Supplier Corrective Action Report

How to Use Supplier Corrective Action Reports (SCARs) to Improve Your Supply Chain Quality

If you want to deliver high-quality products or services, you need to have a good Quality Management System that can fix any problems that may come up. Sometimes, the issues are not your fault but your suppliers. How do you deal with that? You use a Supplier Corrective Action Report or SCAR for short. This article will tell you what a SCAR is, how to make and use it, and why it is crucial for your supply chain.

What is a Supplier Corrective Action Report (SCAR)?

A SCAR is a way of telling your supplier that there is something wrong with their product or service and asking them to fix it. It is a document that shows the details of the problem and how it affects you.
The problem can come from different sources, such as customer complaints, supplier mistakes, audit results, internal quality checks, or legal requirements. The SCAR usually has the following information:
  • The description of the problem or mistake
  • The proof or data that shows the problem or mistake
  • The impact or seriousness of the problem or mistake
  • The root cause analysis of the problem or mistake
  • The suggested corrective actions and the deadline for doing them
  • The check and confirmation of the corrective actions
  • The closure and approval of the SCAR
A typical timeline for the SCAR is as follows:
  • Problem found
  • Problem not caused by us (i.e., not damaged in goods receipt)
  • Problem not because of design
  • SCAR issued
  • Reason for non-conformance found
  • Corrective action done

What does the supplier need to do with a Supplier Corrective Action Report?

The supplier needs to do several things.
  • Reply to the SCAR
  • Explain how they investigated the problem and what was the root cause of it. Sometimes we may ask them to use a specific root cause analysis method, like 8d.
  • Do the corrective actions to fix the problem and prevent it from happening again.

Who makes and manages the Supplier Corrective Action Report?

There are two parts to making and managing a SCAR.

1/ Who makes the SCAR

When we check the products or services from our suppliers, we may find some defects at entry. When that happens, we usually put them aside until we agree on what to do with them.
When we decide to make a SCAR, our QMS should say who can do it. Different organizations have different people who can do it, like someone from goods receiving, Quality, Procurement, etc. But usually, this is done by someone from Quality.
Whoever makes the form needs to know well what is wrong and what we need from the supplier so that they can fill in the SCAR correctly.

2/ Who manages the SCAR until it’s done

Once made, SCARs are usually managed by someone from QA. There may be some commercial issues with the SCAR (for example, replacing parts, contract, delivery time), so sometimes the procurement team will be involved in this process. The person who manages the SCAR usually has a good relationship with the supplier and can work with them until they solve the problem. The steps to managing the SCAR are usually:
  • Problem found
  • Decide if SCAR is needed.
  • Check contractual requirements that affect the schedule and delivery of the products.
  • Make and send the SCAR form to the supplier with clear instructions and expectations
  • Keep in touch with and follow up with the supplier until they finish the corrective actions
  • Review and approve the results and proof of the corrective actions from the supplier
  • Close the SCAR with feedback from both sides
Good communication with the supplier is very important. We may need to make some changes to the parts; they may be scrapped or fixed. We may need them urgently or have high priority and need them fast. There may be some money issues to sort out. All this needs to be handled by the right people in our team and communicated well to the supplier. When we send a SCAR, we usually give them a certain time to reply, like 14 days.

Do we need a SCAR for every mistake?

Different organizations have different levels of tolerance, for example:
  • Some may not make a SCAR for a small one-time issue, like something we can fix ourselves quickly rather than wait for the supplier to do it.
  • Quality Alerts can tell the supplier where to pay more attention.
  • SCARs could be made where there is a big or repeated issue that needs more attention and detail to fix.
  • Some organizations only use SCARs as a last resort when they have tried other ways to fix the problem, but they didn’t work.
What is important is that we have a process for this in our management system. Then we need to follow that process for each issue.

What to include in a SCAR

Every organization has its way of making the SCAR. Many use the same form as their internal corrective action report (some add a mark or a box to show that this is for a supplier and not for us).
Usually, the form has these things:
  1. A unique number so we can track the SCAR
  2. Date made
  3. Supplier name
  4. Part number or product name
  5. Quantity delivered and quantity with problems
  6. Detail of the mistake
  7. What to do with it (i.e. fix, scrap etc)
  8. Root Cause / Investigation – supplier to fill in
  9. Corrective action – supplier to fill in
  10. Final action
  11. Sign off (where the SCAR needs formal acceptance that the problem has been solved)
These are just examples; different organizations have different ways, so use these as a guide but make something that works for you.

Why the SCAR process is helpful

There are many benefits of the SCAR process, such as:
  • It gives us a standard way to find and fix supplier problems.
  • The process helps us work together with our internal team
  • The process helps us work together with our supplier
  • It helps us find the root cause of the problem
  • It helps us do the corrective actions
  • It gives us proof and data that we can use to measure:
  • How well the corrective actions worked
  • How good our suppliers are

What are some problems with the SCAR process?

While the process can be helpful, there are some problems that we need to think about when we design our process. Some key problems are:
  • SCARs should be used when needed – Some may find they don’t work well if we use them too much.
  • SCARs should not be used as a way to get back at a supplier – if someone doesn’t like a supplier, making lots of SCARs can move away from the real purpose and hurt our relationship with them
  • We need to check how well it works; some suppliers may reply well – others may need more help.
  • We need to agree within our team
  • We depend on the supplier to reply well.
  • SCARs need to be managed, and when we use them too much, it can be hard to keep track of and follow up on them. We need enough people and resources to manage them well.
  • Suppliers may not reply.
  • The last problem is the most common.

What do we do when the supplier doesn’t reply to our SCAR?

We may have some problems if we have suppliers that don’t reply to our SCARs:
  • Some suppliers may not agree with the problem and ignore us
  • Some suppliers may ignore our request
  • Some suppliers may not like how we do our process and what information we ask for (i.e. we may ask for an 8d where the supplier may not see why).
  • Some suppliers may not follow our process and email us incomplete answers without using the right form or method.
  • Some suppliers may give us a bad answer.
Whatever the reason, a bad reply can cause us big problems. It’s hard, but we should expect some suppliers to reply poorly to our SCARs at first. When we make our process, if we expect this from the start, we can take some steps to deal with it so that we’re ready.
For example, we might choose to:
  • Have face-to-face meetings with some suppliers
  • Make it part of our contract
  • Look at money penalties
  • Tell their Senior management
When we think about our SCAR process, we often need to remember how we talk about it when we start working with a supplier. Telling them from the start can help build good relationships with them from the beginning. We must remember that in most cases, we will still need to work with them, so finding a way that works for both of us is important. We should always remember that whatever way we choose to get our SCAR replied to, we do not have to accept bad parts.

Conclusion: How to Use Supplier Corrective Action Reports (SCARs) to Improve Your Supply Chain Quality

In conclusion, SCAR plays a big role in keeping supply chains strong. It helps fix problems and keeps things running smoothly. The VIS Quality Control team sets a great example by showing how to do it right. Contact us for professional Quality Control services, and ensure your companies can do well in a competitive world where quality matters a lot.

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