There is predictive monitoring and predictive capabilities out there that businesses are taking advantage of to increase their competitive abilities. Case in point – recently a major commercial aircraft provider was unable to deliver an aircraft order to a customer timely because their ashtray company went out of business. A major bus company was also unable to deliver an order of buses because the company that manufactured and supplied their bumpers also went out of business. These two examples illustrate the power of information and the need to source strategically. It is not just the delivery of a component that is at stake, but the most capable allies that manage your supplies and impact your ability to deliver in the marketplace. Strategic sourcing is the springboard for supply management – there are a lot of processes: whether forecasting and planning on the front end or back end supplier management and score carding. Strategic sourcing is where it all starts and you select suppliers that enhance your firm’s capabilities which affect your bottom line and enter into long-term relationships. You manage the performance of that supply base and on an on-going bases there are negotiations to drive value into the supply management and supply chain strategy. It incumbent upon organizations to understand what they are buying, who they are buying from, who they are buying it for and how much the organization is spending to meet those objectives. Across the enterprise and on a global basis – have senior leadership realized that, rationalize that and determine who are the best suppliers. Fundamentally, organizations must ask themselves what are they are trying to achieve with strategic sourcing. If it were all about price and/or cost ...
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...rprise. It has been suggested that it has to be done by executive fiat – it becomes an operating mechanism that operates harmoniously over time. (23:38)
The stakes are very high in strategic sourcing; it is one of the most benign sources of shareholder value that has been traditionally been overlooked by a more typical view of a purchasing function. The vast majority of companies, particularly manufacturing companies in the United States have an enormous opportunity to incorporate strategic sourcing into the corporate business practices, sadly this is currently untapped. Those procurement office officials that put in place strategic alliances and/or partnerships that yield best practices and improve supply chain processes can reasonably expect a 3 – 5 percent net savings on commodities and services purchased while concurrently doubling the company’s bottom line.
Background Information In implementing a strategic plan for Coastal Medical Center, our consulting team has conducted many analyses and formed numerous strategies in order for Coastal Medical Center to be successful. Such assessments include an internal analysis, external analysis, gap analysis, and SWOT analysis. In conducting these analyses, our consulting team was able to better understand the internal environment, external environment, where the organization currently stands in terms of performance, and the major strengths, weaknesses, opportunities and threats that oppose the Coastal Medical Center. From our inquiry, we will be able to establish a strategic plan that best fits the organization’s needs.
After analyzing the Coastal Medical Center, it is apparent that the employees and staff have no conception of the mission, vision, and values of this health care facility. In addition to this lack of structure, CMC has many projects in the midst of production that lack support of a common goal, employees are unsatisfied with their jobs, the two boards lack ability to agree on strategic decisions for the organization,, and the medical center has a dismal reputation when it comes to quality care.
Metalcraft’s scorecard was developed to address control issues in the supply-chain. The scorecard was a tool that provided Melalcraft a single reference point on supplier performance over a period of time along three dimensions: quality, timing and delivery. There were several business functions that utilized the scorecard; buyers, plant engineers, supplier development engineers, suppliers and various other users within the Metalcraft organization. The scorecard was also used to evaluate supplier performance at both the individual plant level as well as the aggregate supplier level. The scorecard classified supplier performance metrics with color recommendations indicating the degree in which Metalcraft would base future sourcing based on their “color” quality rating.
Other researchers have identified several outsourcing issues, trends and strategies that companies take in establishing and effectively managing their outsourcing activities (Sinderman 1995; Carney 1997). The trend is for outsourcing relationships to function more as partnerships. Outsourcing providers are taking increasing responsibility in realms that have traditionally remained in-house, such as corporate strategy, information management, business investment, and internal quality initiatives (Sinderman 1995; Carne...
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer. In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
In order to build a strong relationship between companies there must be a trust. So trust played a big role in this case. A good example in this case was that inland steel “concern that a single-sourcing policy might cause it to lose touch with the market”. On the other hand, whirlpool “concerned about the technological risks of relying on only one supplier”. However, building a trust relationship between them was the best solution by the belief that both companies will be a low-cost
In such situations, the buying industry often faces a high pressure on margins from their suppliers. The relationship to powerful suppliers can potentially reduce strategic options for the organization.
Lean manufacturing and just-in-time processing are great business strategies that can severely stress a supply chain. The supply chain and supply chain management is a critical operations management element for any major company to succeed and remain competitive in the global market. The supply chain is one of many pieces critical to maximizing value to the end customer and requires close management to minimize external impacts. If a company is relying on another company to supply the raw materials needed for their production line, then impacts to this other company could impact their supply chain. Careful risk management is needed to optimize performance. As a company expands into global markets and global suppliers, this risk and management challenge is multiplied. The global nature of the company could impact important activities such as transportation, funds transfers, suppliers, distributors, accounting and information sharing. Disruption to the supply chain can significantly reduce revenue, cut market share, inflate costs and threaten production. A major disruption would have obvious impacts to profit, but could have additional intangible impacts to the credibility of the company if products are not delivered on time.
Since mid-90, technology changed procedures for evaluating supplier’s relationships. Before technology, Suppliers relationships used to be an isolated activity disconnected from others companies’ activities highly influenced by conflict of interest. But when technology started to provide accurate data, companies begin the focus on inventory management activities increasing the importance of procurements departments’ evaluation as a way to reduce supply chain cost. With data, procurement can evaluate suppliers and their benefits for the company. In today business environment, the company dilemma is evaluating if the supply chain should be vertical, full outsourced of mix, considering industry maturity impact and price competition (Chopra & Meindl, 2007; Slack & Lewis, 2011).
... 2005 are not all that rare. Other issues of political nature create a large amount of uncertainty in supply chains around the world. Therefore, companies need to be aware of this and reduce their risk by maintaining relationships with alternate suppliers.
... management ande-procurement: creating value added in the supply chain”,Industrial Marketing Management, Vol. 33 No. 2, pp. 219-26.
As pointed by Parsons A.L (2002), there was increasing dependent on the relationship and customers is demanding to receive high standard of products and services for them to sustain the business in the intense manufacturing environment. Besides, Xu et al. (2008) has highlighted that supplier is developing a long-term relationship with their crucial suppliers to increase the competitiveness and to establish an effective and efficient supply chain. Trend (2005) also mentioned that work closely in partnership with suppliers is the only way to survive in today’s competitive business environment.
(2014) deduced that procurement performance can be assessed by focusing ondelivery,flexibility, quality, cost and technology. Optimal performance attainment is dependent onhow current suppliers`relationships aremanaged so asto ensure constant availability of needed quality supplies at the organization. This will ensure that sourced materials are indeed procured at the right costand atthe right time. Procurement performancestrives toenable improvements in the procurement process at the organizationso as to improve on qualitydelivery of firm products and servicesatleast possible time and
Generally, a superior supply Chain is an important and unique source of competitive advantage. Its importance is especially illuminated in Multinational companies such as Toyota. Putting this into consideration, the question that now begs for an answer is whether Toyota’s supply chain is effectively serving the organization. Without a doubt, Toyota ha...
Group 6 Strategic Management Strategic management is the process where organization managers reach the goals and aspirations of the organization on behalf of its owners. This is done through formulation and implementation of ways and methods to fulfill the organizational goals and objectives (Brian, 2011). This is done with in-depth consideration of both the internal and external environments that the organization operates in, in order to allow the organization to make the right decisions. Strategic management is an important element that firms must put together through strategic thinking as well as strategic planning (Nag, R., Hambrick & Chen, 2007). In order for a firm to compete within its industry, it must plan and relate to the industry dynamics, determine its strengths and weaknesses before determining the best way to match and overcome competitors.