Purchasing and General Management Function

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Purchasing and General Management Function
QUESTION 5
(Maintaining high quality standards is very important to the staff of Midas Ceramics. Suppose you are Salman Khan, the purchasing manager of Midas Ceramics. Explain in detail how you would go about managing the quality of the raw materials to ensure that the products of Midas Ceramics are of the highest standard. Use practical examples with reference to the case study.)

Introduction
When considering obtaining the highest standard it does not simply mean obtaining the best quality. An item’s price usually rises with its quality, so one has to ask: what should the quality be in terms of relative costs and the intended use? Naturally one would therefore seek to obtain high quality at the lowest possible cost. Materials management has to reach a compromise between these two, which should obviously serve the objectives of the enterprise.

The concept of quality
A description of the concept of quality in broad terms may be approached from a purely technical or a broader business economics explanation. Two elements identified as an inherent requirement of the characteristic of the technical explanation are design quality and conformance quality. From a business management explanation it is the object of efficiency, and particularly the combination of optimization of value and costs that define quality.

The International Standards Organisation (ISO) has identified eight principles of quality management that contribute to a better understanding of the management in the supply chain, they are: •Customer focused organisation

Leadership
Involvement of people
Process approach
Systems approach to management
Continual improvement
Factual approach to decision making
Mutually beneficial supplier relations
From the above it should be clear that in determining quality, a balance has to be struck between technical aspects and those of business management.

Managing quality in the supply chain: TQM
The two main approaches to explaining how quality could be managed in the supply chain at Midas Ceramics is by its analytical approach which attempt to explain the management process related to quality; and a systems approach where the philosophy of managing quality in all the phases of the supply chain is proposed. Total quality management (TQM) is a management approach to the organisation centered on quality, based on participation of all of its members and aiming at the long-term success through customer satisfaction, and benefits the members of the organisation and society.

One of the main elements of TQM is that the attitude of every employee must be directed toward a continuous striving for improvement across all the organisations functions involved in the supply chain. TQM therefore stresses that all individuals and teams working towards customer satisfaction should endeavor to provide fault free products and services. This also means that purchasing must therefore provide a fault-free service to all internal customers and to external customers who are part of the supply chain.

The impact of TQM on purchasing is broken down in the following categories: •Customer focus – purchasing Management must be aware of the two customer groups, internal and external. Internal customers demand raw materials be delivered on time and excellent quality of service and products provided by external suppliers. External customers, who are the end users of the products demand reliable suppliers in order to ensure product quality, availability and quick response time to demands. •Process mapping is aimed at ensuring that all internal process in the supply department are performed in such a manner that quality of service is continually improved and measured against pre-set quality standards. •Performance measurement – TQM approach demands that improvement and performance measurement should be part of the management of the supplier base. Midas Ceramics can achieve...
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