ISO9001 System Document Package (40) | Supplier Admission and Performance Evaluation Work Instruction

Document Number: WI-QA-40　|　Document Level: Level 3 Document (Work Instruction)　|　Corresponding Clause: ISO 9001:2015 8.4 Control of Externally Provided Processes, Products, and Services

Document Description: This work instruction is an operational expansion of the Level 2 document "Procurement and External Provision Control Procedure" (QP-16). It addresses the specific actions of how new suppliers are admitted and how existing suppliers are retained. The procedure document answers "whether to manage and who manages," while this work instruction answers "which form to use, what score to give, what score is considered qualified, and what score warrants elimination." It is applicable to all enterprises that incorporate raw materials, outsourced processing, subcontracted processes, testing services, logistics services, etc., into procurement management. Manufacturing, trading, and service companies can tailor it according to their own material structures. The document includes admission pathways, evaluation elements and weights, performance scoring formulas, differentiated control rules, and a list of accompanying forms, which can be directly applied as controlled documents.

1. Purpose

To standardize the admission evaluation, daily performance monitoring, and annual comprehensive evaluation activities of external providers (hereafter referred to as suppliers), ensuring:

1. Suppliers listed in the qualified supplier directory have the capability to continuously and stably provide qualified products and services, supported by objective evidence rather than personal impressions or relationships.
2. Supplier performance is presented in a quantifiable, comparable, and traceable manner, providing a basis for adjusting procurement shares, coaching and improvement, yellow card warnings, and exit decisions.
3. Supplier management activities leave complete documented information, meeting the requirements of ISO 9001:2015 Clause 8.4.1 "Establish criteria for the selection, evaluation, performance monitoring, and re-evaluation of suppliers," and providing a verifiable record chain for certification audits.

2. Scope

2.1 Applicable to all suppliers of purchased materials, outsourced processing, subcontracted processes, external testing/calibration services, logistics and storage services, software and information services, etc., for admission, evaluation, and re-evaluation.

2.2 Suppliers are categorized into three types based on the impact of materials on the final product, with different management depths:

2.3 Customer-designated suppliers (Customer Directed Source) must still establish files and be subject to performance monitoring according to this document. Admission materials are based on customer-designated documents, and evaluation conclusions do not affect the supplier's qualification but should be fed back to the customer.

2.4 For one-time purchases or purchases below the specified limit, the procurement department head may approve a waiver of admission evaluation in writing, but the incoming verification records for such purchases must still be retained.

3. Responsibilities

3.1 General Manager: Approves the qualified supplier directory, Category A supplier admission conclusions, and decisions on supplier suspension and exit.

3.2 Management Representative: Approves supplier management criteria and score weight adjustments; participates in on-site audits of Category A suppliers; resolves evaluation disputes.

3.3 Procurement Department: Manages supplier activities. Responsible for supplier sourcing, data collection, and initial qualification review; organizes admission evaluation meetings; maintains the qualified supplier directory; compiles and summarizes performance data; initiates yellow card warnings and exit processes.

3.4 Quality Department: Evaluates supplier quality management systems and process capability; leads on-site second-party audits of Category A suppliers; collects and analyzes data on incoming batch qualification rates, online nonconformities, and the effectiveness of quality issue responses and improvements; participates in the determination of sample and trial batch verification conclusions.

3.5 Technical Department/Engineering Department: Participates in the evaluation of technical capabilities, process equipment, and sample compliance; confirms the impact of supplier technical changes on products.

3.6 Production Department: Provides feedback on the actual performance of supplier materials during production, offering raw data on online nonconformities, production stoppages, and rework.

3.7 Warehouse: Provides data on delivery punctuality, accuracy of delivered quantities, and compliance with packaging and labeling.

3.8 Suppliers: Submit true and complete qualification and capability data as required by the company; cooperate with sample verification, on-site audits, and improvement requirements; proactively report significant changes.

4. Work Procedures

4.1 Supplier Classification and Admission Level Determination

4.1.1 The Procurement Department, in conjunction with the Technical Department and Quality Department, determines the category of materials to be procured based on Section 2.2, filling out the "Supplier Category Determination Form." The category determination result decides the subsequent admission path and evaluation depth.

4.1.2 Categories are reviewed annually with the material list. When design changes, customer requirement changes, supplier exclusivity, or quality incidents occur, a re-determination should be made immediately.

4.2 Supplier Admission Process (Textual Flowchart)

Procurement Demand / Supplier Self-Recommendation
        ↓
① Sourcing and Initial Contact (Procurement Department, fills out the "Supplier Investigation Form")
        ↓
② Initial Qualification Review (Procurement Department verifies business license, scope of operations, system certificates, industry permits, environmental and safety compliance)
        ↓ Unqualified → Return, record in the conclusion section of the investigation form
③ Capability Investigation (Quality Department reviews quality management system documents, process capability, testing methods, production capacity, and delivery capability)
        ↓ Unqualified → Terminate
④ Sample Submission and Verification (Technical Department provides drawings/specifications, supplier submits samples; inspectors judge according to the "Incoming Inspection Work Instruction")
        ↓ Unqualified → One opportunity for rectification and resubmission, resubmission still unqualified → Terminate
⑤ Small Batch Trial (Applicable to Category A/B, generally 1-3 batches, jointly evaluated by the Production Department and Quality Department)
        ↓ Issues arise → Issue a "Supplier Improvement Notice," set a deadline for improvement and re-trial
⑥ On-site Second-Party Audit (Only for Category A, and when necessary for Category B, conducted according to the requirements of the "Internal Audit Implementation Work Instruction")
        ↓ Serious nonconformities → Rectification and verification required before continuation
⑦ Comprehensive Evaluation and Admission Scoring (Organized by the Procurement Department, signed by three parties)
        ↓ Score ≥ 70 points → Admission; < 70 points → Not admitted
⑧ List in the "Qualified Supplier Directory," report to the General Manager for approval and release
        ↓
⑨ Establish Supplier Files (Qualification, sample reports, trial records, audit reports, evaluation forms, agreements)

4.2.1 Time limits for each step: Initial qualification review 3-5 working days; sample verification 5-10 working days; small batch trial generally no more than 30 natural days according to production schedules; on-site audit report issued within 5 working days after the audit; from sourcing to listing in the directory, Category A suppliers generally no more than 60 natural days.

4.2.2 For samples and small batch verification that fail, the Procurement Department issues a "Supplier Improvement Notice," clearly stating the nonconformities, rectification requirements, and re-verification deadlines. If the same project fails verification twice consecutively, the current admission process is terminated, and no admission applications from the same supplier for the same project will be accepted for 6 months.

4.3 Admission Evaluation Elements and Weights

4.3.1 Evaluation Rules: A total score ≥ 85 points is considered excellent and directly admitted; 70-84 points is considered qualified, admitted with specified improvement items; < 70 points is considered unqualified and not admitted.

4.3.2 One-vote veto items: Providing false information; samples actually produced by a third party but concealed; major safety, environmental, or mandatory standard violations found during on-site audits; improper behavior such as bribery of company employees. Any of these conditions will result in the immediate termination of the admission application.

4.4 Management of the Qualified Supplier Directory

4.4.1 The "Qualified Supplier Directory" is maintained by the Procurement Department and includes: supplier name, supplier code, category, supply scope, evaluation score, grade, admission date, most recent evaluation date, certification validity period, status (normal/yellow card/suspended/exit).

4.4.2 The directory is reviewed quarterly and re-released annually by the General Manager. For temporary additions or deletions, approval by the Management Representative is required, and change records must be retained.

4.4.3 Procurement activities can only be conducted within the scope of the directory. In case of emergency procurement from a non-directory supplier, the requesting department must fill out the "Temporary Procurement Application for Non-Directory Supplier," which must be co-signed by the Quality Department and Procurement Department and approved by the General Manager. A simplified evaluation must be completed within 15 working days after the purchase.

4.5 Performance Monitoring Data and Calculation Scope

4.5.1 Data source division:

4.5.2 Calculation Formula (Quarterly Score):

Quarterly Score = Quality Score + Delivery Score + Cost Score + Service and Cooperation Score + System and Compliance Score
Quality Score   = Incoming Batch Qualification Rate × 15 + Online Nonconformity Rate Score × 10 + Response Time Score × 8 + Improvement Effectiveness Score × 7
Delivery Score  = Delivery Punctuality Rate × 15 + Quantity Accuracy Score × 5 + Urgent Order Response Score × 5
Cost Score      = Price Competitiveness Score × 8 + Cost Reduction Cooperation Score × 4 + Payment Terms Score × 3
Service Score   = Technical Support Score × 4 + Communication Cooperation Score × 3 + Data Provision Score × 3
System Score    = System Certificate Validity Score × 4 + Change Reporting Score × 3 + Environmental Compliance Score × 3
(Each sub-score is calculated on a 100-point scale and then multiplied by the weight, with a maximum score of 100 points)

4.5.3 Example of Online Nonconformity Rate Score Conversion: ≤ 500 PPM = 100 points; 500-2,000 PPM = 80 points; 2,000-5,000 PPM = 60 points; > 5,000 PPM = 0 points. Each company should set its own levels based on industry standards, and once determined, these levels should not be adjusted arbitrarily within a year.

4.6 Evaluation Frequency and Implementation

4.6.1 Monthly: The Procurement Department completes the scoring of Category A suppliers within 5 working days of the following month, outputting the "Monthly Supplier Performance Scoring Form." This is for process warnings and does not directly trigger qualification changes.

4.6.2 Quarterly: The Procurement Department compiles three months of data to form a quarterly score, outputting the "Quarterly Supplier Performance Summary Form," which serves as a basis for share adjustments and yellow card warnings.

4.6.3 Annual: An annual comprehensive evaluation of all registered suppliers is conducted in December, with the evaluation content being the weighted average of the four quarterly scores (weights can be set as 10%/20%/30%/40%, emphasizing recent performance). This is combined with the conclusions of the annual on-site audit and system certificate validity checks, outputting the "Annual Supplier Performance Evaluation Form." The evaluation results serve as the basis for compiling the next year's "Qualified Supplier Directory."

4.6.4 Evaluation Meetings: The annual evaluation is organized by the Procurement Department, with participation from the Quality Department, Technical Department, and Production Department. Meeting records are compiled and co-signed, and evaluation conclusions are communicated to suppliers via the "Annual Supplier Evaluation Result Notice."

4.7 Performance Grades and Differentiated Control

4.7.1 Yellow Card Warning Trigger Conditions (any one condition triggers, no need to wait for quarterly scoring): Monthly incoming batch qualification rate below 90%; quality issues directly causing production stoppages; the same issue recurring twice within 3 months; delivery punctuality rate below 95% for two consecutive months; concealing significant changes.

4.7.2 Red Card (Suspended/Exit) Trigger Conditions: Two consecutive quarters of Grade D; annual evaluation triggering a one-vote veto item; major quality incidents and refusal to assume corresponding responsibility; system certificate revoked or suspended and not restored within 90 days; inability to meet customer mandatory requirements.

4.7.3 Exit Process: The Procurement Department fills out the "Supplier Exit Approval Form," stating the reasons for exit, the handling plan for existing inventory and in-transit orders, the preparation status of alternative suppliers, and customer notification requirements → co-signed by the Quality Department → reviewed by the Management Representative → approved by the General Manager → removed from the "Qualified Supplier Directory" and marked with the exit date → supplier files sealed for at least 3 years → for Category A supplier exits, the impact on customer delivery must be assessed in advance and a transition plan formulated.

4.8 List of Referenced Forms

5. Related Records

5.1 "Supplier Investigation Form" (QR-SUP-01) 5.2 "Supplier Category Determination Form" 5.3 "Supplier Admission Evaluation Form" (QR-SUP-02) 5.4 "Qualified Supplier Directory" (QR-SUP-03) 5.5 "Monthly Supplier Performance Scoring Form" (QR-SUP-04) 5.6 "Quarterly Supplier Performance Summary Form" (QR-SUP-05) 5.7 "Annual Supplier Performance Evaluation Form" (QR-SUP-06) 5.8 "Second-Party Audit Report" (QR-SUP-07) 5.9 "Supplier Improvement Notice" (QR-SUP-08) 5.10 "Supplier Change Point Reporting Form" (QR-SUP-09) 5.11 "Supplier Exit Approval Form" (QR-SUP-10) 5.12 Sample inspection reports, trial batch verification records 5.13 Supplier agreements (quality agreements, technical agreements, confidentiality agreements, environmental statements)

Record filling and archiving are conducted according to the "Record Filling and Archiving Work Instruction" (WI-QA-39). The retention period is no less than 3 years, and if the customer or regulations require a longer period, that requirement will be followed.

6. Related Documents

6.1 "Procurement and External Provision Control Procedure" (QP-16) 6.2 "Nonconforming Product Control Procedure" (QP-22) 6.3 "Nonconformity and Corrective Action Procedure" (QP-27) 6.4 "Change Management Procedure" (QP-29) 6.5 "Identification and Traceability Control Procedure" (QP-18) 6.6 "Incoming Inspection Work Instruction" (WI-QA-34) 6.7 "Record Filling and Archiving Work Instruction" (WI-QA-39) 6.8 "Internal Audit Implementation Work Instruction" (WI-QA-42)

Usage Instructions

1. Four Actions to Modify Based on Company Reality

1. Trim Supplier Categories: The A/B/C classification in Section 2.2 is the most common three-tier method. If a company has only a few dozen materials, it can be simplified to "key/non-key" categories. If a company has a large number of procurement categories and hundreds of suppliers, it is recommended to further subdivide Category A into "safety characteristics related" and "general key" to avoid resource shortages from on-site audits of all Category A suppliers.
2. Adjust Weights, but Not the Structure: The scores in Sections 4.3 and 4.5.2 can be adjusted according to industry characteristics: for component processing companies, the "process and testing capability" score can be increased from 25 points to 30 points, and the "business conditions" score can be reduced to below 5 points; for trading or service companies, the "delivery and production capacity assurance" score can be increased to 20 points. Any adjustments must be approved by the Management Representative and recorded in the document revision log to avoid departmental misinterpretation.
3. Set Quality Levels Appropriate to the Company's Standards: The PPM levels in Section 4.5.3 are just examples. The reasonable levels for mechanical processing, injection molding, electronic assembly, surface treatment, etc., can vary significantly. Method for setting levels: use the average of the previous year's actual data as the midpoint level (e.g., if the average online nonconformity rate last year was 1,500 PPM, set 1,500 PPM as the 80-point level) to ensure the scoring has discriminatory power and is not universally high or low.
4. Link Evaluation to Business Actions: The most valuable part of this document is the differentiated control in Section 4.7. If the scoring form is filled out annually but procurement shares, sampling frequency, and new project introduction qualifications do not change accordingly, suppliers will quickly view the evaluation as a formality. It is recommended to clearly specify in internal procurement processes that "new project introductions must check the supplier's scores from the last four quarters" and embed the evaluation conclusions into order allocation rules.

2. Audit Focus Points (Frequent in Internal and Certification Audits)

1. Whether the qualified supplier directory covers all actual procurement objects and whether there are any procurements outside the directory without approval records.
2. Whether the admission evaluation includes all four elements and whether there is objective evidence (sample inspection reports, trial records, audit reports) rather than just a signed form.
3. Whether performance data can be traced back to original records (incoming inspection ledgers, delivery notes, daily production nonconformity reports) and whether the qualification rates in the scoring form match the ledgers.
4. Whether evaluation conclusions and measures taken correspond: whether there are cases where a supplier is rated Grade C but no improvement requirements are specified.
5. Supplier change point management: whether changes in materials, molds, production lines, relocation, subcontracting, etc., require reporting and re-verification.
6. Whether customer-designated suppliers are included in monitoring and whether there is a mechanism to feedback performance results to the customer.
7. Whether the files of exited suppliers are completely retained and whether in-transit orders and inventory are properly handled.

3. Common Errors

1. "Admission for Life": Once a supplier is admitted, they are never evaluated again, and the directory remains unchanged for five years. Countermeasure: Mandate the registration of the "most recent evaluation date" in the directory, and automatically issue a yellow card if the evaluation is overdue, to ensure the Procurement Department conducts evaluations on schedule.
2. Beautiful Scoring Forms, Data Based on Memory: Scoring at the end of the month based on impressions. Countermeasure: Include a "data source" column in each scoring form, specifying the corresponding ledger or document number. If there is no source, the item should not be scored.
3. Evaluating Only Quality, Not Delivery and Cost: The Quality Department scores alone, leading to high scores for suppliers who are "good in quality but always delayed." Countermeasure: Insist on cross-departmental, multi-dimensional scoring, with the Procurement Department compiling scores and each department scoring their respective items to prevent a single department from dominating the conclusions.
4. Using "Relationships" Instead of "Criteria": New suppliers start supplying first and then complete the evaluation later. Countermeasure: Set the admission evaluation as a system prerequisite for procurement orders, and non-directory procurements must follow a written approval process.
5. One-vote Veto Items Too Vague: Phrases like "serious violation of laws and regulations" are difficult to verify during audits. Countermeasure: Specify veto conditions as verifiable actions, such as "subcontracting key processes without reporting" or "system certificate invalid for more than 90 days without restoration."
6. Improvement Notices Issued but Not Followed Up: Only tracking the supplier's response date without verifying the effectiveness of measures. Countermeasure: Improvement notices must include a "30-day recurrence check" section, which the Quality Department fills out after the deadline with verification conclusions. Unverified notices cannot be closed.

Admission sets the threshold, performance determines retention, and grading determines resource allocation.

Knowledge code: 2.3.1

Version: v20260809

Author: QTank QTank is dedicated to providing systematic professional knowledge, methodologies, and practical tools for quality management practitioners, helping companies continuously improve their quality capabilities.