How does quality management apply in your supply chain?
Supply chain usually isn’t the first area that comes to mind for quality management in a business. It’s usually areas like safety, regulatory compliance, customer service, or manufacturing.
Yet any business process will benefit from being continuously improved with quality controls, including your supply chain. It’s about setting the standards you want to consistently meet, and putting metrics in place to track how well you’re meeting those standards.
Automate your quality standards
These metrics can be automated in your ERP and financial systems to ensure that the data is consistently and easily captured, and easily assessed. You can even be automatically alerted when quality measures reach specified thresholds that may require your attention. And quality standards documentation and training can be built into your system to ensure that your team knows your standards and how to meet them.
Example: Efficiency as a supply chain management quality standard
To track efficiency, you can measure each of your vendors’ overall responsiveness as one aspect of the service they provide you, by establishing and monitoring efficiency-related quality metrics for:
- Shipping time and transit time
- Loading and unloading time
- Number of times you must contact carriers to get status updates
- Delays and early arrivals
- Any other metrics you want to track
This will give you a reliable picture of how well suppliers are meeting your efficiency standards—the quality standards that they must meet in order to you to be able to meet your customers’ required turnaround times.
With these metrics, you can spot performance problems and opportunities sooner and take action sooner—and have discussions with your vendors that are based on facts not hunches.
You can incorporate your quality standards into contracts and purchase orders with vendors up front.
You can compare suppliers to see which are consistently helping you fulfill orders quickly for your customers.
And you can quantify each vendor’s positive or negative impacts on your cash flow while your items are tied up in transit.
What other quality standards can you measure to ensure quality in supply chain management?
Simply identify the critical factors that impact your supply chain quality, then determine how you can measure those factors and what measurement is your quality standard for each. With a flexible ERP system, there’s truly no limit.
- Perhaps you’ve established a policy of prompt payment of supplier invoices. Your quality standard might be to pay 2 days earlier than the negotiated terms, and your quality metric might be number of days before or after the due date that the payment was actually made.
- Perhaps you want to reduce order quality problems, like shrinkage or goods damaged in transit or incorrect products received. Your quality standards might be to receive exactly the items you order, and to confirm what’s received at the time of receiving, not later. Quality metrics could include the logging of inspection steps such as lot sampling and the tracking of elapsed time between unloading, receiving, and inspection, via easy scans and swipes on the mobile phone screens of your warehouse staff.
- Perhaps you want to maintain your readiness to respond to a product recall. Your quality standards and metrics might include scheduled drills and scoring with your team to simulate a recall, and a checklist with documentation to confirm with each supplier that they’ll be ready to meet your quality standards in case of a future recall.
Supplier quality certifications can be added to your procurement and vendor selection process too. And integrations between your ERP, your accounting system, and your suppliers’ systems, can further automate and streamline quality.
This is just the tip of the iceberg of what’s possible with quality standards and controls in your supply chain management—and the rest of your workflow too.