Logistics: Cost of Quality and Future Global Sourcing Trends - Assignment Example

Organizations estimate the cost of quality by combining the cost of maintaining standards with those that the organization incurs as a result of failure to maintain high standards and quality. This cost of control involves sealing loopholes which could defects, substandard or lawsuits to the organization. For this purpose, organizations have invested in training, laboratories, and audit as well as monitoring production to ensure that it follows specified procedures. To make sure that only quality goods reach the clients, organizations can either internally troubleshoot, re-inspector even process dissipates or externally evaluate the cost of repair, warranty, replacement, legal actions and loss of goodwill.

As a result of globalization, the organization has had to develop a global understanding of supply and sourcing to fulfill their local production needs. This is because companies produce their goods to target the global market and sourcing is a core consideration (Lechner & Boli, 2011) Future global sourcing will depend on negotiated worldwide performance parameters, a globally incorporated market system as well incorporation of global professionalism especially in marketing, human resource, engineering, and source groups.

One effect of sourcing globally is that companies no longer source components but rather source in systems and services. This is important to companies because they not only have to produce affordable goods for the global market, but the goods need to be of the right quality and standard. Companies which source systems, therefore, have an easier way of controlling quality and price. Another effect of global sourcing is that as much as companies would still prefer traditionally cheaper markets of China, Eastern Europe, and India, they cautiously check the unknown costs that arise from sourcing in these markets (Lechner & Boli, 2011)