Quality in Procurement
In Chapter 3, we discussed the quality methods that are used when products are designed to meet the needs of the customer, and the processes designed to make products according to the design In Chapters 4 and 5, we discussed the methods employed during production to prevent the manufacture of defect...
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| description | In Chapter 3, we discussed the quality methods that are used when products
are designed to meet the needs of the customer, and the processes designed
to make products according to the design In Chapters 4 and 5, we discussed
the methods employed during production to prevent the manufacture of
defective products This chapter concerns itself with the methods of assuring quality in materials, parts, and subassemblies purchased from outside
vendors The need for procuring parts and materials of required quality cannot be
overemphasized-especially in the context of modern productive organizations, which procure ever larger proportions of the assemblies they build
from outside vendors Statements such as “you cannot make good product
from bad material,” and “you are as strong as your weakest supplier,” which
we often hear in production shops, only reinforce the fact that the parts and
materials that come into a production facility should be defect free The modern approach to inventory reduction, which employs a just-in-time production philosophy, makes it even more important to receive defect-free supplies,
because in the just-in-time environment there is no cushion in inventory to
make up for the part or material found to be defective during assembly Several approaches have been adopted by organizations to assure quality
in incoming supplies; some involve management methods and some involve
statistical tools We will discuss some of these approaches in this chapter
These include:• Establishing a good supplier relationship
• Choosing and certifying suppliers
• Specifying the supplies completely
• Auditing the supplier
• Supply chain optimization
• Statistical sampling plans for acceptance7.2.1 Essentials of a Good Supplier RelationshipThe Customer-Supplier Division of the American Society for Quality (ASQ),
a group of professionals in the procuring business, suggest the following
as essentials of a good supplier relationship in Chapter 1 of their Supplier
Management Handbook (ASQ 2004):• Personal behavior: Professional, personal behavior of parties, with
mutual respect for each other • Objectivity: A moral commitment, by both parties, beyond the legal
contract requirements, to attain the goal of quality for the end
product • Product definition: A clear, unambiguous, and complete definition of the product requirements furnished by the customer in
writing, with a willingness to provide further clarification if and
when needed • Mutual understanding: Understanding of |
| doi_str_mv | 10.1201/b18637-11 |
| format | Book Chapter |
| fullrecord | <record><control><sourceid>proquest_infor</sourceid><recordid>TN_cdi_proquest_ebookcentralchapters_5338466_161_433</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><sourcerecordid>EBC5338466_161_433</sourcerecordid><originalsourceid>FETCH-LOGICAL-i1033-80b7ca271dd1ba56be30da87693622812767ba1632b44bf911c872ab94516b5c3</originalsourceid><addsrcrecordid>eNotkMFKAzEURSOiqLULN677A6N5eW-SzLIUrUJBBV2HJJPB0emkJlOlf--UdnW5i3u4HMZugN-B4HDvQEtUBcAJuwLCSldKCH56LMSRxPlYOAISKaEu2DTnL845EAeQdMlu37a2a4fdrO1nryn6bQrr0A_X7KyxXQ7TY07Yx-PD--KpWL0snxfzVdGOUCw0d8pboaCuwdlSuoC8tlrJCqUQGoSSylmQKByRayoAr5WwrqISpCs9ThgduJsUf7YhDya4GL_9eCHZzn_azRBSNiWiJikNSDCEOM7mh1nbNzGt7V9MXW0Gu-tiapLtfZv3mGyAm70ocxBlAMzvyGtjL_AfKB1ZzA</addsrcrecordid><sourcetype>Publisher</sourcetype><iscdi>true</iscdi><recordtype>book_chapter</recordtype><pqid>EBC5338466_161_433</pqid></control><display><type>book_chapter</type><title>Quality in Procurement</title><source>O'Reilly Online Learning: Academic/Public Library Edition</source><creator>Krishnamoorthi, K.S. ; Krishnamoorthi, V. Ram</creator><creatorcontrib>Krishnamoorthi, K.S. ; Krishnamoorthi, V. Ram</creatorcontrib><description>In Chapter 3, we discussed the quality methods that are used when products
are designed to meet the needs of the customer, and the processes designed
to make products according to the design In Chapters 4 and 5, we discussed
the methods employed during production to prevent the manufacture of
defective products This chapter concerns itself with the methods of assuring quality in materials, parts, and subassemblies purchased from outside
vendors The need for procuring parts and materials of required quality cannot be
overemphasized-especially in the context of modern productive organizations, which procure ever larger proportions of the assemblies they build
from outside vendors Statements such as “you cannot make good product
from bad material,” and “you are as strong as your weakest supplier,” which
we often hear in production shops, only reinforce the fact that the parts and
materials that come into a production facility should be defect free The modern approach to inventory reduction, which employs a just-in-time production philosophy, makes it even more important to receive defect-free supplies,
because in the just-in-time environment there is no cushion in inventory to
make up for the part or material found to be defective during assembly Several approaches have been adopted by organizations to assure quality
in incoming supplies; some involve management methods and some involve
statistical tools We will discuss some of these approaches in this chapter
These include:• Establishing a good supplier relationship
• Choosing and certifying suppliers
• Specifying the supplies completely
• Auditing the supplier
• Supply chain optimization
• Statistical sampling plans for acceptance7.2.1 Essentials of a Good Supplier RelationshipThe Customer-Supplier Division of the American Society for Quality (ASQ),
a group of professionals in the procuring business, suggest the following
as essentials of a good supplier relationship in Chapter 1 of their Supplier
Management Handbook (ASQ 2004):• Personal behavior: Professional, personal behavior of parties, with
mutual respect for each other • Objectivity: A moral commitment, by both parties, beyond the legal
contract requirements, to attain the goal of quality for the end
product • Product definition: A clear, unambiguous, and complete definition of the product requirements furnished by the customer in
writing, with a willingness to provide further clarification if and
when needed • Mutual understanding: Understanding of each other’s needs from
direct, open communication between the quality functions of the
parties, to avoid confusion • Quality evaluation: Fair, objective evaluation of the quality of supplied goods by the customer • Product quality: Honest effort by the supplier to provide materials
according to the needs of the customer, including disclosure of any
weaknesses • Corrective action: Good faith effort by the supplier in making corrective action when supplies are found to be deficient • Technical aid: Willingness on the part of the customer to share technical expertise with the supplier whenever such an exchange is
needed • Integrity: Supplier’s willingness to provide facilities and services-as
needed by the customer-to verify product quality; and customer
using those facilities and services only to the extent agreed to in the
contract • Rewards: Customer’s use of only qualified suppliers, and offer of
reward and encouragement for good performance by the suppliers • Proprietary information: Protecting each other’s privileged
information • Reputation safeguard: Neither party making unsupported or misleading statements about the other; maintaining truthfulness and professionalism in the relationship It is easy to see that these are the essentials on which a healthy relationship
can be built, and that they will contribute to the exchange of quality information and quality supplies between the supplier and the customer An organization interested in procuring quality parts and materials would do well to
make sure that these elements exist in their relationship with their suppliers During the 1980s, 1970s, and before, organizations in the United States, in
general, believed in cultivating and retaining as many suppliers for an item
as possible The belief was that the larger the supplier base, the better the
competition; and thus, the better the price to be paid for the procured item
That was also the time when contracts were issued routinely to the lowest
bidder and materials and supplies were bought mainly on the basis of price,
without much regard for quality Dr Deming described the situation in the
following words:Dr Deming stresses the need for the buyers to understand the quality
requirements of purchased material in the context of where that material
is used in the production process Otherwise, when bought on the basis of
price alone, the material may make subsequent operations costly or-yet
worse-result in defective products being made and delivered to the final
customer According to Dr Deming, a single supplier must be chosen and cultivated
for each part or material, based on the supplier’s ability to provide quality
material and their willingness to cooperate with the customer in the design
and manufacture of the final product There are many advantages to choosing a single supplier compared to having multiple suppliers for each item
These include:• A single supplier with a long-term commitment to supplying a part
or material will be able to innovate, realize economy in their production processes, and share the benefits with the customer • With a single supplier, it is possible for the supplier and the customer to work together to continuously improve the quality of the
supplies and, hence, of the final product, with a resulting reduction
in costs • Supplies from one supplier can be expected to have more uniformity
than supplies received from a number of suppliers • The paperwork and accounting system are less complex with a
single supplier • If customers decide to keep single suppliers for their various purchases, then there will be healthy competition among the potential
suppliers to improve in order for them to become the single supplier • One supplier per item will result in a smaller overall inventory for
that item, because multiple suppliers will create multiple inventories, thus adding to the overall cost of the item • Having one supplier reduces the risk involved in searching and
experimenting with newer suppliers • Single suppliers can be included as part of the team for the concurrent design and development of future products and processes Many American businesses have followed Dr Deming’s advice and
have benefited from the overall economy and quality improvements that
have resulted from this Juran and Gryna (1993, 317) made the following
observation:For organizations in the United States, the main obstacle to realizing the
ideal recommended by Dr Deming-to retain only one source for every procured item-is the possibility of the disruption of supplies due to work stoppages at the supplier or transportation agencies as a result of labor disputes
or natural disasters The long distances between many suppliers and customers in the United States makes this problem more challenging From the earlier discussion, it becomes clear that using a single supplier per
item can contribute in many ways toward quality and economy in the manufacture of a product It then becomes necessary to choose this supplier with
care, paying close attention to their relevant qualifications The qualifications they should have include:1 Management with a quality philosophy enforced through policies
and procedures 2 Control of design and manufacturing information, with completeness of drawings, specifications, and test procedures, and a positive
recall of obsolete information 3 Adequate procurement control to avoid poor quality in their incoming supplies 4 Material control to ensure that the materials in storage are protected,
verified periodically, and issued only to authorized users 5 Use of capable machinery and qualified production personnel
6 Use of prevention-based process control to avoid the production ofdefective material
7 Use of final inspection methods to verify that the final product meetsthe needs of the customer
8 Use of measuring instruments having sufficient accuracy and preci-sion, and a program to periodically verify and maintain the accuracy and precision of these instruments 9 Collection and processing of information regarding the performance
of processes; use of this information for improving the processes on
a continuous basis 10 Adequate resources, manpower, and facilities to supply goods in the
quantities required to meet time schedules As will be discussed in a later chapter, these are the features of a good quality system In essence, suppliers are chosen based on their ability to create
and maintain a good quality system within their own production facilities Many customers use a certification procedure as a means of improving the
quality of supplies, because certification offers an incentive for suppliers to
improve their performance in quality and delivery In addition, certification offers the customer the advantage of not having to verify the quality of
supplies coming from certified suppliers Certification is also attractive to
many suppliers, because certification-especially by well-known industry
leaders-is a recognition that they can use to obtain business from other customers A supplier is designated as a “certified supplier” based on sustained
good performance over a significant length of time Certification takes different names at different organizations “Quality
supplier,” “certified supplier,” “approved supplier,” “excellent supplier,” and
“preferred supplier” are some of the titles conferred on certified suppliers
Organizations sometimes use some gradation in the level of certification Forexample, certification as an “approved supplier” may be g</description><identifier>ISBN: 1439840342</identifier><identifier>ISBN: 9781439840344</identifier><identifier>EISBN: 1439897220</identifier><identifier>EISBN: 0429195966</identifier><identifier>EISBN: 9781439897225</identifier><identifier>EISBN: 9780429195969</identifier><identifier>DOI: 10.1201/b18637-11</identifier><identifier>OCLC: 1031344727</identifier><identifier>LCCallNum: TS156.8 .K757 2011</identifier><language>eng</language><publisher>United States: CRC Press</publisher><subject>Business & management ; Probability & statistics ; Production & quality control management</subject><ispartof>A First Course in Quality Engineering, 2011, p.432-479</ispartof><rights>2011 by Taylor & Francis Group, LLC</rights><woscitedreferencessubscribed>false</woscitedreferencessubscribed></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Uhttps://ebookcentral.proquest.com/covers/5338466-l.jpg</thumbnail><link.rule.ids>775,776,780,789,24760,27902</link.rule.ids></links><search><creatorcontrib>Krishnamoorthi, K.S.</creatorcontrib><creatorcontrib>Krishnamoorthi, V. Ram</creatorcontrib><title>Quality in Procurement</title><title>A First Course in Quality Engineering</title><description>In Chapter 3, we discussed the quality methods that are used when products
are designed to meet the needs of the customer, and the processes designed
to make products according to the design In Chapters 4 and 5, we discussed
the methods employed during production to prevent the manufacture of
defective products This chapter concerns itself with the methods of assuring quality in materials, parts, and subassemblies purchased from outside
vendors The need for procuring parts and materials of required quality cannot be
overemphasized-especially in the context of modern productive organizations, which procure ever larger proportions of the assemblies they build
from outside vendors Statements such as “you cannot make good product
from bad material,” and “you are as strong as your weakest supplier,” which
we often hear in production shops, only reinforce the fact that the parts and
materials that come into a production facility should be defect free The modern approach to inventory reduction, which employs a just-in-time production philosophy, makes it even more important to receive defect-free supplies,
because in the just-in-time environment there is no cushion in inventory to
make up for the part or material found to be defective during assembly Several approaches have been adopted by organizations to assure quality
in incoming supplies; some involve management methods and some involve
statistical tools We will discuss some of these approaches in this chapter
These include:• Establishing a good supplier relationship
• Choosing and certifying suppliers
• Specifying the supplies completely
• Auditing the supplier
• Supply chain optimization
• Statistical sampling plans for acceptance7.2.1 Essentials of a Good Supplier RelationshipThe Customer-Supplier Division of the American Society for Quality (ASQ),
a group of professionals in the procuring business, suggest the following
as essentials of a good supplier relationship in Chapter 1 of their Supplier
Management Handbook (ASQ 2004):• Personal behavior: Professional, personal behavior of parties, with
mutual respect for each other • Objectivity: A moral commitment, by both parties, beyond the legal
contract requirements, to attain the goal of quality for the end
product • Product definition: A clear, unambiguous, and complete definition of the product requirements furnished by the customer in
writing, with a willingness to provide further clarification if and
when needed • Mutual understanding: Understanding of each other’s needs from
direct, open communication between the quality functions of the
parties, to avoid confusion • Quality evaluation: Fair, objective evaluation of the quality of supplied goods by the customer • Product quality: Honest effort by the supplier to provide materials
according to the needs of the customer, including disclosure of any
weaknesses • Corrective action: Good faith effort by the supplier in making corrective action when supplies are found to be deficient • Technical aid: Willingness on the part of the customer to share technical expertise with the supplier whenever such an exchange is
needed • Integrity: Supplier’s willingness to provide facilities and services-as
needed by the customer-to verify product quality; and customer
using those facilities and services only to the extent agreed to in the
contract • Rewards: Customer’s use of only qualified suppliers, and offer of
reward and encouragement for good performance by the suppliers • Proprietary information: Protecting each other’s privileged
information • Reputation safeguard: Neither party making unsupported or misleading statements about the other; maintaining truthfulness and professionalism in the relationship It is easy to see that these are the essentials on which a healthy relationship
can be built, and that they will contribute to the exchange of quality information and quality supplies between the supplier and the customer An organization interested in procuring quality parts and materials would do well to
make sure that these elements exist in their relationship with their suppliers During the 1980s, 1970s, and before, organizations in the United States, in
general, believed in cultivating and retaining as many suppliers for an item
as possible The belief was that the larger the supplier base, the better the
competition; and thus, the better the price to be paid for the procured item
That was also the time when contracts were issued routinely to the lowest
bidder and materials and supplies were bought mainly on the basis of price,
without much regard for quality Dr Deming described the situation in the
following words:Dr Deming stresses the need for the buyers to understand the quality
requirements of purchased material in the context of where that material
is used in the production process Otherwise, when bought on the basis of
price alone, the material may make subsequent operations costly or-yet
worse-result in defective products being made and delivered to the final
customer According to Dr Deming, a single supplier must be chosen and cultivated
for each part or material, based on the supplier’s ability to provide quality
material and their willingness to cooperate with the customer in the design
and manufacture of the final product There are many advantages to choosing a single supplier compared to having multiple suppliers for each item
These include:• A single supplier with a long-term commitment to supplying a part
or material will be able to innovate, realize economy in their production processes, and share the benefits with the customer • With a single supplier, it is possible for the supplier and the customer to work together to continuously improve the quality of the
supplies and, hence, of the final product, with a resulting reduction
in costs • Supplies from one supplier can be expected to have more uniformity
than supplies received from a number of suppliers • The paperwork and accounting system are less complex with a
single supplier • If customers decide to keep single suppliers for their various purchases, then there will be healthy competition among the potential
suppliers to improve in order for them to become the single supplier • One supplier per item will result in a smaller overall inventory for
that item, because multiple suppliers will create multiple inventories, thus adding to the overall cost of the item • Having one supplier reduces the risk involved in searching and
experimenting with newer suppliers • Single suppliers can be included as part of the team for the concurrent design and development of future products and processes Many American businesses have followed Dr Deming’s advice and
have benefited from the overall economy and quality improvements that
have resulted from this Juran and Gryna (1993, 317) made the following
observation:For organizations in the United States, the main obstacle to realizing the
ideal recommended by Dr Deming-to retain only one source for every procured item-is the possibility of the disruption of supplies due to work stoppages at the supplier or transportation agencies as a result of labor disputes
or natural disasters The long distances between many suppliers and customers in the United States makes this problem more challenging From the earlier discussion, it becomes clear that using a single supplier per
item can contribute in many ways toward quality and economy in the manufacture of a product It then becomes necessary to choose this supplier with
care, paying close attention to their relevant qualifications The qualifications they should have include:1 Management with a quality philosophy enforced through policies
and procedures 2 Control of design and manufacturing information, with completeness of drawings, specifications, and test procedures, and a positive
recall of obsolete information 3 Adequate procurement control to avoid poor quality in their incoming supplies 4 Material control to ensure that the materials in storage are protected,
verified periodically, and issued only to authorized users 5 Use of capable machinery and qualified production personnel
6 Use of prevention-based process control to avoid the production ofdefective material
7 Use of final inspection methods to verify that the final product meetsthe needs of the customer
8 Use of measuring instruments having sufficient accuracy and preci-sion, and a program to periodically verify and maintain the accuracy and precision of these instruments 9 Collection and processing of information regarding the performance
of processes; use of this information for improving the processes on
a continuous basis 10 Adequate resources, manpower, and facilities to supply goods in the
quantities required to meet time schedules As will be discussed in a later chapter, these are the features of a good quality system In essence, suppliers are chosen based on their ability to create
and maintain a good quality system within their own production facilities Many customers use a certification procedure as a means of improving the
quality of supplies, because certification offers an incentive for suppliers to
improve their performance in quality and delivery In addition, certification offers the customer the advantage of not having to verify the quality of
supplies coming from certified suppliers Certification is also attractive to
many suppliers, because certification-especially by well-known industry
leaders-is a recognition that they can use to obtain business from other customers A supplier is designated as a “certified supplier” based on sustained
good performance over a significant length of time Certification takes different names at different organizations “Quality
supplier,” “certified supplier,” “approved supplier,” “excellent supplier,” and
“preferred supplier” are some of the titles conferred on certified suppliers
Organizations sometimes use some gradation in the level of certification Forexample, certification as an “approved supplier” may be g</description><subject>Business & management</subject><subject>Probability & statistics</subject><subject>Production & quality control management</subject><isbn>1439840342</isbn><isbn>9781439840344</isbn><isbn>1439897220</isbn><isbn>0429195966</isbn><isbn>9781439897225</isbn><isbn>9780429195969</isbn><fulltext>true</fulltext><rsrctype>book_chapter</rsrctype><creationdate>2011</creationdate><recordtype>book_chapter</recordtype><recordid>eNotkMFKAzEURSOiqLULN677A6N5eW-SzLIUrUJBBV2HJJPB0emkJlOlf--UdnW5i3u4HMZugN-B4HDvQEtUBcAJuwLCSldKCH56LMSRxPlYOAISKaEu2DTnL845EAeQdMlu37a2a4fdrO1nryn6bQrr0A_X7KyxXQ7TY07Yx-PD--KpWL0snxfzVdGOUCw0d8pboaCuwdlSuoC8tlrJCqUQGoSSylmQKByRayoAr5WwrqISpCs9ThgduJsUf7YhDya4GL_9eCHZzn_azRBSNiWiJikNSDCEOM7mh1nbNzGt7V9MXW0Gu-tiapLtfZv3mGyAm70ocxBlAMzvyGtjL_AfKB1ZzA</recordid><startdate>2011</startdate><enddate>2011</enddate><creator>Krishnamoorthi, K.S.</creator><creator>Krishnamoorthi, V. Ram</creator><general>CRC Press</general><general>CRC Press LLC</general><scope>FFUUA</scope></search><sort><creationdate>2011</creationdate><title>Quality in Procurement</title><author>Krishnamoorthi, K.S. ; Krishnamoorthi, V. Ram</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-i1033-80b7ca271dd1ba56be30da87693622812767ba1632b44bf911c872ab94516b5c3</frbrgroupid><rsrctype>book_chapters</rsrctype><prefilter>book_chapters</prefilter><language>eng</language><creationdate>2011</creationdate><topic>Business & management</topic><topic>Probability & statistics</topic><topic>Production & quality control management</topic><toplevel>online_resources</toplevel><creatorcontrib>Krishnamoorthi, K.S.</creatorcontrib><creatorcontrib>Krishnamoorthi, V. Ram</creatorcontrib><collection>ProQuest Ebook Central - Book Chapters - Demo use only</collection></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Krishnamoorthi, K.S.</au><au>Krishnamoorthi, V. Ram</au><format>book</format><genre>bookitem</genre><ristype>CHAP</ristype><atitle>Quality in Procurement</atitle><btitle>A First Course in Quality Engineering</btitle><date>2011</date><risdate>2011</risdate><spage>432</spage><epage>479</epage><pages>432-479</pages><isbn>1439840342</isbn><isbn>9781439840344</isbn><eisbn>1439897220</eisbn><eisbn>0429195966</eisbn><eisbn>9781439897225</eisbn><eisbn>9780429195969</eisbn><abstract>In Chapter 3, we discussed the quality methods that are used when products
are designed to meet the needs of the customer, and the processes designed
to make products according to the design In Chapters 4 and 5, we discussed
the methods employed during production to prevent the manufacture of
defective products This chapter concerns itself with the methods of assuring quality in materials, parts, and subassemblies purchased from outside
vendors The need for procuring parts and materials of required quality cannot be
overemphasized-especially in the context of modern productive organizations, which procure ever larger proportions of the assemblies they build
from outside vendors Statements such as “you cannot make good product
from bad material,” and “you are as strong as your weakest supplier,” which
we often hear in production shops, only reinforce the fact that the parts and
materials that come into a production facility should be defect free The modern approach to inventory reduction, which employs a just-in-time production philosophy, makes it even more important to receive defect-free supplies,
because in the just-in-time environment there is no cushion in inventory to
make up for the part or material found to be defective during assembly Several approaches have been adopted by organizations to assure quality
in incoming supplies; some involve management methods and some involve
statistical tools We will discuss some of these approaches in this chapter
These include:• Establishing a good supplier relationship
• Choosing and certifying suppliers
• Specifying the supplies completely
• Auditing the supplier
• Supply chain optimization
• Statistical sampling plans for acceptance7.2.1 Essentials of a Good Supplier RelationshipThe Customer-Supplier Division of the American Society for Quality (ASQ),
a group of professionals in the procuring business, suggest the following
as essentials of a good supplier relationship in Chapter 1 of their Supplier
Management Handbook (ASQ 2004):• Personal behavior: Professional, personal behavior of parties, with
mutual respect for each other • Objectivity: A moral commitment, by both parties, beyond the legal
contract requirements, to attain the goal of quality for the end
product • Product definition: A clear, unambiguous, and complete definition of the product requirements furnished by the customer in
writing, with a willingness to provide further clarification if and
when needed • Mutual understanding: Understanding of each other’s needs from
direct, open communication between the quality functions of the
parties, to avoid confusion • Quality evaluation: Fair, objective evaluation of the quality of supplied goods by the customer • Product quality: Honest effort by the supplier to provide materials
according to the needs of the customer, including disclosure of any
weaknesses • Corrective action: Good faith effort by the supplier in making corrective action when supplies are found to be deficient • Technical aid: Willingness on the part of the customer to share technical expertise with the supplier whenever such an exchange is
needed • Integrity: Supplier’s willingness to provide facilities and services-as
needed by the customer-to verify product quality; and customer
using those facilities and services only to the extent agreed to in the
contract • Rewards: Customer’s use of only qualified suppliers, and offer of
reward and encouragement for good performance by the suppliers • Proprietary information: Protecting each other’s privileged
information • Reputation safeguard: Neither party making unsupported or misleading statements about the other; maintaining truthfulness and professionalism in the relationship It is easy to see that these are the essentials on which a healthy relationship
can be built, and that they will contribute to the exchange of quality information and quality supplies between the supplier and the customer An organization interested in procuring quality parts and materials would do well to
make sure that these elements exist in their relationship with their suppliers During the 1980s, 1970s, and before, organizations in the United States, in
general, believed in cultivating and retaining as many suppliers for an item
as possible The belief was that the larger the supplier base, the better the
competition; and thus, the better the price to be paid for the procured item
That was also the time when contracts were issued routinely to the lowest
bidder and materials and supplies were bought mainly on the basis of price,
without much regard for quality Dr Deming described the situation in the
following words:Dr Deming stresses the need for the buyers to understand the quality
requirements of purchased material in the context of where that material
is used in the production process Otherwise, when bought on the basis of
price alone, the material may make subsequent operations costly or-yet
worse-result in defective products being made and delivered to the final
customer According to Dr Deming, a single supplier must be chosen and cultivated
for each part or material, based on the supplier’s ability to provide quality
material and their willingness to cooperate with the customer in the design
and manufacture of the final product There are many advantages to choosing a single supplier compared to having multiple suppliers for each item
These include:• A single supplier with a long-term commitment to supplying a part
or material will be able to innovate, realize economy in their production processes, and share the benefits with the customer • With a single supplier, it is possible for the supplier and the customer to work together to continuously improve the quality of the
supplies and, hence, of the final product, with a resulting reduction
in costs • Supplies from one supplier can be expected to have more uniformity
than supplies received from a number of suppliers • The paperwork and accounting system are less complex with a
single supplier • If customers decide to keep single suppliers for their various purchases, then there will be healthy competition among the potential
suppliers to improve in order for them to become the single supplier • One supplier per item will result in a smaller overall inventory for
that item, because multiple suppliers will create multiple inventories, thus adding to the overall cost of the item • Having one supplier reduces the risk involved in searching and
experimenting with newer suppliers • Single suppliers can be included as part of the team for the concurrent design and development of future products and processes Many American businesses have followed Dr Deming’s advice and
have benefited from the overall economy and quality improvements that
have resulted from this Juran and Gryna (1993, 317) made the following
observation:For organizations in the United States, the main obstacle to realizing the
ideal recommended by Dr Deming-to retain only one source for every procured item-is the possibility of the disruption of supplies due to work stoppages at the supplier or transportation agencies as a result of labor disputes
or natural disasters The long distances between many suppliers and customers in the United States makes this problem more challenging From the earlier discussion, it becomes clear that using a single supplier per
item can contribute in many ways toward quality and economy in the manufacture of a product It then becomes necessary to choose this supplier with
care, paying close attention to their relevant qualifications The qualifications they should have include:1 Management with a quality philosophy enforced through policies
and procedures 2 Control of design and manufacturing information, with completeness of drawings, specifications, and test procedures, and a positive
recall of obsolete information 3 Adequate procurement control to avoid poor quality in their incoming supplies 4 Material control to ensure that the materials in storage are protected,
verified periodically, and issued only to authorized users 5 Use of capable machinery and qualified production personnel
6 Use of prevention-based process control to avoid the production ofdefective material
7 Use of final inspection methods to verify that the final product meetsthe needs of the customer
8 Use of measuring instruments having sufficient accuracy and preci-sion, and a program to periodically verify and maintain the accuracy and precision of these instruments 9 Collection and processing of information regarding the performance
of processes; use of this information for improving the processes on
a continuous basis 10 Adequate resources, manpower, and facilities to supply goods in the
quantities required to meet time schedules As will be discussed in a later chapter, these are the features of a good quality system In essence, suppliers are chosen based on their ability to create
and maintain a good quality system within their own production facilities Many customers use a certification procedure as a means of improving the
quality of supplies, because certification offers an incentive for suppliers to
improve their performance in quality and delivery In addition, certification offers the customer the advantage of not having to verify the quality of
supplies coming from certified suppliers Certification is also attractive to
many suppliers, because certification-especially by well-known industry
leaders-is a recognition that they can use to obtain business from other customers A supplier is designated as a “certified supplier” based on sustained
good performance over a significant length of time Certification takes different names at different organizations “Quality
supplier,” “certified supplier,” “approved supplier,” “excellent supplier,” and
“preferred supplier” are some of the titles conferred on certified suppliers
Organizations sometimes use some gradation in the level of certification Forexample, certification as an “approved supplier” may be g</abstract><cop>United States</cop><pub>CRC Press</pub><doi>10.1201/b18637-11</doi><oclcid>1031344727</oclcid><tpages>48</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISBN: 1439840342 |
| ispartof | A First Course in Quality Engineering, 2011, p.432-479 |
| issn | |
| language | eng |
| recordid | cdi_proquest_ebookcentralchapters_5338466_161_433 |
| source | O'Reilly Online Learning: Academic/Public Library Edition |
| subjects | Business & management Probability & statistics Production & quality control management |
| title | Quality in Procurement |
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