Center for Executive Education (CEE)
Post Graduate Diploma in Supply Chain Management
PGD Project Report
Quality is an essential feature in any going concern manufacturing company and when the industry is highly competitive than the significance increase more than ever. It is highly recommended to maintaining good quality on every level within a company and supplier’s side, which has a direct impact on the product’s cost, reliability and customer trust. Although, at first investing in measures to maintain the required standard of quality seems an expensive and time-consuming decision but in the long run, these measures not only save money but also saves various other factors and that is re-work time, timely deliveries of finished product and customer commitment with the committed quality. In the automotive industry, especially products recall are expensive and give an everlasting bad image of the product. With the passage of time, the auto market has become highly competitive. Therefore, focusing on cost is important along with quality. This is not possible until and unless the supplier of the part is aligned with the company’s policy. ABC automotive taken as a case study, the focus of the project was supplier quality impact on production cost. The scope of this case study was narrowed down only to focus on plastics parts i.e. car bumpers, as bumpers are widely visible and critical on the finishing stage, especially in the paint shop. Based on past data, it has notified that a significant amount was being ignored and added in product cost also DPU was on the higher side than the required level. The quality oversight has not only affects the overall production process but also increase the repair and overtime cost of the product. The main problems identified throughout this project are as follows.
1- Cost of repainting of bumper due to defects caused by the suppliers, the estimated loss per year is 47 million PKR.
2- Quality management activities of the supplier, i.e. basic and advanced level management are not very impressive.
3- Internal quality control measures of ABC automotive are weak.
4- Increasing the sigma level by reducing defect per million opportunities (DPMO) Recommendations stated in the report covers the areas of strengthening the internal controls of ABC automotive i.e. developing a receiving station and inspecting the bumper in various conditions, suggestions on how to enhance the quality of the bumper during the production phase and checking the quality management practices and give pinpoint suggestions on sustaining the quality-enhancing practices. The methodology used in the project is studying the supplier selection process, designing the questionnaire on the plant management requirement system (PMRS) which is extracted from the quality manual of ABC automotive company and visiting the line side of the plastic part vendor to evaluate their working conditions.
The expected saving from this project is approximately 47 million, the saving estimate is based on eliminating the quality defects which are causing reworking and loss of resources.
Ahmed, A., Jamil, I., Amjad, U., & Kamal, Y. (2019). Impact of supplier quality in molding parts on cost performance of OEM: A case of OEM specific tool (Unpublished PGD Project Report). Institute of Business Administration, Pakistan. Retrieved from https://ir.iba.edu.pk/pgd-research-projects/9
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