Appendices
APPENDIX 1 PROCESS FLOW DIAGRAM... 2
APPENDIX 2 VOICE OF THE CUSTOMER... 3
APPENDIX 3 RULES AND REGULATIONS... 5
APPENDIX 4 RAW DATA... 9
APPENDIX 5 INSTRUCTIONS FOR USE: A DATA COLLECTION PLAN... 11
Appendix 1 Process Flow Diagram
Book received materials Inspection
of goods
MRR’s by RI
MRR’s by Engineering
Calculate QR
Calculate total rating:
0.80 (QR) + 0.20 (OTD)
Send total rating to supplier Run query to
calculate OTD Set required
delivery date Inspection
report
Assessment supplier-related
MRR’s Assign
fault-code
Code 80
yes
Cordis issue
Did supplier deliver more than
3 lots in quarter?
no
No supplier evaluation no
yes
If supplier during 4 quarters scores < 95%
on total rating:
evaluation fail
Reconsider continuation
pass
Supplier is acceptable Supplier
rating letter data
Manual operation
documents
desicion
process
sequence termination
Appendix 2 Voice of the Customer
Supplier Management
I. The Supplier Management department is concerned about different aspects of the supplier assessment system. Firstly, they query the group of suppliers that are
considered for assessment. The question is therefore which suppliers should (formally) be considered and which suppliers should not be considered for assessment.
II. Supplier management wonders whether there is a possibility to take into consideration some more subjective criteria in the assessment of a supplier as well, for example, the extent to which the supplier thinks and reacts with Cordis. They feel that they do not have a good insight in supplier performance by only evaluating on-time delivery and product quality.
III. Moreover, there is a need to show a trend so that they not only have a snapshot of supplier performance. Supplier Management wants to be able to demonstrate that a supplier during a certain period of time delivers a constant performance (in a positive or a negative sense of the word) and can be held responsible for that performance. At the moment a trend is not explicitly visualised. Although supplier performance is formally evaluated on the basis of four quarters, the actual supplier evaluation is based on only one quarter.
IV. Furthermore, Supplier Management is concerned about the reliability of the data used for supplier assessment. Order confirmations, for example, are not always being corrected in the system, which means that some suppliers have a low OTD-score whilst they did bring the exact delivery date up to date. Materials Management should have adjusted this date in the system, in case of a deviation from the delivery date that was asked for. As a consequence, suppliers are sometimes wrongly assessed.
Quality Assurance
Supplier Quality Assurance (SQA)
I. The Supplier Quality Assurance department is in the first place concerned whether the current assessment system complies with internal and external rules and regulations.
For them this is of vital importance because their task is to verify whether or not people work according to these rules. A related question, which has been mentioned by Supplier management as well, concerns the suppliers that should be included in he supplier rating. At the moment only active, qualified material suppliers who delivered three or more lots during the period under consideration are being assessed. The question is which suppliers should be formally included in the supplier rating.
II. As far as the assessment-criteria are concerned, the question is whether or not suppliers should be assessed on their service-level. At the moment, for example, there is no insight in what a supplier has done to solve a problem. They feel that a more complete picture should be created of supplier performance.
III. Supplier Quality Assurance is also concerned about the reliability of the data being used. Unreliable input-data will lead to an unreliable end-result. Currently, MRR’s of Receiving Inspection are only taken into consideration when they are closed. As a result, it happens quite often that they are evaluated in a period after they occurred.
This is caused by the fact that the people who have to determine the symptom and the cause of the non-conformity are not always immediately available, which brings about a delay in the closure of an MRR. Another cause of this unreliability is possibly that the
amount of rejection that is discovered during the production stage is not taken into consideration in the supplier assessment. This should obviously be the case since the cause of this rejection is often supplier-related. At Operations the objective is to write as few MRR’s as possible, which results in a considerable amount of rejected materials being thrown away without further attention is paid to it.
IV. Furthermore, the weight of the non-conformities is missing in the current MRR
evaluation system (how much weight should be given to a certain non-conformity with regard to another?). All supplier-related non-conformities are assigned reason-code 80 and subsequently they are taken into consideration in the supplier-assessment. The question is whether certain non-conformities should not outweigh other non-
conformities.
Quality and Compliance Services (QCS)
I. The Quality and Compliance Services department is particularly worried about the risks with which Cordis has to deal by throwing in their lot with suppliers.
II. Besides, Quality Compliance Services attaches a lot of importance to legal standards.
They think that both risks and standards should be taken into account in a supplier assessment system.
III. In addition, they think a trend should be made visible to increase the reliability of the results.
Quality Assurance Engineering (QAE)
I. The Quality Assurance Engineering department thinks it is important that suppliers comply with the external and internal regulations and that the product complies with internal specifications (product oriented criteria).
II. For them the cooperation with suppliers is of high importance, just as the openness of the supplier for new ideas and improvement. The quality level has to be constant, carefully specified and laid down.
Materials Management
I. The Materials Management department is in the first place interested in whether or not a supplier satisfies the aspects of the logistical definition: did the supplier deliver the right amount, at the right moment and at the right place.
II. In addition, importance is attached to product quality, and modernity of the supplier, by which is meant that one has to be able to communicate with a supplier.
Appendix 3 Rules and Regulations
Medical companies have to comply with strict rules, and because Cordis is present on both the European and the American market, they have to comply with the European as well as the American rules and regulations.
The FDA and the British Standards Institution (BSI) are examples of organisations that perform audits for the government to see whether Cordis complies with the rules and regulations. The FDA represents the United States and the BSI represents the European Union. The goal of both organisations is the same, namely making sure that the inhabitants of the countries concerned are assured of safe products. This is among others accomplished by means of ISO regulations. First European regulations will be considered at length, after which the American regulations are discussed.
3.1 European regulation: ISO norms
The Quality Management System ISO 9001:2000
The abbreviation ISO means International Standardisation Organisation and is a worldwide federation of national normalisation institutes of 147 countries, on the basis of 1 member per country. ISO standards contribute to making the development, manufacturing and supply of products and services more efficient, safer and cleaner. They make trade between countries easier and fairer. They provide governments with a technical base for health, safety and environmental legislation. They aid in transferring technology to developing countries. ISO standards also serve to safeguard consumers, and users in general, of products and services - as well as to make their lives easier. Organisations working according to the ISO standards have to conform to the ISO norm. This also concerns Cordis.
The ISO 13458 norm
Cordis has to comply with the ISO 13485 norm. All requirements of this norm are specific to organizations providing medical devices, regardless of the type and size of the organization. It specifies requirements for a quality management system where an organization needs to demonstrate its ability to provide medical devices and related services that consistently meet customer requirements and regulatory requirements applicable to medical devices and related services. While this standard is a stand-alone standard, it is based on ISO 9001. It includes some particular requirements for medical devices and excludes some of the requirements of ISO 9001 that are not appropriate as regulatory requirements.
What does ISO 13485:2003 require with regard to supplier assessment? Paragraph 7.4 of the ISO-norm states the following:
“The organization shall establish documented procedures to ensure that purchased product conforms to specified purchase requirements. The type and extent of control applied to the supplier and the purchased product shall be dependent upon the effect of the purchased product on subsequent product realization of the final product.”
“The organization shall evaluate and select suppliers based on their ability to supply product in accordance with the organization’s requirements. Criteria for selection, evaluation and re- evaluation shall be established. Records of the results of evaluations and any necessary actions arising from the evaluation shall be maintained.”
This norm corresponds to what is described in the ISO 9001. It is a very global description, and therefore the focus should be on Cordis’ interpretation of these norms.
3.2 American regulation: the FDA
In the GMP (=Goods Manufacturing Practice) the law is being described with regard to the manufacturing of quality products. The current GMP requirements set forth in the QSR are promulgated under section 520 of the Food, Drug and Cosmetic Act. They require that domestic or foreign manufacturers have a quality system for the design and production of medical devices intended for commercial distribution in the United States.
The FDA, recognized as the gold standard for food and drug safety and effectiveness, is responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, food supply in the United States, cosmetics, and products that emit radiation. The FDA is also responsible for
advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate, science- based information they need to use medicines and foods to improve their health.
Concerning medical devices the FDA regulates pre-market approval of new devices;
manufacturing and performance standards; and tracking reports of device malfunctioning and serious adverse reactions.
Part 820 of the FDA is about quality system regulation. Paragraph 820.50 describes the requirements concerning purchasing controls:
“Each manufacturer shall establish and maintain procedures to ensure that all purchased or otherwise received product and services conform to specified requirements.”
a) Evaluation of suppliers, contractors and consultants. Each manufacturer shall establish and maintain the requirements, including quality requirements, that must be met by suppliers, contractors, and consultants. Each manufacturer shall:
1) Evaluate and select potential suppliers, contractors and consultants, on the basis of their ability to meet specified requirements, incl. quality requirements. The evaluation shall be documented.
2) Define the type and extent of control to be exercised over the product, services, suppliers, contractors, and consultants, based on the evaluation results.
3) Establish and maintain records of acceptable suppliers, contractors, and consultants.
Quality System Regulation (QSR)
The QSR helps assure that medical devices are safe and effective for their intended use. The medical device QSR requires an “umbrella” quality system intended to cover the design, production, and distribution of all medical devices. The QSR indicates the required end result rather than specifically prescribing how a manufacturer is to comply with this regulation. It is the responsibility of the manufacturer to use good judgement when developing a quality system which appropriately applies the QSR to their specific products and operations.
What requirements does the QSR demand from medical companies with regard to the assessment of suppliers? These requirements are outlined in chapter 10 of the FDA Medical Device Quality Systems Manual: “Purchasing and acceptance activities”:
“Supplier Qualifications: a major factor in obtaining high quality components is the selection of suppliers. Although a manufacturer's knowledge of supplier operations may be limited and information about the operations difficult to obtain, the GMP requirement that a manufacturer is responsible for quality remains undiminished. To the maximum extent feasible, selection and qualification of suppliers by audits, performance analysis, etc., should be part of a quality system.”
Since this QSR specifies a general objective rather than a method it is the responsibility of Cordis to interpret the objective in a manner that applies to Cordis.
The before mentioned only applies to component manufacturers, but also service suppliers have to comply with the requirements of the supplier qualifications. This becomes clear from the paragraph about contractors en consultants:
Contractors and Consultants
Contractors and consultants generally provide a service rather than a physical component.
This service should be treated in basically the same manner as physical components because these services affect the quality of the finished device. The combination of both services and physical components determines the quality of the finished device. Services should be obtained per 820.50, Purchasing Controls, and be controlled upon receipt using the applicable requirements in 820.30, Design Controls, 820.70, Production and Process
Controls; 820.80, Receiving, In-Process, and Finished Device Acceptance, etc., depending on the nature of the service.
Contractor and consultant assessments
Manufacturers shall establish and maintain the requirements, including quality requirements, that will be met by contractors / consultants that perform a service for them. To aid in
accomplishing this task each manufacturer shall:
- Evaluate and select contractors/consultants based on their ability to meet specified requirements, including quality requirements. This evaluation shall be documented.
- Define the type and extent of control to be exercised over the contractors / consultants based on the evaluation results.
- Establish and maintain records of acceptable contractors/consultants.
Contractors and consultants often provide information or a service rather than a physical component. However, the thought and control processes are similar whether one is working with services or with physical product. The input from contractors and consultants has a definite impact on the finished device. Services may include: design activities, various product verification/validation activities, sterilization, routine maintenance, and calibration of
equipment.
Each manufacturer shall provide adequate resources and trained personnel to properly assess the activities of their contractors and make adjustments as necessary. Contractors and consultants may be assessed based on their applicable education, experience, ability, resources such as facilities and equipment, list of clients, patents, technical reports, etc.
Assessment may include conducting internal quality audits [820.20(b)(2)]. Therefore, each manufacturer that is having important work done by a contractor should inform the contractor that their quality system and activities may be audited. These services may include janitorial, consultants, design work, calibration, sterilization, laboratory, and maintenance.
3.3 Cordis Franchise Policy
By means of the Cordis Franchise Policy (CFP) the requirements from the QSR are interpreted. Besides the CFP Cordis has a CFM (Cordis Franchise Method), in which the methods are elaborated.
CFP 11-010 and CFM 11-012 give information with regard to the “supplier quality assurance program”. Procedure 11-010 describes the Supplier Quality Management (SQM) process.
The most important elements of this process are the assessment / qualification and monitoring of suppliers. This procedure is applicable for suppliers of raw materials,
components, end products, and services of all Cordis sites. The procedure does not apply to
“non-inventory or capital materials or services” who are not directly related to the quality system. These items have to satisfy the requirements of every individual location.
In CFM 11-012 the method is explained with regard to supplier selection, assessment and qualification. As for the assessment of material suppliers it has been decided that every supplier who delivered three lots or more during a period of 3 months will need to be assessed at the end of every quarter with the help of the following technique:
• Results of receiving inspection (RI): MRR’s
• Non-conforming reports / corrective action request
• Quality-ratings: QR = [(lots accepted / lots received)] x 100%
• On-time delivery: OTD = purchased item releases delivered on time x 100%
Total purchased item releases due
• Total rating = 0.80 (QR) + 0.20 (OTD)
Concerning the assessment of service suppliers the following is said: “Any service supplier’s level or assessment frequency may be changed based on quality history or criticality to the process, as deemed appropriate by the Site Supplier Quality Assurance.”
A service supplier will become unqualified for reasons including, but are not limited to the following:
- Complaints that are a result of service supplier’s failure to meet requestors specification relating to the item service
- Complaints that are a result of a service supplier’s failure to meet Cordis’
requirements for item or service safety and efficacy - No activity for 2 or more years
For service suppliers there does not exist a supplier rating in the same form as for product suppliers.
Appendix 4 Raw data
4.1 Raw data table 13
Delivery 1 2 3 4 5 6 7 8 9 10 11 12 Total Rank
Stability 5 6 3 2 3 2 3 6 2 4 6 6 48 5
Capability 3 4 2 3 4 3 1 5 3 5 4 5 42 4
On-time delivery 4 2 4 5 2 4 1 2 4 2 3 2 35 3 Reliability of delivery: product, time, place, quantity 2 1 5 4 5 2 1 5 3 2 4 34 2 Product quality 1 3 1 2 1 1 1 3 1 1 1 1 17 1
Invoicing 6 5 6 6 5 6 3 4 6 6 5 3 61 6
Service 1 2 3 4 5 6 7 8 9 10 11 12 Total Rank
Flexibility 3 2 4 3 5 2 4 2 2 4 3 1 35 3
Customer-oriented 2 1 3 2 3 3 2 1 3 3 1 5 29 2 Complaints handling 1 3 2 3 1 1 4 3 1 2 4 2 27 1 Adequacy offer route 5 6 5 4 4 4 6 4 5 5 2 6 56 5 Accessibility 4 5 1 5 2 5 4 5 4 1 6 4 46 4 Possibility to order by internet / EDI 6 4 6 6 6 6 5 6 6 6 5 3 65 6 Information sharing 1 2 3 4 5 6 7 8 9 10 11 12 Total Rank Willingness to cooperate / partnering 3 1 2 4 3 3 3 2 4 7 1 8 41 2 Willingness to share information systems 4 2 7 3 4 4 4 4 3 4 4 1 44 3 No change agreements 2 5 4 6 1 1 2 3 1 3 2 4 34 1 Willingness to share company vision 8 8 3 6 8 5 4 1 7 2 7 5 64 4 Openness about safety and environment 5 7 8 5 5 8 6 8 5 8 8 6 79 6 Clear administrative insight 6 4 6 6 6 6 5 6 2 5 6 7 65 5 CPK of the production process 1 6 1 3 2 2 2 5 6 1 3 2 34 1 Use of electronic data interchange (EDI) 7 3 5 2 7 7 5 7 8 6 5 3 65 5 Price / cost of product 1 2 3 4 5 6 7 8 9 10 11 12 Total Rank Price stability / behaviour 5 4 3 4 5 4 3 4 1 5 6 5 49 4 Price agreements 4 2 2 4 2 2 2 2 2 4 4 2 32 2 Cost-savings projects 3 6 6 5 6 1 4 6 6 6 2 3 54 6 Competitive prices / prices conform market 6 3 4 3 4 5 1 1 3 1 1 1 33 3 Price / quality relation 1 1 1 2 1 3 1 3 4 2 3 6 28 1 Openness of cost-price calculation 2 5 5 6 3 6 3 5 5 3 5 4 52 5 Development 1 2 3 4 5 6 7 8 9 10 11 12 Total Rank Willingness to file Drug Master Files 6 7 7 1 6 6 5 7 4 5 7 7 68 7 Flexible in development routes 7 4 3 3 7 5 4 4 5 2 2 4 50 5 Minimal iterations 5 3 4 5 5 3 3 6 7 7 6 6 60 6 Speed of response 1 2 6 2 2 4 2 1 1 3 5 2 31 1 Keep time lines 3 1 5 1 1 7 2 5 2 6 1 1 35 2 Suggestions for improvements of material 2 5 1 2 4 1 2 2 6 4 4 3 36 3 Think along with Cordis / initiative 4 6 2 5 3 2 2 3 3 1 3 5 39 4 Responsiveness 1 2 3 4 5 6 7 8 9 10 11 12 Total Rank Reaction to observations 1 2 2 3 1 2 4 1 2 2 2 1 23 1 Implementation of improvements 2 1 4 2 3 3 3 2 4 1 3 3 31 3 Continuation of actions as a result of observations 4 3 3 4 4 4 4 3 3 4 4 4 44 4 Speed of CAPA / implementation preventive action 3 4 1 1 2 1 4 4 1 3 1 2 27 2 Other 1 2 3 4 5 6 7 8 9 10 11 12 Total Rank
Continuity 4 1 4 2 1 4 2 1 3 3 2 4 31 3
Quality system / certificates 1 4 2 3 3 2 1 3 1 1 3 1 25 1 Financial reliability 3 2 3 2 2 3 4 1 2 2 4 2 30 2 Quality system tuning 2 3 1 2 4 1 4 2 4 4 1 3 31 3
4.2 Raw data table 14
Delivery 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Ranking
Stability
Capability 4 7 20
On-time delivery 2 2 2 3 4 3 2 59 2 Reliability of delivery: product, time, place, quantity 9 1 2 3 2 6 43 3 Product quality 1 3 1 1 1 1 2 1 1 2 1 106 1
Invoicing 10 4
Service 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Ranking
Flexibility 5 6 5 17 12
Customer-oriented 10 4 5 9 16 13
Complaints handling 7 10 5 7 8 18 11
Adequacy offer route
Accessibility 10 9 3 23
Possibility to order by internet / EDI Information sharing 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Ranking Willingness to cooperate / partnering 8 3 23 Willingness to share information systems 6 6 4 8 20 9 No change agreements 7 3 10 13 15 Willingness to share company vision 3 8 19 Openness about safety and environment Clear administrative insight 9 2 23 CPK of the production process 2 7 5 10 20 9 Use of electronic data interchange (EDI) 7 8 7 20
Price / cost of product 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Ranking Price stability / behaviour 4 7 20 Price agreements 9 8 2 10 7 19 10 Cost-savings projects 9 9 4 22 Competitive prices / prices conform market 4 2 3 1 3 42 4 Price / quality relation 3 8 3 3 27 6 Openness of cost-price calculation 8 5 9 18
Development 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Ranking Willingness to file Drug Master Files 4 7 20 Flexible in development routes 4 4 14 14
Minimal iterations 1 10 17
Speed of response 9 9 7 6 13 15 Keep time lines 10 8 9 4 13 15 Suggestions for improvements of material 5 10 7 20 Think along with Cordis / initiative 5 6 21
Responsiveness 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Ranking Reaction to observations: speed / proactive / complete 5 4 5 7 8 7 30 5 Implementation of improvements 10 6 6 11 16 Overview continuation of actions as a result of observations Speed of CAPA / implementation preventive action 6 9 3 6 4 27 6
Other 1 2 3 4 5 6 7 8 9 10 11 12 13 Total Ranking
Continuity 5 6 11 16
Quality system / certificates: ISO, OHSAS, FDA approved? 6 7 1 8 7 26 7 Financial reliability 6 10 6 21 Quality system tuning 7 2 8 5 22 8
Appendix 5 Instructions for use: a Data Collection Plan
A data collection plan has been developed to provide clear and structured information for the users of the supplier assessment model. The manual consists of the following sections:
I. Use of the Supplier Assessment Model II. The weighted point method
III. Criteria in the Supplier Assessment Model
IV. The Supplier Assessment Model / Division of responsibilities V. Supplier of Choice
VI. Assessment / Measurement frequency VII. Suppliers to be measured
VIII. Analysis and improvement of scores IX. Evaluation of the assessment process
I. Use of the Supplier Assessment Model
The Supplier Assessment Model is being used for the quarterly evaluation of suppliers of materials, who are qualified by Cordis Europe N.V. The suppliers are evaluated in the following areas:
Quality
Delivery and Service
Responsiveness and Development Information sharing
Purchase cost
II. The weighted point method
The performance categories to be evaluated for the assessment of suppliers have been assigned weights. The specific assessment criteria within a category are quantified by giving them a score on 100. If insufficient or no data is available, a default score can be applied.
Another possibility would be to repeat the score from the last quarter. The weights and scores selected in a specific situation represent the judgements of the team concerned with the development the Supplier Assessment Model.
To determine the suppliers’ overall rating the scores within the specific categories are added up and multiplied by the category-weight. The products for all the categories are then totalled to get the suppliers’ overall rating.
Valid comparisons of two or more suppliers always require that the same criteria, weights and measurement formulas are being used for all suppliers.
III. Criteria in the Supplier Assessment Model
Suppliers will be rated on the following five categories: Quality, Delivery and Service, Responsiveness and Development, Information Sharing, and Purchase cost. In total 16 criteria will be expressed in quantitative terms.
The criteria being rated are:
Quality (35%):
Product quality (60) Quality System (20) Quality System Tuning (20)
Delivery and Service (30%):
On-time delivery (35) Reliability of delivery (35) Flexibility (30)
Responsiveness and Development (15%):
Reaction to observation (20) Complaints handling (20) Speed of CAPA (20)
Suggestions for improvements (40) Information sharing (15%):
No change agreement (20) Financial reliability (40) Continuity of products (40) Purchase cost (5%):
Competitive prices (60) Open cost structure (20) Price stability (20)
IV. The Supplier Assessment Model
The Supplier Quality Assurance department is responsible for the coordination and
completion of the Supplier Assessment Model. The following departments will have to provide input for the Supplier Assessment Model:
A. Supplier Quality Assurance B. Supplier Management (5 criteria) C. Materials Management
A. Supplier Quality Assurance
The supplier Quality Assurance department will have to measure the following criteria:
1) Product Quality 2) Quality system
3) Quality System Tuning 4) Reaction to observations 1) Product Quality
= measured on the basis of the number of supplier-related MRR’s and the supplier-related rejection from production (data available in BPCS)
Criterion Description Scores Max Default Product
Quality
(Total lots accepted / total lots received) x 60
60 60 0
Number of lots accepted = total number of lots received – number of supplier-related MRR’s
2) Quality System
= Level of implementation of a quality system (audit result)
Criterion Description Scores Max Default
Quality System
Excellent
Documented Quality System + observations properly addressed
Documented Quality System Unacceptable
20 15 10 0
20 10
3) Quality System Tuning
= Level of implementation of QST
Criterion Description Scores Max Default Quality System
Tuning
Complete Implementation Started
Discussed
20 15 10 0
20 0
4) Reaction to observations
= the speed with which the supplier reacts to the observations discovered in connection with an audit
Criterion Description Scores Max Default Reaction to
Observations
Within agreed period 1 to 10 days too late 11 to 20 days too late 21 to 30 days too late 31 or more days too late
20 15 10 5 0
20 10
B. Supplier Management
The supplier management department will have to measure the following criteria:
1) Purchase price 2) Open cost structure 3) Price stability 4) Continuity of products 5) Financial reliability
6) Suggestions for improvements 1) Purchase Price
= the difference between the overall purchase price level of the supplier and the lowest cost supplier for the components considered.
The score gives the price level of the supplier by dividing the lowest available price for the component by the price of the supplier for that component and multiplying the figure with 55.
When the supplier is a single source supplier with no cost reduction program or no price comparison available 40 will be given as score. The total score of 60 will be given to a single source supplier with a cost reduction program.
2) Open cost structure
= explanation of the supplier of how the price is built up.
Detailed structure: Suppliers who give a detailed structure of the purchase price get the maximum score. A detailed structure means that there is a price structure for each of the components.
General structure: Suppliers who give a general structure give an average structure for the different components together.
Criterion Description Scores Max Default Cost structure Detailed cost structure
General cost structure No cost structure
20 10 0
20 10
3) Price Stability
= prices that increased with maximum the inflation rate over the last year.
When prices were stable over the last year, the score is 20. In case of unstable prices the score is 0. If the information is not available, the score is 10. Prices that decreased over the years are also considered as stable prices.
Criterion Description Scores Max Default Price Stability Stable prices
Unstable prices
20 0
20 10
4) Continuity of products
= whether or not the supplier has the intention to discontinue producing a certain product, or whether there is a risk that the supplier will discontinue producing the product in the future.
Total capacity = the total quantity of the materials beings considered, the supplier is able to produce in total.
Available capacity = the total quantity of the materials beings considered, the supplier is able to produce for Cordis.
% of business = the total sales coming from the group of materials being considered (purchased by all customers together) divided by the total sales of all products being produced by the supplier at the site.
Back-up situation = a back-up situation exists when the supplier has different sites or an agreement with a third party that is able to produce for us in case of a disaster.
Criterion Description Scores Max Default
Purchase Price Multiple source:
- Lowest cost supplier - Other suppliers
(Price level Lowest cost Supplier / Price level Supplier) x 55 Single source (no competitors):
No cost reduction program Cost reduction program
60 0-55
40 60
60 40
Criterion Description Scores Max Default Continuity of
Products
Total capacity < 2 x available
Capacity OK (> 2x available capacity)
% of business > 10% (or guarantee of supply of 5 years)
Back-up situation or disaster recovery plan
0 20 10
10
40 20
5) Financial reliability
When the supplier has confirmed to make profit for the last 3 years the score is 20. In all other cases the score is 0. Other financial standards should be assessed on the basis of the checklist for financial reliability.
Criterion Description Scores Max Default Financial
Reliability
Profit over the last 3 years Profit over the last 2 years No profit or unknown Other financial standards Satisfactory
Unsatisfactory
20 10 0
20 0
40 10
10
Checklist Financial Reliability:
Dun & Bradstreet rating Industrial average data Return on equity Debt to equity Liquidity Solvency
Receivables turnover
Running on borrowed money / sales revenue
6) Suggestions for Improvement of Material
= a subjective evaluation of the suggestions for improvements the supplier is providing with regard to the manufacturing process, requests for material changes or redesigns, and requests for improvements and innovation
Criterion Description Scores Max Default
Suggestions for improvement
Excellent
Minor improvements needed Major improvements needed Dissatisfied
Non-existent
40 30 20 10 0
40 20
Checklist Suggestions for Improvement of Material:
To what extent is the supplier thinking along with Cordis?
Does the supplier show initiative?
Is there an R&D budget to improve old products and develop new ones?
Will the supplier have time for the R&D efforts of Cordis?
Is the supplier willing to participate in joint design programmes?
Is the supplier a leader or a follower?
Is the supplier progressive and seeking better ways to manufacture products?
Does the supplier have a good track record for bringing in new products on time?
Does the supplier have a carefully planned development strategy for bringing out new products and product improvements each year?
Do they have a sufficient number of people to support the improvement efforts?
Does the supplier have a history of success with new products and product improvements?
7) No Change Agreement
If the supplier signs the No Change Agreement, he will receive the maximum of 20 points. If the supplier does not sign the agreement, the score is 0. Included in the supplier assessment to empasize importance of a No Change Agreement for Cordis.
Criterion Description Scores Max Default No Change Agreement Signed
Not signed
20 0
20 10
C. Materials Management
The materials management department will have to measure the following criteria:
1) On-time delivery 2) Reliability of delivery 3) Flexibility
4) Complaints handling 5) Speed of CAPA 1) On-time delivery
Calculation on-time delivery = for every supplier the lots delivered during a specific period should be multiplied by their respective score. The total score should be divided by the total number of lots delivered by the supplier during this period. The following formula can be used for this calculation:
Total points = (total score / total number of lots delivered)
Criterion Description Scores Max Default
On-time delivery On-time Too late
35 0
35 0
2) Reliability of delivery
Calculation reliability of delivery = for every supplier the lots delivered during that period should be multiplied by their respective score. The total score should be divided by the total number of lots delivered by that supplier during this period. The following formula should be used for this calculation:
Total points = (total score / total number of lots delivered)
Criterion Description Scores Max Default
Reliability of delivery
Right quantity Too much Too little
30 15 0
30 0
3) Flexibility
= a subjective evaluation of the way and the speed with which a supplier adapts to changing circumstances.
Criterion Description Scores Max Default
Flexibility Excellent Highly satisfied Satisfied Dissatisfied
35 25 15 0
35 15
Checklist Flexibility:
How does the supplier go about with putting orders forward?
How does a supplier go about with an extra delivery within the normal delivery-time?
How does a supplier go about with an adjustment of the quantity of ongoing orders?
How does the supplier go about with adjustments of the delivery frequency?
How does the supplier go about with orders strongly deviating from the normal pattern?
How does the supplier go about with priorities asked for?
What is the supplier’s attitude towards adjustments?
To what extent does the supplier think along in case of problems?
4) Complaints Handling
= subjective evaluation of the complaints related to the delivery of materials
Criterion Description Scores Max Default
Complaints handling
Excellent Satisfactory Unsatisfactory
20 10 0
20 10
Checklist Complaints Handling:
Is there someone in the supplier’s order entry or planning department who is assigned to the account? (Or do you have to call Customer Service if you have a problem?)
Is this person capable of following through with problems and complaints and does he or she get back to Cordis quickly?
Who is the quality contact? Can you call that person by name if there is a problem?
Can you talk directly to someone who will understand the problem and is able to come up with a good solution?
5) Speed of CAPA
= the speed with which the supplier takes corrective or preventive action in pursuance of an MRR
Criterion Description Scores Max Default Speed of CAPA Within agreed period
1 to 10 days too late 11 to 20 days too late 21 to 30 days too late 31 or more days too late
20 15 10 5 0
20 10
V. Supplier of Choice
Cordis considers a supplier as a supplier of choice when the total score on 100 of the
Supplier Assessment Model, for a period of at least 4 quarters, reaches a minimum of 85 with a minimum score of 80 on each of the 5 categories.
VI. Assessment and measurement frequency
Assessment frequency
At the end of every quarter all qualified materials suppliers have to be assessed by means of the Supplier Assessment Model.
Measurement frequency of the individual criteria
With measurement frequency of the individual criteria is meant: the regularity with which data have to be collected for the specific criteria. This can be either on every delivery, every quarter or once a year.
Every delivery:
Product quality On-time delivery Reliability of delivery Every quarter:
Quality System Quality System Tuning Speed of CAPA Flexibility
Complaints handling
Suggestions for improvements Continuity of products
No change agreements Every year:
Reaction to observations Financial reliability Competitive prices
VII. Suppliers to be measured
All qualified materials suppliers have to be measured.
VIII. Analysis and improvements of score
Supplier Quality Assurance is responsible to collect all the data and complete the Supplier Assessment Model. Moreover, they have the responsibility to distribute and discuss the Supplier Assessment Scores.
Supplier Quality Assurance informs suppliers and arranges meetings with those suppliers where actions need to be taken to improve the scores.
IX. Evaluation of the process
Supplier Quality Assurance has the responsibility to judge whether the Supplier Assessment Model needs to be further optimized / whether the measurements need to be changed.
