Academic journal article International Journal of Purchasing and Materials Management

Operationalizing Quality Considerations in the Purchasing Process

Academic journal article International Journal of Purchasing and Materials Management

Operationalizing Quality Considerations in the Purchasing Process

Article excerpt

Operationalizing Quality Considerations in the Purchasing Process

This article examines the use of product quality information in capital equipment purchasing decisions. The authors incorporate specific quality factors in a simple analytical model designed to provide a buyer with the capability to appropriately consider quality differences in reaching a cost-effective purchasing decision.

Initially, dimensions of product quality are identified and discussed based on the parameters proposed by David Garvin. Using the Garvin framework, the article then reports the results of a study of procurement professionals in which the feasibility and desirability of explicit consideration of quality factors in the purchasing process are established. Finally, the article extends the consideration of specific quality factors by introducing and illustrating an analytical approach that effectively incorporates quality differences in a structured and auditable model. The model projects the cost implications to the firm of those quality differences identified. The analysis indicates that generally accepted dimensions of quality can be identified and applied operationally to assist a buyer in making the most effective purchasing decision.

INTRODUCTION

Important purchasing decisions typically involve a complex ranking and evaluation of a variety of objective and subjective factors. These factors may be addressed explicitly, in the form of objective criteria, or implicitly, based on judgment. In the final analysis, most purchasing decisions focus on the "classical" purchasing objective:

To buy materials and services of the right quality, in the

right quantity, at the right price, from the right source,

and at the right time.[1]

Success in selecting the "right quality" typically impacts the effectiveness of the buying organization's operations. And, for repetitive purchases, suppliers establish a track record of performance that can be used in making subsequent purchasing decisions.

QUALITY: WHAT IS IT AND HOW CAN IT BE BOUGHT?

David A. Garvin has proposed the following five approaches to defining quality:

* The Transcendent Approach is the philosophic concept

of "innate excellence," which is both absolute and

universally recognized through experience.

* The Product-Based Approach focuses on the quantity of

some ingredient or attribute possessed by a product.

Like the amount of cream in ice cream, it can be

assessed objectively and is based on more than

preferences alone.

* The User-Based Approach begins with the premise that

quality "lies in the eyes of the beholder." It is

subjective and rooted in consumer preferences.

* The Manufacturing-Based Approach focuses on

engineering and manufacturing practices. It identifies

quality as "conformance to requirements," and it is

equated with meeting specifications or making a

product right the first time.

* The Value-Based Approach defines quality in terms of

costs and prices. Quality provides performance at an

acceptable price. The phrase "affordable excellence"

summarizes the dilemma.[2]

In assessing these alternative definitions of quality, it should be noted that the approaches often conflict or overlap and may lead to disparate conclusions. For example, under the product-based definition of quality, one expects to pay more for quality because it is expected that better materials, workmanship, and inspection are applied to achieve this quality. Theoretically, from the product-based model, there should be a positive correlation between the price and the quality of an item. This is a marketable attribute--regardless of whether it is based on fact, reputation, or simply impression--which can be applied when marketing under the user-based perspective. …

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