Supplier Quality

July 22nd, 2011

The quality of your end product or service rests largely on the quality of supplier products, and other inputs such as work of employees, operating funds and market place requirements. However, just as quality ingredients of a cake need to be processed in a certain way, effective and efficient conversion of input is necessary to create a product customers will value. A cake containing quality ingredients but that failed to rise will not be valued by anyone. Both stages of the input process, gathering and processing materials, are crucial creating a quality product or service.

Gathering Materials
A supplier must do more than just provide high quality materials at a reasonable price, but make all aspects of the transaction smooth. A good supplier will also be easy to communicate with, have a simple, low cost transaction system, and be able to resolve problems with a minimum of fuss. Be sure to discuss these areas when selecting your supplier, as they are often details that do not become apparent till later. Knowing your supplier from the outset will avoid the costly and time consuming exercise of having to switch suppliers.
No matter how well you research a supplier, some aspects of their service will not become apparent until transactions begin. In the early stages of business, delivery reliability, and any problematic internal policies should be monitored closely, as they will impact the supply chain performance. The performance of a supply-chain is affected by various factors including the supplier’s reliability when it comes to delivery and the supplier’s ability to ensure adequate inventory. 

Many suppliers vs. Select few
While previous supplier selection tended to favour a large number of suppliers to protect against stock shortage and increase price competition, this has changed in recent years. The new school of thought favours working closely with select few suppliers, in order to cultivate long-term partner-ship orientated arrangements. Fewer suppliers ensure greater consistency in stages of the input process, so your business is able to develop an efficient rhythm. Familiar, long term suppliers also take the pressure of having to continually monitor the supply material, once they have proven effective and consistent quality control.
In order to develop effective supplier management processes, support from top management of both companies is required, as this helps generate mutual trust. Consider the spending of more time and money early in the relationship an investment to protect against problems later on.

Processing materials
Once quality materials are acquired efficiently, the manufacturer must correctly incorporate the material into their product. This is still a high inherent risk, or potential impact, in getting the manufactured product to the customer, which highlights the importance of the supplier-management processes. The same concepts used for the supplier-manufacturer relationship can be applied to a wide variety of non-manufacturing business partnerships. All business partnerships and alliances involve a certain level of risk, which demands a carefully researched selection process. When sharing expertise and resources it is vital to spread risk and protect against an increasingly complex global business environment.