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Mutually Beneficial Supplier Relationships

The role of the supplier constitutes a crucial relationship in the value creation chain in QMS. The ISO 9001 standard defines this relationship under Clause 7.4 “Purchasing”. In dealing with suppliers, the standard is focused on the control of the purchased items and the reliability and capability of the supplier in relation to the requirements of the customers.


The extent of dependencies and the need for mutually beneficial relationship depend on the way business is conducted. On one extreme, purchasing control could be the mere issuing of a purchase order and the receiving of the items on delivery to a highly complex working relationship of a sub-contractor working at the organization’s worksite over an extended period of time. What this means is that the degree of working together and control of the inputs – material, services, information can range from a simple, over the telephone relationship to a very complex team working relationship.


The first element of control is to ensure that the supplier has the capability to supplier and deliver to the specified requirements of the organization. This calls for assessment of the supplier on many criteria, including relevant experience for the job, the performance of the supplier against other competing suppliers, the product quality, price, delivery performance, the ability to respond to problems, the management and financial capability, the history of performance, its logistic capability, its awareness and compliance with statutory and regulatory requirements, its response to inquiries, quotations and tendering, among others.



In some cases, the organization may take the proactive approach of evaluating the supplier at the site, and may even provide technical assistance to the supplier to meet the stated requirements. A second party audit by the organization is common practice for a long term contracted supply.


The second element of control is the purchasing process control, from the request for purchase and the issuance of the purchase order to the delivery and receipt of the inputs. In some cases, it could be a simple issuing of purchase order and waiting for the purchase to be delivered, and then the incoming receiving control of the input to the organization. This is allowed by the receiving control of the purchased items, this requirement defined in ISO 9001 Clause 7.4.3 “Verification of the Purchased Product”.


In the sub-contracting cases, the organization will have to team up and work with the sub-contractor at the project site and have scheduled progress meetings on the project. Usually subcontracting work is done through a tendering process. The tendering process will look at all the requirements specified under ISO 9001 Clause 7.4 “Purchasing” and will include the development of the project quality plan for implementation after award of the tender. In such case, developing good working relationship among those working on the project is necessary for successful project management.



Outsourcing has become a major concern in the last few years as some organizations decided to outsource their non-core processes. ISO 9001 Clause 4.1 “General Requirements” requires the organization to ensure control over outsourced processes. The “Note 2” of Clause 4.1 explains what is an outsourced process in the context of ISO 9001:2008 Standard. The “Note 3” of Clause 4.1 further emphasizes that ensuring control of the outsourced process does not absolved the organization of its responsibility of conformity to all customer, statutory and regulatory requirements. This clearly means that the organization has to work closely with the outsource partner.


Applying the Principle of Mutual Beneficial Supplier Relationships In ISO 9001

Applying the Principles of  Mutually Beneficial Supplier Relationships In ISO 9001

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