Your Startup is as strong as your weakest supplier

Building a strong supply base

published by Arta Doci

Nowadays, suppliers (OEM, service suppliers, contract manufacturers, etc.) are critical to a startup’s success in delivering high-quality products at the right time. You’ve likely heard the maxim, “A chain is only as strong as its weakest link”

A chain is only as strong as its weakest link

, which means that no matter how well the startup performs, in order to be great it has to improve the “weakest supplier.”

Startups need to recognize that quality of their products will require building a strong supply base.

Quality of products requires building a strong supply base

For example, at Genu Dynamics – an orthopedic start up medical device, in order to achieve a world-class supply chain, we utilized Lean Six Sigma methodologies to address the variability in the processes and supply chain systems. Given the complexity of medical device products, each supplier might need to meet unique requirements; however, in this blog I tried to list the core requirements and expectations that should be met by every supplier.

Environmental Regulatory Compliance

Suppliers must comply with all country, federal, state, and local environmental regulations. To find out what laws might impact your business and how you can comply, check out:

  • EPA Environmental Laws and Regulations – Search laws and compliance guides by topic and industry
  • EPA Small Business Guide – Learn more about the laws that apply specifically to small businesses
  • State Environmental Laws – Search federal laws that apply in your state or your state government website for state-specific laws

Environmental responsibility and stewardship

Many startups have adopted the ‘Triple bottom line’ framework: social, environmental (or ecological) and financial. Medical design focus is placed on safety, effectiveness, and usability; therefore, the triple bottom line has faced significant barriers to adoption; however, over the last years many improvements have been seen in this front by focusing on improving the disposable business model. For example, suppliers can help the startup disposable model by using bio-sourced plastics and innovative new materials with properties that allow for longer use, sterilization, and material reduction. In addition, they can improve packaging by redesigning stock rooms and considering minimal packaging by analyzing the product context.

Built on innovation

In order to sustain an innovation focus in a startup business, encourage and reward innovation internally, as well as, encourage innovation behavior to your suppliers.

Import Compliance

Businesses have become increasingly global. If a supplier is shipping a product from outside United States for your start up product you need to ensure import compliance, including Country of Origin and Commercial Invoices.

Business Continuity

Business continuity plans are a good practice to ensure planning for interruptions of any kind. While it is apparent that you cannot develop a plan for all potential scenarios, a robust plan will help you and your suppliers to facilitate rapid response and recovery if an interruption occurs.

Change Management

The supplier shall notify the startup company to collaboratively outline all testing prior to any modification.

Quality Agreements

For finished product manufacturing a quality agreement must be in place. Also, there are many other situations that a startup might want to put such an agreement in place. The agreement must define the commitments that both parties must make to ensure that their respective products and services satisfy the quality and regulatory requirements called out in the agreement.

Monitor/Control Processes and Inspect Parts

Use six sigma tools to monitor/control processes and inspect parts. Useful tools are Measurement Systems Analysis – Gage R&R studies, Gage correlation studies, and Process Capability – A Statistical Process Control Plan. Control plans describe the system for controlling product and processes and contains the actions required at each phase of the process.

Cost of Poor Quality

It is the supplier’s responsibility to replace any product that is deemed defective by the start up.

Quality Management System

If your product requires a Quality Management System, then the suppliers also are required to establish, document, and implement an effective Quality Management System.

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