Incorporating the cost of quality in supply chain design

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -This paper aims at exploring the challenges of introducing a model integrating the Cost of Quality (COQ) into the modeling of a supply chain network. Design/methodology/approach -This paper introduces a comprehensive supply chain model that minimizes a series of costs, in which COQ is integrated. Findings -The scenario of incorporating COQ in supply chain network design will ensure the lowest overall cost, because it reduces the probability of defects and hence the probability of additional cost which might be due to corrective action. Practical implications -With many industries today on the quest of improving their quality systems, finding ways to reduce nonconformities and failure of products is crucial. In industries such as the aerospace industry, the variable production cost is high; hence producing extra parts to compensate for defectives would be a costly option. Originality/value -While COQ is a very good indicator of how much poor quality is costing a company, no work has been published in regard to integrating COQ into supply chain modeling.

Models for Optimization of Supply Chain Network Design Integrating the Cost of Quality: A Literature Review

“…Such models are of large scale and require strong computational power [38]. The first work concerning SCND was developed by Geoffrion and Graves [39] that presented a SCND for optimizing the flow of finished products from plants to distribution centers.…”

“…Srivastava [4] measures CoQ in monetary terms using PAF model. Ramudhin et al [38] also introduced a model integrating the Cost of Quality (CoQ) into the supply chain network and found that incorporating COQ in supply chain network design will ensure the lowest overall cost, and reduce the probability of defects of approximately 16%. Castillo-Villar et al [10] developed a mathematical model incorporating CoQ in Supply Chain Network (SCN).…”

A Model for Quality Management in a Supply Chain With a Retailer and a Manufacture

“…More papers investigate the effect of price and quality on demand, and others how demand changes by variation of price, quality, brand diversity, and location of factory come about [7,28,10,17,22,26,12,15,27,11,9,42,35]. Finally there are papers that incorporate quality in designing supply chain networks [13,1,41,30].…”

Quality Cost and Its Relationship to Revenue Sharing in Supply Chain

“…They estimated quality costs in monetary terms according to P-A-F model and used standard DMAIC (Define-Measure-Analyze-Improve-Control) methodology for analysis at selected third-party contract manufacturing sites of a pharmaceutical company. Ramudhin et al (2008) also focused on integration of quality cost in the supply chain. Their study presented a mathematical model for a single product, three-echelon system (i.e.…”

“…Some studies, e.g. Ramudhin et al (2008), focused on total quality cost at suppliers and suggested adding the quality cost of manufacturers (plants) in their model for further research. On the other hand, some studies investigated the revenue sharing in supply chain management, for example, Govindan & Popiuc (2014) shows that significant returns are realized for all supply chain partners in revenue sharing cases, and the performance improves through coordination with revenue sharing contracts.…”