3 - Jacobs University

margins and strengthening their market position (Abele, Meyer, Näher, Strube, & Sykes, 2008). In
a number of market sectors outsourcing has become so important that doing business without it is
unthinkable.
Along with its benefits, however, outsourcing turns quality assurance into a significant challenge.
Increasing the number of parties involved in the production process raises the complexity
of the communication flow, the number of process interfaces grows (practice shows that most of
the quality related problems arise at such interfaces) and thus companies run higher risk of miscommunication
of their business objectives. Nonetheless, it is the responsibility of the outsourcing
company to make sure that their products meet customers’ expectations, which in turn means that
quality requirements must be fulfilled in the entire supply chain. van Weele (2010) writes: ”quality
of the finished product is determined to a large extent by the quality of raw materials and
components” (p. 241). Therefore, it is very important for a company to carefully select its business
partners. For the latter understanding the generally accepted quality practices and being able to
properly manage quality are a basic requirement.
This paper studies quality assurance down the supply chain of the automotive industry – a
business sector with one of the most intricate mass production supply chains which exist 2 . More
precisely, the aim of the subsequent discussion is to present and evaluate the effectiveness of supplier
quality auditing. Supplier quality auditing is a widely used quality assurance tool, which
evaluates the quality capability of production processes down the supply chain and ultimately provides
essential input for decision making in the outsourcing process.
2 Research Question and Research Motivation
Due to the highly competitive environment on the international automotive market, the growing
diversity of customer preferences, and the fact that on average 60 to 80 percent of the global automotive
production is outsourced (Veloso & Kumar, 2002), competing in the automotive business
is particularly demanding. Good management of the entire production chain and more concretely
the use of effective quality management tools is therefore of key importance for staying in the
sector. This work examines the effectiveness of second-party quality auditing in the automotive
2 The supply chains of the aircraft and ship industries are of comparable complexity as that of the automotive sector.
Their production scale is substantially smaller, however, which is the reason why QM tools in the two industries have
not been developed and implemented to the same extent as in most other mass production sectors, what represents an
additional challenge for the quality management process in those two sectors.
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