Supply Chain Quality Management - Essay Example

Supply Chain Quality Management Table of Contents Introduction 3 2.Trends associated with improving supply chain in retail industry 4 3.Problems associated with improving supply chain in retail industry 5 4.Opportunities associated with improving supply chain in retail industry 6 5.Conclusion 7 Reference List 9 1. Introduction Since the early 1980s, quality as a performance variable has gone on to become a foremost influence in the business environment. The definitive push for ensuring the delivery of quality products and services came about with the introduction of the ISO 9000 quality assurance benchmark (Casadesús and de Castro 2005, 349). In a relatively parallel environment, companies operating in the retail industry have emphasized a lot on ensuring that quality products are delivered by their suppliers and the same is distributed to their customers (Robinson and Malhotra 2005, 318). This is where effective and efficient supply chain managers step in. The fundamental responsibility borne by supply chain managers is to make sure that quality of supply chain is improved in every step. Nonetheless, it has to be mentioned that supply chain quality management is moderately a new skill required in ensuring efficiency in supply chain operations (Cooper, Lambert and Pagh 1997, 5). Improving quality within supply chain in retail industry is by far a very detailed and precise function. It involves bringing about improvement in the ways in which management and planning of activities related to sourcing, procurement, logistics and conversion are done (Lambert and Cooper 2000, 71). Quality improvement also involves strengthening the line of communication in order to establish better collaboration and coordination between channel partners. Although, ensuring a robust supply chain management framework has its advantages but the fact that there are barriers in bringing about such improvements cannot be denied (K. Singhal and J. Singhal 2012, 243). It is with regards to these facts that the researcher endeavors to explore the trends, opportunities and barriers associated with improving quality in supply chains in the retail industry. 2. Trends associated with improving supply chain in retail industry Having a robust quality assurance framework is one of the most imperative requirements in a company’s supply chain department. In order to improve the quality in retail industry supply chains, the purchasing departments conduct strict negotiations with its supplier so as to ensure that superior quality products are purchased as the best possible process (Rong, Akkerman and Grunow 2011, 422). The quality department within the retail company is primarily responsible for conveying the product specifications to the purchasing department following which it becomes the latter’s duty to inspect that the products delivered by the suppliers are in adherence to the specifications. This verification can be done in three ways. Firstly, the quality assurance official or the quality auditor inspects the product before it leaves the vendors. However, if that is not done, then the products are normally scrutinized with extreme precision at the receiver’s outlet. Nevertheless, some retailers have even stricter quality inspection framework where quality assurance officers within the supply chain department inspects the products before it leaves the vendor’s facility and after it is received at the retailer’s outlet in order to improve the quality in supply chain (Afshin , Gallear and Askariazad 2012, 28). Given the fact that the quality of products is one of the fundamental determinants of a retail company’s success, supplier chain managers leave no stone unturned when it comes to inspecting the quality of finished products that are stored in the warehouse (Anbanandam, Banwet and Shankar 2011, 84). Products that are yet to be delivered to the customers are stored in the warehouse. In order to make sure that the quality of these products does not deteriorate over time, supply chain managers conducts a thorough supervision of these products at regular intervals until they are delivered to the end user (Afshin , Gallear and Askariazad 2012, 28). This enables to make sure that the quality of the products as well as the details meets the specification provided by the customers at all cost. Benchmarking of supply chain management operations is another trend that is associated with improvement of quality in retail industry supply chain. In this case, retail company managers constantly review their supply chain operations in order to identify the areas of improvement (Plazibat and Brajevic 2009, 136). This process involves performing benchmarking tests thereby assessing the opportunities that supply chain managers have for bringing improvement in areas such as inventory accuracy, storage density, productivity, shipping accuracy and so on and so forth. 3. Problems associated with improving supply chain in retail industry The supplier chain framework of a retail company includes several stakeholders such as suppliers, retailers, logistic companies and the customers themselves. Supplier chain managers sometimes fail to ensure a smooth flow of information between the customers and the suppliers. The lack of information gives rise to two fold results. First of all, it has often been seen that the raw materials ordered by the purchasing manager of the retail company does not match the specification provided by the customers. Instances like these often lead the customers to be dissatisfied with the services of the companies. Besides that in situations when customers return products that do not meet their requirements, it proves to be immensely cost inefficient for the companies (Croom, Romano and Giannakis 2000, 72). In addition to that product demand forecasts made by retail company supply chain analysts are sometimes not precise. Even if they are precise they are not relayed in an accurate manner to the suppliers. In both these cases, the products delivered by the suppliers are either inadequate or excess to the actual demand of the product. This implies that there is a demand supply gap as a result of inappropriate projections made by retail company supply chain analysts. When excess products are supplied as a result of an inaccurate demand forecast, retail companies often pile up excess stocks of inventory which actually goes to waste. In addition the companies also have to bear excess inventory holding cost. This explains the implementation of an inappropriate vendor-managed inventory strategy (Bechtel and Jayaram 1997, 16). Supply chain managers of retail companies often enter into a contract with the suppliers regarding receiving a predetermined unit of raw materials at a predetermined price for a certain span of time. This is one of the strategies adopted by supply chain managers in order to receive superior quality products at a fixed price. However, they fail to undertake the factors associated with market volatility. For example, if the products of the raw materials increase due to inflation, this may compel the suppliers to compromise on the quality of the products that they deliver in order to retain the maximum margin that can be achieved given the market volatility at that point of time (Lee, Padmanabhan and Whang 2004, 1875). 4. Opportunities associated with improving supply chain in retail industry Improving quality within the retail industry supply chain has several advantages. For example, if suppliers chain managers strictly adhere to the implementation of proper just in time strategies, then that will enable them to make sure that the proper amount of raw materials are delivered and subsequently received at the right time and at the right place. In that way, retailers will be able to ensure that the finished products are being delivered to the end user without any form of delay (Closs, Speier and Meacham 2011, 104). Moreover, supply chain analysts within retail companies need to bring about improvement in their analytical skills in order to make accurate forecast of product demands. This will enable them to ensure that there is no demand supply gap. An improved analytical framework will ensure that the retail company does not pile up excess inventory and therefore avoid any form of resource wastage. Besides that, supply chain managers will also be able to make sure that the company does not incur additional inventory holding cost (Tan 2001, 43). Improvement in quality within the supply chain will also enable supply chain managers to guarantee that the supplied materials are in strict adherence to the specifications provided by the customers. One way of doing that, is to ensure that robust channel of communication exist between the customers, retailers and the supply chain partners. This will help retail companies to ensure the fact that the finished products meet the requirements of the end users as closely as possible. In that way they will be able to attain customer loyalty by means of a higher customer satisfaction index. By doing so, retail companies will be able to ascertain repeated visits and purchases from customers which in turn will form a strong and sustainable source of profit for the former (Caniato et al. 2011, 622). 5. Conclusion Improving and maintaining quality within retail company supply chain operations is of paramount importance. Although this activity is highly detailed and requires precision, it needs to be carried rigorously on a number of supply chain operational levels by highly skilled personnel. This is particularly because, superior quality supply chain operations will enable retail companies to provide supreme quality products and services to their customers and therefore a robust supply chain framework will serve as a sustainable source of competitive advantage for companies. Bringing about improvement in supply chain operations within retail companies is also pivotal as it helps supply chain managers to attain higher levels of operational efficiency as well as cost efficiency. In that way they are able to adapt to any variance in the market and provide quality products and services to their customers in return for enhanced customer satisfaction and loyalty. Reference List Afshin Mansouri, S., David Gallear, and Mohammad H. Askariazad. 2012. "Decision support for build-to-order supply chain management through multiobjective optimization." International Journal of Production Economics 135: 24-36. Anbanandam, R., D. K. Banwet, and Ravi Shankar. 2011. 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