POWER ZONE CONTRACTING COMPANY
SUPPLIER SELECTION AND MONITORING
PROCEDURE
Page 1 of 6
Description of Document Document No. Rev. No. Date
Supplier Selection and
PZC-PQ-8.9 0 10-11-2024
Monitoring Procedure
SUPPLIER SELECTION AND MONITORING
PROCEDURE
Rev 0 1 2 3
Date 10.11.2024
Purpose
To establish a standardized process for selecting, evaluating, and monitoring suppliers to ensure
they consistently meet the quality standards and requirements of the organization.
POWER ZONE CONTRACTING COMPANY
SUPPLIER SELECTION AND MONITORING
PROCEDURE
Page 2 of 6
Description of Document Document No. Rev. No. Date
Supplier Selection and
PZC-PQ-8.9 0 10-11-2024
Monitoring Procedure
Scope
This procedure applies to all suppliers providing materials, equipment, or services for projects and
operations.
Responsibilities
Procurement Manager: Oversees supplier selection, evaluation, and ongoing monitoring.
Quality Manager: Assists with supplier quality evaluations and performance monitoring.
Project Manager: Provides feedback on supplier performance related to specific projects.
Procedure Steps
1. Supplier Pre-Qualification
1. Identify Requirements: Determine the specific products, materials, or services needed,
including quality, cost, and delivery requirements.
2. Gather Supplier Information: Obtain information on potential suppliers through market
research, industry networks, and referrals.
3. Initial Assessment:
o Review supplier qualifications, such as certifications (e.g., ISO 9001), production
capacity, and previous industry experience.
o Conduct a background check on financial stability, legal standing, and past client
references.
4. Supplier Pre-Qualification Questionnaire: Issue a pre-qualification questionnaire covering:
o Quality standards
o Environmental, health, and safety practices
o Financial health
o Production capabilities and capacity
o Quality assurance processes
5. Initial Scoring and Ranking: Score suppliers based on their responses and shortlist suppliers
for further evaluation.
2. Supplier Evaluation and Approval
1. Site Visit or Audit (if necessary):
POWER ZONE CONTRACTING COMPANY
SUPPLIER SELECTION AND MONITORING
PROCEDURE
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Description of Document Document No. Rev. No. Date
Supplier Selection and
PZC-PQ-8.9 0 10-11-2024
Monitoring Procedure
o Conduct an on-site audit of the supplier’s facilities to evaluate their production
capabilities, quality control systems, and compliance with safety and
environmental standards.
o Use a supplier audit checklist to record observations and findings.
2. Sample Testing (if applicable):
o Request samples for critical materials or components to verify that they meet
required specifications and standards.
3. Supplier Risk Assessment:
o Assess risks associated with each supplier, considering factors like geographic
location, lead times, and past delivery performance.
4. Evaluation Criteria and Scoring:
o Score suppliers based on criteria such as:
Quality assurance practices and certifications
Delivery and lead times
Price competitiveness
Financial stability
Previous client references
o Assign a weighted score to rank suppliers.
5. Approval:
o Approve the supplier for the Qualified Supplier List (QSL) if they meet or exceed the
minimum score threshold.
o Document the approval in the supplier database and update the QSL.
3. Supplier Contracting and Onboarding
1. Contract Negotiation:
o Negotiate terms including price, delivery schedules, payment terms, and quality
requirements.
2. Quality Agreement:
o Outline specific quality standards, inspection requirements, and non-conformance
procedures in the contract.
POWER ZONE CONTRACTING COMPANY
SUPPLIER SELECTION AND MONITORING
PROCEDURE
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Description of Document Document No. Rev. No. Date
Supplier Selection and
PZC-PQ-8.9 0 10-11-2024
Monitoring Procedure
3. Supplier Onboarding:
o Provide necessary information and specifications to the supplier, including product
drawings, inspection standards, and packaging requirements.
4. Establish Communication Protocols:
o Define communication channels, reporting frequency, and key contacts for order
updates, quality issues, and inquiries.
4. Ongoing Supplier Performance Monitoring
1. Key Performance Indicators (KPIs):
o Set KPIs to monitor supplier performance, such as:
Quality: Defect rates, compliance with specifications, and non-
conformance incidents.
Delivery: On-time delivery rate, lead times, and responsiveness to order
changes.
Service: Customer service responsiveness, communication, and support.
2. Regular Performance Evaluation:
o Review supplier performance on a quarterly or semi-annual basis.
o Conduct evaluations based on KPIs and feedback from relevant teams
(procurement, project, and quality control).
3. Supplier Scorecard:
o Maintain a supplier scorecard to document each supplier’s performance against
KPIs, providing a clear overview of quality, cost, and delivery metrics over time.
4. Corrective Action Requests (CAR):
o Issue a CAR for suppliers not meeting performance criteria or experiencing
repeated quality/delivery issues.
o Require suppliers to submit a root cause analysis and action plan to prevent
recurrence of the issue.
5. Supplier Development and Continuous Improvement
1. Supplier Meetings and Feedback:
POWER ZONE CONTRACTING COMPANY
SUPPLIER SELECTION AND MONITORING
PROCEDURE
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Description of Document Document No. Rev. No. Date
Supplier Selection and
PZC-PQ-8.9 0 10-11-2024
Monitoring Procedure
o Conduct regular meetings to review performance, provide feedback, and discuss
opportunities for improvement.
2. Training and Support (if applicable):
o Provide training or technical assistance for critical suppliers to enhance their
capabilities in meeting quality or delivery standards.
3. Improvement Programs:
o Collaborate on improvement programs, such as Lean or Six Sigma initiatives, with
strategic suppliers to reduce waste, improve quality, or reduce lead times.
6. Supplier Re-Evaluation and Re-Qualification
1. Annual Review:
o Conduct a comprehensive annual review of suppliers, considering quality
performance, delivery, and responsiveness.
2. Re-Qualification:
o Re-qualify suppliers who consistently meet or exceed performance standards.
o For suppliers with frequent non-conformances, determine whether corrective
actions were effective or if alternative suppliers should be considered.
3. Termination:
o Remove suppliers from the Qualified Supplier List if they consistently fail to meet
performance standards or do not comply with corrective action requirements.
o Document reasons for termination in the supplier database.
7. Record Keeping and Documentation
Maintain Records: Keep records of all supplier evaluations, approvals, performance
scorecards, and corrective action reports.
Update Supplier Database: Ensure the supplier database is updated with the latest
performance information, approvals, or terminations.
Quality Records: Retain records for audit purposes, including supplier audit reports, sample
test results, and corrective action plans.
POWER ZONE CONTRACTING COMPANY
SUPPLIER SELECTION AND MONITORING
PROCEDURE
Page 6 of 6
Description of Document Document No. Rev. No. Date
Supplier Selection and
PZC-PQ-8.9 0 10-11-2024
Monitoring Procedure
Performance Indicators and Targets
Quality Performance: Defect rate <2%.
On-Time Delivery: >95% adherence to agreed delivery schedules.
Corrective Action Closure: Within 30 days of issue identification.
Review and Continuous Improvement
The supplier selection and monitoring procedure will be reviewed annually or as needed based on
audit results, non-conformances, or feedback. Continuous improvements will be incorporated into
the process to ensure alignment with quality management goals.
