Chapter: Mechanical : Total Quality Management (TQM) : Principles
Supplier Partnership
SUPPLIER PARTNERSHIP
What is Supplier Partnering?
Partnering is a
defined as a continuing relationship, between a buying firm and supplying
firm, involving a commitment over an extended time period, an exchange of
information, and acknowledgement of the risks and rewards of the relationship.
The relationship between customer and
supplier should be based upon
trust, dedication to common goals and objectives, and an understanding
of each party’s expectations and values.
Benefits of Partnering
The
benefits of partnering include:
(i)
Improved quality;
(ii)
reduced cost;
(iii)
Increased productivity;
(iv)
Increased efficiency;
(v)
Increased market share;
(vi)
Increased opportunity for innovation; and
(vii)
Continuous improvement of products / services.
Key Elements to Partnering
The three important elements to achieve the customer /
supplier partnering relationship are :
1. Long-term commitment: Long-term
commitment provides both customer and supplier the much needed
environment to achieve the planned objectives. Because to set up and solve the
problem of continuous improvement, both parties may require the sufficient
time.
2. Trust : Mutual
trust between two parties forms the basis for a strong working relationship.
Trust enables the partners to effectively combine their resources
and knowledge. It results in a ‘win-win’
situation for both partners.
3. Shared
vision : Both the customers and suppliers have the common
goal i.e., to satisfy the end user. In order to ensure this goal,
both particles should share and understand their goals and objectives.
Three
types of supplier sourcing are:
o Sole sourcing;
o Multiple sourcing, and
o
Single sourcing.
1. Sole
Sourcing
Sole sourcing is the use of only one supplier for
the organization. The organization does not have any choice. It is forced to
use only one supplier.
This forced situation is because of the following
factors : patents, technical specifications, raw material location, only one
organization producing the item, etc.
2. Multiple
Sourcing
Multiple
sourcing is the use of two or more suppliers for an item.
The basic concept of multiple sourcing is that
competition will result in better quality, lower costs, and better service.
(The selection of suppliers from various alternatives is based on their
performance in terms of prices, quality and delivery.
3. Single
Sourcing
Single sourcing is the use of one supplier for an
item when several sources are available. It leads to long-term partnering
relationship.
The suppliers should be treated as partners to achieve the
same quality level as attained within the organization.
The following forces need Supplier Partnership to improve
quality, reduce costs and increase market share.
Ø Deming
Philosophy (Deming’s 4th point)
Ø Just-in-time
Ø Continuous
process improvement
Ø ISO 9000
CUSTOMER – SUPPLIER
RELATIONS
Dr. Kaoru
Ishikawa has given ten principles of customer-supplier relations. They are
1. Both the
customer and supplier are fully responsible for the control of quality.
2. Both the
customer and supplier should be independent of each other.
3. The
customer is responsible for providing the supplier with clear and sufficient
requirements so that the customer can know precisely what to produce.
4. Both the
customer and supplier should enter into a non-adversarial contract.
5. The
supplier is responsible for providing the quality that will satisfy the
customer.
6. Both the
customer and supplier should decide the method to evaluate the quality of the
product or services.
7. Both the
customer and supplier should establish in the contract the method by which they
can reach an amicable settlement in case of any dispute.
8. Both the
customers and supplier should continually exchange information.
9. Both the
customer and supplier should perform business activities.
10.Both the
customer and supplier should have the best interest of the end user in mind.
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