Purchasing & Supply Exam 2

supplier quality

ability to meet or exceed current and future customer expectations or requirements within critical performance areas on consistent basis

Deming’s 14 points

1. Create a vision and demonstrate commitment

2. Learn the new philosophy

3. Understand inspection

4. Stop making decisions purely on the basis of price

5. Improve constantly and forever

6. Institute training

7. Institute leadership

8. Drive out fear

9. Optimize the efforts of teams

10. Eliminate exhortations

11. Eliminate numerical quotas and measurement by objective

12. Remove barriers to pride in workmanship

13. Encourage education and self-improvement

14. Take action

Total Quality Management

1. Define quality in terms of customers’ requirements

2. Pursue quality at the source

3. Stress objective rather than subjective analysis

4. Emphasize defect prevention vs defect detection

5. Focus on process rather than output

6. Strive for zero defects

7. Establish continuous improvement as way of life

8. Make quality everyone’s responsibility

variation

primary source of quality nonconformance

management

has ultimate responsibility for quality improvement

quality at the source

• evaluate key value-adding points in process where defects could occur, including supplier facilities

• product and process design

  • early supplier design involvement

• issue of sharing proprietary information

objective measurement & analysis

• make decisions on facts

• rigorous supplier measurement system

• develop a preferred supplier list

prevention of defects

• strive for predictable consistency and reduce process variation

• reduce reliance on appraisal, inspection, and detection activities

  • non-value-adding activities

• Supplier certification program

• Use of corrective action request

process capability

ability of process to generate outputs that meet specifications and/or customer requirements

99.7%

% of output that falls between ± 3 std deviations of mean

appraisal costs

direct costs of measuring, testing, audits, and inspection

internal failure

failure occurs before product or service is provided to customer

external failure

failure occurs after customer takes possession

prevention cost

keeps defects from occurring

• design and plan for quality

• equipment calibration

• develop quality manual

• maintain quality management system

supplier incentives for quality improvement

• Longer-term contracts

• Higher share of purchase volume

• Public recognition and awards

• Shared cost savings

• Access to new technology

• Early insight to new business and product plans

• Early participation in new-product and process development projects

• Use of buyer’s supply agreements to improve pricing

• Participation in executive buyer-supplier councils

• Listed as preferred supplier with first opportunity for new business

principles of ISO 9000

• Customer focus

• Leadership

• Involvement of people

• Process approach

• Systems approach to management

• Continual improvement

• Factual approach to decision-making

• Mutually beneficial supplier relationships

benefits of ISO 9000 for supplier

• included on master list of ISO certified firms

• helps address adherence to standards

benefits of ISO 9000 for buyer

• buyers have immediate confirmation of supplier’s registration

• may substitute for variety of individual buyer certification programs

• supplier assumes responsibility for meeting ISO 9000 standards and paying own registration fees

• buyer does not have to create its own comprehensive supplier certification audit system