Supply Chain Quality Management to Improve Organizational Performance for Manufacturing Industries
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Date
2011-09
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Addis Ababa University
Abstract
As competition moves beyond a single firm into the supply chain, researchers are beginning
to explore quality management (QM) in a supply chain context. The literature suggests that
supply chain management (SCM) consists of internal practices, which are contained within a
firm, and external practices, which cross organizational boundaries integrating a firm with its
customers and suppliers.
This research assess the current practice of supply chain quality management in Ethiopian
manufacturing industries using questionnaire survey, guided interview and author’s direct
observation. The investigation showed that some companies have begun the concept of SCM
& QM practices independently, but most of them are doing in traditional manner. Among 54
respondent companies for the survey only 27.8% defined SCQM on the context of their
company, this shows manufacturing industries are poorly practicing QM along their SC. The
major problems identified in the manufacturing firms include: under capacity production,
lagging to fill market demand, lack of quality raw material supplier, absence of long-term
relation with supplier/customers, occurrence of bottle neck partner along the SC, usage of
total cost as the only performance measurement system and did not give due consideration for
employee satisfaction, product quality, on time delivery and customer satisfaction.
Further, the study tried to investigate how supply chain management-related quality practices
lead to improved organizational performance and examined the practices that precede and
mediate those relationships. After assessing current level of practice, general supply chain
quality management model for Ethiopian manufacturing firms is proposed.
Finally, to make this research practical and realistic, actual case study was conducted on Faffa
Foods Sc. The current system was analyzed and areas for improvement are identified. The
improvement areas include: supply system, to save cost of materials rejected due to low
quality i.e. suppliers cost 44,265.32Birr for transportation as well as companies incur labour
cost, equipment cost and time for checking impurities, and distribution system, to minimize
customer complain due to delay. Then the general SCQM model was customized for the case
company’s supply chain and it decomposes into sub sections. At the last, conclusion,
recommendation and future works are provided.
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Keywords
Supply chain management, Organizational performance, Ethiopian manufacturing firms, Faffa Foods Sc.