Supply chain network design based on cost of quality and quality level analysis

The influence of the quality criteria on the quality cost of suppliers in SMEs

Purpose

After quality costing, most companies do not know how to invest in supplier quality improvement. This study aims to develop a comprehensive model for the effect of supplier quality criteria on supplier quality costs.

Design/methodology/approach

The independent variable of supplier quality criteria and the dependent variable of supplier quality costs have been identified based on a literature review. Then a model has been developed for the effect of the variables. A questionnaire has been designed and distributed to 158 small and medium enterprises (SMEs) in Jey Industrial Town located in the Isfahan Province. Structural equation modeling and partial least square structural equation modeling (PLS-SEM) have been used for data analysis.

Findings

Supplier quality criteria influenced supplier quality costs (with a value of 0.711). The results also implied that organizational quality had the highest impact. The appraisal costs and the internal failure costs of purchasing received most of the influence. Also, process quality and consequential costs of failure purchasing had the lowest influencing and influenced values.

Practical implications

The findings of this research encourage the managers of SMEs to evaluate and rank the most appropriate quality criteria related to quality costs for selecting a supplier as one of the most fundamental decisions in supply chain management.

Social implications

Appropriate selection of quality criteria influencing quality costs results in reduced quality cost. Quality cost reduction also results in decreased products' fixed prices. Ultimately, the company will have more competitive pricing, and consumers will benefit from such a significant advantage.

Originality/value

Studying the influence of supplier quality criteria on supplier quality costs is relatively new in the manufacturing industry. The comprehensiveness of the investigated variables is also another advantage of the proposed model.

Quality cost management in the SMEs of Poland

Purpose

The purpose of the study is to examine the research problem that represents an attempt to approximate the importance of quality costing in managing a modern enterprise using the selected enterprises from small and medium-sized enterprises (SMEs) in Poland.

Design/methodology/approach

The primary goal of the research is a need to acquire knowledge about the use of quality cost accounts in enterprises operating in Poland. The research has been conducted in the SMEs of production and services. From October 2018 to December 2018, survey-based research was carried out in the selected SMEs of production and service in Poland. The targeted participants of the study are from the medium-sized enterprises, employing 50–250 people.

Findings

The pilot studies conducted in companies indicate that modern enterprises are focused on quality. Many enterprises declare to be continuously improving quality system and quality costing. However, generally, these are large companies that have implemented ISO standards, often part of international corporations. The survey result of the study shows that medium-sized enterprises still make little use of modern cost accounting variants. Based on the study, only 9.75% (39 enterprises) from a representative group of 400 companies from the sectors of manufacturing, services and production as well as service companies apply quality costing. Some of the other enterprises are only taking measures to implement quality cost accounting.

Research limitations/implications

The research has been conducted in randomly selected SMEs in the form of a questionnaire interview. In order to further analyze the construction of quality cost management (QCM) systems and the use of information from QCM by enterprises, case study method should be used more widely.

Practical implications

The results of the study provide useful help for companies that are quality-oriented and want to implement quality costing. The survey has been conducted in 400 enterprises, and the survey results of considered SMEs reveal the most important aspects of the application of quality costing.

Originality/value

The questionnaire used, the answers provided and the resulting conclusions fill the identified research gap. In the author's opinion, findings of research are relevant and useful, not only for accounting practice but also for theory. They show that although TQM and quality costing have been very popular in the literature since the 1990s, the degree of application of quality costing in practice (except for large, often international companies) is too low. So, the suitability of QCM in managing a modern enterprise from the SMEs should be promoted.

Digital supplier selection reinforcing supply chain quality management systems to enhance firm's performance

Purpose

The geographical scattering of physical facilities in conventional supply chains enforces firms to shift toward digital supply chains (DSCs). While switching to DSCs, the decision-making becomes more complex with an upsurge in the size of the manufacturing firms. The manufacturing firms need to develop supply chain quality management (SCQM) systems to improvise their processes for delivering advance products and services. For developing SCQM, the role of the digital supplier is significant, as they may recuperate the quality management systems (QMS) for enhancing the firm's performance. The purpose of this paper is to explore the factors that affect the selection of digital suppliers. The other purpose is to evaluate the alternatives for identifying the best supplier that enhances the QMS for DSCs.

Design/methodology/approach

The decision-making is complex for digital supplier selection (DSS) and thus, the study has utilized integrated SWARA-WASPAS methods for their critical evaluation. The stepwise weight assessment ratio analysis (SWARA) method has been utilized for identifying the weightage of factors and weighted aggregated sum product assessment (WASPAS) for assessing the digital suppliers to explore the best alternative. The integrated SWARA-WASPAS method is the most advance approach in multi-criteria decision-making (MCDM) for the evaluation of the factors.

Findings

The study reveals that supplier competency is the most significant factor in selecting digital supplier in DSC that may improve the product and service quality. The study also explores that manufacturing firms needs an efficient system for developing value for the internal and external partners that help them to cope up with the dynamic world. On the basis of the WASPAS results, supplier S8 has been ranked as the best supplier who has highest competency in the form of responsiveness, resilience, sustainable practices and digital innovation.

Research limitations/implications

The factors are assessed on the decision team of experts that may be biased and thus, the research may further be validated through empirical studies. The research has to be extended in other nations for exploring how organizations and customers are responding to the DSCs.

Practical implications

The study has given insights to the manufacturing firms to consider the crucial factors for DSS, as it affects the overall performance of the organizations. The decision makers of manufacturing organizations should consider the factors such as supplier competency, digital innovation and information sharing for value creation that may provide them better opportunities for developing their DSCs along with their digital suppliers to connect with stakeholders appropriately.

Social implications

The improved SCQM aligned with DSS will offer quality products that are sustainable and provide social and economic benefits to the society. The DSS will be able to provide improvisation of the existing products and services for developing a sustainable value chains for the manufacturing organizations. This process will bring more transparency, viability and sustainability in the product and services. As a result, the DSC partners will be more transparent, viable and resilient.

Originality/value

The research on DSS and its importance in enhancing QMS is limited. This research is the novel approach to understand the criteria behind the selection of the digital suppliers’ role and their presence in enhancing the quality of products and services.

Supply chain cost research: a bibliometric mapping perspective

Purpose

The purpose of this paper is to review the literature on logistics and supply chain costs to provide an analysis of sources of publication, citations and authorship using bibliometric analysis techniques (VOSviewer and CitNetExplorer tools).

Design/methodology/approach

A review of 756 articles published during the period 2014 to 2019 referenced in the Scopus database was performed. The review was limited to articles published in English and directly related to logistics and supply chain costs.

Findings

The research identified more than 2,000 authors representing more than 5,000 keywords and 10,000 references from a total of 155 journals investigated. A critical synthesis of the resulting data revealed several insights about various aspects of studies in this field. For instance, the review identified a scarcity of academic publications in three key areas, namely “supply chain,” “optimization” and “transportation”, which are concepts focused on the total supply chain.

Originality/value

This research highlights important areas of attention for both researchers and practitioners considering costs associated with logistics and supply chain operations and strategies. The results can also help identify thematic areas, journals and topics for future research. The paper identifies and proposes research areas to contribute to the literature when challenges to investigating logistics and supply chain costs are discussed.

A decision-making model for the rework of defective products

Purpose

This paper proposes a decision support model that can be used to help decide the destination of defective products, for mass production industries. The objective of this model is to reduce the cost of the defect, and consequently reduce the total quality costs.

Design/methodology/approach

The decision model was developed based on the theory of quality costs and decision-making models, considering the practical aspects of reality through data collection, observation and experience in Industrial Pole of Manaus (Brazil) industries. A decision model adjusted to reality assists in the construction of the decision process, indicating the facts, data collection and the planning of the actions to choose the best alternative.

Findings

The specific contributions of this research are: (1) define a sequential structure of actions, effects and costs associated with defective items; (2) allow a comprehensive approach to failure costs, including various elements of lost opportunity costs; (3) minimize failure costs, and consequently reduce total quality costs, without necessarily investing in prevention and assessment; (4) describe the use and application of the built theory; (5) identify the quality cost elements most representative in existence of defective items; and (6) identify improvement points in the management of possible future defective items.

Originality/value

Much of the work of implementation of quality cost models do not emphasize the analysis of the destination of defective items. Also, there are no studies that use decision models with identification, accounting and evaluation of effects and criteria of quality, productivity and cost to define the destination of manufacture defective items.