Impact of Quality and Sourcing on Supply Chain Performance

This report delves into the crucial roles of quality and sourcing within supply chain management. It emphasizes that maintaining product quality is essential for brand reputation and minimizing costs, with quality control tools directly affecting the company's reputation. The report recommends the use of Cloud ERP systems to facilitate communication and supplier grading. Regarding sourcing, the report highlights its strategic importance in acquiring raw materials and services, suggesting effective sourcing minimizes costs. The report recommends understanding the company's business strategy and employing various sourcing strategies like single and multi-sourcing. The conclusion emphasizes that effective management of both quality and sourcing is vital for business growth in a competitive market, recommending ERP systems and effective distribution strategies.

Running head: Supply chain
Supply chain

Supply chain
Table of Contents
Introduction......................................................................................................................................1
Quality.............................................................................................................................................1
Sourcing...........................................................................................................................................2
Conclusion.......................................................................................................................................4
References........................................................................................................................................5
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Supply chain
Introduction
In this paper, the discussion will be made on the topic quality and sourcing. It has been examined
that both these factors has an important role in the supply chain. It is necessary for the companies
to emphasize on maintaining quality and sourcing, so that it could be easy to manage the overall
operations of the business. In supply chain, quality is audited by the vendors to certify that raw
materials meet the specifications. By managing the quality of the production inputs, the supply
chain managers can secure the integrity of the operational functions. Sourcing in supply chain is
the method of attaining the raw materials and products from the suppliers to execute the overall
operations of the company. Therefore, in-depth analysis will be done on the topic quality and
sourcing in relation to the supply chain management.
Quality
Quality is always known as the “cost” of the company. If quality is not maintained then it can
lead to the high loss and also affect the brand name of the organization. There are various
consequences that take place in relation to freight expediting costs and line shutdowns. It is
investigated that supply chain management affect the product quality and profits of organization.
Quality control in the supply chain is important aspects that help in maintaining the goodwill
among the competitors and it also minimizes the operating costs (Katz, 2017).
Quality system also helps in bringing improvisation in the efficiency and productivity in the
workplace and also it is the best cost effective method. It can be said that quality is one of the
important factor that should be considered as it can help in boosting the profit ratio of
organization. The supply chain management directly affects the quality of goods, so it is
necessary to maintain the competitive edge among the competitors. If there are no quality control
techniques, then company has to suffer the huge loss in relation to the overall operations of the
business. It is necessary to emphasize on quality control in the supply chain management
(Johnsen, Howard and Miemczyk, 2018).
It is examined that when the supply chain quality control is not effective, then products are not
manufactured in a proper manner. Quality control tool direct link with the reputation of the
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company and it is better to be controlled as it helps in reducing the risks of returns and also
minimize the product failures. There are many companies who consider quality as one of the
important factor at the time of managing the operations of the business. If quality in relation to
goods is controlled by organization then it would be easy to avoid the continual inspections on
the entire production line. Therefore, it can be said that it is necessary for organization to
emphasize on controlling quality so that growth can be attained in the highly competitive market
(Huo et al., 2019).
In reference to quality factor, it is recommended that Cloud ERP helps the suppliers to get the
notification of the quality requirements and also it offers with the unique versions of the
company’s standards, policies and procedures. The ERP system also assists the company to
maintain proper channel of communication with the suppliers (Vanichchinchai, 2019). The
scorecard feature is also one of the best features that can be used to provide grades to the
suppliers based on the overall capabilities and also on time delivery performance. It is the
method that helps to boost the quality standards and also emphasizes on the complaints of the
different suppliers. So, it is recommended that this tool should be used so that satisfaction level
of the suppliers and also of the customers can be enhanced (Hugos, 2018).
The next step that is recommended to be considered by the companies is to improve the
communication with the suppliers. It is analyzed that problem identification and also resolution
process is known as the time consuming process, so there should be effective communication
channel as it can help in identifying the issue that takes place in the overall production of the
goods. Therefore, it can be stated that these recommendations will be beneficial for the overall
growth and also manage the non- conformances in the coming future. The recommendations
will directly enhance product quality introduced in the market and also assist in competing with
the competitors that are present in the competitive business world (Schniederjans, Schniederjans
and Cao, 2018).
Sourcing
Sourcing in the supply chain is considered as the process that relates with acquiring the raw
materials and other components, products and overall services of the organization from the
suppliers. The concept of sourcing in supply chain refers to the practice and skill of tracking
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down the overall source of supply. Sourcing also has the strategic role in the supply chain
management and it is effective at the time of attaining the set goals and objectives in the
workplace. It can be stated that sourcing is the method which is considered to choose the best
product or the service from the particular category of the expenditure. At the time of selecting
suppliers by a process of sourcing, the buyer works in the overall collaboration with the internal
consumers and budget holders. It is necessary to focus on effective sourcing process, as it assists
in minimizing the supply chain surplus and also reduces the inventory costs (Fan and Stevenson,
2018).
There are various advantages that are concerned with the proper sourcing decisions. The first
benefit is to better the economies of scale that can be attained if orders within the company are
aggregated. If there is proper coordination with the suppliers then it would be easy to forecast
and plan the efficiency of the products. One of the major advantages that are related to sourcing
is that companies can easily attain the lower purchase price by enhancing competition with the
use of the auctions. The companies consider the process of sourcing when the supply chain
surplus is large with the low risk. If there is proper outsourcing, then it would be easy for the
companies to achieve growth in competitive market area network. It is necessary to emphasize
on proper sourcing as it has the direct link with the growth of the business (Fernie and
Sparks,2018).
In relation to outsourcing, it is recommended that for sourcing it is important to have proper
understanding of the business strategy of the company. The periodic review should be done of
the sourcing strategy so that it could be easy to ensure the set results and proper alignment with
the objectives of the business. The companies should consider the different sourcing strategies in
relation to supply chain management (Tatoglu et al., 2016). It is recommended to use single
sourcing, which is one of the methods where the purchased part is supplied by one supplier only.
This will help in maintaining the close relations with the different small number of suppliers. The
close relation assists in boost high quality and reliability. Multi sourcing is also the method in
which the overall products procurement is done by more than one independent supplier. The
company can consider it sometimes as it helps to maintain the competition among the suppliers
in order to attain the good quality and also to reduce the price (Essex, Subramanian and
Gunasekaran, 2016).
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It is necessary for the companies to emphasize on making the proper distribution strategy where
emphasis is given on keeping the watch on the problems such as production facilities and also
warehouses. It can be said that sourcing in the supply chain is the best method or the way that
can assist the organizations in offering products on time. If there is proper sourcing concept
considered by the companies then it would be easy to attain success in the high competitive
business environment (Tsay et al., 2018). Therefore, it can be stated that it is important to focus
on these recommendations as they are mainly link with the overall success and growth of the
business in the market or in relation to the competitors that are present in the market.
Conclusion
By analyzing the two factors of supply chain, quality and outsourcing it can be stated that these
play a significant role in achieving the higher growth in the competitive business world. If both
these factors are managed and controlled by the companies, then there are more chances of
giving tough competition in the market. It is necessary for companies to emphasize on the quality
as it assist in boosting the growth of the business. In relation to quality factor, it is recommended
for the companies to consider ERP system and also it is necessary to maintain the
communication flow with the suppliers, as it can assist in boosting the satisfaction level of the
users and suppliers. In reference to outsourcing, it could be easy for the companies to minimize
the inventory costs and to attain success in the market. For this, it is recommended that there
should be proper understanding of the business strategy and also effective distribution strategy
should be considered to attain growth.
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References
Essex, A., Subramanian, N. and Gunasekaran, A., 2016. The relationship between supply chain
manager capabilities and performance: empirical evidence. Production Planning &
Control, 27(3), pp.198-211.
Fan, Y. and Stevenson, M., 2018. A review of supply chain risk management: definition, theory,
and research agenda. International Journal of Physical Distribution & Logistics
Management, 48(3), pp.205-230.
Fernie, J. and Sparks, L. eds., 2018. Logistics and retail management: emerging issues and new
challenges in the retail supply chain. Kogan page publishers.
Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.
Huo, B., Ye, Y., Zhao, X. and Zhu, K., 2019. Supply chain quality integration: A taxonomy
perspective. International Journal of Production Economics, 207, pp.236-246.
Johnsen, T.E., Howard, M. and Miemczyk, J., 2018. Purchasing and supply chain management:
A sustainability perspective. Routledge.
Katz, N., 2017. Successful Supply Chain Vendor Compliance. Routledge.
Schniederjans, M., Schniederjans, D. and Cao, R.Q., 2018. Topics in lean supply chain
management. World Scientific.
Tatoglu, E., Bayraktar, E., Golgeci, I., Koh, S.L., Demirbag, M. and Zaim, S., 2016. How do
supply chain management and information systems practices influence operational performance?
Evidence from emerging country SMEs. International Journal of Logistics Research and
Applications, 19(3), pp.181-199.
Tsay, A.A., Gray, J.V., Noh, I.J. and Mahoney, J.T., 2018. A Review of Production and
Operations Management Research on Outsourcing in Supply Chains: Implications for the Theory
of the Firm. Production and Operations Management, 27(7), pp.1177-1220.
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Vanichchinchai, A., 2019, March. Quality Management and Supply Chain Management
Frameworks: A Classification. In 2019 8th International Conference on Industrial Technology
and Management (ICITM) (pp. 22-26). IEEE.
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