Arthrex tracks suppliers by quality acceptance rate. This rate is calculated using the number of rejects related to nonconformances against the number of items/products received. Example: 1000 parts received, 100 parts rejected. Therefore, the acceptance rate is 90%.
Each supplier category has a target acceptance rating:
- Category A suppliers: 98% minimum acceptance rating
- Category B suppliers: 95% minimum acceptance rating
- Category C suppliers: 90% minimum acceptance rating
The rate is calculated on a quarterly basis for Category A and B suppliers and an annual basis for Category C suppliers. Any supplier that is below the minimum rate for two consecutive monitoring periods may be put into a probationary status in which no new business may be awarded to the supplier. Any supplier that is below the minimum rate for three consecutive monitoring periods is subject to disqualification.
Category A and B suppliers in probation for performance reasons can be reinstated only after demonstrating two consecutive quarters of acceptable performance and, at the end of the two quarters, successfully passing a full quality system audit.
Category C suppliers in probation for performance reasons can be reinstated only after demonstrating a monitoring period of acceptable performance.
Arthrex allows a maximum late percentage of 10%. Any quarter above this may result in probation and potential disqualification. Delivery performance is judged on a ± 1 day grace period. We send a delivery performance document to each supplier at the end of each calendar quarter.