This paper at large includes in-depth information on how to manage the quality of a supplier. It will approach supply quality management from different perspectives and offers an essential general understanding of accepting quality supply techniques and principles. Firstly, this paper will cover the importance of the buyer being concerned with the management and monitoring of supplier quality performance. Secondly, discuss the statement: Supply management not only buys parts or services from suppliers-it often buys a supplier's current and future performance capability. Then, discuss if suppliers have an equal effect on the quality of the product; the importance of a buyer being a good customer and how; how early design involvement supplier efforts can help to a higher level of the quality of the product. And the benefits of obtaining ISO 9001: 2008 registration to the supplier- how ISO 9001: 2008 can be utilized effectively in managing supplier quality? Generally, quality can be defined as the total composite characteristics of service and product marketing, maintenance, and manufacturing and engineering through which the service or product offered will satisfy or exceed customers' needs (Monczka et al.).
Why should a buyer be concerned with monitoring and managing supplier quality performance?
A business organization supplier plays a significant role in the success of the objectified goals of a business given it's among the micro-environmental factors that affect the success of business in addition to the organization competitors and customers. Suppliers add quality to the service or product being offered by the company to the consumers (its customers) thus essential for the buyer to monitor and manage the performance of the supplier quality. An organization has to manage and quantify the risks within the organization effectively to be successful over time. In associating with suppliers in conducting business activities, there are various high rate potentiality for disaster and substantial risks in the form of environmental problems, poor performance, bankruptcy, lack of materials, delivery failure or products defects thus one cost-effective and essential step to take is to manage and monitor the supplier performance (Wheaton) periodically.
The management of supplier performance is more essential than merely buyer buying services and products from the supplier. This is because it is a comprehensive approach to organize a business organization supply base and it also reflects the business organization future-planned strategy. It seeks to determine and mitigate company risks in attempting to improve the general profitability. The management of supplier performance involves assessment of the supplier performance, periodic review of supplier data, supplier scorecards and also evaluation of supplier development. Also, it involves orientation with a primary focus of improving buying and supply base performance. Even though the management of supplier performance is not an easy task as it requires achieving of the objectified business goals, business processes and supply base when the process is done strategically and well, it impacts to significant monetary improvement to an organization (Wheaton).
Discuss the following statement: Supply management not only buys parts or services from suppliers-it often buys a supplier's current and future performance capability
Supply management not only buys parts or services from suppliers, it also buys suppliers current and future performance capability. Generally, this statement means rather than just buying from the supplier products and parts, manufacturers often reserve or should reserve the capacity of those suppliers (capabilities-based sourcing) as by doing so, it impacts to cost control better, the manufactures attain more flexibility and also, they gain higher quality in the products they produced. Capability sourcing is an organizational approach that facilitates gaining access to capabilities of best-in-class for all business activities in the value chain of an organization to make sure of obtaining and maintaining a competitive advantage for an extended period (Parker). Mainly, capability sourcing helps an organization in mitigating supply risk. Reserving future capacity and capability, buyers have the abilities to offer the supplier with the needed working capital without being in their lending record (Parker).
Do all suppliers have an equal impact on product quality? Discuss the conditions under which one supplier may have a more significant impact on a firm's final product quality as compared to another supplier
Do all suppliers have an equal effect on product quality? No. this is because all suppliers have a distinct impact on the quality of products. Various conditions impact the level at which one supplier impact on the final product quality of a firm varies from one another. Mainly, the supplier of a company has a substantial amount of power over the product value chain as it has a direct effect on how the buyer serves its consumers. Depending on the exerted approach or way by the supplier, the buyer has to use the exercised supplier power throughout the product quantity, product prices and product quality. The impact of the supplier on the quality of the final product of the firm depends on the power he/she exerts as it affects nearly all the stages of the product after selling it to the buyer. Too much disruption or attention to any of the mentioned areas (product quantity, price and quality) has great effects on the future success of the firm. These conditions include supplier pricing, product supply availability, supplier power, industry dynamics and also the issues of product quality (Martin).
Why is it important for a buyer to be a good customer? How can a buyer become a good customer to a supplier?
A good buyer-supplier relationship is a crucial factor for the success of a business as the supplier also are the source of advice, information and information apart from providing the buyer with the services and products they require to run their business thus crucial for a buyer to be a good customer. According to Tasmanian Government, the relation between the supplier and the buyer can be complex since both of them-supplier and buyer has the role of maximizing its resources, time and cash investment hence these competitive priorities strains the relationship largely. The following are ways that can assist the buyer in becoming and maintaining good relations with the supplier by becoming a good customer: a regular conversation with the supplier; paying the suppliers accounts promptly; communicating before payment due date with the supplier in case the buyer has foreseen account payment delays. Monitoring suppliers financial position by talking with the market competitors and colleagues concerning the overall financial stability of the services and products supplied to the buyer; building good and better relationship with the supplier's representatives. Also, exercising fairness and firmness with the market sales representatives; being ready from time to time to renegotiate and review trade terms with the supplier, and referring faulty or damaged goods promptly to the supplier with documents to support the claims.
How can early supplier design involvement efforts contribute to higher levels of product quality?
Most of the progressive and successful business organizations include supplies in both process development and product at an early stage than in the traditional approach. Giving the supplier the chance to apply his/her expertise and experience in the buyers' new project of product development impacts to better product design and better product quality because the suppliers' experience and knowledge can be applied before initial customers' requirements development prior final specifications and cost structure development.
Discuss the benefits to a supplier of achieving ISO 9001:2008 registration
The essentiality of achieving the certification of ISO 9001: 2008 to a supplier or any business organization be it small or large is not overstated as practically, many companies have gain hugely by discovering efficiency and cost saving by using the standard. Its benefits include improvement of customer satisfaction, improvement of supplier image and credibility in the industry and it offers better overall integration process thus easy in finding improvements in cost and efficiency savings through elimination of accumulated wastes in the process (Hammar). Also, the quality management system- ISO 9001: 2008 improves the supplier's decision making processes concerning business activities; involves employees in the activities within the organization thus improving work process because of more engaged and happier employers; and also, ISO 9001: 2008 assists in the creation of a continually improved culture. Generally, ISO 9001: 2008 acts as a start point of good things for the efforts of a business to achieve better improvement and process control. It acts as a base of implementing other quality management standards, for example, ISO 20000 and ISO 14001 for IT service and environmental management respectively as they follow similar organizational structure.
Hammar, Mark. "Six Key Benefits of ISO 9001: 2008 Implementation". Retrieved from; https://advisera.com/9001academy/knowledgebase/six-key-benefits-of-iso-9001-implementation/ (2019)
Martin. "Bargaining Power of Suppliers- Porter's Five Forces Model." Retrieved from; https://www.cleverism.com/bargaining-power-of-suppliers-porters-five-forces/ (2014)
Monczka, Robert M., et al. Purchasing and supply chain management. Cengage Learning, 2015.
Parker, Bob. "Purchase capacity, not products." Retrieved from; https://www.supplychainquarterly.com/topics/Procurement/scq200902capabilities/ (2009)
Tasmanian Government. "Maintaining Good Relations with your Suppliers." Retrieved from; https://www.business.tas.gov.au/managing-customers-and-suppliers/choosing-and-managing-your-suppliers/maintaining-good-relations-with-your-suppliers (2013)
Wheaton, Glenn. "Supplier Performance Management." Retrieved from; http://www.epiqtech.com/supplier-performance-management.htm (2009)
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