Purchasing: Quality Clauses vs. Supplier Quality Requirements Manual

When developing your purchasing system, one question is whether to invoke specific “Quality Clauses” or to reference an all-inclusive “Supplier Quality Requirments Manual” (SQRM). What are the pros & cons of each?

“Quality Clauses” (or “Codes”) are a “menu” of various quality requirements that the Buyer can select to be referenced on each purchase order (PO). Alternatively, many purchasing systems allow for the more knowledgeable Supplier Quality team to pre-select specific “Quality Clauses” for each product, service, or supplier.

PROS

• Flexibility - Each PO can be uniquely tailored to invoke specific quality requirements.
• Simplicity for Supplier - Each PO contains only those specific quality requirements applicable to the product or supplier… making them easier to understand AND identify applicable flow-down requirements (due to the omission of superfluous inapplicable requirements).

CONS

• Inconsistency - Since each PO will have different quality requirements, different Buyers or Supplier Quality Teams, may be inconsistent in which “Quality Clauses” they select (invoke) for similar products, services, or suppliers.
• Omissions - In some instances, “Quality Clauses” that should be invoked are not, due to differing opinions held by various Buyers or Supplier Quality Team members.
• Inefficient - Each product, service, and/or supplier must be individually evaluated to determine the appropriate applicable “Quality Clauses”.
• Time-Consuming for Supplier - Since each PO has different quality requirements, the Supplier “should” review each PO in detail to ensure that each “Quality Clause” can be met… even where the same product is ordered on a repetitive basis.

“Quality Clauses” (or Codes) are used by organizations such as:

• BAE Systems
• L3 Harris
• Leonardo DRS
• Lockheed Martin Aeronautics
• NASA JPL

A “Supplier Quality Requirments Manual” (SQRM) is a comprehensive collection of ALL of a company's quality requirements. These SQRMs usually contain “qualifiers” as to when each requirement is applicable to an order.

PROS

• Consistency - Each PO references a single SQRM and its revision level.
• Flexibility - The applicable quality requirements are identified based upon the criteria contained in the SQRM.
• Simplicity for Supplier - The supplier only needs to understand and learn one set of requirements for the same or similar products or services.
• Efficient - There is no need for the Buyer or a Supplier Quality Team to evaluate and determine which quality requirements must be invoked for each product, service, or supplier.

CONS

• Comprehensive - The supplier will need to read the entire SQRM to determine the applicability of the quality requirements AND flow-down requirements.

• Interpretation - While both “Quality Clauses” and SQRMs require a degree of “interpretation”, this issue tends to be more prevalent in SQRMs. For example, some SQRMs fail to clearly address when requirements must be “flowed down” (e.g., do flow-down requirements apply to suppliers of COTS (Commercial-Off-The-Shelf) items?).

• Document Distribution - An SQRM must be maintained under document control. And Suppliers often fail to verify that the version of the SQRM they're following is the current version (whether it is distributed in hardcopy, electronic, or made available via a website).

The “SQRM” approach is used by companies such as:

• Airbus
• BAE Industries
• Eaton Aerospace
• GE Aviation
• Hyundai Motor Manufacturing - Alabama, LLC
• KAMAN Aerospace Corporation
• Meggit Group
• Parker Hannifin Corporation
• Raytheon Technologies / United Technologies
• Volvo