CHAPTER 5

MANAGING SUPPLIER QUALITY IN THE SUPPLY CHAIN

 a network of facilities that procures raw material,
transform them into intermediate subassemblies and
SUPPLY CHAIN final products and then delivers the products to
customers through a distribution system

tool that disaggregates a firm into its core activities

VALUE CHAIN
to help reduce costs and identify sources of
competiveness
 THE VALUE CHAIN ACTIVITIES

TRANSFO OUTBOUN AFTER

SUPPLIER INBOUND D
RMATION SALES
MANAGEM LOGISTIC LOGISTIC
PROCESS SERVICE
ENT S S
ES
 THE CHAIN OF CUSTOMERS
- the chain of customer is revealed when someone/seller view

the step in the chain after the seller be the customer.

- someone who works in a process at the core of the value

chain, he will make sure that the work done is absolutely perfect

before handling it over to the customer.

- each as long as the networks work to satisfy our customer, the

end customer will satisfied with the products.

 MANAGING THE SUPPLY CHAIN

- One of the most significant aspect of the value chain is the linkage between a series of supplies

and customers.

CUSTOMER
FISH FISHING FISH
TRANSPORTER SERVICES
VESSEL PROCESSING
UNIT
 SUPPLIER ALLIANCES
❖ Improving the quality of a product requires assistance from suppliers
where they can provide the required product without any risk of damage
while fulfilling the given conditions.

❖ Several approaches for suppliers to produce what is desired are referred to

as supplier alliances

❖ Inspired by a lean purchasing approach learned from the Japanese

industry
SUPPLIER DEVELOPMENT APPROACHES

6) Supplier
1) Single 7) Supplier
development
sourcing audits
programs

5) Supplier
certification or
2) Dual sourcing
qualification
programs

3) Supplier 4) Sole-source
evaluation filters
 1) Single sourcing
- Refers to narrowing down the list of
approved supplier for a single
component to just one supplier
3) Supplier evaluation
- Supplier evaluations are often
recorded on report cards in which
potential supplier are rated based on
criteria such as quality, technical
capability, or ability to meet schedule
demands.
2) Dual sourcing
- Companies that are uncomfortable with using a
single supplier may use dual sourcing where the
number of approved suppliers is reduced to just
a few.
4) Sole-source filters
- That are used in many companies rely on
external validation of quality programs.
- Two of the most common filters are the
Baldrige criteria and ISO 9000 . The ISO is
commonly used in the international community
 5) Supplier certification 6 ) Supplier Development Program

- Many companies perform lengthy - If the focus is on helping the supplier

inspections of their suppliers. These improve, then the programs are called
programs are often called supplier supplier development programs.
certification or qualification programs if
the focus is entirely on evaluation.

7) Supplier audits

- The audits are performed to ensure that

product quality and procedural objectives are
being met.
APPLYING THE CONTINGENCY PERSPECTIVE
TO SUPLIER PARTNERING

❑ Different firms take different approaches to supplier development.

❑ Apparently, one variable that affects what customers want from their
suppliers is the customer’s position in the supply.

❑ The keys to the contingency approach are an understandings of

quality approaches, an understanding of the business, and the
creative application of these approaches the business.
VIEWING QUALITY THEORY FROM A CONTINGENCY PERSPECTIVE

• Beause a variety of approaches can work to improve quality, it is best to

focus on fundamental questions such as:

⮚ What are our strengths?

⮚ Where are our competencies?
⮚ In what areas do we need to improve?
⮚ What are our competitors doing to improve?
⮚ What is our organizational structure?
 Supplier
Development
Program
Supplier development

Activities a buyer undertake to

improve the performance of
Intro it’s suppliers

The activities includes supplier

evaluation, supplier trainig,
Explanation consultation, sharing data and
sharing processes

Such as Toyota and Honeywell

Example have become very good at
developing suppliers
7 step of Supplier Development
Identify critical products and
1 services

Identify critical supplier

2

3 Form crossfunctional teams

4 Meet supplier top management

5 Indentfy key projects

6 Define details of agreemnet

Monitor status and modify

7 strategies
Further explanation

Identify critical product and services

• It’s involves identifying strategic products and components( which that are difficult to obtain, high cost or
high volume

Identify critical suppliers

• These may be suppliers who provide strategic components but do not meet quality or reliability objectives or suppliers
who do not meet schedules

Forms crossfunctional teams

• The buyer forms a crossfunctional team to work with the supplier.

Further explanation

Meet with supplier top management

• This meeting is to discuss details of strategic alignment, performance expectations and measurement,
and processes for improving.

Identify key projects

• These occur when there is agreement about how the supplier needs to improve and where. Projects are selected in the
same way Six Sigma projects are selected, by criteria such as impact, ROI, feasibility, and required investments.

Define details of agreement

• This definition involves cost (and benefit sharing), commitments of resources, metrics for improvement, project charters,
accountability, and deliverables.

Monitor status and modify strategies

• To ensure success, management must actively monitor progress and revise

strategies as needed.
Quality Management System
• Must recognize key processes and
document these processes.
• Make resources and information available
in sufficient quality and quantity in business
• Monitor, measure, and analyze the
business
 Management Responsibility
Management is committed to
the development and
implementation of quality
management and continuous
improvement is documented.
Developing policy:
Communicating with the
organization relative to customer
service, establishing quality
objectives, conducting
managerial reviews, and
providing resources.
Example, managers with
responsibility and authority for
corrective actionswill need to be
informed when products do not
meet specifications and see that
corrective action
is taken to ameliorate the
problems.
Resource Management

1. To 3. A safe, clean, and

maintain the quality adequate work
management system environment is
and to meet established for
customer worker satisfaction.
requirements.

2. This includes training and

development for human
resources.
Provide infrastructure such as
bricks and mortar, equipment,
and support systems.
 Product Realization
• Should be adequately planned,
including quality objectives for the
.
products.
• This section considers all aspects
of productand process design

• Example:
• Purchasing, suppliers, control
.
plans, setups, preventive
maintenance, traceability, and
many other aspects of designing
and producing products.
 Measurement, Analysis, and Improvement

Provide documentation that This includes aspects such

it can demonstrate product as statistical tools,
conformity, quality measurement systems,
management system customer satisfaction
conformity, and continual measurement, internal
improvement of the quality audits, and other
management system. considerations.