Supplier quality control in the food and beverage industry is essential, but companies still face many challenges in ensuring consistent standards. Only 67% of respondents feel they have adequate control over supplier quality, according to a study by ETQ in Q1 2024. These findings reveal a clear opportunity to improve supplier oversight and strengthen quality assurance measures.
The Importance of Supplier Quality Management
Consistency and safety are paramount in the food and beverage industry, and supplier quality control is essential. Failing to meet standards can have severe consequences.
Impact of Supplier Quality on Brand Reputation and Product Safety
A brand’s reputation and product safety hinges on the quality of its suppliers. When customers purchase products, they expect them to meet a certain standard. Even a single bad experience can severely damage their trust in the brand. The ETQ survey shows that 40% of respondents cited product recalls due to quality issues, with some linked to supplier mishaps. Such incidents highlight the high stakes of supplier quality, where a single error can erode years of brand loyalty.
Supplier-Related Recalls and Financial Costs
Supplier-related recalls are common: 56% of survey respondents attributed between 25% and 50% of quality issues to suppliers. The financial costs of recalls due to these supplier issues are high.
To resolve these issues, organizations must fund the direct costs associated with recalls. That includes the logistical costs, the cost of providing refunds and replacements, public relations costs, inspection costs and potential legal costs. Then, organizations are faced with the longer-term indirect costs of these recalls, such as reputational damage, reduced customer loyalty and a reduced market share.
Standardized Processes in Supplier Management
According to the study, 87% of respondents have standardized quality management processes for suppliers. Standardized processes can help maintain consistency across the supply chain and ensure that every organization operates according to the same protocols. This strategy reduces the risk of miscommunication and ensures that each product meets a specific set of production requirements.
Standardizing processes also makes it easier to track products at each stage of the supply chain. If a batch of products is found to be defective, immediate action can be taken. Recalls are initiated quickly to avoid future complications.
Level of Control and Accountability
According to the survey, only 67% of companies feel they have control over supplier quality. Organizations can implement several processes to maintain this level of control.
One of the most common processes is carrying out regular supplier audits. This process involves assessing suppliers’ adherence to standards by identifying potential gaps in their processes, searching for potential risks and highlighting opportunities for improvement.
In addition, regular communication with suppliers and performance reviews can encourage suppliers to report potential issues and increase the likelihood that they will strive to meet standards. If issues are found or reported, the organization can work with the supplier to create a corrective action plan so improvements can be made.
Finally, organizations can use quality metrics to measure suppliers’ compliance with standards, the rate of defects and the costs associated with these defects.
Ensure Consistent Standards Across Multiple Suppliers
Many companies work with a large number of suppliers. Each of these suppliers typically has its own processes and standards, which can make it challenging to achieve consistency. These variations in supplier practices can lead to quality discrepancies.
For instance, some organizations carry out strict automated quality checks with stringent standards, while others may rely on intermittent manual inspections, which may result in some defects being missed. Alternatively, some suppliers may only ship components that fit the requirements exactly, while others may willingly ship components with minor defects.
Organizations working with suppliers that operate across different regions or countries are also likely to have to deal with variations in labor standards and regulatory frameworks, which can make it difficult to ensure consistent standards and increase the odds of recalls or quality issues occurring.
Communicate Quality Expectations
Misunderstandings around quality standards can lead to quality issues throughout the supply chain. To reduce the risk of these problems occurring, organizations should set clear guidelines and expectations with suppliers from the outset.
Organizations should establish clear quality criteria for all products they receive from suppliers and have a method of inspecting and testing products to ensure these criteria have been met.
These expectations should be easily accessible to suppliers. Ideally, they should be written in a document that allows employees from all required organizations to refer to them when needed. Throughout the production process, organizations should schedule regular follow-ups to ensure these expectations are met.
Regular Supplier Audits and Performance Tracking
Regular audits allow organizations to identify any issues in suppliers’ processes that could lead to problems later. This means suppliers can address these issues before they escalate and affect customer satisfaction.
Conducting regular audits also helps foster a culture of transparency and accountability. Suppliers who may be required to demonstrate quality standards at any time are more likely to adhere to them.
Regular audits can clearly indicate how organizations are performing compared to previous audits. This means they can take further action if there is a continuous pattern of poor performance.
Building Stronger Partnerships
Organizations can benefit from collaborative relationships with suppliers that prioritize transparency and accountability. Promoting open communication by scheduling regular meetings and sharing KPIs can help align suppliers with quality goals.
For instance, regular meetings allow representatives from both organizations to discuss their goals, challenges and issues in a more personal manner. This also allows an opportunity to flag problems more quickly so adjustments can be made.
Meanwhile, sharing KPIs ensures that the organizations are working towards the same goals and that there is mutual accountability. This increased transparency also makes it easier for organizations to identify potential issues and work together to implement any corrective actions that may be required.
Technology Enhances Supplier Quality Management
Technology can help to streamline supplier quality management by making it easier to monitor and enforce quality standards.
Automated Quality Management Systems
According to the survey, 91% of respondents reported using automated quality management systems (QMS).
A QMS can simplify supplier oversight by providing organizations with real-time insights and ensuring compliance. For instance, it can seamlessly track an organization’s KPIs — including product defect rates — to provide an overview of how each supplier is performing. This information can be used to help define the root cause of any issues and to determine areas of improvement.
A QMS can also generate audit reports and track findings. This ensures that organizations are compliant with the required food safety regulations and prepared for potential internal and external audits.
Finally, a QMS can also improve supplier communication by centralizing all quality-related information. Making this information accessible increases transparency and means any potential quality issues can be resolved faster.
Data Analytics for Better Decision-Making
Data analytics has become one of the most effective ways for organizations to assess supplier performance, track trends, and make proactive adjustments. For instance, it allows organizations to analyze supplier KPIs, including product defect rates, delivery rates, and product cost. Organizations can use this data to determine whether suppliers are meeting their standards and to identify issues early so they can address them before they escalate.
The Importance of Effective Supplier Quality Management
Effective supplier quality management plays a critical role in maintaining brand reputation and safety in the food and beverage industry. Maintaining supplier relationships, standardized processes, and leveraging technology can all contribute to ensuring high standards and maintaining strong customer satisfaction.
Read the full report now and learn how an automated quality management system can help your organization decrease recalls, maintain top-tier supplier quality, and remain compliant as you scale.
