Supplier Quality in the Horizontally Integrated Organization (1)

At one time, most organizations were vertically integrated. That is most, if not all, functions, processes, and procedures were carried out within the organization. If a specific department wasn’t functioning properly it could be addressed as soon as the issue came to light. "Heads would roll" and the organization would continue to function. In the current manufacturing environment, it is not always economically feasible to integrate the organization in a vertical fashion. Therefore, many functions, processes, and procedures are outsourced.

Outsourcing brings up the issue of supplier quality. When a specific supplier isn’t functioning properly the situation also needs to be addressed as soon as it comes to light. The organization doesn’t have as immediate control over a supplier in a horizontal integration. The organization cannot fire a supplier’s employee, and it may not be wise for a number of reasons to bring your business elsewhere. Working closely with suppliers and being able to measure your suppliers’ merit and rate it as a function of your organizational requirements is necessary for a horizontally integrated organization. It is also a key element in most manufacturing certification requirements.

The following outline will be addressed, one element at a time, in a bit more detail.

 

 

 

 

 

 

Outline:

Supplier Quality

and the Horizontally Integrated Organization.

 

Market

Supplier relationships and Supplier Performance

 

Consistency

Reliability; the reality of good, fast, and cheap...

 

Competition

The horizontally integrated organization in the manufacturing environment.

 

Supplier controls

            Critical Quality concepts.

 

Supplier Rating

Communication and improvement.

 

SPM

Metrics; Reducing nonconformance and increasing profitability. 

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