Most businesses will aim to produce 100% of the products or services they provide without error. Unfortunately, issues do occur, and when they do, our Quality Management System needs to kick in and drive processes that remedy the situation.
Most of us will be familiar with the CAR process (Corrective Action Reporting), which identifies internal issues that require corrective action, but what happens when the issue that has been highlighted has originated from our supplier base?
One common route is the Supplier Corrective Action report (often known by its acronym SCAR), which we’ll be covering in today’s post.
While the format is familiar (often the same as its internal cousin), the process requires some thought. It has some unique issues and challenges, specifically around communications and dealing with third parties.
In this article we’ll be looking to cover:
- What is a Supplier Corrective action report
- Who manages the supplier corrective action report
- Supplier corrective action report process
- Contents of supplier corrective action report
- Benefits of the supplier corrective action report process
- Common issues with the supplier corrective action report process
OK – let’s get to it.
What is a Supplier Corrective action report
The Supplier Corrective Action Report (SCAR) is a document that lists issues/defects that have been found on a product delivered by a supplier, communicates them to the supplier, and requests investigation and corrective action.
The document outlines several facets regarding the issue.
- Information about the origins of the part (i.e., Order No)
- Information about the part (where known)
- I.e., Part Number, batch number, description
- Information regarding the defect
- Supplier information detailing root cause assessment (to be completed by the supplier)
- Supplier information detailing the corrective action (to be completed by the supplier).
A typical timeline for the SCAR is as follows:
Process steps are typically
- Issue identified
- Error not found to be locally caused (i.e., dropped in goods receipt)
- Error not as a result of design
- SCAR issued
- Non-conformance reason determined
- Corrective action deployed
What does the supplier need to do with a SCAR?
The supplier needs to do several tasks.
- Respond to the SCAR
- Provide detail around investigation methods and provide a root cause for the defect. In some cases, the issuing organization may stipulate the method of root cause analysis to be used. For example, organizations may request a supplier carries out an 8d.
- Implement corrective action – this might be a change of process but ultimately will usually end up with replacement goods being provided.
Who manages the supplier corrective action report
There are two aspects to managing a SCAR.
1/ Who raises the SCAR
Inspection procedures within the receiving organization will capture defective parts at entry. Where items have been identified with non-conformities, items are often quarantined pending agreement on remedial actions.
Where a SCAR is agreed upon, the QMS should describe who can author a SCAR. This varies between organizations and can be raised by a variety of people, for example, a member of goods receiving, Quality, Procurement, etc. However, you’ll find in most organizations; this sits within the Quality function.
Whoever raises the form, it’s essential that they have a robust understanding of the non-conformance and what requirement has not been met so that the Supplier corrective action report is correctly populated.
Supplier corrective action report process
While it’s similar to the CAR process, the Supplier Corrective Action report process requires you to collaborate with the supplier. The key takeaway is that you want to make the report easy for your supplier to process by including information that can help them trace the issue.
Below we show some standard steps that most organizations will follow.
Steps to prepare SCAR
- Define the problem
- Is a SCAR required? If yes:
- Internal stakeholder review (even if it’s just internal communication advising SCAR being raised)
- Prepare the SCAR form
- Capture useful information to help resolve the SCAR i.e
- Order No
- Part Number
- Qty received
- Qty rejected/found with issue
- Date of delivery
- Capture useful information to help resolve the SCAR i.e
- Identify the disposition (i.e rework/scrap etc)
- Issue the SCAR
- Supplier updates the SCAR
- Supplier investigates the issue and updates the SCAR
- Supplier provides root cause evidence (i.e. 8d)
- Supplier provides Corrective Action
- Customer updates SCAR with
- Follow up actions required.
2/ Who manages the SCAR to conclusion
Once raised, SCAR’s will usually be managed from within the QA function. There are likely to be commercial implications of the SCAR (for example, replacement parts, contract, lead time), so usually, the procurement team will become involved during this process.
The person who manages the SCAR will typically have a relationship with the supplier and can work alongside them targeting resolution.
The steps to managing the SCAR will usually follow.
- Issue identified
- Identify that SCAR is required.
- Identify contractual requirements impacting the schedule and delivery of the products.
- Issue SCAR
- Liaise & follow up with the supplier until closure
Appropriate communication with the supplier is essential.
- Parts may require a concession; they may be scrapped or they could be reworked.
- Parts may be urgent, high priority and require swift turnaround.
- there might be commercial issues to resolve
- All this needs to be handled via appropriate members of the team and communicated effectively to the supplier.
When the SCAR is issued, there is usually a specified period for the supplier to respond i.e 14 days.
Does every non-conformance need a SCAR?
Organizations tend to have different levels of tolerances, eg.
- Some may not issue a SCAR for a one-off minor issue, i.e. something that could be rapidly reworked in house rather than wait the supplier lead time.
- Quality Alerts can be used to identify areas where attention is required.
- SCAR’s could be issued where there is a critical issue or endemic repetitive issue that requires attention and detail to resolve the issue.
Some organizations leave the SCAR as a document of last resort where if previously identified problems are unresolved, then a SCAR is raised.
What is important is that the process is documented within the management system. Each issue must then be managed against this standard.
Contents of supplier corrective action report
Each organization has a different take on what the SCAR looks like. Many build on what they have developed for their internal corrective action report (some adding an identifier/tick box indicating that this is a supplier report rather than an internal one.
Usually, the following appears on the form.
1/ Unique number so the SCAR can be tracked
2/ Date raised
3/ Supplier name
4/ Part number or product reference
5/ Quantity delivered and quantity affected
6/ Detail of the non-conformance
7/ Disposition (i.e. rework, scrap etc)
8/ Root Cause / Investigation – supplier to complete
9/ Corrective action – supplier to complete
10/ Closing action
11/ Sign off (where the SCAR requires formal acceptance that the issue has been closed)
Again, these are examples; many organizations have different approaches, so use the above as a guide but develop something that works for you.
Benefits of the supplier corrective action report process
There are numerous benefits for the corrective action report process, including:
- Provides a standard process to investigate supplier driven product issues.
- The process facilitates collaboration between internal stakeholders
- The process facilitates collaboration between supplier and buying organization
- Facilitates root cause analysis of the issue
- Facilitates corrective action
- Provides evidence and data that can be used for measuring:
- Effectiveness of corrective actions
- Supplier analysis.
Common issues with the supplier corrective action report process
While the process can be effective, there are various issues that it’s worth thinking about when designing your process. Key issues include:
- SCARS should be used where appropriate – Some may find effectiveness is reduced through overuse.
- SCARS should not be used as a tool to facilitate personal grievance against a supplier – where there is a dislike of a supplier by an employee, issuing a multitude of SCARS can move away from the intended use and impact supplier relationship
- Effectiveness needs to be carefully monitored; some suppliers may respond well – others may require more management.
- Requires consensus within issuing organization
- Relies on the supplier to respond appropriately.
- SCARS need to be managed, and when use is excessive, the burden on record control and follow-ups can be significant, requiring a suitable level of resources to be managed effectively.
- Suppliers fail to respond.
The last issue is one that is perhaps the most common.
What do you do when the supplier doesn’t respond to your Supplier corrective action report?
You may face difficulties if you have suppliers that don’t respond to the SCAR’s:
- Some suppliers may disagree with the issue and simply ignore you
- Some suppliers may simply ignore the request
- Some suppliers may disagree with how you have designed your process and the information you are requesting (i.e. you may request an 8d where the supplier may not find the relevance).
- Some suppliers may rebel against your process and email incomplete responses failing to use correct documentation or approach.
- Some suppliers may just provide an inadequate response.
Whatever the root of the problem, a poor response can provide significant challenges.
It’s tough, but expect for some suppliers to not initially respond to your SCAR’s
When you’re designing the process, if you expect this upfront, then you can design some mitigation steps in so that you’re prepared.
For example, you might choose to include:
- Face to face reviews for some suppliers
- Underpin request through commercial obligation
- Look at financial penalties
- Escalate to Suppliers Senior management
One process often overlooked when considering your SCAR process is to consider how it’s discussed during the supplier onboarding process. Building awareness from the outset can help enormously, as can building the right functional relationships from the start.
What’s worth remembering is that in most cases, you will need to maintain your relationship with them, so developing a workable solution is important (and that doesn’t mean you forget about the SCAR’s you’ve raised!)
It’s critical to remember that, whatever the route you choose to get your SCAR responded to, you do not have to accept bad parts.
We hope you enjoyed this post on Supplier Corrective Action Reports. If your buying materials, then it’s an important part of your management system.
We’d love to hear your experiences with the process; perhaps you’ve got some lessons that you’d like to share with our readers, or maybe you’re looking to tweak your process and have a few questions? As ever, you can reach us through twitter or leave a comment below.