RELATIONSHIP BETWEEN QUALITY AND SUPPLY CHAIN MANAGEMENT

Introduction

In today's economy, it is no longer business versus business, but rather supplying chain versus supply chain. To compete, supply chain members must learn to seamlessly integrate, grow, and develop business functions. Traditional quality management practices have been and will continue to be used to address many of these supply chain integration issues. With this in mind, current managerial thinking is advancing the notion of supply chain quality management. Supply chain quality management is a systems-based approach to performance improvement that integrates supply chain partners and leverages opportunities created by upstream and downstream linkages with a focus on creating value and achieving satisfaction of intermediate and final customers (Robinson & Malhotra (2005). The intent of the chapter is to

1. Review the positive impact of quality management on supply chain management,
2. Present cases of supply chain improvements through quality management with a focus on the processes of design, production, delivery, support, and supplier-customer relationships, and
3. Discuss the best practice recommendations, relationship between total quality management factors and transition to supply chain quality management that follows from these results.

(Before starting the real article let me describe that I work as a lecturer for supply chain management degree courses, diploma in supply chain management and supply chain management courses at institute of supply management in London so my article is based on different study notes of my colleagues and friends)

Positive relationship between quality management and supply chain management

Although there are several definitions of quality, simply put, quality can be defined as meeting or exceeding customer expectations (Evans & Lindsay, 2002). According to the American Society for Quality, the definition of quality is "A subjective term for which each person or sector has its own definition. In technical usage, quality can have two meanings:

•         The characteristics of a product or service that bear on its ability to satisfy stated or implied needs;
•         A product or service free of deficiencies. According to Joseph Juan, quality means “fitness for use;” according to Philip Crosby, it means “conformance to requirements.” (American Society for supply chain management degree) Quality tools exist and include, but are not limited to: cause analysis (analysis collected from several students of supply chain management courses), evaluation and decision-making tools (decision matrix and multi-voting), process analysis (flowchart, failure modes and effects analysis, mistake-proofing, and spaghetti diagrams), data collection and analysis (box and whisker plot, check sheet, control chart, design of experiments, histogram, scatter diagram, stratification, and surveys), idea creation (affinity diagram, benchmarking, brainstorming, and nominal group technique), an improvement project (Gantt chart and Plan-Do-Study-Act continuous improvement model), and management tools (relations diagram, tree diagram, matrix diagram, L-shaped matrix, arrow diagram, and process decision program chart) (Teague, 2004).

Total quality management is a set of quality practices that seek to continuously improve quality in processes. The eight key principles of total quality include:

• Define quality in terms of customers and their requirements.
• Pursue quality at the source.
• Stress objective rather than subjective analysis.
• Emphasize prevention rather than detection of defects.
• Focus on process rather than output.
• Strive for zero defects.
• Establish continuous improvement as a way of life.
• Make quality everyone's responsibility. (Xara, Tokyo institute of supply management)

Image Courtesy: AIMS College UK

Supply chain management is an approach to integrating suppliers, manufacturers, distributors and retailers, such that products are produced and distributed at the right quantities, to the right location, at the right time, with the mutual goals of minimizing system wide costs and satisfying customer service requirements.

In other words, supply chain management synchronizes a firm's processes with its suppliers and customers with the goal of matching the materials, services and information with customer demand. Critical supply chain processes include product design, production, and delivery, support, and supplier-customer relationships. To succeed in today's environment, managers need to integrate their goals effectively to compete in the dynamic, global economy and focus on the final customer as the driver for improvements. Supply chains compete based upon cost, quality, time and responsiveness. Supply chain improvement tools include, but are not limited to process improvement tools of flow charting, flow diagrams, service blueprints, process analysis, process re-engineering, link charts, multi-activity analysis, backward chaining, and Gantt charts.

Quality is one of the most important factors for companies in their relationship between suppliers and customers. In fact, quality is so critical that today's executives question whether their companies should be participating in global sourcing as many global suppliers are not able to meet quality requirements.

The adage 'garbage in, garbage out' advocates strong relationships between suppliers and buyers with respect to quality. Supplier certification programs and registration systems, such as ISO9000, assist companies to obtain quality items at the source. Product variation and information accuracy is negatively impacted. Certified suppliers and long-term relationships can positively impact on both quality and supply chain initiatives In these relationships, suppliers and buyers reap joint improvement driven by mutual interdependence, open and complete exchange of information, and win-win shared rewards. In these relationships, due to improved and increased exchange of information, supplier's product design changes are minimized, visibility to future purchase volume requirements is increased, and access and visibility to new product requirements is improved. Suppliers gain from a reduction in new product development time, production lead time, ethical treatment, and accurate, timely payment of invoices.

To summarize, quality management practices are associated with supply chain performance improvements. Therefore, quality management and supply chain management strategic goals and initiatives need to be pursued simultaneously as customers drive supply chain management and quality initiatives.

(At the end I would like to thanks my friends of institute of supply management and my group of diploma in supply chain management).