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Bailey et al (2005) say that the supply chain is an action which deals with the flow of material or products from producer or supplier to the organization or consumer. It is carried out in a way to increase value and lower cost.

In terms of manufacturing, the supply chain is described as the process of material processing which includes the following characteristics.

- Supply of products

- Transformation of products

- Demand for products (T Davis, 1993).

Transformation manages the changes in the characteristics of the product or in other words it provides a description of quality of the product, which should be achieved while carrying out a production for customer satisfaction. This is the eventual goal of any business.

There are many encouraging aspects of the supply chain, which will improve the organization's production display. Shin, Collier and Wilson, (2000) provide some examples of the OEMs, which ameliorate their performance by proper supply chain management from supplier to organization and from organization to the consumer. Proctor & Gamble (P&G) maintain its place of leadership in the consumer base market due to its outstanding supply chain management. US$ 325 million has generated in supply chain saving owing to its continuous replenishment program and well-organized customer response.

In the automobile industry, Chrysler presents the program for supplier involvement which is called supplier cost lowering effort (SCORE). And in 1997 Chrysler announced that they succeeded in US $ 1.2 million in cost savings as a result of to the SCORE program.

2.2 Objectives of SQAE and Its advantages:

Quality Management has been the topic of various practices applied in the industry. Introduction and execution of TQM makes companies alternative inspection based activities with quality preparation and quality assurance practices (Benito and Dale, 2000). SQAE has also come out as a vital tool of procurement management. In this regard, Benito and Dale mention that the widespread practices in the industry include supplier selection based on quality and dependability considerations, supplier quality and reliability records on which the regeneration of contracts are based, supplier certification and supplier development. The aim of these practices is to guarantee supplier quality. However, BSI [British Standard 5750] also states that the dealer quality assurance evaluation is essential to establish the close working relationship among buyers and suppliers; the main purpose is to assure the quality of the final product for the client. A clear understanding must be developed with the supplier on quality assurance issues and SQAE must be done to assess the supplier's capability and quality to elucidate the mutual understanding and therefore to settle an agreement in this regard because a buyer relies on a supplier's quality system.

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