Quality and cost significant for manufacturing supply chain sourcing

Manufacturing supply chain sourcing can be dependent on a broad range of different criteria, but new research reveals that certain of these might be more important than they are to non-manufacturing companies.

An article published in the International Journal of Business Performance and Supply Chain Modelling compares the priorities of manufacturing and non-manufacturing firms.The researchers looked at four main segments of supplier selection – quality, price, service and delivery – to see which are prioritised by decision-makers in the two groups, and if there are any differences between the two.

Among non-manufacturing firms, lead time was more important, but in the manufacturing respondents, nearly every quality-related characteristic ranked more highly, along with opportunities for cost reduction.

One potential way to achieve both of these aims is through global outsourcing, which can enlist the assistance of firms with skills and expertise, or specialist equipment, and save on the cost of trying to produce components of high quality in-house.

Clearly, manufacturing supply chain sourcing is focused on finding the right balance between base price and quality of components – and those holding the purse strings prefer not to compromise unnecessarily on quality. Areas that can be outsourced include various types of casting including steel casting and aluminium casting. 

Overall, significant differences between large and small firms were detected in three quality-related sub-criteria, and one each of cost, delivery and service, which is perhaps unsurprising given the potentially costly nature of quality failures in manufactured components, and highlights the potential value of global outsourcing of component production.