Optimizing Procurement and Quality Control in Business

Posted on Nov 17, 2024 in Other subjects

The Quality of Shopping
The purchasing function is one of the keys to the company. Its efficiency and organization depend on the results of the company.
Poor management can cause:
“The factory does not receive the material on time.”
“Customers return products due to defects in materials.”
“The store accumulates excess inventory due to over-purchasing.”
These cases can lead to significant losses.
The Functions Related to Procurement
– Define specifications for products to buy.
– Select suppliers.
– Negotiate purchase conditions with suppliers.
– Procure, i.e., order as needed.
– Track orders to avoid delays.
– Receive and test products.
– Process payment of invoices to suppliers.
Specifications
The company should have clearly defined specifications for products to buy. The main groups are:
– Raw Materials: Parts used by the company to manufacture a product.
– Auxiliary Materials: Added during the manufacturing process, including ink, oil, and glue.
– Packaging Materials: Used to maintain and carry the product, such as pots, pallets, and bottles.
– Maintenance: Contract maintenance for production equipment and general facilities.
– Studies: Market research and product launches.
– Spare Parts: Spare parts for machines in case of failure.
– Storage: Deposit services for stores outside the company.
– Transportation: Transportation of finished products, handled by other companies.
– Production Equipment: Machinery needed to manufacture products.
– Ancillary Equipment: Machinery that supports production, such as electric trucks and lifting belts.
Spec Sheets and Notebooks
Purchase specifications are formalized in writing on cards or books. These include for each product:
– Product Description: Name and identification code.
– Basic Characteristics: Size, composition, and flatness.
– Behavioral Characteristics: Lifetime, resistance, and capacitance.
– Packaging Characteristics: Dimensions of the box, units per box, and pallet dimensions.
– Checks by the Supplier: Description of checks and results submission.
– Service Characteristics: Type of transportation and delivery.
– Administrative and Legal Requirements: Permits and licenses required by law.
Approval of Suppliers
This is a process by which a company defines which providers are qualified to supply products or services. It can be done through several methods:
– Audit: A visit to the provider to assess predefined factors, resulting in a score that determines acceptance or rejection.
– Product Testing: The product is used in production to assess its behavior. At the end of the test, the supplier is validated or not.
– Approval by History: Approving providers who have previously worked with the company, analyzing historical performance, quantity delivered, number of deliveries, test results, etc.
– Questionnaire for Approval: Similar to an audit but conducted via a questionnaire with important information about the activity, organization, and resources.
These processes should involve representatives from purchasing, quality, and user departments, especially if raw materials are involved in production or transportation. The list of approved providers must be distributed to all staff responsible for purchasing products that cannot be sourced from non-approved suppliers.
Evaluation of Suppliers
Once approved, ongoing assessments ensure that suppliers meet requirements consistently. Evaluation criteria should include:
– Quality of Supplies: Measures whether the supplier has provided exactly what was requested, considering controls and potential impacts on the supplied product.
– Reliability of Supplies: Measures adherence to deadlines, as delays can halt production.
– Flexibility of the Supplier: The degree of adaptation to the company’s needs, such as responding to urgent requests.
– Reliability of Information: Evaluates the administrative relationship, quality of deals, and reliability of delivery notes and invoices.
– Competitiveness of Prices: Assesses value for money compared to other providers.
After defining criteria, weight must be assigned since not all criteria are equally important. For example:
– Quality of Supplies: 50%
– Reliability of Supplies: 20%
– Flexibility of the Supplier: 20%
– Reliability of Information: 5%
– Competitiveness of Prices: 5%
Then, a scoring system for each criterion must be established (e.g., 0-5, 0-10, etc.). For example, in the case of quality supplies on a scale of 0-5:
– Score 5: No failures in specifications during the assessment period.
– Score 4: Infringements between 1% and 2% of deliveries.
– Score 3: Infringements between 3% and 5% of deliveries.
– Score 2: Breaches between 6% and 10% of deliveries.
– Score 1: Infringements between 11% and 20% of deliveries.
– Score 0: Failures exceeding 20% of deliveries.
Finally, define the frequency of assessment (quarterly, biannually, annually) and actions based on scores. For example:
– Suppliers with a Score of 0: Cease to be approved suppliers. To regain approval, they must pass the approval process again.
– Suppliers with a Score of 1 or 2: Will be notified in writing to correct violations within a month. If they cannot prove corrections within two months, they will lose approval.
– Suppliers with a Score of 3 or 4: Will be informed of defaults and requested to provide a plan for improvement, with the next assessment requiring improved performance.
This process helps select the best suppliers and gradually improve the quality of supplies. Evaluations should be documented. With suppliers that achieve the best scores, quality agreements can be established, leading to lower control costs as confidence in those suppliers grows.
Products
A product is defined by its specifications. The description of the specification must contain at least:
– The title or name of the product, including technical and commercial names.
– The product applications and utility methods.
– The conditions needed for manufacture, installation, storage, and use, including characteristics and precautions.
– The physical characteristics, such as size, composition, hardness, and conductivity.
– The reliability characteristics, including terms of use and operation, and the period of time without defects.
– Maintenance features, including forms, methods, and maintenance.
– The test methods and acceptance criteria, including measuring instruments and tolerances.
– The packaging and product protection, including means of protection for storage, handling, and transport.
– Special information and customer service details, including any important information not covered above.
In practice, this is not exhaustive but should consider the most important specifications that are essential for product characteristics.
Quality Control
The control process follows seven stages:
– Set the object of control.
– Define units of measurement.
– Establish the normal value of the specification to control.
– Determine the measuring instrument.
– Measure the magnitude in the selected unit.
– Interpret the differences between actual and normal values or standards.
– Act on the differences found.
Quality control encompasses not just the final product but the entire production process, from raw material receipt to the final product. Quality control inspections are performed.
Inspection
Inspection evaluates a product’s features. Actions to be inspected include:
– Determining the property to inspect.
– Measuring or testing the quality of that feature.
– Comparing the standard feature with the measurement obtained.
– Deciding on the disposition of conforming cases.
– Deciding on the disposition of nonconformities.
– Recording the data.
Inspection Arrangements
Depending on the product, inspection can be:
– Inspection of independent elements, such as screws, plates, or ball bearings.
– Inspection of parts of a body, such as a steel casting or a wine vat.
Typically, inspections are conducted on batches. The intensity of inspections can be:
– No inspection when there is no guarantee that the product meets specifications.
– Inspection of small samples to verify maintenance of conditions.
– Inspection of large samples through random sampling.
– 100% inspection for critical or complex products where random sampling is insufficient.
The Sampling Inspection
The main advantage of sampling versus 100% inspection is cost-effectiveness, as only part of the lot is inspected. To do this, a sampling plan must identify:
– The size of the lot (N), representing the number of pieces or quantity of the lot.
– The size of the sample (n), representing the number of sample materials.
– The acceptance number (c), representing the maximum number of defective parts allowed to accept the lot.
Accepted lots continue in the process, while rejected lots may be:
– Disabled.
– Inspected to remove or repair defective parts.
– Subjected to a second sample, separating or repairing defective parts.
Self-Control
Inspections are usually conducted by verifiers who are different from the operators. The reasons for this separation include:
– Specification and knowledge of the verifiers.
– Separation of responsibilities.
– The need for complex measurement equipment located in laboratories or factory areas.
However, this separation has disadvantages, such as:
– Increased staff costs.
– Loss of personal responsibility for execution, as operators may feel that verifiers will correct any issues.
Therefore, self-control is encouraged, where workers perform inspections on the job. Self-control can be implemented under several circumstances:
– If operator time allows inspections without neglecting responsibilities.
– If the operator’s capacity is sufficient or can be acquired for inspection.
– If measuring equipment can be used in the workplace.
– If inspection results do not adversely affect wages, work, or performance evaluations.

The Quality in the Store and Expeditions
To maintain product quality for the final customer in the store, it is essential to:
– Respect storage specifications, including environmental conditions, temperature, altitude, etc.
– Provide necessary means to prevent spoilage, such as proper storage facilities.
– Establish appropriate methods for product entry and exit from storage.
– Evaluate the conservation status at appropriate intervals.
Additionally, apply suitable packing and marking methods.
Process Control
Process control is a set of elements that add value to an input to provide an output to a client. To ensure compliance with specifications, focus controls on:
– Detecting defects through 100% control of the product or batch statistical control.
– Preventing defects through Statistical Process Control.
Statistical Process Control
This method focuses on prevention to intervene before defects occur and allows:
– Ensuring the product complies with required specifications to instill customer confidence.
– Reducing or eliminating the causes of defects.
– Increasing stability by avoiding abrupt changes in parameters.
– Providing immediate feedback to operators on process evolution.
– Reducing costs by minimizing repairs and rejections.
Statistical process control utilizes two tools: histograms and control charts.
Histogram
A histogram is a graphical representation of the number of occurrences of a certain value. Analyzing the histogram allows conclusions on three characteristics:
– Its shape.
– Its central position.
– Its level of concentration or dispersion.
Basic Statistics
The histogram provides approximate indications. To study a distribution in more detail, use the arithmetic mean, range, and standard deviation.
Arithmetic Mean
The arithmetic mean is the average result of the values obtained:
(77 • 3) + (78 • 8) + (79 • 18)
100
Range
The range is the difference between the largest and smallest values obtained:
R = 84 – 77 = 7
Standard Deviation
The standard deviation is the average distance of points from the mean value:
(77 – 80.22) • 3 + (78 – 80.22) • 8 + (84 – 80.22) • 2
100
Control Charts
A control chart represents the evolution of a property over time. If a point is outside the control limits, it is considered unstable or out of control. The most common types are:
– Frequency: The position of points rising or falling in cycles.
– Sequence: A series of 8 consecutive points above or below the average.
– Trend: A series of 7 consecutive points increasing or decreasing.