Use of ISO 9000 and Baldrige Award Criteria in Supplier Quality Evaluation

IN BRIEF Purchasing and materials managers are increasingly concerned with ISO 9000 registration, both as a prerequisite for participation in global markets and in supplier selection. The ISO 9000 guidelines link certification requirements to quality-related corporate issues, and can be used as a screening tool for companies when assessing a supplier's process conformance. However, many important areas of quality management are not addressed by ISO 9000. The Malcolm Baldrige Award criteria, on the other hand, provide a comprehensive framework within which to conduct an evaluation of suppliers' quality systems. The similarities and differences between the two frameworks are compared in a map that is validated using survey data from 314 North American organizations. The results suggest that ISO 9000 registration criteria fail to measure key areas of quality management, including strategic planning, employee involvement, quality results, competitive benchmarking, and customer satisfaction. Based on these results, the implications for the design of supplier quality measurement and evaluation systems are discussed. INTRODUCTION The role of quality in supplier evaluation and selection has emerged as a primary dimension of performance. For example, several studies have found that quality is the major issue for many professional buyers for several reasons: first, higher product quality can yield lower total costs;[1] and second, it permits many firms to compete on a global basis.[2] This is especially true in the case of supplier partnerships. Many North American firms are carefully selecting suppliers based on their quality capabilities, then forming long-term relationships in order to continuously improve processes through joint problem-solving activities.[3] In measuring and assessing their suppliers' quality management systems, purchasing managers are increasingly turning to established quality auditing and measurement systems. Two audit frameworks often applied are the ISO 9000 criteria and the Malcolm Baldrige Award criteria. This study compares the criteria applied within each measurement system. In doing this, the authors attempt to provide purchasing managers with a set of guidelines that can be used to determine how and when each quality measurement system can be applied in the design of supplier quality evaluation systems. From the outset, managers must recognize that each of the two systems is based on a different set of objectives. Because the two programs are designed for different purposes, they measure different things in different ways. The ISO 9000 criteria represent model guidelines which promote the broad participation and qualification of as many companies as possible. Therefore, this program can be viewed as a set of absolute standards that test the qualifications of the applicants to ensure conformance quality. As such, it provides a common basis for an independent and transferable supplier qualification system. On the other hand, the basic purpose of the Baldrige Award criteria is to select a winner of the award and to enhance competitiveness. The criteria are a set of relative and competitive standards in terms of overall measurements, which attempt to rank order the applicants. The Baldrige Award's strategy is to create an evolving body of knowledge in the United States by encouraging the learning and sharing of competitive knowledge.[4] Not surprisingly then, the criteria of the two programs are applied in very different ways. The ISO 9000 criteria are recognized as the required quality standard for the European Economic Community (EC), and many other parts of the global marketplace will likely adopt these standards. The EC is developing 1,500 safety, health, environmental, and quality standards that are to be consistent throughout its member countries.[5] ISO 9000, and its EC counterpart EN 29000, is not required by all EC directives, but many EC customers do require adherence to such international quality process standards. …