliers, but the strongest supplier performance scorecards incorporate purchasing, COAs, receiving, QA, factory floor feedback, certifications, and paperwork compliance metrics. 

5. Risk assessment 

It is vital to look at purchase volume and any hazards that could cause contamination of the products supplied. Examining laws and historical facts can aid in determining item risk. An ingredient, for example, might be deemed high risk if it is an allergy, is utilized in large quantities, or has the potential for bio, physical, or chemical contamination.

 

6. Qualification & Acceptance

 

Following your risk assessments determines whether there is a low or high risk associated with the supplier. For a supplier with an increased risk, an audit might be helpful to analyze the risk comprehensively. Different procedures can be used at other receiving points, with responsibilities such as visual inspection, COAs for each cargo, or screening and monitoring. 

 

7. Test run

 

After successful qualification, conducting a test run is critical. It can include certain metrics to meet specific compliance needs and acceptable quality assurance checks. It's vital to provide the supplier with plenty of deliveries/loads throughout the test run to establish compliance trends and how well they can satisfy standards. 

 

8. Approval

 

After a successful test run, the supplier can be added to the approved list. Businesses should develop and manage a procedure for developing and maintaining an approved supplier list. Ingredient suppliers, food contact packaging, and services that affect food safety and quality should be included. Everyone in the firm should be aware of the list, and procedures should be in place to guarantee that approved vendors complete purchases.

 

Three levels of approval

 

1. Approved: The procurement and quality departments have approved the supplier, and supplies can begin. 

 

2. Limited approval: The provider can only supply a certain number of items or for a said length of time with limited approval. This may be strategically advantageous for top suppliers who have not met all the approval criteria. A restricted clearance allows the supplier to work with the buying firm to enhance the quality of its goods to create a long-term relationship. 

3. Refused: While the first two levels allow transactions, a "Refused" approval status will instantly cancel any purchase until the status is modified.

AgriPlace Chain as a solution

 

With our AgriPlace Chain platform, you can efficiently manage a compliant, secure supply chain, and bring your due diligence process in line with upcoming regulations

 

  • Automatically capture social and sustainability information

  • Facilitate information sharing with suppliers and gain insight into your requirements

  • Gain clear visibility and insight into your supply chain

  • Identify risks and opportunities at the right level of the supply chain

Join our network today and gain greater insight and visibility into your supply chain to help you comply with current and future regulations.