Some Determinants of Satisfaction and Quality Performance in the Electronic Components Industry

As internal design and production processes have been simplified, standardized, and brought under statistical control, firms have looked to systems and channels outside operations to further reduce defectives and improve conformance quality. Because most manufacturers buy more than half their inputs from outside suppliers, practical approaches for improving incoming component quality are particularly relevant for reaching the goal of zero defects and total customer satisfaction. This study examines the effect suppliers' internal quality management practices and buyers' supplier development practices have on customer and supplier satisfaction and on supplier quality performance. Results indicate that clarity, transparency, and control of quality management and supplier development programs are the key influential factors that lead to mutual satisfaction among buyers and suppliers. It appears, however, that supply base reduction and quality performance standards may have been pushed so far that suppliers are resorting to an overactive quality department to inspect quality into their components.