ACQ.4 - Supplier Monitoring

Involved in the challenges of Automotive SPICE, particularly supplier monitoring? Read on for a quick overview of key information on ACQ.4, a key process from VDA Scope, including a video and our free white paper.

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Process ID
Process group
ACQ.4
Procurement

Automotive SPICE® is a trademark of VDA QMC.

The Supplier Monitoring process in Automotive SPICE® (also known as ACQ.4) helps your organization to track and assess the performance of the supplier against agreed requirements.

Why is this process important? Building cars involves many complicated supply chains. OEMs have suppliers who in turn have sub-suppliers who in turn have sub-sub-suppliers. There is so much that can go wrong along these chains. I've seen a lot of bad examples like failed deadlines of subcontractor that had delayed the OEM's start of production. Or quality problems at a subcontractor causing huge cost of non-quality for the OEM. And I can tell you that nothing in a supply chain works automatically. This requires hard and systematic management at all levels of the chain. And this is what this process is about.  Actually, "Supplier Management" would be a more appropriate name for ACQ.4.

Image   The ACQ.4 process under VDA Scope

By the way, what are "suppliers" in this context? There is no official, binding definition for what kind of suppliers we use this process: we focus on suppliers who develop a component of our product, typically a software component or a combination of hardware and software, such as a sensor. The component should be developed according to our specification, as this requires considerable management effort. In contrast, the purchase of Commercial of the Shelf Products does not require much management.

The following are the most important aspects of Supplier Monitoring in Automotive SPICE®.

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Your free white paper

Interested in finding out more about supplier monitoring (ACQ.4), the Automotive SPICE® process from VDA Scope? Our free white paper provides you with a summary of all key information, including an extract from our book on Automotive SPICE® Essentials – ideal reading for anyone new to the topic of process improvements.

Define the way of cooperation.

You should establish a written agreement on the co-operation. In project management terminology, this is usually called a "Supplier Statement of Work". Here you define interfaces, responsibilities, meetings, joint activities, common processes, reporting, and so on.  

I consider this to be particularly important:

  • What are your requirements for the supplier development process? In particular, what kind of Automotive SPICE requirements do you request from the supplier?
  • When and in what format will you provide the supplier with your requirements?
  • How does the requirements review and acceptance by the supplier work?
  • How do you deal with conflicts if the supplier does not accept requirements?
  • What tests are performed after the supplier has implemented the requirements? 
  • Which tests are carried out by the supplier and which by you as customer?  
  • What kind of support do you expect from the supplier after the tests are completed so that their product works in your environment?
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Provide appropriate resources to manage the supplier.

It is a common mistake to severely underestimate the capabilities required to manage a supplier. You can't imagine how often I see organizations thinking that this is a piece of cake. Or that they think that talking to the supplier from time to time would be enough. No!!! You need an experienced person who will invest a reasonable amount of time to manage the supplier. For large cooperation this can be a full-time person who deals with the supplier on a daily basis. Especially for Farshore suppliers with cultural and language barriers, the effort can be many times greater compared to a local supplier next door. I've seen how supplier managers dealing with farshore suppliers were implementing short incremental development cycles. On day 1 they discussed the requirements. On day 3 they checked the software delivery and determined the deviations from the requirements. And on day 4, they started all over again. 

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Establish effective means to monitor the supplier's progress.

There are two methods:

  • There is the technical meeting where you can discuss and clarify requirements, technical questions, problems, and quality issues. You maintain a list of open items and manage the points until closure.
  • And then there is the management part, where you check progress against the schedule, check effort and costs (if it is a time and material contract), and also deal with change requests, forecasts, and risks.
Nothing works without

As part of our strategy to systematically improve development processes in the automotive electronics sector, we are also an official licensee of Automotive SPICE® – a trademark of the Association of the German Automotive Industry (VDA QMC).

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WE CAN SUPPORT YOU WITH…
  • Using AUTOMOTIVE SPICE® to achieve the required maturity levels within your key processes in development
  • Systematically improving existing workflows and methods
  • Evaluating the status of your process improvements through formal assessments and gap analysis
  • Fulfilling the requirements of Automotive SPICE® in harmony with SECURITY, FUNCTIONAL SAFETY and AGILE METHODS
  • Training your staff and assessors