Strategic procurement - Case Study Example

? STRATEGIC PROCUREMENT of Prepare a list of advantages of the inclusion of supply management and prequalified suppliers. According to Handfield and Minahan (2012), the type and nature of relationships existing between customers, the suppliers of the raw materials and the manufacturers is very important in the process of product development. The critical decisions made at this point determine the success of the product in the market. this is not only on matters to do with functionality, but also the decisions made on matters to do with logistical channels, packing, sourcing of materials as well as the technology required to realize the required best profits on sales. In addition, Beil (2011) adds to this input by stating that “unless you can impact the sourcing early in product development, you have almost no impact on the resulting design of the supply chain”. Therefore, the advantages of including supply management and pre-qualified suppliers in the supply chain as far John Dear Company is concerned are: Improvement in quality of the products Reduction in the material costs involved in producing the finished product Reduction of the time the goods take to reach the market There is improved access to new products that are also innovative as well as the market experiencing stable supply. The accuracy of product costing is highly improved Expanded market for the goods being produced and increased profits realised due to the ability to be an early mover to the market. Pre-qualified suppliers bring unparalleled knowledge to the market and in particular to the companies they wish to supply to. Their contribution therefore increases the value of the company products in the wake of a crisis (Handfield & Minahan, 2012). Prepare a list of disadvantages of excluding supply management and suppliers from the new product development process. New product development process is supposed to be an all-inclusive process. When all the stakeholders are included in it, a collection of advantages follow. Excluding them however is a daunting task to the company. Before considering whether it is necessary to include them or not, there are some questions that must be put to mind: Are the suppliers able to meet the volume obligations when considered to take part in the supplies? Is there a secrecy ‘fit’ between the suppliers and the company? What contributions is the supplier going to add to the new product development process? What is the level of familiarity between the supplier and the company? Was the supplier or supplier management involved in a prior process of planning? To these questions, there are several disadvantages of not including these in the supply management process. The disadvantages therefore would be: Problems in the produced quality as a result of re-designing, reworking, failures in the field and retrofitting Overruns in the costs incurred Foregone savings in costs incurred A collection of scheduling problems Production of new products which will be late to the market There will be inability to identify and rectify problems in a manner that is timely. There will be lack of a collection of bookshelf technologies that would be implemented in the market at the appropriate time in future for the company. The suppliers and the supply management are the owners of market knowledge. Without having those in the chain at one given stage may result in very retrogressive developments (Monczka, 2000). Assuming that the three executives agree on early involvement of supply management and suppliers, develop a plan to implement this new way of doing business. On agreement about involving these stakeholders, the company can involve a gradual development process in which case all the sectional procedures get the involvement of the respective stakeholders. This is to say that the plan would involve many professionals in the supply chain bringing up samples of the expected projects from their respective positions. This would be considered instead of going to a high involvement from zero involvement of these (Brethauer, 2002). The stakeholders at this level would take the form of members of the supply chain that can create value addition, another would be one that can read prints well, one who knows and understands that suppliers clearly well and another that has people skills. All these can be invited by Mr Steel. Together with the product project engineer, they can take part in the key company projects to oversee success. These should then invite a carefully selected pre-qualified supplier to make participation in the project at the right and appropriate point. This is a viable plan because, according to Handfield and Minahan (2012), suppliers and other stakeholders that participated at an earlier stage in the development of a supply strategy can take part in decision making and goal setting for the company. The suppliers usually have product expertise, process knowledge and very realistic information in the company setting. These goals are not just associated with cost alone but with product characteristics in response to the consumer changes in tastes, preferences. References Beil, D. (2011). Supplier Selection. Michigan: Ross School of Business. Brethauer, D. M. (2002). New Product Development and Delivery. New York: AMACOM Div American Mgmt Assn. Handfield, R. B., & Minahan, T. (2012, 10 10). Managing supplier integration in new product development. Retrieved 11 19, 2013, from International Association for Contract and Commercuial Management : http://www.iaccm.com/news/contractingexcellence/?storyid=905 Monczka, R. M. (2000). New Product Development: Strategies for Supplier Integration. New York: ASQ Quality Press. Read More