Very few organizations can legitimately claim that they experience a Six Sigma level of quality. Most companies have quality issues about what they buy as well as sell. Those who attempt to achieve Six Sigma do better because they are more concerned and because they realize that poor quality represents a cost through customer dissatisfaction, lost sales, scrap generated, and extra labor to produce product, or correct errors.
The purchasing operation is affected when requisitions are inaccurate or misleading. Buyers waste time processing the requests for material and service when specifications are wrong or inadequate. Higher quantities requested add to inventory costs. Quantities that are too low cause shortages and may require paying for the use of premium transportation methods.
Purchasing activities are usually blamed when suppliers deliver flawed product. The cost of checking, rejecting, and replacing poor quality products may never be adequately compensated by the guilty supplier.
A review of these varied problems and others indicates that all business departments can and do contribute to both good and bad quality. Solutions must address the general causes as well as each type of quality issue.
Organizations that experience an excess degree of poor quality may lack a formal quality control or quality assurance function. They may not have formal written policy and procedure manuals that address quality issues.
Frequently, quality problems are a result of poor employee training. Too often new employees are given tasks with little or no training and are simply expected to know what to do and how to do it. The military does a better job of training than most companies. Look at the army’s training material and you will see minute instructional detail about very simple jobs. Text is supplemented with photos or graphical illustrations where appropriate. The armed services realize that lives may depend upon doing the job properly.
Not only should the instructions be detailed in writing, follow-up must be conducted to make sure the material has been read and understood. The work of inexperienced employees needs to be checked until it is certain that the job will be done properly every time.
An organization may assign an older, more experienced employee to help train a new employee. But not just any worker should be given this task. Too often, under-performing workers are used to train new employees. It would be better to use the best-performing worker to teach the new employees. In fact, that person may be able to help the slower or error prone employees as well.
It is not sufficient to solve each quality problem as it arises. The long-term and cost-efficient method is to determine the underlying cause of the problem and remedy it. Otherwise, similar problems will continue to develop.
Buyers can do much to eliminate supplier related quality issues by selecting well qualified suppliers in the first place, by making it very clear what is expected and by checking initial performance carefully.
A system of inspections, training, and checks should be established. A new buyer-seller relationship requires more frequent inspections and checks. As time goes by, less verification may be necessary. Eventually, random checks may be sufficient depending on the product and the buying organization’s requirement.
Data on supplier performance must be obtained to evaluate and compare suppliers. A company with major supplier quality problems should concentrate improvement efforts on the smaller percentage that have the worst records. This is only possible if statistics are available. Depending on gut feel from product users about who is good and who is not is a very unreliable method.
Total quality is more than that associated with the delivered tangible product. It includes obtaining delivery when scheduled. It is a quality problem if the product arrives too early or is later than agreed. It is a quality problem if billing is incorrect. Invoices should match the terms of the purchase agreement.
Most of all, it is a quality problem if the received goods don’t match the specifications. Often that can only be determined by expensive testing. Testing tools and equipment must be available in-house or through an outside independent service when it is critical that a product meets specifications within a certain tolerance.
Suppliers can either be rewarded for good quality or penalized for unsatisfactory quality. The rewards or penalties can be in the form of additional or fewer orders or cash payment incentives or cash charges against billing.
The article was reprinted from the American Purchasing Society, http://www.american-purchasing.com/default.asp