So far, we’ve defined vetting as a careful examination of a supplier’s practices, performance, and “personality.” When you vet a supplier, you learn who your potential partner is, what they do, and how they do it.
In Part 1 of our series, we covered the who. In Part 2, we dealt with the what. And in this article, we’ll focus on the how— or more specifically, how suppliers “do” the production process, quality control, and responsible sourcing.
Vetting the Production Process
The most straightforward of the “how” questions relate to the supplier’s production process. But before you vet, take some time to clearly define what you expect in terms of production (or what your customers will expect if you’re an indirect supplier). That way, you’ll be able to validate the quality of the answers you get.
Here are some key questions to ask:
How are the supplier’s production oversight teams organized? Held accountable?
What are the current utilization rates of the supplier’s factories?
How do these rates fluctuate over the year?
What are the typical production lead times? By product? By line or factory?
How does the supplier try to decrease production time? Or increase production efficiency?
What has the supplier tried in the past?
What did the supplier learn?
What capacity will be held for your production?
What is the process for securing production?
What is the timeline on the commitment to production that you need to make?
What technical specifications does the supplier need to begin production?
How will these be validated throughout the production process?
What payment terms does the supplier require? (You may have already covered this when you did your General Overview)
How are the purchases of raw materials financed?
Vetting Quality Control
Next up, a biggie: quality control. To find out how the supplier builds in quality to their processes, zero in on these areas:
How does the supplier assess the quality of the product?
How is quality measured at the factory level?
What is the structure of the team that oversees production quality?
What do the quality processes look like?
How are they refined/elevated?
How are they trained to the team?
More specifically, how are defective items managed?
What quality inspection metrics are used at the factory?
How are results gathered?
What are the most recent metric trends?
What are the quality metrics that current customers request?
Vetting Responsible Sourcing Practices
“Responsible sourcing practices” are best defined as responsible and repeatable commitments to the team, the community, and the environment. Many questions in this area are industry-specific, so do your homework and due diligence beforehand.
Here are some essentials to ask:
How are the teams for responsible sourcing structured?
What metrics are evaluated?
How are hiring processes documented and audited? Hours and wages tracked?
What are the recent factory audit scores?
What responsible production certifications has the supplier secured? Responsible production? Dyeing? Water processing? Pollution remediation? Others?
What non-governmental organization (NGO) partnerships has the supplier secured?
One more important question: How do you know if a factory is truly committed to quality products and working conditions? This isn’t easy to tease out, but when I worked in the corporate space, one of my peers—a specialist in quality and responsible sourcing practices—taught me to look for this particular set-up:
The supplier has one team dedicated to assessing, measuring, and elevating the quality of the product.
The supplier has another team focused on the quality of the production processes, including the team and the factory conditions.
This structure is best, because the performance metrics for two these teams can be at cross-purposes—they pursue different aspects of quality, as it were. But when suppliers empower both teams to operate independently, they will have set up a strong system that enables these teams to check and balance one another.
Vetting (Mostly) Accomplished
We’ve now covered the essentials for vetting potential suppliers. You know have a strategy for finding out who a supplier is, what they do, and how they do it.
I’d love to know what you think of it all, and what other sorts of questions you ask your suppliers when you vet them. Please share your comments.