Page 250 - The Handbook for Quality Management a Complete Guide to Operational Excellence

236 P r o c e s s C o n t r o l S u p p l y C h a i n M a n a g e m e n t 237

With processes the certification is usually based on some demonstrated
capability of the process to perform a specified task. For example, a lathe
may machine a special test part designed to simulate product characteris-
tics otherwise diffi cult or impossible to measure. The vendor is usually
responsible for certifica tion. Process audit involves establishing a proce-
dure for the special process, then reviewing actual process performance
for compliance to the procedure. A number of books exist to help with the
evaluation of special processes. In addition, there are inspection service
companies that allow you to hire experts to verify that special processes
meet established guidelines. These companies employ retired quality con-
trol professionals, as well as full-time personnel. In addition to reducing
your costs, these companies can provide a level of exper tise you may not
otherwise have.

Partnership and Alliances
Research suggests that purchased items account for 60 percent of sales,
50 percent of all quality problems, and 75 percent of all warranty claims. Yet,
even these impressive figures understate the importance of suppliers to a
firm’s success. The emphasis on just-in-time ( JIT) inventory management
systems has created a situation where any slippage in quality or delivery
commitments causes an immediate detrimental impact on production
schedules and the firm’s ability to ship fin ished product. The interdepen-
dence of the supplier and the purchaser is now painfully obvious. This
has led many firms to reduce the number of suppli ers in an effort to better
manage supplier relationships. The new approach is to treat suppliers as
partners rather than as adversaries. Suppliers are given larger and longer
contracts and, in turn, they are expected to work closely with the pur-
chaser to ensure that the purchaser’s customers are satisfied.
The conventional wisdom in American quality control was, for
decades, that multiple vendors would keep all suppli ers “on their toes”
through competition. Multiple vendors provided a hedge against unfore-
seen problems like fire, flood, or labor dis putes, and became the de facto
standard for most firms (and required by major government agencies,
includ ing the Department of Defense).
In the 1980s, the consensus on multiple sources of supply began to
erode, as Japan’s enormous success with manufacturing in general and
quality in particular inspired American businesspeople to study the
Japanese methods. Japanese businesses dis courage multiple-source pur-
chases whenever possible, in keeping with the philosophy of W. Edwards
Deming (see points 2 and 4 in Deming’s 14 Points, Chap. 3). The advocates
of single-source procurement argue that it encourages the supplier to take
long-term actions on your behalf and makes suppliers more loyal and
com mitted to your success. Statistically, minimum variability in product

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