The Standards Answer

I’ve long been frustrated, both as an auditor and as a consultant, by the unique exemption most organizations extend to distributors. It’s a common practice for purchasing personnel to excuse distributors from the vendor qualification requirements they apply to most of the other companies they do business with.

The defeatist notion that prevails is that distributors are impotent go-betweens, with no appreciable influence on the product. Many distributors perpetuate this view by implying, either deliberately or inadvertently, that if the manufacturers they represent are ISO 9001-registered, then the blessing somehow rubs off on them as well. Conversely, if there’s a problem with a product or the manner in which it is delivered, the fault lies not with the distributor but with the manufacturer. What ends up happening is a shell game in which no one is accountable.

The actual consequences of this mindset are troubling. Distributors are routinely added to the ubiquitous approved vendor list without any assessment or qualification. There is rarely a set of criteria for qualifying distributors. When there’s a problem with defective product or late deliveries, requests for corrective action aren’t sent out. It’s automatic ally assumed that, because the distributor didn’t manufacture the product, it either won’t respond or won’t be able to take any meaningful action to address the matter. The sm aller distributors beg off, insisting that they have little or no clout. Companies aren’t provided with (or fail to ask for) the name of a contact person at the manufacturing facility to help address the problem, or the manufacturer is on another continent and the distributor is the only viable link the company has. Distributors abdicate responsibility and their customers absolve them.

Distributors play a vital role in industry. They serve the market by providing local access to varied products. Good distributors provide product support and facilitate inventory management. Many of them have achieved ISO 9001 registration. However, the customers they supply still harken back to the manufacturing source for answers to problems that arise. The distributor function is either discounted or viewed as an obstacle. That’s unfortunate.

ISO 9000 is about processes, not products. When a company buys a product from a distributor, the activities that are involved in fulfilling specified requirements originate with the distributor. The factors distinguishing one distributor from another aren’t re ally the product lines they carry. The distinctions relate to the manner and level to which they serve their customer base (i.e., how they control their processes and implement their quality management systems).

Activities and factors that directly relate to the effect a distributor has on your ability to fulfill your customer’s requirements may include:

• Customer service and order-taking processes
• Warehouse personnel’s ability to recognize product when pulling orders
• Packing and shipping practices
• Min. /max. levels; purchasing practices
• Shelf life of certain commodities
• ESD protocols for electronic components
• Availability of current literature
• Re-labeling or other value-added processes
• On-going training for new products
• Traceability and lot control
• Control of nonconforming material
• Document control (contracts, MSDS sheets, certificates of analysis, electronic infrastructure)
• Corrective action programs

Questions that you may want to ask to qualify a supplier might include some of the following:

• How do they double check orders to verify that the shipping documents match the customer’s order?
• How are special instructions communicated?
• Do they participate in the periodic trainings that some manufacturers offer? (I remember years ago spending a week at Boston Gear’s Gearology School).
• How do they control environment ally sensitive materials?
• What are the monitoring procedures for products with limited shelf life?
• Do they substitute different manufacturers’ products without notifying you? (This isn’t an uncommon practice; substitutes are routinely furnished unless a customer stipulates otherwise).
• How does the organization ensure they can meet customer delivery requirements?
• What process do they have in place to handle nonconforming product?
• What is the procedure for inspecting material that has been returned before it’s put back in stock?
• Who is responsible for corrective action?

Answers to these questions will provide insight into the over all control the company has over their critical procedures. It will also reflect the extent to which they recognize their own accountability in the supplier chain.

Other factors that affect your supplier include mergers with other companies, relocation, acquisition or loss of product lines and turnover in personnel, just to name a few. Without periodic monitoring, most of these changes won’t come to light. On more than one occasion, I’ve audited a company’s supplier records and found inconsistencies between the names in the vendor database and the ones on purchase orders. The answer I received to my question was, “Oh, they were bought out, and we haven’t had time to change the name in the system.” It didn’t occur to any of these buyers that this was a major change that could (and in one case did) affect the supplier’s ability to meet their requirements.

Organizations need to establish criteria for qualifying distributors, just as they do other categories of suppliers. “Grandfathering” isn’t an acceptable practice if material is critical to your product, especi ally when you consider the possible consequences of the name-change scenario just described. Companies must ensure the distributor is capable of fulfilling all of their quality management system requirements. Anything less is a lapse of the supplier qualification requirements found in Subclause 7.4.1 of ISO 9001:2000.

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