Supply Chain Quality Management

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Supply Chain Quality Management DOCTORAL T H E SIS Department of Business Administration, Technology and Social Sciences Division of Business Administration and Industrial Engineering Aron Chibba Supply Chain Quality Management Aron ISSN 1402-1544 Supply Chain Quality Management ISBN 978-91-7583-777-2 (print) ISBN 978-91-7583-778-9 (pdf) - Exploring performance of manufacturing organisations Luleå University of Technology 2017 Aron Chibba Quality Technology Doctoral Thesis Supply Chain Quality Management - Exploring performance of manufacturing organisations Aron Chibba Luleå University of Technology Department of Business Administration, Technology and Social Sciences Division of Business Administration and Industrial Engineering Printed by Luleå University of Technology, Graphic Production 2017 ISSN 1402-1544 ISBN 978-91-7583-777-2 (print) ISBN 978-91-7583-778-9 (pdf) Luleå 2017 www.ltu.se Abstract This thesis addresses the issue of quality performance in supply chains in the manufacturers’ context. Research shows that the management and performance of supply chains play a major role in gaining competitive advantage, especially in times of decreasing international trade barriers and quickly evolving information technology. Some researchers claim that it is the supply chain itself that competes on a market and not merely the organisations with their specific strategies and goals. Supply chain performance has been widely discussed in the research literature in recent years. However, this research points out that supply chain quality management (SCQM) and its impact on firm performance (both inter-organisational and intra-organisational) have not been sufficiently understood. Further studies are needed to identify the direct and indirect impact of SCQM practices on firm performance at multiple levels. A problem that many organisations face is the lack of resources and knowledge on how to manage supply chain quality performance (i.e., which performance to measure, how to control performance, and how to improve performance). Studies show that often even large companies measure effectiveness using key performance indicators (KPI) and that these indicators often do not depict key characteristics critical to organisational performance or customer behaviour. Therefore, such indicators might be inadequate for fully capturing the performance of supply chains. As quality management standards evolve, managers need to adapt to changing requirements. To fulfil the new version of ISO 9001, organisations are required to determine criteria and apply methods to ensure effective operation and control of their processes (both intra- organisational and inter-organisational performance). This includes monitoring and measuring performance indicators. The quality performance of a supply chain is dependent on its ability to improve and thereby enable organisations to stay competitive over time. Good measurements of supply chain quality performance must reflect this ability. To do so, organisations need to know which measures and metrics to use and how to analyse performance of their supply chains. From the seven studies presented in this thesis we are able to draw a number of more general conclusions that bear on the main research question: What improves quality performance of supply chains that include manufacturing? At the process level, it has been found that manufacturers should focus on the quality and delivery performance of each process within the organisation. At the internal, integrated supply chain level, a manufacturing organisation should focus on quality (conformance), delivery performance (on-time delivery), and cost cutting in the internal supply chain. Collaboration using cross-functional teams seems most appropriate when working with product development. The use of a process-oriented mapping tool was found to facilitate description of information flows and physical material flows and also to identify disturbances that could be improved and rationalized to generate a better flow in the total supply chain. At both the upstream and downstream sides of the supply chain, one-sided measures that depict performance over organisational boundaries were found to be the most common. At the downstream side of a supply chain, suppliers could be chosen based on cost, conformance, speed, and flexibility. At the upstream side, procedures that handle changing requirements and information about delays or incorrectness of materials were found to influence flow. The results from these seven studies are the basis for the development of a supply chain quality improvement model. In the literature, supply chain performance is often discussed on a strategic level with measures for quality, flexibility and delivery. Managers also need metrics that can be followed up on at a detailed level (e.g., capacity load, breakdown rates, claims, cost of poor quality, and lead-times). To bridge this gap, a Key Performance Indicators Matrix of supply chain quality performance indicators for manufacturers is proposed. , Sammanfattning Denna avhandling tar upp frågan om hur försörjningskedjor i en kontext av tillverkande organisationer presterar i termer av kvalitet. Forskning visar att ledning och utveckling av försörjningskedjor spelar en viktig roll när det gäller att erhålla konkurrensfördelar, särskilt i tider av minskande internationella handelshinder och snabba förändringar i informationstekniken. Vissa forskare hävdar att det är leveranskedjan i sig som konkurrerar på en marknad snarare än enskilda organisationer med sina specifika strategier och mål. Prestanda i försörjningskedjor har diskuterats i forskningslitteraturen under de senaste åren. Ny forskning har pekat på att ledning av kvalitets- prestanda i försörjningskedjor (SCQM) har inverkan på företagens resultat (både mellan olika organisationer och inom en organisation) men att detta område ännu inte är tillräckligt klarlagt. Ytterligare studier har behövts för att identifiera direkta och indirekta effekter av SCQM praxis på företagens resultat på flera nivåer. Ett problem som många organisationer står inför är brist på resurser och kunskap om hur man bör hantera kvalitetsprestanda i leveranskedjan, det vill säga vad som ska mätas, hur man styr och hur man kan förbättra denna prestanda. Studier visar att företag, även stora sådana, som mäter effektiviteten med hjälp av nyckeltal (KPI) ofta saknar indikatorer för många viktiga egenskaper av betydelse för organisationens resultat och kundbeteende. Därför kan sådana indikatorer vara otillräckliga för att på ett bra sätt fånga prestandan hos försörjnings- kedjor. I takt med att nya standarder för ledningssystem för kvalitet utvecklas behöver chefer anpassa sig till förändrade krav. För att möta kraven i den senaste utgåvan av ISO 9001 måste organisationer upprätta och tillämpa kriterier och metoder för att säkerställa en effektiv drift och styrning av processer (både prestanda inom organisationen och mellan organisationer). Detta in- kluderar övervakning och mätning av resultatindikatorer. En distributionskedjas kvalitetsprestanda beror av dess förmåga att förbättra och därmed göra det möjligt för organisationer att förbli konkurrenskraftiga över tiden. Bra mätningar av kvalitetsprestanda i försörjningskedjan behöver kunna återspegla denna förmåga. För att göra detta måste organisationer veta vilka underlag som kan användas och hur man analyserar en försörjningskedjas prestanda. Utifrån de sju studier som presenteras i denna avhandling ges ett antal mer generella slutsatser som har bäring på den huvudsakliga forsknings frågan, det vill säga: Vad förbättrar kvalitetsprestanda i försörjnings- kedjor som inkluderar tillverkning? På processnivå har det visat sig att tillverkande organisationer bör fokusera på kvalitet och leveranssäkerhet för varje process inom organisationen. Vad gäller den interna integrerade försörjningskedjan bör en tillverkande organisation fokusera på kvalitet (överensstämmelse), leveranssäkerhet (leverans i tid) och sänkta kostnader för interna försörj- ningskedjor. Att samverka med hjälp av tvärfunktionella team verkade vara det mest lämpliga tillvägagångssättet när man arbetar med produktutveckling. Användningen av ett processorienterat kartverktyg befanns underlätta beskrivningen av informationsflöden och fysiska materialflöden samt identifiering av störningar som skulle kunna förbättras och rationaliseras för att skapa ett bättre flöde i den totala leveranskedjan. Ensidig mätning som skildrar prestanda över organisa- toriska gränser (både nedströms i försörjningskedjan, dvs. mot kunder, och uppströms, dvs. mot leverantörer) befanns vara det vanligast förekommande. På nedströmssidan av en försörjnings- kedja kan leverantörer väljas baserat på kostnad, överensstämmelse, snabbhet och flexibilitet. På uppströmssidan är det lämpligt med rutiner som hanterar förändrade krav och information om förseningar eller felaktigt material. Resultaten har använts som grund för utveckling av en modell för kvalitetsförbättring av försörjningskedjor. I litteraturen om försörjningskedjor diskuteras ofta prestanda på en strategisk nivå, mätningar som kvalitet, flexibilitet och leverans. Chefer behöver också statistiska underlag som kan följas upp på en lägre nivå, t ex vad avser kapacitetsbelastning, felfrekvens, fordringar, kvalitetsbristkostnader och ledtider. För att illustrera detta har en KPI- matris av försörjningskedjors kvalitetsrelaterade resultatindikatorer föreslagits. ,, ACKNOWLEDGEMENTS It has been quite a long research journey, but also a fun and rewarding one. There are
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