Chapter 8

Slide 8.
Procurement and Supply Chain

Management
Tenth Edition
Part 2
Strategy, tactics and
operations 1: Procurement
factors
Chapter 8
Quality management, service
and product innovation
Copyright © 2020, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Slide 8.2
Definitions of quality
‘The totality of features and characteristics of a product that

ISO 8402
bears on the ability to satisfy stated or implied needs.’
CROSBY ‘Conformity to requirements not goodness.’
JURAN ‘Fitness for use.’
Slide 8.3
Garvin’s eight dimensions of quality
1 Performance 5 Durability
2 Reliability 6 Features
3 Serviceability 7 Aesthetics
4 Conformance 8 Perceived quality
Slide 8.4
Quality system and the quality loop

A quality system is defined as ‘The organisational structure,
responsibilities, procedures, processes and resources for
implementing quality management.’
The quality loop

Marketing and market research Design/specification engineering and
product development
Disposal after use Procurement
Technical assistance and

Customer / Producer / Process planning and
maintenance
consumer supplier development
Installation and Production
operation
Inspection, testing and
Sales and distribution
examination
Packaging and storage
Slide 8.5
Definition of total quality management

‘A way of managing an organisation so that every job, every process, is
carried out right, first time and every time.’
TQM – three important principles
A focus on product improvement from the customer’s

1 viewpoint
A recognition that personnel at all levels share

2 responsibility for product quality
Recognition of the importance of implementing a system to

3 provide information to managers about quality processes
that enable them to plan, control and evaluate performance
Slide 8.6
TYPES OF SPECIFICATIONS
Those relating to things

Raw materials Those relating to actions
Components Functions
Assemblies Processes
Final products Procedures
Systems Services
Complex structures
Slide 8.7
Conditions in which the item or material is to be installed, used,

manufactured or stored
Characteristics
Performance
Life
Reliability
Control of quality checking
Packaging and protection
Information from the supplier to the user
Slide 8.8
Performance Brand Drawings/

specification names blueprints
Chemical
analysis Prescriptive
Samples
specification
SOME ALTERNATIVE METHODS OF SPECIFYING
Slide 8.9
Advantages to the buyer!

Removal of uncertainty as to what is required
Helps achieve reliability and reduces costs
Eliminating the need to prepare company specifications
Saving design time
Accurate comparison of quotations
Less dependency on specialist suppliers
Reduction in error and conflict
Facilitation of international sourcing
Saving in inventory
Reduced investment in spares
Reduced cost of material handling
Slide 8.10
Approaches to quality assurance
Quality systems including Design of manufacturing

ISO 9000 processes
Incoming materials control
Supplier appraisal
New design control
Slide 8.11
INSPECTION ACTIVITIES
RECEIVING CONTROL AUDIT INSPECTION

CLASSIFICATION
INSPECTION INSPECTION Ensuring that
INSPECTION
Materials or Inspection of periodic procedures and
Inspection to
components received sample of processes are
separate parts
from outside supplier work-in-progress being followed to
into categories
are inspected for of an end product ensure the validity
according to
conformance to to detect and and reliability of
specifications
specifications correct deviations inspection operations
Slide 8.12
The house of quality

Quality
function
deployment
Matrix showing
interaction between
each engineering
characteristic
Engineering characteristics
that affect customers’
requirements
Matrix showing interaction • Importance of each
Customers’ between each engineering requirement
requirements characteristic and each • Customer-perceived
customer requirement performance against
competitors
Target engineering
characteristics
Slide 8.13
Cost of quality – appraisal costs

COST OF CONFORMANCE
Appraisal costs
(Cost of assessing the quality achieved)
 Laboratory acceptance testing  Review of test and inspection data

 Inspection tests (including ‘goods  Field (on-site) performance testing
inward’)  Internal testing and release
 Product quality audits  Evaluation of field stock and spare parts
 Set-up for inspection and test  Data processing inspection and test
 Inspection and test material reports
 Product quality audit
Slide 8.14
Miles – definition of value analysis

‘A philosophy implemented by the use of a specific set of techniques, a body of knowledge
and a group of learned skills. It is an organised, creative approach which has for its purpose
the efficient identification of unnecessary cost, i.e. cost which provides neither quality nor use
nor life, nor appearance nor customer features.’
The value analysis checklist

1. Does its use contribute value?
2. Is its cost proportionate to its usefulness?
3. Does it need all its features?
4. Is there anything better for the intended use?
5. Can a usable part be made by a lower cost method?
6. Can a standard product be found which will be usable?
7. Is it made on proper tooling – considering the quantities used?
8. Are the specified tolerances and finishes really necessary?
9. Do material, reasonable labour, overhead and profit total its cost?
10. Can another dependable supplier provide it for less?
11. Is anyone buying it for less?

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Slide 8.

Procurement and Supply Chain

‘The totality of features and characteristics of a product that

CROSBY ‘Conformity to requirements not goodness.’

JURAN ‘Fitness for use.’

Garvin’s eight dimensions of quality

4 Conformance 8 Perceived quality

Quality system and the quality loop

The quality loop

Technical assistance and

Definition of total quality management

TQM – three important principles

A focus on product improvement from the customer’s

A recognition that personnel at all levels share

Recognition of the importance of implementing a system to

Those relating to things

Conditions in which the item or material is to be installed, used,

Control of quality checking

Packaging and protection

Information from the supplier to the user

Performance Brand Drawings/

SOME ALTERNATIVE METHODS OF SPECIFYING

Advantages to the buyer!

Approaches to quality assurance

Quality systems including Design of manufacturing

Incoming materials control

RECEIVING CONTROL AUDIT INSPECTION

The house of quality

Cost of quality – appraisal costs

 Laboratory acceptance testing  Review of test and inspection data

Miles – definition of value analysis

The value analysis checklist

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