PQI Management of Suppliers - Article Example

PQI Management of Suppliers Analyze how PQI ifies its suppliers. What transaction cost-sand hazards are associated with each type?Tier 1 suppliers were global, with the capability to supply goods internationally. These suppliers had to be strong technologically. More so, they should have been in the market for a long time with strong customer base. Tier 2 suppliers who were to supply PQI goods in the region such as Asia. Lastly, Tier 3 suppliers were local suppliers whose goods were designed by their customers.

2- Analyze and comment on the biannual score sheets for the three suppliers in Exhibit 4. Based on the score sheets, what kind of action is recommended?Tier 1 suppliers had great technical ability and production capacity in relation to the needs of PQI Company. PQI should continue working with Tier 1 suppliers to supply its products globally. Therefore, Tier 1 suppliers should maintain the relationship with PQI. Tier 2 suppliers have the capability to maintain stable supply in the region. It also has strong technical support, and production management ability.

Due to this, PQI should continue working with Tier 2 to supply its products in the region. Tier 3 suppliers have low competitive prices, and less ability to produce quality products. PQI should issue warning to Tier 3 suppliers. If the numbers of local customers continue to reduce, PQI should cease working with Tier 3 suppliers and pursue new suppliers. 3- Should PQI share its assessment results with its suppliers? How would doing so impact its management of suppliers and its relationships with them?

It should share the assessment results because this will enable the suppliers to realize their weakness and improve. This will also enable PQI to keep close relationship with all the suppliers because it wants to take advantage of any technology that might arise. Further, it will be able to minimize on production costs. For instance, maintaining close working relationship with Tier 3 implied that production of die products by a skilled company would play a vital role in assisting PQI to bring new products to the market at a low production cost.

4- The purchasing manager has narrowed its choice of potential supplier for the rush order from the new customer to A, B, and C. If you were Wang, which supplier would you recommend that the purchasing manager place the order with? Explain why. Wang should recommend Supplier C. Supplier C have the capability to guarantee against damage, quick response to bad quality and the ability to venture into new product development. Work CitedShannon, Anderson, O’Connor, Neale and Wu, Anne. PQI: Management of Suppliers.

Asia Case Research Centre, 2011. Print.