What issues should a supply manager consider in determining whether a comprehensive evaluation of a potential supplier is appropriate?
We live in a world that is highly competitive. Producing quality products and they be on reasonable and competitive prices is a great concern for progressive companies. Firms must be able to select a supplier who would supply at competitive rates with the highest quality possible. But this argument is highly based on idealistic thinking as it is a condition that is not easy to meet. Supply managers are given more and more power in the recent times to get defect free supplies on competitive prices. It is pertinent to look at multiple factors before a decision to select a supplier is selected. The supplier’s evaluation process itself is a great factor even after the selection of a potential supplier as there is always a possibility that there might have been lapses in the supplier selection process or the suppliers might have manipulated information to be considered for a selection.
Before a decision is made about the evaluation of a potential supplier, following issues should be considered to determine if an evaluation would be necessary.
Experience of the supplier: an assessment of the experience of the supplier can be made from the submitted documents for the bidding process. Supplier must have enough experience in the field that they are being considered for supplying materials.
Quality focus of the Supplier: An assessment process should be carried out to see how much the supplier is focused on quality in the past and how the supplier is perceived in the market.
Openness and honesty of the suppliers: It must be noted that how the honesty level of the supplier has been in interaction with you, as a supply manager. Have they been open and honest about any information sought from them or there are still some doubts remaining.
Quality of communication: The supplier must be able to communicate effectively. The quality of the communication can be assessed by noticing the speed at which the supplier is able to answer queries, clearness in communication and free of confusion communication.
The attitude of the supplier: the attitude of the supplier towards the demands of the firm they are supplying to is a great factor in a successful relation between the two (Ellram, 1990). If the attitude of the supplier has been effective in answering queries, it means they are serious in doing business with you.
Above points are an indicator to let the supply manager know if further comprehensive evaluation of the potential supplier is necessary or not
Why does a negotiation become more difficult as it progresses? How can buyers reduce or overcome these difficulties? Be specific.
We have always learned that a win-win situation should be a logical end to a negotiating process but the common collaborative approach is substituting the win-win approach in the present business world (Burt, Petcavage, Pinkerton, & Burt, 2010). But even if the aim of the negotiators is to find a common collaborative solution, the negotiation becomes more difficult as the process progresses.
The negotiation processes becomes more and more difficult because the nature of supply and demand transactions is primarily time bound. Especially the buyer is dependent on the supply pf raw material for his/her as the conversion to valuable good can then be initiated. On the other hand the supplier has also invested financial and human resources in getting a deal to be able to supply. Therefore, as a purchasing manager and at the buyer firm, there should have been much homework on the exploration of the market for other suppliers who can act as alternative to the one that is already dealt with. The supplier would then be able to know that they are not the only firm to supply and do not enjoy a dominating status in the process of the negotiation. They would then be ready to collaborate and come to common terms with the buyers.
Write 3–5 paragraphs on the R&D Contract Development at PNS Vignette in Chapter 15. Describe the actions you would take as June Oster and explain why. Include 3 research sources that can be from the Internet and/or other sources.
PNS or Personal Network Systems are in the process of developing a new computer for home use. They planned to produce 1 million units to be sold in the open market with a design to cost objective of 600 USD. They conducted a make or buy analysis and found out that they discovered that a wireless networking device has is one of the more costly items costing around 100 USD. After the make or buy analysis it was decided that PNS does not have the capacity to develop the item they need and hence an outside company would be sought to produce these items for PNS. Make or buy analysis helps a firm in deciding if a specific item that acts as a part of a larger product should be made in the form or would it be feasible to buy from outside (Ruffo, Tuck, & Hague, 2007).
Three out of five companies contacted by June Oster who is a newly promoted supply manager, showed interest in producing the item required. One of the company, Tigertronix, among the three has shown their interest in the development in the wireless networking device provided that at least 500,000 devices would be bought from them.
June Oster has received a proposal from Tigertronix and has to make a decision about an action about the proposal. If I were June Oster, I would accept the proposal by Tigertronics Corporations. The reason is that they have agreed on 100 USD price per unit which is desired by my company. This price is for the initial 10,000 units but I believe that with experience gained, the price would not increase. The first 10,000 units would also provide us an idea of the quality of the item and how we should deal with it in the future. According to the history of the company, it is a firm with dynamic workforce that has rapidly progressed over the last five years.