The Supply Chain Management Case - Coursework Example

Supply Chain Management Case Study CASE DISCUSSION TOPICS 1. What is your recommended sourcing strategy in this case? Please support your decision with quantitative and qualitative evidence gathered during the case analysis. Also, present your plan to reduce any risks associated with your sourcing decision. Basing from the suppliers, which were primarily assessed by the company, there are two major sourcing strategies that could be used in dealing with the supplier choice decision of the administration of the company. One is that f the intrafirm sourcing strategy and that of the outsourcing strategy. Understandably, there are also two major elements of sourcing that must be considered on this phase of the decision-making, the quality and the cost of the item or product [DVD] to be sourced from the supplier. Carrying these primary elements into consideration, it is most obviously profitable for the organization to use the outsourcing strategy since the [DVD] production on the two major companies situated outside the country are both competent in handling high quality production at a reasonable price. Transportation cost payment system may also be negotiated with the chosen supplier to lower the cost of expenses in terms of shipment and transport of the product deliveries. 2. This case provided the data necessary to perform a cursory supplier financial analysis. In reality, cross-functional sourcing teams must often obtain this data during their assessment of potential suppliers. Discuss possible sources of supplier financial information. What may impact a purchaser's ability to obtain supplier financial data? Through having a thorough conversation with the top executive personnel of the business entity being assessed, a carefully presented financial report of the company could be achieved. Through gaining such information, the company could then measure the stability of the company that they are assessing in the business. The willingness of the suppliers to get the deal done with the purchases of the products in regular terms shall indeed move them to give certain financial results from past annual records of the organization. By doing this, they are setting a connection of loyalty and trust between them and the purchaser. It is through this process that both parties could actually measure the kind of relationship that they could be sharing if they are to pursue with the contract signing to close the deal of supplier-purchaser connection between the two firms. 3. A sourcing decision of the magnitude highlighted in this case requires a serious commitment of resources and time. Do all sourcing decisions require similar commitments of time and effort? If not, describe the types of sourcing decisions that justify this effort. Describe the types of sourcing decisions that do not justify or require the level of effort and analysis required in this case. The kind of decision-making system that needs to be dealt with in this case is much likely concerned in choosing the best supplier from the four others who have already been closely assessed by the administration at an earlier time. Because of the number of choices and the level of concentration that needs to be considered in this phase of decision-making for the company, the process of coming up with the final decision would certainly require more time and effort of analysis. Unlike other systems of approach in sourcing, this case may appear to be quite difficult to handle since the choices range from both insource and outsource suppliers. In other business cases, the choices are rather much easier to decide upon since they either involve insource suppliers or outsource suppliers. Having to decide upon this matter would be much easier to control since the choices are more closely related compared to that of the case handled by PSC. 4. How important is the issue of supplier capacity in this case? How did your group evaluate supplier capacity? What level of attention or importance should supplier capacity receive during the sourcing decision? Why? The record or reputation that the organization has already established in its name as part of the industry is quite a huge matter of consideration for many purchasers to understand. As the said purchasing company assesses the possible candidates for the supplies of the product to b outsourced, knowing the capabilities and capacities of the major organizations on the top choice is an important element that could influence the results of the decision-making process that the organization is undergoing. It is indeed of high importance that this aspect of the company competence of the different organizations chosen be measured well by the decision-makers of the said matter. 5. Supplier selection decisions, such as the one presented in this case, usually require many weeks or months of analysis and discussion before reaching final agreement with a supplier(s). Creatively identify ways that the buying company can shorten the time from recognition of a purchase need to reaching agreement with the selected supplier. (Hint: Consider performing certain required activities concurrently or in anticipation of a purchase requirement). To lessen the time of decision-making spent in this phase of the process, PSC should delegate two separate groups to observe how each top chosen organizations are able to complete their tasks on time and in high-end quality results. It is through this that all four organizations could be tested on actual account of business operations. With this process, a bias on recognizing the reputation of the huge companies in comparison with the starting one [SureTech] could be eliminated in the process. After such operation, a process of re-evaluating the stability of the four companies based on their financial records of the past years could be simultaneously checked y another group. At the end of a controlled time-frame, the assessment results shall be compared and the decision on the process shall be released. 6. The issue of single versus multiple sourcing is an important consideration during supplier selection. Using the following table, identify the potential advantages and disadvantages of single and multiple sourcing (not only as they relate to this case). Single Sourcing: Potential Advantages Controlled communication environment Controlled technical matters: the support system could be much easier to handle incase certain issues arise during the process of B to B relations of the companies involved Single Sourcing: Potential Disadvantages If some unforeseen situations occur along the way, immediately shifting to another supplier may become a difficult matter to deal with thus holding up the business operation process as it needs to continue in the track of supplying products to its major distributors in the market Multiple Sourcing: Potential Advantages Immediate resolution for certain unforeseen occurrences such as delivery failure or system operation failure on the part of the suppliers could be easily handled by the purchasing company Multiple Sourcing: Potential Disadvantages Comparison of the quality of DVD device from different companies that would be embedded within the computer system produced by PSC may cause slight difference on the end product of the company, which may cause consumer divide. 7. The issue of short versus long-term contracts is also an important consideration during supplier selection. Using the following table, identify the potential advantages and disadvantages of short and longer-term contracts (not only as they relate to this case). Short-Term Contracts: Potential Advantages Short-term contracts could give the purchasing company a chance to decide upon changing the supplier company as the contract ends. Through this, the annual operations of the business could change based from the decision of either ending or continuing the contract. Short-Term Contracts: Potential Disadvantages As noted, signing of contract procedures require time and re-evaluation assessments of the capacity and capability of the supplier. This process may hurt the operation time pressure that the purchasing company should consider as it engages with its distributing companies. Longer-Term Contracts: Potential Advantages Through long-term contracts, the relationship between the supplier and the purchaser could become more intimate in terms of professional relations, giving further possibilities for both parties to be interested in furthering their business relations in the industry that they are in, this would result to more effective cost and profit balancing process. Longer-Term Contracts: Potential Disadvantages With the inability to choose other companies with freedom, if in case several situations that may hurt the business of the purchaser occur, changing the supplier company immediately may not be an easy task to undergo. 8. Consider the following statement: Supplier evaluation and selection, which is really a process of risk management, is one of the most important activities performed today. If your group agrees with part or all of this statement, provide arguments and evidence as to why your group agrees. If your group disagrees, provide arguments and evidence as to why your group disagrees. AGREE: supplier selection process is a one time decision that would affect the entire operational process of the business as it further progresses towards the years forward. It is indeed a risky part of decision making as it would involve the assessment of the capability of the supplier to provide what the purchaser needs on time, having lesser control of the things that may occur during the operations that both businesses should engage in that may affect the contract that both parties signed and agreed upon. 9. Instead of conducting supplier evaluations through formal assessment, some firms rely on product samples as a means to validate supplier capability. What are the risks associated with relying only on supplier samples when making a supplier selection decision? How can a company minimize this risk? Relying on product samples alone may indeed give the purchaser an idea on the quality of the end products of the suppliers. What this process does not measure is the capability of the company [supplier] to provide the goods on time, their culture on work that makes their end products of high-end quality, the process of support that the supplier company could provide the purchasers in case certain problems occur with their products in the future. All these elements of choice are essential in assuring that the supplier chosen by the company would provide top of the heap quality product and outstanding service to the purchaser. Read More