Supplier Quality Surveillance Before and After COVID-19

Inspection strategies have not changed but inspection considerations have.

COVID-19 is an infectious virus that was first identified in late 2019 in Wuhan, China. Its spread has become a global pandemic. The COVID-19 virus outbreak is a human tragedy that directly affects billions of people, cripples governments, fosters fear, and shuts down economies. It’s growing impact on the global economy is unmistakable. Companies, forced to mitigate this threat, are making strategic changes to their supply chains[1] – including inspection activities at supplier facilities.

Supply chains often extend worldwide; thus, it is impossible to avoid the virus’ impact on oil and gas (O&G) or other industrial projects and their inspection activities. Companies are being forced to modify conventional approaches to inspection activities and considerations such that they can be completed cost effectively and safely amid and after the COVID-19 crisis.

Supplier quality surveillance (SQS) is the selective audit, evaluation, inspection, observation, and review of engineering, procurement, fabrication, and manufacturing operations, and quality management systems to determine a supplier’s compliance with purchase order (PO) requirements.

The purpose of SQS is to a provide a risk management function to ensure that a project’s equipment and materials are received complete, correct, and on-time. Risk management is the identification, evaluation, and prioritization of risk exposures. Inspection is an element of SQS that projects use to mitigate risk.

SQS Before and After COVID-19

At the beginning of a project, the project team plans specific inspection activities to balance the benefit of risk mitigation with the cost of inspection resources. This includes considering and planning for all circumstances, including an unforeseen global crisis. Table 1 is an overview of how SQS requirements have changed to mitigate the COVID-19 crisis. Most new considerations (see the right-most column in Table 1) focus on:

  • Applying strategies to manage risk, and mitigate cost and lack of inspection resources;
  • Eliminating instances of face-to-face meetings and facility visits to curtail and stop community spread;
  • Lowering the amount of inspections (i.e., frequency, length, or both); and,
  • Lowering the quality surveillance (QS) level.

Inspection Strategies

Despite the differences in a world with and without COVID-19, the strategies for mitigating a dearth of inspection resources are surprisingly similar. For example, instead of witnessing the testing of every pump – only the first pump test is witnessed. After the project confirms that the proper procedures were used and test results are acceptable on the first pump, remaining tests are non-witnessed.

Despite these similarities, what has changed is how and when these strategies need to be applied. Table 2 lists inspection strategies that mitigate lack or scarcity of inspection resources.

How projects deploy these strategies depend on many factors, including project-specific needs, requirements, and risks, and actual and projected impacts of COVID-19 to business and world financial markets. As always, close communication with project and supplier teams is required to:

  • Adapt to change before and after a PO award; and,
  • Implement suitable processes and protocols that cost-effectively and safely meet project requirements by considering all circumstances.


Other Inspection Strategies

What other inspection strategies do you find useful to manage risk and mitigate the availability or cost of inspection resources now, during COVID-19, and in the future? Your ideas and discussion are welcome. 

Please respond to this forum with a comment below or use direct messaging to discuss ideas, specific project needs, and questions.

Note

This article was originally published on LinkedIn 26-Mar-20 https://www.linkedin.com/pulse/supplier-quality-surveillance-before-after-covid-19-christensen-ret/.

About the Author

Roy O. Christensen is a Welding Engineering Technologist who has over 35 years’ experience with oil and gas, pipelines, and other projects. He has authored countless instructions, manuals, plans, proposals, reports, specifications, and other documents that continue to drive success for many projects. He is the founder of the KT Project, which saves organizations significant money and time, by providing key resources to leverage expert knowledge transfer for successful project execution.

Contact

Email: hello@ktproject.ca 

Phone: 403.703.2686 

Web: www.ktproject.ca 

Figures

  1. World Map Depicting the Spread of the COVID-19 Virus (March 24, 2020). https://minnesota.cbslocal.com/2020/03/05/coronavirus-covid19-map-real-time-john-hopkins-cases-death-toll/
  2. Supplier Incentive (KT Project Key Knowledge). www.ktproject.ca 

Tables 

  1. Supplier Quality Surveillance Before and After COVID-19
  2. Inspection Strategies Projects Use to Mitigate Lack or Scarcity of Inspection Resources

References

  1. McKinsey & Company. COVID-19: Implications for business. https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business