3.1 Introduction to Quality

3.1.1 Definition of Quality

Quality, in the context of supply chain management, is a measure of excellence or a state of being free from defects, deficiencies, and significant variations. It is brought about by the strict and consistent commitment to certain standards that achieve uniformity of a product in order to satisfy specific customer or user requirements.

3.1.2 Importance of Quality in Supply Chain Management

Quality plays a pivotal role in supply chain management, influencing every step from procurement to customer service. High-quality processes and outputs reduce costs associated with rework, returns, and lost sales, thereby increasing profitability. Quality also builds trust and strengthens the relationship between different supply chain players, fostering collaboration, and efficient problem-solving.

3.1.3 Various Perspectives on Quality

Quality is subjective and can be viewed differently depending on the perspective:

• Customer Perspective: Customers view quality as conformance to their expectations. These expectations may be based on their previous experiences, recommendations, or advertised features and specifications.
• Producer Perspective: For producers, quality is often about specifications and process control. They define quality as a product or service free from defects and one that adheres strictly to the design specifications and standards.
• Value-Based Perspective: In a value-based perspective, quality is seen as ‘getting what you pay for’ and ‘what a product or service is worth to the customer’. This concept balances quality with cost and a higher price might be justified if the customer perceives that the product has superior quality.

Of these three perspectives, the Customer Perspective is the most crucial in supply chain management as customer satisfaction directly influences a business’s success.  This will be the perspective we focus on in this chapter.

3.1.4 Understanding and Delivering on Customer-Defined Quality

In supply chain management, the key objective is to meet or exceed customer-defined quality expectations. Understanding these expectations is critical as it directly impacts every aspect of the supply chain – from the design, procurement, production, and distribution of goods to after-sales service. This customer-focused approach ensures that the delivered product or service aligns with the customer’s needs and preferences, thereby maximizing customer satisfaction and loyalty.

To ensure the consistent delivery of high-quality products or services, Quality Assurance (QA) and Quality Control (QC) systems are integral to supply chain management. QA focuses on the process and prevents defects by ensuring the process is designed and controlled correctly. QC, on the other hand, is product-oriented and involves checking final products for defects. Both play crucial roles in maintaining the desired level of quality in a supply chain, safeguarding the customer’s interests, and promoting efficiency and effectiveness.