Product quality risk in supply chain focuses on the quality problems in the supply chain context rather in the manufacturing quality context. Tse and Tan (2009) identified the concept of "Product Quality Risk in Supply Chain" (PQR) as:
In practice Product quality risk is an inherent part of the supply chain risks, with a tendency to comprise some or all of the risk elements, such as
operational risk, disruption risk and reputational risk. For example, when lead was found in
Mattel's toys, it tarnished the company's reputation, and disrupted the supply of its products in the market. In the literature, the concept of product quality risk has not been fully investigated. Although Zsidisin stated that quality risk includes the risk of producing unsafe products that can harm the consumer, even when these defects are caused by another firm or inherited from a sub-contractor. However, neither PQR nor its
domino effect in the
supply chain have been thoroughly studied. The product quality risk in global supply chain concept, though similar to "product harm crisis" (defined as defective or dangerous products) and "moral hazard problem" (defined as the outcome of
asymmetric information, imperfect observability in supplier's quality), are not about the risk of product quality in a global supply chain context.
In construction In construction, defects include aspects of the constructed works which are not in accordance with the scope of the project (the work which the
contractor was asked to undertake) or, where the contractor has designed the work, the construction not compliant with any applicable law or with a design for the work offered by the contractor and accepted by the
client or on the client's behalf. They may be "patent defects", observable in practice during or on
completion of the construction process, or "
latent defects", which are not visible or identifiable until a later date. Under
common law, a defect which results from the contractor's
breach of contract should be put right by the client, who then sues the contractor for the costs of doing so. The
NEC Engineering and Construction contract, a standard form of contract widely used in the construction industry, allows the contractor to rectify a defect at their own expense in place of the common law position, and obliges the client to allow the contractor appropriate access to undertake the rectification work. At the end of an agreed period, a defects certificate may be issued, which is intended either to certify that there are no patent defects, or to state any defects which remain outstanding. == See also ==