Performance Based Evaluation Systems Under Total Quality Management

Abstract

Many firms are moving toward closer relationships with key suppliers to support total quality management (TQM) and just‐in‐time (JIT) systems. Because these systems dictate closer working relationships with suppliers, supplier evaluation systems will also undergo changes. This article focuses on these changes.Evaluation systems under TQM/JIT must be broader in scope and oriented toward proactive problem solving and continuous improvement. They will be characterized by short‐ and long‐term improvements jointly selected by both parties.These propositions are supported by a case study at a large corporation that successfully implemented TQM/JIT. Results indicate that the firm improved its supplier evaluation and selection process. These improvements led to increased customer satisfaction and lower costs. Improvements realized in the evaluation process were accomplished through the increased use of data, customer and supplier input, and feedback from the purchaser. Finally, the case study reviews the broader evaluation measures used in a TQM/JIT system.