João Gilberto Mendes dos Reis
Universidade Federal da Grande Dourados – UFGD, Brazil
Universidade Paulista – UNIP, Brazil
E-mail: betomendesreis@msn.com
Pedro Luiz de Oliveira Costa Neto
Universidade Paulista – UNIP, Brazil
E-mail: politeleia@uol.com.br
Sivanilza Teixeira Machado
Universidade Federal da Grande Dourados – UFGD, Brazil
E-mail: sivateixeira@yahoo.com.br
Rone Vieira Oliveira
Universidade Federal da Grande Dourados – UFGD, Brazil
E-mail: rone.vieira.oliveira@hotmail.com
Submission: 27/09/2013
Revision:
17/10/2013
Accept:
01/11/2013
ABSTRACT
The development of relationships
between organizations through Supply Chain Management, with a view to delivering
products and services and consumers has led quality management to go beyond the
boundaries of the individual firm and thus spread to the various network actors
in which the organization is involved. This has been called Supply Chain
Quality Management (SCQM) and consists in developing a quality policy
applicable to the whole supply chain. Quality management systems have been
successfully implemented within individual companies, but how has this actually
affected suppliers, within SCM? This paper conducted a survey in thirteen
companies operating in Brazil to assess the effectiveness of SCQM. The results
show that companies are still very concerned about quality within their
individual companies and ensuring quality from their suppliers still involves
performance indicators and depends on the availability of
suppliers for each item required.
Keywords: supply chain quality management; quality management
systems; Brazilian companies
1.
INTRODUCTION
Quality
assurance systems are an integral part of today's industrial processes and
service operations and therefore can not be viewed as systems that are
disassociated from the universe of operations. Accordingly, production
engineers and operations have had to implement systems that enable the
customers to have a perception of the quality of the products and service that
they receive.
As
a result, many systems have been developed, such as Total Quality Management,
Six Sigma, ISO 9000 standards, Hoshin Kanri, Quality Awards, among others (FEIGENBAUM,
1994; CAMPOS, 2004; AKPOLAT, 2004; SAMPAIO et al., 2009; MEHRJERDI, 2011).
Though
these may differ in certain aspects, their objectives remain the same, and it
is possible to find many cases of successful application of these systems in
different companies around the globe. After the 1990s, an increase in the
quantity of information from companies and customers was observed as well as
the development of tools like the Internet have contributed to greater
knowledge of products and services by customers who buy from the companies who
have become more demanding as to the quality of such products, and with regard
to reductions in price.
The level of competitiveness thus generated
caused organizations to begin to monitor their suppliers and their distribution
processes better, through management of their supply chains. This process led
to competitiveness being between the levels of the chains and no longer just
between companies (CHOPRA; MEINDL, 2011).
Quality
management systems went beyond the boundaries of the individual firms, and
began to spread throughout the network for supplies that make up the production
of a given product or service. This advance in quality management systems
across company borders has been named Supply Chain Quality Management (SCQM).
This
paper propose to study the concepts of SCQM and assess how some companies
operating in Brazil have adopted quality management systems throughout their
supply networks.
2. LITERATURE REVIEW
2.1.
Supply Chain Management
Supply
Chain Management (SCM) consists of coordinating relationships between companies
within the same network, with a view to maximizing the profits of the members,
through an improved and cooperative relationship. This allows the supplier
companies in the network to deliver better products and services to end
consumers at more competitive prices. These networks are composed of sets of
customers and suppliers, responsible for the flow of goods, from the origin of
the raw materials to the end user.
Costa
Neto and Canuto (2010) emphasize that supply chains entail the flow of
products, starting from the raw materials to products and services at the point
of sale, and that the whole system of companies and activities has a sum of
costs plus expenses which are necessary for the entire system to function, of which
the customer is the most important in all of this process, because that is who
pays all the bills. Figure 1 shows the flow of products and services, and the
flow of information within a supply chain.
Figure 1: Flows in the Supply Network. Source: Adapted from Costa Neto and Canuto (2010). |
The
evolution of concepts of network between companies changed ideas about
competitiveness, which was no longer
considered as a dispute between companies but reached the level of competition
between supply chains, even when parts of the elements in such networks are
common to several chains and are shared (CORRÊA, 2010), making managing such
chains essential.
A
supply chain can be conceptualized as being all parties involved, directly or
indirectly, in filling the order from a particular customer (CHOPRA; MEINDL,
2011). The parts produce an interaction that can be managed. This management of
supply chains is known as management of upstream and downstream relationships,
and its purpose is to deliver superior value to the customer at the lowest cost
for the entire supply chain (CHRISTOPHER, 2011).
2.2.
Supply Chain Quality Management
The
quality of products and services has been studied for many years. The discovery
that the quality of products and services is linked to the manufacturing
processes and the way of providing services culminated in studies, techniques,
systems and tools being developed, aimed at improving the processes and
operations, in order to obtain the desired end result. However, the network
environment has changed this scenario because we can no longer think of the
quality by focusing on individual processes. With competitiveness between
networks, it is necessary to observe quality within this new context, to
understand how it is established in the competitive environment.
Despite
the importance of quality in company networks, the issue has not been addressed
in major industry publications, among which one can cite Pires (2009), Corrêa
(2010), Christopher (2011), Chopra and Meindl (2011). Such publications
conceptualize networks, map their processes, study their risks and deal with
performance evaluations, but do not deal with quality in particular.
Thus,
this gap has been covered by the academic community based on scientific
articles that address the issue of quality in the universe of networks. Among
the studies reviewed in various journals, the most important are the research
from Beamon and Ware (1998), Kuei et al. (2001), Robinson and Malahotra (2005),
Lin et al. (2005), Sila et al. (2006), Foster Jr. (2008), Kaynak and Hartley
(2008), Carmignani (2009), Zu and Kaynak (2012), Lin et al. (2013).
Kaynak
and Hartley (2008) argue that the competition has moved beyond the individual
company to the supply chain, in which context the researchers begin to explore
the issue of quality management. They believe that two management practices,
directly impact the quality of the network, known as "quality supply
management and customer focus." Lin et al. (2005) agree with Kaynak and
Hartley (2008) that SCQM is influenced by two quality management practices:
management of the quality of the suppliers and their participation in the
tangible business results, along with the level of customer satisfaction.
The
authors also claim that quality in the supply network is a key component in
achieving a competitive advantage. Kuei et al. (2001) claim that, in the
digital age, SCQM has been recognized as one of the most important ways to
respond quickly, correctly and profitably to the demands of the market.
Sila
et al. (2006) infer that the first step toward SCQM was given by organizations
when they began to not only control their quality, but also began to determine
the quality of their direct partners. According to Lin et al. (2013) modern
enterprises need to pay immediate attention to SCQM through following to path
ways: a compliance approach and a voluntary approach.
Robinson
and Malahotra (2005) state that traditional quality programs focus on
approaches such as Total Quality Management, the Malcolm Baldrige Award and ISO
9001, and should transform themselves into a network perspective. Thus, SCM
must encompass quality initiatives, however, this is only one aspect that
programs to continuously improve quality must address in order to achieve
competitive leadership.
In addition, Zu and Kaynak (2012) proposes an
interesting methodology that allow create a conceptual framework that relates
the underlying factors of a supply chain relationship to the use of quality
management approaches.
According
to Robinson and Malahotra (2005), SCQM can be defined as formal coordination
and integration of business processes that involve all partners in the supply
channel organization to analyze, measure and continuously improve products,
services and processes, in order to create value and achieve satisfaction of
intermediate and final customers.
Foster
Jr. (2008) argue that the SCQM is a system based on a performance improvement
approach that leverages opportunities created downstream and upstream in the
supply chain, with both suppliers and customers. Thus, one can infer that SCQM
is the natural evolution of quality systems toward company network environments
(Table 1).
Table 1: Evolution of Quality Management Systems
Year |
1920 -1960 |
1960 - 1980 |
1980 - 1990 |
1990 - 2004 |
2004 and Beyond |
Program |
Control charts Statistical process control (SPC) Inspections |
Zero Defects; Troubleshooting Quality Circles Statistical process control (SPC) Experimental projects |
TQM ISO 9001 Malcolm Baldrige Award Six Sigma |
Supply Chain Management |
Supply Chain
Quality Management (SCQM) |
Focus |
Internal
organization. |
Internal organization |
Supply base Internal organization Customers' expectations |
ü All actors in the supply chain and primarily internal organization. |
All actors in the supply chain and primarily external organizations |
Source: Adapted
from Robinson and Malahotra (2005)
2.3.
Quality Management Systems
Several
quality management systems have been used by organizations; the most noteworthy
are the following: Total Quality Management (TQM), Six Sigma, ISO Standards,
Quality Awards, Hoshin Kanri.
2.3.1. Total Quality Management
The Total
Quality Management has its origin in Total Quality Control (TQC), and an
administrative system perfected in Japan from American ideas. Initially
developed by Armand Feigenbaum, TQC practiced in Japan is different from that
[originally] proposed because it is based on the participation of all sectors
of the company and all the employees in studying and performing quality
control.
The
Japanese TQC became known in the West as CWQC Company-Wide Quality Control (CAMPOS,
2004). According to Miguel (2006), the evolution of TQC resulted in TQM. The
main idea of TQM is that quality is present in the function of organizational
management, with the objective of broadening its focus, rather than merely
limited to control.
Hur
(2009) after a careful study explain that TQM can be dividing in three
dimensions: Employee empowerment – hability of workforce meet the customer requirements,
Understanding – perception of quality with which customers are satisfied and
finally continuous organizational improvement. All these characteristics are
important to get the total quality management.
2.3.2. Six Sigma
Concerning
the Six Sigma conception, the quality is almost always associated with the
perception of each individual client, so a service performed or a product sold
may be good for one person and bad for another. Therefore, there is a change in
perceived quality from one customer to another. However, this difference in
perception is not necessarily related to a personal vision, but rather
variations in product specifications or in the way of providing the service.
This
variation can occur in several ways. If variation is a problem, what is the way
to control it to improve the quality of products and services? It is in
response to that question that the system known as Six Sigma arose. The Six
Sigma program, according to Mehrjerdi (2011), is credited to Dr. Mike Harry, a
statistician who was the principal founder of the Six Sigma Academy in
Scottsdale, Arizona, United States. Motorola was the first U.S. Company to
adopt the system, followed by other organizations such as General Electric (GE)
and Texas Instruments. The idea behind the application consists of using
statistical tools to reduce process variations.
For
instance, we can measure the quality of system using average of process and
your standard deviation. The name six sigma, derives of deviation of process.
The idea consists that to avoid failures is necessary ensure six times standard
deviation of process (Figure 2). This situation is equivalent a three or four
parts per million (ppm).
Figure 2: Six Sigma Conditional. Source: Adapted from Costa Neto and Canuto (2010). |
2.3.3. ISO Standards
The
search to define quality standards that can be applied to different
organizations and guarantee the uniformity of quality parameters, and at the
same time determine indicators for organizations, led to the emergence of
so-called Quality Standards. Companies meeting the requirements of such standards
can be certified by a reputable institution.
Such
institution certifies that organizations comply with the items set forth in the
standard, thus ensuring quality in the organization. A standard is a document
established by consensus and approved by a recognized body, that provides rules
and guidelines for activities or the results thereof (FERREIRA, 2005).
The
International Organization for Standardization (ISO) is an international
non-governmental organization made up of a network of standardization
institutes, one per country. Headquartered in Geneva, Switzerland, it is made
up of 162 countries and sets international standards, including quality
standards (ISO, 2013). The ISO 9000 series, a designation given to quality
management systems, emerged in 1987 and became a worldwide phenomenon showing
tremendous growth and dissemination across different countries (SAMPAIO et al.,
2009). The ISO 9000 series, according to Ferreira (2005), consists of three
main standards: ISO 9000 - Quality Management Systems - Fundamentals and
Vocabulary; ISO 9001 - Quality Management Systems – Requirements; and ISO 9004
- Quality Management Systems - Guidelines for performance improvements
2.3.4. Quality Awards
Quality
awards were created in order to enhance the efforts of organizations towards
achieving excellence in their products and processes. The first of these,
called the Deming Prize, named after the American master who greatly
contributed to its improvement, was introduced in Japan in 1951, honoring
companies and persons related to quality control.
After
many years, prizes began to emerge valuing management excellence, such as the
American Malcolm Baldrige Award and, in Brazil, the Prêmio Nacional da Qualidade - PNQ (National Quality Award), which
came about between 1988 and 1992 (COSTA NETO, 2007). Unlike ISO 9000 standards,
which certify the fundamentals of quality management, these awards cover
excellence in management as a whole, and are only given to companies considered
world class.
2.3.5. Hoshin Kanri
Another
way to manage an organization based on the quality of its products and services
is policy deployment, known in Japan as Hoshin Kanri. This is an administrative
system practiced by the whole organization with the objective of ensuring
survival in the international market. According to Campos (2004), policy
deployment is a management system that leads to the establishment and carrying
through of an annual plan.
Accordingly,
annual goals are the starting point for such management systems. Policy
deployment seeks to identify the causes which make it impossible to meet
targets and establishes countermeasures to achieve objectives by improving and
implementing products and processes.
3.
METHODOLOGY
Companies
from different segments were evaluated to determine the effectiveness of the
application of quality management in their networks. Thus, this work is divided
into the following stages:
(a) Bibliographical
research in order to understand the concept of networks and ideas on Supply
Chain Quality Management and Quality Management Systems.
(b) Subsequently,
performing research in the field on companies operating in Brazil, both of
Brazilian origin and transnational, to identify whether systems for
coordination between supply chains and quality management systems across the
company and its suppliers had been adopted.
(c) Analysis
of the results obtained.
4. FIELD SURVEY AND DISCUSSION OF RESULTS
This
research was conducted in thirteen companies operating in various sectors of
Brazil. For each company, we tried to identify where supply management
techniques for their supply chains had been adopted, along with the
implementation of quality systems within the organization, and quality systems
for other actors in the network.
Companies
were classified into sectors by adopting the criteria from the Brazilian
Geography and Statistics Institute - IBGE (2007), which classifies and defines
economic sectors for statistical analysis to be used in Brazil; along with the
definitions established by the Federation of Industries of the State of São
Paulo - FIESP (2013). Accordingly, the sample was divided up in accordance with
Figure 3.
Figure 3: Companies Taking part in the Research, by Sector.
Of
the thirteen companies surveyed, eight are multinational and have facilities in
more than one region of Brazil; the others are of Brazilian origin.
4.2.
Supply Chain Management
Companies
were evaluated as to whether they carried out supply chain management, i.e., if
they managed the network within which they operate. This assessment was done jointly
with an evaluation of the degree of vertical integration that the companies
involved have adopted. The results obtained are shown in Figure 4.
Figure 4: Supply Chain Management and Verticalization.
The
research found that 46% of companies have adopted management of their supply
network, but with some kind of vertical integration process. Already 38% of
companies say they manage their supply chains without verticalizing their
processes. Another 15% say they do not perform network management or verticalize
their processes, but merely purchase their raw materials at the lowest price
and carry out their own transformation process.
None
of the companies surveyed claimed to be totally vertical, as the companies buy
most of the raw materials they need and verticalize what they consider
strategic or which they have no supplier for. Of the 11 companies that claimed
to manage the supply chain, it was observed in the field that five of them are
responsible for managing their entire network, so they are the hubs of the
chain to which they belong.
The
three companies in the electronics sector and one food company, who claimed to
manage their supply chains, actually managed their suppliers and the quality
assurance of the final product. The company which is the hub of the network is
responsible for retail, and determines the quantities to be sold and the gains
to be obtained from the network. Retail chains like Walmart, for example, are
larger than most of their suppliers, thereby serving as the hub for the supply
networks in which they participate.
With
respect to the other two companies that adopt the management of the supply
network, one affirmed that this was more of a concept than an actual practice
whilst another actually manages its suppliers, because it is the [main] actors
who are responsible for managing the entire network (manufacturers who purchase
their products, such as in the automotive industry).
4.3.
Quality Management Systems
Companies
were evaluated according to the quality management systems that date adopt.
This information refers to systems that apply within the organization,
regardless of the network as a whole. The results are shown in Figure 5.
Figure 5:
Quality Management Systems Adopted by Companies.
The
research identified that the quality management system that was most used was
ISO 9001. Of course, this rule is widespread globally, which leads it to be
used by a majority of businesses. In many sectors, this standard is mandatory
for suppliers. At present, final
consumers recognize this standard as a way to guarantee the quality of products
and services from organizations.
The
other quality management systems were cited equivalently, but none were present
in more than 30% of the sample. Some organizations reported using other quality
assurance systems which were specific to the specific sector in which they
operate. Only the food manufacturer said that it did not adopt a specific
system of quality management, although it is a well-established company.
According to the company, its market share is approximately 17%, and operates
in the southeast region of Brazil only. This may be an important factor in the
company not yet having assessed the need to adopt a quality management
system. Of the companies researched, 77%
considered their quality management system either excellent or good.
In
relation to its suppliers of raw materials, equipment and services, the
companies said that they adopted quality assurance controls for these suppliers
in their supply network. These systems are identified in Figure 6.
Figure 6:
Quality Assurance Systems for Providers of Products and Services.
In
order to ensure quality from suppliers of products and services, the companies
surveyed mostly adopt internal systems for approval of suppliers and create
performance indicators for monitoring them. Other companies use ISO
certification as a way to ensure such quality. Only two companies said they had
special systems to ensure the quality of product suppliers (raw materials and
equipment) and service providers. For the former, they use ISO 9001:2008 and,
for the latter, they use performance indicators.
It
can be inferred that for the suppliers in the supply network to ensure that
they will be able to provide their products and services, these must meet the
requirements of the customers. It follows therefore, that it may be more
important to follow these requirements than effectively adopt a quality
assurance standard, though this may well be mandatory in some sectors.
4.4.
Analysis of the results
The
survey conducted at the companies enabled a practical analysis of how they have
implemented supply chain management and applied quality management systems. The
results showed that organizations do not have the SCM model as standard for
their operations. It can be seen that there is still a considerable presence of
process verticalization in some organizations, with a view to satisfying the
consumer market.
Concerning
to quality management systems, research has shown that these are well
established within organizations individually, with in many cases more than one
quality management system being used.
However, it can be seen that Standard ISO 9000 is the one which is
predominant in companies, one reason being that it is better known by
customers. However, it can be seen that when it comes to the quality of
suppliers which belong to the supply network, the quality management systems
are not used in the same way as within individual companies. In general, indicators are established instead
of adopting a formal system for quality management, and an advance in the use
of ISO Standards by suppliers can be observed, essentially in those
organizations are the hubs of the networks in which they participate.
Therefore,
it is possible to infer that the migration of quality management systems across
the supply chain with a view to full SCQM is still a process that is in need of
further improvement and development. Organizations have different standards for
their suppliers from those which they use inside their own installations, the
conditional factor being mainly the difficulty of obtaining suppliers, such as
in the case of the automotive industry, which has trouble obtaining suppliers
for seats for their vehicles, which leads to less strict control of the quality
of these.
5. CONCLUSION
This
study has aimed to demonstrate the implementation of the concepts of quality
management systems over the entire supply chain, addressing the evolution of
the concept from within individual companies to encompassing the different
actors in the network. The results of the survey conducted in companies
operating in Brazil have shown that SCQM is still at an embryonic stage,
although it was found that it is mandatory for an ever growing number of
suppliers, to comply with the requirements of the quality management systems of
the network hub companies.
We
believe that this work has contributed to spreading the concepts of SCQM and
assisted in the analysis of its application, demonstrating to entrepreneurs,
researchers and customers all the work that still needs to be done, so that the
quality can be the same throughout the network.
Furthermore,
the objective of this paper was achieved. The work showed concepts of supply
networks, supply chain quality management and their relationship that quality
management systems and their empirical applicability in thirteen companies
acting in Brazil.
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