THE NEXUS BETWEEN SUPPLIER QUALITY MANAGEMENT AND ORGANIZATION€™S COMPETITIVE ADVANTAGE: AN EMPIRICAL EVIDENCE

Background: Due to the increasing demand on product quality and operation efficiency, supplier quality management has become increasingly important in supporting organizations to achieve the desired excellence. With the rapid globalization happening in these few decades, the business world is experiencing a higher complexity phase.  However, there are only a limited number of studies that has been conducted on supplier quality management (SQM) and organization’s competitive advantage (OCA) in the context of multinational corporations (MNC). The purpose of this study is to identify critical elements in supplier quality management as well as testing the significance of supplier quality management in affecting organization’s competitive advantage.

Methods: This study employed self-administered questionnaire that has been distributed to 355 respondents and the data is analyzed using Statistical Program for the Social Science (SPSS) software version 23. The population of study is concentrated on multinational corporations in Malaysia.

Results: The results revealed that 5 elements have been identified as critical elements for supplier quality management namely Tracking of Cost of Supplier Quality, Supplier Audit, Supplier Scorecard, Close Loop Corrective Action and Engagement of Suppliers in Quality System.

Conclusions: The findings of the study show that supplier quality management is found to be significantly affecting organization’s competitive advantage in positive direction. The managerial implications of this study have been discussed as well.