CASE REQUIREMENTS – Sub-headings must be provided for each of the 6 Questions
The team realized this supplier selection decision, which was one of the most critical involving the new product line, was also going to be difficult. Until the team analyzed the numbers and discussed the findings from the field visits, it was clear that no consensus existed among team members concerning which supplier(s) to select. To reach a decision, you must do the following:
1. Identify the immediate issue and other issues and concerns.
2. Perform a situational analysis (SWOT, PEST, Porters 5 forces etc.)
3. Perform various analysis designed to support the supplier evaluation and selection decision. These analyses, with supporting worksheets or templates provided, include:
· Financial Risk Analysis While this case assumes that the cross-functional team visited four suppliers, organizations often perform a preliminary financial risk analysis to identify the suppliers that may not warrant further consideration due to excessive financial risk.
· Total Cost Analysis Unit price rarely, if ever, equals the total cost of doing business with a supplier. This analysis requires each group to identify relevant additional costs beyond unit price. This involves considering a combination of actual and estimated costs. Consider potential currency issues in your analysis.
· Supplier Evaluation and Selection Analysis As organizations continue to rely on fewer suppliers, the supplier selection process takes on greater importance. The Supplier Evaluation and Selection Analysis is a robust tool used during supplier assessment.
· Evaluate the single sourcing option versus multiple sourcing option
|Single Sourcing: Potential Advantages
|Multiple Sourcing: Potential Advantages
|Multiple Sourcing: Potential Disadvantages
· The issue of short versus long-term contracts is also an important consideration during supplier selection. Using the following table, identify the potential advantages and disadvantages of short and longer-term contracts (not only as they relate to this case).
|Short-Term Contracts: Potential Advantages
|Longer-Term Contracts: Potential Advantages
|Longer-Term Contracts: Potential Disadvantages
4. Identification of at least 3 alternatives which are well described and clearly related to organization goals and clearly developed from situational analysis and other analysis.
5. Make a final recommendation.
6. Make an implementation timeline chart.