IATF 16949:2016 Clause Control of externally provided processes, products and services-General

An external provider is a supplier, or any entity that provides goods, materials, knowledge, parts, assemblies, printed materials, services, software, or finished goods that feature, or are incorporated into your business’s final product or service.All suppliers of products and services must be adequately controlled to ensure their products and services conform to specified purchase requirements. Suppliers are controlled via initial selection evaluations using self-assessment questionnaires, audits of the supplier’s quality management system, and audits of the supplier’s processes. The selection criteria for potential suppliers, and the subsequent decision rationale for the approval of suppliers must be documented and authorized. What is the scope, extent and criteria for evaluating suppliers and who decides? Organizations should evaluate and approve each supplier prior to proceeding with the supplier approval. The supplier evaluations are completed to determine if each supplier is capable of meeting quality, delivery, and performance requirements. A typical supplier evaluation might include:

  1. Gathering and analysis of data (such as technological and operational capabilities, logistics, quality, technical risks) about the supplier;
  2. An on-site assessment of the quality system or compliance review by your Audit staff;
  3. Completing and signing a quality agreement or contract.

Businesses often assess the supplier’s facilities, quality system, and process controls to determine if there is potential impact on their own manufacturing or service provision processes.

  1. Assign risk levels on parts/materials, as appropriate;
  2. Determine if there is potential product or regulatory risk;
  3. Confirm the capability of the supplier to supply or manufacture to requirements.

All suppliers should be given an overall performance rating between 0-100%. Set the minimum performance threshold or benchmark to 95% for example. The resulting performance rating is an indication of a supplier’s performance ability and their ability to meet your requirements. Retain records of supplier evaluations and the related actions.Approved suppliers must have satisfactorily demonstrated their ability to meet your business’s requirements, as well as customer and legal requirements, as determined and evidenced by the initial supplier evaluation process.Suppliers are often approved, or not approved, on the basis of financial standing, preferred cost, product expertise, past performance, technology, logistics, supply chain integrity, business risk, and any known significant environmental, or health and safety compliance issues.If the supplier is acceptable, they should be added to your approved supplier list. Signed approval must be given by an authorized representative, typically the Quality Manager and the Purchasing, or Contracts Manager have the authority sign off on supplier approvals. The approval status of each supplier must be clearly authorized on your approved supplier list. The performance of suppliers must be consistently monitored by the Quality Manager and the Purchasing, or Contracts Manager. Various ways include the review of measures, targets, KPIs, score cards, dash-boards, scored ratings, or survey results. The ongoing monitoring of external providers and suppliers commonly use some of the following criteria to rate performance:

  1. An assessment of the quality and quantity of products, services or materials provided;
  2. On-time delivery performance;
  3. Supplier responsiveness/communication;
  4. Total number of corrective actions;
  5. Supplier response time;
  6. Defective parts per million (PPM);
  7. Total cost;
  8. A review of receiving records, inspection records, or acceptance records.

Businesses should periodically communicate these results to their suppliers as appropriate. On-site supplier audits and process audits at the supplier’s premises is deemed necessary by the Quality Manager and the Purchasing, or Contracts Manager. Issues or conditions which might initiate a supplier audit include quality issues, engineering changes, process changes, plant location changes or the criticality of the part or service. When an audit is necessary, you should contact the supplier and schedule an on-site visit and confirm the agenda. Control of externally provided processes, products and services-General

In addition to the requirements given in ISO 9001:2015 clause 8.4.1 Control of externally provided processes, products and services-General , Clause requires that the organization includes all products and services that affect customer requirements such as subassembly, sequencing, sorting, rework, and calibration services in the scope of their definition of externally provided products, processes, and services.

Please click here for ISO 9001:2015 clause 8.4.1 Control of externally provided processes, products and services-General

In the automotive industry, “Control of externally provided processes, products, and services” is a critical aspect of ensuring product quality, safety, and compliance. This process involves managing and monitoring the activities of external suppliers, contractors, and service providers who contribute to the design, development, production, or service of automotive products. Here are the key aspects of controlling externally provided processes, products, and services in the automotive industry:

  1. Supplier Selection and Approval: Automotive manufacturers carefully select and approve suppliers based on their ability to meet specific quality and performance requirements. This includes evaluating the supplier’s capabilities, quality management systems, and track record.
  2. Supplier Performance Monitoring: Once approved, suppliers’ performance is regularly monitored to ensure they consistently meet the required standards. This may involve conducting supplier audits, reviewing performance metrics, and addressing any non-conformities promptly.
  3. Supplier Agreements and Contracts: Automotive organizations establish clear agreements and contracts with suppliers, defining the terms, conditions, and expectations regarding the supply of processes, products, or services. These agreements usually include quality requirements, delivery schedules, and responsibilities.
  4. Risk Management: Automotive companies assess the risks associated with externally provided processes, products, or services. This includes identifying potential risks, such as supply chain disruptions, quality issues, and compliance challenges, and implementing risk mitigation strategies.
  5. Change Management: Any changes in externally provided processes, products, or services must be controlled and communicated effectively. The organization collaborates with suppliers to ensure changes are thoroughly evaluated, validated, and documented before implementation.
  6. Incoming Inspection and Verification: Upon receiving externally provided products or materials, automotive organizations conduct incoming inspection and verification to ensure they meet the specified requirements. This helps detect any defects or discrepancies early in the process.
  7. Supplier Development: Automotive manufacturers often collaborate with suppliers to enhance their capabilities and processes continuously. Supplier development programs can include training, process improvement initiatives, and sharing best practices.
  8. Communication and Collaboration: Effective communication and collaboration between the organization and its suppliers are crucial for maintaining a smooth flow of processes and products. This includes sharing information on product specifications, changes, and feedback on performance.
  9. Traceability and Documentation: Traceability of externally provided processes, products, and services is essential for accountability and compliance. Automotive organizations maintain comprehensive documentation of supplier-related activities and decisions.
  10. Recall and Containment Actions: In case of any quality issues or defects found in externally provided products, the organization collaborates with the supplier to implement recall and containment actions to prevent defective products from reaching customers.

Controlling externally provided processes, products, and services is essential to ensure that all elements of the supply chain contribute to the overall quality and safety of automotive products. Adherence to these control measures helps automotive companies meet customer requirements, regulatory standards, and maintain their reputation in the industry. Additionally, it fosters a strong partnership between the organization and its suppliers, promoting a shared commitment to delivering high-quality automotive products and services.

The organization, in the automotive industry, is required to include all products and services that directly impact customer requirements in the scope of their definition of externally provided products, processes, and services. This means that activities such as sub-assembly, sequencing, sorting, rework, and calibration services, which have a direct influence on the final product’s quality and conformity to customer requirements, should be considered as part of the external supply chain management process. Let’s understand each aspect in more detail:

  1. Sub-Assembly: Sub-assembly refers to the process of creating pre-built components or modules that will be integrated into the final product during the manufacturing process. Including sub-assembly in the scope means that the organization should closely manage and control the suppliers or contractors responsible for producing these pre-built components.
  2. Sequencing: Sequencing involves organizing and arranging the delivery of parts or components to the automotive assembly line in the correct order to optimize the production process. Managing sequencing as part of externally provided services ensures that the right parts are delivered at the right time, preventing disruptions and delays in production.
  3. Sorting: Sorting services involve inspecting and categorizing incoming components or materials based on their quality and adherence to specified requirements. Integrating sorting services into the scope ensures that only conforming parts are used in the production process, reducing the risk of defects in the final product.
  4. Rework: Rework services encompass correcting any defects or non-conformities identified during the production process. Including rework services in the scope means that the organization must collaborate with rework service providers to ensure proper rectification of defects while maintaining product quality and compliance.
  5. Calibration Services: Calibration services involve adjusting, testing, and verifying the accuracy and performance of measuring equipment or instruments used in the production process. These services are crucial to ensure accurate measurements and maintain the quality of the final product.

By including these activities in the scope of externally provided products, processes, and services, the organization ensures that all critical aspects of the supply chain that directly impact the final product’s quality and customer requirements are adequately managed and controlled. Proper management of these external processes and services helps automotive companies deliver high-quality products that meet customer expectations, comply with industry standards, and adhere to relevant regulations. Additionally, it fosters a collaborative and transparent relationship with suppliers and service providers, contributing to the overall efficiency and success of the organization.

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