Satisfying your customers and retaining their loyalty is key if you want them to continue buying from you; so quality is the way to go. The purpose of this paper is to focus on the supply quality management of Apple and to see the different criteria which suppliers are submitted to.
The aim of this assignment is to determine the quality management of Apple’s suppliers and its effect on their performance; as well as evaluate the extent to which Apple has implemented Supplier Quality Management by finding out how it selected suppliers, what activities it undertook to improve quality performance and capabilities of suppliers and ways it integrated suppliers.
2 Literature Review
ISO 9001:2015 has set quality management criteria for organization regardless of its size and field of activity and it includes: customer focus, motivation and implication of top management, and the process approach (supplier relations) and continual improvement. When used, it aims to satisfy customers with quality goods and services on a regular basis (ISO, 2019).
According to Juran, quality is when a product meets customer needs, which drive his or her satisfaction. And on another side, it also means all of the activities in which a business engages in, to make sure their needs are met (Grimsley, 2016)
Deming mentions quality based on how efficient the management circle is in planning, implementing and making improvements in the project. Quality is defined by the satisfaction of the customers (Monnappa, 2018a).
Crosby defined quality as conformance to customer’s requirements. The system of quality is prevention. To him, the measurement of quality is the price of non-conformance (Monnappa, 2018b).
According to Webster dictionary, management is defined as the act or art of managing: a way of supervising a business for example. If we relate that to quality management, it can be seen as running a business.
“Harland al. (1999) defines Supplier Quality Management as an integration of strategic practices, which need to be brought into organizations to satisfy customers. Yeun and Lo (2002) sees SQM as managerial efforts necessary for creating an operating environment in which a manufacturer can integrate its supplier capabilities into its operating processes. These efforts are classified into five groups such as: management responsibility, supplier selection, supplier development, supplier integration and quality measure” (Lo, Yeung and Sculli, 2006)
Lo et al., (2006) in their study on managing quality effectively in supply chain came up with ten critical factors to describe Supply Quality Management system. These factors can be classified into three major groups namely supplier selection, supplier development and supplier integration. Which brings us to the matter discussed in this paper (Garg, Sharma and Agarwal, 2012).
If we compare the different views on quality, we can remember that Deming talks about continuous improvement, Juran about customer’s satisfaction and Crosby talks bout meet the requirements for a product. My opinion of quality is in line with Crosby and Juran’s ideas; because a company should set its requirements based on its customer’s needs.
2.1 Supplier Quality Management definition
As mentioned in class, supply quality management is “various management-driven efforts, which are aimed at enhancing the overall quality performance through more effective management of quality on the supply side”.
2.2 Supplier Selection
After multiple readings, it has been found that the criteria used to evaluate supplier selection were: quality, cost (price) or service (delivery performance). Quality was perceived to be the most important and our focus on this report paper (Abdolshah, 2013a).
Hence, the sub-criteria used to assess quality are put in two different groups. “The first group regroups the qualitative methods such as continuous improvement programs, quality of customer and support services, certifications, technical and design level, capability of handling abnormal quality, and ease of repair. The second group consists of quantitative methods including reliability, rate of rejects, yield rate, process capability indices, and loss functions” (Abdolshah, 2013b)
“In those readings, they have insinuated that the qualitative method only evaluates one aspect of an organization but cannot evaluate the whole production process; and that they are not appropriate for assessing the quality. As a backup for they statement, they used an example of a product that has as a bad quality and instead of discontinuing the product, managers has decided to make improvements through programs. Continuous improvement programs help to enhance the quality, but they cannot guarantee the quality of the current products. There are some quality certifications, such as ISO 9000, focused on the quality management in organizations. These quality systems can be chosen in order to assess the quality of an organization, but they cannot be an appropriate representation of the quality of the products” (Abdolshah, 2013c).
The second group of quality assessment methods consists of quantitative methods.
“Rate of rejects is one of the main methods for assessing the quality. This method chooses the supplier with least rate of rejects. This is a good quantitative method for assessing the quality, but it cannot be useful in case of similar rate of rejects.
The use of loss functions (Taguchi) has been suggested for the assessment of quality. The quality losses occur when the product deviates beyond the specification limit, thereby becoming unacceptable (Pi & Low, 2005). Taguchi defines quality as ‘the loss imparted by any product to society after being shipped to a customer, other than any loss caused by its intrinsic function’ (Antony and Kaye, 2000, Ross, 1996)” (Abdolshah, 2013d).
Loss functions like the Taguchi are considered effective and reliable methods to identify the best quality (Abdolshah, 2013e).
2.3 Supplier development
As mentioned in class, it is “Any activity undertaken by a buyer to improve a supplier’s performance or capabilities to meet the buyer’s short- and long-term supply needs”.
This program helps improve supplier’s performance and can be seen as assistance technic to help them provide quality goods and services.
Table reference (Krause, 1997).
Supplier Development (summarized from the above ideas)
Activities Reference Detail
Educate Book, on the job training Training, skills, certification programs
Site visits Invites, physical presences Better understanding of the field they are working in
Investment Face to face Joint action, greater dedication, visits
Evaluation Assessment, guidelines and procedures given Feedback, certification programs, informal or formal evaluation, recognition of there achievements can be done as well
Theses represent the different speculations around supplier development from literature researchers and how they rank from the most adopted to the least.
2.4 Supplier Integration
This definition of supplier integration has been gotten from the materiel given in class. It is the process of incorporating or bringing together different groups, functions, or organizations, either formally or informally, physically or by information technology, to work jointly and often concurrently on a common business related assignment or purpose.”
- Joint development
- Knowledge sharing
- Supplier Involvement in the NPD (New Product Development)
Also like we have seen in class, there are two types of Supplier integration: internal and external integration. Internal integration concerns the buying organization, its relationship between purchasing and the different departments (such as Human Resources, operations, finances and accounting, quality assurance and marketing and sales). The second integration, external links the purchasing habits to the government, local communities and the multiple suppliers.
3 Supplier Quality Management At Apple
3.1 Company introduction
Apple is a technology corporation which focuses on design and manufactures products to service customers. Steve Jobs created Apple and its current Chief Executive Officer is Tim Cook. The company’s hardware products are Macintosh, iPad, IPhones, iWatch; IPod etc. Apple is a multichannel company that has 500 retail stores in nineteen countries. It has about 132000 employees worldwide (Dunn, 2017) and has at least 200 suppliers including component providers and others representing at least 98% of procurement expenditures for materials, manufacturing, and assembly of our products worldwide in 2017 (Apple Supplier Responsibility, 2019a).
3.2 Supplier selection
Apple requires its suppliers to meet their high standards for goods and services. Theses requirements include: Quality assurance, being social responsible, understanding their culture and expectation (Apple, n.d.)
A case study written about Apple’s supplier selection in China outlines that the criteria to be met are
Code of conduct
It was quoted that “Suppliers commit to the Apple Supplier Code of Conduct as a condition of doing business with us”.
It covers labor and human rights, health and safety, the environment ethics and management commitment. This provides Apple with the areas of improvement such as anti harassment and discrimination and allows putting more emphasis in to the quality of trainings (Apple Supplier Responsibility, 2019b).
Picturesource: Apple Supplier Responsibility, 2019c
Focus on technology capability (O’Connor, 2013a)
- Apple requires that their samples are hard to make whether its regarding the production process or the yield capability
- Technical perfection (engraving)
You invest first (O’Connor, 2013b)
- Average technology
- But will invest for special technology
Show us your processes (O’Connor, 2013c)
- Beyond ISO9000 capability. Apple wants its suppliers to prove that they are built for the job and provide quality products.
Everything is critical (O’Connor, 2013d)
- Select all suppliers who are critical (except the box).
Color (O’Connor, 2013e)
- Has the color experts to make sure the exact right color is used
3.3 Supplier development
It is important for Apple to understand the importance of supplier development since its helps suppliers improve their performance (thus increase their productivity, satisfaction), define their relationship with the brand, sustain operations and deliver good quality product.
“To begin with, Supplier Employee Education and Development (SEED) which is a computer based learning program has been put together to Empower people through education, skill building and create a safe respectful workplace.
Furthermore, Training which is a part of the education process is available to suppliers to make their English better and through: robotic training for employees in the supply chain, on the job training to help suppliers employees acquire the skills to work in a new landscape and also through onsite associate degree programs” (Apple Supplier Responsibility, 2019d).
3.4 Supplier Integration
In the supplier’s responsibilities report (2019e) it was mentioned that Apple often collaborates with NGOs, Government service, Universities and consultant to work with suppliers and assist them through different methods (and purposes). First, there is an audit adherence to its code of conduct to prevent abuses and unethical hitting practices. Apple has used the government and peer companies in Southeast Asia to educate their suppliers on how to recruit and about obligations for foreign workers. Secondly, in 2010, Apple worked with Verité and the Fair Labor Association (NGOs in human rights) to evaluate the quality of social responsibility training at their final assembly manufacturers.
Last but not least, Apple is also making sure to have a joint effort with the EICC (Electronics Industry Citizenship Coalition) and the Global e-Sustainability Initiative (GeSI) to help their supplier’s source conflict-free materials (Apple Supplier responsibility, 2012).
On the other side, I also believe that Apple does not fully integrate its suppliers into the company because most of their suppliers are actually their competitors: Samsung, Toshiba. It is only right for them to keep the integration to a certain level to avoid duplication of their design and stay competitive.
4 Suggestion of the company
After collecting the general information of our subject, we can now compare and contrast the supplier quality management of Apple and companies.
The general supplier development done by companies and the one from Apple is pretty much the same education ways. They both have programs to help improve the performance of their suppliers, which is done through training. This training involves on site training, visits, skill building.
The ways supplier selection and integration are done at Apple differs from the way other companies do.
Regarding the code of conduct, Quality assurance, technology capabilities, color, investing first.
The criteria: Quality, cost and delivery
Sub-criteria of quality assessment (improvement programs, quality of customers) are qualitative and quantitative methods (AHP, rate of rejects, loss functions).
There is some knowledge transfer done through the collaborations with NGOs, government services…
- Joint development
- Supplier Involvement in the NPD (New Product Development)
I do believe that the three groups under supplier quality management can be similar no matter the organization but each company should apply it in an appropriate manner to their traits and uniqueness to make them successful. I also suggest that Apple starts assessing its suppliers to give them more guidance and make sure they really understand the code of conduct and the specifications for their product.
Connection with the literature review
Apple based its quality on total quality management, which is a way to maximize competitiveness and to continuously improve the quality of ones products and services and work environment (Goetsch and Davis 1995). While Total Quality Management is not a focus on this assignment, it is important to mention why Apple serves as an example for focusing on quality first in today’s technology industry.
As stated above, Deming had is own opinion on the improvement of quality and came up with fourteen points to management.
Tablesource: (Learn about Quality, n.d.)
Apple did not implement all of the Dr. Deming points but had its own approach, which is similar to the fourteen points, summarized below.
Some of the fourteen points VS Apple’s approach
- Does replace a product rather than just responding to individual needs (can be seen as new philosophy)
- New updated, improved versions every year
- Uses six sigma (quality assurance system) for continuous improvement. (Pulanco, 2017)
6, 7 and 13
- Apple has a program for future leadership, job training for all employees
- Reference of the comparison (Oslon and Fawzy, 2018)
In this paper we have talked about the supplier quality management and its three different groups: supplier selection supplier development and supplier integration. Apple was one of the companies outlined in this report. Apple has its own way of applying SQM to its company and staying on top of the competition. However, Apple is not perfect in the implementation of some its own approach. We did not have enough information about Apple and its relationship with suppliers. Like their website is mentioning, Apple requires its suppliers to meet the highest standards for all goods and service; it has a diversity program for their suppliers where it states their commitment to them and how suppliers can register to it.
Apple continues to strive against its competitors and its legacy of continuous improvement.
Apple should evaluation their suppliers for more guidance. It looks like they only do business with them and gives them regulations to follow but at the end of the day they should evaluate they performance
We have learnt that quality is key in the business performance; driving change through continuous improvement is essential in order to stay relevant and competitive because we live in a world that is continuously changing as well as people expectations.
In addition, the combination of both qualitative and quantitative methods of measuring quality should be the best way to go to integrate what it takes to get products and services of good quality.
...(download the rest of the essay above)