Cost of Quality as a Determinant for the Convergence of Digital Technologies in Supply Chain

Abstract

The convergence of digital technologies for supply chain resilience can have a positive impact on the cost of quality in small and medium enterprises (SMEs). However, SMEs also require a sizeable revenue stream to effectively invest in digital technologies which are not readily available to most of the SMEs. One way of freeing up some capital for the adoption of digital technologies is through the initial implementation of cost of quality to help reduce the failure costs and invest in the prevention costs. SMEs make up about 90% of the organizations worldwide, yet research on the implementation of cost of quality in these organizations is scarce. This study aimed to fill this research gap through a mixed-method approach that included a systematic literature review, a global survey, and semi-structured interviews with subject matter experts. The study examined the benefits, barriers, and factors affecting the implementation of cost of quality in SMEs. The quantitative analysis of the global survey and the qualitative analysis of the semi-structured interviews were combined to identify the benefits and barriers of implementing cost of quality in SMEs. The rank agreement factor was used to compare the benefits and barriers, and the Mann Whitney U test was used to compare the quality maturity of different subgroups. The qualitative analysis used a grounded theory methodology to capture insights from subject matter experts. The study found that implementing cost of quality can lead to several benefits, including improved quality control activities, identification of high-cost problem areas, and overall improvement of quality. The most common barriers to implementation were a lack of awareness of the cost of quality and inadequate accounting systems. The adoption of quality certificates may have a long-term effect on organizations, and investing in prevention costs can have a significant impact on lowering the cost of quality.

Date of Award	Apr 2023
Original language	American English
Supervisor	Raja Jayaraman (Supervisor)