The University of Greenwich - TEI of Kavala

M.Sc. In Finance and Financial Information Systems

M.Sc. Thesis

Submitted in partial fulfillment of the degree of Master of Science

Quality-oriented Supply Chain Management

The case of C.E.R.I.N.T. company

Postgraduate student: Meke Maria

Supervisor: PhD Christoforides Sophocles

January, 2008

2

Table of contends

Abstract 4

Acknowledgements 5

Chapter 1. Introduction

1.1. About supply chain quality management 6

1.2. Purpose and objectives of the study 7

1.3. Structure of the study 8

Chapter 2. Literature review

2.1. The roots of the quality concept in an organisation 9

2.2. Key definitions 11

2.2.1. Total quality management 11

2.2.2. Quality systems 12

2.2.3. Supply chain 14

2.2.4. Logistics and Supply Chain Management 16

2.2.5. Just-in-time 18

2.3. Supply chain management in the modern world 19

2.3.1. Flows along the supply chain and customer focus 19

2.3.2. Quality and supplier-customer relationships in the SCM 22

2.3.3. JIT linkage with SCM 25

Chapter 3. Quality oriented supply chain management

3.1. Introduction to SCQM 27

3.2. Quality management linkages with SCM 28

Chapter 4. SCQM based on workflow and Petri Nets

4.1. Business processes workflows and IT in the fields of SCQM 34

4.2. Workflow modelling 38

4.2.1. Workflow modelling with Petri Nets 40

3

Chapter 5 . Theoretical model and research methodology

5.1. Theoretical model and research questions 42

5.2. Conclusions from literature and case study questionnaire

formulation 45

5.3. Introduction to research methodology 50

5.3.1. The research in the case organisation: C.E.R.I.N.T. 51

5.3.2. Case study organisation profile 51

5.3.3. Questionnaire construction and variables 53

5.3.4. Sample and data description 54

Chapter 6 . Results and data analysis

6.1. The company’s FMS and production line modelling with Petri

Nets 56

6.2. Results of the questionnaire data analysis 63

6.3. Correlations . 71

Chapter 7 . Conclusions

7.1. Conclusions and suggestions 75

6.2. Limitations & future research and work 76

References 78

Appendices 86

4

Abstract

Supply chain management is considered to be the “competitive edge” for all

organisations, public and private, and its combination with quality management

boosts the competences and abilities of an organisation to fulfil customers’

requirements and respond to today’s increasing demands of the business environment.

It is suggested that a stable and strong competitive advantage is gained through the

quality-oriented supply chain management. The term of Supply Chain Quality

Management (SCQM) implies process integration, continuous improvements in

services and products and the customer’s satisfaction through improvements at the

inner-organisational and inter-organisational level. In the fields of the present

dissertation a framework for SCQM was developed in order to formulate a

questionnaire used as a tool in a case study. A process modelling technique, Petri

Nets, was also used to facilitate the case study research. The manufacturing company

studied, data analysis and results, provide solutions on how production line and

workflows can be better assessed and modelled, making easier the process of drawing

information from the company. As regards to the SCQM it is concluded that no

interrelations exist among external supplier quality management, internal supplier-

customer service quality and integration and, service and product quality to external

customers in the case study organisation, C.E.R.I.N.T. All three SCQM aspects

though, should be highly exercised. The fact that this assumption is opposite to the

results of some other relative empirical studies indicates that each different

organisation or company bears particularities and it should be carefully studied.

General standards are not always applicable and do offer integrated solutions.

5

Acknowledgement

I would like to thank the personnel of the company C.E.R.I.N.T. that supplied

me with important facts about the company allowing me to develop the present study.

I would also like to thank my supervisor Christoforides Sophocles, who allowed me to

use his own antecedent research studies and for his contribution during the

development of the present dissertation.

Finally, I must thank my mother, my brother and my fiancé for their support

and patience.

“I declare that this research study is my own original work, except from the assist

mentioned in the Acknowledgements and has not been previously submitted for

another degree or diploma to this or to another institute. The opinions expressed are

put forward in personal capacity and do no represent those of the University of

Greenwich or of any other organisation or author.”

Meke Maria

January, 2009

6

1. Introduction

1.1. About supply chain quality management

Quality Management (QM) and Supply Chain Management (SCM) display

theories, practices and initiatives applied worldwide. It is obvious though that

organisations set different priorities and vary in the way they perceive these

managerial philosophies. Supply chain management is widely recognised by all kinds

of organisations and in many cases considered to be the “competitive edge” of

businesses (Chow et al., 2008). Despite the SCM necessity and recognition as a

theory, there are still various problems in achieving an inter-organisational

integration, given that an inner-organisational integration already has been fulfilled.

At this point, quality management as well as process based managerial approach seem

to be capable of offering valuable help to the supply chain management, and to the

inner and inter-organisational integration. These two fundamental managerial theories

are herein perceived to be complementary (Robinson and Malhotra, 2005) and are

used in order to formulate a theoretical model and test the Supply Chain Quality

Management (SCQM) in the case study organisation. The results of the present

attempt to set initiatives and propose a framework for quality oriented supply chain

management will presumably contribute to the quality management along the supply

chain. It aims at the development of the crucial aspects of quality management in the

fields of suppliers’ and customers’ management both within and beyond the

organisation. In order to achieve SCQM, an appropriate quality management

framework and concept is formulated and adopted through literature. The quality

management concept adopted in the present study extends beyond the standards

underlined by Total Quality Management (TQM) and Quality Systems (QS) without

having however the intention of neglecting them. A strong customer orientation is

therefore enforced as proposed by the basic concept of quality management (Klefsjo

et al., 2008).

7

1.2. Purpose and objectives of the study

The present dissertation is based on s case study research method. One of the

study’s central objectives is to draw conclusions from precedent theoretical and

empirical researches regarding SCQM. These kinds of conclusions serve to the

investigation of the SCQM exercised by an organisation. It is actually desired to

provide the organisation with significant indicators aiming at the improvement of

quality management in the Supply Chain (SC) it belongs to.

Although it is not possible to support and generalise conclusions, due to the

use of a case study research technique, the objective here is to obtain the degree of

external supplier quality management, of internal supplier-customer service quality

and integration, of the product and service quality to external customer and possible

interactions in the case organisation.

As revealed from literature review and theoretical background of the SCQM,

there are limited studies about SCQM and its implications. The fact is that there isn’t

any framework and it is impossible to formulate such a framework to be applicable to

all businesses and organisations. The present study argues that the investigation of

special issues that a certain organisation bears is the preferable way to develop and

plan SCQM

Since a theoretical model is formulated in order to study quality management

of the supply chain in a given organisation and its implications, a questionnaire is

constructed as a research tool in the given case. Results stemming from the

questionnaire analysis of the answers in the case study provide SCQM guidance

considering though at the same time the use of IT, workflow processes management,

Petri nets and other business practices. It is therefore important to point out the

importance of modelling the general workflow and the production line if a

manufacturing firm is concerned, as it happens with the case study organisation dealt

with herein. This is important in the field that the objective here is to have insights on

how each point of the company and all of them integrate within the organisation and

then, with suppliers and customers. Other questions to be answered are: - How SCQM

is achieved in the organisation and who is involved and – Why critical points of

SCQM are not appropriately managed (if any).

8

1.3. Structure of the study

The meaning of quality and quality management in an organisation are

initially investigated while the actual intention is to settle basic directions for the

evaluation of quality management in the supply chain of the case study organisation.

Chapter 2 also includes the theoretical background of SCM, logistics and a brief

analysis of the most important subjects related to SCM. The issues developed in the

part of literature review (Chapter 2) set the roots for the development of the following

chapter in which an attempt is maid to investigate possible linkages between quality

management and supply chain management and support the concept of SCQM.

Following the theoretical basis of the present paper, an attempt to propose possible

solutions for SC and business process modelling is made in Chapter 4 that will

contribute to the analysis and modelling of the case study organisation with the

ultimate scope to develop quality oriented supply chain management. Chapter 5 is

dedicated to the development and description of the theoretical model, the research

questions applied in the case study, the questionnaire and to the research

methodology. As far as a case study is dealt with at the present dissertation, an in-

depth description of the situation, the objectives and methodology are given in

Chapter 5. Finally, in Chapter 6 all the results of the research made are described,

commented, supported though literature and analysed. Final conclusions and further

analysis though can be found in the last chapter, Chapter 7, along with critical

discussions, limitations of the study and proposals for future work and extension of

the present study.

9

2. Literature review

2.1. The roots of the quality concept in an organisation

Most books, articles and studies used (Besterfield, 2003; Kaynak, 1997;

Summers, 2005; Lysons, 1996) for the development of the basic theoretical

background of the quality issue that this dissertation deals with, always in the fields of

quality’s appliance in the supply chain management, point out the contribution of the

so-called “masters” of quality or TQM (Besterfield, 2004). It was considered critical

though to define quality through the viewpoint that these “masters” who introduced

the concept and definition of quality.

The actual definition that Armand Feigenbaun provides for quality is actually

based on the ability to offer what customers ask in an unstable environment given the

fact that continuous and dynamic changes characterise today’s markets. According to

Feigenbaun (1997) quality is not part of the overall management but a complete

managerial method, applicable in every single aspect of an organisation which may

constitute a well-integrated managerial culture.

Shewhart (1931) lays emphasis on two different quality dimensions. The first

is customer’s satisfaction, a subjective measure, and the second are tangible and

objective aspects of the components comprising a good or a service produced,

including at the same time the value that may receive at a given price. Not only has he

introduced the foundations in quality control but he is also considered to be the father

of modern quality, influenced by the pragmatist philosopher, C.I. Lewis as noticed by

Wilcox (2004). Deming was his student.

Deming (1986) points out the constant and continuous improvement that must

take place in the whole organisation. He indicates 14 points to be followed in order to

achieve quality which, are still applicable not only in quality systems but in many

quality projects. Deming’s assumptions are taken into consideration since a large

number of the 14 Deming’s points are used as the basis for the construction of the

questionnaire developed in the field of the present dissertation (Deming’s 14 points

can be found in the appendix). Deming has proved the principle that quality is the

fundamental feature in an organisation and the only one to allow the following

consequences to occur as described at the following Figure 2.1. Sosik and Dionne

10

(1997) notice that the most possible type of leadership Deming promoted through his

studies is the “Transformational leadership”, which reflects equal opportunities to

develop any attitude regardless of the position held in the hierarchy of an

organisation.

Economic Chain Reaction

Figure 2.1. Deming’s Economic Chain Reaction, source: Summers (2005), p.18

Juran (1992) mainly mentions that leadership should contribute and control the

design and the development of the product, the purchasing activity, should control and

monitor manufacturing and marketing areas. Every year quality should be improved

in relation to last year’s quality performance. Team work, continuous educational

motives and the philosophy of change should be instilled in every business

department. He is also known for the definition he gave for quality: “fitness to use”.

Crosby P.B is the last quality “master” mentioned although there are many

other authors and practitioners (such as Ford) that have put forward indispensable

theories and quality philosophies. The main contribution of Crosby lies in the field of

the exact identification and, as possible, measurement of customers’ requirements.

The main aim is to have “zero defects” at the initial stage of production, that is, before

the very first stage of production is completed. This achievement, according to

Crosby, will bring no quality costs incurred when a customer is only partially satisfied

or dissatisfied. Crosby highlights the necessity of the quality department in an

organisation which contributes to meeting quality standards, achieving goals and

imparting knowledge in other departments (Crosby, 1979).

Improved Quality

Improved

Productivity

Better Use of

Resources

Fewer Mistakes

and Delays

Decreased Costs

Stay in Business Capture Larger

Market

More Jobs

11

2.2. Key definitions

2.2.1. Total quality management

Besterfield (2003) states in his book that Total Quality Management is the

combination of six basic elements:

a) the top-managers’ commitment to achieve quality,

b) the clear orientation to customers’ needs both internally

and externally,

c) the active participation of every single employee to

achieve quality diffusion,

d) the ongoing amelioration of business processes and

production line,

e) the development of partnerships with basic suppliers,

and

f) the establishment of performance measurement.

To the aforementioned definition of TQM, Porter and Tanner (2004) add also

the necessity to concentrate on the result production affecting positively and adding

value to stakeholders, they place emphasis on responsibility towards society, and

finally on the trust and the compound relations to be developed between people in the

organisation. Employees’ motivation is considered to be a very crucial factor towards

success.

TQM, this innovative practice consolidated and initially implemented by

organisations in Japan became famous for its ramifications in the whole world but

under some circumstances it is of utmost importance that the perception which

renders TQM a panacea be reconsidered. Jones and Seraphim (2008) studied the

implementation of TQM in an organisation stationed in a developing country and

indicate various obstacles such as the national authorities’ and environmental

boundaries and the employees’ difficulty to communicate. TQM critical factors were

sometimes partially and gradually given different priority due to the fact that many

amendments were debated extensively in order to change the organisational culture

and oppose the local cultural environment. TQM was finally successfully

implemented and positively influenced the overall performance of the company but

still Jones and Seraphim (2008) do not guarantee for the outcome of TQM

12

implementation in other organisations situated in developing countries such as in the

United Arab Emirates where the study was conducted.

2.2.2. Quality systems

Quality Systems today are implemented by firms not only with a view to

certifying their service quality, products and procedures, but also to aiding them to

restructure processes and provided services both within and beyond the business, so

as to improve their effectiveness. Many systems and quality models as well, such as

ISO 9000, Six Sigma, various Awards, Malcolm Baldrige National Quality Award

and many other not mentioned here, offer various criteria in an attempt to specify

quality. According to Summers (2005), the Malcolm Baldrige National Quality

Award system is said and has proved to be the most complete model dealing mainly

with the following seven general categories:

a) “Leadership (Senior Leadership, Governance and

Social Responsibilities).

b) Strategic Planning (Strategy Development, Strategy

Deployment).

c) Customer and Market Focus (Customer and Market

Knowledge, Customer Relationships and Satisfaction).

d) Measurement, Analysis and Knowledge Management

(Measurement, Analysis, and Improvement of Organizational

Performance, Management of Information, Information Technology,

and Knowledge).

e) Workforce Focus (Workforce Engagement, Workforce

Environment).

f) Process Management (Work Systems Design, Work

Process Management and Improvement).

g) Results (Product and Service Outcomes, Customer-

Focused Outcomes, Financial and Market Outcomes, Workforce-

Focused Outcomes, Process Effectiveness Outcomes, Leadership

Outcomes).” (The Malcolm Baldrige National Quality Award, 2008:

p.5).

13

It is obvious though that through comparisons made between existing different

quality systems, there are no fundamental discrepancies among systems reviewed in

the bibliography (Summers, 2005; Porter and Tanner, 2004). In Europe though,

mainly the ISO quality system is more popular.

Another relatively recent orientation of quality systems is associated with the

environmental management systems such as ISO 14000, falling into a system with a

similar philosophy and implementation stages as quality systems (Foster, 2007). ISO

14000 offers the opportunity to an organisation to be certified for the environmental

management system it implements. An interesting relation is illustrated by Darnall et

al. (2008), between the implementation of such a system and the environmental

orientation of the SCM. It is indicative that 58 percent of the organisations having

adopted ISO 14000 were asking from their suppliers to enforce environmental

practices (Darnall et al.,2008). Thus, it is considered a relatively new quality approach

in the SCM, Green Supply Chain Management (GSCM), seeking to enhance

environmental sensitivity to the network of businesses belonging to a supply chain

that mainly diminishes harmful wastes to the natural environment. This point though

could be further examined in another study and is proposed for further research in the

SCM thematic area. Nevertheless, national regulations either encourage the

implementation of quality systems and environmental management systems or adopt

inflexible norms and penalties bringing about problems to those businesses wishing to

change but previously exercised harmful practices. Vachon and Mao (2008) examined

the possible link between quality in supply chain and environmental practises

adoption at a national level of different countries. They conclude that supply chain

quality management and considerations regarding the network of suppliers and

customers in a SC and their performance lead to the establishment of a more

favourable and moral corporate environment willing and more capable to adopt

environmental practices. Additional ameliorations are expected in the fields of

developing businesses with other countries, management of inter-organisational

relationships, social acceptance and customer preferences to products and services

coming from countries, organisations or corporations paying serious attention to these

issues. On the contrary though, Klefsjo et al. (2008) express doubts about the

effectiveness of quality systems in the fields of quality management and argue that if

issues such as stakeholders, social impacts, and physical environment could also be

misleading while trying to expand the quality management concept. On the other

14

hand, they also support that appropriate manipulation and common conformity at a

more universal level of such “new” issues could contribute to the evolution of quality

management as it is normal and bound to take place.

2.2.3. Supply chain

Porter (1985) notices that the internal integration of an organisation is not

adequate anymore for a company to develop a competitive advantage.

Stevens (1989) sets four stages when moving from the typical and basic

material flow in separate departments of an organisation to intermediate stages of

functional and internal integration, and finally to external integration which is

described in the following Figure 2.2.

Externally Integrated Supply Chain

Figure 2.2. Externally Integrated Supply Chain, source: Stevens (1989)

The supply chain (SC) reflects all organisations or entities taking part in the

entire value chain until a product or service is delivered to the final customer. Given

the fact that nowadays organisations do not tend to integrate vertically or even

horizontally, especially due to negative cost-effective consequences, more than one

organisation is usually needed to participate until final products reach customers

(Lysons, 1996). As Chandra and Kumar (2000) note, the way that the supply chain

concept is used to work out problems, determines the meaning and the essence of the

supply chain, which may be the assessment or/and the implementation (of one or

more) of the following characteristics:

- suppliers’ arrangement and control (in the case of

products/materials and services),

Suppliers Internal Supply

Chain

Customers

Material flow Customer service

15

- a network existence leading to effective management of

demand including the flow of products and services,

- a philosophy of doing transactions (business),

- a strategy to acquire a competitive advantage via the

synchronisation and co-ordination of all supply chain’s member

organisations’ actions.

The expansion or else the width of the supply chain are determined by the

number of businesses participating and the list of activities and operations engaged in

it. Each business or organisation belongs to a supply chain and there is always a

degree to which SCM exercised (Cooper et al., 1997). The supply chain different

levels developed by Harland (1996b cited in Harland, 1999) are based on the

development and management of relations among organisations and refer to the

external environment of the organisation. These levels are:

- the dyadic level. This level considers exclusively the

sole dyadic relationship between the supplier and the manufacturer or

manufacturer and distributor/retailer. Through this type of

relationship an independent organisation has its own objectives,

culture, organisational structure and communication mechanisms

built along with the close co-operation of both parts,

- the chain level. It goes far from the dyadic level which

is actually part of it. It contains a number of dyadic relations

including the supplier, the supplier’s supplier, the customer and the

customer’s customer. It incorporates all exchanges beginning from

the very early procurement of raw materials and ending to final

customer after passing all organisations/stages of elaboration,

production, fitting, distribution, delivery and retail,

- the network level. It refers to a network of operations

going up and down the supply chain. The chain level is its subgroup.

At this level special attention is paid to the network of the central

organisation/business, meaning the network relations with its

suppliers and suppliers’ suppliers and similarly to the upper part of

the network and with its customers. The intentional co-operation

among independent organisations aims at the creation of a

competitive advantage through the delivery of value to the end

16

customer and is referred to as ‘value creating network’ (Harland et

al., 1999).

Levels of Supply Chain

Figure 2.3. Levels of Supply Chain, source: Harland,1996b cited in Harland, 1999

2.2.4. Logistics and Supply Chain Management

It must be pointed out that there are various different interpretations regarding

the supply chain management basically because of the existence of different concepts

one may attribute to supply chains. SCM and SC are interdependent and a SC

comprises the basic structural element of the SCM developed (Ross, 1997). Therefore,

a set of different approaches are herein included after having cited the difference

between logistics and SCM.

“Logistics is the process of strategically managing the procurement,

movement and storage of materials, parts and finished inventory and the related

information flows, through the organisation and its marketing channels in such a way

that current and future profitability are maximised through the cost-effective

fulfilment of orders.” (Christopher, 1992: p2)

17

Romano and Vinelli (2001) detect two basic differences between SCM and

logistics. The first difference has to do with their amplitude and lies in the fact that

SCM includes the entire supply network whereas logistics occupy a more restricted

area. The second difference lies in the processes and activities SCM and logistics

incorporate. SCM goes further that logistics as soon as it aims at the integration of all

business processes, from the final customer to the early supply stage.

SCM encompasses logistics management that mainly deals, as stated above,

with internal issues of an organisation. SCM goes further though, focusing on the

external dimensions of the organisation (e.x. suppliers’ management and customers),

just-in-time procedures and inter-organisation relationships such as partnerships

(Moody, 1993). Purchasing management is also considered a critical point in the

value chain analysis and SCM, characterised by the overall organisational strategic

management (Lysons, 1996).

Some other approaches regarding SCM are the following:

- According to Cooper et al. (1997) SCM is the

completion of all business processes along the supply chain.

- Spekman et al. (1998) states that SCM comprises

actions such as planning, development, optimisation and

management of internal and external supply chain elements,

including materials procurement, their modification and the delivery

of final products and/or services to customers. The sequence of all

these processes should be consistent with the overall strategies and

objectives of all participators (organisations and entities).

- Ross (1997) faces SCM as an evolving and progressive

philosophy falling into the general field of management. He

gradually and continuously aims at the unification of all capabilities

and resources, located both in the internal of a business and in its

external allies, supporting all business functions and operations in a

highly competitive environment and in a “customer enriching”

supply system. The entire supply system focuses on the development

of innovative solutions and the synchronisation of work, product,

material, service, and information flow, with the aim of creating

unique and atomistic value sources to the customer.

18

- Harland et al. (1999) use the expression “Supply

Strategy” in order to avoid the confusion caused by the use of the

expression “Supply Chain Management”. As a result, Supply strategy

is a holistic approach concerning the management of operations via

inter-organisational and co-operative networks allowing the

formation of those dynamics and conditions that will fully meet

customer demands and requirements.

For the needs of the analysis that follows in the present study, the definition of

Ross (1997) seems to be the most appropriate to rely on. It is also important to accept

the fact that SCM is developed in different environments influencing its perception at

the same time. Chow et al. (2008) bring to light results about how Taiwan and US

approach SCM through an empirical study. Relatively, managers in Taiwan support

that customer focus and good service constitute the competitive edge in SCM whereas

US managers mostly give priority to SC competence, meaning product and service

quality along with inventory management, forecasting sales, design and appropriate

positioning. They have also proved that interrelations exist among critical aspects of

the supply chain management found in the literature they used and discussed

(communication, supplier-customer management and relationships, quality, delivery

options, service quality, integration, etc.). Even if there are differences regarding

direct or indirect impacts of SCM aspects and practices in different geographical

regions or/and organisations, a general agreement rises which lies in the fact that a

competitive advantage is gained and an improvement in organisational performance is

attainable.

2.2.5. Just-in-time

Just-in time (JIT) purchasing is a part of JIT procedures that a firm may

support and Kaynak (1997) finds a strong relation between JIT purchasing and TQM,

influencing at the same time the firm’s performance, regardless of the size or the type

of the organization. It is realised that as JIT performance and TQM are developed,

firms appreciate a better financial and market performance. The external parameter of

JIT underlies the choice, communication and co-operation with suppliers aiming at

smaller purchased quantities each time, quality products, early stage product design in

co-operation with suppliers, material flow facilitation and precise delivery schedules

19

(Kannan and Tan, 2005; Kaynak, 1997). Subsequently, internal JIT performance

requires personnel incorporation, training, top management support, appropriate

leadership and teamwork. Finally, if JIT performance is to be settled, employee

relations are a key dimension, and all entities, suppliers and customers, should work

together with a common target: to cultivate a competitive advantage (Moody, 1993;

Kannan and Tan. 2005).

2.3. Supply Chain Management in the modern world

2.3.1. Flows along the supply chain and customer focus

It is considered that in SCM the basic and central axis of competition (unit of

competition) are not anymore sporadic entities but the supply chain (Croom et al.,

2000; Spekman et al., 1998). Sporadic practices, management and operations of an

organisation are gradually neglected and the inter-organisational competition adapts

to a scheme of competition among entire supply chains. It is obvious that businesses

will not seek cost reductions and profit maximisation against their partners belonging

to the same supply chain but they will contribute to the competitiveness of the whole

supply chain (Croom et al., 2000).

Additionally, in the supply chain management, cost implications and revenue

enhancement prospects is a field intensively explored by researchers, although quite

difficult to segregate revenues, costs and assets developed due to SC processes

(Ballou, 2006). On the other hand, non-quantitative factors such as information flow

and collaboration between all supply chain members, internally and externally of the

business, stands at the heart of SCM and will be the key to its future evolution

(Ballou, 2007).

“Supply Chain Management integrates supply and demand management

within and across companies.” (Ballou, 2007: p.335).

The customer oriented standpoint of SCM is a fundamental principle

comprising a basic element of a successful business, and SCM contributes to the

successful operation of the member-organisations in the SC and the amelioration of

their competitive position (Lambert et al., 1998). SCM is a downstream material flow

20

with customer as the final destination and bilateral information flows. Herein in the

Figure 2.3. a basic supply chain is simply designed and it is obvious that, except the

quality of goods and materials, the management of information is an equally

important factor in all stages.

It is also supported (Ballou, 2006) that in the future only a customer-oriented

philosophy and satisfaction related to the value received, along with information

sharing, metrics developed and applied to measure results in SCM, collaboration

between all channels, selectivity regarding the key suppliers and many other issues

will bring the desired results. It is not an empirical study but some of its literature

conclusions are adopted in the theoretical part of the present dissertation.

A Basic Supply Chain

Figure 2.4. Basic Supply Chain, source: Chopra and Meindl (2001)

The objects of transaction between organisations flowing along the supply

chain are manly the tangible resources and materials, financial, human and

technological resources, information and knowledge (Bessant et al., 2003; Groom et

al., 2000).

Frayer and Monczka (1997) band together flows occurring along the supply

chains in three basic categories as follows:

- flows generating value, including activities of developing new

products, processes and services,

21

- flows delivering value, which include materials’, services’ and

products’ order execution in the field of procurement, production

flows and activities related to delivery to the final customers and,

- information flows offering the ability to co-ordinate and control.

Chandra and Kumar (2000) refer to two types of flows along the supply chain

– information flows and material flows – and they point out that there are boundaries

in many cases obstructing flows not only at the inter-organisational level between

organisations-members of the SC but also within the organisation. Despite the many

categories of flows one may meet in the literature of SCM, emphasis is put on the

flow of goods (materials-products and services) and information. It is important to

know every time which member of the SC holds a certain resource and the exact place

this member holds in the SC. It is equally important to know the ways of transaction

taking place which are closely related to the relationships developed and managed

among all members of the SC (Croom et al., 2000). That is why SCM is often referred

to as the management of compound and multiple relationships along the supply chain.

Relationships developed during a transaction in the SC are maybe the more important

part of the transaction (Handfield and Nichols, 1999).

Although the meaningful concept of consumer focus in the SCM is repetitive

in the present paper, it is inevitable not to cite researchers’ results that come to the

same conclusion about the future evolution of SCM: The fulfilment of customers’

requirements is the final and supreme purpose. Foster (2007) says that customers

deserve special attention because the customers are those who give new ideas for a

new service or product development, retaining customers costs less than gaining new

ones and they diffuse bad impressions more than good ones. It is meaningful though

for an organisation to know, examine and arrange the proportion of value each entity

of the SC adds up to the total value received by the final customer-consumer of the

product or service. Zokaei and Hines (2007) use a composition of two theoretical

models to identify opportunities for further improvements in the SCM, categorise

consumers’ needs and find linkages with SC and possible impacts on customers’

value if changes in the SCM occur, all in a particular firm. By the use of the case

study research methodology they make an attempt to fill in the gap they consider

regarding the existence of a practical example - contribution in the fields of customer

value enhancement. They stress the importance of translating customers’ needs and

aspirations into SCM improvements.

22

2.3.2. Quality and supplier-customer relationships in the SCM

The increasing interest in supplier-customer relationships can be attributed to

the recent business trends, such as the detachment of the vertical integration, the

development of outsourcing, the use of just-in-time techniques, the focus on

partnerships and co-operations and the reductions in the number of key suppliers that

an organisation retains (Harland 1996a). New business philosophies and

administration techniques such as TQM, the supply base management and a customer

oriented business strategy rise and change the status quo in supplier-customer

relationships. Authors coming from the area of TQM claim that relationships with

suppliers differ across different organisations and depend upon the implementation of

TQM and consequently to the emphasis given by TQM to suppliers and suppliers

management (Caddick and Dale, 1998).

Kerrin (2002) examined how different kinds of supplier – customer

relationships influence and formulate results in the fields of continuous improvement

and present a case study in British automotive industry. The results of the case study

showed that the success or failure of the activities aimed at continuous improvement

depends on the type of supplier – customer (buyer) relationship. Antagonism leads to

failures and causes problems whereas a synergy provokes various benefits.

Genuine long-term relationships and alliances along the supply, trust and

reciprocal retreats in the supplier-customer relations, contribute to the creation of a

stable supply chain. Given the advantageous position that a firm gains when a stable

relational environment has been established, alliance performance is gradually on the

mend. Yang et al. (2008) found out that the power to keep stable relationships with

key partners and develop a secure, trusting environment; significantly affect the

stability of alliances through a survey in US firms. Yet, at the same time, they confirm

that friendliness and reciprocal openness are not sufficient in order to develop stable

and long-term relationships between supplier and customer entities, always in the

fields of supply chain strategic partnerships. What is significant here is that they

highlight the tangible and implicit nature of human relations, falling into the fields of

psychology and amplified in the fields of the inter-organisational and inner-

organisational relations. Human relations have nothing to do with technical

instructions, they are quite subjective and it is difficult to be controlled or managed.

23

To that direction, Gowen and Tallon (2003) state that human resource management

(personnel support, education etc.) reinforces the competitive advantage of SCM

practices. The results of their research imply that when the administration and the

employees of an organisation work in harmony and offer their support, training and

educational programmes become more effective, changes are affordable and SCM is

easier to be applied and improved.

Monczka et al. (1998) also deal with the subject of “strategic supplier

alliances” from the buyer’s perspective and they conclude in the following definition:

“Strategic supplier alliances are long-term, cooperative relationships

designed to leverage the strategic and operational capabilities of individual

participating companies to achieve significant ongoing benefits to each party.

These alliances continue as long as significant value accrues to both parties.

Among the primary benefits of such relationships are enhanced supply chain

synchronization, total cost reduction, improved quality and cycle time and a

strengthened overall competitive position, which exceeds the contributions

possible from other traditional relationships.” (Monczka et al., 1998: p.556).

They do not propose any guidelines or framework for successful supplier

alliances as they notice that the development of such an alliance was not described

homogeneously by respondents working in the survey companies. Despite this

difficulty, which arose owing to the gap between traditional partnerships and strategic

alliances, elements such as trust, quality of communication, common and evolutionary

problem solving and supplier selection and assessment methods influence strategic

alliances and are part of a broader framework for future study as proposed by authors.

Long-term relationships and cost implications do not seem to be determinative in

developing a strategic alliance.

Yeung and Lo (2004) have built a framework for firms to use, with the view to

improving SC performance and management. In their model, they include TQM

philosophies such as continuous improvement, customer focus and holistic

improvement, but they mainly develop critical factors for supplier selection,

development and integration. Finally, they propose some quality factors, essential for

the development of strategic partnerships and alliances, which are assumed to be

substantial parts in the SCM. The study concludes that continuous improvement,

buyer-supplier relation and supplier development management are the most critical

24

aspects in achieving successful alliances and reflects the opinion of firms situated in

definite manufacturing area in China.

Large (2005) found that communication quality is influenced by individuals’

attitude and has a positive impact on supply chain management, especially when one

focuses on personal relationships developed among the supply chain. Thus, trust but

also systematic, open and continuous communication improves quality of information

that customers and suppliers exchange. He supports the idea of creating a

communication strategy to be applied by managers and departments closely connected

and interacting with customers and suppliers. Additionally, Prahinski and Fan (2007)

examined if systematic and frequent communication and quality in that

communication promotes a better supplier-customer relationship and assures that

supplier conformity to customer’s needs and requirements. It is revealed that the

communication of some elements such as quality and delivery information improve

communication quality and suppliers’ behaviour whereas continuous concerns about

cost and economic issues cause negative reactions to the suppliers. As far as the

timely, accurate and clear communication of the customer’s needs to its suppliers is

concerned, it obviously offers a higher commitment, better cooperation and

willingness to the supplier in order to continue the cooperation and improve its

performance towards the customer’s expectations. When the buying organisation

assesses and manages appropriately its suppliers, there is always the opportunity for

willing suppliers to adjust, correct or improve their performance for reinforced

customer satisfaction.

Another empirical study introducing attributes such as “openness” and

“closeness” among customers and suppliers is that of Goffin et al. (2006), suggesting

that, while keeping tight relationships with selected suppliers, quality enhancement

and cost reductions are possible. They sum up with a set of attributes of partnership

under the spectrum of literature and of their exploratory study performed in the field

of psychology. Personal relationships come to be the key attribute along with other

eight attributes, and their use by manufacturers is proposed in order to develop and

maintain wealthy competitive advantages in collaboration with their suppliers, after

having selected the most appropriate ones. Jap (2001) also supports the idea of

formulating a common competitive advantage through investments allocated at the

development of supplier – customer (buyer) wealthy relationships. The results of

Jap’s (2001) research indicate that these kinds of investments bear a positive relation

25

with the economic outflows of all members ameliorating the organisational attitude

and the prospects all members bear about the continuation of this relationship.

Frohlich and Westbrook (2001) used data from the International

Manufacturing Strategy Survey (IMSS) and collected a sample of 322 manufacturing

companies in the sector of wrought metallic products, component parts and machines

from different countries and present different tactics of integration a business may

fulfil with its suppliers and customers in the supply chain it belongs to. It is proved

that the higher the degree of integration in the supply chain, the higher the degree of

performance, when it is measured through the use of productivity indexes. They

empirically proved that the integration directed both to the suppliers (down) side and

to the customer (up) side is inextricably linked to the performance levels of all

businesses and effectiveness of their processes.

Finally, it is corroborated by the results of studies presented so far that human

relationships developed through the need for an organisation to co-operate with other

organisations in the SC are essential. Supplier-customer relationships are also

developed within the organisation as it is also supported in the following paragraphs.

Quality management and especially its successful application discriminate those firms

exercising it, while they manage to shape more wealthy interactions with their

suppliers. TQM successful application lies in the long-term exercising of TQM

practices and programs, the strong management’s commitment, the spread of quality

everyday issues and quality oriented processes along the supply chain (Carter and

Smeltzer, 1998). The form of supplier-customer relationships is indicative of

discriminating those firms that successfully apply TQM practices in SCM. They

stretch beyond the typical external suppliers’ management and procurement activity

and focus on the need to satisfy both external and internal customers’ requirements.

Successful TQM enhance this kind of individualism and the realisation of each

internal and external unit needs. Additionally, TQM in supply chains is widely

supported to lead to a reduction in supplier volume and tends to promote single

sourcing and long-term partnerships.

2.3.3. JIT linkage with SCM

Kaynak and Hartley (2006) emphasise the contribution of Just-in-time

purchasing (JITP) and processes throughout the supply chain in the SCM and amplify

26

the criteria and factors to use as an adequate base for testing and analysing JIT

performance. In parallel, JIT factors’ selection and validation shows a clear

orientation to SCM philosophy as they are developed under this viewopoint. It is

obvious though that there are many common aspects and areas to focus on when

developing a quality supply chain management along with JIT procedures. Such areas

consist of the following: top management commitment and organisational culture,

relations among employees and their active role in decision-making centres, training,

and suppliers’ selection, suppliers’ maintenance through long term contracts,

suppliers’ quality management and Logistics’ issues.

27

3. Quality oriented supply chain management

3.1. Introduction to SCQM

Throughout the last decades, customers’ increasing demand regarding the

quality of products and services provided, along with competition, has led enterprises

to move towards the decentralisation of quality inspections. Quality tends not to be

controlled through massive inspections and tests internally, but at the source, at the

suppliers’ site (Heinritz et al., 1991). An organisation may ask for statistics and

documented proof that quality is achieved at the place of its suppliers, and co-operate

with them to achieve TQM in the whole supply chain. Similar to the basic theory of

SCM previously cited in this paper as well as supported by the majority of authors,

Kaynak and Hartley (2008) conclude that the only way for quality to be managed is to

extend managers’ view further away from the interior aspect of a single organisation.

Furthermore, Foster (2008) refers to authors that have recently published

articles on the subject of quality management in supply chains in the Journal of

Operations Management. Among the five authors’ articles analysed by Foster in his

paper (some of them also referred in the present paper), there are found basic themes

that these authors deal with while approaching the SCQM concept from different

points of view and by using different methodologies. These common themes may

qualify as key attributes or variables and are mainly the following:

- Customer focus

- Quality practices

- Supplier relations

- Business results

Taking into account the special purpose of Foster (2008) to institutionalise a

new area of future research called SCQM, quality practices and philosophies are

subject to change under a new era marked by coalitions between business process

theories, change management and SCM.

28

3.2. Quality management linkages with SCM

Product quality is achieved after the organisation’s general commitment to

adopt a quality oriented philosophy and passes through the quality implementation in

supply chain performance. Performance quality requires appropriate documentation,

validation, timing, logistics management etc., and gives the opportunity to gain access

to all business and production processes, to check materials, detect weaknesses and

finally improve product or service quality (Langheinrich and Kaltschmitt, 2006).

However, according to the “contingency theory”, there is no appropriate practice or

perspective from which quality can be viewed and applied in all cases or businesses.

This prospect explains up to a point the existence of numerous quality definitions and

business approaches when quality is to be implemented (Foster, 2007). Thus, it could

be said that quality management in and along the SC also falls into the same line that

contingency theory sets.

Additionally, Kannan and Tan (2007) investigated if internal and external

quality practices and strategy of the business are positively related with organisations

performance. All interactions are found to be significantly important, concluding that

quality management is more than just another philosophy to be applied but determines

the overall supply chain performance. The model indicates factors related to

customers’ implications and relations with suppliers, JIT processes and quality design.

Kuei et al. (2002) consider that quality and Information Technology (IT) are

the two stepping stones to succeed in SCM besides the social dimension. They

identify variables and important perspectives of supply chain quality management in

the fields of leadership, training, customer focus, suppliers’ quality, IT and process

management. In a later study Lin et al. (2003) examine how QM practices, supplier

participation and selection influence SCQM and the way these elements affect

organisational performance. They adopt the definition (Kuei and Madu, 2001 cited in

Lin et al., 2003: p356) about SCQM, as follows:

- SC = a production–distribution network;

- Q = meeting market demands correctly, and achieving customer

satisfaction rapidly and profitably; and

- M = enabling conditions and enhancing trust for supply chain

quality.

29

It is remarkable though that they find QM to be significantly correlated with

supplier management, participation and selection but they did not find any direct

linkage between QM and organisational performance. A very good observation is

also pointed out in the fact that TQM philosophy and practices do not aim at the

improvement of organisational performance regarding both tangible and intangible

measures but they deal with the overall change in the SC and organisational culture. It

is therefore more complex and can not be easily and immediately aligned with

business processes.

From a different point of view, Bessant et al. (1994) determined

relationships flowering when total quality is implemented in the supply chain as

strategic, limited or bounded and cultural between people and processes. In these

fields, measuring, monitoring, continuous development and improvement may be

applied.

Sila et al. (2006) based their study on trying to identify how TQM is

engaged in the SCM. Considering that each entity in the supply chain bears the role of

both customer and supplier they realise that even if companies have quality

management in mind, they involve neither the suppliers nor the procurement activity

in the SCQM as much as it is required to achieve business advantages and benefits.

Accordingly, QS development does not usually tie with customer input. Even if it is

superficially acknowledged by companies that, quality driven suppliers’ selection,

customer-supplier communication, trust and participation in QS, partnerships, and

organisation’s knowledge about its position in the SC and about its suppliers and

customers, are all important factors and improve product and service quality, they do

not exercise them (Sila et al., 2006).

Stanley and Wisner (2001) provide conclusions with the aid of a survey

about how internal and external suppliers and customers are influenced mainly by the

fields of service quality produced and conveyed to internal and external customers.

They argue that the purchase department has to shoulder much responsibility in

accordance with the relationships and cooperation with suppliers, as well as with

quality implementation. It is also characteristic that segregation exists between

purchasing performance interacting with external suppliers and its strong positive

influence over the internal customers’ services provided. Furthermore, it is found that

internal suppliers, even if they do not keep a direct contact with external suppliers,

such as the purchasers do, they directly and strongly influence the quality of services

30

provided to internal customers. As the final link, external customers are found to have

greater satisfaction as far as internal customers’ satisfaction gets better due to high

quality of services offered by the purchasing activity.

A basic conclusion by revising the literature is consistent with Robinson and

Malhotra (2005), and lies in the fact that the general quality concept and management

has been neither proven empirically nor defined sufficiently when it comes to

covering the entire supply chain. Most of the papers imply or include quality in the

SCM but the majority of them focus on specific or specialized issues and parts of the

overall SCM. In relation to this, Robinson and Malhotra (2005) have set a framework

both from the academic and practical point of view whereas they examine an already

established SCQM in the form of a case study. Above all, a very good definition for

SCQM:

“SCQM is the formal coordination and integration of business processes

involving all partner organizations in the supply channel to measure, analyze and

continually improve products, services, and processes in order to create value and

achieve satisfaction of intermediate and final customers in the marketplace.”

(Robinson and Malhotra, 2005: p.330).

The main pillars Robinson and Malhotra (2005) identify about quality’s

general enforcement in the domain of SCM constitute the following:

1. Partnerships and Relationships

2. Process integration

3. Managerial culture and leadership

4. General Strategy

5. Best Practices (including much of the attributes,

practices and philosophy that QS adopt).

Another interesting empirical study trying to engage quality and SCM is the

one of Casadesu´s and De Castro (2005) that explored how QS affect SCM, and

especially, how ISO 9000 boosts SCM. They contacted Spanish enterprises having

been certified with ISO 9000 and generalised the empirical results they found

insisting on the fact that ISO 9000 or any QS can not satisfy nor have positive effects

on all aspects of SCM and SCQM. Besides, it is indicative that the empirical study

showed that the management of time, inventory, deliveries and other logistical issues

were not improved via the application of the QS. In this point, it is crucial to mention

that even if a great proportion of companies had improved supplier-customer

31

relationships, after the QS implementation (not all of them), the QS was not

considered to be the only responsible system for the relative improvement. On the

other hand, there is always a contribution of a QS, in the fields of management tools,

culture and business strategy. Thus, the superiority of quality versus costs and prices,

the communication with customers and suppliers and long-term relations were largely

achieved. Additionally, JIT techniques, IT and Information Systems (IS) integration

were not found to be in much compliance with ISO 9000.

In the same line with the previous study of Casadesu´s and De Castro

(2005), Yeung (2008) claims that Strategic Supply Chains (SSC), valuable and

competitive systems in the modern world, encompass quality management initiatives

that can not be defined within the limits and conditions enforced by quality systems

such as ISO 9000. It is also significant that factors such as the size of an organisation

and the type of processes were not found to affect significantly the creation of a SSC

whereas the formation of a quality oriented and strategic SC influence and improve

punctuality of response to all processes, cost efficiency, customer satisfaction and

finally the overall performance. By revising Yeung (2008) QM could be considered as

the basic requirement for achieving a strategic SC which is actually defined as the

formation of a SC that will afford the opportunity to an organisation to develop

strategic relations with its suppliers and valuation systems, to manage time in all

operations and services offered without delays, to support customer bilateral relations

and as a consequence to improve cost and business performance.

Forker and Stannack (2000) examined the degree of buyer’s and supplier’s

satisfaction stemming from the kind of relationship they develop and the degree of

understanding when the buyer/customer contributes and encourages TQM in the

facilities and management philosophy of its supplier. The quality management

development in the supplier’s site was measured by using quality practices that the

buyer/customer adopts regarding its supplier selection, development and maintenance.

In this research, two cases of buyers/customers were used, one from the electronic

component sector and the other from the aviation industry. From these two buyers, the

one adopts co-operative relationships with its suppliers whereas the other antagonistic

ones. The results showed that in the case of a competitive environment (market),

suppliers and the buyer retained common perspectives, understanding and satisfaction

to a greater extent than in the case of a co-operative (partnership based) environment.

The authors though point out that this is due to certain practices each individual

32

organisation adopts, such as the company developing competitive relationships had,

for example, recently reduced the base of its suppliers, and the conditions of market it

belongs to. Reciprocal relationships are very important and when a practice or

organisational attitude is to be adopted, the interested organisation should not be

based only on its own needs and perspectives.

Levy et al. (1995) put forward fifteen propositions in order to successfully

develop a TQM relationship between the supplier and the buyer (a common quality

management relationship). They checked the validity of these propositions using a

sample from eight suppliers belonging in the sector of telecommunication and

electronics in Great Britain representing a big proportion of the sector’s suppliers.

Customer organisation seems to be at the center when dealing with a common quality

management relationship with its suppliers. Furthermore, through the results, it is

confirmed that internal integration, restructure of processes and change management

(in the internal of the organisation) are necessary in order to successfully

communicate and apply joint quality management and initiatives to suppliers. Careful

study and observation techniques are fundamental in order to reach the “competitive

edge” quality management and SCM may offer. Finally, it is strongly supported that

integration should be extended to the whole supply chain, that is, to the customer-

supplier relationships in all phases, for example, beginning from key suppliers,

passing through the central manufacturing organisation and ending to the final

customer.

Carter and Ellram (1994) examined a strategic alliance between a supplier of

mechanical components in United States and one of its buyers/customer wishing to

improve product quality received by the supplier. Two alternative practices are

studied with the view to improving quality on the supplier’s side. The first practice

that was also proved to be the most adequate and effective one, was the amendment of

the way the supplier was designing the products and the second one was the use of

process analysis techniques by the supplier, such as the statistical control of processes.

Even though improvements and methodical reviews at the very early stage of product

design allow continuous improvement, tools related to process controls serve more

than a “programme” and should be accompanied by the continuous improvement

practices. The authors supported that unfriendly and hostile forces are not fruitful

when developed between suppliers and customers and do not contribute to suppliers’

33

quality improvement. What is surely needed is the development of close relationships

or inter-organisational alliances based on trust and open communication.

Mangiameli and Roethlein (2001) studied the agreement having been

developed among the key members of a supply chain in relation to the concept and

definition they give to quality. Three enterprises were used as a sample in the sector

of domestic appliances manufacturers. This chain consisted of a central business

(Whirlpool), a key supplier of the central business (SEC), the suppliers of the key

supplier and the households as the final customers and users. The research which was

mainly based on the key supplier (SEC), explored the distribution of quality

requirements and demand along the supply chain, beginning with the quality final

customers and users ask for and ending with the sub-suppliers. They found out that

quality initiatives are partly communicated among different parties of the supply

chain and there was a problem in perceiving the end customers’ needs, quality

demands, complaints, etc. They conclude that interrelations among all members are

very important and quality issues should be communicated and circulate among all

members if there is a prospective to create a competitive advantage by diffusing

quality management along the supply chain.

However, a basic assumption is that quality management or TQM is not

usually studied in combination with SCM. As a result, these disperse information is

herein allocated and connected while trying to integrate QM and SCM, based on

literature. The theoretical model that will emerge is subsequently implemented in the

firm selected under the evolution of a case study, investigating the SCQM directions

and exploring possible interrelations between the main SCQM aspects.

34

4. SCQM based on workflow and Petri Nets

4.1. Business processes, workflows and IT in the fields of SCQM

Following the analysis of SCQM in the previous paragraphs, business

process integration is an important aspect firstly in the internal of each business and

then towards its external co-operators, and it is an issue that needs a practical solution.

It is very common nowadays for a business to seek reorienting its philosophy and

renovating its business processes. Furthermore, the IT development offers an even

more structured environment so as to achieve the desired business processes’

reengineering. Given the fact that in the present study a workflow modelling tool is

going to serve for the better examination of SCQM at a certain firm, initiatives and

previous studies are herein, in this subparagraph, offering a brief overview of change

management and business process management. It is essential though to mention that

the workflow model formulated in the case study of the present dissertation targets the

examination of the quality oriented supply chain management which is also the core

of the literature and methodology followed. As a result, a relatively bigger part of

literature has already been developed regarding this field.

Usually business processes are congruent with production and more generic

definitions are not so enlightening. Various schools and styles categorise workflows

and processes giving characterisations such as material processes, office processes,

production processes, manual processes, business processes etc. (Lindsay et al.,

2003). Different representation and modelling techniques treat a process in a different

manner but none of them is able to include a great deal of activities dealing with

internal cooperation, decision making etc., although some of them, especially the

agent-oriented ones (such as Petri nets) very closely describe a process through

workflow representation. On the other hand, Lindsay et al. (2003) persist in the view

that not all processes consist of a clear start/input and end/output extent, amplifying

this view in that all managerial processes are open-ended tasks. An effective process

is specified as follows: “Effective processes not only adhere to planned actions to deal

with known goals, they also encompass another essential element that deals with not

only the unpredictable but the unknowable.” (Lindsay et al., 2003: p.1018).

35

Peppard (1996) stresses the implications of business Process Reengineering

(BPR) in the fields of IT, human resources management and other managerial fields

and techniques aiming at improving the general performance of a business. The

following figure illustrates how BPR evolves from centralisation to decent and more

holistic and strategic schemes.

BPR Evolution

Figure 4.1. Business Process reengineering evolution, source: Peppard (1996)

Peppard (1996) also supports that in case TQM and customer focus are

exercised by an organisation, every change is better dealt with. By and large, it can be

noted that if changes are conducted through a process depiction method, something

that both TQM and BPR theories suggest, integration among departments and

different organisational entities is attainable. Focusing on a “process” should not lead

to unilateral attitudes but lead to tackling problems from all sides and coping with

them from the wider managerial side including all aspects.

As a result, BPR is not irrelevant when a TQM approach is reinforced.

Besides, both practices deal with processes, as previously said so, and base their

theories on the recognition of processes in an organisation while putting them in the

centre of their analysis. This is also what De Bruyn and Gelders (1997) supported by

trying to solve real problems in two different departments of the same organisation

via a case study. While in the first department of their analysis, TQM was adequate to

36

solve problems, in the second department, TQM was merely the initiative and drove

managers to change the workflow of the process in order to have the desirable results.

In other words, TQM, a bottom-up activity was combined with business process

change and reengineering, proving that these two frames are complementary.

Regardless of the multidimensional and dynamic character of business

processes, business process modelling is an effective way to monitor and achieve a

better management even if weaknesses exist to cover informal and intangible aspects

(Lindsay et al., 2003). Another issue though exists in the fact that in many cases

workflow models and business processes are developed from persons with no deep

knowledge of the processes. Gruhn and Laue (2007) argue that one of the most

suitable solutions is to use graphical models so as to enhance the effectiveness of the

organisational change through the better understanding these models offer to people

and managers seeking to improve and change processes to a certain direction. They

conclude that the selection of a certain style and type of business process model

determines success in building an enterprise information system or reconfigurate it in

order to support a strategic business change. A structured workflow management

system of languages helps to avoid errors and the quality of the model comprises the

usage of connectors (OR-joins, And-joins, XOR-joins). It is important though that

descriptive and theoretical models, directions and instructions prepared to support

change management in an organisation are not actually followed by managers

faithfully (Saka, 2002). It is even acknowledged that theory differs from practice.

Every single organisation has its dynamics and internal forces. Whenever a decision

or an action is to be taken, different views of people dealing with the key changes in

the organisation may contradict each other. Even the facilitation that an ideal planning

may offer, the upshot of all events can not be assured as far as each organisation

encompasses certain limitations and boundaries associated with its internal and

external environment (Diefenbach, 2007).

Actually, the business process modelling and reengineering, stemming from

the need to redesign the way a task is performed when quality improvements are

implemented or just-in-time techniques are to be developed, sets “business process”

as the unit to be analysed. Each function or human activity or work appertained to a

certain process is scanned so as to select those that will critically contribute to the

business change that the organisation looks for. Teng et al. (1996) concentrated on the

fact that one-way sequential functions (serial) with no or low bilateral information

37

movements can change to parallel functions accompanied with high bilateral

information exchange and directly participating to a business process outcome. IS and

IT is the secret to implement parallel and collaborative functions or tasks taking place

in an organisation. The elimination of serial steps and the enhancement of information

input/output flows are always desired. Tangible and intangible elements are separated

by Teng et al. (1996), as the first illustrates physical object (documents, parts, etc.)

movements whereas informal communication and other information exchange

constitute the intangible elements.

Kobayashi et al. (2003) combined software packages and finally managed to

support old business processes and new real-time information sharing and processes

across a selected business, bounded by the SCM philosophy. They used specific

software to design and plan the new processes and workflow, selected critical tasks to

be re-engineered and renovated and they incorporated them to the old system (mainly

ERP). They contribute by proving that the change of a business process and workflow

is attainable individually by any organisation wishing to get close to real-time

processes. On the other hand, they do cover only a restricted area of SCM theory and

they equate quality mainly with the reduction of the time needed to execute tasks. It

can otherwise be an analytical, step by step guide on how to re-engineer and integrate

business processes by using IT and integrate IS in practice.

Porier et al. (2004) dedicate their book to Business Process Management

(BPM) and they support that BPM and IT allow the real connection of different

businesses and the creation of business networks in much less time and with less

effort than in the past. BPM theory and the innovative use of IT such as modelling

techniques and integration are likely to be enforced by any organisation and then

approach other organisations belonging to the same supply chain in order to agree to a

same way in illustrating business processes and set standards to real-time information

sharing. BPM actually coordinates and contributes to the improvement of process

models, deals with new software development taking into consideration managers and

people and allowing the full integration with other business units (Porier et al., 2004).

BPM is connected with workflow management and technology, but it is important

that each workflow change or improvement has to be accompanied with a scope and

bear a theoretical background and appropriate management. BPM dimension,

workflow modelling and IT combinative solutions could accompany SCM and SCQM

38

if an organisations wishes to take advantage of quality and integration internally and

externally in the supply chain.

4.2. Workflow modelling

Following the previous suggestions and according to the objectives of the

present study, workflow modelling contributes to the results of the case study research

analysis and accompanies conclusions regarding the quality oriented supply chain

management of the case organisation. It is indicative therefore to mention some

initiatives of workflow modelling.

Workflow expresses the movement of documents and orders when a task is in

progress. It comprises the operational aspect of processes and procedures, and it

actually expresses how orders and procedures are structured, who executes them, how

they are executed, in which order and hierarchy they are related to each other, how

they are synchronised, how information flows supporting all procedures, even how

they are inspected. A workflow can be modelled and analysed by using graphical

representation tools such as Colored Petri Nets (CPN) (Tourlakis, 2006).

Additionally, workflow systems allow businesses and organisations to manage

workflow in the fields of their operation, and workflow applications constitute the

results and completion of a procedure where both people and machines are involved.

As expected, there are various software packages and papers about software to be

used in order to manage the workflow system (usually called workflow management

systems) of an organisation.

The following Figure shows different types of routes having been grounded in

the area workflow management (Sun et al, 2006; Tourlakis, 2006).

39

Workflow Modelling Types

Figure 4.2. Workflow modeling types, source: Sun et al. (2006); Tourlakis (2006)

Relatively to the examples in the above scheme it is indicative to mention that

in order to model a parallel routing AND-split and AND-join are used, whereas in the

case of conditional routing OR-split and OR-join are used. Iterative routing is

A D

C

B

Conditional routing

A C B

Iterative routing

A B C

Sequential routing

A

B

C

D

Parallel routing

40

necessary if a task has to be executed again, one or more times (Sun et al, 2006;

Tourlakis, 2006).

4.2.1. Workflow modelling with Petri Nets

Workflow is subject to change due to necessary changes imposed by the

external environment of an organisation (ex. Legislation) or by its internal

environment and needs (ex. Automation, modernisation). Workflow changes are

possible to influence and change the type of the workflow or only a single workflow

instance (Rinderle et al., 2004). Petri nets offer the possibility to model with true

semantics, meaning that it uses one type of token and support adaptive workflow.

According to Rinderle et al. (2004) there are different approaches other than Petri

Nets and various software packages regarding workflow systems, all bearing strengths

and weaknesses and there is much space for further research. The interests and scopes

of the present analysis though, do not allow for further development of this subject

except for dealing with some more issues regarding workflow modelling and Petri

Nets.

Petri Nets as also defined so far, allow the modelling of workflow processes

and it is possible to be extended towards workflow-nets and Colored Petri Nets (Liu et

al., 2002). A formal definition of Petri Nets is as follows:

A marked Petri net (PN) Ζ = (Ρ, Τ, Ι, Ο, m) is a five tuple where

1) Ρ = {pi, p2,..., Pn}, n>0, is a finite set of places pictured by circles;

2) ............. T= {ti, t2, , ts}, s>0, is a finite set of transitions pictured by

bars, with

3) PT≠0 and PT ≠ 0;

4) I: PxT -» N, is an input function that defines the set of directed arcs from Ρ to

Τ where Ν = {0, 1, 2,....};

5) Ο: PxT —> Ν, is an output function that defines the set of directed arcs from Τ

to P;

6) m: Ρ —> Ν, is a marking whose i* component represents the number of

tokens in the ith place. An initial marking is denoted by m0. Tokens are pictured by

dots.

In the present case though, high level quality Petri Nets or else Colored Petri

Nets are going to be the central part. Sun et al. (2006) also uses Petri Nets in order to

41

represent and model workflow mergers meaning the “coalition” of two or more

workflows of different businesses or organisations. They support that so far

technology and workflow modelling can help in planning business changes, mergers

(company mergers) and face current challenges regarding workflow and other

business process based problems.

There are numerous advantages to modelling with CPN as literature reveals

(Liu et al., 2002; Rinderle et al., 2004; Tourlakis, 2006). Liu et al. (2002) via a case

study prove that CPN give the opportunity to users to simulate and set the roots for a

really flexible manufacturing system (FMS) or flexible workflow processes. It is also

possible to edit business rules and achieve integration with applications. Generally

though Petri Nets advantages are mainly found to the following components:

- graphical representation, ease of learning and use, interactive

with user,

- well defined, formal semantic characteristics,

- models all types of workflow found today,

- includes techniques to analyse and manage or study workflow

processes,

- it is not necessary to use any particular software package.

CPN connect all single Petri Nets’ attributes and characteristics with

programming languages. Additionally, hierarchy and time may also be managed

through the use of CPN.

As a result, CPN are going to offer considerable assistance, as realised later in

the results of the present dissertation, and still play an important role in business

modelling and in the reorganisation of the production line if needed. It helps to model

the organisation in order to further examine SCQM according to a well-structured

model and realise quality philosophy and attitudes in each part of the organisation

(model). Indeed, the utility of the model formulated is not restricted only in the fields

of quality management since it sets the grounds for further improvements in the fields

of management, operations, technology, IT, automation, human resource

management, financial – cost management, in other fields described previously, etc.

Figure 4.5. T3 CPN extended model of AGV, source: Christoforidis et al. (2008)

42

5. Theoretical model and research methodology

5.1. Theoretical model and research questions

In this point, it is noticeable throughout the literature revised until now that the

quality concept encompasses and requires actions in every single part of the supply

chain management. In an attempt to separate and test managerial initiatives aiming at

the investigation of SCQM, the model of the “Externally Integrated Supply Chain”

(Stevens, 1989) previously described in subparagraph 2.2.3., Figure 2.2., is used. At

the same time, the words “supplier” and “customer” do not reflect only external

entities but they also stress the supplier-customer relationship developed inside the

organisation. Information flows, workflows, flows of services, materials and goods

that occur in the internal of the organisation, depend both upon the internal and the

external supplier-customer relationship (Stanley and Wisner, 2001; Sila et al., 2006;

Kannan and Tan, 2007; Stanley and Wisner, 2001, Besterfield et al., 2003; Robinson

and Malhotra, 2005; Kaynak and Hartley, 2008; Young and Varble, 1997; Kaynak

and Hartley, 2006; Carter and Smeltzer, 1998; Foster, 2007; Klefsjo et al., 2007).

Internal suppliers may be defined as those employees working in the same

organisation and providing with goods, services and information internal customers,

always in the same organisation. External suppliers are those who are paid by external

customers for the services or goods they sell to them. External customers are the final

destination and every organisation bases the continuing of its existence on external

customers. The “end user” is also a customer but it is usually considered to be the one

that takes advantage of the final product or service (Foster, 2007). Integration is a

main quality pillar and has to be achieved by using both internal and external forces

of the organisation to achieve a quality oriented SCM (Sila et al., 2006; Young and

Varble, 1997).

Additionally, Klefsjo et al., (2008) argue that there is an important lack of

discipline in what quality management represents in its development through years.

TQM and quality systems do not offer a universally accepted meaning for quality

management, often leading to misunderstandings and confusion. Each method

contains different scopes and consequently is not suitable so as to be implemented in

all organisations. The model formulated herein is based on these considerations while

43

setting customer orientation and satisfaction at the core of SCQM. The definition of

customers is therefore of utmost importance in which also lies the secret of quality

management concept. Accordingly, a very interesting definition stated in the article of

Klefsjo et al. (2008) is the following:

“Individuals or organizations upstream in the same process would

accordingly be named suppliers. Customers and suppliers could be internal or

external, depending on the organizational boundaries of the actual process.

This definition does not refer to issues of financial transfer but only to the

transfer of products, such as goods or services. This means, for instance, that

owners or stockholders are not included as customers. The customer concept

could, of course, also be composed to include the requirement of a monetary

transaction, that is, the customer meaning the buyer of a product.” (Klefsjo et

al., 2008: p.124).

Kaynak and Hartley (2008) indicate two quality management dimensions

referring to supplier quality management and customer orientation, both falling under

the umbrella of SCM. These two quality aspects are taken into consideration in the

following case study in order to check the level of quality management of the selected

enterprise towards internal and external integration. A precondition to this is the

inner-organisation supplier-customer service quality and integration. Additionally,

Kaynak and Hartley (2008) have found (using replication of empirical studies)

interrelations among quality and SCM influencing quality’s overall performance in

the supply chain. They also conclude with the following:

- Organisational culture and leadership have a strong impact

both on supplier quality management and customer

orientation employees adopt.

- Training and educational motives have no direct impact on

SCM quality aspects as employees’ relationships and general

co-operation tactics do.

- A positive relation exists between quality management at

suppliers’ level and the end customer satisfaction, whereas

passing through the improved management of processes and

workflows in the internal of an organisation.

Following the previous indicative conclusions found in Kaynak and Hartley

(2008) and the “Externally Integrated Supply Chain” (Stevens, 1989) as previously

44

referred to, a consistent supply chain level is also considered, a triune level describing

dyadic relationships between supplier-manufacturer and manufacturer-customer

(Metz, 1998). In the present study, a central organisation is considered and

relationships with suppliers and customers that belong to the supply chain are found

from the point of view of this central organisation.

SCQM is tested as viewed by the central organisation and while bearing the

ultimate scope to satisfy the end customer. At this stage, the following research

questions are formulated:

a. Is internal supplier-customer service quality and integration positively

influenced by external supplier quality management?

b. Is service and product quality to external customer positively influenced by

internal supplier-customer service quality and integration?

c. Is service and product quality to external customer positively influenced by

external supplier quality management?

Relatively, Wisner and Stanley (1999) made an attempt to answer research

questions regarding the internal service quality as developed by internal suppliers and

customers but taking into consideration only the purchasing departments of the

sample organisations. Yet, they connect internal quality performance with the service

and product quality to external customers. They found a positive relationship between

inner-organisational communication effectiveness and internal service quality, and

Central

organisation

Supplier

Customer

External supplier quality management

Internal supplier-customer service quality and integration

Service and product quality to external customers

a

b

c

45

that internal service quality positively influences external service and product quality.

In the case that high quality initiatives existed in the internal services of the survey

organisations, Wisner and Stanley (1999) found that internal customers’ requirements

were better fulfilled, internal suppliers’ assessment was in force and the need for

changes was adequately detected and implemented. Additionally, better inner-

organisational supplier-customer relationships were developed.

Wisner and Stanley (1999) suggest future studies falling in the field of the

present paper. In other words, they suggest considering external quality management

towards external suppliers and customers along with the internal service quality and

integration and integrate these separated groups. Relatively, through the present case

study it is important to identify in a specific organisation, the degree of the external

supplier quality management, of the internal supplier-customer service quality and

integration and the as well as the degree of the quality offered to external customers

and their satisfaction. Additionally, the purpose herein is to identify possible

interrelations between the three pillars of the SCQM applied by this specific

organisation.

5.2. Conclusions from literature and case study questionnaire

formulation

The following table 5.1. illustrates the three main pillars and the domain of

each one, in the concept of developing a questionnaire based on literature and

antecedent research that has been submitted so far in this first part of the current

study. In the fields of a SCQM not only the general concept of quality matters but also

more specific issues disserting SCM development. As a result, both perspectives have

been used as a source to develop the domain of each pillar and a quality based model

in SCM is herein developed through the use of relative literature, allowing the use of

precedent researchers’ results to be tested in a given organisation (Table 5.1.).

Conclusions are also expected to be deduced regarding the linkages among supply

chain members’ management.

46

Critical quality elements in the SCM QM elements in SCM Authors

External supplier quality management

Knowledge of suppliers-partners Besterfield et al. (2003), Sila et al. (2006), Kaynak and Hartley (2006), Yang et al. (2008), Yeung and

Lo (2004)

Suppliers' involvement in quality projects and/or product design

Sila et al. (2006), Ballou (2007), Kuei et al. (2002), Kannan and Tan (2007), Stanley and Wisner

(2001), Robinson and Malhotra (2005), Yeung and Lo (2004), Yeung (2008)

Quality oriented supplier selection

Sila et al. (2006), Kuei et al. (2002), Kannan and Tan (2005), Stanley and Wisner (2001), Yeung and

Lo (2004), Kaynak and Hartley (2006), Robinson and Malhotra (2005), Kaynak and Hartley (2008)

Partnerships and long-term relationships with suppliers

Large (2005), Goffin et al. (2006), Sila et al. (2006), Kaynak and Hartley (2006), Robinson and Malhotra

(2005), Yang et al. (2008), Yeung and Lo (2004),Yeung (2008)

Completeness of a supplier rating system

Kannan and Tan (2007), Ballou (2007), Kaynak and Hartley (2006), Langheinrich and Kaltschmitt

(2006), Robinson and Malhotra (2005), Yeung and Lo (2004),Yeung (2008)

Communication of quality standards to suppliers Ballou (2007), Kannan and Tan (2007), Kannan and Tan (2005), Robinson and Malhotra (2005), Yeung

and Lo (2004)

Suppliers' conformance with company's quality standards and requirements

Kuei et al. (2002), Kannan and Tan (2007), Langheinrich and Kaltschmitt (2006), Yeung and Lo

(2004)

47

QM elements in SCM Authors

External supplier quality management

JIT dimension in purchasing

Goffin et al. (2006), Kannan and Tan (2007), Kannan and Tan (2005), Stanley and Wisner

(2001), Kaynak and Hartley (2006), Robinson and Malhotra (2005), Kobayashi et al. (2003)

Inspections in suppliers' facilities

Bessant et al. (1994), Kannan and Tan (2007), Langheinrich and Kaltschmitt (2006), Kannan and

Tan (2005), Heinritz et al. (1991), Stanley and Wisner (2001), Robinson and Malhotra (2005),

Yeung and Lo (2004)

Personal relationships with suppliers

Besterfield et al. (2003), Large (2005), Goffin et al. (2006), Bessant et al. (1994), Deming (1986), Kannan and Tan (2005), Yang et al. (2008),

Yeung and Lo (2004), Foster (2008)

QM elements in SCM Authors

Internal supplier-customer service quality and integration

Quality of products and/or services flowing from one department to another

Kuei et al. (2002), Sila et al. (2006), Kannan and Tan (2007), Stanley and Wisner (2001), Robinson

and Malhotra (2005)

Timely delivery in internal supply chain Large (2005), Kannan and Tan (2007), Stanley and

Wisner (2001), Young and Varble (1997), Kobayashi et al. (2003),Yeung (2008)

Fulfilment of internal customers' requirements

Besterfield et al. (2003), Kannan and Tan (2007), Langheinrich and Kaltschmitt (2006), Stanley and

Wisner (2001), Robinson and Malhotra (2005), Young and Varble (1997)

Information quality of the internal supply chain (reports-updates)

Large (2005), Bessant et al. (1994), Kannan and Tan (2007), Kannan and Tan (2005), Stanley and

Wisner (2001), Robinson and Malhotra (2005), Kobayashi et al.(2003)

48

QM elements in SCM Authors

Internal supplier-customer service quality and integration

Employee relations quality in the company

Porter and Tanner (2004), Large (2005), Kuei et al. (2002), The Malcolm Baldrige National Quality

Award (2008), Deming (1986), Kaynak and Hartley (2006), Young and Varble (1997), Yang et al. (2008), Bessant et al. (1994), Foster (2008)

Training-education

Porter and Tanner (2004), Kuei et al. (2002), Deming (1986), Kaynak and Hartley (2006),

Langheinrich and Kaltschmitt (2006), Juran (1992), Kannan and Tan (2005), Robinson and Malhotra

(2005)

Continuous improvement Kuei et al.(2002), Bessant et al. (1994), Besterfield et al. (2003), Deming (1986),Juran (1992), Yeung

and Lo (2004), Foster (2008)

Leadership, Organisational culture and Top management commitment

Large (2005), The Malcolm Baldrige National Quality Award (2008), Juran (1992), Besterfield et

al. (2003), Deming (1986), Kannan and Tan (2005), Kaynak and Hartley (2006), Robinson and Malhotra

(2005)

IT and IS quality driven Kue et al. (2002), Robinson and Malhotra (2005),

Kobayashi et al. (2003)

QM elements in SCM Authors

Service and product quality to external customers

Knowledge of customers-end users

Besterfield et al. (2003),Kuei et al. (2002), Sila et al. (2006), Zokaei and Hines (2007), Yang et al.

(2008), Yeung and Lo (2004), Juran (1992), The Malcolm Baldrige National Quality Award (2008)

Customer focus and orientation

Besterfield et al. (2003), Sila et al. (2006), Kuei et al. (2002), The Malcolm Baldrige National Quality

Award (2008), Juran (1992), Zokaei and Hines (2007), Yeung and Lo (2004), Robinson and

Malhotra (2005),Kaynak and Hartley (2008), Ballou (2007), Foster (2008)

49

QM elements in SCM Authors

Service and product quality to external customers

External customers complains and queries

Kuei et al. (2002), Kannan and Tan (2007), Sila et al. (2006), Langheinrich and Kaltschmitt (2006),

Zokaei and Hines (2007), Yeung and Lo (2004),Yeung (2008)

Customer general satisfaction and measurement

Kuei et al. (2002), Kannan and Tan (2007), Sila et al. (2006), Langheinrich and Kaltschmitt (2006), Zokaei and Hines (2007), Yeung and Lo (2004),

The Malcolm Baldrige National Quality Award (2008), Stanley and Wisner (2001), Robinson and

Malhotra (2005),Yeung (2008)

Quality of product and/or service received from external customers

Sila et al. (2006), The Malcolm Baldrige National Quality Award (2008), Stanley and Wisner (2001),

Zokaei and Hines (2007), Foster (2008),Yeung (2008)

On-time delivery to external customers Zokaei and Hines (2007), Kobayashi et al. (2003), Kaynak and Hartley (2006), Stanley and Wisner

(2001),Yeung (2008)

Flexibility and capability to satisfy customers' changing demand and expectations

Kannan and Tan (2007), Stanley and Wisner (2001),Goffin et al. (2006), Zokaei and Hines

(2007), Yang et al. (2008), Yeung and Lo (2004), Kobayashi et al. (2003)

Order-size constrains Kaynak and Hartley (2006), Kaynak and Hartley

(2008), Zokaei and Hines (2007), Kobayashi et al. (2003)

Ordering convenience Kaynak and Hartley (2006), Kaynak and Hartley

(2008), Zokaei and Hines (2007), Kobayashi et al. (2003)

Order status information Kaynak and Hartley (2006), Kaynak and Hartley

(2008), Zokaei and Hines (2007), Kobayashi et al. (2003)

Table 5.1. Critical quality elements in SCM (SCQM three pillars description)

50

5.3. Introduction to research methodology

The present exploratory research uses the case study technique (Zikmund,

2002). The case study is performed upon a manufacturing firm described in the

following subparagraphs. As a result, the workflow of the production line was

modelled with Colored Petri Nets in order to better answer research questions and

draw conclusions from the questionnaire answered by the company’s employees

working in all departments except the administration ones. Questionnaire structure

and formulation along with the objectives of the data analysis are also described in the

following subparagraphs.

In the results of the present dissertation it is crucial to identify potential

improvements in SCQM applied in the case firm. The case study research tactics

allows the collection of evidence, the description of the situation (the case) and finally

adds knowledge by research findings and by answering research questions (Remenyi,

1998).

Based on Yin (1993, 2003), it is indicative to point out that a case study may

be defined as an empirical research method that “investigates a contemporary

phenomenon within a real life context, when the boundaries between phenomenon and

context are not clearly evident, and in which multiple sources of evidence are used.”

Following this definition, it could be said that in the fields of a case study, the present

dissertation uses tools such as observation, questionnaire, informal contacts and

information gathered by the contacts made with managers.

Observation and informal interviews and contacts allowed the workflow and

production line representation. Information about how production is planned, initially

allowed the graphical representation of the Flexible Manufacturing System as it is

showed in the results. Results are therefore drawn in two stages. In the first stage,

CPN were used and proposals are made of how to model productive processes.

Production line would be better planned and problems in the case organisation will be

easier detected. In the second stage and after acquiring deeper knowledge of the

company’s structure, processes and applications, a questionnaire was distributed in

order to support research findings in the fields of SCQM according to the theoretical

model and the research questions.

Actually, the unit of analysis herein is the case firm (C.E.R.I.N.T.) and it is

treated as a member (the central organisation) of the SC in order to deal with research

51

questions related to the adoption of SCQM and find potential improvements in the

SCQM that C.E.R.I.N.T. could make.

5.3.1. The research in the case organisation: C.E.R.I.N.T.

C.E.R.I.N.T. (Centre of Education in Information and New Technology) is a

manufacturing company where the questionnaire was distributed and comprises the

present case study organisation. Initially, contacts were made with managers and

administration officers and then, all employees were informed of the company’s

intention to model the production line and set the basics for the further development

of quality management in the SCM of the organisation. As production line had not

been modelled at the time of the research, and information (general or specific) about

the company was dispersed, there was a stage of gathering information about

production, suppliers, customers and general principles of the company and its

management tactics. Thus, a brief presentation of the company along with special

issues regarding the production is herein included, its suppliers and customers as well

as other important issues where the following analysis (mainly in Chapter 6), Flexible

Manufacturing System (FMS) modelling, workflow modelling, results and

conclusions were based on.

5.3.2. Case study organisation profile

C.E.R.I.N.T. was founded in 1995, is located in Bulgaria, in the town of

Botevgrad, and produces robots used for educational purposes. The questionnaire was

distributed and answered by employees and managers working mainly in production

and warehouses covering the majority of the personnel. 130 people work in

C.E.R.I.N.T. out of whom 120 work in the production line and warehouses and 10 in

other departments who were not distributed the questionnaire (but were nevertheless

approached in order to draw relevant information).

C.E.R.I.N.T.’s main supplies can be divided into two categories having to do

with plastic and metallic pieces. The company collaborates with two suppliers in

France and one in USA for the procurement of the plastic pieces and two companies

in France and three in USA for the procurement of metallic-electronic pieces. Final

orders and purchases are settled after auction held by the companies that C.E.R.I.N.T.

52

cooperates with. During all auction, it is perceived that all suppliers-partners are

reliable and trustworthy. Price was not the absolute criterion for the selection of these

suppliers and it is additionally expected and speculated that suppliers impose logical

prices.

Insofar as a manufacturing company is concerned, the production line covers

the biggest part of business processes. Production incorporates eleven robots

(machines) from which nine serve for the assembly of different parts, one serves for

their disassembly and one for the conversion in order to direct production towards the

two different types of the final product. Production was designed in such a way so as

to be able to reuse materials coming from defective parts disassembly. There are four

test points in production line, two where unfinished products are tested, one where

defective materials are tested and one where finished products are tested. The first test

is executed after the assembly of the three first basic parts of the product that do not

contain any electronic parts and/or components. The second test point is conducted

after the conclusion of the electronic parts assembly and their incorporation to the

product. Finally, the last test point is conducted to the final product (both for types a

and b) before its further despatch to the warehouse. No serious problems regarding the

final product quality have been detected in the recent years following the re-

evaluation and change of some suppliers in the year of 2000.

Furthermore, there are four warehouses in the company and every one serves

for different production needs. In the warehouse for input materials, materials are

picked up. The most common is that these input and raw materials reach the local

airport and are transported with trucks belonging to the company. The main part of

input materials and supplies transportation is the suppliers’ responsibility. On the

other hand, the company has taken over the responsibility of the final products’

delivery to wholesalers. Final products are actually transported to 12 different

points/locations in Europe with tracks and in two locations/points in USA with ships

and a 10% by air.

It is supported by the company that all suppliers are selected according to the

qualitative characteristics they bear and that the quality management philosophy

already has been adopted and exercised by all employees and managers.

Finally, the company produces two types of educational robots, one robot with

arms and one robot with sensors. The production of these two types of final products

53

was programmed by the research and development (R&D) department and no change

has taken place in the productive processes since their initial establishment.

5.3.3. Questionnaire construction and variables

Before the questionnaire and variables description it is important to point out

that the questionnaire was developed for the needs of a case study and not in order to

make generalisations from the results drawn.

The questionnaire comprises three parts as proposed by the theoretical model

and was applied to the employees of the case study company in order to investigate

the SCQM exercised by the company.

The first part of the questionnaire comprises thirteen questions with the aim to

investigate the external supply quality management applied by the company. Each

question corresponds to a specific variable according to the critical elements specified

previously in subparagraph 5.2. Respectively, thirteen variables were evaluated which

are: knowledge of suppliers-partners, suppliers' involvement in quality projects and/or

product design, quality oriented supplier selection – culture, quality oriented supplier

selection – QS, quality oriented supplier selection - product quality, quality oriented

supplier selection – cost, partnerships and long-term relationships with suppliers,

completeness of a supplier rating system, communication of quality standards to

suppliers, suppliers' conformance with company's quality standards and requirements,

JIT dimension in purchasing, inspections in suppliers' facilities and personal

relationships with suppliers.

The second part of the questionnaire is related to the internal supplier-

customer service quality and integration and comprises nine questions respectively

corresponding to the following variables that were also evaluated: quality of products

and/or services flowing from one department to another, timely delivery in internal

supply chain, fulfilment of internal customers' requirements, information quality of

the internal supply chain (reports-updates), employee relations quality in the

company, training-education, continuous improvement, leadership-organisational

culture-top management commitment, T and IS quality driven.

Finally, the third part of the questionnaire aims at the investigation of the

service and product quality to the external customers of the organisation and

comprises twelve questions respectively falling in the fields of the following variables

54

that were finally evaluated: knowledge of customers-end users, customer focus and

orientation on QS – customer, customer focus and orientation on QS - self

development, customer focus and orientation on QS – ISO, external customers

complains and queries, customer general satisfaction and measurement, quality of

product and/or service received from external customers, on-time delivery to external

customers, flexibility and capability to satisfy customers' changing demand and

expectations, order-size constrains, ordering convenience and order status

information.

The variables used in order to measure the company’s quality oriented supply

chain management in the fields of the three pillars (all three parts of the questionnaire)

indicated by the literature, were evaluated by using a 5-point semantic differential –

bipolar type of scale (Kinnear and Taylor, 1996). Answers that range between one and

five according to the semantic differential scale, represent the most negative position

if they have the value; one “1” and the most positive if they have the value; five “5”.

Two variables were recoded (the variables: Quality oriented supplier selection – Cost

and customer focus and orientation on QS - self development) by using the SPSS

statistical package in order to represent the most negative position if answer “one”

was given and the most positive if answer “five” was given. Additionally, for the

evaluation of two variables, ordinal type of variables used (for the variables:

knowledge of suppliers-partners, knowledge of customers-end users), and for the

evaluation of three variables, nominal-dichotomous type was used (for the variables:

Communication of quality standards to suppliers, customer general satisfaction and

measurement, Order-size constrains).

5.3.4. Sample and data description

Actually, 119 employees answered the questionnaire from which each one

holds a specific position in the company. Thirteen groups of positions were evaluated

according to the production line described in the following paragraph. These positions

were categorised as described in the following table and correspond to a certain point

in the FMS presented in Figure 6.1., respectively.

55

Position Descriptions based on C.E.R.I.N.T.'s FMS Frequency Percent

1 First point Robot for assembly 8 6,7

2 Second point Robot for assembly 8 6,7

3 Third point Robot for assembly 8 6,7

4 Fourth point Test point for first level of assembly 8 6,7

5 Fifth point Robot for assembly 8 6,7

6 Sixth point Robot for assembly 8 6,7

7 Seventh point Robot for assembly 8 6,7

8 Eighth point Robot for assembly 8 6,7

9 Tenth point Robot for final assembly for item a 8 6,7

10 Tenth point Robot for final assembly for item b 8 6,7

11 Warehouse for input materials 13 10,9

12 Warehouse for output materials 13 10,9

13 All other internal processes 13 10,9

Total 119 100,0

Table 5.2. Population description based on C.E.R.I.N.T.’s FMS

Details about the shifts are also given. There are three sifts and 37,8% of the

answers coming from employees working during the 1st shift, 37,8% coming from

employees working during the 2nd shift and 24,4 of the answers coming from

employees working during the 3rd shift.

Employees seem to behave in a similar way and have a positive opinion on

how the company exercises SCQM. The fact is that they were just asked to fill in the

questionnaire and they may express such an opinion because they faced it

superficially, even though relative information was also given to them. On the other

hand, a fairly homogeneous attitude from employees is always expected when dealing

with only a certain organisation in the fields of a case study (Sekaran, 2003).

Additionally, in many cases employees may don’t want or hesitate to express negative

opinions about the company they work in or even have develop a certain attitude in

the fields of the general environment in the company.

56

6. Results and data analysis

6.1. The company’s FMS and production line modelling with Petri

Nets

According to the production line and the flexible manufacturing system, as it

had been designed by the company, a graphical representation of the FMS was

developed for the needs of the present case study. It is important to point out that the

company had developed customization with the view to gain advantages from FMS

(Qiao et al., 2003) in the fields of manufacturing flexibility and customers’

satisfaction (delivery times, capability of production decreases, increases or ceasing).

The important is that the company produces only after an order is placed. In the

following Figure 6.1., the FMS of C.E.R.I.N.T. is showed, described and a brief

discussion follows, mainly regarding the main productive processes’ potential

modelling with CPNs, following the company’s and its R&D department decision to

do so.

57

Warehouse for recycle material

Test point for final level of

assembly

Warehouse for final product

Fourth point Test point for the first

level of assembly

Third point Robot for assembly

Warehouse for input material

First point Robot for assembly

Second point Robot for assembly

Warehouse for defective material

Point

Robot for disassembly

Test point for defected material

Ninth point Robot for conversion

Tenth point Robot for final assembly for item a

Tenth point Robot for final

assembly for item b

Seventh point Robot for assembly

Eighth point Robot for assembly

Fifth point Robot for assembly

Sixth point Robot for assembly

Test point for the second level of assembly

Figure 6.1. Flexible Manufacturing System (the case of the company CERINT)

Flexible Manufacturing System:

The case of C.E.R.I.N.T.

58

The scheme viewed in Figure 6.1. was used in order to group employees

working in different departments and draw conclusions from the answers they gave to

the questionnaire distributed to them. The production consists of 8 productive

processes viewed in the FMS as follows:

1st – First point Robot for assembly, Second point Robot for assembly, Third

point Robot for assembly.

2nd – Fourth point Test point for the first level of assembly.

3rd – Fifth point Robot for assembly, Sixth point Robot for assembly, Seventh

point Robot for assembly.

4th – Test point for the second level of assembly.

5tha–Eight point Robot for assembly, Ninth point Robot for conversion, Tenth

point Robot for final assembly for item a.

5thb–Eight point Robot for assembly, Ninth point Robot for conversion, Tenth

point Robot for final assembly for item b.

6th – Test point for final level of assembly.

7th – Point Robot for disassembly.

8th – Test point for defected material.

Following the given FMS of C.E.R.I.N.T. the 1st, 3rd, 5tha and 5thb productive

processes were modelled according to CPNs with the contribution of the R&D

department of the company. The specific model used is the following as viewed in

Figure 6.3. Possible changes are attainable given the advantages of the use of CPNs as

previously mentioned (Liu et al., 2002; Rinderle et al., 2004; Tourlakis, 2006). The

model was actually developed in the fields of the company’s intention to improve

automation and just-in-time falling in the fields of SCM. Actually, in the following

figures it can be viewed the workflow (Figure 6.2.) that includes three machines-

robots as it happens with the main productive processes (1st, 3rd, 5tha and 5thb) in

C.E.R.I.N.T. and the workflow model according to CPNs (Figure 6.3.) of the same

workflow.

59

Workflow Model for three machines

Figure 6.2. Workflow model of three machines

Petri Nets Model for a production line of three machines

Figure 6.3. Petri nets model for a production line of three machines

Tokens I, O and W show if the machine is active, processes a part or if it is

blocked. Where L and U, it is showed the charge (arrival) or discharge (departure) of

a part. Timed transitions t represent the process of an item from each machine and

their firing times (processing times) are 2, 1 and 2 according to the machine M1, M2 or

M3. Tokens Q represent the parts or components waiting in buffers B1 and B2

respectively. Buffers are inserted in order to face deadlocks and problems in the

system. Finally the number of tokens in F1 and F2 show the remained space in the

whole unit which consists of B1 and M1, and B2 and M2 respectively. It is important

to point out that the present analysis of the model is a brief one due to time and size

60

constrains of the present study In order to practically develop and extenuate the model

it is needed to programme machines and cooperate with engineers and programmers.

It is also supported that further development of models according to CPN are

possible and of much interest for the company in the fields of SCM (Christoforidis et

al., 2008). Petri Nets comprise a very important and useful aspect when it is needed to

model a SC and take into consideration, not only the modelling of a FMS but also

include raw materials and the entire distribution cycle. It is also possible to model all

discrete event dynamic systems (DEDS) such as communication and transport

systems. As far as Petri nets offer a dynamic solution and the opportunity to include

heterogenic elements involved in a supply chain, their use and mathematical

background is really worldwide acceptable in many variations (Liu et al., 1996).

Christoforidis et al. (2008) considers elements such production line, supplier,

customer, communication interface, production line towards suppliers and towards

customers as the basic of the supply chain management in order to initially construct

the following general model of production line. In the following Figure 6.4., three

basic subsystems are viewed: 1. Assembly/disassembly/conversion machines, 2.

Transportation system (Automated Guided Vehicles, AGV) and 3. Storage system.

General Model of a production line

Figure 6.4. General model of a production line, source: Christoforidis et al. (2008)

In the case of a production line, transportation of parts and goods take place

between the three subsystems described in the above figure. In the case of a very

general model of an AGV as seen in the Figure 6.5., a request is received when a part

has to be transported and a notice is sent back in order to declare the status of the

61

AGV. If the request is accepted and the part received, the destination receives a

request and sends back its status. As more details and information is desired to be

included, the more complicated the model would be (Zhang, 1988).

General Model of AGV

Figure 6.5. General model of AGV, source: Zhang, (1988)

In the following Figure, a more complicated and analytical model of AGV is

described with two waiting positions p5 and p6 and two transactions moving AGV to

p5 and p6 (Shu et al., 2005). It is important to state that an AGV usually has two

states; idle or busy. If we consider a level of intelligence, AGV does not only

transport parts between machines and places but it is also acquainted with the roots of

the production line and with cargo spaces. Petri Nets allow to adequately manage all

AGVs as it is needed to know about all AGVs status as well as the demand and

availability of materials and parts in the production line.

62

Analytical Petri Net Model of AGV

Figure 6.6. Analytical Petri Net model of AGV, source: Shu et al., (2005)

The actual problem when a supply chain is to be planned and modelled is to

create alternative routes in order to satisfy customers’ and clients’ requirements. As a

result, the use of high level Petri Nets or Colored Petri Nets is required, for instance,

if more than one AGV has to be modelled or if it is desirable not to use an AGV only

for a certain route but for all alternative ones if it is idle. In the following Figure 4.5.it

is obvious that with the use of CPN a model for multiple AGV is achievable. The

multiple AGV model is indeed much more simplified and only tokens’ complexity is

increased. This model allows communication between different AGVs, describes all

movements with a less complicated model. After having resulted in these modelling

rules, the following model has been developed for C.E.R.I.N.T. for its multiple AGV.

The code developed in cooperation with the department for Research and

Development (R&D) to programme the multiple AGV model is also provided.

63

Multiple AGV Model with CPN

Figure 6.7. multiple AGV model with CPN in the case company: C.E.R.I.N.T.

The company also intends to establish a new department only for the

development of different software applications. Since it has not yet been developed

and implemented a cohesive information system in the company, this new department

is going to contribute to this direction. The fact is that even if automation has been

achieved in production line and if improvements still take place gradually, the rest

tasks, mainly the administrative ones, are performed manually. Automation in

production line does not cover many of the SCQM objectives according to the

theoretical background till know disserted. Furthermore, an ISO certification, that the

company intends to attain, requires that the company will able to handle

administrative works in a non-manually manner (Kannan and Tan, 2005) Regardless

of the low proportion of these tasks in the present manufacturing company, the

development of an information system that will include them is still crucial.

6.2. Results of the questionnaire data analysis

Given the fact of having gained enough knowledge regarding the production

line, philosophy and intentions of the company, the analysis of the questionnaire data

is based both on the company as a whole and on the company’s structure as described

in Figure 6.1. As mentioned earlier, employees’ answers to the questionnaire were

also categorised according to the point or position they occupy in the company, each

Color AGV=…; Color TYPE=…;

Color CONTENT=…;

Color INTER-STATE=record a1:AGV* a2:AGV;

Color CARD=int; Color INTER-STATE-CARD=product

INTER-

STATE*CARD; Color MSG=record s:AGV*r:AGV*

t:TYPE*c:CONTENT; Color BROADCAST-LIST=AGV with…;

Val size=…; Color TARGET=index BROADCAST-LIST

with 0…size-1;

var s,r:AGV; var msg:MSG; var i:CARD;

64

one corresponding to a certain point in the FMS as described in the previous

subparagraph (Figure 6.1.).

Following the data analysis that was performed in the Statistical Package for

Social Science (S.P.S.S.), a very low variability was found in the answers given. Five

of the scale variables were found to be constant. One variable belongs to the first part

of the questionnaire whereas the other four to the third part of the questionnaire.

There is a trend in answering fairly homogeneously as it can be viewed in the

following three figures describing the answers given to questions corresponding to the

scale variables.

Accordingly, employees answered positively meaning that they have chosen

the answers 4 and 5 in seven out of the eleven questions analysed for the first part of

the questionnaire. This attitude reveals that the company actually covers almost all

aspects of the external supplier quality management as these are defined in the present

case study. Regarding the cost implications in the supplier selection though, 41,2% of

the employees answered “2” that means that the cost plays an important role when

selecting suppliers. Additionally, 32,8% of the employees tend to characterise

personal relationships with key suppliers formal, impersonal or superficial while they

answered “2”.

External Supplier Quality Management

0,0

20,0

40,0

60,0

80,0

100,0

%

q2 q3a q3b q3c q3d q4 q5 q7 q8 q9 q10

1

5

questions

answers

External supplier QM

1 absolute negative position 2 3 4 5 absolute positive position

65

Variables

q2 V2 - Suppliers' involvement in quality projects and/or product design

q3a V3a - Quality oriented supplier selection - culture

q3b V3b - Quality oriented supplier selection - QS

q3c V3c - Quality oriented supplier selection - product quality

q3d V3d - Quality oriented supplier selection - cost

q4 V4 - Partnerships and long-term relationships with suppliers

q5 V5 - Completeness of a supplier rating system

q7 V7 - Suppliers' conformance with company's quality standards and

requirements

q8 V8 - JIT dimension in purchasing

q9 V9 - Inspections in suppliers' facilities

q10 V10 - Personal relationships with suppliers

Figure 6.8. External Supplier Quality Management in the case company: C.E.R.I.N.T.

Regarding the second part of the questionnaire that investigates the internal

supplier-customer quality and integration, the answers given were the most

homogeneous ones as far as four variables have the constant value of “5”. The answer

“5” which represents the absolute positive position was given from 100% of the

employees regarding the employee relations quality in the company, the continuous

improvement in the company, the training-education motives in the company and the

IT and IS interaction with quality management.

66

Internal supplier-customer service quality and integration

0,0

20,0

40,0

60,0

80,0

100,0

%

q11 q12 q13 q14 q15 q16 q17 q18 q19

1

5

questions

answers

Internal supplier-customer service quality & integration

1 absolute negative position 2 3 4 5 absolute positive position

Variables

q11 V11 - Quality of products and/or services flowing from one department to

another

q12 V12 - Timely delivery in internal supply chain

q13 V13 - Fulfillment of internal customers' requirements

q14 V14 - Information quality of the internal supply chain (reports-updates)

q15 V15 - Employee relations quality in the company

q16 V16 - Training-education

q17 V17 - Continuous improvement

q18 V18 - Leadership, Organisational culture and Top management commitment

q19 V19 - IT and IS quality driven

Figure 6.9. Internal supplier-customer service quality and integration in the case company: C.E.R.I.N.T.

As regards to the third part of the questionnaire, employees answers again

vary between answer “4” and “5” except from the answers given to question 21b.

Generally it seems that the company holds a positive position regarding the service

and product quality to its external customers-wholesalers. The fact that 83,2% percent

of the employees answered that the company develops by its own the quality

standards is not of much importance as far as 81,5% and 90,8% of the employees

67

answered that the company also uses customer’s requirements and general standards

respectively.

Service and product quality to external customers

0,0

20,0

40,0

60,0

80,0

100,0

%

q21a q21b q21c q22 q24 q25 q26 q28

1

5

questions

answers

Service and product quality to external customers

1 absolute negative position 2 3 4 5 absolute positive position

Variables

q21a V21a - Customer focus and orientation on QS - customer

q21b V21b - Customer focus and orientation on QS - self development

q21c V21c - Customer focus and orientation on QS - ISO

q22 V22 - External customers complains and queries

q24 V24 - Quality of product and/or service received from external customers

q25 V25 - On-time delivery to external customers

q26 V26 - Flexibility and capability to satisfy customers' changing demand and

expectations

q28 V28 - Ordering convenience

Figure 6.10. Service and product quality to external customers in the case company: C.E.R.I.N.T.

Regarding the employees’ knowledge of suppliers and customers, 84,87% and

84,03% of the employees answered that they know 81-100% of the company’s

suppliers and customers respectively. It is interesting though that a relatively large

proportion of the employees working in the warehouse for output materials (position

12) answered that they know 21-40% of the company’s suppliers-partners and 11-

68

20% of the company’s customers. The findings also indicate that a relative large

proportion of employees working in the warehouse for input materials (position 11)

know only the 11-20% of the company’s customers and some of them do not know all

suppliers.

84,87%

5,04%

7,56%2,52%

81-100%

41-60%

21-40%

11-20%

Knowledge of suppliers-partners

Figure 6.11. Knowledge of suppliers-partners in the case company: C.E.R.I.N.T.

69

84,03%

5,88%

9,24%

81-100%

61-80%

41-60%

21-40%

Knowledge of customers-end users

Figure 6.12. Knowledge of customers-end users in the case company: C.E.R.I.N.T.

70

In the case of the other four dichotomous types of questions employees

answered absolutely homogeneously in two of them, indicating that:

1. There are no order-size constrains, and 2. It is possible to have order status

information.

In the case of the other two questions they answered fairly homogeneously

since a percentage of 95,8% answered that quality standards are communicated to

suppliers and a percentage of 83,19% answered that it is possible to measure

customers’ general satisfaction.

4,2%

95,8%

No

Yes

Communication of quality standards to suppliers

Figure 6.13. Communication of Quality Standards to suppliers in the case company: C.E.R.I.N.T.

71

16,81%

83,19%

No

Yes

Customer general satisfaction and measurement

Figure 6.14. Customer general satisfaction and measurement in the case company: C.E.R.I.N.T.

6.3. Correlations

Given that the questionnaire was based on antecedent studies and its content

was also discussed with academics and managers, the variables in each of the three

parts of the questionnaire measure external suppliers’ quality management, internal

supplier-customer service quality and integration and service and product quality to

external customers respectively. In the present case study eleven variables from the

72

first part, nine variables from the second part and eight variables from the third part of

the questionnaire were scored in order to create three new variables respectively:

1. the new variable “SupplierQM” measures external

suppliers’ quality management,

2. the new variable “InternalQM” measures internal supplier-

customer service quality and integration, and

3. the new variable “CustomerQM” measures service and

product quality to external customers.

In order to create these new variables, the three numeric expressions

comprises variables that follow the same scale (5-point semantic differential - their

negative and positive concept are expressed to the same direction). Correlations were

assessed for these new variables so as to find if there is a relation between them and

answer the research questions. Actually, it presumed that there is no significant

relation between the three new variables, as also viewed in the following table and

since correlation is significant at the level of 0.05.

SupplierQM InternalQM

Pearson Correlation 1 0,024

Sig. (2-tailed) 0,799

N 119 119

Pearson Correlation -0,004 0,008

Sig. (2-tailed) 0,969 0,930

N 119 119

SupplierQM

CustomerQM

Correlations

Table 6.1. Correlations

Actually, it was found that in the case study company quality management

towards external suppliers does not positively or negatively influence quality received

by external customers and/or internal supplier-customer service quality and

integration. Additionally, it was not found a statistically significant relation between

internal supplier-customer service quality and integration, and service and product

quality to external customers.

In order to gain deeper understanding of the situation since a single

organisation was only considered, correlations where also assessed separately in the

case of every working position, each one responding to the company’s FMS thirteen

points (processes) (Figure 6.1.), indicating that there is no statistically significant

relation between the three new variables in almost all cases. Only in the case of three

73

positions (Fifth point Robot for assembly, Warehouse for input materials, Warehouse

for output materials), correlations where found to be significant, as viewed in the

following tables. Using Pearson’s Correlation and significant level at 0.05, as

previously mentioned, CustomerQM (Service and product quality to external

customers) is significantly correlated to InternalQM (Internal supplier-customer

service quality and integration) in positions 5, 11 and 12 (r=-0.745 and p<0.05 in

position 5, r=-0.603 and p<0.05 in position 11 and r=0,845 and p<0.05 in position 12.

For these three cases and in order to test the relationship between InternalQM

and CustomerQM given the research questions of the study, a linear regression

analysis was assessed (Saunders et al., 2003). CustomerQM was taken to be the

explanatory (dependent) variable whereas InternalQM, the response (independent)

variable. In the case of position 5 a positive relationship exists between CustomerQM

and InternalQM, and InternalQM explains 48,1% of CustomerQM’s

variations(adjusted R square=0.481). This is not a significant result as it is considered

that a percentage greater than 50% could sufficiently explain the model (Saunders et

al., 2003). A negative relation between CustomerQM and InternalQM also exists in

the case of position 11 but only 30,6% of CustomerQM variations are influenced by

InternalQM variable (adjusted R square=0.306). In the case of position 12 though,

there is a strong positive relationship between CustomerQM and InternalQM and

68,8% of the CustomerQM variations can be explained by the new variable

InternalQM (adjusted R square=0.688). As a result, it seems that certain departments

and especially those that mainly deal with customers and suppliers directly

(Warehouse for input materials Warehouse for output materials) support a kind of

interrelationship between CustomerQM and InternalQM. It is found that internal

supplier-customer service quality and integration influence negatively influences

service and product quality to external customers in the case of position 5 and 11 but

without being very important. The most interesting finding is that in the Warehouse

for output materials the fact that that internal supplier-customer service quality and

integration influence positively influences service and product quality to external

customers is strongly supported.

Some indicative tables are also herein included.

74

Correlations in the case of employees working in position 5

(Fifth point Robot for assembly)

SupplierQM InternalQM

Pearson Correlation 1 0,555

Sig. (2-tailed) 0,153

N 8 8

Pearson Correlation -0,210 -0,745

Sig. (2-tailed) 0,618 0,034

N 8 8

Correlations

*. Correlation is significant at the 0.05 level (2-tailed).

SupplierQM

CustomerQM

Table 6.2. Correlations in the case of employees working in position 5 (Fifth point Robot for assembly)

Correlations in the case of employees working in position 11

(Warehouse for input materials)

SupplierQM InternalQM

Pearson Correlation 1 -0,225

Sig. (2-tailed) 0,461

N 13 13

Pearson Correlation 0,338 -0,603

Sig. (2-tailed) 0,259 0,029

N 13 13

Correlations

*. Correlation is significant at the 0.05 level (2-tailed).

CustomerQM

SupplierQM

Table 6.3. Correlations in the case of employees working in position 11 (Warehouse for input materials)

Correlations in the case of employees working in position 12

(Warehouse for output materials)

SupplierQM InternalQM

Pearson Correlation 1 0,017

Sig. (2-tailed) 0,956

N 13 13

Pearson Correlation -0,181 0,845

Sig. (2-tailed) 0,554 0,000

N 13 13

Correlations

**. Correlation is significant at the 0.01 level (2-tailed).

CustomerQM

SupplierQM

Table 6.4. Correlations in the case of employees working in position 12 (Warehouse for output materials)

75

7. Conclusions

7.1. Conclusions and suggestions

The use of a processes’ modeling technique at the present case study facilitates

the research in the case study organisation-company and provides valuable aid in

gaining insights about how the company applies quality management in its supply

chain. Additional information and implications are acquired about the SCM in the

case study company, C.E.R.I.N.T.

While investigating SCQM applied by the case organisation and based on the

data collected and analysed, it can be supported that all businesses bear particularities

that no QS or TQM theory and technique can cover in the whole, something that

Klefsjio (2008) also mentioned. Based on SCM and QM theories every business

should investigate and examine its internal and external situation and environment.

The distinctiveness of every business is also supported due to the fact that during the

data analysis about the case study company no important interrelations were found

among external supplier quality management, internal supplier-customer service

quality and integration and, service and product quality to external customers as

implied by other relative surveys (Stanley and Wisner, 2001); Kaynak and Hartley,

2008). These results imply that for example, internal customer satisfaction do not

correlate with service and product quality to external customer and its satisfaction in

the case of the organisation dealt with at the present paper, regardless of what Stanley

and Wisner (2001) point out.

Despite the fact that all three pillars of SCQM (external supplier quality

management, internal supplier-customer service quality and integration and, service

and product quality to external customers), developed here, seem to be indicative, as

far as all of them are also developed by the case study company, they comprise three

different and independent aspects of SCQM. It is therefore important to notice that it

is not sufficient to develop only quality management towards external suppliers since

internal supplier-customer service quality and integration and/or service and product

quality to external customers are not going to be directly positively influenced. All

three aspects should be separately and equally be developed by the case study

company as well as process integration.

76

Process integration suggested in literature such as by Malhotra (2005) has

been proved to play an important role in the case organisation.

A very interesting finding though is that internal supplier-customer service

quality and integration is strongly and positively correlated, while positively

influences product quality to external customers according to the employees opinion

working in the Warehouse for output materials and only in this case. This finding

implies that the careful observation and analysis of all positions in order to find

weaknesses, strengths and appropriately treat every part of the operationally business.

Regarding the more specific issues of the SCQM in C.E.R.N.T., employees

hold a positive position about the application of QM in the SCQM aspects. Through

the present study is revealed that C.E.R.I.N.T. exercises SCQM in a relatively good

manner and at a high level.

On the other hand, there are some points that the company should pay

attention. A relatively large proportion of the employees (42%) answered that cost is

an important factor when selecting a supplier while quality oriented supplier selection

is also 100% important for the company. It is crucial to discriminate cost implications

and not involve then in the suppliers’ selection process. At the same time it is

important for the company to improve employees’ relationships with its external

suppliers as not be superficial, unfriendly etc. Additionally, the knowledge of external

suppliers and customers by employees working in the Warehouse for input and output

materials should be enhaced. Another issue that the company should communicate to

its employees is pertains to QS that the company uses. It seems that the personnel

confuses the meaning of QS and relative actions such as seminars should take place in

order to inform personnel and give details about QS and the company’s intention to

adopt ISO.

7.2. Limitations & future research and work

One of the most basic limitations of a case study is that it is not possible to

make generalizations (Creswell, 2003; Yin, 2003), and at the present dissertation a

single organisation was studied. Although SCQM is an extremely broad field to deal

with, an important attempt was made to set borderlines and simultaneously investigate

it in depth.

77

Another similar issue is that if there were not strict time limits other more time

consuming case study techniques would be possible to be used. For example, personal

structured interviews would contribute in the case of a long-term analysis in order

understand the homogeneous attitude of the personnel. The fact is that the company

herein investigated is stated in a developing country, something that may be

considered to influence the results of the questionnaire distributed to employees that

mainly come from that country. Their attitude and culture may be constrained due to

the cultural and political environment they are experiencing.

It is also interesting to explore those departments-positions in the case study

company that seem to differentiate from the general homogeneous picture regarding

SCQM, given by the company’s employees. Corrections and improvements should be

traced always in the concept of continuous improvement and feedback. A more

integrated picture of the case study results could be also formulated if external

suppliers and customers were also included in a more amplified research of the

SCQM in the whole supply chain.

Finally, the research questions developed in the fields of the present

dissertation and the questionnaire, it would be interesting to be analysed and enhanced

in the fields of a survey contacted in many manufacturing companies belonging to a

certain sector.

78

References

1. Ballou, R.H. (2006), Revenue estimation for logistics customer service

offerings. The International Journal of Logistics Management, 17, 1, p. 21-37.

2. Ballou, R.H. (2007), The evolution and future of logistics and supply chain

management. European Business Review, 19, 4, p. 332-348.

3. Bessant, J., Kaplinsky, R., Lamming, R. (2003), Putting supply chain learning

into practice. International Journal of Operations & Production Management,

23, 2, p. 167-184.

4. Bessant, J., Levy, P., Sang, B., Lamming, R. (1994), Managing successful

total quality relationships in the supply chain. European Journal of

Purchasing and Supply Management, 1, 1, p. 7-17.

5. Besterfield, D.H., Besterfield-Michna, C., Besterfield, G.H., Besterfield-Sacre,

M. (2003), Total quality management. 3nd ed. New Jersey: Prentice Hall.

6. Caddick, R.J., Dale, B.G. (1998), The impact of total quality management on

the purchasing function: Influences and implications. European Journal of

Purchasing & Supply Management, 4, 2-3, p.133-142.

7. Carter, J.R, Ellram, L.M. (1994), The impact of interorganizational alliances

in improving supplier quality. International Journal of Physical Distribution

& Logistics Management, 24, 5, p. 15-23.

8. Carter, J.R., Smeltzer, L. (1998), The role of buyer and supplier relationships

in integrating TQM through the supply chain. European Journal of

Purchasing & Supply Management, 4, 4, p. 223-234.

9. Casadesu´s, M., De Castro, R. (2005), How improving quality improves

supply chain management: empirical study. The TQM Magazine, 17, 4, p. 345-

357.

10. Chandra, C., Kumar, S. (2000), Supply chain management in theory and

practice: a passing fad or a fundamental change? Industrial Management &

Data Systems, 100, 3, p. 100-113.

11. Chopra, S., Meindl, P. (2001), Supply Chain Management. New Jersey:

Prentice Hall.

79

12. Chow, W.S., Madu, C.N., Kuei, C., Lu, M.H., Lin, C., Tseng, H. (2008),

Supply chain management in the US and Taiwan: an empirical study. Omega,

36, 5, p. 665-679.

13. Christoforidis, S.G., Christoforidis, G.S., Papadopoulos, C. (2008), The

transport of flexible manufacturing system (FMS) in the supply chain

management (SCM). Proceeding of the Fourth International Bulgarian-Greek

Scientific Conference 2008, TEI of Kavala, department of “Industrial

Informatics”, Greece.

14. Christopher, M. (1992), Logistics and supply chain management: strategies

for reducing costs and improving services. London: Pitman.

15. Cooper, M.C., Lambert, D.M., Pagh, J.D. (1997), Supply chain management:

more than a new name for logistics. The International Journal of Logistics

Management, 8, 1, p. 1-13.

16. Creswell, J.W. (2003), Reserch design: qualitative, quantitative, and mixed

method approaches. 2nd ed. California: Sage Publications.

17. Croom, S., Romano, P., Giannakis, M. (2000), Supply chain management: an

analytical framework for critical literature review. European Journal of

Purchasing & Supply Management, 6, 1, p. 67-83.

18. Crosby, P.B., (1979), Quality without tears: the art of making quality certain.

New York: McGraw-Hill.

19. Darnall, N., Jolley, G.J., Handfield, R. (2008), Environmental management

systems and green supply chain management: complements for sustainability?

Business Strategy and the Environment, 17, 1, p. 30-45.

20. De Bruyn, B., Gelders, L. (1997), From TQM to BPR: two case studies in

personnel administration. Int. J. Production Economics, 50, 2-3, p. 169-181.

21. Deming, W.E. (1986), Out of the crisis. Cambridge MA: MIT Press.

22. Diefenbach, T. (2007), The managerialistic ideology of organisational change

management. Journal of Organizational Change Management, 20, 1, p. 126-

144.

23. Forker, L.B., Stannack, P. (2000), Cooperation versus competition: do buyers

and suppliers really see eye-to-eye? European Journal of Purchasing &

Supply Management, 6, 1, p. 31-40.

24. Foster, Jr., S.T. (2008), Towards an understanding of supply chain quality

management. Journal of Operations Management, 26, 4, p. 461-467.

80

25. Foster, S.T. (2007), Managing quality: integrating the supply chain. 3rd ed.

New Jersey: Prentice Hall.

26. Frayer, D., Monczka, R. (1997), Enhanced strategic competitiveness through

global supply chain management. Annual Conference Proceedings of the

Council of Logistic Management, p. 433-441.

27. Freigenbaum, A.V. (1997), Changing concepts and management of quality

worldwide. Quality Progress, 12, p. 43-47.

28. Frohlich, M.T., Westbrook, R. (2001), Arcs of integration: an international

study of supply chain strategies. Journal of Operations Management, 19, 2, p.

185-200.

29. Goffin, K., Lemke, F., Szwejczewski, M. (2006), An exploratory study of

‘close’ supplier–manufacturer relationships. Journal of Operations

Management, 24, 2, p. 189-209.

30. Gowen, C.R., Tallon, W.J. (2003), Enhancing supply chain practices through

human resource management. Journal of Management Development, 22, 1, p.

32-44.

31. Gruhn, V., Laue, R. (2007), What business process modelers can learn from

programmers. Science of Computer Programming, 65, 1, p. 4-13.

32. Handfield, R.B., Nichols, Jr.E.L. (1999), Introduction to supply chain

management. New Jersey: Prentice Hall.

33. Harland, C.M. (1996a), International comparisons of supply-chain

relationships. Logistics Information Management, 9, 4, p. 35-38.

34. Harland, C.M. (1996b), Supply chain management: networks, relationships

and chains. British Journal of Management, 7, special issue, p.63-80.

35. Harland, C.M., Lamming, R.C, Cousins, P.D. (1999), Developing the concept

of supply strategy. International Journal of Operations & Production

Management, 19, 7, p. 650-673.

36. Heinritz, S., Farrell, P.V., Giunipero, L., Kolchin, M. (1991), Purchasing

principles and applications. New Jersey: Prentice Hall.

37. Jap, S.D. (2001), Perspectives on joint competitive advantages in buyer–

supplier relationships. International Journal of Research in Marketing, 18, 1-

2, p. 19-35.

81

38. Jones, J.P., Seraphim, D. (2008), TQM implementation and change

management in an unfavourable environment. Journal of Management

Development, 27, 3, p. 291-306.

39. Juran, J.M. (1992), Juran on quality by design: the new steps for planning

quality into goods and services. New York: Free Press.

40. Kannan, V.R., Tan, K. C. (2005), Just in time, total quality management, and

supply chain management: understanding their linkages and impact on

business performance. Omega-The International Journal of Management

Science, 33, 2, p. 153-162.

41. Kannan, V.R., Tan, K.C. (2007), The impact of operational quality: a supply

chain view. Supply Chain Management: An International Journal, 12, 1, p.

14-19.

42. Kaynak, H. (1997), Total quality management and just-in-time purchasing:

their effects on performance of firms operating in the U.S. New York &

London: Garland.

43. Kaynak, H., Hartley, J.L. (2006), Using replication research for just-in-time

purchasing construct development. Journal of Operations Management, 24, 6,

p. 868-892.

44. Kaynak, H., Hartley, J.L. (2008), A replication and extension of quality

management into the supply chain. Journal of Operations Management, 26,

4, p. 468-489.

45. Kerrin, M. (2002), Continuous improvement along the supply chain: the

impact of customer-supplier relations. Integrated Manufacturing Systems, 13,

3, p. 141-149.

46. Kinnear, T.C., Taylor, J.R. (1996), Marketing research: an applied approach.

5th ed. USA-Chicago: Mc Graw-Hill, Inc.

47. Klefsjo, B., Bergquist, B., Garvare, R. (2008), Quality management and

business excellence, customers and stakeholders: do we agree on what we are

talking about, and does it matter? The TQM Journal, 20, 2, p. 120-129.

48. Kobayashi, T., Tamaki, M., Komoda, N. (2003), Business process integration

as a solution to the implementation of supply chain management systems.

Information & Management, 40, 8, p. 769-780.

49. Kuei, C., Madu, C., Lin, C., Chow, W. (2002), Developing supply chain

strategies based on the survey of supply chain quality and technology

82

management. International Journal of Quality & Reliability Management, 19,

7, p. 889-901.

50. Kuei, C., Madu, C.N., (2001), Identifying critical success factors for supply

chain quality management. Asia Pacific Management, 6, 4, p. 409-423.

51. Lambert, D.M., Cooper, M.C., Pagh, J.D. (1998), Supply chain management:

implementation issues and research opportunities. The International Journal

of Logistics Management, 9, 2, p. 1-19.

52. Langheinrich, C., Kaltschmitt, M. (2006), Implementation and application of

Quality Assurance systems. Biomass and Bioenergy, 30, 11, p. 915-922.

53. Large, R.O. (2005), External communication behaviour of purchasers: effects

on supplier management performance. Journal of Purchasing & Supply

Management, 11, 1, p. 28-41.

54. Levy, P., Bessant, J., Sang, B., Lamming, R. (1995), Developing integration

through total quality supply chain management. Integrated Manufacturing

Systems, 6, 3, p. 4-12.

55. Lin, C., Chow, W.S., Madu, C.N., Kuei, C., Yu, P.P. (2003), A structural

equation model of supply chain quality management and organizational

performance. Int. J. Production Economics, 96, 3, p. 355-365.

56. Lindsay, A., Downs, D., Lunn, K. (2003) Business processes: attempts to find

a definition. Information and Software Technology, 45, 15, p. 1015-1019.

57. Liu, D., Wang, J., Chan, S.C.F., Sun, J., Zhang, L. (2002), Modelling

workflow processes with colored Petri nets. Computers in Industry, 49, 3, p.

267-281.

58. Liu, H., Li, Z.,Ye, S. (1996), Design of FMS teaching system controller based

on Petri Net. Mechanical Science and Technology, 15, 6, p. 1015-1019.

59. Lysons, K. (1996), Purchasing. 4th ed. London: Prentice Hall.

60. Mangiameli, P., Roethlein, C.H. (2001), An examination of quality

performance at different levels in a connected supply chain: a preliminary case

study. Integrated Manufacturing Systems, 12, 2, p. 126-133.

61. Metz, P.J. (1998), Demystifying supply chain management, Supply Chain

Management Review, 2, 4, p. 46-55.

62. Monczka, R.M., Petersen, K.J., Handfield, R.B., Ragatz, G.L. (1998), Success

factors in strategic supplier alliances: the buying company perspective,

Decision Sciences, 29, 3, p. 553-577.

83

63. Moody, P.E. (1993), Breakthrough partnering: creating a collective enterprise

advantage. New York: Oliver Wright.

64. Peppard, J. (1996), Broadening Visions of Business Process Re-engineering.

Omega, Int. J. Mgmt Sci., 24, 3, p. 255-270.

65. Porier, C., Ferrara, L., Hayden, F., Neal, D. (2004), The networked supply

chain: applying breakthrough BPM technology to meet relentless customer

demands. Florida: J. Ross Publishing.

66. Porter, L.J., Tanner, S.J. (2004), Assessing business excellence: a guide to

business excellence and self-assessment. 2nd ed. Oxford: Elsevier.

67. Porter, M.E. (1985), Competitive advantage. New York: The Free Press.

68. Prahinski, C., Fan, Y. (2008), Supplier evaluations: the role of communication

quality. Journal of Supply Chain Management, 43, 3, p. 16-28.

69. Qiao, G., Lu, R., McLean, C. (2003), Flexible manufacturing system for mass

customization manufacturing. Manufacturing Systems Integration Division,

National Institute of Standards and Technology, Gaithersburg, USA.

70. Remenyi, D., Williams, B., Money, A., Swartz, E. (1998), Doing research in

business and management: an introduction to process and method. London:

Sage Publications.

71. Rinderle, S., Reichert, M., Dadam, P. (2004), Correctness criteria for dynamic

changes in workflow systems-a survey. Data & Knowledge Engineering, 50,

1, p. 9-34.

72. Robinson, C.J., Malhotra, M.K. (2005), Defining the concept of supply chain

quality management and its relevance to academic and industrial practice. Int.

J. Production Economics, 96, 3, p. 315-337.

73. Romano, R., Vinelli, A. (2001), Quality management in a supply chain

perspective: strategic and operative choices in a textile-apparel network.

International Journal of Operations & Production Management, 21, 4, p. 446-

460.

74. Ross, D.F. (1997), Competing through supply chain management. USA:

Kluwer Academic Press.

75. Saka, A. (2002), Internal change agents’ view of the management of change

problem. Journal of Organizational Change Management, 16, 5, p. 480-496.

76. Saunders, M., Lewis, Ph., Thornhill, A. (2003), Research methods for business

students. 3rd ed. New Jersey: Prentice Hall.

84

77. Sekaran, U. (2003), Research methods for business: a skill-building approach.

4th ed. New York: John Wilet & Sons.

78. Shewhart, W. (1931), Economic control of quality of manufactured product.

New York: Van Nostrand Reinhold.

79. Shu, H., Li, Q., Yan, S., Song, B. (2005), Research on dynamic scheduling

simulation model of FMS. Journal of Harbin Engineering University, 26, 2, p.

192-196.

80. Sila, I., Ebrahimpour, M., Birkholz, C. (2006), Quality in supply chains: an

empirical analysis. Supply Chain Management: An International Journal, 11,

6, p. 491-502.

81. Sosik, J.J., Dionne, S.D. (1997), Leadership styles and Deming’s behaviour

factors. Journal of Business and Psychology, 11, 4, p. 447-462.

82. Spekman, R.E, Kamauff, Jr.J.W, Myhr, N. (1998), An empirical investigation

into supply chain management: a perspective on partnerships. Supply Chain

Management: An International Journal, 3, 2, p. 53-67.

83. Stanley, L.L., Wisner, J.D. (2001), Service quality along the supply chain:

implications for purchasing. Journal of Operations Management, 19, 3, p.

287-306.

84. Stevens, G.C. (1989), Integrating the supply chain. International Journal of

Physical Distribution and Materials Management, 19, 3, p. 3-8.

85. Summers, D.C.S. (2005), Quality management: creating and sustaining

organisational effectiveness. New Jersey: Prentice Hall.

86. Sun, S., Kumar, A.,Yen, J. (2006), Merging workflows: a new perspective on

connecting business processes. Decision Support Systems, 42, 2, p. 844-858.

87. Teng, J.T.C., Grover, V., Fiedler, K.D. (1996), Developing Strategic

Perspectives on Business Process Reengineering: From Process

Reconfiguration to Organizational Change. Omega, Int. J. Mgmt Sci., 24, 3, p.

271-294.

88. The Malcolm Baldrige National Quality Award (2008), Criteria for

Performance Excellence. Baldrige National Quality Program (on line).

Available from: (http://www.quality.nist.gov/index.html). Last accessed on 19

March 2008.

85

89. Tourlakis, P. (2006), Execution analysis of workflow systems. Aristotle

University of Thessaloniki, Department of Informatics, Greece (Msc thesis in

Greek).

90. Vachon, S., Mao, Z. (2008), Linking supply chain strength to sustainable

development: a country-level analysis. Journal of Cleaner Production, 16, 15,

p. 1552–1560.

91. Wilcox, M. (2004), Prediction and pragmatism in Shewhart’s theory of

statistical control. Management Decision, 42, 1, p. 152-165.

92. Wisner, J.D., Stanley, L.L. (1999), Internal relationships and activities

associated with high levels of purchasing service quality. The Journal of

Supply Chain Management, 35, 3, p. 25-32.

93. Yang, J., Wang, J., Wong, C.W.Y., Lai, K.H. (2008), Relational stability and

alliance performance in supply chain. Omega, 36, 4, p. 600-608.

94. Yeung, A.C.L. (2008), Strategic supply management, quality initiatives, and

organizational performance. Journal of Operations Management, 26, 4, p.

490-502.

95. Yeung, A.H.W., Lo, V.H.Y. (2004), Practical framework for strategic alliance

in Pearl River Delta manufacturing supply chain: a total quality approach. Int.

J. Production Economics, 87, 3, p. 231-240.

96. Yin, R. (2003), Case study research: design and methods. London: Sage

Publications.

97. Yin, R.K. (1993), Applications of case study research: design and methods.

Newbury Park, CA: Sage Publications.

98. Young, J.A., Varble, D.L. (1997), Purchasing’s performance as seen by its

internal customers: a study in a service organization. International Journal of

Purchasing and Materials Management, 33, 3, p. 36-41.

99. Zhang, X. (1988), Modern production logistics and simulation. Beijing,

China: University Press.

100. Zikmund, W.G. (2002), Business research methods. 7th ed. USA: South-

Western College Pub.

101. Zokaei, K., Hines, P. (2007), Achieving consumer focus in supply chains.

International Journal of Physical Distribution & Logistics Management, 37,

3, p. 223-247.

86

Appendices

Appendix I: Deming’s 14 Points

1. Create constancy of purpose.

2. Adopt a new philosophy.

3. Cease mass inspection.

4. End awarding business on the basis of price tag.

5. Constantly improve the system.

6. Institute training on the job.

7. Improve leadership.

8. Drive out fear.

9. Break down barriers between departments.

10. Eliminate slogans.

11. Eliminate work standards.

12. Remove barriers to pride.

13. Institute education and self-improvement.

14. Put everybody to work.

Source: Deming, (1986) cited in Foster, (2007): p.38

87

Appendix II: Sample of the questionnaire

Question Num

Q1 Indicate the percentage of suppliers you Know

0 percent

1-10 percent

11-20 percent

21-40 percent

41-60 percent

61-80 percent

81-100 percent

Q2

What is the degree of suppliers' involvement in company's quality

improvement and/or product improvement or design

1 no involvement

2

3

4

5 complete involvement

Q3

What do you consider about the degree of importance for the company of the

following items in the suppliers' selection proccess

Suppliers' quality culture

1 not important

2

3

4

5 very important

Suppliers' quality systems

1 not important

2

3

4

5 very important

Product quality

1 not important

2

3

4

5 very important

Cost

1 not important

2

3

4

5 very important

Part I - External supplier quality management

88

Question Num

Q4

To what extent does the company promotes closer and long-term relationship

with suppliers

1 not at all

2

3

4

5 very much

Q5 To what extent is the suppliers' rating system complete

1 perfectly incomplete

2

3

4

5 perfectly complete

Q6

Does the company communicates quality standards and requirements to its

key suppliers

Yes

No

Q7

What about the level of suppliers' conformance with company's quality

standards and requirements

1 no conformance

2

3

4

5 perfect conformance

Q8 Define the level of just in time practices with your suppliers

1 no JIT practices

2

3

4

5 perfect JIT practices

Q9

How would you characterise inspections in suppliers' facilities regarding the

periodicity

1 no inspections

2

3

4

5 many inspections

Q10 How would characterise the personal relationships with key suppliers

1 formal, impersonal, superficial

2

3

4

5 human "oriented", familiar

Part I - External supplier quality management

89

Question Num

Q11

Determine the quality of the product and/or service you receive from internal

suppliers

1 poor

2

3

4

5 excellent

Q12

Determine the timely delivery of products and/or services from your internal

suppliers

1 poor

2

3

4

5 excellent

Q13

What do you consider about the possibility to fulfil your internal customers'

requirements

1 poor

2

3

4

5 excellent

Q14

What do you consider about the level of information quality (relevance,

accuracy, reliability, timeliness, completenes) in internal supply chain

1 poor

2

3

4

5 excellent

Q15

What do you consider about the level of employee relations (trust, will to help

and co-operate, respect)

1 poor

2

3

4

5 excellent

Q16

To what level do you feel that the company promotes training and seeks to

educate its staff

1 poor

2

3

4

5 excellent

Q17

Do you agree that continuous improvement characterises the company and to

what extent

1 not at all

2

3

4

5 very much

Part II - Internal supplier-customer service quality and integration

90

Question Num

Q18

Do you agree that quality initiatives characterises the organisational culture

and the Top management commitment

1 not at all

2

3

4

5 very much

Q19

Do you agree that quality management interacts with IT and IS development in

the company

1 not at all

2

3

4

5 very much

Part II - Internal supplier-customer service quality and integration

Question Num

Q20 Indicate the percentage of customers you Know

0 percent

1-10 percent

11-20 percent

21-40 percent

41-60 percent

61-80 percent

81-100 percent

Q21 How do you think that the company develops the quality standards

Using customers' requirements

1 not exercised

2

3

4

5 highly exercised

The company itself

1 not exercised

2

3

4

5 highly exercised

General standards (ISO)

1 not exercised

2

3

4

5 highly exercised

Part III - Service and product quality to external customers

91

Question Num

Q22

Are there any provision for customers' complains and queries follow-up and to

what extent

1 no provision

2

3

4

5 perfect provision

Q23 Is it possible to measure external customers' general satisfaction

Yes

No

Q24

To what extent are external customers satisfied from the quality of the

delivered product/service

1 poor satisfaction

2

3

4

5 perfect satisfaction

Q25

To what extent fast / on-time delivery of product/service is attained to external

customers

1 poor

2

3

4

5 excellent

Q26

To what extent is possible that the company satisfies customers' changing

demand and expectations

1 no capability

2

3

4

5 absolutely capable

Q27 Are there any order-size constrains

Yes

No

Q28 Is it friendly and convenient to place an order and to what extent

1 inconvenient

2

3

4

5 absolutely convenient

Q29 Is it possible to have direct access to order status information

Yes

No

Part III - Service and product quality to external customers