Effective Supplier Programs

When shopping for big-ticket items such as autos, furniture, household appliances and electronics, any smart consumer will do some research before actually making a purchase. A shopper may spend endless hours seeking just the right items at the best prices because he or she has been “burned” by bad purchases in the past.

Human nature also dictates that we desire a certain comfort level in items purchased regularly. For example, you would rarely question items purchased at your favorite grocery store because you’ve developed a “trust” that the store would only carry goods from reliable vendors. Even on rare occasion when a product is found to be inferior, a store would typically honor your complaint either through replacement or a refund.

The common element here and in supplier relationships for businesses is TRUST. However, in both personal relationships and in business, trust must be earned.

Choosing Your Suppliers

We all know the old saying “garbage in, garbage out,” which is a simple way of saying that your end product is only as good as the quality of the material going in. In the food business especially in restaurants the attitude should be that the food is at its freshest when first received. You cannot make it any fresher than when it first arrives, and so you need to make sure it is at its best upon receipt.

Purchasing materials that are used to make your products must be carefully controlled by establishing close working relationships with your suppliers and provide them with high standards, as well as providing feedback as to their performance. Suppliers of raw materials must only be selected after following appropriate assessments and approvals.

Selecting the Right Vendor

A good supplier relationship starts by defining what you require of that supplier to be considered “approved.” The first step is telling a potential supplier exactly what you want in the form of a purchasing specification. This is important, especially on critical requirements.

Prospective vendors can, by reviewing the specification, determine if they are able to supply required items to you. This may eliminate certain vendors. Occasionally, there may be one or more items in your specification that cannot be met, and negotiations, regarding any possible changes to the specification can take place. The potential supplier would normally submit a “sample” to you as a representation of the product you would be buying. This sample should be analyzed for specification compliance.

However, product specifications should not be the only criteria for approval. Based on food industry standards and practices, your supplier-approval program should require the following:

Quality Systems Compliance: Your supplier must have its own quality system in place, which must meet certain industry standards. Auditing firms have the expertise to review these programs for their existence and effectiveness.

Programs that are expected to be included in the supplier’s quality systems include: An organizational chart; job descriptions for all the positions on that chart; self-inspection programs; incoming goods and trailer inspection programs; raw material and finished product analyses; outbound trailer inspections; written cleaning procedures; a master sanitation schedule; a documented recall program (including the ability to perform mock recalls); a HACCP program; a written quarantine policy; allergen control (if necessary); a policy regarding how to manage rework; water testing records; procedures regarding handling regulatory audits; a customer complaint program; a safety committee; and proof of training for both new and tenured employees in areas relevant to your product. Also included should be the presence of a formal pest control program, records of cooler and freezer temperatures (if applicable), and a preventive maintenance program.

Third-Party Audits: In addition to quality systems compliance, suppliers must also be willing to have their facility inspected by an independent auditing firm or agree to allow your company to send in an auditor. The purpose is to assure that the vendor has demonstrated compliance with food safety and sanitation regulations and appropriate codes of good manufacturing practices (GMPs). This will determine whether or not the facility is clean, well-maintained, has appropriate operational procedures in place, and is free of pest activity. The audit report issued will include an overall grade or rating, and that supplier must meet a certain minimum standard rating to be considered approved.