Quality in Manufacturing

To solve quality-related problems in a manufacturing company, Magna can adopt the 'red box' approach to isolate defective units and provide communication-based quality control. By adopting closed-loop quality management and advancements in measuring quality metrics such as cost of quality goods and overall equipment effectiveness, Magna can improve the efficiency of supply chain management, enhance product quality, and maintain a positive brand image.

GLOBAL SUPPLY CHAIN STRATEGY

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................1
TASK 1......................................................................................................................................1
Adoption of CPFR to work and OEM customers as well as its advantages..........................1
TASK 2......................................................................................................................................4
Role of a tier 1 supplier in safeguarding the quality of final products...................................4
TASK 3......................................................................................................................................6
The Staircase Model of IKEA................................................................................................6
Application of Stair Case Model in Magna Group................................................................7
TASK 4......................................................................................................................................8
How auto parts suppliers and car manufacturers can work together to increase the
recyclability of end of life cars by using the approach of WRAP to the retail industry in
UK..........................................................................................................................................8
Value stream management concept......................................................................................10
TASK 5....................................................................................................................................10
Solving quality related problems.........................................................................................10
CONCLUSION........................................................................................................................11
REFERENCES.........................................................................................................................13

LIST OF FIGURES
Figure 1CPFR Model.................................................................................................................2
Figure 2Manufactruing Supply Chain........................................................................................5

INTRODUCTION
Supply chain management can be defining as a flow of management among diverse
organization. In includes several activities for coordinating, integrating appropriate flow
between suppliers to manufacturer to wholesaler to retailer to consumer. All those
organizations which are highly focused with the uses of services from another business
organization of overseas market require focusing on their supply chain management (Shah,
2009). With the help of this, business firms can easily manage their business operations in a
more effective manner and overcome with all the existing issues.
Moreover, Logistics is one of the most critical sections of supply chain which mainly
provides high level of assistance in several management functions. In this regard, it can be
stated that global supply chain management is highly focused with the integrated work. At
the time of using this management companies can easily meet out the needs and demands of
their customers (Packowski, 2013). They can provide them easily accessibility to resources.
Further, global supply chain is a process which helps in managing all the resources globally.
The present study is based on the same concept and how it helps the firms in managing their
business process. All learning will focus on the various advantages of CPFR to work with
their OEM customers to achieve optimal performance.
Whole study will incorporated on the basis of Auto parts supplier Magna Company.
They are the leading automotive supplier with 285 manufacturing operations as well as various
other product development processes in 29 countries. Company is highly focused with providing
innovative services to their customers and wants to become world class manufacturer. The main
vision of company is to become customer’s preferred global supplier’s partners for the
automotive industry. As per this organization, the total report will give deep insights about the
role of a tier 1 supplier in safeguarding the quality of final products. Further, it will also
determine that staircase model can be used by company for better sustainability in competitive
market (Lowson, 2004). However, the whole study gives deep insights about the supply chain
management process.
TASK 1
Adoption of CPFR to work and OEM customers as well as its advantages
Magna is a global leading automotive supplier company which is currently serving
their business operations in almost 29 countries. They mainly strive to be the employer of
choice and long term investor firms all the shareholders. It is one of the main aims of
company to deliver original parts to their customers and maintaining better relations with
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them (Bowersox, Closs and Cooper, 2002). Moreover, they are highly focused with their core
values i.e. world class manufacturing, commitment to innovation, investment in our people,
customer satisfaction, integrity etc. (Lin and Ho, 2014).
In order to maintain their profit margin as well as current growth it is necessary for
Magna to have an effective supply chain management. In this whole process, they must have
to focus on the equipment delivery and it should be on the basis of original equipment’s. For
the delivery of original equipment’s at the time of manufacturing company can adopt CPFR
model (Karlsson and Voss, 2009). It is known as collaborating, planning, forecasting and
replenishment stages. This is the best model of boosting the supply chain process of company
by providing appropriate framework for information flow of goods and services.
Figure 1CPFR Model
Nowadays, most of the organizations are facing huge competition due to the
increasing globalization. It is the most common reason which provides number of benefits to
business organizations by improving their whole work conditions (Gadde and Hakansson,
2001). This is the best process through which Magna can develop its supply chain process
more effectively by concentrating on large number of customers. The major focus of this
model is on the consumers. It considers that buyer and sellers collaborate at every level and
exception management is systemized in the whole process.
In addition to this, Magna can use this model in order to increase the availability to
customers while reducing inventory, transportation and logistics costs (Bååth, 2008).
Collaboration is the major factors which enhance the collaborative working practices of
employees. In this regard, suppliers and client can perform all their business operations
together and enhance the performance of company as well. Further, appropriate order
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planning can be done in the management of Magna and it helps in reducing the number of
risks relates to supply chain as well (Waters, 2010). By reducing the existing risks company
is able to implement manufacture and produce and better automobile parts and go through its
proper distribution.
CPFR model is nowadays used by most of the companies so that they can work in
collaborative manner with their OEM (original equipment manufacturer) to make a
subsystem as well. It is the most effective way through which OEM can easily understand
about the requirements of all their customers and go with the effective production of
automobile parts (Varley, 2006). They can rebrand their products and sell it to their end
customer as well.
A customer of Magna demands for the delivery of original equipment’s within a
desired time. In order to fulfil all these needs it is essential for management team to adopt
CPFR model. It is the most effective process of improving relationship between supplier and
manufacturer. With the help of this activity company is able to achieve their objectives and
highly focused with providing innovative services to their customers as well (Petersen, Aase
and Heiser, 2011).
By effectively using this model, Magna is able to follow processes, technologies and
the supporting standards that allow continuous exchange of information between trading
partners. Moreover, with the help of commonly used 4 steps company can make effective
collaboration between supplier and manufacturer so that they can work together and fulfil
their customer’s needs. There are mainly CPFR model among which best suitable model can
be used by company such as:
Basic CPFR: As far as this mode is used, a limited of business processes are
integrated between a limited numbers of supply chain partners (Russell and Taylor,
2008).
Developed CPFR: This model involves the exchange of greater number of data
between two partners. By using this mode, suppliers can take full responsibility for
replenishment on behalf of their customers (Tang, 2011). It helps in fulfilling the
desired needs and demands of their customers.
Advanced CPFR: Under this model, synchronization can be done through appropriate
coordination and replenishment process as well.
However, by using this CPFR model value chain partners can coordinate different
plan in order to reduce the variance between supply and demand. It is the most effective way
through which they can share their benefits as well. Further, Magna’s OEM customers are
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able to share significant information with each other in order to achieve their objectives
(Meijboom and Vos, 2008). It provides several benefits to company as they are able to give
better response on the basis of their customer demands.
Effective distribution and accessibility of automobile parts highly helps to OEM
customers will provide effectiveness to final production of goods. There are various car
manufacturer companies in UK who are accessing the services of Magna. By using the CPFR
model Magna is able to manage its supply chain and make appropriate delivery on time to the
UK dealers (Chang and et.al, 2007). With the help of this fast and effective process total
production process of different UK car manufacturers can be boosted and it is highly
beneficial for Magna as well as its OEM customers.
Further, it can be stated that CPFR process is one of the most effective model used by
most of the companies in order to enhance their accuracy and market share (Carter and
Rogers, 2008). It also gives higher benefits to trading partners also and maintains this with
circular entries as well. For the better sales and advanced production of end goods and
services Magna need to put right product at right time in right place as well. The total
inventory system of also attain higher advantages by decreasing the safety stock in their
whole process.
In addition to this, it can be stated that OCM customers’ needs can be easily fulfilled
by the company by accurate forecasting and effective aligning of the production schedule.
Moreover, low cost acquisition of auto mobile parts helps the effective production of final
goods (Flynn, Morita and Machuca, 2010). As per this whole discussion, it has been founded
that CPFR model has proven to be so much beneficial for companies supply chain
management and also provide higher improvement in their product developments.
TASK 2
Role of a tier 1 supplier in safeguarding the quality of final products
One of the most essential tasks for every organization nowadays is to maintain high
quality of all their products and services. A 1 tier supplier plays a major role in maintaining
the quality of products and services. Here, 1 tier supplier is a manufacturer who directly
supplies the products to business without dealing with any type of middleman. Magna is
maintaining direct relationship with each other and they do not have any middle man in their
total dealing process (Choon Tan, Lyman and Wisner, 2002). For this whole process,
commitment is the major concern which is needed by international auto mobile manufacturer.
Further, it is the most effective way of developing better trust among all the partners in
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context of overall design. This one tier structure has proven to be very successful for firms as
it follows different quality standards such as ISO/TS16949. By following these quality
standards firm can allow having certified manufacturing of parts and maintain the quality of
products as well.
Figure 2Manufactruing Supply Chain
(Source: Supply Chain Analysis, 2014)
Within the automobile supply chain, tier one plays a major role in safeguarding the
quality of final products. This sector is technically most capable sector in the supply chain as
they supply critical components. They highly go through the established process for
managing suppliers in the tiers preceding them. In addition to this, Magna uses this concept
nowadays as it requires proper responsibility for the designing and manufacturing of various
modules such as interior lighting systems, fuel delivery as well as braking system. However,
it can be determine that by using this process company can redevelop their structure and
boost their supply chain process by providing quality services to end customers. It also helps
in maintaining direct interactions with OEMs and providing them appropriate and quality
services (Minis, 2011).
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It has created a huge number of values for all the customers and OEMs such as
increasing customer vehicle safety as well as delivery of better system performance. In
addition to this, Magna can easily go through the increases pace of innovation as well as
systematically improved costs. The total quality of the final products depends upon the
quality of auto parts supplied by tier one suppliers. By using tier one approach Magna can
easily satisfy the needs of customers through the more technologically developed products.
Magna is one of the largest tier one suppliers and they provide wide range of manufacturing
services by complying with the ISO/TS16949 standards.
Further, with the assistance of one tier supplier a direct relation can be maintained by
Magna and all the automotive suppliers can also have focus on manufacturing of diverse
models in better way. This model is highly focused with meeting all the quality standards as
well (International supply chain management). All the OEM traders can make direct contact
with the management team of Magna. With the help of this, they can ensure about the quality
of spare parts and retain their customers by gaining their trust level. This approach has helped
them towards attaining high quality and innovation has made Magna one of the world’s most
favourable choices as auto parts suppliers. By this approach they are able to directly
communicate with their OEM customers and understand their needs. Due to this, quality of
final product is reflected by the Tier 1 supplier approach and it helps in safeguarding the
quality of final products as well.
TASK 3
The Staircase Model of IKEA
The Stair Case Model of IKEA has proved to be very beneficial in maintaining long
term business relations with the suppliers. Taking this into consideration the organization has
established a specialized cell under which relation with the suppliers are managed according
to the norm sustainability. This department holds the responsibility related to managing and
monitoring the suppliers. It has developed various strategies to make sure that it meets all the
requirements of the business. Along with that management of IKEA has also established
compliance and monitoring group at global level to ensure various developments and
operations (Siler and Maidment, 2010). It plays an active role in managing all the business
activities with different suppliers.
With regard to sustainability, the management of the organization always keep the
right to examine suppliers by taking the support of independents firms. According to the
norms of sustainability, the approach has found to be very effective in selecting the best of
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suppliers for the business. It helps the managers in finding out the best quality material within
good price. Through the help of staircase model, company has able to make good selection of
appropriate suppliers who can provide wood (Chang and et.al, 2007). It offers safety and
protection to the environment and forestry. It contributes towards enhancing the goodwill of
the company. The Stair Case Model consists of four models which play an important role in
the selection of suppliers and maintaining a high quality supply chain management. The four
levels can be described as follows:
 Start-up level – At this stage, IKEA identifies the basic formalities which are
required to be fulfilled by the suppliers before starting the business with IKEA. For
instance suppliers must know about the origin of the wood and the region within a
country the wood originates. The high value tropical tree species are required to be
certified according to the Forest Stewardship Council (Lin and Ho, 2014). These
standards help the organization in maintaining ethical business practices with the
suppliers.
 Level 2 – Minimum Requirements – As per this level, IKEA performs trading with
only those suppliers of wood which are being produced with regard to national and
regional forest legislation. It helps in offering protection to the forest and also ignores
trading of such kind of wood which is produced from the protected areas. Therefore a
high amount of safety is ensured in the tropical and subtropical regions. The standard
is very effectual in choosing the best raw material for the business.
 Level 3 Wood to Ease Transition – This standard was developed by the organization
in the year 2005 for the suppliers so that transitions from Level 2 to Level 4 can be
made easy (Waters, 2010). It focuses on use of wood tracking procedures. In this
manner the company’s management succeeds in making proper gaining within
production. This ignores wastage of resources
 Level 4 Forests certified or responsibly managed - This section of the model helps
the organization in ensuring the forest management. The balance has been tried to
achieve between social, environmental and economic stakeholders. At present FSC is
the only level 4 certification determined by IKEA. It offers high amount of help in
handling of the business operations.
Application of Stair Case Model in Magna Group
The Stair Case Model is also applicable in Magna Group of companies. The group is
expertized in supplying of automotive parts and products. The management needs to collect
raw material from different suppliers. On the basis of sustainability, this model of IKEA
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provides assistance to the management of Magna so that they can identify the best of
suppliers for the business. This is because Magna is responsible for maintaining the
company’s entrepreneurial heritage (Delfmann, 2007). It is achieved through taking active
support of decision making at the operational level. These decisions are taken on the basis of
very coordinated strategies and processes. In this way company is able to maintain effective
relations with different suppliers. Organization takes wide range of raw materials such as
metal, plastic etc from different types of suppliers. The management of Magna group is able
to develop some basis criteria at the time of selection of suppliers according to the different
levels of Stair Case Model.
This technique offers the chance to the managers in selecting more valuable suppliers
for the company who are offering wide range of raw materials. This ensures safety of
environment along with the ethical business practices. The business group has identified
some standards which are taken into consideration by the company while the course of
selection of suppliers (Bowersox, Closs and Cooper, 2002). These are follows:
 Certification to the ISO/TS requirements
 Evaluation of successful financial and operational reviews on on-going basis
 Commitment of the supplier towards the Commodity Cost Models
It helps in managing the culture of regular enhancements and on-going innovation. In
this manner healthy business relations have been maintained between Magna Group and
suppliers.
TASK 4
How auto parts suppliers and car manufacturers can work together to increase the
recyclability of end of life cars by using the approach of WRAP to the retail industry in UK
WRAP is a Worldwide Responsible Accredited Production firm which is mainly
focused with the accelerating the move to a sustainable and resource efficient economy. They
mainly focus on the approach of re-inventing and related to any type of design. Moreover, it
helps in defining that company can go through the total recycling process where they are able
to develop more effective parts (Skjoett-Larsen, Thernøe and Andresen, 2003). Mainly there
are three approaches of WRAP i.e. re-inventing, re-thinking and re-defining.
These are the major elements which are used by different retail firms dealing with
clothing and food products. Moreover, it has been founded that this is the most effective
approach which helps in increasing the recyclability of end products.
With the help of using this approach suppliers and manufacturers can the work together. First
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approach is re-inventing which is basically related to the redevelopment of any product by
recycling all its waste material (Delfmann, 2007). By this approach, auto parts suppliers of
Magna can select an appropriate car design along with reducing the wastage of raw material.
Further, selection of raw material is having significant impact on maintenance of the
recyclability of auto parts after and ends of car’s life. Moreover, this approach clearly
indicates that companies can use WRAP approach in order to minimize their waste of
material and increase their production system. In this regard, it can be stated that management
team of Magna group is able to develop appropriate supply chain management process and
reduce the carbon emission by reducing their transportation requirements (Holmen, Pedersen
and Jansen, 2007). Further, this approach has proven to be very successful as it helps in
delivering high quality services to all their customers and also plays a most important role in
handling various business operations.
This is the most common approach used by most of the organizations nowadays to
develop and joint work agreement associated with designing and development of parts in an
effective way through which consumption of raw material would be reduced. This concept is
used by car manufacturing company and auto parts suppliers (Christopher and Peck, 2004).
This is the only system under which companies can manage their business by following all
the norms regarding sustainability. The last element of this approach is known as re-defining
process which is applied by Magna in order to develop joint operations. By using this element
both the companies are able to provide appropriate opportunity to consumers and recycle
their cars. Within the retail sector of UK WRAP approach helps in finding out those
companies who offer glass collections locally. This approach also used by wine industry for
appropriate packaging of their products as well. In this regard, wine industry can develop and
produce lighter weight wine bottles by reducing the waste of packaging (Seuring and Müller,
2008).
By using wrap approach companies can effective highlight the concept of
recyclability. It follows the concept of reduce, reuse and recycle. It also provides appropriate
solution through which any product can be recycle by the way of using all those products
which have already been used. Under this concept the approach which is used is as follows:
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With the help of this approach, it has been identified that manager of Magna is able to
design and develop such parts as per the view of recycling contracts. It is the most effective
process through which recyclability can improve at the end of the car’s life. In this way, it can
be determine that it is the most effective approach which helps in maintaining all the spare
parts of cars and utilize them as per the future requirements.
Value stream management concept
It is a type of mapping which can also be determines as a lean transformation but
there is more to a value stream improvement project than value stream mapping. With the
help of using this concept Magna Company can easily analyse the current state and deigning
a future state for the series of events. By this they can provide high quality and manufactured
products to their customers. In any manufacturing company it is known as material
information flow mapping. In this way, it can be stated that value stream management
concept helps firms in developing an appropriate management focus and organizing as well
as costing by value stream. As per the past research it has been founded that most of the
organizations are struggling with producing current state while most of them are busy with
the process of creating future state. However, many organizations are able to truly sustain a
system level problem and solving efforts during and beyond the implementation.
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TASK 5
Solving quality related problems
The Magna International is engaged in sale of several parts such as Magna Exteriors,
Magna Seating, Magna Mirrors, Magna Powertrain, Magna Closures, Magna Electronics and
Cosma International to the various car companies. Due to this aspect, approach of supply
chain management had direct impact of the cost of the product. In this aspect, management of
company had found customers had facing quality issues in the product provided by the
company. Main reason of occurrence of this quality issue is inappropriate sharing of
information, improper use of raw material and deficiency in traceability (Delfmann, 2007). In
order to resolve these issues, management of organization had planned to implement better
approaches of information sharing and traceability. With better traceability, management of
company will be able to keep proper tract of information of business in chronological order.
This information will interrelate uniquely to the identifiable element. In the context of
logistics, traceability will provide better capability of business entity for the tracing of goods
as well as product distribution chain. In automotive industry is must crucial element for
rendering better products (Lin and Ho, 2014). Through the applicability of this approach,
company will be able to determine duration and time period of manufacturing of car in order
to work of specific segment to resolving quality issues. In this way, it can be stated that with
the help of this stating the problem by using different quality checking tools Company can
easily resolve the issue regarding quality. With the help of this they can easily record possible
and various ways from which quality of the product get hampered. One of the most effective
ways to solve the quality related problems within any manufacturing company is problem
detection. A “red box” is an approach for isolating defective units found on the production
lines and it is identified by the production lines. In addition to this, it can also be determining
that there various ways through which quality services can be provided. In this way it can be
stated that communication related problem can be resolved. By the way of going through
appropriate communication quick response quality control can be provided. In this way, it
can be stated that if any of the particular process is being worked in the wrong manner, the
issues cannot be easily corrected until the person is made aware of the problem. Fir this, a
person need to be communicated in effective manner that how to respond. Magna need to
trust the validity of its quality metrics and to remain a top quality issues. Further, in order to
resolve the quality services advancements in measuring need to be taken into consideration
such as: Cost of quality goods, cost of poor quality, overall equipment effectiveness as well
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as new product introductions. Moreover, Closed-loop quality management is the new
paradigm of industry-leading manufacturing enterprises. It can be adopted by Magna to
resolve such issues and implementing high quality products.
Through the sharing information, management of the company will be able to make
improvement in efficiency of supply chain management. For this aspect, they can make use
of the latest communication methods. With this approach they can deal with customer
enquiry in proper manner (Packowski, 2013). It is because; car manufactures can share
information linked to the small issues that would be occurred or that have been addressed
from consumers associated with quality of auto parts or design with suppliers. With the
implementation of new technology, there will be positive impact on the brand image of the
organization. By considering this information, management of organisation can made call
back and can make changes in particular part of the auto mobile product that is creating issue
for the business (Siler and Maidment, 2010). In addition to this, management of the
companies will be able to identify the potential area for the improvement and along with this
they can enhance efficiency of supply chain and increase quality of final product. For this, it
is essential to take appropriate measures and adopt high quality strategies so that issues can
be effectively resolved. With the help of taking all the above measures company can easily go
through the quality products.
CONCLUSION
From the whole above study on the global supply chain management strategy it has
been founded that tire one supplier’s approach has proven to be very beneficial approach for
Magna. It helps in managing the quality of automobile parts of company. In addition to this,
WRAP approach has also been founded as a most effective approach through which spare
parts can be recycled and quality can be maintained in an effective manner. This is the most
effective approach through which auto parts suppliers and car manufacturing companies
requires considering sustainability elements. Further, CPFR approach has founded to be the
most successful approach nowadays and used by most of the organizations. It helps in proper
allocation of products in desired time and accomplishment of all the requirements of OEM
customers.
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