Assignment:
Please complete the following "Procurement Outsourcing Strategies" scenario.
Scenario description: you are the supply manager for wonderful widgets. The company produces one product, Widgets. The company canproduce its widgets parts from various suppliers or use its current equipment, facility, layout, and materials to produce the component in house.
The problem: As the supply manager you see the operational costs increase each month. You need to reduce these costs and streamline processes before the end of the quarter. Corporate will see these cost on the quarterly reports. You need to be pro active.
1 Additional Information: As the supply manager you are responsible for making all decisions pertaining to procurement. Wonderful widgets can produce the parts needed to assemble the widgets or they can outsource the parts to a carity of suppliers.
2 Additional information: remember, wondferful widgetss can produce the components internally or buy them from thier suppliers. Based on historical data and knowledge of customers you know:
1. Value is not attached to the component
2. Clock speed is slow
3. No competitive advantage exists
3 Additional Information: As the supply manager you decide to outsource or procure the compponent from one or multiple suppliers. Now, you must think about supply risk and profit impact you decide the following:
1. Supply risk is low
2. Profit impact is low
4 Additional Information: based on what you know, the component is considered to be a functional part/product versus an innovative product. Likewise this fits with low supply risk and low profit impact. You also realize that using multiple suppliers is the best option.
Your task is to determine which procurement strategy is best for the company.
Choose a solution and in one paragraph make a clear and specific recommendation based on the readings in the class so far. In a second paragraph, describe how the company can implement your recommendation. Write your recommendation/implementation in third person. Include a cover page.
At the end, discuss the questions that are presented below.
Answer the following questions:
1. What did you find challenging in completing the scenario?
2. How do strategic alliances impact procurement outsourcing strategies?