Supplier Quality Agreement Template
A supplier quality agreement spells out who is responsible for what on quality: targets, change control, how problems are contained and fixed, and what records must be kept. It reduces disputes because expectations are written down before the first defective lot arrives.
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Supplier Quality Agreement Template
Supplier Quality Agreement
Between Acme Precision Ltd (Buyer) and Northline Components Inc (Supplier). Effective date: 2026-11-01
This agreement sets out the quality requirements that apply to the products and services supplied under the purchase orders between the parties. It supplements, and does not replace, the purchase order terms and any supply agreement.
1. Scope
Machined aluminium housings and related drawings listed in Appendix A.
The Supplier shall meet the requirements of the drawings, specifications and purchase order revision in force at the time of order.
2. Quality system
The Supplier shall maintain a documented quality management system conforming to ISO 9001. The Supplier shall notify the Buyer within 10 business days if certification is suspended, withdrawn or not renewed.
3. Performance targets
Quality: 99.5 percent lots accepted, 1,000 PPM maximum. Delivery: 95 percent on time, in full.
Performance is measured by the Buyer and reviewed with the Supplier at agreed intervals. Missed targets may require an improvement plan.
4. Change control
The Supplier shall obtain written approval from the Buyer before implementing changes to design, materials, process, location, tooling, sub-tier suppliers or inspection methods that could affect form, fit, function or reliability.
5. Nonconformance and corrective action
The Supplier shall contain suspect material immediately upon notification and respond to corrective action requests with containment, root cause and corrective actions within 10 business days. Nonconforming product shall not be shipped without written Buyer disposition.
6. Traceability and records
The Supplier shall maintain lot or serial traceability from raw material to shipment and retain quality records, inspection data and certificates for 7 years, producing them on request.
7. Audit and access
The Buyer may audit the Supplier's relevant facilities, processes and records on reasonable notice. The Supplier shall flow down applicable requirements to its sub-tier suppliers.
8. Responsibilities
| Topic | Supplier | Buyer |
|---|---|---|
| Process control and inspection | Owns | Reviews data |
| Specification and drawing release | Receives | Owns |
| Containment of suspect lots | Owns | Notifies |
| Performance reporting | Responds | Owns |
| Change approval | Requests | Approves |
Approvals
This is a starting point for discussion, not legal advice. Have counsel review it, and add liability, warranty, confidentiality, regulatory and customer-specific clauses that apply to your situation before signing.
Track agreement targets against ERP data
Optional: we can show how delivery and quality targets from the agreement can be monitored from purchasing and receiving data.
Optional. The tool and every export work without this. No spam.
How to use the template
Fill in the party names, the scope, the quality system you expect and your targets, then preview and export. Change the wording for each supplier risk level: a critical machined component needs tight change control and traceability, while a catalog commodity may only need a short version. Always attach the drawing list or specification index as an appendix so the scope is unambiguous.
What belongs in the agreement
Quality agreements focus on operational responsibilities, while commercial terms such as price, payment and liability stay in the supply agreement or purchase order terms. Typical sections follow the product life cycle from approval to ongoing control.
- Quality system requirements and certificate maintenance
- Targets for quality and delivery with how they are measured
- Change notification and approval before implementation
- Containment, root cause and corrective action response times
- Traceability, retention and access to records
- Audit rights and flow-down to sub-tier suppliers
Common mistakes
Agreements fail when targets cannot be measured, for example PPM with no defined sampling or return process. Another is demanding approval for every tiny change, which suppliers ignore; list what counts as a notifiable change. Do not copy a regulated-industry agreement into a catalog purchase, since heavy requirements raise cost without lowering risk. Finally, an unsigned or unfiled agreement protects nobody, so store it with the supplier record.
Where it fits with your ERP and PPAP
Link the agreement to the supplier master and the purchase order terms so buyers see the version in force. For automotive and aerospace supply chains the agreement works alongside PPAP, first article inspection and customer-specific requirements. Where your ERP tracks supplier ratings, use the same definitions of on-time and accepted quantity as the agreement so numbers match.
Frequently Asked Questions
Is a supplier quality agreement legally binding?
It can be if properly executed and incorporated into the supply contract or purchase order terms. Legal effect depends on your jurisdiction and drafting, so have counsel review the final document. This template is a starting point, not legal advice.
What is the difference between a quality agreement and a supply agreement?
A supply agreement covers commercial terms like price, payment, delivery and liability. A quality agreement covers technical and quality responsibilities such as change control, nonconformance handling and records. They are usually separate documents that reference each other.
Which suppliers need a quality agreement?
Prioritize suppliers of safety-critical, regulated, custom-made or high-spend items, and any supplier with past quality escapes. Standard catalog items often rely on the purchase order terms and a short quality clause instead.
How long should corrective action response times be?
Many companies ask for containment within 24 hours and a full response with root cause and actions within 10 to 30 days. Pick times your supplier can realistically meet and that match the severity of the issue.
If you want the performance data behind these targets generated from your ERP automatically, Netray can build it on your own system, including on-prem deployments.
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