Operations Management: An Integrated Approach, 5th Edition

THE SUPPLY CHAIN LINK

The ultimate goal of TQM is to produce and deliver a good or service that provides value to the final customer. This can only be achieved if the concepts of TQM are adopted by all members of the supply chain. The reason is that the supply chain is a system of organizations that are linked together and that are dependent on each other's performance. If just one member of the chain produces poor quality, the entire chain will suffer, as the defective product will be passed down the chain until the defect is finally discovered. This will result in higher cost for all chain members and possibly the loss of customers. That is why one of the main ideas of TQM is to extend quality concepts to a company's suppliers. In the chapter we discussed the differences between the external and internal customer, stressing that no one in the company should pass a defective item on to the internal customer. Just as all the internal functions of an organization are dependent on one another, so are the members of a supply chain. For this reason, the concepts of TQM must be extended to everyone in the chain.