Over the lecture content of MGMT-360, you have been introduced to concepts and considerations in the process of securing resources that go far beyond the basics. These included:
The Make vs. Buy decision;
Managing suppliers based on type of product or service being sourced;
Enhancing supplier relationships;
Adding value in sourcing via Lean, Quality, and Product Lifecycle Management;
Global vs. local supply and the pros and cons of extended supply chain;
The concept of Total Cost of sourcing: cost considerations beyond the basic cost of an item or service;
External considerations when securing resources: government or regulatory bodies as well as the growing importance of social and environmental considerations; and finally
Reducing risk in the supply chain.
In this final homework assignment, you are asked to write a Sourcing Strategy. Please pick one of the following two scenarios for your paper:
(1) You are the sourcing agent in a company that produces a product with demand across the globe (you can use your imagination on the nature of the product – a fancy new cell phone, a radical new car, a new cola with that tastes great and is less filling, etc. – please describe what it is). More importantly, the item is still in its infancy, and the demand is expected to explode over the next year. You are a sourcing manager that has been asked to create a strategy on securing supply for three critical inputs for the product (again you can define what they are, but they will be subject to the conditions below):
One of the items is currently made in-house in a manufacturing location based in the United States. It is become apparent that this item can be sourced from low cost countries where capability to produce the item has evolved over several years. However, management is unclear whether it should continue to produce it internally or consider an outside supply;
The second item is already sourced from a single supplier based in Indonesia. It was the first attempt to secure parts from a low-cost country, and there have been periodic quality issues – although there have been no apparent attempts to work with the supplier to understand their capability. It is also unclear whether they could scale with the expected increase in demand. Additionally, there has been news recently that other companies in the same area have been dumping their manufacturing waste into local rivers and drawing negative attention to the foreign companies that use them, although nothing is known about the environmental responsibility of your supplier in that region;
The third item is sourced from a large multi-national, which is in fact a bigger company than your own. They supply the product out of a plant in Japan, which has experienced periodic supply disruptions such as the recent tsunami. The relationship with this supplier is somewhat strained as they perceive your company as a ‘small fish’ in its ocean of customers, and they don’t appear to have an understanding of the expected growth in your product and the dependency on the item they supply for its success.
OR
(2) Choose one or more critical items that are being sourced where you work today that you feel do not have a comprehensive sourcing strategy in place.
Your request is to write an 8-9 page sourcing strategy document that lays out recommendations to the senior management team on what should be done for the three items noted above (or the items you choose from your own work setting). Your strategy document should hit at least four of the lecture themes (most of which were summarized at the start of this homework assignment write-up). Don’t be afraid to embellish the scenario laid out above – the conditions on the three items and the respective suppliers was to provide enough to be able to leverage any of the lecture themes. Elaborate on the scenario if it helps in the creation of your sourcing strategy.
Add at least one reference to each part of the four themes being tackled to help underscore the suggestions and make a convincing argument for the management team that needs direction.