I have always said that greater consideration should be given to companies that provide proof of their qualifications.
This comes in the way of a prospective supplier or contractor having the facilities, technical know-how and experience to be able to meet the needs of the municipality or private sector owner.
While price comparisons can normally be made on an objective basis, comparisons of the quality of supply offered by different potential suppliers can be more difficult to assess before the supply is made.
The ancient practice of taking up references has its uses, but such reports tend to be subjective and anecdotal. Fortunately, industry practice has now evolved to the point at which it is possible to identify at least some objective attributes of high-quality supply, these include total quality management (TQM) and International Organization for Standards (ISO) certification.
Since in the private sector many large corporations confine their purchasing to companies that have a commitment to TQM there is good reason to argue municipalities should also give some consideration to this option.
TQM is an all-embracing term describing the business theory that it is possible to effect a variety of efficiency improvements across a business by striving for perfection on a number of fronts.
It incorporates such practices as just-in-time inventory, broadened worker involvement, a focus on the customer, streamlining process and feedback loops.
This is much more difficult to accomplish during these unsettling times of COVID, issues with the economy, and interruptions in the supply chain for a multitude of reasons beyond our control.
In principle, the successful implementation of TQM by a supplier will generate an improved overall quality of performance, since TQM requires organizing a business to improve its effectiveness, flexibility and competitiveness as a whole.
The objective is to deliver products and services in the most cost-effective way, aiming at maximum satisfaction of customer needs.
It also involves nurturing relationships with suppliers and subcontractors, to improve the input side of business operations.
The argument is that if quality has been maximized at every stage of operations, it is impossible to improve the overall delivery to the customer.
Production improvements are usually the main goal for TQM implementation, for instance by reducing costs, increasing output, or both. TQM is a pervasive process striving for perfection in every step of operations from creation to execution, delivery and final resolution of work.
Proponents of TQM argue that the cost of quality (i.e., the cost of not getting things right on the first attempt) lies typically at between 15 per cent and 40 per cent of turnover.
It follows that if initial mistakes can be avoided, the economic efficiency of a supplier can be greatly enhanced.
The savings achieved can then be passed along to the customer without any adverse effect on overall profit.
This basic expectation of price reduction partly explains why many customers expect their suppliers to pursue a TQM approach.
A further explanation for the growing creep of TQM across industry is that for it to be successfully and fully implemented within a company, it is necessary for that company to demand that its own suppliers have also maximized the quality of their own delivery.
More generally, for TQM to be successful its introduction must be implemented on a company-wide basis, since problems in supply can arise at any stage of the production or delivery chain, it requires total commitment from the chief executive down to all employees.
The ISO has developed new standards that are published every year.
The full range of technical fields can be seen from the online listing of International Standards.
Users can browse that listing to find bibliographic information on each standard and, in many cases, a brief abstract.
Stephen Bauld is a government procurement expert and can be reached at [email protected].
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.
