The Importance of Quality in Purchasing & Supply - Literature review Example

The Importance of Quality in Purchasing & Supply Name: Institutional Affiliation: Instructor: Date: Introduction Gunasekaran, Patel and McCaughey (2004) identified quality as an essential component of all the stages undergone by different companies towards achieving effective purchasing and supply. This component influences essential processes such as all the inspection activities that occur during the manufacturing process, quality checks before the arrival of goods at the customer as well as checking and ascertaining quality when the purchased raw materials as they enter the company. Choi and Hartley (2013) ascertain that the purchasing department has a responsibility to ensure that all materials delivered at the company meet the correct quality specifications before being utilized in the manufacturing process. This paper looks at the importance of quality in purchasing and supply while defining quality and discussing the consequences of receiving products of poor quality. Additionally, the paper explains the meaning of Total Quality Management, describes the role of quality assurance as well as explaining different tests used when determining Quality Control & Reliability. Definition of Quality and Consequences of Receiving Poor Quality Products Robinson and Malhotra (2005) define quality as the ability of given product or service to constantly meet or even exceed the expectation or requirements of a given customer. However, the working definition of the term quality is customer-dependent since different consumers have varying expectations. It is important to consider the design, production, and service when discussing quality (Monczka, Handfield, Giunipero, & Patterson, 2015). Therefore, the entire process of ascertaining quality should start with careful assessment of the customer’s choice, needs and preferences. Failure to make assessments results in severe consequences caused by the delivery and reception of poor quality products (Robinson & Malhotra, 2005; Benton Jr, 2011). Delivery of poor quality products has direct impact on not only the financials but also the reputational image of the company. According to Johnson (2014), poor quality products reduce the company’s annual revenues and profits. At the development stage, poor quality of products result in late delivery and requires the addition of resources such as human labour and time to correct the problems found. Addition of more resources increases product development and manufacturing costs which in turn reduces profits and revenues (Stanley & Wisner, 2011; Shin, Collier, & Wilson, 2010). Besides damaging the organizational image, the release of poor quality products causes a reduction in sales as some consumers return products they are not satisfied with. Moreover, some customers end up not buying any product due to their poor quality and reduce ongoing revenues (Kuei, Madu, & Lin, 2012). Additional common effects of receiving poor quality goods include increased costs of production, loss of business, loss of consumer trust and decreased productivity. An Overview of Total Quality Management Carter and Narasimhan (2014) define Total quality Management (TQM) as a constant pursuit of quality that calls for the active participation of every individual in a given organization. TQM operates on a key philosophy of continuous improvements with a driving force of customer satisfaction. Lin (2012) adds that some countries such as Japan use the term kaizen to imply continuous improvement. Some of the important aspects of TQM include effective training of managers and employees in different quality, concepts, and procedures (Chorafas, 2013; Farb, Luttrell & Kirsch, 2005). However, effective groups and teams of employees act as essential parts of achieving the desired TQM in any organization. The entire concept has two major aspects within its approach; solving of problems and ensuring continuous improvement of the process. According to Fernando, et al. (2007), the Six-sigma programs provide the best example of a form of TQM. The entire project normally consists of one or more objectives. These objectives range from minimizing the time spend on delivery to improving customer satisfaction to enhancing productivity. Six-sigma lays great focus on the utilization of statistical and management science tools on designated projects to achieve the desired business outcomes(EI-Khawas, 2008). An organization can use seven different elementary quality tools while solving problems and achieving its expected process improvements. A flowchart is a basic example of a problem solving tool that acts as a visual representation of a process (Carter & Narasimhan, 2014). This tool can assist investigators to identifying potential points within a given process where problems take place. The Role of Quality Assurance According to Zeederberg (2012), quality assurance focuses on providing confidence to ensure the fulfilment of quality requirements. Quality assurance shares a close association with clinical trials and entails all the systematic and planned actions set to oversee the performance of the trials, generation of data, documentation as well reporting in compliance with GCP as well as the respective regulatory requirements (Cline & Burkman, 2009). Quality assurance managers have a crucial role to play within an organization by that all the products delivered and received meet the expected quality standards. It is their role and responsibility to plan, direct and coordinate quality assurance programs while formulating quality control policies (Henggeler & Schoenwald, 2009). Watkinson, Moores and Hill (2013) add that quality assurance requires managers to work to improve a firm’s efficiency and profitability by effectively reduction of wastes. Quality assurance facilitates all the process within the organization by preparing and updating quality documentation with reference to recognized standard such as ISO 9000 (Carter & Narasimhan, 2014). Managers have a responsibility in developing proper processes and train their employees in readiness for quality audit as step of complying with customers’ quality standards. Effective training of employees assists in creating awareness of quality requirements (Thoft-Christensen, 2013). According to Watkinson et al. (2013), quality assurance managers collaborate with the suppliers when formulating quality standards for goods. This involvement ensures all incoming materials and components comply with the manufactures quality standards, reduce the cost and time of inspection and contribute significantly to the quality of the finished products. The quality assurance managers have the responsibility of reviewing all statistical data from the production lines to identify quality problems so as to achieve the desired organizational improvement (Donabedian, 2012). They establish, monitor and evaluate progressive improvement programs, targeting to minimize the number of defects and enhance levels of quality. Constant quality improvement minimizes manufacturing costs and increases overall product quality. Tests Employed For Quality Control & Reliability According to Carter and Narasimhan (2014), managers employ a variety of tests to achieve effective quality control and reliability. However, most of the organizations and individual consultants have a tendency to name their personal specific approaches to quality control of which most of them end up having a widespread use. Statistical quality control (SQC) was first used in 1930 and entails the use of statistical techniques such as acceptance sampling and control charts to achieve quality control (EI-Khawas, 2008). The Total Quality Control (TQC) was invented in 1956 and emphasizes on the active involvement of departments in addition to production. These departments are wide in an organization and include sales, marketing, finance, accounting, design, human resources, and purchasing(Schatz et al., 2006). Invented in 1960s, the Statistical Process Control (SPC) entails the use of flow charts when monitoring and evaluating a specific process and its feedback performance to the operators responsible for the identified process. The Company-wide Quality Control (CWOC) is a Japanese-style of total quality control invented in 1968. The Total Quality Management (TQM) was invented in 1985 by the Quality movement that begun in the United States Department of Defence that employs the approaches of statistical quality control to achieve constant organizational improvement (Stanley & Wisner, 2011). Lastly, the Six-sigma is a 1986 statistical quality control tool applied to achieve the desired business strategy. This tool was initiated by Motorola. Conclusion Achieving the desired quality in an organization requires the commitment of all stakeholders including employees, managers as well as the company investors. Quality is an imperative component of ensuring sustainable supply and purchase of goods. Failing to achieve quality standard when delivering products has the impact of damaging a company’s image, reputation or result in external criticism. Failing to meet the expected quality has severe outcomes. Consequently, good quality has its associated costs such as appraisal, prevention and failure in future. Organizations have a role to play by preventing the occurrence of problems as opposed to fixing them when they take place. The quality of equipment or the raw materials delivered can disrupt the whole manufacturing process in a manufacturing field. Increased costs are incurred in the process of solving problems upon failing to detect defects or poor quality of goods in time. References Benton Jr, W. C. (2011). Purchasing and Supply Chain Management 3/e. A A, 1. Carter, J. R., & Narasimhan, R. (2014). The role of purchasing and materials management in total quality management and customer satisfaction. Journal of Supply Chain Management, 30(3), 3. Choi, T. Y., & Hartley, J. L. (2013). An exploration of supplier selection practices across the supply chain. Journal of Operations Management, 14(4), 333–343. Chorafas, D. N. (2013). Quality control applications. London: Springer. Cline, S. P., & Burkman, W. G. (2009). The role of quality assurance in ecological programs. In Air pollution and forest decline, Proc. 14th Int. Meeting for specialists on air pollution effects on forest ecosystems, IUFRO P (Vol. 2, pp. 361–365). Donabedian, A. (2012). The role of outcomes in quality assessment and assurance. QRB. Quality Review Bulletin, 18(11), 356–360. EI-Khawas, E. (2008). Accreditation’s role in quality assurance in the United States. Higher Education Management, 10, 43–56. Farb, D., Luttrell, A., & Kirsch, R. (2005). Pharmaceutical quality control lab guidebook. Los Angeles, Calif: UniversityofHealthCare. Fernando, et al. (2007). Pre-employment drug testing among job applicants at a Texas tertiary level pediatric hospital: 1992--2006. (Masters Abstracts International, 46-5.) Gunasekaran, A., Patel, C., & McGaughey, R. E. (2004). A framework for supply chain performance measurement. International Journal of Production Economics, 87(3), 333–347. Henggeler, S. W., & Schoenwald, S. K. (2009). The role of quality assurance in achieving outcomes in MST programs. Journal of Juvenile Justice and Detention Services, 14(2), 1–17. Johnson, P. F. (2014). Purchasing and supply management. McGraw-Hill Higher Education. Kuei, C.-H., Madu, C. N., & Lin, C. (2012). The relationship between supply chain quality management practices and organizational performance. International Journal of Quality & Reliability Management, 18(8), 864–872. Monczka, R. M., Handfield, R. B., Giunipero, L. C., & Patterson, J. L. (2015). Purchasing and supply chain management. Cengage Learning. Retrieved from https://books.google.com/books?hl=en&lr=&id=cAJoBwAAQBAJ&oi=fnd&pg=PR4 &dq=Significance+of+Quality+in+Purchasing+%26+Supply&ots=R9oLbbnoDf&sig=iZmJjz_NPGp-psVkf8yp7z-Bmwg Robinson, C. J., & Malhotra, M. K. (2005). Defining the concept of supply chain quality management and its relevance to academic and industrial practice. 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