How To Qualify Component Suppliers At The Design & Prototyping Stage

At Agilian, we mostly work on totally new products. It is a rare project that doesn’t force us to use new components from new suppliers.
The selection and qualification of a new component supplier is not a light decision. In this post, we’ll share how we qualify component suppliers.

Why making prototypes with parts from qualified suppliers prevents issues later on

Many manufacturers, when they make prototypes, are solely aiming at getting approval from their customer and getting a 30% down payment for the first production batch. It means they will buy parts on Taobao or in local markets (e.g. Huaqiangbei in Shenzhen) in order to obtain them quickly.
This may be the best course of action to put together a ‘proof of concept’ prototype when getting new information fast is the most important. However, we avoid it as much as possible for later-stage prototypes, which need to incorporate parts from qualified suppliers.
Here’s why…

A supplier that can deliver 5 pieces quickly on Taobao is far from guaranteed to deliver 10,000 of the exact same pieces, on time, with a >99% quality level, and without last-minute renegotiation of prices/terms.
And those types of issues are the last thing anybody wants in mass production. It can trigger long delays and serious cost overruns.

So, how to qualify component suppliers that are not already in the AVL (Approved Vendor List)?

Objective facts: what is most important to check?

Sending an auditor, or a supplier quality engineer, to visit the new supplier’s manufacturing facility(ies) is often necessary if the part in question has a direct impact on the final product quality & reliability.
For the purpose of brevity in this article, here are the few topics that are most important:

• Do they have the technical understanding needed to keep their processes under control and, if needed, to customize their product?
• Do they have a basic quality management system in place, including the right inspection & testing points where they make sense? If the supplier is a small company and has the benefit of being flexible on order quantities, one shouldn’t require too much…
• If the application of their part is new to them (e.g. for a class 1 medical device), do they understand the implications on their operations?
  
  

Subjective judgement: can we rely on this supplier?

This is the work of the person doing the sourcing (in our company, the project manager) and/or the purchaser who will have to work with that supplier.
This is more of a subjective assessment, based on person-to-person conversations.

If the owner seems involved closely in the day-to-day operations and has a technical background, if he seems serious (not promising anything over-the-top of making insane claims), and if he is interested in the business, these are good points.
Confirming the salesperson handling our account has sufficient experience and communicates well is also a plus.

How to detect major risks quickly?

Again, the best approach is generally to send someone to the supplier’s factory and observe their processes. Do it when they are running a pilot, especially if they need to make custom parts for the project (and confirm the real yield, since it impacts the price directly). And do it during the first mass production, if that is economically justified.

All this is extra work to qualify component suppliers should take place at an early stage when the product design is still in iterative improvements. It will later make a lot of sense once the design is relatively mature and the project has a good chance of moving forward.