The impact of supplier quality management on Eskom's Eastern Region power network operations.
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Date
2011
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Abstract
South Africa’s national power utility, Eskom, procures products and services from
a multitude of suppliers for its operations. Annually, Eskom’s Eastern Region
spends approximately two billion rand on the procurement of products and
services for its power network operations. Considering the expenditure, what is the
effect of supplier quality management on Eskom’s operations? The aim of this
study was to determine the impact of supplier quality management on Eskom’s
Eastern Region’s power network operations. A multi methods approach was used
for this study which included quantitative data and phenomenological interviews.
For the past two financial years, Eskom’s Eastern Region procured R2.7billion
worth of products and services from 187 suppliers for its operations. A probability
sample of 82 suppliers was drawn from this population. The sample was
composed of 58% electrical construction companies, 20% product manufacturers,
17% consulting engineers and 5% electrical hardware distributors. Data was
collected using an email questionnaire developed by the researcher. Structured
phenomenological interviews on supplier quality management were conducted
with 41 employees of Eskom’s Field Services Department. These employees were
chosen as they are directly accountable for managing network operations and are
end-users of suppliers’ products and services. Significantly, the statistical analysis
and the outcome of the phenomenological interviews revealed points of
convergence and divergence between the stated positions of the suppliers and the
actual experience of Eskom’s employees on quality of products and services.
By combining the quantitative and qualitative dimensions of this study, the analysis
illustrated the existence of cavernous gaps between suppliers and actual
experience of Eskom employees on quality management areas such as suppliers’
commitment to product and service quality, focus on customer satisfaction,
effective quality control and network operations. Several elements of the suppliers’
quality management programmes don’t meet Eskom’s expectations. The results of
the study can benefit both suppliers and Eskom in identifying aspects of quality
management that are negatively impacting operations and recommends areas of
improvement.
Description
Thesis (MBA)-University of KwaZulu-Natal, Durban, 2011.
Keywords
Eskom (Firm), Electric utilities--South Africa--Quality control., Management--South Africa., Theses--Business administration.