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Examine the role and tasks of purchasing in assuring product quality from suppliers, with reference to: a) specification of quality requirements b) supplier quality audit c) contractual terms

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  • March 27, 2004
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Introduction

Purchasing is critical to the effective management of material logistics (Ford, 2002). Positioned at the interface between the customer and the supplier, responsibility often falls on this function for managing the relationship between the customers and suppliers in the supply chain. The role of purchasing is a gateway to suppliers so that other business functions can communicate with counterpart within the supplier organizations (Leenders et al., 1994)

Product quality is rapidly becoming an important competitive issue (Garvin, 1984). According to Garvin (1984), there are eight basic elements of product quality. They are performance, features, reliability, conformance, durability, serviceability, aesthetics and perceived quality. What is quality? Quality is defined as "conformance to requirements" (Crosby, 1979). To maintain a high quality standard of goods, supplier quality is of paramount importance.

This article put emphasis on the role and tasks of purchasing in assuring product quality from suppliers, with reference to:

(1)Specification of quality requirements

(2)Supplier quality audit

(3)The use of appropriate contractual terms in a purchase order

Purchasing has different meaning in different industries. This article first introduces different perspectives of purchasing in different industries. Then, the role and task of purchasing in the abovementioned areas will be analyzed respectively. Examples are given in each area in the article.

Objectives of purchasing

Purchasing has four objectives. They are right quality, competitive price, economic quantity and on-time delivery. Right quality refers to conforming specification requirement (Crosby, 1979). For competitive price, there are two aspects. One is internal competition, the other is external competition. The former can be achieved by reducing the production cost. The latter is due to highly competitive market, with reference to price comparison, historical price,...