In June 2018, the American Petroleum Institute (API) released an update to its Spec Q1 standard, the update, also known as Addendum 2. This update brings in an additional layer of control over critical supplier and these great benefits by closing a quality gap. The 2 key terms which have a huge impact on purchasing through this update are component and supply chain. Moreover, the supply chain phase becomes even stronger by this update, let’s see to the advantages.
API defines a supply chain as, Suppliers and associated sub-supplier(s) required for product realization. This statement is explained as many organizations will only focus on the first level, which means the focus is only the first level of supply chain and not much emphasis is given to the second level. The first level suppliers might be doing a great job and comes to a gap within the second level suppliers creating a room for risk and quality loss. To adhere to the gap and make the standard even firmer the addendum 2 came into existence to ensure organizations have a strong supply chain by focusing on both levels of the supply chain.
Addendum 2 would require several updates in your API spec q1 documentation. One of the overriding modifications is the inclusion of the phrase products, components, and activities. This phrase is used in API Spec Q1, 9th Edition, however Addendum 2 adds it in numerous other clauses. This can include coating, welding, inspections, and many others. The sections impacted due to this statement consists of: 5.4.3, 126.96.36.199, 188.8.131.52, 184.108.40.206, 220.127.116.11, 5.6.3 and 18.104.22.168.c. Check those sections and ensure they have been added.
The update ensures organizations to identify which products, components or activities are considered critical. Earlier there have been only required determination but now when it comes to the extent of control applied to suppliers, Addendum 2 keeps it as a key to extend and control the organization applies to its entire supply chain. Also, it includes the extent and controls that your suppliers place on their suppliers.
API Spec Q1 Addendum 2 brings it as a strict practice to evaluate the type and extent of controls that suppliers have on their supply chain. Earlier the priority of evaluation was only focused on the first level suppliers but now it has become mandatory to evaluate both the first and second level suppliers. If you want to meet the requirement, have your suppliers provide evidence, such as the API, ISO or other certifications for the applicable suppliers within their supply chain.
Supplier Re-evaluation is now based on the individual supplier risk and quality performance and these criteria will determine the re-evaluation frequency. To meet these requirements, it has become mandatory for organizations to perform a risk assessment for each supplier. This may seem time-consuming, but organizations need to determine that some suppliers are riskier than others and should be re-evaluated more often.
If any organization is specifying the coating and plating specification standard, then validation becomes significant. Also, organizations should verify or ask for the specifications and standards from applicable suppliers. The validation also involves the supplier providing you with their data and inspection reports regarding the coating and plating that was applied to your product.
Overall Addendum 2 has brought in some additional controls around the area of your organization’s suppliers and your suppliers’ suppliers, incorporating these changes will require some minor adjustments to your documentation. Also, the supply chain expands your scope of responsibility beyond direct suppliers. You are now accountable for the quality of your suppliers’ suppliers, not only about products but outsourced processes as well.
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