The global supply chain is of increasing importance to many companies. This is especially true for international companies. The global supply chain refers to “the facilities, functions, and activities involved in producing and delivering a product or service from suppliers to customers” (Spinney, 2002). It is, in effect, how goods and services flow from the beginning stages to customers. As a result, quality control is exceedingly important within the global supply chain. Thus, within this report, a number of topics are covered. To begin with, the case study is summarized. Second, the problems and causes of low quality are discussed. Third, recommendations to the problems previously addressed are discussed. Third, proposed changes to the supplier contract are discussed. The paper concludes with a summary of all major points within the report.
It is not easy to develop an effective global supply chain system that also encompasses quality. However, they are both extensively interconnected. It is also important to remember that high quality management is not always an indicator of benefits. For instance, there may not necessarily be downstream benefits for the manufacturer or for the end customer. Thus, a “greater level of cooperation is key to comparative advantage … [and the] competitive advantage position [has been] affected by [the company’s] position in another country” (Soltani, Azadegan, Liao, & Phillips, 2011). The level of technology that the supplier has must be taken into consideration, as the supplier must be efficient and effective in their productions. Part of this excellence or dysfunction can be explained through organizational theories. Ultimately, the overall cost of product or service depends on supplier quality, which also affects “revenues and long-term survival in the marketplace” (Soltani, Azadegan, Liao, & Phillips, 2011). It is important to remember that internal and external customers are the interlocking connections in the organization. Thus, the quality management philosophy is based on customer focus. This focus occurs through an effective customer-supply chain.
Effective quality management and supply chain management is “[focused] under operations management, emphasizes the importance of systems-based views to operations, [a provision of a] major means of attaining competitive advantage, [a] require[ment] [of] cooperation between all organization levels and people and activities, [and] start[s] and end[s] with [the] customer” (Soltani, Azadegan, Liao, & Phillips, 2011). This is completed through a triangular relationship. This relationship encompasses the upstream and downstream supply chain. In fact, those with an effective global supply chain with a focus on quality management often “benefit from a very diversified global market across both developed and developing economies” (Soltani, Azadegan, Liao, & Phillips, 2011). As such, this cooperation is crucial for the success of the organization.
Problems and Causes of Low Quality
Numerous problems occur as the result of low quality. However, there are many causes as to these problems and low quality itself. For instance, nowadays, it is important to remember that they are “not competing firm versus firm, but supply chain versus supply chain” (Soltani, Azadegan, Liao, & Phillips, 2011). This can result in poor quality, causing the need for product recalls. However, there is a fear of opportunism, which is the most significant cause of low quality. This refers to the looking out for one’s own interest, rather than considering the collective’s interest. In other words, this fear commonly leads to the believe that “poor quality is due to shop floor workers and good quality is due to senior management competencies” (Soltani, Azadegan, Liao, & Phillips, 2011). This has resulted in a culture of blame and the belief that quality management responsibilities belong to quality units only. In fact, suppliers often “compete [based] on costs and mass production, [leading to] low quality products” (Soltani, Azadegan, Liao, & Phillips, 2011). Therefore, there are mixed beliefs regarding the responsibilities of quality management, which results in poor quality products.
Implementation of Recommendations
Quality management can be implemented by monitoring the workforce. This leads to the “detection of errors [and] post production inspection[s] identify poor performers” (Soltani, Azadegan, Liao, & Phillips, 2011). In addition, it is necessary to get the entire organization involved in quality management. This can be done by having distant, local, and regional suppliers, which are chosen through a supplier selection criteria and/or certification process. In fact, many companies participate in the “purchasing function, [which involves being] responsible for selecting suppliers, managing long-term contracts, monitoring supplier performance, and maintaining close and effective supplier relations” (Bayo-Moriones, Bello-Pintado, & Merino-Diaz-de-Cerio, 2010). As a result, a supply chain community can be established, that increases competencies related to supply chains and quality management (Kuei, Madu, & Lin, 2011). With these implementations, better products can be produced for customer purchases.
Proposed Changes to Supplier Contract
In order to effectively utilize suppliers and create effective quality management, supplier contracts must be changed. For instance, suppliers must participate in quality culture and understand that quality is everyone’s responsibility. This also involves the understanding that mutual economic benefits can occur with collaboration and close relationships between suppliers and customers. Thus, by decreasing dependence on any single supplier, opportunism is either decreased or eradicated. Importantly, supplier contracts can be altered to include at-source monitoring and product consumption monitoring (Soltani, Azadegan, Liao, & Phillips, 2011). Finally, the supplier contract can be changed to commit to “ensur[ing] high quality, safe, [and] cost effective” products (Das, 2011). As a result the relationship is established to ensure a stronger global supply chain that is focused on its customers and quality.
As noted in the introduction, the global supply chain is the flow of goods and products from its beginning stages to customers. This requires effective quality control, which can be achieved in a variety of ways. However, this is no easy task because of the extensive interconnection. Significantly, this does not always mean that benefits are obtained through the relationship. In contrast, companies are more likely to attain benefits through cooperation, which leads to comparative advantage, which is commonly influenced by the company’s position in individual countries. Thus, technology advancement is important to suppliers. Furthermore, organizational theories are commonly explanatory for excellence or dysfunction. Importantly, these organizational theories are also important in explaining the overall cost that results from supplier quality. This reflects on revenue and long-term survival within the global marketplace. Most importantly, it is important to remember the necessity of customer focus.
Low quality products lead to numerous problems. These problems may be the result of supply chain competition, rather than company competition. As a result of poor quality, product recalls occur, costing the company money. Opportunism is another cause of problems within quality management of the global supply chain. This is characterized by individuals looking out for individuals, rather than the collective interest. This also leads to a culture of blame, in which opposite parties are blamed, such as floor workers for poor quality and senior management being typically praised for their competencies in creating high quality products. Thus, it is commonly believed that quality management is the sole responsibility of quality units, rather than the entire organization. However, quality management can be enforced by monitoring the workforce, allowing for the detection of weak links or poor performers. Thus, the entire organization becomes involved in quality management, leading to satisfied customers
- Bayo-Moriones, A., Bello-Pintado, A., & Merino-Diaz-de-Cerio, J. (2010). Quality assurance practices in the global supply chain: the effect of supplier localisation. Taylor & Francis.
- Das, K. (2011). A quality integrated strategic level global supply chain model. International Journal of Production Research, 5-31.
- Kuei, C.-h., Madu, C. N., & Lin, C. (2011). Developing global supply chain quality management systems. International Journal of Production Research, 4475-4481.
- Soltani, E., Azadegan, A., Liao, Y.-Y., & Phillips, P. (2011). Quality performance in a global supply chain: finding out the weak link. International Journal of Production Research, 269-293.
- Spinney, B. (2002). The Global Supply Chain.