Improving quality via matching: A case study integrating supplier and manufacturer quality performance

The relentless pursuit of increased product quality via continuous improvement is an important long-term strategy for achieving competitive advantage. However, manufacturers must still achieve high product quality in the short run. Hence, short-run quality improvement strategies are necessary, and, if possible, should complement (rather than substitute for) a longer run continuous improvement strategy with suppliers. We propose a novel short-run quality improvement strategy with suppliers which is based on a combinatorial optimization model for determining the optimal matching of raw material batches (from suppliers) with process variable parameters (of the manufacturer) by exploiting their interaction effects. Although the model can be difficult to solve, we develop sufficient conditions for a special case where the attainment of an optimal solution is straightforward. We demonstrate the use of the proposed approach in an actual pharmaceutical process. Using data from the pharmaceutical case, we develop several simulation scenarios where matching is shown (predicted) to greatly improve process yield. We also discuss the use of matching to illuminate various strategies for long-term continuous improvement of supplier and manufacturer processes in general.