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26
CHAPTER 5
Quality management
Objectives of this chapter
• To indicate the move away from quality control (inspection techniques) towards quality
assurance (prevention of defective work)
• To discuss statistical process control (SPC) and offline control
• To introduce the concept of failure mode and effect analysis
• To examine the different approaches to producing a specification and the role of value
analysis, including the idea of early supplier involvement
• To consider the fact that total quality management requires the involvement of all
suppliers and subcontractors, ideally at an early stage, and to outline the concept of
concurrent engineering
• To comment on the benefits of standardisation
• To introduce the standards BS EN ISO 9000 on quality assurance
• To discuss value analysis (VA) and value engineering (VE)
• To comment on the economics of quality
• To identify what drives make-or-buy decisions
• To outline Six Sigma methodology
List of Cases, Research Boxes and Figures in this chapter
Mini Case Studies
• Neilson Media Research
• Mitel
• Lucas Engineering
Research Boxes
Nil
Figures
• Figure 5.1 Multidimensional quality analysis
• Figure 5.2 Feedback loops in statistical process control
Instructor’s Manual
• Figure 5.3 Statistical process control
• Figure 5.4 The quadratic loss function
Notes: The loss function takes the quadratic form L = C(X í T)2 where:
L = the money loss (£s), C = cost, T = target value, X = the point where the quality
characteristic is actually set. Note that as upper (T + S) and lower (T í S) specification limits
are approached, costs rise exponentially. Costs are only minimised when the parameter is at its
target value.
• Figure 5.5 Concurrent engineering contrasted with consecutive engineering
• Figure 5.6 ‘Quality first’ supplier programme: award recognition levels (Source:
Kodak)
• Figure 5.7 A schematic representation of change in quality cost over time
Note: Base cost index = 100.
Shift is from no quality management to quality control to quality assurance.
Teaching Notes
Product or service quality is increasingly seen as a ‘qualifier’ which must be demonstrably
attainable before a supplier can merit consideration.
Unless specifications can be understood and consistently met, a potential supplier is unlikely to
win business from a buying organisation taking a professional view of the need to do business
only with vendors who are tuned in to, and able to respond to, the particular needs of customers.
The shift in business and commercial practice from quality control to quality assurance is
reflected in the chapter, as is the developing extent to which attention is paid to the management
systems employed by suppliers rather than the measurement or assessment of their products or
services.
In this chapter, we consider the question ‘What is quality?’
We discuss approaches to specification, and some of the relevant commercial practice.
A note on value analysis and value engineering is included.
Firms need to convince their customers that they can meet quality requirements before they can
compete on price, and so ISO 9000, now firmly established as a key ‘must know’ for the
procurement professional, is outlined in the chapter.
Quality management is a very complex topic which has been developed over many years.
This chapter attempts to give an overview of many of the techniques and concepts with which
procurement staff and students should be made familiar when studying procurement and the
supply chain.
