The Realities of Becoming a Long-Term Supplier to a Large TQM Customer
INFORMS: Institute for Operations Research
In late 1993, the range appliance division of Whirlpool Corporation adopted total-quality-management principles. It announced that companies would have to meet specific objectives and support quality if they wanted to be considered as future suppliers of Whirlpool's components. Many of Whirlpool's established suppliers were suddenly forced to realize that long standing relationships were no longer important. One of Whirlpool's long-time suppliers, Stanley Engineered Components (SEC), a small supplier of oven-door latches, spent three and one-half years attempting to accommodate and keep its largest customer. How did SEC accommodate and satisfy Whirlpool? Top management committed itself to a complete change in corporate philosophy, strategy, and practice. To bring about the change, top management hired talent from outside and developed in-house talent. Top management used TQM-style principles as a method of competitive advantage to obtain new business contracts. SEC understood and complied with the needs of its customers.