Auditing Critical Suppliers

Q: According to API Spec. Q1 sections 5.6.1.2 and 5.6.1.4, we are basically supposed to perform supplier audits annually on “critical” suppliers. I have an audit planned for suppliers of critical products and services. That’s OK. However, I found a few critical suppliers that are companies abroad with a global presence, and I don’t have any doubt of their capability, as they are a leading provider of steel cord! Should I audit them? Is it really necessary?

A: Keep in mind a few key points:

1. There is no singular Q1 requirement to perform annual audits of critical suppliers.
2. One criterion for approving critical suppliers is an audit, but this is not the only method.
3. With regards to re-evaluation, it can be performed through Section 5.6.1.3 (c) receiving inspection and by monitoring supplier nonconformances.

 As for the audit of companies abroad; let’s go through Section 5.6.1.2:

If you want, you can have an audit performed; you can contract a competent 3rd-party auditing company in that geographical area to do the audit for you to specified requirements.

With regards to critical supplier controls, Section 5.6.1.2 (a) requires an organization to determine if a supplier meets the organization’s QMS. This can be done in one or more ways. As an example:

1. Does the supplier have a QMS certification such as ISO 9001 / API Q1 or a certification to another internationally recognized scheme? If so, this can be used.—OR—

2. You can request a copy of their QA Manual; review it and accept it. —OR—

3. You can document a quality plan or inspection and test plan requirements; make it a controlled document under Section 4.4.3 and attach it to your PO according to Section 5.6.2, Purchasing Information. —AND— you can ask the supplier to furnish a Certificate of Conformity to your quality plan or inspection and test plan.

In addition to Section 5.6.1.2 (a), you are required to meet one or more of the requirements shown in Section 5.6.1.2 (b): (i), (ii) or (iii).

i. would be the performance of an audit as described earlier herein.

ii. would be asking the supplier to furnish a product sample for your review, inspection, test and /or analysis, or some other physical or contractual confirmation. This primarily applies to a new supplier/product.

iii. would be identifying how you meet proprietary, legal, and/or contractual requirements. Proprietary or legal would be up to the specific organization’s agreements with their supplier if these conditions apply. However, the term “contractual arrangements” could mean requirements identified in an organization’s material specification, quality plan, and/or inspection and test plan as examples. Where “contractual arrangements” are used for this purpose, the conditions identified in item (3) above related to 5.6.1.2 (a), “Certificate of Conformity,” could apply.

— Bud Weightman
President, Qualified Specialists, International