Posted in Operations and Supply Chain Terms, Total Reads: 519
Definition: Certified Supplier
It’s a supplier that has undergone the supplier certification of the buying organization. Under supplier certification program, buying organization evaluates the supplier’s internal and external capability and decides whether it will be able to meet the business expectations like good quality, lower cost, timely delivery etc. It may involve visit to some of the companies of supplier and testing of quality of their products.
A certified supplier allows buying organization to look into their processes, identify problems and solve them jointly through various measure like capacity building, liquidity arrangements, technology or other relevant information sharing etc. Buying organizations also conduct timely audits of their supplier. These measures are taken in order to gain competitive advantage and give an opportunity to buying organizations to implement new measures like Just-in-Time (JIT), lean production etc. Toyota, Boeing, Starbucks, General Electric and many other companies across industries use this strategy these days.
Example: If you want to be certified supplier, you have to fulfill certain standards like ISO 9000(for quality management), ISO 14001 (for environmental management) etc. Representative of buying organization also visit your facilities, talk to your staffs and check relevant documents. Once they approve, you become the certified supplier.