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This dissertation intends to discover, assess and prioritise a variety of aspects of Supplier Quality Assurance Evaluation. It additionally aims at presenting a suitable methodology in a sequential order. To start with, this thesis exploits the literary practices and reviews the methodologies authored by a variety of researchers. A reference company (Toyota-Pakistan) has been chosen to conduct the Analysis of Supplier Quality Evaluation concept in the industry. Interviews were conducted and data was obtained and analysed. Thorough analysis has been conducted and important answers have been highlighted.

Making use of academic and experimental research, a model based on comprehensive methodology was established. Also, the improvement points as well as the areas of weaknesses of the SQAE system in the pilot organization are clearly drawn. This thesis is mostly focused on real-time issues related to the managerial, tactical and methodological areas of Supplier Quality Assurance Evaluation in light of Supply Chain Management.

Analyzing the proposed framework and looking into its application in the industry as well as possible results and viability has also been carried out. Every vital detail, format and content has been explained. Also, involvement of advanced manufacturing concepts has been discussed.

The proposed concept helps in making manufacturing companies come to terms with the need to introducing Supplier Quality problems into the mainstream of their manufacturing process. This is seen as the foundation for establishing a proper working principle for Supplier Quality Evaluation.

1.0 Introduction:

Supplier Quality Assurance (SQA), within the idea of Supply Chain Management, has received tremendous notice by the industries in the last few years. Methodology of purchasing function has been shaped quite a lot by the concepts of Total Quality Management and newer supply chain management practices resulting in a change from detection to prevention philosophy. “A wide array of new materials and new products has emerged and the assemblies now days demand degrees of complexity at the same time as performance needs are increasing and allowable tolerances are being narrowed” [Lloyd, 1984]. However, to make sure that the quality of the product is up to the optimum level, it is mandatory to look into the supplier quality issue and only inspecting the supplier parts is not the answer as the role of supplier is getting more and more important regarding production and specially in the manufacturing processes where various assemblies are included in the make up of the final product. Inspection indeed cannot be done to such a massive number of components and buyer has to take the supplier quality assurance operation into account (Bailey et al, 2005, 23-35).

Supplier-Buyer relationship also relies on a greater input into the Quality of not only Supplier's items but also into the Supplier's quality assurance operations. Like Japanese organisations (huge names such as Toyota, Nissan and Mitsubishi), adhering to the principle of supporting supplier to ameliorate the quality by assessing and later reforming their quality output against their own standards, as a result they managed to create optimum quality levels with regard to their products and succeeded in attaining the advantage in terms of taking control of the business and markets (Bailey et al, 2005, 23-35).

However, Supplier Evaluation concerning supplier range and post-selection audits, is an intricate process related to the evaluation of supplier's production capacity, quality control operation, process capabilities, reliability in supplies, cost related to product and their co-ordination with the purchasers.

Amid these important issues, Product Conformance (with the conditions, requirements or standards) is of great significance as it is directly related to Quality and in some cases related to safety and effectiveness. As different products have differing standards of quality, it is quite tedious to set a single criterion to gauge their quality and as a result, to establish a single model or singular standard to evaluate the supplier's operation and capability in this regard. Any Product Confirmation framework or standard should include all the relevant matters like matching the product with the drawing, its fabric qualities, operational standards, functionality criteria and, to some extent, customer's overall fulfilment level regarding the performance of product in any regard. However, “joint agreement on product substantiation methods and provisions for settlement of quality disputes are essential regarding supplier's quality evaluation programme (Bailey et al, 2005, 23-35).

In this research, Supplier Quality Assurance Evaluation (SQAE) with regard to Product Conformation will be deliberated over. Step by step methodology of Supplier Evaluation is imperative to set up and taken into inspection. There are different working processes in this view, applied in different industries, so it's really vital to put the supplier assessment theories and principles under inspection (Juran and Frank, 1993, 45-64).

1.1 Aims and Objectives of the Project:

The aim of this dissertation is to examine these complex issues by analysing the present practices and models and their outputs and to evaluate the most suitable model, founded on the analysis and securitisation in different industries. A step-by-step working process for the assessment should also be evaluated and it should include all the procedural and managerial features of the supplier quality assurance evaluation procedure (regarding Product Conformance) related to description of specifications, standards, requirements and examination and testing methods (Juran and Frank, 1993, 45-64).

The objectives are to,

- Identify various features of supplier quality assurance assessment regarding product conformity and study their significance and effect on Supply Chain Management.

- Assessment of needs for specifications and standards.

- Importance of Product Quality in Supplier Assessment, choice process and assessment of selection criteria.

- Establishment of Supplier assessment methodology based on the scrutiny of current practices in industry.

- Analysis of height of understanding among suppliers and buyers with regard to agreement on Quality Assurance.

- Consolidation of a Strategy for Supplier Quality Assurance Evaluation with regard to product Conformance (Juran and Frank, 1993, 45-64).

One significant objective is to spot methods of using SQAE in order to ameliorate the supply chain management performance, not to only assess suppliers but also to make decisions to carry out business with them on the grounds of SQAE. In fact, SQAE must be used to improve the supplier's performance and thus Supplier should be involved form the product improvement process and there SQAE can recognize the bottlenecks which could be set aside by both buyer and supplier mutual efforts.

1.2 Importance of SQAE and its Relevance to Engineering Management:

As discussed above, supply chain management is a significant aspect of business now a days and it's not only about buying products at right time in a suitable quantity. It's getting more and more intricate with globalisation and trade as well as ever-increasing intricacy in designs and presentation modes of different products. Supplier Assessment both prior to choice selection and after selection is imperative in order to ensure the quality of the product or material supplied.

Now, the growing volume of business turnover led up to the huge numbers of components and merchandise under supply chain where a solitary buyer (especially ones that are assemblers) is trading with many suppliers and has got numbers of components to be given from suppliers.

The characteristics of these components are also important. Some supplied parts are essential assembly components that must be accurate and up to the standard so as no problem is observed concerning their assembly and finally their performance, some raw materials are so vital that material properties setting up the performance criteria. Supplier has indeed has got more and more significance and so consequently, Buyer-Supplier relationship are stronger and need betterment in each regard. Therefore, Quality would come first to assure (Juran and Frank, 1993, 45-64).

Engineering companies specially deals with lot of supply chain management issues. Supplier reliability and excellence are given much importance and most of the buying firms select and evaluate their possible suppliers for these two important aspects. Manufacturing companies also gives much significance to their supplier's performance in terms of quality. However, resistance levels are being narrowed, due to market pressures, delivery timetables have been tightened too. This all lead up to the Supplier-Buyer focus to achieve the most favourable quality level and obliviously, this can only be done by appropriate coordination (Juran and Frank, 1993, 45-64).

However, SQAE is not all about investigating the supplier quality system but it's about the implementation of continuous enhancement principle and establishment of proper relationship between buyer and dealer to get the maximum benefits leading to the competitive advantage. “An efficient process of purchasing functions should be based on past performance of a vendor, on an assessment of competitiveness of prices, meeting delivery schedules and most importantly conformity to specifications and tolerances for individual units and production batches. It is obvious that low price is meaningless without quality” [British Standard 5750]. Therefore, Supplier Quality Assurance is seen as the primary issues in connection with Supply Chain Management in order to execute the procurement function in an efficient manner.


A: Accepted products.

AQL: Acceptable Quality Level.

C/F: Checking Fixtures.

CA: Conditionally Acceptable.

CAD/CAM/CAQ: Computer aided Design/Manufacturing/Quality.

CKD: Completely knocked down (products exported by Toyota principles).

EDB: Engineering Development Bureau (Govt. of Pakistan).

ESL: Early Supplier Involvement Program.

FAI: First Article Inspection.

FMEA: Process Failure Mode Effect Analysis.

HR: Human Resource.

IMC: Indus Motor Company Ltd. (TOYOTA-PAKISTAN).

IMC-PD: IMC- Product Development Department.

IMC-QA: IMC- Quality Assurance Department.

IMC-SQAE: IMC- Supplier Quality Assurance Evaluation Methodology.

JIT: Just-in-Time Manufacturing

NG: Not Good (Defective-rejected products/parts).

NPI: New Product Introduction.

OEMs: Original Equipment Manufacturers.

OK: Acceptable products/parts.

OTS: Off-Tool Sample

PPM: Parts Per Million.

PQC: Product Quality Chart.

QC: Quality Control.

QFD: Quality Function Deployment.

QSP: Quality Standard Procedure.

RESP: Responsibility.

SC: Supply Chain.

SCM: Supply Chain Management.

SQAE: Supplier Quality Assurance Evaluation.

TES: Toyota Evaluation Standards.

TIS: Toyota Inspection Standards.

TQM: Total Quality Management.

VER: Vendor Evaluation report.

VIR: Vendor Information report.

2.0 Literature Review:

Supply Chain Management, together with its growing necessity, has developed into a vital part of manufacturing business all around the world. Researchers and Practitioners have been focusing on the issues [and still do] regarding the concept and methodologies relevant to Supply Chain Management. Therefore, a huge amount of material is available that can be searched through with a detailed analysis of the Supply Chain Function. The literature review helps to classify the appropriate material for research on the subject of Supplier Quality Assurance (Juran and Frank, 1993, 45-64).

This literature review is founded on different features of SQAE. Firstly, it discusses the supply chain and its result. Secondly, it looks at SQAE usage as well as its advantages and its methodology, and finally SQAE investigation regarding Product Conformation. However, SQAE is related to the supplier positions and identification of their advantages and shortcomings, and this is also discussed in this literature review as an essential discussion point (Juran and Frank, 1993, 45-64).

2.1 Supply Chain and Its Effect on Companies:

Bailey et al (2005) say that the supply chain is an action which deals with the flow of material or products from producer or supplier to the organization or consumer. It is carried out in a way to increase value and lower cost.

In terms of manufacturing, the supply chain is described as the process of material processing which includes the following characteristics.

- Supply of products

- Transformation of products

- Demand for products (T Davis, 1993).

Transformation manages the changes in the characteristics of the product or in other words it provides a description of quality of the product, which should be achieved while carrying out a production for customer satisfaction. This is the eventual goal of any business.

There are many encouraging aspects of the supply chain, which will improve the organization's production display. Shin, Collier and Wilson, (2000) provide some examples of the OEMs, which ameliorate their performance by proper supply chain management from supplier to organization and from organization to the consumer. Proctor & Gamble (P&G) maintain its place of leadership in the consumer base market due to its outstanding supply chain management. US$ 325 million has generated in supply chain saving owing to its continuous replenishment program and well-organized customer response.

In the automobile industry, Chrysler presents the program for supplier involvement which is called supplier cost lowering effort (SCORE). And in 1997 Chrysler announced that they succeeded in US $ 1.2 million in cost savings as a result of to the SCORE program.

2.2 Objectives of SQAE and Its advantages:

Quality Management has been the topic of various practices applied in the industry. Introduction and execution of TQM makes companies alternative inspection based activities with quality preparation and quality assurance practices (Benito and Dale, 2000). SQAE has also come out as a vital tool of procurement management. In this regard, Benito and Dale mention that the widespread practices in the industry include supplier selection based on quality and dependability considerations, supplier quality and reliability records on which the regeneration of contracts are based, supplier certification and supplier development. The aim of these practices is to guarantee supplier quality. However, BSI [British Standard 5750] also states that the dealer quality assurance evaluation is essential to establish the close working relationship among buyers and suppliers; the main purpose is to assure the quality of the final product for the client. A clear understanding must be developed with the supplier on quality assurance issues and SQAE must be done to assess the supplier's capability and quality to elucidate the mutual understanding and therefore to settle an agreement in this regard because a buyer relies on a supplier's quality system.

Lloyd [1984] puts stress on an important issue related to general supply chain management. He states “it is too late to protest about poor quality of incoming suppliers after the examination if the supplier is.

- Not qualified to meet the specifications and tolerances required.

- May not be fully responsive of just what is implied by specifications and tolerances required.

- Does not have a constant quality control program.”

These failures can cause enormous problems for any organisation concerned with purchasing and manufacturing.

Hahn [1990] describes two significant uses of SQAE, to select a new supplier and to assess the existing supplier. However, American companies chiefly apply this methodology to set up the ratings and rankings of their suppliers for the purpose of decision-making regarding persistence of the business transaction with the suppliers or not. Japanese and Korean producers use these assessment techniques differently and are less likely to construct any rating or ranking system for the suppliers.

Motwani et al (1999), analyse the efficiency of SQAE process regarding ISO 9000 and TQM and insist on the investigation of how a supplier applies ISO 9000 in his organisation and so they bring to a close that SQAE can also be done by the examination of ISO standards execution at the supplier's end and the aim of Quality Assurance of the final product can be satisfied.

2.3 Working Method of SQAE:

Lloyd [1984] says that the methodology of seller evaluation on the basis of past performance of vendor. He includes the following ways in which vendor quality performance can be documented and assessed.

- Quality History Records concerning Product Conformance:

This is based mostly upon the quantity of accepted and rejected products supplied in a specific time period. This is a conventional technique and reflects the terminology of Acceptable Quality Level.

- Comparison among Suppliers on the grounds of Acceptance/Rejection:

Here, Statistical methods are used and Normal Distribution graphs used to investigate the comparative performance of vendors connected to the defected parts/lot/period of time (Dobler and Burt, 1990, 63-74).

- Typical Frequency Distribution:

Again this method is based on the examination results, either at the supplier or buyer's end. Tolerance restrictions are defined on charts and so quality of lots is determined on the basis of changeability in products.

However, the methodology described above is completely based upon the theories of AQL and SPC, only analysing the examination capabilities of the supplier and not focusing on the in-process ability or in-process quality assurance of the supplier. Supply Chain Management is more about the presentation of all functions in a swift manner and to rely heavily on assessment cannot help the cause of both price and time taken to manufacture a product (Dobler and Burt, 1990, 63-74).

Swift and Booker [1996] use ability indices in order to evaluate the product conformance and they declare the need of dependability of supplier's data in this regard. They additional state that newer quality reassurance tools like FMEA should be included into SQAE procedure to determine the causes of breakdown or defects in a product and so a dealer can be evaluated on the foundation of potential causes of breakdown and so severity height can be obtained. This is an important point which needs to be evaluated. However, they utilize the idea of variability forecast and acceptance chain analysis in this regard. Regardless, their research is mostly focussing on the engineering of product conformity and didn't deal much with the supply chain management concept in SQAE.

Russell [1995] provides the method of Quality Management Benchmark Assessment, which fundamentally a checklist of several requirements related to all aspect of manufacturing purpose of a supplier and set progressively more challenging improvement goals. It is fundamentally task oriented and so a good approach regarding SQAE.

Paul Curry [1991] and Feigenbaum [1991] depend on supplier audit methodology to evaluate supplier quality. Curry recommends that a descriptive audit in terms of inspection of a product can be done after a precise period of time and all sorts of performance and evaluation tests must be done in this regard. Schuurman relies more on the management side of audits and Feigenbaum announces that over all audit of supplier's quality control operation is necessary to assure the quality of the product.

Jerry Wolfe [2002] from the American Society for testing and materials hoists his model for supplier assessment, although it deals particularly for the raw material supplier and the exact material in steel but he formulated his methodology in a comprehensive manner by bearing in mind the importance of dimensional evaluation and performance tests for material in provision and thus makes these tests the criteria for Supplier Quality Assurance Evaluation. He establishes a sort of sample evaluation method, to build the foundation of Supplier Evaluation for Product Conformance.

Karl Springer [1994] resolute on the establishment of the supplier-buyer relationship and relates it to the procedure of Continuous Quality Improvement and finally he makes CQI the base of Supplier Evaluation that whether the dealer is committed to implement Continuous Improvement Strategy or not. Although this could be said to be as a stringent criteria but it should not be used by buyer to put any force on supplier, it should only be used to assess supplier and then as a result help the supplier to set a certain degree of quality assurance.

Balakrishnan [1997] describes the system of record of approved supplier based on supplier assessment, based on the comparison of suppliers present in the market. It's fundamentally a supplier selection methodology, but trades with the supplier evaluation in this regard. He insists on the need of budding the information supporting system for supplier assessment and supplier ranking.

There are different methodological factors in SQAE, regarding inspection and testing, based on contemporary Manufacturing Technology and Supply Chain Management Tools. Elmaraghy [2004] unveils the concept of Integrated Inspection and deems it an important factor in assessing the suppliers, particularly in future as technology and manufacturing procedures are getting more complex. The Japanese are working for the development and execution of Multi-Vendor Integration software to assess many vendors at a time based on conformance standards for different products and they use it to detect non-conformances and their amount. Bhote [1992] declares that World-Class manufacturers and Buyers don't rely only on mainstream Supplier Evaluation procedures like Supplier Quality System Audits, evaluation of supplier's quality manuals and relationship based primarily on reporting. They make SQAE a mutual process, both for supplier and buyer, by implementation techniques like Specification Optimisation, Classification of features of products and processes, early supplier involvement mainly in product development and they set up product and cross functional teams to assess supplier and supplier's capability.

2.4 Different Methodologies for SQAE in Literature:

To start with the literature review, one must go through the JURAN's methodological model of SQAE. It's mainly loaded in terms of application and entirety. It stressfullly addresses the glaring issues connected to product conformance. In view of this, Quality Gurus [J.M. Juran and Gryna, 1993], underscore some examples they find of importance while functioning on Quality Planning and Analysis. They recognize the nature of dissimilarity between the manufacturing procedures and sequences in view of complexity of some products. They start with the specifications and assert that it is to be the first phase of quality planning for SCM. Their methodological framework is below.

2.4.1 Specification of Quality Requirements for Suppliers:

For contemporary products, Quality-planning starts before a contract is agreed on. Such planning must recognise 2 issues.

The buyer must transmit to the supplier a whole understanding of the implementation to advantage from using the product. Communicating usage supplies can be tedious even for a simple product (Howe and Howe, 1995, 12-149).

The buyer must look for information to be sure that the dealer has the capacity to meets all fitness-for-use requirements. When there are intricate products, in view of the specific internal environments nearby a certain component, it is important to assign distinct development and production contracts that help to determine how to conclude requirements (Evans and Dean, 2000, 53-72).

Different circumstances may beg for two kinds of specifications:

* Specifications that describe the product requirements.

* Specifications that describe what value-related activities are expected of the supplier, i.e., the dealer's quality system.

2.4.2 Assessing of Supplier Capability:

Assessing supplier quality encompasses one or both actions:

* Approving the supplier's design via the assessment of product samples.

* Approving the supplier's ability to fulfil quality requirements on production consignments (Evans and Dean, 2000, 53-72).

-Qualifying the Supplier's Design:

Qualification assessments are mandatory to assess a product and it is not abnormal for qualification test outcomes to be refused. 2 reasons are common:

-The test outcomes illustrate that the design does not meet the product functions desired.

-The test process is not sufficient to gauge the performance of the product.

-Qualification of Supplier's manufacturing process:

Evaluation of the supplier's developing ability can be carried out through three approaches:

* prior data on similar products,

* procedural capability analysis, or

* An assessment of the supplier's quality system via a quality survey (Evans and Dean, 2000, 53-72).

A supplier quality assessment is an assessment of a supplier's capacity to meet quality requirements on production shipments. The outcomes of the survey are used in the supplier selection process. It is also made use of if the supplier has already been selected, in which case, the survey informs the buyer about areas where the supplier may require help in fulfilling requirements. The survey can range from a simple questionnaire that is mailed to the dealer to a personal visit to the supplier's facility (Evans and Dean, 2000, 53-72).

Example of dealer quality survey (this highlights product conformance related factors):

The questionnaire presents clear questions such as the ones below that are presented to suppliers of a producer of medical devices:

* Has your business received the quality requirements on the product and agreed that they can be completely met?

* Are your ultimate examination results documented?

* Do you agree to supply the buyer with advance notice of any changes in your product design?

* What protective garments do your employees wear to reduce product contamination?

* Describe the air-filtration system in your manufacturing areas (Evans and Dean, 2000, 53-72).

2.4.3 Evaluating of Supplier Products:

The assessment of the supplier product (according to Juran) must be based on the methodology below.

-Evaluating of first samples of product:

Under a variety of circumstances, it is imperative that the supplier sends in test results of a small initial sample prepared from manufacture tooling. They should also send in a sample from the first production consignment prior to the full shipment being made. The final assessment can be completed when a buyer's representative visits the supplier's plant and overviews the examination of a random sample chosen from the first production lot. A review can also be produced from procedure capability or process management type data from that lot (Evans and Dean, 2000, 53-72).

-Surveillance of supplier quality:

Quality observation is the ongoing monitoring and verification of conditions, processes, products, procedural actions, methods, services, and analysis of records. These are all related to stated references. This certifies that specified requirements for quality are being met.

In the past decades, inward inspection often took up a large segment of time and effort. With the introduction of modern intricate products, there were several companies that discovered that they do not have the desired examination skills or tools. This led them to rely more on the supplier's quality system or examination and test data (Evans and Dean, 2000, 53-72).

2.5 Dobler-Burt Methodology for Dealer/Supplier Quality in connection with Product Development- Design and Specifications:

Dobler and Burt [1990] talk about four major factors that validate the quality assurance stage of a firm's purchased products;

1. Formation of total and suitable specifications for quality requirements.

2. Option for suppliers with technical and production ability to carryout the desired quality/cost job.

3. Development of a realistic insight with suppliers of quality requirements, and establishment of the incentive to perform accordingly.

4. Overseeing of suppliers' quality/cost performance, and use of suitable control (Evans and Dean, 2000, 53-72).

2.6 Product Specifications:

In accordance with Dobler and Burt, a solid product specification stands for a combination of the four considerations below:

1. Design prerequisites.

2. Production features.

3. Commercial buying considerations.

4. Sales and marketing features (Evans and Dean, 2000, 53-72).

While handling commercial purchasing considerations, purchasing employees need to carry out the following examinations with regard to quality:

* Examine the quality requirements.

* Assure that quality requirements are completely and plainly stated in the specifications.

* Assess their rationality, relative to cost.

* Assure that specifications are written in a way that allows competition among potential suppliers.

* Determine whether or not present suppliers can develop the desired quality into the material.

* Assure the viability of the examinations and tests needed to assure quality (Evans and Dean, 2000, 53-72).

They also declare the need for more generalised specifications, which are appropriate to the broad industrial specifications. They assert: “When preparing its own specifications, a company should aim at making them as close as probable to industry standards”. If certain dimensions, tolerances, or features are needed, every move must be made to attain these “specials”. This must be done by designing them as additions or alterations to framework parts, and it will save time and money.

2.7 Various methods of Product Specification Establishment:

Dobler and Burt express the application of specification growth process as follows. They say: “Many firms now make use of a cross-functional product development team in the overall design process. The approach is perfect for integrating the views of purchasing, as well as the other suitable functions, in the specification development process. In some cases it is desirable to include appropriate designers or application engineers from the supplier's company in the specification development procedure before the specs are finalised”.

They talk about various types of specification development systems as well as their implementations.

Designing Drawings:

Drawings are perhaps the most exact method of detailing what is required, especially when one needs precise shapes, measurements, and spatial relationships. Engineering drawings are made use of significantly when there is need to detail quality for construction projects, particularly in foundry and machine shop work to produce a variety of particular mechanical parts and components.

There are four fundamental advantages in using drawings for description:

* They are specific and accurate.

* They are the most realistic way of detailing mechanical items requiring extremely close tolerances.

* They encourage wide competition.

* They clearly establish the standards for inspection (Sadgrove, 1994, 22-44).

Material and Method-of-Manufacture Specifications:

When this procedure is used, potential suppliers are instructed exactly as to the materials to be used and how they are to be implemented. The purchaser assumes full legal responsibility for product performance.

Performance Specifications:

A performance requirement for wire may need it to endure a given temperature, have a selected resistance to abrasion, and have particular conductivity ability. No mention is rendered in the specifications with regard to what materials are to be implemented or how the wire is to be equipped or encapsulated to construct the desired characteristics.


Some organisations produce brands to attain their objectives which comprise quality assurance (Sadgrove, 1994, 22-44).


Samples are recognized as the lazy person's method of describing requirements [Dobler and Burt 1990]. When samples are implemented, the purchaser doesn't have to search for an equal brand, choose a standard requirement, or exemplify the performance wanted. Samples are not the most cost competent or the most appropriate means of purchase. Generally, the cash used for inspection costs significantly goes further than the cash cut through description costs. It often is tough to resolve by examination that the product produced is, in fact, the same as the sample. Quality of materials and workmanship are usually quite tricky to decide through routine examination. Therefore, in several cases, acceptance or rejection becomes quite a subjective decision matter (Sadgrove, 1994, 22-44).

Samples are generally used only in the case if other methods of description fail. Shade and touch, printing, and grading are three broad areas in which other methods of description are not feasible. A specific shade of blue, for example, is not easy to explain without a taster. Proposed lithographic workmanship is best described by the supplier's proof. Setting grades for commodities such as wheat, corn, and cotton by samples has apparently been the most appropriate method of describing these products (Sadgrove, 1994, 22-44).

This literature review is not in the last state but has some ideas about methodological features of Supplier Quality Evaluation. Different companies and in fact greater names in market or what we must call them world-class organizations have considered Supplier Quality Evaluation an essential part of their Procurement and up to some extent, their Quality Assurance purpose. Toyota (Pakistan) model of supplier quality assurance assessment is a good exercise in this regard and it is a progressive methodology deals with the supplier assortment and over all quality assurance enhancement of the products and components and also founded on cost effectiveness.

2.8 Toyota Pakistan:

Toyota (Pakistan) assesses its suppliers on the basis of advancement they made regarding product development, if it's a new creation (this means Toyota includes suppliers in the early stages of production), Toyota also examines their suppliers assesses planning for quality assurance. Below is a brief step-wise description of Toyota Supplier Quality Assurance Exercise in connection with Product Conformance (Toyota Supplier Quality Assurance Manual, 2003, 44-73).

It is imperative to discuss the Toyota policy of applying its own efforts in execution of rules at its own side, in its part dealing with the vendors. Toyota starts Supplier Evaluation Process along with the assortment and thus it is mostly applied during the product development procedure or when a new manufacturing set up is established. Formulation of SQAE process generally consists of following step-wise methodologies (Dobler and Burt, 1990, 63-74).

- Supplier Involvement in product development process. The supplier requested the provision of a planning schedule for production of jigs, fixtures and other test equipments for individual product.

- Plan for assessments, which will be applied to final part under supply. Details of required evaluation must be specified on the part evaluation plan.

- There should be evaluations for material, measurements, appearance, performance and operations.

- Planning must be done for the Internal Quality system growth at the dealer/supplier. It includes:

* Standard work.

* Maintaining Logs.

* Receiving assessment check sheets. (For parts of sub contractors or suppliers of secondary level)

* Daily/routine check Sheets.

* Processes

* Systems (Dobler and Burt, 1990, 63-74).

-Information in connection with the following items should be present and given to Toyota.

* Sample Data sheets

* Investigative standards.

* Process FMEA.

* Material Certification.

* Engineering change (if any) Implementation and its evaluation.

* Approval based on Part assessment (Dobler and Burt, 1990, 63-74).

Toyota involves suppliers in establishing specifications and standards so there is no mishap with regard to these matters and sharing of information is not a problem.

-Toyota demands for the planned and system description of all manufacturing and quality control activities necessary to guarantee the quality of parts for Mass Production.

-Manufacturing Quality Chart, Process Flow, Procedure Layout and Process FMEA must be developed at the supplier's position and these are standardized products and checked during SQAE (Dobler and Burt, 1990, 63-74).

-A supplier should have on-line quality checking method, not just the last inspection and proper documentation should have been done to train employees in standard work procedures and quality standards.

-Definition of important characteristics of supplied parts (or part under development) in terms of dimension, look and purpose and the method should be declared along with the rate by which the parts should be checked.

-As lots of automobile parts require inspection through checking fixture due to their nature of fitment and utilisation in production, so examining fixtures should be developed and tested (Dobler and Burt, 1990, 63-74).

-Boundary Exhibits (limit samples) for those features related to appearance of any product must be prepared.

-Each product supplied, should be checked and tested against Toyota Standards before mass production and appropriate evaluation of each part should be done.

-Supplier should also have needs (if any) for obtaining assistance from Toyota and this must be discussed formally.

Minimum Quality Standards concerning specific product conformation are as follows;

* Part Examination Standard.

* Checking fixtures/Gauges.

* Boundary exhibits.

* Producing Quality Chart.

* Countermeasure Activity description for any Issue occurred regarding part quality (Dobler and Burt, 1990, 63-74).

All points described above are related to product development stage; however, Toyota founded its SQAE methodology on the same basis and has put up the above described aspects in their Supplier Evaluation criteria. Toyota in fact looks for the suppliers to know whether they are capable of executing and incorporating these methodologies into their quality assurance system.

Toyota set up its Vendor Assessment Criteria on monthly and annual basis, analysing the product conformance capability of the dealer/supplier. Results of this SQAE scrutiny used to give Quality awards to the suppliers and these outcomes tabulated in the form of points, these points given in accordance to vendor rating (Dobler and Burt, 1990, 63-74).

Monthly Assessment factors and their standards are

-Investigation data (Toyota Receiving Inspection). Rating system is established.

“A” for less than 600 defected parts per million.

-Resolving any problem occurred in parts regarding quality.

“A” for No problem. “D” for frequents problems and no timely response over it.

-Submission of Merchant Quality report.

Annual monitoring based on

-Re-occurrence of defects.

-Customer feedback/complaints about any specific part.

-Vendor Quality System assessment (Howe and Howe, 1995, 12-149).

Vendor Quality System assessment (based on product conformance) consist of following items.


* Presence of Border Samples.

* Identification of issues and defects. Defects definition and recognition criteria, in the form of check list.

* Inspection Gear Calibration.

* Accessibility of appropriate Inspection tools.

* Accessibility of Inspection Procedures.

* Fault feedback and monitoring system.

* In-process defect control system.

* Use of examination records for quality improvement activity.

* Receiving Examination of purchased material.

* Control and direction of sub-suppliers.

* Preparation of examination standards

* Maintenance of standards.

* Assessment facilities and technology at supplier end.

* Skilled staff for assessment.

* Maintenance of measuring tools, examining fixtures, gages and other inspection equipment.

* Quality Audit set up for products and their frequency (Howe and Howe, 1995, 12-149).

Considering the feature of modern manufacturing competition and environment, one comes to the conclusion that though Toyota (Pakistan) has described well the Supplier Evaluation Criteria and has come up with its SQAE policy in a concealed manner it doesn't emphasize some vital factors like usage of technology at the dealer/supplier end (for any specific product or component).


In the preceding chapters we discussed the basic literature of SQAE. Now we will review the data compilation methods which are available to a researcher. After discussing each methodology, the researcher will examine the chosen method and reason for choosing the exact method for this research.

3.1 Research Philosophy:

In any research the most essential part is the research philosophy. After reviewing the literature related to the research philosophy, the philosophy was separated in to three main categories which help the researcher to carry out the research. The philosophy is a guideline, through which the researcher carries out the research and gets the answers of the research question(s). Those three main philosophies are Positivism, Phenomenology and Realism. (Proctor, 2003)

3.1.2 Positivism:

Mostly the natural science researcher makes use of this philosophy to explain the causes and effects of the events (Proctor, 2003). In accordance with Proctor positivism is an, “important methodology in the social sciences and mainly in business research. Inside a positivist methodology the ontological assumptions view the social world as an exterior environment, where exact structures affect people in similar ways and where people understand and act in response to these structures in similar ways. The epistemological suppositions in this approach are that the researcher is autonomous of what is being researched and their job is to observe and measure social structures” (Proctor, 2003).

In accordance with Saunders et al (2000) “If your research philosophy mirrors the principles of positivism then you will probably take on the philosophical stance of the natural scientist”.

3.1.3 Phenomenology:

Proctor (2003 p.7) elucidates that “phenomenology approach discovers the meaning rather than measurement and it is inductive in nature”. Phenomenology that is primarily made use of in the social and management science research, in which the researcher relates “people's understanding of event rather than the events themselves” (Proctor, 2003). Proctor further elucidates the phenomenology as “the ontological assumption here is that people are not inactive in simply responding to structures but instead reality is itself socially made up” (Proctor 2003).

3.1.4 Realism:

Saunders et al (2003) say that “realism is based on the belief that a reality exists that is self-determining and independent of human thoughts and belief. In the social science and in the study of business and management this can be seen as demonstrating that there are large scale social forces and processes that affect people without their essentially being aware of the existence of such influences on their interpretations and behaviours”. So it is obvious that the realism philosophy discuss the reality that what the people process in thoughts regarding the organization and products.

For this research project on Toyota (Pakistan), the researcher makes use of the philosophy of realism because he or she will discuss the current procedure for SQAE in Toyota (Pakistan).

3.2 Research Design:

Research design is a most imperative part in research methodology. It helps the researcher on how to collect the information and data and how to analyze it. The structure of the research relies on the research design (Saunders et al 2003). Malhotra et al (2003) stated that “A research design is a model or blueprint for conducting a marketing research project. It details the procedures essential for attaining the information needed to arrange or solve marketing research problems. A good research design will make sure that the marketing research project is carried out effectively and efficiently”.

There are three major types of research design; these are (1) Investigative research (2) Descriptive research and (3) Causal research.

3.2.1 Explorative Research:

Explorative research emphasizes on the problem in research, Chisnell (1997) describes this “Exploratory design targets identifying or explore the real nature of research problem”. When the quantitative method is not capable of identifying or solve the research problem than this way will help to solve the research problem, because according to Malhotra (2004) investigative research allows the researcher to create the “structured questionnaires, large samples, and possibility sampling plans”. Through this researcher is capable to complete the research by using the variety of research methods. Malhotra (2004) deliberates the many objectives which will be achieved by using the explorative like, problems are identify, researcher has different choices to solve the problem, researcher can develop ideas, help to make a guideline for further research.

3.2.2 Descriptive Research:

Malhotra (2004) says the descriptive research “As the name implies, the main objective of descriptive research is to explain some thing, usually market characteristics or operations. A major difference between investigative and descriptive research is that descriptive research is featured by the prior information needed is clearly defined”. In accordance with Malhotra (2004) the grounds for conducting the descriptive research are to know the client behaviour toward the product, the amount of market for the organization, assessment the future of market etc.

Therefore to conduct this research the researcher has to know the precise problem, skills and knowledge. Due to this research requires to be “well-structured pre-planned and based on a sizable representative samples” Malhotra (2004).

3.2.3 Causal-Research:

Causal research is to establish the relationship of cause and effect (Malhotra 2004). To conduct the causal research a planned and frame design is needed for the research. A test is the chief method for the causal research. Malhotra (2004) further said that “similar to the descriptive research, designed and structured designs are essential for causal research as well”. But the expressive research is not capable to gauge the causal connection between variables. Malhotra (2004) says that “examining causal relationships need causal design, under which the causal or independent variables are controls in a relatively controlled environment”.

Comparison of basic research designs





Explore ideas and insights

Explain market characteristics or functions

Ascertain cause and effects relationships


Flexible, versatile, often the front end of the entire research design

Marked by previous formulation of specific hypothesis, pre-arranged and structured design

Manipulation of one or more independent variables.

Control of other intervening variables


Professional surveys, pilot surveys, secondary data, qualitative research

Secondary data, surveys, platforms, observational and other data


Table 3.1

Source: Malhotra (2004) Marketing research

For this project on Toyota (Pakistan), the researcher uses the Investigative design because the researcher is engaged in one department of the organization and has sufficient secondary data is available and also examine the new methodology for SQAE. Therefore the investigative design is more suitable for this research.

3.3 Methods of Data Collection:

Many types of research are available for compilation of data but it divided in to two major categories.

* Secondary Data

* Primary Data

3.3.1 Secondary Data:

“Any good marketing research study must begin with secondary data” [Churchill 2002, p.199]. Those information and statistics which is accessible and collected by another individual is a secondary data [Kotlar1999, p.324]. For the researcher the quickest and the easiest method to collect the data is the compilation of secondary data in a given period of time for the research. Analysis of secondary data is also easy because the research is already carried out [Lancaster et al, 2002]. The main source for getting the secondary data is internal data sources and outside data sources. The invoices of sales, call report by salesman and the guarantee cards are some of the example for the collection of data from inside source and the data from general, magazine, newspaper, fiscal records are the examples of data from external source [Churchill 2002,p. 200].

Secondary data aids in identifying the issues and objectives of the research. But it gives the foundation to the research through which researcher concludes the research.

3.3.2 Primary Data:

Kotler et al (1999) says that “information collected for the precise purpose at hand is called primary data”. To achieve the good research outcome it is compulsory the researcher should have a whole primary data. It is difficult, costly and time consuming way for the data collection, but this data is very imperative in the research as it will guide the researcher toward the solution of the issue (Kotler et al 1999). There are primarily two type of primary data (1) Qualitative and (2) Quantitative.

3.3.3 Qualitative Research:

It is the kind of research when researcher investigates the subject within limited variables, via this methodology the researcher can get in more detail information. “Qualitative research examines the attitude, emotion and motivation of the product users” [Proctor 2003, p.208]. A variety of techniques can be use for qualitative research like interview, focus group interview/investigation or projective techniques. For instance in interview or focus group interview the researcher can speak with a person or group, and it aids the researcher to figure out their experiences or sentiments about the issue.

Qualitative research helps to attain a data from small group of respondents [Kotler et al 1999, p.326].

3.3.4 Quantitative Research:

Quantitative research permits the researcher to solve the issues through statistical methods; it requires a huge number of respondents and all respondents have to answer the same questions. This helps the researcher to gauge the attitude, opinion and the behaviour of all participants towards the issue.

3.3.5 Comparison of Qualitative and Quantitative Research:

If the organization management chooses quantitative research rather than qualitative it is because the quantitative research permits them to see the response and the attitude on the broader spectrum rather than making the main decision on a smaller spectrum which will be achieved via the qualitative research. But due to the following reasons the qualitative research still increasing.

· Need low budget to conduct the research.

· Participant behaviour analyze easily.

· The effectiveness of quantitative research will be stronger.

[Proctor 2003, p.208-209]

Comparison dimension

Qualitative research

Quantitative research

Kind of questions



Sample size



Information per respondents




Requires interviewer special talent

Fewer special skill required

Hardware required

Tape recorder, projection devices, video, picture


Convenient of replication



Researcher training necessary

Psychology, sociology, consumer behaviour, marketing, marketing research

Statistical, decision models, computer programming, marketing, marketing research

Type of research


Descriptive or causal

Table 3.2; comparison amid quantitative and qualitative research

Source: Proctor (2003) Essential of marketing research

To meet the prerequisite of the research, the questionnaires sent to the Toyota (Pakistan). I received the answered questionnaires and all questions are answered by the Manager of the department.

3.4 Questionnaire Design:

A good skill is required to create a legit questionnaire which leads the research issues towards the solution. Chisnall (1997) stated that “A Questionnaire is the way of obtaining specific information about a defined issue so that, the data after analysis and interpretation, outcome in a better appreciation of the problem”. Fundamentally there are two kinds of questionnaire (1) Structured and (2) Unstructured.

Structured questionnaire can be produced in “multiple option”, dichotomous or a scale” Malhotra (2004). In multiple choice questions, the options will be given to the respondent, in dichotomous questions the participant answer in ‘yes' or ‘no' and in a scale questions the options are given in numeric numbers in which respondent mark that number which is close to his views. Structured questionnaire are easy to analyze.

Those questions which allow the respondents to state their feeling freely are called unstructured survey questionnaire (Malhotra 2004). The examples of the unstructured question are like: who is your choice personality? What do you like? Etc.

In accordance with Lancaster et al (2002) for structuring the questionnaire the following instruction should be followed:

* “The overall questionnaire must move from topic to topic in a logical manner, with all questions on one subject completed before moving to the next.

* Sensitive questions, such as the respondent's returns, should be at end.

* The first few questions should be simple, purpose and interesting.

* The questionnaire must be designed so as to minimize recording errors and assist analysis.

* The questionnaire must be pre-tested with respondents similar to ones who will be included in the final survey”.

The purpose of this project that how the SQAE process results in the supplier selection and how it impacts the supply chain process. For this research the combination of structured and unstructured questions are implemented. The questionnaire is accessible in Appendix 1, which were gathered from Toyota (Pakistan). Following is the example of questions which is used in the questionnaire for this project.

Do you rank suppliers differently on the basis of nature of the article being supplied like Products for Assembly/Consumables/Spare components for machinery? YES/NO.

How do you assess the quality of (company as well as) dealer products: (methods/inspection technique/Quality Tools like SQC/Quality Audits/or any other methodology). Kindly state all methods and tools. (Explanatory Question)


3.5 Sampling Techniques:

Malhotra (2004) explain that there are two methods for sampling (1) Probability and (2) Non Probability sampling. In Probability sampling the certain size of a group or number of persons is selected involuntarily and then the researcher analyzes the data for a certain group. And in non probability the sampling is carried out by the researcher's decision. In non probability sampling the researcher chooses the respondents according to the research necessity.

For this project, researcher makes use of the probability sampling technique, because the research is founded on one organization Toyota (Pakistan).

3.6 Sample Size:

“Sample size refers to the quantity of elements to be included in a study” Malhotra (2003). The following factors will help in the collection of the sample size (Malhotra, 2003)

* What type of research design to use, for example investigative design needs small size of sample, but in expressive design large sample are required.

* For data collection time, cash and skilful people should be available.

For this research project, the size of the sample consists of one participant and he or she is a Manager of the department in Toyota (Pakistan).


4.1 Company Introduction:

Toyota Pakistan, Indus Motor Company (IMC) is a joint undertaking among the Toyota Motor Corporation Japan (TMC), House of Habib (one of the largest industrial groups of Pakistan), as well as Toyota Tsusho Corporation Japan (TTC) for setting up, producing and marketing Toyota vehicles in Pakistan.

Few specifics in sight of manufacturing, human resource and plant operations are specified below:

Production Size: 58,000 (December 2005).

Workforce Strength: 1,700 (2 shifts/ day)

Plant Capacity: 210 vehicles (2 shifts/day)

Number of Suppliers: 121

Products: Toyota Corolla, Daihatsu Cuore and Toyota Hilux.

Percentage of Supply parts (Localised Parts): Cumulative % for all models: 65%

The first two questions of the survey are about the company and how many suppliers are concerned with the Toyota. The response which I received from the manager is that the company come on the groups of “manufacturing and assembling” and “around 123” number of suppliers are trading with Toyota (Pakistan).

4.1.1 Localisation:

Localisation of automobile assemblage parts has been implemented in Pakistan, as the government wants to boost the production sector. Pakistan Government has set up an authority for this, EDB, for which it has determined a certain criteria for the necessary percentage of components/parts need to be locally produced localised (manufactured by local/domestic suppliers). They established a diversity of targets for the localisation of various groups of automobiles. These were largely averaging around 50-60% of the ISDP points (Total 100%). ISDP points are calculated by a particular formula, which is evaluated on the basis of the nature of the component, technology and cost participation, accessibility of raw resource of substances and several other factors. Each industry/manufacturer has to adhere to the ISDP points for which there is a certain system of ISDP audits and accountability (Toyota Supplier Quality Assurance Manual, 2003, 44-73).

4.1.2 Manufacturing Industry in the Country:

The production or manufacturing segment in Pakistan has blossomed significantly since its beginning; it largely rotates around Automobiles, which is one of the largest Manufacturing industries in Pakistan. Securely based on Japanese technologies and ideas of Manufacturing, the production segment tends to hold up the supplier in the most appropriate manner. The supply chain is complex due to certain political, geographical and technological fronts, although the management method is quite similar to the other countries.

Supplier Quality has always stayed as a significant issue, while considering Localisation, which is a peak requirement. Supplier relations also have an immense role in assessing and enhancement of supplier quality; the healthier the relations, the better the ultimate quality of supply components will be (Toyota Supplier Quality Assurance Manual, 2003, 44-73).

4.2 Supply Chain in IMC:

IMC has a massive web of suppliers, supplying consumables, tools and a wide range of automobile parts, ranging up to 2000 parts/vehicle, including a variety of sub-assemblies (manufactured by one or more supplier), electronic components, metallic, plastic and rubber products.

As localisation is a obligatory part of their manufacturing operation and IMC has to commence planning for localisation. This is because it is the beginning of product development, and they have to connect with suppliers in the product development procedure.

An essential and most important part of IMC production is the participation of Toyota-Japan, which is the main organisation. The product is conceptualized and designed in Japan. All sketches and specifications have been developed by Toyota Japan. Also, the body end engine parts are supplied by Toyota Japan, which is rated as CKD (Completely Knock Down) components (Sadgrove, 1994, 22-44).

IMC also holds up value in terms of product development, bearing in mind different factors that deal with the automobile market in Pakistan. Various car accessories and spare components have been used in view of different road, environment and market conditions for automobiles (Sadgrove, 1994, 22-44).

4.2.1 Localisation of Parts in IMC:

Localisation procedure in IMC works out as follows;

The process demonstrated above, generally takes one and a half year to accomplish. Every step holds its own exact details about working methodology. IMC, under the Toyota Management Style, measures Quality Assurance as one of the most significant product's features. Details of its specifications and Evaluation of Product Conformance are fundamentally furnished in the Formal Localisation Proposals (Sadgrove, 1994, 22-44).

4.3 SQAE in IMC:

Supplier Quality Evaluation, in IMC is an essential facet of Localisation of products and the proper SQAE process begins at the 8th stage of localisation cycle prior to the finalisation of the dealer for the supply.

4.3.1 VIR-VER:

There are two separate formats for exposing the Supplier Evaluation results VIR and VER (Vendor Information and Vendor Assessment Reports respectively). These reporting procedures are made use of at the product expansion stage, and so, preparation aspects of supplier quality are entirely put under assessment.

Product Development department implements, both VIR and VER, when handling the surveys at this phase. VIR just gives proof the presence of sound QA/QC department in the manufacturing procedure and marks the condition of the suppliers' quality management process (Zairi, 1994, 89-104).

VER caters to the Vendor capabilities largely, and so vendor's quality control capabilities are examined. VER has got a whole segment for quality and it evaluates the product conformance related features in every portion of vendor's manufacturing structure.

-Supplier participation in Product Development process:

Supplier is asked to Supplier asked to supply the planning schedule for development of jigs, fixtures and other test gear for individual product (Zairi, 1994, 89-104).

4.3.2 Analysis:

VER-Vendor Capability Summary report is an inclusive tool for Vendor Evaluation. IMC-PD also rates the different items in accordance with their relative importance but the Quality department should assess matters regarding quality control and product conformance. Development Engineers always gives the advantage of doubt to the vendors as their efforts are focussed on helping vendors for fast progress of product development, especially bearing in mind the number of localised parts involved in the manufacturing. There is a potential drawback of this method and this often results in misleading quality assurance assessment of the suppliers and consequently it affects both quality and growth of the localisation, as it become more tedious to improve the quality in the latter stages.

The second significant thing is the interpretation of overall results, to classify the outcome into three classes: Good, Fair and Poor. This might also mislead both supplier and buyer companies to whether accept or reject the supplier capability level. This confusion has always been a participant of the supply chain function of IMC, with further classification of Conditionally Acceptable suppliers into (+) and (-), its not easy to decide whether supplier is capable or not to preserve the desired quality level and to what extent supplier should advance its quality control activities. These results must be summarised in terms of Acceptable and Non-Acceptable position and improvement points should be highlighted with particular objectivity (Zairi, 1994, 89-104).

This interpretation methodology will be additionally analysed in the critical analysis (analysing different products from the information attained: end of this chapter) related to the quality assessment of different products belonging to the SC of IMC.

The direct involvement of IMC-PD in supplier assessment ends up here, however, its IMC-PD's responsibility to preserve coordination among suppliers and IMC-QA regarding value matters. IMC-QA has not got a straight communication system with the suppliers and so IMC-PD practices a great pressure on quality evaluation and progress of IMC-QA Supplier Quality monitoring for the period of and after product development. The working procedure of IMC-QA regarding supplier quality assurance assessment is described in the following section (Zairi, 1994, 89-104).


IMC-QA, perhaps conduct trader quality evaluation in a comprehensive manner, however, QA starts to be involved in Vendor assessment only after when IMC-PD finalises VER-VIR and confirm the vendor as the approved supplier. This format is more comprehensive and methodically defines the criterion to establish vendors' performance position on certain items, significant regarding quality and subsequently product conformance.

Following is the presentation of the Vendor quality study report, conducted by IMC-QA. This is a greater elaborative format and weighting system is completely defined according to the rank of the standards set by supplier in terms of different items in connection with quality assurance. This format analyses quality conditions in a better way with the full understanding and application facilitation of Quality department in IMC. It could perform as the Basic Supplier Quality System Evaluation tool (Kenneth, 1984, 67-95).

Insight of the points described above, it's suitable to present this report. It's quite adequate to apply in any production environment or more specifically in automotive assembly environment. Ratings are well described and action plans along with remarks are incorporated for each assessment item. Responsibilities related to different activities are also defined in this approach. Some points are well incorporated like In-process fault control system, Control and guidance of sub-suppliers and assessment of shipping quality. These standards in fact pursue suppliers to implement in-process quality management checks and not only buyer organisation gets the advantage but suppliers also get the manufacturing advantage. So, this reporting format, also with certain enhancement points related to ever changing and advanced production concepts (Kenneth, 1984, 67-95).























- Independent QA dept. with apparent responsibilities and functions.


- Shared accountability for Quality Assurance with Production.


- QA dept. exists but operation and responsibilities are not fixed.


- No QA activity.



- Boundary samples demonstrated at each job site and at shipping


inspection site to enable rectify judgement.

- Boundary samples prepared, and criteria set up to enable


Correct judgment.

- Photos and illustrations permitted by Toyota are used. Quality


Required by Toyota can be ensured, but some necessary items

are missing and must be included.

- No boundary samples produced.



- In addition to 3, boundary sample created.


- Definition and detection of defects established. Definition


Of no faults are distinguished by photos or sketch.

- Definition and detection of defects has problems. Separation


Of faults is incomplete.

- No proper detection of defects



- Check list are prepared, permitted & sent by person who


record them. Measured outcomes are recorded & stored and

used quality Assurance activities on checklist, which is approved

by persons who recorded them.

- Rules and circumstances established. All necessary condition


items included.

- Inadequate rules for calibration exist.


- No rules or circumstances established for calibration



- examination system is fully operational and data is totally



- Measurement tools, inspecting fixture and standard are


available, but examination check sheets are not available.

- Gauging tools and checking fixtures are available but


inspection standards are not available.

- Gauging tools, checking fixtures & examination standard


are not available.


- examination items and criteria determined based on process


capability and permitted by manager and control department.

- Inspection process used illustrations and photographs


for easy understanding, and is shown at assessment site.

- Inspection process prepared. Items and content have issues.


- No assessment procedure prepared.



- Sampling frequency is set based on procedure capability, and defect


do not flow to subsequent procedure.

- Process competence is not grasped, but sampling frequency is set


properly so that defects do not flow outside the company.

- Sampling rules have been recognized, but have problems and not


successful in preventing outflow of defects.

- No rules agreed on.




- Status grasped and controlled by the best management. meeting held


periodically to follow up issues.


- Rules of communicating issues to other departments and process


are set up and followed.

- Either no rules set up or rules established but not followed.



- Control Boards are accessible at each job site and monitored on daily


basis by management.

- Control Boards are obtainable but monitoring frequency is no set.


- Monitoring is done through meeting on requirement basis.


- No monitoring mechanism.



- Use examination result for quality improvement activity. actual numerical.


- Actual mathematical value has been recorded.


- Has record of fault or non-defect. Tractability can be done.


- Not inspected.



- Inspection item decided, taking into account the quality


characteristics of materials bought.

- examination conducted in accordance with rules. Visual inspection


conducted on 100% materials and dimensional assessment on

sample.(Quality characteristics of purchased material are not clear)

- Rules established, but inspection method insufficient


- No rule set up.(No Inspection and quality and assured)



- Guidance planned. System for frequent guidance established and


successfully implemented.

- No particular guidance system established. Staff visits each sub


dealer/supplier for guidance, and check its production process,

- Guidance provided only from time-to-time, but quality status grasped to


the same extent as when leadership is provided periodically.

- No leadership activities performed. No selection criteria.




- Update record is correctly maintained and stored.


- Rules established, and updated edition available. Old version is


replaced with updated version, with no revision recorded.

- Rules established, but updated editions not available. Quality


Assurance has issue.

- No rules set up. Drawings not found



- Inspection standards ready, taking process capability into account.


- Items exceeding Toyota requirements are encompassed. Agreement done


with sub supplier.

- assessment standards not exchanged with sub supplier.


- Items needed by Toyota are missing or have problems.



- Updated versions are properly maintained using maintenance column.


- There is no preservation column. Updated versions are properly


maintained by substitute.

- Standards not handled, but there are no quality assurance issues.


Control is essential in the future.

- No standards ready & maintained.




- Calibration item list is obtainable and record is properly maintained.


- Calibration procedures are obtainable but records are not available.


- Calibration procedures are not obtainable.


- Keeping place and responsible individual is not clear.



- Special/conventional assessment facility with high skilled staff.


- High skilled staff with conventional assessment facility.


- Only conventional / simple type of assessment tools / facility available


with less skilled staff.

- No facility and skill for assessment.




- assessment items, share of work, schedule, quantities etc. have all


been decided and agreed upon with IMC relevant determined.

- For each subject part, assessment items and share of work have been


Agreed upon with IMC.

- It has not yet set up or is being set up



- OTS result completely matched with IMC reports.


- Results of assessment by supplier are satisfactory. Samples passed


Testing for all items needed by IMC with minor improvement.

- Samples does not work for some items, but countermeasure is easy.


- Samples does not work for many items, mismatch with IMC report and there


are no measures to be taken.


- Rules established, standardized and properly executed.


- assessment conducted on shipping quality, as well as on ma


- Manufacturing quality, taking into account preservation time and

delivery form.

- Some assessment items missing.


- Unaware of need for shipping quality evaluation.


The above supplier assessment report is a comprehensive tool to manage the suppliers' quality assurance assessment. Product Conformance issues have been significantly addressed and assessment criterion are clearly defined in terms of measurable items. This format also realizes the current manufacturing capability of domestic suppliers in Pakistan and both worst and best likely conditions put under analysis. This format could be used as the key tool for the supplier quality system evaluation in IMC and with a single-page summary; this reporting document can serve as the sole SQAE tool. However, it is essential to acknowledge the need of acknowledging the continuous enhancement concepts and a system of annual/half-yearly revision must be introduced to include the advanced manufacturing theories. A very significant issue to be realised is that this tool is more related to casual supplier quality audits performed by IMC-QA during the delivery and just used as an improvement tool, not as the formal exercise for SQAE, which reduces the effectiveness of this tool (Kenneth, 1984, 67-95).


IMC-QA starts suppliers' product assessment at the OTS-Off Tool Sample stage. After the endorsement of vendor, IMC-PD issues tooling orders and product development process starts (refer 4.2.1 -Localisation process). This is the main point for the quality conformance of the supply product and IMC-QA carryout a detailed evaluation for this purpose as OTS assessment feedback acts as the backbone of the quality performance of the product in mass supplies.

IMC-QA conducts OTS Evaluation in their premises largely, demanding suppliers to submit reports related to raw material, parts, their quality evaluation report, MQC charts, etc. For this function, IMC-QA has developed a guiding principle booklet “SQAM-Supplier Quality Assurance Manual”, dealing with the needs related to OTS submission, pre-production quality measures to be implemented by suppliers and mass supplies quality control. SQAM also provides guidelines to the suppliers with regard to application of MQC, PFMEA and other tools in manufacturing function. It also defines the model way of documentation and sequential flow of QC activities regarding product design, development and production (Kenneth, 1984, 67-95).

OTS Evaluation is based on various factors like dimensional, material, performance, durability and workability assessment etc. The format used in OTS evaluation is the main format used to conduct audits of the supply components and also used to evaluate the pilot lots and bulk supplies. It also defines the standards for evaluation and also mentions whether standards are obtainable or not. The main standards for assessment are TIS (Toyota Inspection Standard), TES (Toyota assessment standard), Component Drawings, SQA (Shipping Quality Audit) Manuals and other practical standards. Judgement on the quality height of supply products is based on three criteria: Acceptable, Conditionally Acceptable and Not-Acceptable, the conventional way of IMC to analyse the quality. Following is an descriptive example of OTS evaluation methodology of IMC-QA. Formal OTS assessment reports are drafted in the same manner. [See Appendix: Illustrations 1-4]

The OTS report is the core of product conformity methodology in IMC. Critical analysis of OTS assessment methodology will be presented in context of analysis of overall IMC-QA Supplier Quality assessment system. Its not as simple as it looks in first glance, OTS evaluation, in sight of the nature of production operations applied to produce an automobile, is an intricate activity (Kenneth, 1984, 67-95).

In many cases, when IMC needs to produce some new parts, different from what designed for original Toyota models in Japan, examination standards are established by IMC-QA on the guidelines provided by general examination criterion.

It has been observed that OTS of several supply parts has been submitted for more than three-four times, sometimes showing no signs of development, or indeed very little improvement (Kenneth, 1984, 67-95).

In the questionnaire, the Manager give details that the evaluation of the supplier is done by the different methods which talked about above like the VIR-VER, perform test on the supplier products, and rated the supplier as described above in the evaluation form. After the basic evaluation of the supplier than the next level for the approval of supplier is the product conformity. For the product conformance evaluation of the supplier or the assessments of the supplier the major methods are use by Toyota (Pakistan) are OTS-Off Tool Sample, auditing of dealer/supplier and done the PPM test. After these assessments Toyota knows the capabilities of the supplier. This helps the Toyota to make a decision.


As explained above, IMC-QA uses the same format and procedure to inspect pilot lots or bulk amounts of supplier products. However, sampling layouts are made on the basis of the supply quantity and value performance. Acceptance or Rejection criterions are also described.

This technical reporting process is also followed during supplier surveys and product assessment at the suppliers end. However, this reporting layout has been the same for the last ten years, not many changes have been made to it. However, considering the intricacy of automobile manufacturing, huge number of different components involved and responsibility of localisation of components, Supplier Quality (in IMC) tends to be the subject needs large efforts in its application. So it's important to do decisive analysis of SQAE process (IMC-QA). Preceding changes must be brought forward regarding SQAE system application to preserve its effectiveness (Kenneth, 1984, 67-95).

In a questionnaire, the Manager answers yes, which means that the Toyota does the inspection when the dealer/supplier products are delivered to Toyota. It is because Toyota wants to make sure that the products that are sent from supplier should be according to their standards.


Following is an attempt to analyse the decisive points regarding SQAE in IMC. Not only technical factors should be examined but also the managerial and methodological issues should also be scrutinised as they evenly (sometimes more strongly) affect the quality of the product.

Questionnaire Analysis has been completed in order to critically appraise the IMC SQAE methodology. Information with regard to local parts quality performances, technical evaluation of supply products and their effect on overall manufacturing performance of IMC has been analysed in the way to recognize the competencies and enhancement points. This information has been summarised and graphically displayed to highlight points of significance (BSI handbook 22 Quality Assurance, 1987, 96-100).

These analyses have also been contrasted with the methodologies illustrated above in the literature review.


-Both PD and QA in IMC got inclusive tools to evaluate suppliers' quality related to Elementary product development procedure. And now in Toyota the supply chain quality concepts have been included in a comprehensive manner into VIR, VER and IMC-QA's vendor quality assessment.

-Toyota's world-renowned ideas of Kaizen-Continuous Improvement, TPS and technical quality standards are also included with effectiveness. These concepts have gained popularity and admiration all around the world regarding manufacturing and so suppliers also recognised the significance of these concepts and so suppliers accept the application of this quality assessment.

-Presence of Toyota Inspection and assessment standards (TES and TIS) always proves to be the backbone of technical assessment.

These standards, as one would expect, demonstrate perfection in terms of inspection and testing methodologies and cover each feature of inspection like details of testing equipment, testing conditions and certification etc (BSI handbook 22 Quality Assurance, 1987, 96-100).

-Rating criterion for different assessment items. IMC-QA reporting format (shown in section 4.3.2) shows some immense examples of defining rating standards in terms of simple numbers. Toyota also uses the similar report layout for rating suppliers' assessment or quality assurance.

-Toyota has a Comprehensive structure for OTS evaluation, which is use for the suppliers. The reporting methodology of OTS assessment is comprehensive in terms of different testing items. It covers measurement, material; fitment, presentation and workability related testing items. (See 4.3.3).

-Involvement of Trained staff in examination and evaluation. All team members responsible for the technical assessment of supply products are well trained regarding use of examination equipments.

Toyota believes in providing thorough knowledge of all subjects regarding the science of production and so all IMC-QA staff has been taught in a sound manner to accomplish quality evaluation, inspection and all related functions.

-To preservong the standard Toyota also, Uses ISO 9000 standards and principle in establishment of SQAE systems. IMC covering methodology related to quality evaluation is indeed compatible to ISO standards and therefore it helps to develop a certain level of understanding with regard to quality assurance with the suppliers.

-In Toyota, there is a Strong Data Analysis and Communication linking IMC and vendors. IMC-PD attains the duty of maintaining strong communication with the suppliers. Computerised system (SAP) for recording receiving examination data is also under exercise and accelerates the procedure of data analysis and communication to the suppliers. SAP can distinguish among thousands of variables regarding component categories and their faults.

4.6 Conclusion:

This analysis demonstrates that both managerial and technical sides of SQAE need a lot of attention, particularly in organisations like Toyota-Pak (IMC). However, literary research encompasses the technical and statistical sides of SQAE comprehensively, but there is nothing much available with regard to SQAE management and small details like some of the weaknesses in IMC-SQAE operations which are the followings.

* Product Development naturally facilitates suppliers and cannot examine the matters where strict analysis is required. Timeframe plays a significant role and IMC-PD, as it handles large volume of localised products, favours suppliers and tends to neglect quality issues to save time and reach the localisation targets on time. Considering tight development and production schedules, it's no shock that Development department cannot cling to the critical responsibility of SQAE and taking the final decision in this regard. Any undue favour to suppliers could wrong the quality performance and it has been proved in IMC in recent times.

* Weaker influence of IMC-QA in the procedure. IMC-QA possesses good tools (as discussed above) to assess the suppliers' quality system and product conformance systems but it cannot take the formal choice to certify the suppliers' quality. Mishaps, uncertainty and misunderstanding regarding execution of SQAE principles on supplier side come into action because IMC-PD deals with the judgment regarding acceptance of supplier value and QA later takes the duty to control the suppliers' quality. Rules and regulations are not followed constantly in this conditions and issues observed many times during the product conformity and their quality analysis. IMC-QA doesn't hold the power it must have and eventually IMC has to surrender on certain grounds related to quality.

* IMC-QA doesn't assess the product accessories, and sometimes suppliers don't surrender them with the OTS or Pilot Lots either. These small accessories like wires; nuts, bolts etc. result in many quality issues later on during the bulk supply and using up of supply parts on production lines. Similarly, part recognition is also neglected in evaluation. There are many body parts that look similar but are different regarding fixture on the vehicle and it's a normal practice in IMC that components are installed and fitted on the wrong side/wrong quantity/wrong location, causing issues.

It's quite obvious that industrial functioning principles or methodologies are quite complete and looks effective in nature (especially in organisations like Toyota, Siemens and Motorola etc.), but the real debating matter is the application of such principles. Researchers formulate methodologies and formulate the methods for inspection, assessment, sampling and analysis though, but the real-time industrial issues are not discussed sometimes. With the growing volume of supply chain in production industry and the emergence of global supply chain idea, it is important to take supply chain and supplier quality as vital as the manufacturing function itself (Enrick, 1984, 22-35).


The proposed methodology formulated in this thesis focuses on the IMC-SQAE system analysis and all the value adding works including enhancement points are derived from the analysis of IMC-SQAE advantages and disadvantages. This proposal is not just a model or reporting format for SQAE but is an effort to establish a comprehensive methodology. Both industrial and scholastic practices have demonstrated good methodologies and their applications but there is a room for enhancement regarding minor and complex details, which are indeed similar to those of manufacturing function itself.

Some of these finer details have been demonstrated in terms of IMC-SQAE weaknesses analysis. In this chapter, the suggestion for the establishment of SQAE methodology will cover all these features of Product Conformance and manufacturing function and try to correlate supplier quality assessment with the manufacturing and quality of the buyer organisation. Relationship plan with the suppliers regarding guaranteeing quality will also be formulated. Supplier Quality should be treated on strategic grounds rather then on routine-work and that's what is taken into reflection in this proposed methodology.

It is important to strategically formulate the SQAE methodology in form of sections related to different phases of supplier participation in the manufacturing process. Clearly it starts with the product development stage, taking account of mass supplies later on. In this proposed Methodology, SQAE process is divided into three phases,

a) Supplier choice Stage

b) Supplier Quality assessment during Product Development Stage

c) Supplier Performance assessment (Bulk Supplies)

The level of strictness with regard to quality assurance standards and evaluation of supplier quality assurance performance turns softer with the stages. Its important to take this matter into consideration, suppliers should be chosen through vigorous selection procedure as once they are certified and start supplying products then its not easy to enhance or attain the better quality of the products. So it's essential to start strict and soften it up with the time, as sometimes, due to greater production volumes and to deliver the products on time, buyers have to be relaxed regarding quality checks in order to fulfil the demands. Cost is another feature that could affect the concern for the quality; costs of examination and repair are quite high, so it's feasible to check quality strictly in the choice and development phase rather than rejecting supply parts in bulk supplies.

Similarly, time frame for the initial stage i.e. Supplier Selection should be bigger than that for the second one and same rules applies for the advanced stage. The aim is to concentrate on the bottlenecks and the enhancement points in the first stage to minimise the possibility of appearance of disadvantage later on when supply chain is set up full operation and needs even running. Time frame is also dependent on the nature of the product and function associated with the supplier (Enrick, 1984, 22-35).

IMC-SQAE methodology is founded on weighted points system, giving weight to certain important aspects of supplier choice. A category system could also be implemented which rates quality system group wise but the most advantageous way is Cost Based Rating system [Chow, Yen and Chang, 2003].

In this proposed methodology, a variety of aspects of SQAE are described stepwise and a methodological layout is discussed, targeting the significant issues. However, some imperative points like rework and repairs at the buyer's end due to bad supplier quality have been put up, which are not there in literature or in industrial (IMC) practice with the weight they must be given. On the other hand, it's avoided to show the survey type rating system, giving weighted points to heights of the performance, because different industries devise these levels on varying standards, compatible to their purposes and management styles (Enrick, 1984, 22-35).

5.1. Supplier Selection Stage:

In supplier selection process, price and dependability hold great importance regarding the selection criteria. However, quality, in some cases comes after or just side by side with the price. So some buyers tend to choose a cheaper supplier with an average quality performance but this approach can harm the business function to a great extent. Bad quality can cost hundred times greater than one would expect it doesn't only affect manufacturing excellence but also makes customers to lose confidence regarding business progress.

So, Quality Assurance should top the list of assessment items regarding Supplier Selection. Same weight as price, in some cases greater than price or anything else where high precision is the main factor regarding product quality should be given to the quality related factors.

The most significant thing in this regard is the involvement of QA department in supplier selection procedure itself. All matters related to supplier quality should be assessed and judged by QA only; Product Development should only coordinate the activities.

Different aspects of SQAE with regard to Supplier Selection are described in following table in steps describing the evaluation items and tools, highlighting debateable and critically important points related to the setting up of Supplier Quality Evaluation methodology. However, the mode of assessment, weight given to different points and ranking could alter for different types of production functions and companies.

Following is the table with the details a purchaser should take into account while establishing or executing a methodology for supplier quality evaluation regarding supplier selection. As discussed above, it must cover all factors in a sequential manner. However, this is just a methodological layout; reporting or assessing formats could be designed up to suitable levels. Most important is to determine the items need to be evaluated the assessment tools and judgement criterion.

assessment Item





Current Perf.



1-Quality presentation History with other clients.



2- ISO Certification and execution.


3-Quality Management System.


4-Design quality

a- Design Technology and accuracy


b- CAD/CAM application.


c- Tool/Die/C/F Design Quality.


d- Reverse Engineering.


e- Value Engineering.


f- Capacity to establish standards and specifications.


g- Drawing abilities.



a- In Process QC system.


b- Tool and C/F Production.


c- Storage System for finished/in -procedure products.


d- Production Lines Individual quality presentation.

Survey/ QA


6-Advanced Manufacturing.

a- Application of PQC, PFMEA, Six Sigma, QFD and TQM values.


b- Process Layout and capacity Analysis.


c- Understanding of JIT QA needs.


7- Quality Assurance.

a- fault Identification and Prevention capability (Source Inspection).

Survey/QA Reports

b- Examination Standards for every single product.

Survey/QA Reports

c- Detailed assessment facilities.


d- Planning for Evaluation and examination for products at all stages.

Survey/Production Rep.

e- Incoming Inspection System.


f- Inspection and assessment Records.


g- In-Process fault Control System.


h- Gauges/Equipment/Checking Fixture Calibration.

Survey/Calibration Rep.

i- Application of Boundary Samples.


j- Use of Ishikawa (fishbone) diagrams, kaizen and Continuous enhancement Concepts.

Survey/Production-QA Reports

k- Sampling methods


l- Overall Quality analysis method.


m- C/F assessment.

Survey/QA Rep.

n- Shipping Quality Audits.


o- Customer feedback analysis.


p- Corrective movement responsiveness.


q- Application of SPC.


r- Sub-Supplier assessment System.


8- Management and HR.

a- Quality Policy and purposes.


b- Training of Inspectors and QA staff.


In the above table:

- Assessment Items: Different aspects of supplier quality.

- Assessment Tool: Method/tool/technique of performing evaluation.

- Awareness Level: Level of Supplier Understanding of the method and awareness of the significance and application of the tool.

- Current Perf: present level of performance analysed in surveys/audits and data reports.

- Requirements: Buyer's /standardised needed level of performance.

- Remarks/feedback: feedback to the supplier regarding enhancement points or future plan regarding the assessment (Enrick, 1984, 22-35)

Each of the above assessment items can be further categorised to define different levels of performance. It could be numbers, circles demonstrating quarter, or any other way of elucidating the grades of performance. However, it's important to check the awareness of supplier with regard to these items because it sets the course for future supply chain value and its just objectives, which could demonstrate any organisation's honesty to the cause of quality.

Example of further break-up of the evaluation criterion is as follows:

Awareness Level: Can be rated by weighted numbers.

0: No awareness/understanding.

1: Just simple level knowledge.

2: Mediocre Knowledge but unaware of the necessity.

3: Applicable knowledge.

4: Updated Knowledge and completely aware of the necessity regarding application.

Current Performance:

0: No application.

1: Insufficient application.

2: Processes are available but no records.

3: Intermediate stage of application.

4: Proper application and all records are obvious.

The foundation of allocating these numbers can be given via any questionnaire with check marks.

Ideally, Requirements should be set up at the optimised maximum level, but it depends upon the buyer's demands and assessment of specific items related to its manufacturing objectives (Hahn et al, 1990, 2-7).

Current Performance again can be determined against some standards; these standards should be suitably established, considering the nature of business, operations and market conditions. Similarly, buyer's requirements can be established in terms of numbers and levels. Development points can be declared in feedback and remarks section.

Some items are pretty important regarding modern business effectiveness like advanced developing items; PQC (Product Quality chart, showing all the aspects of any producing process; showing the nomenclature of products, procedure flow, tooling/machine layout, manpower, checking points, examination and final production process). It is important to decide on the No. of products approved on first time inspection, JIT awareness and competence because it helps producing goods OK first time (Hahn et al, 1990, 2-7).

Product Quality chart or anything one can call it, is an attempt to combine all the necessary details regarding process and product plan, the inspection process and points. It could be formatted, processed in any way; the main aim is to evaluate process-product layouts, examination layout and process, identification of each and every step in action. It is one of the most significant tools regarding quality analysis of the product, can mark out the root cause.

Supplier must be encouraged to use these implements and can be supported before pre-selection audits. Examples of PQC, Process and Product Plan are given in the end of this chapter.

All these items can be jointly judged to formulate last judgement and results, and also can be rated separately and allocated some weight or points to demonstrate their significance. It's up to the conditions, under which supplier selection takes place, and the objectives of supply chain. It also relies on a lot on the organisation's management style and the business objective and clearly on the nature of the manufactured product and its market, but no recognition with any sort of conditions should be made.

In view of the proposed SQAE methodology, that supplier must be given support before and after selection audits. They must be given appropriate time period and support from the purchaser to make improvements. However this also depends on the first assessment results done by buyer. Clearly, supplier with the better results would be given preference (Hahn et al, 1990, 2-7).

5.2. Product Development Stage:

In this phase, the most important thing is to assess supplier's products, which are under development. The purchaser needs to take following points into consideration and assess supplier performance regarding product development using following points:

- Product's detailed assessment during NPI process.

- Complete paperwork regarding product layout, process layout, and product quality chart and assessment report by supplier should be submitted and analysed.

- Evaluation of checking fixtures and measurement instruments provided by supplier in order to verify the fitment and dimensional quality of the product.

- Submission of Sampling Plan, Inspection Criterion (based on the standards furnished by the buyer) by supplier. However, Buyer's Product Development Department must assist suppliers to establish these items.

- Assessment of the supplier premises to estimate and audit the production process at their end.

- Cross checking to ensure the uniformity of specifications, examination standards and judgement criterion during the supply chain procedure.

- To assess the samples submitted by suppliers in both on and off line production trials, using various operating conditions just not to examine all samples at the same time.

- Submission of all kind of test reports, founded on material, workability, toughness and chemical tests along with the sample.

- Supplier should supply the certification status of the third party who is involved in product testing for the endorsement of the buyer.

- Strict status on No Conditional Acceptance. Samples must be rejected straight away if they don't fulfil the specifications.

- Complete acceptance criterion should be set up for each assessment item, even minor ones like outlook, it should not be left on the will of inspectors, and there must be a concise standard (Hahn et al, 1990, 2-7).

5.2.1. Product Evaluation:

First Samples, or OTS (Off Tool Sample) must be evaluated comprehensively, and separate check sheets/reporting formats must be used to evaluate different attributes for the product. Each and every quality has its own specific standards showing the tool used for examination and the other testing conditions as well.

The assessment items, in general, should include the following attributes, although it relies on the nature of the product to choose what attributes should be tested or not, for instance, plastic or resin based parts cannot be tested for welding performance. So, it's important to choose appropriate assessment items for supply products.

1. Appearance: For exterior body parts particularly; paint, colour, rust or decomposition and texture checking etc.

2. Dimensions: Distances, Pitches, and measurements such as diameters, radii, surface profiles, Angles. Clearances and Level ness etc.

3. Material: Basic material characteristics, tensile strength, flexural strength, yield strength, exterior treatment tests, chemical and physical properties etc.

4. Performance: strength tests and practical analysis of functional parts like engine, switches, air-conditioners, steering assemblage and exhaust assembly etc.

5. Fitment: (for Assembly products) Fitment with the mating components, fitment scrutiny on assembly lines to check whether it's easy for an operative to install part under the model work instructions. Fitment on checking fixtures as well must be evaluated.

6. Workability: Workability investigation of the product. Operational performance after fitment.

7. Checking Fixture Evaluation: Checking fixtures and measurements also need to be evaluated and assessed against specific standards.

8. Product Nomenclature: As discussed above, a car comprises of hundreds of components, look similar to each other, but are quite different. So it's vital to make sure that the component identification is feasible for the fast paced manufacturing. Product accessories such as nuts, bolts and wires etc. should also be checked against the specifications.

It is significant to first establish a grade system of the parts assigned to suppliers, and in fact for all products. This ranking must be based on the nature of their function, nature of manufacturing procedure, cost of production and criticality of their performance. Product assessment, and in some cases, Supplier Selection criterion should be established on the grounds of these ranking and obviously , the quality assurance standards should be more stringent for the high ranking products and could be a bit lenient for the lower grading non functional products (Hahn et al, 1990, 2-7).

The assessment items described above, should be put up under practice in a sequential manner, step by step assessment, this means if some product fails to satisfy the dimensional and material assessment standards then it shouldn't be evaluated for Performance and Fitment. Even if it doesn't look faulty (regarding performance) in first place, but there is a strong likelihood that it would fail to get along with the quality needs in later stages and that could create a bigger problem (Hahn et al, 1990, 2-7).

5.2.2. Buyer's Responsibilities:

Buying organisation's responsibilities comprises following aspects;

- To support supplier with regard to tooling and technology transfer related to design and assuring quality of the products.

- To timetable the quality audit and survey activities with the consent and confidence of the supplier.

- To provide supplier all the essential documents, drawings, standards and specifications prior to product development.

- To make sure that all activities with regard to quality assurance and product conformity are well planned and adequately implemented.

- To design or to facilitate supplier with all the necessary details regarding patience related to products and processes.

- To maintain a successful level of communication with the suppliers during product development stage (Hahn et al, 1990, 2-7).

Tolerance for critical assessment items should be followed very strictly after being set up and there should only be complete Acceptance or Rejection regarding judgement. Supplier should also be asked to supply Sampling plans for Bulk supplies. Product evaluation at this stage must also incorporate the Shipping Quality Audit standards and also the complete standard quality check of the final assembled product, to fulfil the requirement of complete quality assessment of the new product. However, Conditional Acceptance must only be applied where evaluation item doesn't seem to be critical.

During the Product Development stage, after getting samples, suppliers should be asked to submit pilot lots, so as their production stream quality can also be checked. Same Evaluation criteria must be used to evaluate samples from the pilot lot and after the whole trial of pilot lot, if product judged as accepted, supplier should be asked to start regular supplies (Hahn et al, 1990, 2-7).

5.3. Supplier Performance Evaluation in Bulk Supplies:

It's not an easy job to establish the supplier quality status based on the quality of the products under bulk supplies. Conventional methods for these purposes are based on incoming examination results; usually established on the basis of sampling, sometime just can't be effectual to raise the quality standards. However, Sampling is indeed necessary in order to manage the examination of thousands of supply parts in short period of time but it must be realised that overall vendor performance should not be judged on the basis of Sampling Inspection. Proper Supply components audits should be done from time to time, results must be taken into account regarding appreciation of supplier quality (Hahn et al, 1990, 2-7).

A weekly/monthly report must be formulated for each supplier to convey the quality performance and so as a rating system must also be maintained. This sets up the sense of competition among suppliers, and if possible, rate the suppliers in different categories, for example, one group could be the nature of product, rate the suppliers who supply same type of product in the same category and a joint supplier performance can be rendered to all of suppliers in that category. For instance, suppliers of rubber products could be ranked in a same category, analysing the quality of their products, which are clearly classified in the same category as rubber and have similar performance requirement (Schuurman, 1984, 95-98).

Supplier responsiveness and its efficiency related to take preventive action should also be analysed and included into these performance reports. Supplier should also be made conscious of the final consumer complaints. However, quality measuring and improvement techniques for mass supplies are well described in both academic and industrial practices and presented in different appearances. Parts per million (PPM), used to analyse the ratio of faulty parts is one of the most advanced method to show the quality performance of products. AQL, LTPD and vaiour other sampling methods are obvious in literature as well (Schuurman, 1984, 95-98).


6.1 Relationship with Advanced Manufacturing concepts

The proposed SQAE methodology, recognizes the significance of Advanced Manufacturing concepts. The first section, Supplier Quality assessment regarding Supplier Selection includes the evaluation items related to advanced manufacturing concepts like JIT, Lean and Agile production. The item addressing the assessment related to the supplier's capacity to produce goods acceptable first time is fundamentally the mainframe of Lean Manufacturing Principles (Wolfe, 2002, 138-147).

There are some additional clauses related to JIT technique and quality demands presented in the proposed framework. Evaluation items related to Product and Process Layouts, Inspection process and Product Quality charts have been put up in the proposed framework. Similarly, there is a question for six-sigma awareness for the dealer/supplier and its compatibility with the buyer's requirements.

Use of Ishikawa- Cause and Effect illustrations have also been put up as one of the features regarding supplier quality evaluation. These tools aid in establishing the source of defect production and getting rid of the cause of defects. It also helps in analysing the supplier ability to avoid the defects passing on to another phase without being wiped out or detected (Wolfe, 2002, 138-147).

Shipping Quality audit is another methodological feature of advanced quality tools used to evaluate the quality of any type of product, but largely associated to the assembled products like cars and aeroplanes etc.

Assessment of CAD/CAM activities has also been made. CA/CAM has now been considered to be a vital element of manufacturing function, especially where high precision is required. Similarly, Reverse Engineering is also a basic phenomenon associated to Design and Manufacturing where huge numbers of components are included in building up of a product, like automobile. Most of the buyers dispatch samples to suppliers in order for them to follow the design and apply reverse engineering principles to produce the product, so it's very important to evaluate the reverse engineering capacity of the supplier (Wolfe, 2002, 138-147).

6.2 Possible Outcomes and Hindrances associated with the proposed SQAE Methodology

Benefits and Possible Outcomes:

The proposed methodology will help both supplier and buyer quality assurance systems in terms of maintaining good quality levels. As a purchaser is applying SQAE as one of the main functions with regard to manufacturing, a supplier could also realise the intensified importance of achieving good results in terms of quality. Overall outcome is the better and ever-improving quality of the final product (Schuurman, 1984, 95-98).

Proposed SQAE stringently evaluates all aspects of Supplier manufacturing function which could affect the quality of the product for supplier assortment and if a supplier fulfils such rigorous demands then it can give an enormous boast to its confidence and can help to earn more business. However, at the same time, this methodology also compels a buyer to make its quality performance suitable to the standards and also to put up accurate work regarding design and manufacturing.

The second stage of proposed SQAE methodology stressfully reckons that product should be evaluated or inspected step-by-step, if it fails to be approved against standards in the first step (dimensional evaluation) then it must not be assessed for the items related to the next level (performance and workability evaluation) . This cuts the amount of unnecessary work done regarding inspection and cuts man-hours plus costs associated to inspection (Schuurman, 1984, 95-98).

However, it is important to apply this SQAE methodology in the proper context, with the clear intention ameliorate overall quality. If buyer's quality performance is full with faults, then supplier would not follow the quality expectations willingly. So, buyers must set up the SQAE methodology taking account of its own quality performance and standards and must make it compatible with the nature of their work and results.

This proposed methodology is well tailored to SCM principles. Cost based Evaluation of supplier quality performance additionally favours buying organisation to scrutinize the losses and profits associated with its manufacturing. So no further cost analysis and calculations are needed for later stages. Many companies (just like IMC) allocated more than 50 percent of the parts/components to suppliers and so cost analysis related to supplier quality assessment helps them in analysing their financial outcomes (Schuurman, 1984, 95-98).

6.3 Hindrances and Feasibility

There are few obstacles a buyer could face regarding the implementation of the planned methodology. Some of them are as follows,

* Overall technology level of production in the market: If the technology level of general manufacturing industry in the market is not sufficient then buyer nor supplier can execute the proposed SQAE methodology. It also relies on the level of the products under use in the market.

* Location of Suppliers: Physical space matters a lot regarding communication and execution of business strategies. If supplier is remotely distanced then it's not simple to do all surveys and audits related to SQAE. One has to rely on the data and reports which could be presented in any shape and any state by suppliers.

* Small Sized Manufacturing Organisations: The proposed SQAE methodology requires long period of time, big effort and sufficient manpower to be applied and is not feasible for small sized companies who cannot manage to put up efforts to analyse quality. Such companies must utilise third party assessors or simpler methods to assess Supplier Quality.

* This proposed SQAE methodology is most suitable for the Assemblers and automotive production companies. Such organisations deal with a huge number of parts to manufacture the final product and their supplier foundation is immense as well. They relies a lot on their supplier to basically maintain the good level of quality and so needs to assess supplier with rigour and concern (Schuurman, 1984, 95-98).


7.1 Analysis of Research Work done

The research completed for this thesis fundamentally encompasses around automotive industry, considered as one of the chief branches of manufacturing. However, it is applicable for other industries like aerospace most significantly which has greater depth of supply chain and where performance with regard to quality is more than important to survive. Data rendered by the pilot organisation (IMC) basically consists of quality reports and different layouts, not in the form of proper documentation which means that IMC has not gotten a appropriate set up for evaluating Supplier Quality and not a lasting department/section performs SQAE but what reflects is that IMC considers SQAE a secondary operation of Supplier Evaluation as Quality department just involves in examination and not in the detailed evaluation of supplier capability with regard to quality (Schuurman, 1984, 95-98).

However, literary practices are very strong in terms of conventional quality evaluation tools and methodologies but if one explicitly analyse the IMC_SQAE system then he/she would conclude that IMC is still following all authentic methods and principles to assess supply product quality but yet does lack in setting up a proper methodology, planning and execution system. This research basically capitalises on this weakness of the SQAE system and tries to deal with minor issues related to planning-management of SQAE and its harmonization with the technical quality issues.

Any methodology, when implemented, requirements to be worked with unadulterated purposes to achieve the purposes associated with it. Ideas like Conditional Acceptance looks appropriate to accommodate any problem that it seems it cannot be resolved but open the door for many disagreements, misunderstandings and issues regarding quality, which is certainly an inflexible phenomena and should be regarded with complete grip, not to be left with disadvantages or gaps, that's what the proposed Methodology addresses in this dissertation (Schuurman, 1984, 95-98).

Analysis done in this research based on the reports and data based on total manufacturing and value progress reports. One would smoothly analyse that IMC has been facing lot of troublesome issues related to dealer quality yet they seem applying a particular method but without any proper practical managerial approach. This is what given value in setting up the prospective methodology n this dissertation.

7.2 Further Research-Recommendations

Supplier Quality Assurance seems to be more of a secondary activity, in view of the elevating competition both in international and domestic markets. Thorough research work has been put up recently and its one of the major topics in view of manufacturing studies.

Further investigation can be done in view of this dissertation, based on following aspects of SQAE.

- Quality Planning to support Supplier Quality Development.

- Examination techniques and reporting related to supply components.

- Supplier-Buyer relationship- Role in Managing Quality of the resulting product.

- Supplier Quality Audit methodology.

- SQAE for process and retail industry.

- Setting of Standards and needs for Supply Products Evaluation.

- Statistical ways for SQAE etc.

8.0 References and Bibliography:

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22. Jaideep Motwani, Mohamed Youssef, Yunus Kathawala and Elizabeth Futch, Grand Valley State, Eastern Illinois University and Norfolk State University, USA. Journal: Integrated Manufacturing Systems, 10/3, (1999), pp. 154-161. MCB University Press.

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26. Most vendor certification methods are trivial, Bhote, Keri R. (Motorola, Inc) Paper: Annual Quality Congress Transactions, volume 46, 1992, pp. 230-236.

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28. Performance-based supplier audits, Curry.Paul M. Journal: Proceedings of the American Power Conference, volume 53, number 2-1991, pp. 1344-1346. Published by Illinois institute of technology.

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  3. Product and Service testing Methodology, and ISO 9000, T.C. Chiang, AT & T Bell Laboratories.
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33. Purchasing partnership: essential to continuous quality improvement, Springer, Karl J. (Southwest Research Inst) Paper: American Society of Mechanical Engineers (Paper), 94-ICE-9, 1994, pp. 1-5.

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  3. Quality Control for Management: Kivenko Kenneth, 1984, Prentice Hall.

37. Quality is still free, Philip B. Crosby, 1st edition, 1996, ISBN 0-07-014532-6.

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39. Quality management benchmark assessment, Russell, J.P., Columbia Quality, Journal: Quality Progress, volume 28, number 5-May 1995, and pp. 57-61. Published by ASQC.

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43. -Quality, Reliability and Process Improvement, Enrick, Norbert Lloyd, 7th edition, 1984, ISBN 0-8311-1125-9.

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45. Selection of Suppliers, Schuurman. F. J. H. Journal: Quality Assurance, volume 10, number 4- Dec 1984, pp. 95-98. Conference: World Quality Congress, June 19-21, 1984.

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47. Simple system for evaluation of sub-contractor performancem, Balakrishnan, N.T. Paper: National Electronic Packaging and Production Conference-Proceedings of the Technical Program (West and East), volume 2, 1997, pp. 753-754.

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49. Steel supplier evaluation techniques to assure bearing performance, Wolfe. Jerry O. (Bearing Materials and Metallurgy, Timken Company, Timken Research) Journal: ASTM Special Technical Publication, number 1419- 2002, pp. 138-147. Publisher: American Society for testing and Materials.

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51. Supplier quality and reliability assurance practices in the Spanish auto components industry: a study of implementation issues, Javier Gonzalez Benito and Barrie Dale, University of Salamanca, Manchester School of Management, UMIST, Journal: European Journal of Purchasing and Supply Chain Management, issue, 7 (2001), pp. 187-196.

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58. Toyota Supplier Quality Assurance Manual, for Toyota Pakistan (Indus Motor Company Ltd.), April 2003. Sections 5-8.

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