Assignment: individual assignment: sourcing impact on supply chain
· Question 1:
Last week, we read an article on the “Hierarchy of Supply Chain Metrics” by Debra Hofman. Develop a ranking of the metrics from each of the three tiers. Please pick the single most important one from each tier and then determine how the make vs. outsourcing decision impacts your top metric from each of the three tiers.
A. Submit the ranking for each of the tree tiers.
B. Clearly explain why the “make or outsource” decision will increase, decrease, or have no effect on the given performance measure. You must choose only one of these 3 items.
· Question 2:
In his article, Lynch discussed a number of factors that influence the decision to outsource–they include personal productivity, flexibility, labor considerations, specialized services, information technology, global capabilities and the maturity of the service provider (note–I did not include cost or ROA as part of this question—these two items cannot be used on your list.) Develop a list and rank these items in order of importance to you, from most important to least important.
A. Submit the ranking of that list and
B. Briefly discuss your reasoning for only the top item on your list. Do not discuss all of them–just your top one.
C. Additionally, list one risk that is associated with that item and
D. Clearly explain how you may be able to mitigate that risk.
E. Lastly, how does this approach impact the overall network design?
Please use information from our readings to support your position.
Single sourcing vs. multiple sourcing can also have an impact on the design of a supply chain. Many USA firms (Ford, Patagonia, Caterpillar, etc.) over the last few years have announced programs to change their historical sourcing approach of short-term (even one year contracts) vendor price reductions through contentious bidding programs.
Another method looks at sourcing strategically, i.e. through the Toyota lens of cost management. In this mode, they work with a limited number of suppliers to find ways to reduce or eliminate waste across the entire supply chain; thereby, reducing cost and ultimately pricing. Ford (and Caterpillar) announced and implemented this technique and they seem to be surviving better in the current economic environment.
A. Clearly discuss the advantages to this method for a firm utilizing this approach
B. And for its suppliers. Many folks forget to discuss the suppliers!
C. How does it impact the design of the supply chain network?