Assessment of supplier quality cost in automobile industry
Today the cost of quality (COQ) is of more strategic and economic importance, which has been previously applied for an internal performance measure within companies. The purpose of this paper is to present cost of quality using part per million equivalents (PPMeq) to determine rejected parts and their associated manufacturing cost. The customer’s products and services depend upon supplier’s cost, quality and delivery improvement. The purpose is to communicate expectation to our suppliers that has to be used in the manufacture, design and development of parts, products. A competitive advantage can be more effective by supplier quality management practices which involve a commitment of time, resources, and expertise. This paper briefly outlines PPM agreement to establish a minimum standard for the supplied quality and to encourage suppliers to develop ways of working towards the prevention of non-conformances and their underlying causes implemented by such manufacturers in supplier quality management.