ISO9001 System Document Package (16) | Control Procedure for Purchasing and External Provision (8.4)

Document Description

This procedure corresponds to Clause 8.4 "Control of externally provided processes, products, and services" of ISO 9001:2015. It is one of the key procedures in the "support processes" (SP) of the quality management system (QMS), covering the entire process from the identification of procurement needs, supplier selection and evaluation, procurement information determination, procurement implementation, incoming verification, to supplier performance monitoring and re-evaluation. Its purpose is to ensure that externally provided processes, products, and services meet the company's requirements, prevent nonconforming raw materials, outsourced components, or services from entering the product realization process, and control supplier quality risks within an acceptable range. This procedure applies to all manufacturing, trading, and service companies that have raw material procurement, outsourced processing, external testing, or service outsourcing, especially small and medium-sized enterprises (SMEs) with long supply chains and critical materials dependent on external suppliers. Through this procedure, companies can implement the quality management principle of "mutually beneficial supplier relationships" into specific, executable, and traceable actions.

1. Purpose

To standardize the control activities for externally provided processes, products, and services, ensuring:

1. Externally provided products, processes, and services meet specified requirements (including quality, delivery, price, and legal and regulatory requirements);
2. Suppliers undergo systematic selection and evaluation before being listed in the approved supplier directory, and have the capability to consistently provide conforming products;
3. Procurement information (technical, quality, delivery, and service requirements) is complete, accurate, and transmissible;
4. Procurement products are verified as specified, and nonconforming products are promptly identified and handled;
5. Supplier performance is continuously monitored and re-evaluated, forming a dynamic management mechanism of survival of the fittest.

2. Scope of Application

This procedure applies to the control of all external provision activities within the company, including but not limited to:

1. Procurement of raw materials, auxiliary materials, and packaging materials;
2. Outsourced processing (including process outsourcing and whole-piece outsourcing);
3. External testing, calibration, transportation, and storage services;
4. Components and parts provided by suppliers and directly used in customer products;
5. Control of customer-designated suppliers (suppliers designated by customers).

The following scenarios are not applicable to this procedure: customer property (managed according to the "Customer Property Control Procedure"); internal transfers between units within the group (managed according to internal transfer regulations, which can refer to this procedure for simplified execution).

3. Responsibilities

4. Work Procedures

4.1 Identification and Classification of External Provision Needs

1. The Production Department compiles the "Material Demand Plan" based on production plans, sales orders, and inventory levels, and submits it to the Procurement Department after review by the department head.

2. The Procurement Department manages the procurement objects by classification, and the classification results serve as the basis for selecting control methods:

   • Class A (Critical Materials): Materials that directly affect the critical performance, safety, or regulatory compliance of the product, such as core raw materials and critical outsourced components. Control methods: strict supplier entry evaluation, full inspection or enhanced sampling of incoming materials, annual on-site audits, and at least two approved suppliers as backups.
   • Class B (Important Materials): Materials that significantly impact product quality but are not critical. Control methods: routine entry evaluation, sampling inspection of incoming materials, and annual performance evaluation.
   • Class C (General Materials): Auxiliary materials, packaging materials, and low-value consumables. Control methods: simplified entry (checking business licenses and qualification certificates), visual and quantity verification of incoming materials.

3. For externally provided processes and services (such as outsourced processing, external testing, transportation), the responsible department should submit an application, clearly defining the service content, acceptance criteria, and responsibility boundaries, and follow the procedures outlined in Sections 4.2 to 4.6.

4.2 Supplier Selection and Evaluation

1. Initial Selection: The Procurement Department collects information on potential suppliers through market research, industry recommendations, and supplier self-nominations. Suppliers are required to provide business licenses, qualification certificates, quality management system certification certificates (if applicable), product inspection reports, etc., and fill out the "Supplier Investigation Form."

2. Evaluation: The Procurement Department organizes the Quality Department, Technical Department, and other relevant departments to conduct a comprehensive evaluation of suppliers from the following aspects:

   • Quality assurance capability (system certification status, inspection equipment and personnel, quality performance, sample verification results);
   • Supply capability (production capacity, equipment, delivery performance, emergency supply capability);
   • Price and business conditions (price level, payment terms, after-sales service);
   • Reputation and compliance (operating qualifications, environmental/safety compliance, past performance records).

3. Sample Verification: For first-time cooperating suppliers, samples should generally be requested. The Quality Department conducts inspections or trials according to technical standards and fills out the "Sample Verification Record." Suppliers whose samples fail verification will not be approved.

4. Small Batch Trials: After sample verification is successful, small batch trials are arranged for Class A and Class B materials. The trial results are confirmed by the Production Department and the Quality Department.

5. Approval: Suppliers who pass the evaluation are listed in the "Approved Supplier Directory" after the Procurement Department fills out the "Supplier Evaluation Form," which is co-signed by the Quality Department and the Technical Department and approved by the General Manager. Suppliers not listed in the directory shall not be procured from (except for customer-designated or emergency situations, see Section 4.6, Item 5).

6. Supplier evaluation materials (investigation forms, evaluation forms, sample verification records, trial records) are archived and preserved by the Procurement Department, with the retention period following the "Record Control Procedure."

4.3 Determination of Procurement Information

1. The Procurement Department compiles the "Procurement Plan" based on the "Material Demand Plan" and inventory levels, and implements procurement after review by the department head.

2. The procurement contract/order (including written confirmation of verbal orders) should clearly specify the following information (where applicable):

   • Product name, specifications, quantity, unit price, delivery date, and delivery location;
   • Technical standards, drawing numbers, quality requirements (including key characteristics and environmental requirements);
   • Acceptance methods and standards;
   • Packaging, transportation, and labeling requirements;
   • Documentation requirements (certificates of conformity, inspection reports, material certificates, etc.);
   • After-sales service requirements (where applicable);
   • Requirements for supplier personnel capabilities and process control (for outsourced processing and service outsourcing).

3. Before issuing procurement information, the Procurement Department head or authorized personnel should verify its accuracy and completeness. Technical requirements must be confirmed by the Technical Department, and quality agreements and environmental requirements must be confirmed by the Quality Department.

4. Procurement contracts/orders should be signed by authorized personnel and stamped. Important contracts should follow the "Document Control Procedure" and contract management regulations for approval.

4.4 Procurement Implementation and Follow-up

1. The Procurement Department issues procurement orders to approved suppliers according to the approved procurement plan, using written orders, faxes, emails, etc., which become effective after mutual confirmation.
2. The Procurement Department tracks the execution of orders and communicates with suppliers in a timely manner if there are any issues that may affect delivery schedules. Adjustments to delivery arrangements should be communicated to the Production Department and the Sales Department if necessary.
3. After the supplier's delivered products arrive, the warehouse custodian verifies the item name, specifications, and quantity on the delivery note against the procurement order. If everything is correct, the products are temporarily received, and the Quality Department is notified to conduct incoming inspection/verification. If the quantity does not match, the actual received quantity is recorded, and the Procurement Department is notified for handling.

4.5 Verification of Procurement Products

1. Incoming Inspection: The Quality Department conducts inspections on Class A and Class B materials according to the "Incoming Inspection Work Instruction" and inspection standards, and fills out the "Incoming Inspection Record." Class C materials undergo visual and quantity verification.
2. Emergency Release: For materials urgently needed for production but unable to be inspected in time, the using department can apply for emergency release, which must be approved by the head of the Quality Department. However, proper labeling and records should be maintained to allow for recall if nonconformities are discovered. Emergency release is not allowed for Class A critical materials (unless the customer provides written consent).
3. On-Site Verification at Supplier: When specified in the contract or deemed necessary by the company, inspection personnel can be dispatched to the supplier's site for verification or third-party verification. On-site verification does not exempt the supplier from responsibility for product quality, nor does it exempt the company from incoming inspection (unless otherwise specified in the contract).
4. Nonconforming materials are handled according to the "Nonconforming Product Control Procedure": the Quality Department issues a nonconforming judgment, and the Procurement Department is responsible for negotiating returns, replacements, concessions, or claims with the supplier and tracking the results.

4.6 Supplier Performance Monitoring and Re-evaluation

1. The Procurement Department establishes a supplier performance file, and the Quality Department monthly collects data on incoming material conformity rates, timely delivery rates from the Production Department/Warehouse, and service quality.

2. The Procurement Department conducts a supplier performance evaluation quarterly (or semi-annually) from three aspects: Quality (incoming material conformity rate, weight approximately 50%), Delivery (on-time delivery rate, weight approximately 30%), and Service and Cooperation (issue response, after-sales service, weight approximately 20%). The "Supplier Performance Evaluation Form" is filled out.

3. Evaluation results are divided into four levels: A (Excellent), B (Qualified), C (Needs Improvement), D (Nonconforming):

   • A Level: Priority orders, increased share;
   • B Level: Normal orders, continued monitoring;
   • C Level: Limited-time rectification, reduced share, suppliers must submit a rectification report;
   • D Level: Removal from the "Approved Supplier Directory," cessation of procurement, and transfer of unfulfilled orders to other approved suppliers organized by the Procurement Department.

4. For Class A suppliers, at least one on-site audit or written audit should be conducted annually, with the results serving as the basis for re-evaluation. Audits are organized by the Quality Department and can involve the Technical Department and the Procurement Department.

5. Exceptional Procurement: Customer-designated suppliers can be directly procured after written confirmation by the customer, but they should still be included in incoming inspection and performance statistics. In emergency situations, procurement from suppliers not listed in the directory requires approval by the head of the Quality Department and the Procurement Department, and the evaluation procedures in Section 4.2 should be completed afterward.

4.7 Control of Supplier and Procurement Changes

1. If a supplier undergoes changes that may affect product quality (such as relocation of production sites, changes in key processes, changes in material sources, or major equipment updates), the supplier should be required to notify the company in writing in advance. The Quality Department and the Technical Department should assess the impact of the changes, and if necessary, arrange for sample verification or on-site audits.
2. If the company's procurement requirements (technical standards, drawings, acceptance standards) change, the Procurement Department should promptly communicate the changes in writing to the relevant suppliers and confirm that they have received, understood, and implemented the changes. For design changes, the "Design and Development Control Procedure" should be followed.
3. All communication records related to supplier changes and procurement requirement changes should be archived to ensure traceability.

4.8 Process Flow Diagram (Text Version)

Material Demand Plan/Procurement Application
        │
        ▼
Is the Supplier in the Approved Directory? ── No ──→ Supplier Selection and Evaluation (Investigation/Samples/Trials) ── Nonconforming ──→ Elimination or Rectification
        │ Yes                                  │ Conforming
        ▼                                    ▼
Compile Procurement Plan ──→ Determine Procurement Information (Technical/Quality/Delivery Requirements) ──→ Issue Procurement Orders/Contracts
        │
        ▼
Supplier Delivery → Warehouse Temporary Receipt (Item Name/Quantity Verification) ──→ Incoming Inspection/Verification ── Nonconforming ──→ Nonconforming Product Control Procedure
        │ Conforming                                    │
        ▼                                        ▼
Storage, Labeling, and Use ←── Returns/Replacements/Concessions/Claims ←── Communication with Supplier
        │
        ▼
Supplier Performance Statistics and Re-evaluation (Quality/Delivery/Service) ──→ Tiered Management (A/B/C/D) ──→ Directory Maintenance and Updates

5. Related Records

6. Related Documents

1. Quality Manual (Chapter 8.4 and process description section);
2. Record Control Procedure (7.5.3);
3. Nonconforming Product Control Procedure (8.7);
4. Product Protection Control Procedure (8.5.4);
5. Identification and Traceability Control Procedure (8.5.2);
6. Incoming Inspection Work Instruction;
7. Supplier Entry and Performance Evaluation Work Instruction;
8. Procurement Contract Management Regulations (if the company has additional regulations).

Usage Instructions

1. How to Modify According to Company Needs

1. Material Classification Adjustment: The A/B/C classification ratio should be determined based on the company's product characteristics. For example, electronic assembly plants can classify chips and PCBs as Class A; food companies can classify raw materials and packaging materials as Class A. Trading companies without outsourced processing can delete the on-site audit requirement in Section 4.6, Item 4, and replace it with document reviews. It is recommended to release the classification list as an appendix, "Procurement Material Classification Detail Table."
2. Organizational Structure Adaptation: For small companies without an independent Procurement Department, the General Manager can designate a specific person to handle procurement duties, and the responsibilities table should specify "Procurement Officer (Part-time)" and clarify their reporting to the General Manager. If the Quality Department and Inspection Group are merged, the incoming inspection responsibilities can be assigned to the Inspection Group.
3. Service Outsourcing Supplement: If the company outsources services such as storage, transportation, and IT operations, it is recommended to add a "Special Control for Service Outsourcing" clause after Section 4.1, clearly defining service level agreements (SLAs), performance indicators, and breach handling, and linking them to the supplier evaluation form.
4. Process Simplification: The evaluation of Class C materials can be simplified to "business license verification + initial batch verification," without the need for a complete sample trial process. Suppliers with very low annual procurement amounts can be evaluated annually in a centralized manner, rather than quarterly.

2. Audit Focus Points

1. Auditors often check the consistency between the "Approved Supplier Directory" and "actual procurement records" by randomly selecting procurement orders from the past three months to verify if all suppliers are listed in the directory and if exceptional procurement has been approved.
2. Whether procurement information is fully communicated: Randomly select a procurement order to verify if it specifies technical standard numbers, acceptance standards, and documentation requirements; whether technical requirement changes have been communicated in writing to suppliers.
3. Whether supplier evaluations are "closed-loop": After identifying Class C and D suppliers, whether actual actions such as limited-time rectification, reduced share, and removal from the directory have been taken, rather than just scoring without action.
4. Whether emergency release is controlled: Check the approval records, labeling, and traceability mechanisms for emergency release applications to ensure that Class A critical materials are not improperly released.
5. Whether there are corresponding records and contract provisions for special scenarios such as on-site verification at suppliers and customer-designated suppliers.

3. Common Errors

1. "Lifetime" Directory: Suppliers are not evaluated or updated for years after approval, and even defunct suppliers remain listed. Quarterly/annual re-evaluations should be conducted to dynamically maintain the directory.
2. Verbal Procurement Information: Orders placed by phone or WeChat without subsequent written confirmation lead to disputes over quality requirements and delivery schedules. All orders must have written records or be confirmed in writing afterward.
3. Disconnected Inspection and Procurement: The Quality Department's inspection records do not match the warehouse's incoming quantities or the procurement order quantities. Regular tripartite reconciliation (orders, incoming, inspection) should be conducted.
4. Emphasis on Price Over Quality: The Procurement Department selects suppliers based solely on price, bypassing the evaluation process. The procedure should clearly state that "price is only a factor in the evaluation if quality and delivery requirements are met."
5. Uncontrolled Supplier Changes: Suppliers change material sources or processes without notification, leading to batch quality incidents. The contract/quality agreement should specify the supplier's obligation to notify of changes, and execution should be spot-checked.

Select good suppliers and manage procurement effectively to keep external risks out.

Knowledge code: 2.3.1

Version: v20260809

Author: Quality Think Tank Quality Think Tank is dedicated to providing systematic professional knowledge, methodologies, and practical tools for quality management practitioners, helping companies continuously improve their quality capabilities.