A systems engineering approach to supply chain auditing

Abstract

Purpose – The purpose of this paper is to discuss the theoretical foundations, development, and application of the quick scan audit methodology (QSAM) for comparative evaluation of supply chains via uncertainty codification and material flow assessment. Design/methodology/approach – Charts the evolution of QSAM via the Parnaby concept of a manufacturing system leading to a control model representation of a value stream. Monitoring in process and critical interface material and information flows provide the substantive data to evaluate supply chain health. The authors show how QSAM satisfies the six desirable attributes previously established as advantageous when value stream auditing. Findings – Basing QSAM on this particular systems approach readily leads to transferability of approach to new market sectors and new companies within the same sector. It ensures comparability via uncertainty levels to be established. Hence, using statistical cluster analysis “best practice” may be identified and annotated. Research limitations/implications – There may yet be specific supply chain regimens where uncertainty codification is insufficient to reach a definitive conclusion. However, QSAM is now sufficiently mature that it has been applied successfully and widely beyond its original systems-friendly European automotive sector. Practical implications – A systematic, non-industry-specific audit method based on systems modelling builds confidence into comparability studies and identification of “exemplars” exhibiting best practice. The importance of understanding and satisfying the expectations of the four “players” in the QSAM balanced scorecard is discussed and exemplified. Originality/value – QSAM is an original contribution which fits well into the spectrum of excellence measurement techniques. The two established extremes are vertical case studies (European style) and horizontal surveys (US style). QSAM brings together certain strengths of each so that the whole is greater than the sum of the parts.