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86 SMT007 MAGAZINE I OCTOBER 2020 Practical Approach to Risk Evaluation The foundation of supplier qualification is based on risk evaluation. Risk management has taken a higher level of importance in recent quality system standards of ISO 9001, ISO 13485, and AS9100, among other quality system standards. But first, we need to under- stand risk. The new ISO 31000:2018 risk man- agement guidelines offer the following defini- tion of risk in section 3.1 [2] : Risk: Effect of uncertainty on objectives 1. Note 1 to entry: An effect is a deviation from the expected. It can be positive, negative, or both and can address, create, or result in opportunities and threats. 2. Note 2 to entry: Objectives can have different aspects and categories and can be applied at different levels. 3. Note 3 to entry: Risk is usually expressed in terms of risk sources (3.4), potential events (3.5), their conse- quences (3.6), and their likelihood (3.7). In essence, supplier qualification requires risk assessment before approving a new sup- plier to the supply chain. Companies need to establish risk evaluation procedures for qual- ifying new suppliers. Risk assessment allows companies to objectively determine the qualifi- cation level required for a new supplier depend- ing on the supplier's performance impact and supply chain to the company. Table 1 provides considerations needed when determining the qualification level for a new supplier. Higher risk suppliers require a process effec- tiveness qualification and a quality system conformance qualification. Medium-risk sup- pliers are only required to do a quality system conformance qualification. Low-risk suppliers may be sufficient to complete a questionnaire or demonstrate an ISO certification. IP Considerations Suppliers typically have no concerns provid- ing quality systems documentation to custom- ers as a method to demonstrate conformance to established quality systems standards. This practice has been commonly accepted in all industries for many decades. However, when it comes to process effectiveness qualification, suppliers are required to provide process con- formance information to demonstrate the abil- ity to perform to expectations. Suppliers may initially be hesitant to do this if process knowhow is requested as part of the process effectiveness qualification. It is important to protect a supplier's IP during any review of process effectiveness exercise. The focus should be to monitor performance vs. plan on key process characteristics. Process Effectiveness Qualification Plan The foundation of process effectiveness is to have an unbiased way to measure per- formance results in comparison to the plan. Suppliers are required to demonstrate perfor- mance with empirical data. Performance effec- tiveness qualification activities can be done Table 1: Considerations when determining the qualification level for a new supplier.

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