Managing quality in de-

centralised supply chain

Research paper
RM Assignment -1

Submitted by- Astha Akriti,

Eishita Mehta, Radhika
Chandak and Shivani Gupta
Introduction A brief understanding of what is
quality in supply chain
management
 Quality in supply chains
● Quality concerns may occur at any stage in the supply chain, and companies must identify them as soon
as possible to avoid incurring additional expenses and minimising threats to their reputation,
compliance, safety, and bottom line.
● As a result of unexpected downtime, delays, and interruption, poor supply chain quality management can
lead to greater production and distribution costs, as well as revenue loss.
● The excellent quality of both products and services at every stage of the supply chain has been identified
as a critical component of effective SCM.
● Improving the quality of all supply chain operations results in cost savings, better resource use, and
increased process efficiency.
● Several studies have been conducted to study how supplier-customer interactions impact the quality of
both products/services and operations. However, many research concentrated on a single organisation
or its immediate suppliers and consumers, and relatively few studies examined quality management
from an SCM viewpoint.
● Indeed, coordinating the whole flow of materials and information between customers' customers and
suppliers' suppliers may yield various benefits in terms of product and process quality.
Quality in Decentralised Supply Chain
● Because of its rising operational complexity and dynamic character, the fashion sector is getting
increased interest from operations and supply chain management researchers. Due to the combined
pressures of achieving cheap prices and fast lead times, buyer-driven and geographically complicated
outsourced supply chains have emerged (Masson et al. 2007).
● Quality is an important aspect in the success of fashion supply chains.
● From the standpoint of production, high quality indicates appropriateness in terms of cost-quality ratio
(Bhargava and Choudhary 2001); consumers are willing to acquire high-quality products with low cost-
quality ratios.
● Aspects of quality may vary depending on market levels and consumer price sensitivity, but for fashion
items in general, quality may be split into physical quality (in terms of durability and utility) and
fashionability (in terms of style and emotional appeal).
● Individual units in a decentralised supply chain make decisions based on local knowledge. A system
like this makes it simple to reward players to work together, making the entire supply chain more
efficient.

● The quality level given to the end customers is the outcome of each link in the supply chain's quality
management policies; hence, each player is responsible for the final outcome.
 We have analysed research papers
Findings and written about the current
studies(literature review) and
research gaps that exists.
Defining the concept of supply chain quality management and its
relevance to academic and industrial practice
Objective
● The goal in this research was to thoroughly investigate earlier work that incorporates quality management
principles within the supply chain arena in order to better understand the function of quality in a supply chain
architecture.
● Then utilise this literature base to identify prevalent themes and gaps, which are then used to establish future
research possibilities and goals in this field.
● Also demonstrate how pursuing this research agenda might assist practical managers in improving their
operations and bottom line results.
● This paper demonstrates how quality tasks that were once compartmentalised and departmentalized have
become outmoded and must now be integrated with the overarching strategic business direction of the entire
marketplace.

Gap
● To completely assess how previous scholars have approached comprehension of SCQM, we need to make a
further differentiation.
● Managers may use SCOR's prescribed supply chain process analysis to characterise, evaluate, configure, and
explain the depth and breadth of a supply chain, as well as provide the groundwork for improvement decisions.
● The impact of ISO 9001 implementation on downstream and upstream supply chain operations is mostly
unknown.
 A Blockchain-based Supply Chain Quality Management Framework

Objective
● In order to improve supply chain quality management with the blockchain technology, this study
proposes the framework and system architecture for blockchain-based supply chain quality
management.

Gap
● How to solve the problems of products qualities in supply chains has become a key issue in acquiring
manufacturing power from strategy implementation in China, and has drawn attention of scholars in
various fields recently.
● Although there have been many related research projects and studies, to resolve the series of problems
in supply chain quality management arising from the lack of trust is still a difficult problem for the
technology used nowadays.
● The root cause is that the traditional centralized trust mechanism cannot completely solve these three
challenges:
❖ the self-interests of the supply chain members
❖ the information asymmetry in the production process
❖ the cost of quality testing and technical limitations .
Price and quality decisions in dual channel supply chain

Objective
● This article looks at different channel structures:
❖ traditional retail, manufacturer direct-to-consumer (Scenario M),
❖ a dual channel that includes both retail and direct channels (Scenario MR).
● We look at how these channel architectures affect pricing and quality judgments in two
different decision structures: cases centralised and decentralised

Gap
● What impact does channel structure have on supply-chain participants' strategic pricing
and quality decisions, channel selection, and overall supply-chain performance?
Understanding Supplier Quality in Decentralized Supply Chains

Objective
● To comprehend decentralised production systems problems, a supply chain model was used in which the
vendor and buyer(s) agree on a mutually acceptable quality standard.
● The model includes penalties that force the seller to return the purchase price of units that are discovered to
be of poor quality.
● The study assists in understanding the impact of the purchase price and enforcement expenses on the
quality of the supplier's units. The concept distinguishes between two types of enforcement: individual
enforcement and joint enforcement (sometimes known as "class action").
● Individual enforcement means that each buyer enforces the quality separately, but joint enforcement means
that if even one of the buyers' units is found to be below the quality level, all of the purchasers gain.
Gap
● There has been considerable concern recently regarding the lax oversight over the supplier’s supply chain
and the consequent poor quality.
● This is reflected in considerable media interest in understanding the reasons behind poor supplier quality.
For example, the Mattel toy recall, blamed on a Chinese subcontractor for paint contaminated with lead, has
received considerable media attention.
● Poor customer service in call centers is another oft-cited example of sub-standard quality, in the services
context which needs to be researched upon.
 Decentralized Manufacturing Systems Review: Challenges
and Outlook
Objective
● The purpose of this paper was to specify the main trends, issues, and sensitive topics that
characterize the behavior and performance of these production systems. Based on this review, a
discussion over existing production concepts is performed.
Gap
● The main trend currently outlining the development of manufacturing paradigms is the ever
increasing tendency in the direction of decentralization of manufacturing functions toward
decentralized entities.
● This has caused a fundamental reorganization process of the manufacturing organizations in order
to cope with this trend.
● Several critical issues rise in the control and management of such organizations.
● These criticalities are further compounded by the need to achieve mass customization of industrial
products, as this greatly complicates the manufacturing and supply activities.
● The research needs to be done in order to find the ways by which these issues can be tackled as the
mass customization and decentralization in industry is increasing more than ever.
Quality uncertainty and quality-compensation contract for
supply chain coordination
Objective
● This paper proposes a scheme for supply chain coordination in the presence of quality
uncertainty.
● It first examine the two most extensively discussed contracts for coordination, buybacks
(Pasternack, 1985) and revenue-sharing (Cachon and Lariviere, 2005), and find that these
two contracts fail to coordinate the supply chain when the product quality is uncertain.
Gap
● This model did not examine a coordination scheme for a retailer with downside risk.
● This research did not extended to the case where there are multiple retailers competing in
the same market, or to the case where there are multiple retailers who have different
market conditions.
● In addition, this framework, may be extended to the case of intra-firm coordination to
alleviate internal conflicts among the agents within an organization.
● The research can empirically show that behavioral coordination such as use of a process
and shared goals can enhance the agents’ overall performance in a software development
project and in a nursing home by managing their task or context uncertainty effectively.
 Measuring supply chain performance upstream and
downstream the supply chain
Objective
● The major goal of this article is to present the Supply Chain Performance measurements and metrics utilised
by two heavy vehicle manufacturers (Kalmar Industries and Dynapac) as a result of the type of supply chain
they operate in and their location within it (efficient, quick, lean, hybrid, or agile).
● Furthermore, depending on where in the supply chain the supplier or customer operates (e.g., upstream or
downstream), the article specifies the sorts of supply chain performance measures that should be examined.
● The secondary goal of this study is to propose appropriate measurements, sub-measures, and metrics that
such manufacturers might use to measure and track supply chain performance.

Gaps
● Shorter lead times are a priority for both companies, but not at the expense of increasing costs.
● They do not track the entire supply chain (from 2nd and 3rd tier suppliers to the end customer).
● The company lacks the resources to interact with other suppliers farther upstream in the supply chain
● Both manufacturers have limited interactions with their suppliers. Kalmar Industries does not have the
resources to communicate with its suppliers more extensively; the company only interacts with its first-tier
suppliers.
● Dynapac does not have any ongoing, systematic initiatives with suppliers, but it does have a variety of modest
projects with projected outcomes such as reduced supplier lead times, better in-house delivery performance
for clients, and shorter average lead times.
 Supply Chain Quality Management
Objective
● The goal of this research was to look at the linkages between various stakeholders, the supply
chain and quality performance, and aspects of quality assurance across the supply chain.
● The goal was to see how different sorts of stakeholders, including as suppliers, customers, the
community, the state, neighbours, landowners, and members of various pressure groups, might
alter fundamental goods and service qualities.

Gap
● The supply chain is unbalanced since most wind turbine manufacturers are major corporations,
whereas practically all other suppliers and customers are small businesses.
● The customer’s needs, wants, and expectations were new to the supplier compared to those of
its other customers, so there was certain misunderstanding between them.
● The provider did not have complete control over the products supplied from sub-suppliers
(transport, installation, and service, for example). The client, who did not always deal with the
supplier, frequently dealt with the sub-suppliers directly. The working environment for these sub-
suppliers can be challenging at times, resulting in high employee turnover and a high necessity
for effective, pre-site training of new people. This instruction was not always conducted correctly,
resulting in inconsistencies.
Capacity and Quality Risk in Decentralized Supply Chains

Objective
This article describes a five-step process to help companies swiftly get on that road to service supply
chain excellence
1. To understand the Supply Chain of various services.
2. To determine, how to Measure the service’s Supply Chain.
3. To develop the Business Case for Improvement

Gap
This paper is unable to foresee all possible contingencies and time to market pressures are two
other reasons that make quality difficult to measure.
Quality requirements may be better understood after the CM builds a prototype.
Quality management in outsourced global fashion
supply chains: an exploratory case study
Objective
1) The aim is to give information on how outsourced fashion supply chains maintain quality. For
managing quality control in outsourced fashion supply chains, we suggest a new trilogy: (1) manufacturer
quality evaluation, (2) quality management in production, and (3) quality inspection and assurance. An
exploratory case study methodology is used.

2) The aim is to add to quality management research by proposing a new quality control triad for
outsourced supply chains based on a qualitative case study of a large global Japanese fashion retailer
that outsources production primarily to China

Gap
1) The findings are limited in their generalizability because they are based on a single case study of a
single case.
2)Only long-term manufacturers are prepared to disclose real-time quality data from their internal
processes with the case company.
 A decentralized supply chain planning model: a case study of
hardboard industry
Objective
This article describes:
1. How to present a decentralized (distributed) approach in order to address the production and distribution
problem in supply chain including manufacturer and retailers and
2. How to propose a coordination mechanism in order to handle problems related to production and
distribution in a two-echelon supply chain network through a decentralized approach. The proposed
model is tested using real case study. Sensitivity analysis is accomplished to find the effects of changing
the parameter on the results.

Gap
● Although there are growing numbers of contributions combining the mathematical programming tactics
with the maximum realistic decentralized decision-making, the SCs taken into consideration in maximum
of those researches have been pretty easy if in comparison with the commercial enterprise reality.
● Finally, researches that cope with simultaneous temporal and spatial integration have been uncommon
and have been required for decision-making approaches in CP.
● The coordination mechanism proposed on this paper attempts to factor out that the each producer and
the store speak with every different via way of means of minimal-statistics sharing, different than their
non-public statistics which include the asked demand.
Conclusion
● Limitations in supply chain visibility make supply chain quality control challenging as companies
become more reliant on sophisticated and internationally spread networks of supply partners.
● To assure the quality of goods and processes across the value chain, organisations need a
mechanism to get increased visibility into partner performance and to allow seamless
information flow and cooperation.
● Different methods like : Blockchain , RFID ,OEE , SCQM , etc.
● After analyzing the previous research papers and articles, and looking at all the gaps in the
current studies, we have reached problem statement -
 The problem statement
The mid-90s saw globalization change many traditional and non-traditional practices. Moving from centralized product
development to geographically dispersed and distributed product development teams was one such change. The
fashion industry was among the first to decentralize the product development process across geographically dispersed
teams.
Company
With the need for adapting to the fast-changing fashion trends worldwide, this approach attempts to harness the best-
of-capabilities from across the globe. However, geographical and cultural disparities as well as lack of effective
collaboration tools hamper the apparel house's ability to leverage full benefits of global manufacturing. Several critical
issues rise in the control and management of such organizations and one such issue is “What improves quality
performance of supply chains that includes decentralised manufacturing”? Diverse researches have been done to find
the answer of this questions but previous researches looks at quality only from the supplier’s point of view and doesn’t
take the cultural differences of the buyer, the supplier and the entire supply chain into action.

Research Scope

The scope of research can be to look at quality in decentralised manufacturing from the buyer’s point of view and how
quality is lost as a result of things like communication gaps, practices followed, interpretation of ideas which originates
due to cultural gaps between buyer, supplier and supply chain.
References
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